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The foils summit 

Newremedies 
forold problems . 


Page»4and13 



MandedliMBs . . V 

pfit of. reform, • 
art almighty rn uddle . 

Paget 'IZ ' ‘ "1; • v:>. V 



‘Go to market* 

digital 

i 

Digital's revival 
plan for Europe 

Management Page 9 



AchUmg! Umleitupg 

Watch your speed on 
eastern autobahns 

Busumms travel, Page 8 


FINANCIAL TIMES 



Europe's Business Newscaoer 


takes 25% 


gas supply venture 


i^^stake in Finnish 

w.; 

j lj '^' Russian monopoly gas company Gazprom is to 
• ' • intake a 25 per cent stake In a joint venture with 

Neste, the Finnish state energy group, that will 
< ;.j ‘^V lead to a substantial increase in Russian gas 
, exports to Finland. The deal includes a 20-year 
r\ ; j: -''gas supply contract under which Finnish imparts 

Russian gas could rise to more than 4bn cubic 
metres a year from the present level of 2^bn 
: U ^ .< cubic metres. 

Gazprom, the world’s largest gas producer, 

... . i has partnerships and joint ventures in Austria, 

• i 3 ’ Germany, France and Italy. Page 15 

Defence chief quits: Britain’s Chief of the 
’ 7,; Defence Staff, Sir Peter Harding; 60, resigned 
- x ~ after allegations of an affair with the Spanish 
■'r ^ with of former Tory defence minister Sir Antony 
Buck. 

' Sbtf Anny may boost UK airport security 


Pur r 



British ministers are expected to consider using 
army patrols to boost security at Heathrow (above) 
and other British airports following the third 
i IRA mortar attack at Heathrow in five days. Army 
personnel and equipment were at the London 
. airport yesterday to help the search for farther 
devices after the latest attack in which four mor- 
: tars, fired from a heavily camouflaged launcher; 
Med to explode. Page 14 

. Israel bans extremist Jewish groups: 

Two anti-Arab Jewish groups were banned and 
; branded as terrorist by lsrad in an attempt to 
bring the Palestine Liberation Organisation back 
' to the suspended Israeh-Falestioian peace talks. 
Page 6 

: Flotation may value Ashanti at £1Jba: 

Preparations for the flotation of gold mining com- 
pany Ashanti Gold J^elds of Ghana are to be 
stepped up this we$k J&l4«idj#t. The company .. 
is expected to be valued at up to £L5bn {$£2bn). 
Page 15 

07 ministers tackle unemplo ym ents Finance 
and employment ministers from the Group of 
Seven leading industrial nations gathered in 
Detroit for a two-day session on tackling unemploy- 
ment. Page 14; Further reports, Page-i; A mis- 
guided focus. Page 13 

European Monetary System: TheD-Mark 
last week climbed above the Belgian franc to 
third place in the EMS grid, bolstered by the 
slow pace of Bundesbank monetary easing and 
a weaker US dollar. The Portuguese escudo slipped 
below the Spanish peseta at the bottom end of 
the grid. The Irish punt remains the strongest 
currency, but is now only marginally ahead of 
the Dutch guilder. Currencies, Page 27 


EMSs Grid 


Mwty *1,1994 





jlfil 


The chart shows the member currencies of the 
exchange rate mechanism measured against the 
weakest currency in the system. Most ctf the curren- 
cies are permitted to fluctuate within is per cent 
of agreed central rates against the other members 
of the mechanism. The exceptions are the D-Mark 
and the guilder which move in a ZJ5 per cent band. 

South American free trade area backed: 

Brazil’s proposal to create a South American 
free trade area has won the backing of Argentina, 
Paraguay and Uruguay, the country's three part- 
ners in Mercosur, the regional common market 
planned to come Into effect next year. Page 5. 

Henkel lift by rationalisatioiK The costs 
of rationalisation measures helped depress Henkel's 
pre-tax profits by 7 per cent to DM375m ($218m) 
year, the German chemicals, cosmetics and 
cleaning products group said. Page 17 

Buyout planned at Radio Marconi: A group 
of 40 managers at Radio Marconi, Portugal's inter- 
continental telecommunications operator, plan 
a Es30bn ($i70m) management buy-out. Page 17 

Profits melt away: The Japanese finance 
ministry will lose about Y270bn ($25bn) on the 
sale of 90 tonnes of gold obtained from me l ti n g . ■ 
down unsold coins, Issued in 1986 and 1987 to 
commemorate Hirobito's 60 years an the throne, 
because the price of gold has fallen. 

Page 14 

Nigeria’s policies ‘sot to faff: Nigeria’s 
economic policies “are definitely going to faff* , 

Kim Jay cox, World Bank vice-president for Africa, 
warned in the most forthright public criticism 
by a World official since Nigeria's military 
gover nmen t revalued the currency, the naira, 
in January. Page 6 


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MONDAY MARCH 14 1994 


Christian Democrats slip to worst result in state election for 35 years 

SPD set to win Lower Saxony 


By Michael Lmdemann 
and Quentin Peel to Bonn 

Germany's opposition Social 
Democratic party (SPD) was 
coasting to a dear victory in the 
state election in Lower Saxony 
last night with Chancellor Hel- 
mut Kohl's Christian Democratic 
Union slipping to its worst result 
in the state since 1959. 

Lower Saxony’s vote is seen as 
a key indicator of Chancellor 
Kohl’s prospects in 19 elections 
this year, which culminate with 
the general election on October 
16. That will be preceded by 16 
state and local authority elec- 
tions, an electoral assembly for 
federal president in May and 


European elections In June. 

The vote yesterday confirms 
the uphill struggle Mr WriM fpras 
if he is to win re-election, even 
though the SPD has yet to gain a 
decisive lead at a national level 
Exit polls an German television 
predicted the SPD would win 
more than 44 per cent in Ger- 
many’s fourth most populous 
state. The CDU was forecast to 
win up to 365 per cent. 

Mr Gerhard Schroder, SPD pre- 
mier, expressed confidence that 
he would win an absolute major- 
ity in the Hanover- based Lower 
Saxony state parliament and be 
able to rule without his coalition 
partner, the Green party. 

Mr Jflrgen Trittin, the leading 


Anti-EU feefing rises 
to Austria. 


Green party minister in the out- 
going SPD-Green. coalition in 
Hanover, said: "This is the day 
the twilight of the chancellor* 
began in Bonn. 1 ' 

Yet the result amounts to less 
of a setback for Mr Kohl than 
had been feared by some party 
members. It may be less of a vic- 
tory for the Social Democrats, 
who seemed unlikely to improve 
on the vote won in Lower Saxony 
in 1990, despite the Bonn govern- 
ment's obvious unpopularity. 

The CDU did for worse In both 


previous local elections - in 
Hamburg last September, when it 
fell to 25 per cent support, and 
Brandenburg in December, when 
it barely wan 20 per cent and fen 
to third place behind the former 
Democratic Socialist party (PDS), 
the former Communists. 

The exit polls also suggest that 
protest parties, including the 
extreme rightwing Republicans, 
the non-party Statt Partei. and 
the now relatively well-estab- 
lished Greens, have not risen to 
the extent predicted by some 
political observers. 

The Green party, which has 
been in coalition with the SPD 
since the last elections in 1990, 
was likely to win up to 75 per 


cent, a small improvement on the 
55 per cent it won in the 1990 
election. 

The Free Democratic party 
(FDP), Chancellor Kohl's part- 
ners in the Bonn coalition, 
appear to have slipped a little 
from 6 per cent last time, and 
may foil to reach the 5 per cent 
minimum needed to win seats in 
the state parliament. 

The Republicans were likely to 
win at most 4 per cent, according 
to the exit poll conducted by ZDF 
television. The Statt Partei, 
which caused a small sensation 
when it won more than 6 percent 
in Hamburg last year, was fore- 
cast to get no more than 15 per 
cent this time. 


Cell phone pact 
lifts US threat 
against Tokyo 


By Mtehlyo Nakamoto In Tokyo 

Japan has narrowly averted US 
trade sanctions over, its treat- 
ment of Motorola, a leading US 
cellular phone company. 

A deal was reached after 
intense negotiations, which 
removes the immediate threat of 
sanctions against Japan over US 
access to its cellular phone mar- 
ket But it could create an unfor- 
tunate precedent by encouraging 
the Japanese government to 
become closely involved .in the. 
affairs af'prtvate companie&. 

Washington, which .used the 
case to signal its dissatisfaction 
with Tokyo's progress in opening 
its markets, was due this week to 
publish a list of likely targets ibr 
sanctions. The US wanted to put 
pressure on Japan to accept 
quantifiable indicators of the 
openness of its markets. 

Last month Mr Mickey Kanfor, 
US trade representative, bran- 
dished a Motorola cellphone as 
he announced the US finding that 
Japan bad breached a bilateral 
agreement. 

The agreement calls on the 
Japanese government to .monitor 
investment by a Japanese group, 
IDO, in a cellular phone system 
promoted by Motorola. The gov- 
ernment should also allocate 
mare radio frequency to the US 
system. IDO, the Japanese cellu- 
lar phone operator, agreed to 
quicken the pace of its invest- 
ment in Motorola's system. 

The Japanese government also 
agreed to monitor IDO's progress 
in Implementing its plans at 


three-morrihly intervals; to back 
low-interest loans from the Japan 
Development Bank; to allow IDO 
to carry out its investment and to 
review the situation at any time 
if there was a request from either 
party. 

In a weekend radio prog ramme . 
President BID Clinton welcomed 
the breakthrough. 

However, Japanese officials, 
who have emphasised the impor- 
tance of deregulating domestic 
industry, said that such a deal 
.was only possible in a sects? 
where bureaucratic inyd^nnient 
was still strong bechnite 'tf the 
need to allocate frequencies. 

Japan’s Ministry of Posts and 
Telecomnaatications bad, sought 
initially t&ftave the dispute in 
the hands of the two' companies. 

However, US pressure, and the 
threat of sanctions at a time 
when US-Japanese relations have 
been fraught with difficulty, 
forced Tokyo to concede. 

The deal calls far IDO to bring 
forward its investment in a fur- 
ther 159 base stations for the 
Tacs cellular phones system, 
which is backed by Motorola, and 
complete that investment by the 
early autumn of 1995. IDO also 
agreed to reallocate some of its 
radio frequency used for a Japa- 
nese rival to Motorola’s system. 

The US had threatened sanc- 
tions against Japan on the 
grounds that a bilateral agree- 
ment to provide the US system 
with “comparable market access” 
-had not been met 

Apple assault on Intel, Page 15 


Change reaches the altar 



The -Rev Susan Shipp (above), 
one of the first woman priests 
ordained by the Church of 
Rngland, celebrated communion 
yesterday in Bristol, as groups 
opposed to their ordination 
warned of further splits in the 
church. Thirty-three women 
were ordained on Saturday by 
the bishop at Bristol, the Rt Rev 
Barry Rogersan. 

The Vatican warned of a "pro- 
found obstacle” to reunion hopes 
between the Catholic church and 
the Anglican camsurnfam. But Rt 
Rev Mark San ter, bishop of Bir- 
mingham, said be hoped tradi- 


tionalists tempted to become 
Roman Catholics would find it 
possible to stay. 

One UK government minister 
has already converted to Catholi- 
cism over the Issue, and another 
has announced his intention to 
do so. A claim by the latter, envi- 
ronment secretary John Gam- 


mer, that the Church of England 
had turned itself Into a "sect” by 
accepting women priests was dis- 
missed as "incredibly insular”, 
by the bishop of Birmingham. 
Many other branches of the 
Anglican church around the 
world already have women 
priests. Picture: Reuter 


DS523A 


Italy to 
fund $lbn 
retirement 
scheme at 
llva steel 

By Robert Graham In Rome 

The Italian government has 
agreed to fund an early retire- 
ment programme for 10,450 peo- 
ple working in Uva. the stale-con- 
trolled steel group which has 
been ordered by the European 
Union to cut production. 

According to trade union repre- 
sentatives the deal will cost up to 
L1.80Qbn ($l.Q8bn) over the next 
three years. 

This is the second time in a 
fortnight that the government 
has arranged costly early retire- 
ment packages to solve problems 
of Industrial restructuring. 

The previous agreement cov- 
ered 6,600 workers at Fiat. Both 
have been pushed through in 
advance of the March 27 general 
elections. 

“It is a costly but effective 
arrangement,” said Mr Luigi Por- 
tion. a union official. “The cost to 
the public purse will be four 
times that of Fiat, and at least 
Ll.800bn will be needed over the 
next three years to cover all the 
early retirements envisaged." 

Uva. controlled by lri, the state 
holding c ompany , gave an under- 
taking last December to cut pro- 
duction by 1.2m tonnes a year, as 
part of an EU-wide plan to reduce 
steel capacity. The cuts affected 
12517 of its total workforce of 
45,000, the bulk coming from the 
Taranto steelworks. Europe’s 
largest steel complex. 

Under the weekend agreement, 
early retirement covers most job 
losses at Taranto as well as at 
Ova's Bagnoli plant, closed 18 
months ago. At Taranto, many of 
those obtaining early retirement 
are workers recruited from the 
countryside into industrial jobs 
when the complex was built in 
the early 1970s. 

The deal limits job losses 
through solidarity contracts - 
work-sharing arrangements on 
reduced pay and hours. 

Some 1,200 jobs are being saved 
through 4,300 solidarity con- 
tracts. A further 1,500 will be 
transferred to other companies 
within the group and ljQOQ work- 
ers will be employed in commu- 
nity work projects. 

With the job aspect of Diva’s 


Continued on Page 14 
Italy’s electoral reforms. Page 12 


Right wing split eases threat 
of S Africa election boycott 


By Patti 



The threat of a widespread 
boycott of April’s all-race elec- 
tions in South Africa was signifi- 
cantly lessened at the weekend 
after a split In the rightwing 
Freedom Affiance. 

The split was provoked by the 
crisis in the black “homeland" of 
Bophuthatswana, where a Pre- 
toria-appointed administrator 
yesterday took over from ousted 
President Lucas Mangope. 

General Constand VUjoen, 
probably the most popular leader 
of right-wing Afrikaners, said at 
the weekend he was resigning 
from the umbrella right-wing 
group, the Afrikanet Volksfiront, 
to lead a new moderate Afrikaner 
party into the polL The party, the 
Freedom Front, will field candi- 
dates iMhiHng wiPirih Bwi of the 
moderate wing of the divided 
ultra-right Conservative party. 
Mr Fertile Hartzenberg, CP 
leader, and hardline Conservative 
members of the old white partia- 
meut stiH support a boycott. 

Gen Vffioen's move marked a 
split with the neo-Nazi Afrikaner 


.2-* 

-'7 

. w 

- H 


Weerstandsbewegjng (Afrikaner 
Resistance Movement), whose 
members were involved fa gun 
bsdtiee an-Friday in the streets of 
Bophulha^^ars twin capitals, 

blacks and right 
wihg whites wfae killed. 

There was some confusion last 
night over whether Gem Vffioen 
might yet back out of partidpat 
ing in the election after ids close 
ally Mr Rowan -Cronje, foreign 
minister pf Baphuthstswana, said 
the general was reconsidering his 
position. But the split with the 
AWB appeared to be permanent. 
As a result the paramilitary 
movement Is isolated and 
faci$asfngiy discrecBted. 

Gen VHoaa’s powerful aRy fa 
the Freedom ATHimce, the Zafa* 
based Inkatha Freedom party, 

said at the weekend it would not 

partici p ate in elections. However 
Inkatha's chief negotiator, Mr 
Frank. Mttialose, appeared to 

when he said intp rrJSnna^awlS 
ation - the subject of talks with 
the African National 
likely winner of the 
might yield a p os iti ve result 


CONTENTS 


Gen VUjoen was due to meet 
Chief Mangosuthu Buthelesa, 
Iukatfaa leader, today for discus- 
sions which could lead to a shift 
in the position of one or the other 
party. 

Although Infra tha faded to reg- 
ister a list of candidates by" the 
deadline last Friday, tech n ically 
disqualifying it from participat- 
ing in the April poll, officials of 
the ANC said they would rmnove 
such obstacles to Inkatha’s par- 
ticipation provided a settlem en t 
of the country’s constitutional 
disputes was reached. 

The third member of the Free- 
dom Affiance, the government of 
Botyitthatswana, fa effect ceased 
to exist at the weekend when a 
Sfod fi African administrator, Mr 
Tjaart van der Walt, took over 
from Mr Mangope. who was 
ousted by a combination of popu- 
lar protest, a civil servants’ 
strike, la security force mutiny 
and the intervention of South 
. African troops on Friday night. 

At least 42 people were killed 
in last week’s rioting as home- 
land residents demanded the 
right to participate freely in the 
April elections. 


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© THE FINANCIAL TIMES LIMITED 1994 No 32,316 Week No 11 LONDON ■ PARIS ■ FRAHKFUBT . MEW YORK ■ TOKYO 



Flextech p.l.c. 

has acquired 

the European programming assets of 
United Artists European Holdings Limited 

for a consideration of £zoi million 


Flextech was advised bv 



N M Rothschild & Sons Limited 


March [994 


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• • 







FINANCIAL TIMES MOND AY MARCH 14 W4 


NEWS: INTERNATIONAL 


EU procurement row with US set to flare 


By Lionel Barber hi Brussels 

THE European Commission is 
heading for a showdown with the US 
over public procurement after the 
disclosure that the US has, in the 
view of Commission officials, 
revived efforts to woo Germany 
away from its European partners. 

Last week the Clinton administra- 
tion quietly dropped trade sanctions 
against Germany, apparently imple- 
menting the secret non-aggression 


pact which it struck with the Bonn 
government on telecommunications 
a year ago. Commission officials said 
yesterday that the US action 
appeared aimed at driving a wedge 
between Germany and the rest of the 
European Union. 

The US move could trigger Com- 
mission measures against Germany 
if the Bonn government was shown 
to have failed to implement EU trade 
sanctions against the US. These 
were imposed last year as part of the 


long-ru n nin g transatlantic dispute 
over public procurement. 

The US action was disclosed in the 
daily Federal Register of US govern- 
ment business last Thursday, and 
comes ahead of a renewed effort by 
the Commission and the Clinton 
administration to resolve outstand- 
ing differences on opening public 
procurement markets. 

The two sides have set a deadline 
of April 15, when leaders are due to 
assemble in Marrakesh to sign the 


Uruguay Round agreement of the 
General Agreement on Tariffs and 
Trade. 

Arguments over fair access to 
lucrative contracts in road, rail and 
other public sector projects dared in 
the early days of the Clinton admin- 
istration. But the row was defused 
with reciprocal market-opening mea- 
sures, supported by token trade 
sanctions and the promise of an 
independent study into trade barri- 
ers. Later, however. Mr Mickey Kan- 


tor, US trade representative, reached 
a separate bilateral understanding 
with Mr Gdnter Rexrodt, German 
economics minister. Under the oral 
deal. Mr Rexrodt indicated that Ger- 
many would not apply Article 29 of 
the EU’s utilities directive which 
gives a 3 per cent price preference to 
EU companies, and allows a bidder 
to ignore an offer if it has less than 
50 per cent local content. 

The German offer challenged the 
EU decision to impose a 515m 


(£l0.2m) sanctions package against 
the US. ft also appeared to contra- 
vene the Treaty of Rome, which 
awards sole competence to the Euro- 
pean Commission on trade policy. 

A spokesman for Sir Leon Brittan. 
chief EU trade negotiator, said the 
Commission had not initiated 
infringement proceedings against 
Germany. If Bonn was not applying 
the relevant public procurement leg- 
islation that would be "surprising 
and disappointing", he said. 


Release of Brittan’ s 
book throws cat 
among Euro-pigeons 


By Lionel Barber In Brussels 
and Philip Stephens in London 

The UK government faces 
renewed controversy over 
Europe today after the prema- 
ture release of a book by Sir 
Leon Brittan. in which the 
senior British commissioner 
calls for a wide-ranging over- 
haul of decision-malting in an 
expanded European Union. 

Sir Leon's views run counter 
to the UK's insistence on spe- 
cial protection for the large 
member states which has led 
to deadlock in enlargement 
talks with Sweden. Finland. 
Austria and Norway. 

His proposals for institu- 
tional reform are also likely to 
stir up Tory Euro-sceptics wor- 
ried that UK Prime Minister 
John Major's government may 
be about to (hop its hard-line 
stand and adopt a more pro-Eu- 
ropean manifesto ahead of 
European Parliament elections 
in June. 

Mr Major was warned yester- 
day that retreat from his insis- 
tence on maintaining the pres- 
ent voting system after 
enlargement would provoke 
new convulsions in the Conser- 
vative party. 

But with other EU states 
threatening to block enlarge- 
ment unless the threshold for a 
blocking minority within the 
council was raised from the 
present 23 votes, British minis- 
ters acknowledged ' the 
dilemma. 

Both Mr Major and Mr Doug- 
las Hurd, the foreign secretary, 
have been adamant that the 
minority veto should not be 
diluted. The same point has 
been made to Conservative 
party managers by Euro- 
sceptic MPs. 

EU foreign ministers will 
attempt to rescue the enlarge- 
ment talks at a meeting tomor- 
row in Brussels. Spanish 
demands for access to 7,000 
tonnes of Norwegian cod 
appear likely to be accommo- 
dated after reports of a new 
offer from Oslo; but hopes of 
settling the row over power- 
sharing rest on a face-saving 
compromise which takes 
greater account of population. 

Britain, supported by Spain, 
is pressing to maintain the 
present voting arrangements 
which allow two large nations 
and a smaller country to block 
their partners. Germany and 
other EU members want to 
raise the “blocking minority" 
threshold to 27 votes. One com- 



Sir Leon Brittan; Proposes three- tier voting system 


promise under review is to 
increase the blocking minority 
to 27 votes, on condition it 
would not apply if countries 
representing more than 40 per 
cent of the population wanted 
to hold up decisions. 

Mr Javier Solana, Spanish 
foreign minister, said in an 
interview with the El Pais 
newspaper yesterday: “I hope 
in the coming days we can find 
a formula that will satisfy our 
legitimate aspirations." 

Friends of Sir Leon said last 
week that he was dismayed at 
the UK government’s apparent 
willingness to jeopardise 
enlargement, a goal previously 
judged to be central to 
Britain's European policy. 

The chief EU trade negotia- 
tor, who is a candidate to suc- 
ceed Mr Jacques Delors as 
president of the European 
Commission, argues in his 
book that institutional reform 
Is inevitable. 

He urges the UK to prepare 
actively for the entry of the 
former communist countries of 
central and eastern Europe in 
the Union. 

Sir Leon proposes the intro- 
duction of a three-tier voting 
system which would balance 
the need for accelerated deci- 


Italian general elections 


Focus on the centre ground 


By Robert Graham 

As Italy's general election 
enters its final two weeks, 
attention has switched to the 
large, undecided vote caused 
by the collapse of the tradi- 
tional centrist grouping. 

Polls published last week 
showed that neither of the two 
main alliances on the right and 
left were capable of winning an 
absolute parliamentary major- 
ity. This raises the spectre of 
the centre, composed of the 
reshuffled remnants of the five 
parties that have governed 
post-war Italy, acting as arbi- 
ters in the formation of the 
next government 
The polls, the last permitted 
before the election on March 
27. also suggested that the 
momentum had slowed behind 
media magnate Silvio Berlus- 
coni's Forza Italia movement. 

Mr Berlusconi himself suf- 


fered embarrassment over the 
weekend after his younger 
brother Paolo admitted he had 
paid Ll-3ba (£520,000) to Social- 
ist and Communist local coun- 
cillors to secure a golf club 
development at Basiglio uear 
Milan. In connection with 
these payments. Milan magis- 
trates searched the home of Mr 
Alessandro Moneta, a former 
mayor or Basiglio and cur- 
rently southern Italy coordina- 
tor for Forza Italia. 

According to a poll con- 
ducted by Directa, the Berlus- 
coni-dominated right-wing alli- 
ance would obtain 295 seats in 
the 630 lower house against 242 
seats for the Progressive Alli- 
ance led by the former commu- 
nist Party of the Democratic 
Left CPDS). 

The Directa poll -broadly 
endorsed by another conducted 
by Telemontecarlo - indicated 
that the PDS will get a maxi- 


mum of 135 seats in the cham- 
ber of deputies with Recon- 
structed Communism, the 
hardline rump of the old Com- 
munist Party w inning up to 35 
seats. The strength of Recon- 
structed Communism and its 
damaging programme propos- 
als. such as raising taxes on 
government bonds, are impos- 
ing severe strains on the Pro- 
gressive Alliance. 

The centre parties, composed 
mainly of the former Christian 
Democrats reformed under the 
Popular party (PPD and refer- 
endum leader Mr Mario Segni's 
Pact for Italy, would get 68. 
The remaining 25 seats would 
go to the small parties. 

• Seven former members of 
Italy’s domestic Intelligence 
service (Sisde) have been sent 
for trial for allegedly embezzl- 
ing L60tm following an investi- 
gation by Rome magistrates 
lasting over nine months. 


Portugal seeks to keep veto 


By David Marsh, 

European Editor 

Mr Anfbal Cavaco Silva, the 
Portuguese prime minister, has 
held out the possibility of a 
compromise this week to settle 
the power-sharing row which 
could prevent Austria, Finland. 
Sweden and Norway joining 
the European Union. 

In an interview during a visit 
to London. Mr Cavaco Silva 
also urged Britain to rejoin the 
exchange rate mechanism of 
the European monetary system 
it left in September 1992. 

He said he told Mr John 
Major, UK prime minister, in 
talks on Friday that the UK 
should rejoin the ERM “to per- 
suade others to move in the 
right direction" towards eco- 
nomic and monetary union. 

On the EU votes dispute, 
which pits Britain against 
most of its EU partners, Mr 
Cavaco Silva said he hoped 
Brussels talks starting tomor- 


PM urges compromise on the 
dispute over power-sharing 


row would agree a formula 
under which a minority of 
states could veto EU decisions 
in a 16-nation EU. 

Most EU members want to 
raise the so-called "blocking 
minority," the threshold for 
blocking decisions in the EU 
council of ministers, to 27 
votes from 23 at present. 
Britain and Spain, with some 
support from Italy, are insist- 
ing on keeping the 23-vote 
blocking minority unchanged 
to avoid being more easily out- 
voted in the enlarged EU. 

Unless resolved, the row 
could scupper plans for the 
four members of the European 
Free Trade Association (Efta; 
to join the EU next year. 

Mr Cavaco Silva said a deal 
could set a combination of 
votes and numbers of states 


able to block EU decisions. 
Since the UK government was 
“keen” on enlarging the EU. he 
did not think the UK would 
want the voting disagreement 
to hold up accession by the 
four Efta states. 

Mr Cavaco Silva said he had 
agreed on Friday with Mr 
Major that enlargement 
towards the Efta states should 
be agreed without opening a 
debate on fundamental reform 
of EU decision-making, which 
looks like topping the agenda 
of the conference planned for 
1996 to review progress of the 
Maastricht treaty. "It would be 
a mistak e to open the institu- 
tional question now," he said. 
“This would not stabilise confi- 
dence." 

Mr Cavaco Silva said it was 
“inevitable” that the EU was 


growing into a “looser" com- 
munity as membership 
increased. “Plenty of uncer- 
tainty [about the future of the 
Maastricht process] has been 
created am ong the citizens of 
Europe. It is not the time for 
deepening.” The EU’s priority 
was to “consolidate" the 
advances it bad already made 
in setting up the barrier-free 
single market and laying the 
groundwork for Emu. he said. 

The Portuguese prime minis- 
ter said he was relatively opti- 
mistic about prospects for fur- 
ther cuts in German interest 
rates, an essential condition 
for promoting Europe's recov- 
ery from recession. 

•The attitude of the Bundes- 
bank seems to be different 
from a few months ago. Per- 
haps the Bundesbank is not so 
strong as it was." he said. 

Mr Cavaco Silva ruled out 
EU membership before 2000 by 
countries from central and 
eastern Europe. 


Tapie questioned in murder probe 


sum-making without upsetting 
the balance between the big 
and smaller member states. 

• The first tier would cover 
internal market measures, 
health and safety at work, 
farm and fisheries policies, as 
well as the purchase and sale 
of goods and services any- 
where in the EU. 

These measures would be 
subject to “low majority" vot- 
ing, making it harder for coun- 
tries to muster a blocking 
minority. 

• A second tier would cover 
social rules and environment, 
as well as “exceptional trade 
measures" such as action 
against low-cost imports. This 
would make a majority in 
favour of action harder to get. 
though still not impossible for 
a single country to block. 

• A third tier would cover the 
levying of taxes, all moves to 
European economic and mone- 
tary union, increasing the EU’s 
budget, and all laws on visas 
and immigration. 

On these matters of "core 
sovereignty”, governments 
would retain their right to 
veto. 

Sir Leon’s book is part of his 
undeclared campaign to suc- 
ceed Mr Delors. 


Mr Bernard Tapie. the 
politician and owner of Olym- 
pique-Marseille football club, 
has been questioned by police 
about the murder of a 
corruption-fighting woman MP, 
investigators said yesterday, 
Reuter reports from Marseil- 
les. 

He bad been named by Mrs 
Yann Piat, who was shot on 


February 25, in a letter to an 
aide in which she said she 
feared assassination. 

Mr Tapie was not immedi- 
ately available for comment 
but last week he denied any 
connection, telling French tele- 
vision: “What now? Why don’t 
you accuse me of being 
responsible for the war in Bos- 
nia?" 


The investigating judge has 
placed two minor Toulon 
underworld figures under 
investigation for suspected 
murder but made clear he 
believes there was a wider con- 
spiracy, possibly including pol- 
iticians. 

Police have also de- 
tained four other people with 
underworld links for question- 


ing in the investigation. 

Mrs Piat. who began her 
political career in the extreme- 
right National Front before 
switching to the Union for 
French Democracy (UDF), 
earned a reputation for 
denouncing alleged links 
between organised crime, prop- 
erty speculation and politics on 
the French Riviera. 


Anti-EU feeling 
rises in Austria 


Inflation ‘to fall’ 
in west Germany 


By Patrick Blum in Vienna 

Opponents or critics of the 
European Union made gains in 
three elections to provincial 
parliaments in Austria yester- 
day. according to projections 
from early results in Carin- 
thia, Salzburg and TyroL 

The far-right Freedom party 
(FPO), led by Mr JBrg Haider, 
who waged a strongly nation- 
alist campaign, and the 
Greens, who oppose EU mem- 
bership, increased their share 
of the vote. 

According to the projections, 
the two government coalition 
parties which strongly favour 
EU membership lost support, 
with the conservative People's 
Party (OVP) losing its absolute 
majority of seats in Tyrol and 
Carmthia, and the Social Dem- 
ocratic Party (SPO) losing 
votes in all three provinces. 

The FPO vote in Cartnthia 
rose by about 4.4 per cent 


from 29 per cent in 1989 to 
33.4 per cent this time, though 
this will not be enough for Mr 
Haider to recapture the prov- 
ince's governorship which he 
lost after making remarks 
praising Nazi Germany's 
employment policies. The 
province has been run by a 
OVP-SPO coalition since then. 
The maverick Mr Haider has 
been ambivalent about the EU. 

The Greens did particularly 
well in Tyrol, winning over 10 
per cent of the vote and repre- 
sentation in the provincial 
assembly. They campaigned 
strongly against the govern- 
ment's deal with the EU on 
transit, a particularly sensi- 
tive issue to TyroL 

The pro-EU Liberal Forum, 
is projected to have scored less 
than 4 per cent of the vote in 
the three provinces. 

Austria must hold a referen- 
dum on EU membership in 
June. 


By Christopher Parkes 
in Frankfurt 

Inflation in western Germany 
is set to fell below 2 per cent, 
according to Mr Hans Tiet- 
meyer, Bundesbank president 

“Expectations of stability 
will now be visibly fulfilled 
and confirmed through the 
continuing decline in the rate 
of price increases," he told 
DQsseldorf foreign exchange 
dealers at the weekend. 

His confident statement, 
which follows anti-inflationary 
pay settlements last week in 
the engineering and public ser- 
vice sectors, will give support 
to the strengthening view 
among economists that the 
bank's 5.25 per cent discount 
lending rate could fall to 4 per 
cent or less by the year’s end. 

“With a February rate of 3.4 
per cent we have still not 
reached where we ought to be: 
below 2 per cent But we are on 


the way," Mr Tietmeyer said. 
Economists expect the 2 per 
cent barrier to be breached 
early next year. 

German inflatio n has fallen 
below 2 per cent in only two 
periods in the past 35 years, in 
the late 1960s. and again 
between 1986 and 1988. 

Mr Tietmeyer shrugged off 
recent surges in world capital 
market interest rates. The 
development stemmed from 
the US and Japan. “It was nei- 
ther a typically German nor 
European phenomenon, and 
certainly not a result of devel- 
opments in our M3." he said. 

M3, the bank's favoured mea- 
sure of money supply growth 
and potential inflation, bal- 
looned in January with an ann- 
ualised expansion rate of over 
20 per cent International mar- 
kets, already rattled by fears of 
rising US inflation, took fright 
when the figure was released 

earlier this month. 





Thousands of people marched through Paris at the weekend demanding the right to work and protesting against the Balladur 
govemment's proposal to cut wages for recent graduates. The rally was organised by the Communist-led CGT a bsomah, 


Clinton 
wants 
talks with 
Scharping 

By Jurek Martin in Washington 

The US administration is 
trying to arrange an early 
meeting in Washington 
between President Bill Clinton 
and Mr Rudolf Scharping, the 
German Social Democratic 
party leader. 

The US approach is being 
undertaken with the full 
approval of Chancellor Helmut 
Kohl, according to officials la 
Washington. He is said to 
accept that it is perfectly nor- 
mal for the US president to 
meet leaders of the opposition 
in countries dose to the US. 

The heavy German election 
season, beginning yesterday In 
Lower Saxony and culminat- 
ing at the national level In 
October, presents the US with 
a tricky problem of diplomatic 
niceties. 

Mr Clinton and Mr Kohl get 
on well, as witnessed in their 
genial last session in Washing- 
ton in January. In July the 
president will go to Germany 
after the summit in Naples of 
the Group of Seven leading 
industrial nations. 

Beyond personal rapport, 
US-German co-operation over 
issues such as Bosnia and Rus- 
sia has become extremely 
close, partly because of the 
effectiveness of Mr Richard 
Holbrooke, the US ambassador 
in Bonn. In general terms, the 
Clinton admin istration Is giv- 
ing as high a priority to Ger- 
many in the European context 
as did its predecessor. 

On the other hand, the US 
can read German public opin- 
ion polls as well as the next 
country and Is aware that Mr 
Scharping. whom Mr Clinton 
has never met. could be the 
next chancellor. 

Mr Scharping also appears a 
politician in the Clinton 
image. US officials ore particu- 
larly struck by his tough fiscal 
and budgetary policy propos- 
als, which they see as similar 
to the deficit reduction plan 
now in effeet in the US. 

The SDP leader has had 
some recent contact with US 
officials. He met Mr William 
Perry, now defence secretary, 
at a conference in Germany 
some two months ago. 

Mr Clinton will want to 
avoid the uncomfortable prece- 
dent set, in reverse, in the 
1976 US election, when then 
Chancellor Helmut Schmidt's 
public preference fra- President 
Gerald Ford created problems 
for the bilateral relationship 
when Mr Jimmy Carter 
became president 


Last post for 
La Suisse 

La Suisse, once the most 
popular daily newspaper in 
French-speaking Switzerland, 
brought out its final edition on 
Sunday after almost 96 years 
on the streets. Reuter reports 
from Geneva. 

The independent Geneva 
daily had been hit by financial 
problems, including a sharp 
fall in advertising revenue 
over the past five years. 

In an emotional dosing edi- 
tion, marked “Final” in large 
black letters, the paper’s 400 
staff pledged to continue their 
battle to save and relaunch the 
title. 


THE FINANCIAL TIMES 
ftiMistad by The FmandaJ Thx> lEurocr) 
GmbH. Nibefamgenpiau X 60MS Frankfort 
am Mam. Germany. Trienbrae +-M0 69 156 
SS0. Fix (A Wittl. Tdex 41619). 
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Responsible Editor Richard Lambert, do The 
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4HL. UK. Sbanhotden ol the Financial Times 
(Europe! GmbH art The Financial Times 
(Europe) Ltd.Londoa and F.T. (Germany 
Advertising) Lid. London. Shareholder of ifc 
above mentioned lap companies o. The 
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England ami Wales. Chairman: D.CM. SdL 

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NEWS: INTERNATIONAL 


US and Russia anxious to begin drawing up maps 

Envoys near critical stage 


in hunt for Bosnian 


By Jucfy Dempsey 

The US and Russia, now 
co-ordinating every move in 
the search for peace in the for- 
mer Yugoslavia, want to 
resolve one of the more intrac- 
table aspects of a settlement 
for Bosnia: the maps. 

After three days of negotia- 
tions in Vienna. Zagreb and 
Sarajevo, Mr nh«rTe« Redman, 
the US special envoy, and Mr 
Vitaly Churkin, his Russian 
counterpart are reaching a 
critical stage in negotiations 
over Bosnia's future. 

US and UN officials said that 
if the Bosnian Serbs could not 
be brought on board to join a 
complex federation of Bosnia’s 
Moslems and Croats, then the 
Bosnian Serbs would have to 
decide whether to cede land in 
return for peace. Otherwise, 
they added, the Bosnian Serbs 
could find themselves in a 
"limbo”, with their territory 
unrecognised by the interna- 
tional community. 

The search for a settlement 
intensified over the weekend 
when: 

• General John Galvin, the 
former supreme commander of 


French Prime Minister 

Mnnar ri WaTlarfiir paid an 

unannounced visit to French 
troops serving with United 
Nations peacekeepers in 
former Yugoslavia yesterday, 
Reuter reports from Paris. 

Mr Bahadur went first to 
Zagreb, Croatia, and was due 
to visit the Bfhac pocket in 
northern Bosnia, aides said. 

He was accompanied by 
Defence Minister Francois 
L6otard on his visit to units 


Nato, helped forge a defence 
agreement between Bosnia’s 
Croats Moslems to 

the establishment of one Bos- 
nian army. 

US officials stressed this 
would not provide the means 
for a new offensive against the 
Bosnian Serbs. Its aim is to 
stop the fighting between 
Croats and Moslems. It is also 
the first step towards creation 
of a federation in one part of 
Bosnia.” a US off i rfai said. 

• After talks in Zagreb, the 
Croatian capital, Mr Churkin 
said he would not rule out Serb 
participation in the federation. 


last week, when artillery 
rounds hit French positions 
and a 22-year-old soldier was 
killed by a sniper. 

French commanders are 
reported to be irate since a 
request they made for Nato 
aircraft to strike back at the 
Serbs was turned down by UN 
commanders. 

The Bfhac pocket, where 
about 1,300 French troops are 
stationed, is a Moslem- 
inhabited enclave surrounded 
by Serb troops. 


Even Mr Momcilo Krajisnik, 
speaker of the Bosnian. Serbs’ 
self-proclaimed parliament and 
an important negotiator, said 
Serbs were willing to join 
peace talks or some some kind 
of co-existence with Modems 
and Croats within Bosnia. 

• In Sarajevo, Bosnian Serb 
and Moslems said they had set 
up a preliminary agreement to 
open up to civilian traffic 
routes in and out of the Bos- 
nian ca pital, ibis could be the 
beginning of the lifting of the 
siege, and an eventual de-mQi- 
tarisation of h** city. 

• Mr Churkin, who met Bos- 


peace 

plan President Allja Izetbeg- 
avic in Sarajevo yesterday, will 
today hold talks with Serb 
leaders in Belgrade, the Ser- 
bian capital. US officials said 
the talks could pave the way 
for an overall peace settlement 
for Bosnia and Croatia. 

Mr fBuirkin must establish 
today whether President Slobo- 
dan Milosevic of Serbia is 
ready to sue far peace, which 
would lead to the lifting of 

«a»ni*Hrmg 

Any moves towards peace 
would require Belgrade per- 
suading the Bosnian Serbs, 
who hold nearly 70 per cent of 
Bosnia, to reduce their control 
to about 49 per cent, while the 
proposed Bosnian Croat/Mos- 
lem federation would include 
61 par cent of the republic’s 
territory. 

During Bosnian Croat and 
Moslem talks hosted by the US 
in Vienna, maps have not been 
discussed for the proposed fed- 
eration as any decisions would 
have to involve negotiations 
with the Bosnian Serbs. 

Sections of the Bosnian Serb 
leadership are loath to cede 

any land. It would mean break- 
ing the fragile territorial corri- 


wMch w wii> under Serb fire 



dors linking Serbs living in 
Krajina, south-western Croatia, 
to Bosnian Serb territ o r y , and 
ultimately to Serbia proper. 

"It is difficult to know if the 
links between Milosevic and 
the Krajina Serbs are weaker 
than those between the Bos- 
nian Serbs and Krajina,” a UN 
negotiator said. 

"Milosevic has to decide if he 
is prepared to weaken those 
links [with Krajina] in return 
for sanctions being lifted; 
equally the Bosnian Serbs 


must recognise they have no 
legitimacy as a self-proclaimed 
state if they do not negotiate,” 
he added. 

But the overriding consider- 
ation with regard to tbe status 
- flnri fete - of the Krajina 
Serbs is the extent to which 
they can be used as pawns by 
Belgrade in the hunt for a set- 
tlement with Croatia and Bos- 
nia. 

"The future status Krajina 
holds is the linchpin for peace 
between Croatia and Serbia,” a 


UN peace negotiator said. 
"Croatia wants full control of 
its territory, including Krajina. 
Bat the Krajina Serbs do not 
want to live in Croatia, regard- 
less of pressure from Belgrade. 
They are the Achilles* heel” 
Despite this, Bosnian Serbs - 
and Mr Milosevic - continue to 
hold a strong negotiating posi- 
tion. They can argue that the 
federation of Bosnian Croats 
and Moslems will be linked to 
Croatia through a confedera- 
tion, in effect creating an even- 


tual Greater Croatia and 
rewarding Croat gains in west- 
ern Hercegovina. Consequently 
they can ask why the Bosnian 
Serbs in eastern Bosnian can- 
not link to Serbia proper. 

"The answer is that the US 
wants to maintain a semblance 
of Bosnia's territorial integrity. 
But we know that under a new 
guise, and with haggling over 
the maps, Bosnia Is already 
being carved up between 
Zagreb and Belgrade," a UN 
official said. 


Slovaks worry 
about jobs 
as political 
battle rages 


Mr Vladimir Meciar, Slovakia’s 
beleaguered prime minister, 
begins what is expected to be a 
long and bitter battle for his 
political survival today, when 
he hands In his government’s 
resignation. 

Mr Medar, who lost a parha- 
mefitary vote 'of nhconfidence 
on Friday, has already threat- 
ened to close down govern- 
ment by immediately pulling 
out all his ministers. 

While in theory a new gov- 
ernment could be appointed 
within days, as is clearly the 
hope of President Michal 
Kovac, disagreements within 
the opposition and stalling tac- 
tics by Mr Meciar and his 
Movement for a Democratic 
Slovakia (HZDS.) could prolong 
tbe crisis. 

Parliament must also 
approve a date for early elec- 
tions - something it has not 
been able to agree on until 
now. The next general election 
Is not due before 1996. 

Mr Medar - who is aware of 
conflicting interests within the 


support for its own motion 
calling for elections in Novem- 
ber. Deputies representing the 
Hungarian ethnic minority 
held back support in the hope 
of winning concessions for 
more autonomy. 

The SDL mil now try again 
on Wednesday with another 
motion calling for elections in. 
September -October, but it is by 
no means guaranteed it will 
win the 90 votes required in 
the 160-seat parliament. The 
opposition could muster only 
78 votes in support of its no- 
confidence motion. 

The HZDS has also gathered 
more than the 350,000 signa- 
tures required for a petition to 
force a referendum on holding 
early elections and dismissing, 
deputies who have switched 
party. If the petition is 
accepted as legitimate. Presi- 
dent Kovac must order a refer- 
endum within 30 days, but 
even so elections are likely to 
be delayed. 

"It could take months before 
the situation is resolved,” a 
senior Slovak official said pri- 
vately yesterday. 

Such political uncertainty 
could not come at a worse 
time, with the country facing 
serious economic difficulties 
that may require unpopular 
measures. 

The economy remains deeply 

in recession, unemployment 
already at 15 per cent of tbe 
workforce is rising fast, and 


there may be renewed pres- 
sures for a devaluation. 

None of this would make a 
transitional government very 
papular. 

The problem is compounded 
by the lack of clear political 
alternatives. Opposition to Sir 
Meciar has been as much over 
his authoritarian style of gov- 
erning as about policies. None 
of the opposition parties has 
come up with a distinct politi- 
cal progamme for government, 
'focusing fawtoad on piecemeal 
poBcfes. 

Slovakia became indepen- , 
dent almost against its own | 
wishes on January 1993; hav- 
ing to build most of its institu- i 
turns from scratch. 

It was short of qualified per- 
sonnel, and its poBtidans had ! 
no experience of running an 
Independent country. 

This has made for highly 
personalised and unpredictable 
politics, such as attempts to ' 
find a third way between capi- 
talism and socialism, that have 
since been aba ndon ed but did 
not hflip the country's intemar 

Hnnai imagp QT 

encourage for- 
eign invest- 
ment. 

Meanwhile, ; 
the past two 
years’ political 
infighting has 
alienated an- 
incr easing 1 
number of 
Slovaks. 
According to 
recent polls, , 
about haH eligi- 
ble voters do 
not intend to i 
vote or do not 
know what to vote for. ' 
Younger voters are most disaf- 
fected, though dissatisfa c tion 
is widespread. 

“They don’t care, they’re just 
interested in power,” says a ; 
young biology student in Brati- 
slava. A taxi driver berates the 
politicians' constant wheeling 1 
and dealing and has no time 
for the parliament “It’s bad for j 
business,” he says. 

Even officials are down- 
hearted. "There’s a big gap 
between what the government 
think and what the people I 
think,” a provincial chief of ' 
police says. 

Less than two years after 
victory in the June 1992 elec- j 
tions, and over a year after 
independence, Mr Medar’s pop- i 
ularity has declined to around 
15 per. cent in opinion palls. 
The government has been j 
weakened by successive rows J 
and defect i o ns, culminating in | 
the recent damaging public i 
confrontation with the presi- 
ded. 

Independence has not 
brought the prosperity prom- i 
ised by politicians, though it is I 

now accepted as irreversible. 
People are more worried about I 
jobs and security, bat with 
every new twist in the political 
crisis, tire uncertainty deepens 
and prospects of economic 

recovery become more remote. 

"Whatever happens it’s | 
going to take time. It’s a mess, 
and its going to get worse ; 
before it gets better," one dip- I 
loroat said 


opposition, which ranges from 

the strongly 

Christian KDH n . i n . 

on the right to Patrick Blum 

the reformed 
communists in 
the Party erf the 
Democratic 
Left (SDL) - 
has also 
thrown the cat 
among the 

tSSSS io?l parliamentary 

general elec- VOte Of 
tion in June. 

This was commence 

rejected by par- 
liament as “ 
impractical, but the opposition 
then failed to muster enough 


on the crisis as 
Meciar fights 
for survival 
after losing a 



Travel. Learning about other cultures reveals much about our own. 


The Chinese observed long ago that the person who returns from a journey is not quite 
the same person as the one who began it. If so, big changes are coming: airlines will sell 
over 12 billion trips in 1994— equal to about 25% of the world population. And travel 
may double by 2005- With time, what once was seen as “alien" may be valued as "diversity" 





4 

NEWS: INTERNATIONAL 


G7 leaders in Detroit try to find balance between high wages and unemployment 


of training shuts door to 


Lack 


By George Graham 
in Washington 

When President Bill Clinton 
first called for a special confer- 
ence to discuss jobs and unem- 
ployment at the Group of 
Seven summit in Tokyo last 
summer, the US economy was 
still recovering only anaemi- 
cally from the 1990 recession, 
and unemployment stood at 7 
per cent 

Today, as the conference 
convenes in Detroit, the jobless 
rate is 6.5 per cent - 
despite a change in the method 
of calculation that makes the 
figure higher than under the 
old system. 

Comparing the US record 
with that of Europe, some US 
commentators have sneered at 
the purpose of the conference. 

“Actually, there is no global 
crisis; there is only a European 
crisis," scoffed Mr Robert Sam- 
uelson in the magazine New- 
sweek. "We have no thing to 
learn from the Europeans 
about job creation, and the les- 
sons they could team from us 
are the obvious ones that - for 
political and social rea- 
sons - they can't adopt" 

Clinton administration offi- 
cials, however, have spent the 
last week telling anyone who 
would listen that on the con- 
trary, they still have a great 
deal to learn from them. 

While the US has indeed had 
much more dynamic job cre- 
ation than the other G7 coun- 
tries, they note, real wages in 
the US have stagnated for 
years. At the same time, 
income disparities between the 
better trained and educated 
and the less well trained have 


widened dramatically. Whole 
segments of the population 
have been virtually shut out of 
the job market, with unem- 
ployment approaching 70 per 
cent in some cases, such as 
inner-city black teenagers. 

"Others could learn from US 
flexibility and dynamism. We 
couid learn from what others 
have done to facilitate the 
transition from school to 
work," said Mr Larry Sum- 
mers, the treasury under- 
secretary for international 
affairs. 


Looked at over a period of 
decades, the US has consis- 
tently created new jobs at a 
strong pace. The number of 
non- farm jobs grew by an aver- 
age of 2J2 per cent a year from 
1950 to 1990. 

Unemployment, meanwhile, 
oscillated between 19 per cent 
and 9.7 per cent in the 1970s 
and 1980s, much lower than 
comparable European rates 
-although some workers may 
give up the search Cor work 
quicker than they might in 
Europe, since US benefits stop 


after 26 weeks. 

At the start of the 1990s, 
employment stagnated as 
recession was followed by a 
slow recovery which seemed to 
bring few new jobs in its wake. 
Last year, net job creation 
picked up to 1.8 per cent - 
more robust, but stDl weak by 
the standards of most post-war 
recoveries. 

A new study by economists 
Steven Davis, John Haltiwan- 
ger and Scott Schuh at the 
Census Bureau's Centre for 
Economic Studies shows that 


the gross creation and destruc- 
tion of jobs that produces these 
net annual figures is far more 
dramatic. 

Looking at data from individ- 
ual manufacturing plants from 
1973 to 1988. they found that in 
a typical 12-month period 10.3 
per cent of jobs disappeared, 
while another 9.1 per cent were 
newly created. 

While US workers have been 
finding jobs, their earnings, 
adjusted for inflation, have 
fared worse. Average weekly 
earnings in the private sector, 
measured in 1982 dollars, 
climbed from S261.92 in i960 bo 
S315.38 in (973. Since then, 
they have slipped back steadily 
to only S255.99 at the end of 
1993. 

Within this overall decline, 
workers in the highest wages 
bracket saw their earnings rise 
by an average of 4.4 per cent in 
real terms over the last 20 
years, while workers in the 
bottom wage bracket saw a 
real fell in earnings of 10.3 per 
cent 

Another Census Bureau 
study published last week 
shows that 18 per cent of 
America's 81m full-time work- 
ers earned less than a poverty 
level wage of S13.091 a year, 
compared with only 12 per cent 
in 1979. 

Some European countries, 
white they may not have 
escaped the erosion of real 
wages, have avoided this 
increase in inequality. 

This does not just mean that 
the superior record of job cre- 
ation in the US has come 
entirely in low-wage, low-skill 
sectors such as fest food res- 
taurants as some European 


poor 

critics suggest. Half of the job 
growth in the 1380s came in 
professional and managerial 
job categories. 

"The US economy has not 
been producing McJobs dispro- 
portionately," says Ms Laura 
Tyson, chair of the White 
House council of economic 
advisers. "We have been creat- 
ing jobs in good job classifica- 
tion categories, but that rate of 
growth of compensation of 
those jobs has slowed.” 

Some of the pressure on 
earnings has come from the 
spiralling cost of health insur- 
ance, which is provided in 
most cases by employers who 
generally pass on around 80 
per cent of the costs to their 
workers in lower wages. 

But even measures of total 
compensation, including 
health benefits, have grown at 
a rate the Clinton administra- 
tion finds disappointing. 

The question ministers will 
address today and tomorrow is, 
in the words of Mr Robert 
Reich, US labour secretary: 
"Are the citizens of advanced 
economies condemned to 
choose between, on the one 
hand, more jobs which pay less 
and less, or good jobs but high 
levels of unemployment accom- 
panying those good jobs? 

"I think there’s a third 
choice, and that third choice 
may be to combine the kind of 
investments in education and 
training and apprenticeship 
that we find in Europe with 
the dynamic labour mobility 
and flexibility we find in the 
US, all encased within macro- 
economic policies which 
encourage growth and jobs,” 
Mr Reich concludes. 



Nearly a thousand job seekers queue for 30 jobs at a refinery in Chester, Pennsylvania in the early 
80s. How much has the picture improved? new uh 


US and Europe discover unusual consensus 

All agree on need for greater flexibility and better training, writes David Goodhart 


An unusual consensus has 
emerged - at least between the 
US and Europe - from the 
dozens of papers produced by 
governments and think-t anks 
for the Group of Seven jobs 
summit, which is to begin in 
Detroit today, even if there has 
been no new big idea for solv- 
ing the developed world’s 
unemployment problem. 

The three main voices in the 
debate - the US, the UK and 
the continental European - 
backed by economists at the 
Organisation for Economic 
Co-operation and Development, 
are all emphasising a combina- 
tion of greater labour market 
flexibility, easier enterprise 
formation, more effective 
active labour market measures 
and improvements in educa- 
tion and training. 

There is even a broad con- 
sensus around one of the cen- 
tral causes of unemployment 
in the developed world: that a 
combination of trade with 
developing countries and tech- 
nological change has perma- 
nently reduced demand for 


less-skilled labour. Benefit 
systems and minimum wages 
pat a floor under unskilled 
wages in Europe, so the fall in 
demand has shown in rising 
unemployment. In the US, on 
the other hand, the problem is 
expressed in failing wages or 
resort to crime. 

The policy challenge is to 
move as many people as possi- 
ble into high-skill jobs, while 
ensuring that labour markets 
are flexible enough to soak up 
the rest without forcing down 
incomes too fer. By their atten- 
dance at the summit, all G7 
countries implicitly accept that 
social engineering to deal with 
this collapse in demand for 
unskilled labour, and to cot 
the time lag between the 
destruction of old jobs and the 
creation of new ones, is 
justified. 

In political terms, both free- 
market liberals, represented 
most strongly by the UK gov- 
ernment, and social/Christian 
democrats, represented by con- 
tinental Europe and the Euro- 
pean Commission, can sign to 


such a combination of ideas. A 
Democratic administration in 
the US, interested in European 
welfare and training systems 
but still wedded to many 
aspects of its own flexible 
labour market, hovers between 
the two. 

But the idea of mid-Atlantic 
convergence can also be mis- 
leading, because the meeting 
point is fer closer to the US 
than to the European coast. 
Indeed, the starting point of 
the most influential analysis is 
considerably more liberal and 
competitiveness-conscious 
than a decade ago. 

The emphasis in Europe is 
on repairing the poor capacity 
of its economies to create new 
jobs. In the US, which has pro- 
duced 2m new jobs In the past 
18 months, the emphasis is on 
producing higher-skilled, 
higher-paid jobs. 

All the main parties to the 
debate, including the tradition- 
ally orthodox OECD, are also 
careful to avoid advocating US- 
style wage differentials, and 
real wage cuts (In 1972-1992 US 


average real wages fell by 
about 10 per cent). Even the 
UK government, the strongest 
admirer of the US model, talks 
about the balance to be struck 
between market forces and reg- 
ulation. 

The main clusters of ideas on 
the Detroit agenda are: 

• Wage and regulatory flexi- 
bility. The OECD has long 
advocated that Europe increase 
its labour cost flexibility and 
reform its job security provi- 
sions. The most surprising 
recent convert to this ortho- 
doxy has been the European 
Commission. The European 
Commission's White Paper on 
Growth, Competitiveness and 
Employment, published at the 
end of last year, talks about a 
new solidarity between the 
employed and the unemployed, 
and about “remodelled" regula- 
tion rather than de-regulation. 
But it pulls few punches on the 
problems of European rigidity. 
It says that many social protec- 
tion schemes and wage bar- 
gaining systems have had a 
negative impact on employ- 


ment protecting those in work 
at the expense of job-seekers, 
and says that there is broad 
consensus from member states 
on the need for greater flexibil- 
ity and lower labour costs. 

The most concrete policy 
proposal to create more jobs 
for the less skilled and increase 
the ■‘employment-intensit> J ’ of 
the services sector is to 
increase the burden of non- 
wage labour costs as incomes 
rise. At present the proportion 
fells as incomes rise in most 
European countries. 

The US paper circulated to 
governments before the sum- 
mit also stresses that the main 
policy requirement for Europe 
- and Japan - is to reduce 
restrictions on wage setting 
and employment adjustment 
which reduce the incentives of 
the unemployed to find jobs 
and the incentives of employ- 
ers to create them. 

• Training, education and 
good jobs. The US paper says 
that, in the right climate of 
innovation and entrepreneur- 
ship, new technology creates 


as many jobs as it destroys. 
But. if all citizens are to qual- 
ify for these jobs, the standards 
of basic education and training 
must be improved, especially 
tn the US. and the school-to 
work transition must be better 
handled. 

• Active labour markets and 
more flexible welfare. The 
annual cost of unemployment 
in the EU - Including foregone 
income - is more than 
Ecu200bn (£l5ibn) each year, 
greater than the GDP of Bel- 
gium. In recent years, there 
has been a small shift towards 
active labour market measures 
- training, job placement, and 
so on * but more than two- 
thirds of direct spending on 
unemployment still goes on 
passive measures. 

The challenge is to find ways 
of boosting the incomes of the 
unskilled In a more economi- 
cally efficient manner than 
just leaving them on benefits. 
The problem is that Europe's 
social security systems were 
designed on the assumption of 
full-time employment and have 


FINANCIAL TIMES MON PA V MARCH >4 1944 


Unemployment; the dimensions of tho crisis 


Recent unemploymont levels 
Aswagd parcamaga of Cota! arwkfocfi, 1930-92 



Japan 


Station Germany US AuswBa Franca My UK Sp* 


Total real GOP and employment growth, 1970*412 



Changes in employment by broad sector 



Expenditure an labour market measures 


PomnagaotGOP 


Ireland 
Sweden 
EMgkJm 
DonraoK 
Finland 
New Zeeland 
UK 
Canada 
Germany 
France 
Norway 
My 
AuatraOa 
Portugal 
NMMrtandn 
Spain 
Luxembourg 
Austin 
US 
Greece 
Jopen 
Switzerland 



0 1 % 


2% 3% 


4% 


Saunas. OECD, Bauoean Cttmuoton 


felled to adapt to the growth of 
part-time and “atypical" 
employment Individuals find 
it difficult to move from unem- 
ployment into anything other 
than full-time work because of 
the steep claw-back of benefits. 
• Disagreements and other 
views. There are, of course, dif- 
ferences of emphasis between 
the main participants, with 
most European countries 
playing down cyclical factors 
and playing up structural 
factors, while the US still 
believes that a good part of the 
unemployment problem is 
linked to low growth. 

"Countries which pursue 
structural improvements, with- 
out taking steps to increase 
aggregate demand, will see lit- 
tle or no return for their 
efforts,” warns the US paper. 
Japan, with the best record of 


any G7 country on jobs in 
recent years, also warns In its 
otherwise orthodox paper 
against too much emphasis on 
labour flexibility. "Excessive 
mobility of workers discour- 
ages incentives to enhance 
human resource development 
by enterprises." it warns. 

One idea - not on the Detroit 
agenda - which runs strongly 
counter to economic orthodoxy 
Js work-sharing. The EU White 
Paper was ambivalent about it, 
praising the Netherlands for 
producing many new jobs, but 
rejecting "a generalised reduc- 
tion in working hours and job- 
sharing at national level". 

Even so, as a preferable 
alternative to widespread 
redundancies for companies In 
short-term trouble, reduced 
working time will remain on 
the broader agenda. 


INTERNATIONAL PRESS REVIEW 



H. J. JOEL GOLD MINING 
COMPANY LIMITED 

Registration Number 85/01995/08 
[Incorporated In the Republic of South Africa) 
t"H j Joer or “the Company') 


Terms of the rights offer 


Further to an announcement dated 22 February 1 994, H. J. Joel is to proceed with a rights 
offer of 97 980 267 new ordinary shares of one cent each to be issued ata price of 290 cents 
per share on the basis of one new ordinary share for every one ordinary share held in 
H. J. Joel at the close of business on Friday, 18 March 1994 (“the offer"}- The proceeds 
of the offer amounting to R284 142 774 (before expenses), will be used to finance the 
company's revised development programme and to restructure its balance sheet 

Johannesburg Consolidated Investment Company, Limited ("JCI”) and South African 
National Life Assurance Company ("SAN LAM") effectively hold 55.16% and 7.12%, 
respectively, of the issued ordinary shares in H. J. Joel. JCI and SANLAM have undertaken to 
take up their respective entitlements in terms of the offer. Accordingly, the entitlements 
being offered to JCI and SANLAM will not be underwritten. Subject to certain conditions 
including, inter alia, the approval of the offer by The Johannesburg S'ock Exchange 
(“the JSE") and the London Stock Exchange ("the LSE"), the balance of :he offer, being 
the difference between the total number of new shares offered and toe sum of JCI 
and SANLAM’s entitlements, will be fully underwritten. 

Application will be made to the JSE for a listing of the (nil paid) renounceable letters of 
allocation and to the LSE for a listing of the new (nil paid) ordinary shares, and In each case, 
for the listing of the new (fully paid) shares to be issued pursuant to the offer. The offer is 
conditional upon such listings being granted and upon registration of the appropriate 
documentation by the Registrars of Companies in South Africa and the United Kingdom. 

A further announcement setting out the salient dates for the offer will be published on 
Thursday, 17 March 1994. 

On behalf of the Board 

KW Maxwell Johannesburg 

WA Naim 14 March 1994 


Sponsoring Brokers: 

i South Africa) 

Davis Borfcum Hare 8 Co. Inc. 

(Registration No. 72/09126/21) 

(Member of The Johannesburg Stock Exchange) 


(United Kingdom) 

Smith New Court Corporate Finance Limited 
(Member of the London Stock Exchange and the 
Securities and Futures Authority) 



France, struck a more upbeat 
note. Mr Christian Blanc, Air 


Madrid 


Spain’s Socialist government 
has found itself in a role It 
wanted badly to avoid - as 
the villain of the piece, or as 
they say in Spanish "the bad 
guy in the film", over 
enlargement of the European 
Union. But by evokfog 
“national interests 0 It has 
ensured a broad front of 
support from the country's 
press. 

Most editorialists gave less 
importance to the wrangle with 
Norway over fishing rights than 
Spain's demands for minority 
blocking votes in the future 
16-member EU. The leading 
Madrid daily El Pais described 
Spain's decision to dig its 
heels in as "unfortunate, but 
right". 

At stake was Spain's ability 
to prevent decisions on crucial 
Issues being imposed on it 
The argument boiled down 
to ‘a struggle to prevent 
Europe’s centre of gravity 
being definitively shifted 
northwards". It recognised the 
quandary this represented for 
Spain's ostensibly pro- 
European leaders. 

"For some negotiators it is 
hard to resist the pressure and 
criticism from friends, partners 
and allies. But in this Instance 
there is no other way for 
Spain, which favours 
enlargement, to defend 
interests of foe first 
magnitude.” 

The right-wing daily ABC 
said the government's firmness 
was backed by all political 
parties. But the government 
Staff was partly to blame for 
the “terrible’ way it negotiated 
Spain's entry eight years ago, 
leaving the country “in many 
sectors defenceless against 
a decision by Brussels." As 
for Norwegian cod. It hoped 
for "a logical outcome which 


would cater for Spain’s 
legitimate demands without 
Imposing intolerable conditions 
on Norway.” 

The conservative Barcelona 
newspaper La VanguanSa 
commented^ “Anyone shocked 
by Spain's attitude should also 
be shocked by the attitude 
of those opposing its 
demands." Norway, it 
conceded, was "perfectly 
entitled to defend Its interests." 
The difference was that the 
Norwegians were on the 
outside trying to get In. 


Paris 


Air France's request for 
FFr20bn (£2-3bn) In state aid, 
and the fact that it accounted 
for half the losses made by 
all the world's airlines last year, 
occupied much space - but 
provoked relatively little 
editorial comment - in the 
French press. 

One exception, however, 
was La Tribune, the business 
dally, which said that some 


would find ft “scandalous that 
the French taxpayer was 
having to dig into his pocket 
again" to save Mr France, and 
Bull the computer company, 
and others “would reckon that 
the bills presented by the new 
bosses of these companies 
were a bit steep, even 
indecent, at a time when 
private companies were having 
to take tire risk of going to the 
markets for new money". 

The distortion of competition 
was too flagrant not to be 
noticed, said La Tribune In 
language that could have 
come - and undoubtedly will 
- out of a British Airways 
press release on the Air France 
aid request 

But the real problem. La 
Tribune said, was that Air 
France and Bull had simply 
always lived sheltered lives, 
protected from the market and 
winds of competition. Their 
recent history was a tale of 
"money k»L energies wasted 
and employees disappointed". 

However, Quest France, 
produced In Bordeaux but with 
the largest circulation In 


France s new boss had a 
record of solving knotty 
problems like the New 
Caledonian crisis in the 1980s, 
and other French companies 
like Citroen had been able to 
pull themselves rapidly 
together. But it said Air 
France's problem was that it 
essentially lacked a business 
culture, and “that will not be 
settled by a cheque". 


Santiago 


Weekend papers were glowing 
In their accounts of the 
presidential handover, a “fiesta 
of democracy” In which 
Eduardo Fret, in the words of 
La Nacfon, “arrived in 
Valparaiso (home to Congress) 
as a common citizen and 
returned to Santiago as 
president". 

For the most part, editors 
forgot their political differences 
and treated the event as 
pageant. This was. after all. 


as La Epoca pointed out, the 
first time in nearly 25 years 
that power had been 
transferred from one 
democratically elected 
president to another. The last 
time was in 1970 when 
Eduardo Frei's father handed 
the presidential sash to 
Salvador AJIende. 

The man responsible for 
breaking that sequence, 
General Augusta Pinochet, 
attended Frei's inauguration 
In his capacity as 
commander-in-chief of the 
armed forces. According to 
S Mercurio. the general’s 
entrance “was received with 
loud and prolonged applause". 
La Epoca noticed that, after 
the ceremony, the general did 
not exit through the front door, 
but left “via the car parks". 

There was much praise for 
outgoing president Patrick) 
Aylwin, though an opinion 
piece in La Tereera thought 
his government had not 
Property administered “what 
ft had received from its 
(military) predecessor”. 

S Mercurio said that - 
discounting financial scandal 
at state copper company 
podelco. and a lax attitude 
towards crime - Ayl win's 
presidency “had been one of 
the most auspicious in the 
country's history". It hoped 
President Frel, a fellow 
Christian Democrat would 
show the same “moderation*. 

La Nad6n was less cautious, 
in a piece headlined "Four 
unforgettable years" It said: 
|Tne historical merit of Ayfwfci 
o that he taught us to live In 
a democracy once again.” 

Now that Chileans were not 
fighting for basic political 
freedoms, they could 
conc sntrata on social 
problems, it said, "Four years 
ago. it was not (ike that." 

Confobuf ions from; David 
White, Madrid; David Buchan, 
Pads; David Pilling, Santiago. 




II 



*• . vj 

* E 

■‘ " i.. i 


in 







'I -T| 
* *? « _ 


y 



FINANCIAL TIMES MONDAY MARCH 14 1P94 


White House j 
fights back 
on Whitewater 

Jurek Martin senses that a new 
strategy is starting to emerge 


NEWS: INTERNATIONAL 


T he outlines of a new 
White Bouse strategy to 
recover from the debili- 
tating Whitewater affair have 
begun to emerge over the last 
few days, according to senior 
officials preferring to speak off 
the record. 

Prominent win be the emer- 
gence of Mrs HUIary Clinton 
back into the public domain, 
following more than a week 
when, controversy about her 
role in the complex tale of fam- 
ily financial and land ffaafing B 
in Arkansas had driven her 
into relative seclusion. 

Two weekly news magazines 
will publish interviews with 
her today in which she con- 
fesses to “misTSteps” in White 
House handling of the affair 
an d an Tmd^ r es ttmn , Krw i on her 
part of media interest in it A 
press conference or TV inter- 
view, with or without her hus- 
band, is also being considered. 

The White House sense is 
that Mrs Clinton's “moral 
authority,” both as a policy 
adviser and role model, has 
been damaged, but is by no 
means beyond repair. Presi- 
dent Bill Clinton’s public 
schedule, which took him to 
Detroit yesterday for today's 
Group of Seven jobs confer- 
ence, will also be stepped up. 

Officials admit he has been 
much distracted over the last 
ten days by Whitewater and 
particularly want him to turn 
bis attention back to several 
pressing foreign policy issues, 
such as relations with. China 
and Russia, Bosnia and. possi- 
bly. putting the new Nato 
“partners hip for peace” with 
eastern Europe on a fester 
track. 

Mr Lloyd Cutler, recruited 
last week as new White House 
legal counsel, has already 
emerged as a leading desig- 
nated spokesman, with the 
mission to assure both public 
and press that no crimes were 
committed and so cover-up 
undertaken. Yesterday, for 
-example,- he appeared on all 
three TV network Sunday 
shows, a rare occurrence. 

His presence, taken together 
with the feet that both the 
Clintons are now consulting 
more widely with senior staff 
who bad been frozen out of the 
internal Whitewater delibera- 
tions, seems to have lifted 
some of the demoralised gloom 
inside the White Bouse that 
touched a nadir when the fed- 
eral grand jury Issued subpoe- 
nas to serum staff. 

Mr Joel Klein, the deputy 
counsel who joined the White 
House last December to fill the 
late Mr Vincent Foster’s shoes, 
is also given much credit for 
ensuring no stone was 
unturned in delivering docu- 
ments to the grand jury. He is 
said to have established an 
excellent working relationship 
with Mr Robert Fiske, the inde- 
pendent counsel, and this has 
contributed to what is hoped to 
be a growing impression in the 
medfa that the White House is 
holding nothing back. 

Mr Cutler said on NBC yes- 
terday his investigations 
included “accusations relating 
to possible Clinton involve- 
ment” in the death of Mr Fos- 
ter. He did not elaborate. 

The media mood itself is cur- 
rently quite fickle. Absent any 
new revelations, several publi- 
cations in the last 48 hours 
have run self-critical articles 
about Whitewater reporting 
overkill Opinion polls depict a 
public still less than consumed 
by the affair. 

A critical element to the 


White House strategy is to get 
political and public focus back 
on the president's domestic 
programmes. Last Friday's 
comfortable passage by the 
House of the 1994-95 budget 
with only ma rgin a l rViflng pg tO 
the administration blueprint 
was a substantial victory for 
the president but received per- 
functory media coverage, in 
sharp contrast to last year's 
budget drama when Mr Clinton 
prevailed by just one vote. 

One option is to try to cut an 
early deal with Congress on 
health care reform, incorporat- 
ing some basic elements of the 
Clinton pum , inrturiing univer- 
sal coverage, but with conces- 
sions to more modest versions 
advanced by both conservative 
Democrats and moderate 
Republicans. 

This approach is being 
pushed by the less ardent sup- 
porters of the Clinton plan and, 
therefore, may encounter resis- 
tance from the First Lady, its 
chief architect The counter 
ar gument is that pubHc . sup- 
port for tiie plan is ebbing and 
failure to cut a deal soon may 
mean loss of any chance to 
pass health care this year. 

The second option Is to try to 
reach early accommodation 
with House Republicans on a 
crime bill comparable to that 
approved by the Senate last , 
year. This would take up a pop- 1 

nlar Issue and WOUld exploit 

some Republican nervousness 1 
about bring seen to hold the i 
legislative programme hostage 
to Whitewater. I 


W hite House tacticians 
sense a tendency an 
the part of the 
Republican Whitewater assault 
troops to overplay their hand. 
Over the weekend several 
prominent Democrats took to 
attacking the record of Senator 
A1 D” Amato of New York, a 
leading Whitewater critic, 
whose own ethical history is 
studded with controversy. 

: However, Anther personnel 
sacrifices from the administra- 
tion are fer from excluded. The 
most likely candidate appears 
to be Mr Webster HnbbeU, now 
the associate attorney general 
and previously Mrs Clinton’s 
law partner in Arkansas. He 
has been accused of . assorted 
ethical improprieties, not all 
related to Whitewater. 

Also vulnerable is Mr Roger 
Altman, deputy treasury secre- 
tary, who initiated meetings 
with White House officials to 
discuss the status of federal 
investigations into the failed 
savings and ban at the heart 
of Whitewater. However, late 
last week, Mr Lloyd Bentsen, 
treasury secretary delivered a 
pep talk to senior treasury 
staff on the imperative of rally- 
ing behind Mr Altman. 

Beneath, this guarded sense 
of recovery lies the fear of ftir- 
ther damaging accusations and 
revelations. As fas as White- 
water itself Is concerned, 
senior officials believe that the 
worst that could happen is that 
Mr and Mrs Cttntan might be 
forced into a rivll settlement, 
such as payment of back taxes. 

This could be politically 
harmful but not fetal to his 
political future, especially if 
the economic recovery contin- 
ues. However, so Balkanised 
bad the White House become 

that extensive knowledge both 
of Whitewater and of the 
events of the last ufoa months, 
sometimes portrayed as a cov- 
er-up, is not widely spread 
even in the upper reaches of 
the executive branch. 


Hopes for global green 
fund at meeting today 


By George Graham 
in Washington 

Delegates from 80 countries are 
meeting In Geneva today in an 
effort to reach agreement on 
setting up a $2bn (£L3bn) 
Global Environment Facility to 
hpfp developing countries deal 
with climate change, water pol- 
lution. threats to biodiversity 
and ozone depletion. 

A pilot GEF has been operat- 
ing since 1991 under the wing 
of the World Bank and the 
United Nations Development 
Programme, but the 1992 Earth 
Summit in Rio de Janeiro 

agreed to reorganise the facil- 
ity and give it new resources. 

Member countries failed, 
however, to reach agreement 
an the rules and structures of 
the new GEF at a meeting in 
Colombia, in December, as del- 
egates from many developing 
nations began to question 
whether the richer industria- 
lised countries were cooling on 
their promise to provide $2bn 
for the fund. 

Mr Mohamed el-Ashry, GEF 
^»hnhtn«m , is Optimistic that 
agreement can be reached in 
Geneva, but he warns that 
tiniB is running out for the 
negotiations. “While all the 
indications point towards 
agreement, Z also feel this 
could be the last opportunity 


for governments to put 
together a GEF.” he said last 
week- 

Other participants agree 
both with his optimism and 
with Us warning that the win* 
dow of opportunity could dose 

Developed countries have 
reaffirmed their commitment 
to a target of $2hn for the facil- 
ity, divided among them 
roughly In line with a formula 
based on their shares in the 
International Development 
Association, the soft loan win- 
dow of the World Bank. 

The US, the largest contribu- 
tor, is offering $43 0m, about 
$20zn less than the XDA for- 
mula would require, and 
France and perhaps Italy have 
threatened to reduce their con- 
tributions in line with the US. 
Australia and Spain will also 
give slightly less than the for- 
mula. 

US officials are unapdogetic, 
however, about what they see 
as a substantial contribution in 
a very difficult budget environ- 
ment. “ft’s a httle unfair for 
others to use us as an excuse,” 
a US Treasury official said. 

Japan, the second largest 
contributor, Is expected to 
come up with its foil share of 
just over $400m share, and the 
UK with its share of over 

$130m. 

With contributions from half 


a dozen developing countries, 
the total would probably come 
to about gunm, which GEF 
officials hope would be enough 
to avert a collapse in negotia- 
. turns, and which could be 
topped up later with money 
from countries not Involved in 
the talks. 

With the issue of money out 
of the way, delegates in 
. Geneva must resolve their 
remaining differences on the 
new GEFs procedures. 

These differences have for 
the most part been over 
whether the GEF should be 
run more along the lines of the 
UN and its spin-offs - an 
approach favoured by the 
developing countries - or like 
the World Bank and the other 
Bretton Woods institutions, as 
the developed countries prefer. 

Perhaps most contentious Is 
whether the council should be 
chaired, tiirp the World Bank, 
by the chief executive, or by 
one of the country representa- 
tives, like the UN. 

Mr el-Ashry behaves that the 
GEF countries have moved 
much closer to an agreement 
since the Colombian meeting; 
“We have gone a long way 
towards putting together some- 
thing that can {tend the test of 
efficiency and effectiveness, 
while at the same Hnx* having 
political acceptability.” 


Mexican 

political 

threat 


By Damian Fraser 
to Mexico Chy 

Mr Manuel Camacho Sobs, the 
Mexican government’s peace 
envoy In the southern state of 
Chiapas, has indicated be 
might run for national office if 
the government did not 
approve democratic reforms 
under discussion for the coun- 
try and failed to comply with 
the recent peace accord for the 
rebels In Chiapas. 

He thereby resisted rising 
pressure from his colleagues 
in the governing party to role 
himself out of the presidential 
race. 

The party’s 65-year hold on 
power could be jeopardised if 
Mr Camacho, a former mayor 
of Mexico City and an ex-for- 
eign minister, were to realise 
his veiled threat to run as an 
opposition candidate in the 
presidential election in 
August 

“If there are no advances in 
democracy and if, instead of 
accord, there Is polarisation 
and if anyone wants to tram- 
ple on my political rights as a 
citizen, then after 1 have ful- 
filled my mission in Chiapas, I 
wfU take the necessary politi- 
cal decision to bring democ- 
racy and unity to Mexico," Mr 
Camacho told reporters. 


Support for 
S American 
free trade area 


By Angus (fester in Brasffla 

Brazil's proposal to create a 
South American free trade 
area has won the backing of 
the country’s three partners in 
Mercosur, the regional com- 
mon market planned to come 
into effect next year. 

Brazil and its partners 
Argentina, Paraguay and Uru- 
guay agreed last week to begin 
negotiating the proposal with 
other countries in the second 
half of this year, after final 
arrangements for Mercosur are 
agreed. 

Mr Jose Arthur Denot 
Medeiros, responsible for Mer- 
cosur at the Brazilian foreign 
ministry, said the Idea for the 
free trade area, first suggested 
last year, is an extension of 
Mercosur and designed to 
increase trade In the continent: 
“This should be seen as a fur- 
ther trade liberalisation move 
to make South America even- 
tually ready for some kind of 
convergency with an expanded 
North American Free Trade 
Agreement" 

The free trade am is expec- 
ted to go into effect over ten 
years from 1995. It will be 
defined to cover “substantially 


all” goods, or at least 80 per 
cent of trade. Unlike Mercosur, 
the ansa would aim to create a 
customs union, although some 
countries may be invited to 
join Mercosur at a later stage. 

Mr Denot Medeiros said the 
proposal was not designed as a 
response or competitor to 
Nafta. Brazil behoves the two 
entities could be complemen- 
tary and that some countries 
could be members of both. 
Chile, expected to be the next 
invited to Join Nafta, would 
also be an important member 
of the South American area, he 
said. 

Brazil's idea has received so 
far only a lukewarm response 
from other South American 
countries. Some were awaiting 
a formal decision ou whether 
to proceed from the four Mer- 
cosur countries. 

There have also been occa- 
sionally r*i nfurin g signals from 
Argentina on its commitment 
to Mercosur, after disagree- 
ment with Brazil over the rate 
of common external tariffs to 
be applied. Tariffs on about 85 
per cent of goods have already 
been agreed and the two coun- 
tries have until June to agree 
tariffs an the remainder. 






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Israel moves to US crosses swords with I Nigerian 
ban extremist China over human rights 

By Tony Wetter in Beftng after sometimes acrimonious im pro vements in Tibet, permis- 

T • V ___ encounters with both Mr Li Sion for the International Com- 

I PlinCll fYV*|\llV%CJ Mr Warren Christopher, US and Mr Qian Qichen, foreign mittee of the Red Cross to visit 
\_s ff JL \pU||) 3 secretary of stale, has told Chi- minister. “I emphasised to Chinese prisons, and a less 

JT nese offirfais that time is run- China that time is of the rigid attitude to emigration. 


By JuSan Qzanne in Jerusalem 

Two extremist anti-Arab 
Jewish groups were banned 
and branded as terrorist by 
Israel yesterday, in a move 
designed to bring the Palestine 
Liberation Organisation back 
to the suspended Israeli- 
Palestinian peace talks. 

The concession to the PLO 
came after Mr Yassir Arafat, 
FLO chairman, said a package 
of guarantees allowing the Pal- 
estinians to return to the peace 
negotiations may be reached at 
today's meeting in Vladivostok 
between Mr Andrei Kozyrev, 
Russian foreign minister, and 
Mr Warren Christopher, US 
secretary of state. The two 
countries are cosponsors of 
the Middle East peace process. 

PLO officials said yesterday 
under the agreement Russia 
and the US would back a 
United Nations Security Coun- 
cil resolution condemning last 
month’s Hebron mosque mas- 
sacre and providing for the 
deployment of an international 
force in the territories to help 
protect Palestinian lives. Israel 
would promise to speed up the 
peace talks on implementing 
Pales tinian self-rule and would 
complete a military with- 
drawal from the Gaza Strip 
and West Bank area of Jericho 
by April 13. hi return the PLO 
would resume talks in Wash- 
ington and Paris next Monday. 

The outlawing of Kehane 


Lives and Kach, two militant 
orthodox Jewish groups which 
glorify violence against Pales- 
tinians in the Israeli occupied 
territories, has been one of the 
PLO demands for returning to 
talks. Both groups, which have 
only a handful of activists, are 
followers of Rabbi Meir 
Kehane, a slain Jewish racist 
who believed violence against 
Arabs sanctify Jews, reveal 
God’s glory and bring the cran- 
ing of the Messiah closer. 

Knr-h has been banned from 
parliamentary politics since 
1988 because of its racist elec- 
toral platform which 
demanded prison terms for 
Arabs and Jews who had sex- 
ual relations. Mr Baruch Gold- 
stein, the Jewish settler who 
massacred 30 Palestinians in a 
Hebron Mosque last month, 
was a member of Kact| 

Mr Michael Ben-Yair, attor- 
ney general, compared the two 
organisations with the Islamic 
extremist Hamas movement 
which rejects peace talks and 
advocates violence against 
Jews. Mr Ben-Yair said the two 
groups wanted to create a Jew- 
ish theocracy in the biblical 
land of Israel and force the 2m 
Palestinians living in the terri- 
tories to leave. 

The cabinet unanim ously 
endorsed the ban after reports 
from the police and internal 
security that members of tire 
two organisations were 
involved in murders of Arabs 


Clash in Malaysia 
over state poll call 


By Kleran Cooke at Kota 
Kinabalu, Sabah 

A crisis was unfolding in the 
eastern Malaysian state of 
Sabah last night, as local lead- 
ers and the state governor 
clashed over whether the state 
assembly could be dissolved 
and new elections held. 

In a bitter state election less 
than a month ago. the locally 
based Parti Bersatu Sabah 
(PBS), led by Mr Joseph Pairin 
Kltingan, Sabah's chief minis- 
ter, narrowly defeated Malay- 
sia's ruling National Front 
coalition led by Dr Mahathir 
M ohamad, the prime minister. 

At the weekend, three PBS 
deputies to Sabah’s state 
assembly announced they were 
joining the National Front 

Mr Pairin said he had no 
alternative hut to dissolve the 


assembly and call fresh elec- 
tions. The chief minister said 
he had followed the constitu- 
tion in obtaining the Sabah 
governor’s signature to author- 
ise the dissolution. 

At a news conference last 
night, Mr Pairin distributed 
what he said were copies of the 
signed document But, on 
national news broadcasts con- 
trolled by the federal govern- 
ment, the governor denied 
signing and accused Mr Pairin 
of “mischievous an d unbecom- 
ing behaviour." 

Dr Mahathir has made no 
secret of his antagonism 
towards the PBS and to Mr 
Pairin in particular. After the 
PBS election victory, Mr Pairin 
was forced to wait for 38 hours 
outside the gates of the Sabah 
governor’s house before being 
sworn in as chief minister. 


By Tony Wetter in Be$ng 

Mr Warren Christopher, US 
secretary of state, has told Chi- 
nese affWak that time is run- 
ning out for China to improve 
Its human rights behaviour or 
risk losing its preferential 
trade status In the US. 

IBs warning came in a week- 
end of bruising exchanges over 
human rights. The wrangle 
threatens a trading relation- 
ship worth more than $40bn 
(£26-7bn) last year, heavily in 
China's favoar, 

Chinese leaders dropped dip- 
lomatic niceties to tell Mr 
Christopher to mind his own 
business on human rights. 

Premier li Peng said it was 
“futile" to apply pressure over 
human rights. “China will 
never accept the US human 
rights concept," he declared. 

Mr Christopher's mission 
was in danger of unxaveDjng 


','L 'V-jt?: 

• ‘-'t ■ 



after sometimes acrimonious 
encounters with both Mr LI 
and Mr Qian QLchen, foreign 
minister. T emphasised to 
China that time is of the 
essence... as we move into the 
mart critical two mo nth 8 before 
1 have to make my recommen- 
datio n to President Clinton" an 
the renewal of Most Favoured 
Nation trading status, Mr 
Christopher told reporters. 

Mr Li warned Mr Christo- 
pher that the US “win lose its 
share of the bis Chjnreu* mar- 
ket" if it withdraws China's 
tr ading privileges. 

The arrest of prominent dis- 
sidents before Mr Christopher 
arrived in Beijing cast a pan 
over his mission. Detention at 
the weekend of several foreign 
journalists - who were trying 
to contact itiw^ynts — further 
clouded the atmosphere. 

The US wants the release of 
jailed Hiwriricmfa hnmm rights 


i m p rw wnmls in Tibet, pwmls- 

ai<nt for the International Com- 
mittee of the Red Cross to visit 
fihinegft prisons, and a less 
rigid attitude to emigration. 

China appeared ready late 
last year to respond to US con- 
cerns, but fears of civil unrest 
over rising prices and signs 
that dissidents were becoming 
more active appear to have 
prompted a fresh crackdown. 

The US business community 
In Beijing, meanwhile, was 
openly critical of Washington's 
approach to China at an Amer- 
ican Chamber of Commerce 
breakfest meeting yesterday 

“Choices facing our govern- 
ment are historic - either we 
engage nhina as a partner in 
managing regional security, 
economic growth and eco- 
nomic- stability or we become 
adversaries,” said the represen- 
tative In Beijing of AT&T, the 
telecoms group. 


Fears prompt price curbs 


Christopher Time running out 


Lawrence’s 
victory 
lifts Labor 

By Nikki Taith Sydney 

Ms Carmen Lawrence, the 
former premier of Western 
Australia who is tipped for 
hi gh office in the Australian 
Labor party, is due in Can- 
berra today having won a deci- 
sive victory in a Fremantle 
by-election at the weekend. 

Ms Lawrence received 59 per 
cent of the votes, a swing of 1 
per cent towards the ALP. The 
result is seen as a personal tri- 
umph for Ms Lawrence given 
the unpopularity of the Labor 
party in Western Australia. 

The Fremantle seat was pre- 
viously held by Mr John Daw- 
kins. former federal treasurer, 
who has left politics. 

. Ms Lawrence is likely to be 
given ministerial responsibili- 
ties almost immediately. 


China, fearful of unrest caused 
by sharp increases In the cost 
of living, has taken a step 
back from its price reforms by 
authorising price controls on 
20 basic items, writes Tony 
Walker in Beijing. 

The official Economic Daily 
yesterday published a State 
Council (cabinet) decree en- 
abling local authorities to 
“make appropriate interfer- 
ence*’ In the market. Items 
cove r e d include wheat flour, 
rice, edible oil coal and foes 
for schools and hospitals. 
China had claimed it had dere- 


gulated markets for all but a 
handful of staple items. 

The cabinet decision reflects 
concern over the risks posed to 
public order by sharp rises in 
the cost of firing. Inflation in 
China's 85 largest cities 
reached 23JJ per cent in Janu- 
ary compared with the same 
mouth last year. 

China has vowed to bring 
inflation below 10 per cent 
over the next year or so but is 
having difficulty gaiwrtwg an 
over-heating economy that 
grew by more than 13 per cent 
last year. 


Japanese drug price 
cuts to average 6.6% 


By Paul Abrahams in Tokyo 

Pharmaceutical price cuts 
announced late last week by 
Japan’s ministry of health and 
welfare will reduce prices by 
6£ per cent on average. 

The cuts are based on a com- 
plicated formula related to the 
level of discounts offered by 
manufacturers to wholesalers. 
They are due to be imple- 
mented on April 1, further 
slowing growth of Japan's pre- 
scription dn^js market 

Sankyo, the country's second 
largest drugs group, was 
among those worst hit, suffer- 
ing an average 8.1 per cent 
reduction on its eight top sell- 
ing products, according to bro- 
kers )>.hman Brothers. Zantac, 
the world’s top-selling product 
which Sankyo markets for 
Glaxo of the UK, suffered a 103 


per cent price reduction. 

Sankyo was particularly hit 
because the ministry intro- 
duced a specie! 1Z2 per cent 
price cut for Mevalothx, a cho- 
lesterol-lowering drug which is 
Japan's biggest-seUing medi- 
cine, With estimated annual 
sales last year of Y99.6bn 
(£63Qm). Banyu, the subsidiary 
of Merck, the US groups was 
also the victim of a 122 per 
emit special price cut on Llpo- 
vas, its cholesterol treatment 

Ike special cuts have upset 
the industry because they are 
targeted at particularly suc- 
cessful medicines, and are not 
based on the usual formula. 
Interferons, used to treat hepa- 
titis and cancer, were also sub- 
ject to special reductions. Sales 
of cholesterol-lowering drugs 
increased more than 20 per 
cent last year in Japan. 


By MfehaeJ Holman, 

■ r~n if in r 

Axnca uonor 

Nigeria’s new economic 
policies "are definitely going to 
fan" , Mr Kim Jaycox, World 
Bank vicepresident for Africa, 
warned at the weekend. 

In the most forthright public 
rrt t i ctem by a World Bank offi- 
cial since Nigeria’s mi l i t ar y 
go v e rn ment revalued the cur- 
rency, the naira, in last Janu- 
ary’s budget, Mr Jaycox said: 
“There Is just no way they are 
going to succeed, and I t hin k 
that they have got to he 
reversed.” 

Hie was speaking at a Wash- 
ington news conference to 
mark the publication of the 
bank's report Adjustment in 
Africa. 

“These are not acceptable 
ways of managing an econ- 
omy," Mr Jaycox said. “They 
have already tried this fa fixed 
exchange rate] in Nigeria 
many timaa it has all come to 
major failure, and so it sur- 
prises us that they would be 
doing tHi« again." 

Nigeria was one of six coun- 
tries credited in the report 
with a "large improvement” in 
macroeconomic policies 
between 1987 and 1991- 

But the impetus that marked 
the reform programme fell 
away towards the end of the 
1980s and, over the last two 
years, many of the benefits of 
reform have been lost 

The single greatest blow was 
the 1994 budget General Sani 
Ahachfl Nigeria's new military 
leader, AthI the grehnng p rate 
of the naira to the US dollar at 
nearly twice the market rate. 

Hopes for tire renewal of a 
lapsed agreement with the 
International Monetary Fond 
have been dashed, end resched- 
uling of Nigeria’s external debt 
is unlikely to take place this 
year. 

Arrears on the f23bn 
(£l8.7bn) drift exceed $6bn. 


Algerian raid 
frees militants 

Algerian security forces aft the 
weekend sought at least 900 
prisoners, mostly felagpn mili- 
tants, freed by a 150-strong 
commando in the most daring 
armed operation in the coun- 
try's two years of internal vio- 
lence, writes francis GinUs. 

The raid on the fortified 
Tazult prison, 400km south- 
east of Algiers, supports evi- 
dence that much of Algeria is 
beyond the control of the 
armed tones. 


<■ » 


CONFERENCES & EXHIBITIONS 


MARCH 17 

RSA INQUIRY TOMORROW’S 
COMPANY NATIONAL 
CONFERENCE 

A conference which examines the 
challenges facing tomomrw'B company. 
Christopher Haskins, Quurman. Nonbera 
Poods; /oho Neill, Croup Chief 
Bxecnlive, Unipart; Robin Buchanan, 
Bain A Company; Pmc Leith, and a 

di Sfim ntMiwi w-»m «T mt™ 


Details front: Gay Webb 
TbL 0532 832600 ext 4328 
Pax: 0532 833233 

VIP TRAIN London to Leeds LEEDS 

MARCH 21-22 
BUSINESS PROCESS RE- 
ENGINEERING SEMINARS & 
WORKSHOPS 

Continuing a successful series of seminaci 
for executives end senior managers 
charged with designing and implementing 
BPR initiatives. Established blue chip 
client list. Presented by a leading US 
practitioner. u nr proven "how-lo-do-il - 
implementation guide is illustrated 
throughout with case studies and 
workshops- Coarse book also available. 
Repeated April 21-22 
Contact: Richard Parris, Vertical Systems 
Intercede Lid Tct +4+455-250266(24 tail 
far +44-155-890R21 

UNIVERSITY OF WARWICK 

MARCH 2 3 

DOTHTOTIATING CUSTOMER 
PROPOSITION (DCP) 

CBI/Develin & Partners conference, 
chaired by Jobe Humphry*, uses case 
studies to show the roles of Positioning 
and Capability In developing an 
organisation's DCP. 100 plus delegates 
already boohed. 

Oantacc Oeomna Kingaby.CBl Cbef o en u es 
Ttt 07! 37V 7400 Fax: 071 4973646 
Julia Robins. Develln & Partners 
Teh 071 917 99S8 

LONDON 

MARCH23-24 

BUSINESS RE-ENGINEERING: 
MANAGING RADICAL CHANGE 
This two-day international conference 
e xp l o res bow to addresi the otganisuianaf 
and human challenges of business re- 

ffl g i mu i iig |rylnH mg frank diSCQffilOll Of 

the reasons why so many nritiatives fail and 
e x pl ores practical methods for achieving 
critical buy-in and support for redesigned 
processes and now wmttng practices. 
Conmct ■ Business Intelligence 
Teh 081 544 1(430 Fax; 051 544 903) 

LONDON 

MARCH 23 & 24 
VENEZUELA & COLOMBIA 
THE CARIBBEAN BASIN - 
INTEGRATION, INVESTMENT & 
TRADE 

Linked events on significant regions for 
direct investment and trade and with 


Mercs util, Banco Ganadero, Crown 
Agents. Canning Home and the Chribbr en 

riwwril for Europe. 

DcttBs fttme Mete Lee, Otytomm Ltd 
Tel: 0223 <66744 fine 0225 442W3 

LONDON 


MARCH 23-24 

EASTON EUROPESBCONOMC 
RECOVERY 6 OS' CONTINUING 
DGCUfE AND OPPORIUMRES ft 
CHALLENGES MTFE REGIONS 
ENERGY NDUSTRES 
PlanEccn. DRl/McGraw-HJU conferences 
with Dr. Lcuelc Bole crawler. Former 
Polish Finance Minster, and Western Oil 
Industry Reps. Contact Patricia Matthews, 
DRI an +444H-54S-6212 

LONDON 

MARCH 24 

WORKSHOP ON PORTUGAL: 
EEC FUNDS AND PUBLIC 
AND UTILITIES CONTRACTS 

An important event for any one interest ed 
in, ot already investing in Portugal. Topics 
will include: opportunities for trade and 
investment and bow UK companies cooid 
do better in Portugal, how contracts are 
awarded, who are winning am tracts, and 
EC structural foods available to inveMnoL 
Contact: Amanda DagUsh, The Contracts 
and Procnm a ncnt Research Unk 
Teh 021 414 3221 Far 021 414 3217 
BIRMINGHAM 

MARCH 24 

INTELLECTUAL PROPERTY 
ISSUES IN COLLABORATIVE 
RESEARCH & DEVELOPMENT 
Sapioring the challenge or setting op A 
managing j AHOCCSSful R&D 
Speakers foam Patent Office. EG Office 
of Science A Technology. Universities, 
Industry & specialist lawyers. Update on 
new "wiwnl £ European potictea. 
INTERFORUM 
TVfc +44 (01 71 386 9322 
Fate +44(0)71 3818914 

LONDON 

MARCH OT 

LAUNCH OF THE GREEN 
HEALTH CHECK MANUAL 
Morning event id launch Green Health 
Check Manual, developed by Weal 
London TEC and Touche Ross to enable 
businesses to independently conduct an 
environmental audit. Speakers include 
World Wildlife Fund. Touche Ross and 
companies who bsve benefited from 
environmental audits. Contact: Nicbola 
Wynne at West London TEC on: 

Tel: (HI 814 3250 Fix: 081 570 9969 

LONDON 

MARCH 31 
PRIVATELY FUNDED 
INFRASTRUCTURE . THE 
PRACTICAL IMPLICATIONS FOR 
GOVERNMB4T AND INDUSTRY 
This conference will tbc I—"*— 

connected with privately financed 
infrastructure projects, looking at the 
international legal and financial 
perspectives and the views of the cUeru, 
operator and the Government 
Contact: Amanda Daglish , CP HU. 
University of Birmingham B15 2TT 
Td; 021 4 14 3221 Pmc tel 414 3217 



APRIL 5 -MAY 23 
FT-CTTY COURSE 
Tbc Course, arranged by the Financial 
Times and the City University Business 
School, b held on Monday afternoons far 
eight weeks. It fat designed to explain how 
the various banking and financial 
Institutions in the CSiy of London operate. 
Enquiries: Financial Timra 
Teh 081-673 9000 Fax:081-6731335 

LONDON 


APRIL 13 

BUSINESS PROCESS 
MANAGEMENT 

This radical approach alms to improve the 
operational competence of a business, 
rather dun its portfolio of products and 
activities. Find out bow business process 
management can help yon gain 
competitive advantage hum this course. 
Contact: E vacua Morris, 

GMA Mastctamses 

Teton 9179244 Fax: 071 5806991 

LONDON 


APRIL 13 

POLISH ELECTRIC POWER 
INDUSTRY CONFERENCE 
Polish Power Sector undergoing a 
dramatic oausfuuuotiaa has opened up to 
foreign involvement. A unique event to 
discuss tire latest devel o pm ents and assess 
buriae» opportunities in Poland. Speakers 
Inchde Mixdster Monrarski and 

representatives of key Polish enterprises. 
Contact: Jngoda Bak 081-563 7187 
Polish Enterprise Ce nt re 

LONDON 


APRIL 14 

BUSINESS PROCESS 
REENGINEERING 
ONE DAY sa*NAR AND WORKSHOP 
The seminar provides a comprehensive 
BPR implementation strategy (Theory, 
case smdy. Workshop). Uniquely, we use 
proven methodologies and computer 
modelling. The speakers from OSC. 
William Lynn Associates and Origin 
cover all aspects of a successful 
implementation Repeated May IX 
Contact Sharon Hayca. OSC Led. 

Tefc 071 -329-3377 Fate 071-329-1508 
_ LONDON 


APHIL14 

FORECASTING, PLANNING 
AND BUDGETING 
Business forecasting, planning and 
badgering is an area in which personal 
c om put er s may be used to great effect in 
both large and small firms. This coarse 
can hdp yuo improve your PC techniques 
and so enhance your fore easting 

effectiveness. 

Contact: Evanna Moots. 

C3MA MartctCOuraes 

TeL- 071 917 9244 Fa* 071 MU 6991 


APRIL 14 & 15 

OPPORTUNITIES IN TURKEY 

A two day seminar for companies with an 
interest in the Tbrtasfa market wishing to 
establish direct contacts between 
companies fat the ssmo or comple m entary 
sectors. Speakers wOl inefudo Ministers 
and both commies' An dwsra doa. as well 
asoauwefficUs. 

Contact: Beth Rayney, LCQ 
Tel: 071 248 4444 Pax: 071 4S9 0391 

LONDON 

APRIL 14-15 

FINANCING AND DEVELOPING 
PRIVATE PROJECTS FOR THE 
HEALTH SERVICE 

Examining the opportunities, risks and 
rewards or wotting with the NHS under 
the Governments private finance 
initiative- Hjflhligj hiiiig BfflpiHal and 
operational issues. Speakers from tire 
Government, Treasury. NHS, Corporate 
Finance and Private Sectot. 

Contact IOOM on 0226 299072 (nd + fax) 
LONDON 

APRIL 14-15 

THEORY OF CONSTRAINTS: 
TOC M ACCOUtmNG - 
THROUGHPUT AND BEYOND 
'TOC w w ifi pim throughput In 

financial management and production 
TOC concentrates on I be flow of 
production and focuses on outputs, 
challenging basic assumptions about the 
use nf traditional cost accounting 

Contact foramn Morris, 

QMA Ma s re t co m a c s 

Tefc 071 9179244 Fan 071 580 6991 

MANCHESTER 

APRIL 16-17 

EMPOWERING THE HUMAN 
RESOURCE FUNCTION TO 
DRIVE CHANGE 

An intensive conference, using 14 
practical esse studies, to establish bow to 
integrate Human Resource planning with 
yranr line m anag ement- Empowering your 
HR function will be key to drive future 
business success. 

CotUaa: Tim Clnk, tBC Technical Services 
Tefc 071 637 4?83 Hoc 071 631 3214 

LONDON 

APRIL 18 

INTRODUCTION TO 
REGULATION 

Thb coarse is designed Far those new to 
regulated industries; looking ar fe gni and 
economic aspects of regulation, lmues: 
price control techniques: enforcement; 
rtgnlamy rule-making; standard setting 
and quality control; managing ihe 
regnhnom; due process in regulation; the 
politics of regulatory mstiintioas. 

Contacc London School of Bccraa ni cs 
Tefc 071 9SS 7227/7015 Fax: 071 955 767 

LONDON 


APRIL 18-20 

LAFFERTYS INTERNATIONAL 
ALLFINANZ CONVENTION 
A lHhan a is rapidly bec o min g more than 
Retail Hsu king + Life Insurance, ft now 
includes Investment Funds + General 
Insurance. Increasingly banka, insnrera 
and fund managers seek to supply AU. 
FINANCIAL SERVICES. Hence, this 
convention of throe inter-related 
conference*: Contact Elaine Fitisnums, 
LaOefly Conferences 

Tetf+aSJ-l)67I«G2 Rtr{+3S3-l>fi71 35W 
LONDON 


APRIL 19 
STRIVING FOR 
BUSINESS EXCELLENCE 
Demonstrable evidence that Total Quality 
Management (TQM; pays. Practical 
e xamp les from the 1993 European Quality 
Award winners. Mi Hikes Europe and 
D2D. Other speakers include Lord 
Alexander (NatWest Bank). Bill 
CocUmru (Tost Office) and John King 
(European Foundation for Quality 
Management). 

Contact: Laron Macintosh: 071-714 4479 

LONDON 


APRIL 19-20 

BUSINESS PERFORMANCE 
MEASUREMENT rTRANSBDRMING 
CORPORATE PERFORMANCE BY 
MEASURING AND MANAGING THE 
DRIVERS OF FUTURE PROFITABILITY 
A uiif.ll two-day iutei iiuflotBl tratlic pence on 
bow and why org ani sations are broa d e nin g 

it»v pat f ru irnn a* h mhium i h ii S y s PE UB to ‘ 

Include drivers of furore value such as 
tpaSty, customer service and human capital. 
(VwW T B mi— Intelligence 
TeL- 081-544 1830 Fax:061-5449020 

LONDON 


APRIL 26 

1994100 ANNUAL 
CONVENTION 

The El Uon Michael Howard QC MP. 
Gordon and Audrey Baxter. Michael 
Quintan. Str Philip Harris and John Neill 
are amongst the line-up of speakers who 
will address the theme of ’Business and 
People. Thriving on Change* at the Royal 
Albert HalL 

Eatpriries: Director ConfctmuBt 
0717300022 ' 

LONDON 


APRIL 28 & 29 

ASIAN CAPITAL MARKETS 

This timely conference will review 

investments in hey matters in the region. 
The practical issues relating to 
MirtMiii n itiL tax and risfc n utn ^ M imii will 
also be addressed: 

Enquiries Financial Times 

Tct 081-6739000 Fax: 081-673 1335 


MAY 4-5 

KNOW YOUR COMPETITORS 

Competitor Intelligence & Analysis Inc. 
Bench ma r k i n g. A practical two day 
eaninii/wotfcsbap from the UK's No 1 
specialists. Practical case exercises, 
successful case studies. Guest speaker 
who is heed of a major company's 
Intelligence onh. 

Contact: Patricia Donnord, 

EMP Service- 

TeL 071-487 5665 Fane QTL-935 1640 
LONDON 

MAY 11 
RAO-FREIGHT 
AFTER OPBI ACCESS - 
MAKING PRIVATISATION WORK 
A conference examining open access to 
UK railways and implications for new 
entrants following privatisation of 
Trahdoad Freight, RfD and Freighttfarer. 
Speaker! include Rt Krai John MacGregor 
MP, Secretary of State for Transport. 
Organised by The Water fr ont Partner s hip 
& Tbs Rail Freight Group. 

«>»-» »-jn fy 1 - WatrrTTTvV 
Tefc 071 730 0430 Fax: 071 730M<S0 

LONDON 

MAY 17-18 

WORLD CLASS NTONAT10NAL 
WORKSHOPS: 

WORLD CLASS PURCHASING . 
This 2-day workshop ehallmgea some of 
the fundamental purchasing concepts 
pro v idi ng pi t tfi f u ii prabbans in 
with suppliers. Have your suppliers 
achieve the necessary quality, delivery 
and cost targets you require. (Reft 
WCM5) 

Contact: Vicki Welham, World Class 

lim u r m ln uj J Is! 

Tel: 0705 268133 FacOTDff 268160 

HAMPSHIRE 

MA Y 17-18 

FOUR CONCURRENT 
SOFTWARE DEVELOPMENT 
EVENTS 

Object Development Experiences; Object- 
Orieoted Databases; Effective Teat 
Uinagemont; PngruDDc Mu^gpuiciit 
and Project Support Offices. Software 
developers present foading-odge tools; 
industrial asms i Vunjiv. cose mH 

experiences. Valuable for systems 
developers hi 15 departments. 

Co met Unicorn 

Tefc 0893 256484 Fte 0895 813095 ' 

: LONDON 

JUNE6&7 _ 

WORLD GOLD 

This important conference, which has been 
timed to coincide with the te rcente na ry 
celebrations of foe Bank of England, wffl 
feature central bank presentations. * 
review of international mining 
developments and a major form on. the 
ink of the marirets in the arid- I990 sl - 
Bwij rf rMW. Financial Times 
Tefc Ofil-673 9000 Fee 081-673 1335 

LONDON 


JUNE 7-9 

BUSINESS PERFORMANCE 
AND EFFECTIVE USE OF LT. 
Investing in IT 10 , meet the seeds of 
business; re-en g i n e eri ng holiness 
processes to become more customer 
oriented; successfully managing the 
ealuunl impact ol change. Leading 
international speakers describe case 
sanfics and strateg i cs. 

I S emfaim* 

Tel: 0895 256484 Ram 08915 813095 

LONDON 

JUNE 28-30 

PARALLEL PROCESSING: 

REAL APPLICATIONS FROM 
INDUSTRY AND COMMERCE 
Un ique i ronferen oe foacriag exdasrycly 

of parallel comparing. Top level 

of commcntiaL embedded aadtafasSri®! 
appl ica tion s and eiptain bow to harness 
the power or parallel munpraieg in the 
corporate context 
Contact: g a m fr f w 

Tel: 0893 256434 fax 0695 813095 

LONDON 

JULY 3-7 

THE LEAS1NGUFE 
EUROPEAN LEASING FORUM 

A conference examining opp or tun i ties in 
the European leasing iufcnfcy. Speakers 
Include Transport Minister Roger 
Freeman & representative* from the 
European Commission and European 
financial Institutions. Covets public 
projects ft private finance, leasing is 
Eastern Europe, risk g nuaannBnt . cSaot 


needs ft funding through securittaalioo- 
Organlsnd by Leasing Life and The 


Organised by Leas 
Watofront Pantnentah 
Ortas ism Drib, The 1 
Tefc 071 7300430 Fta 


: 071 7300460 
LONDON 




EUROPE'S LARGEST VOICE EVENT. 
A. three day ( tf yMttfMH i and 

conference providing the latest 
information on new communication 
fciiytaw And 

The workshop^ focused co n fe rence will 
brans a special track on Can Centres. 
Coarser: Simon Cooper, Advetrstsr 
ferns Tefc *44 10) 244 379999 
244370011 LONDON 


INTERNATIONAL 


MARCH 21 -24 
EUROPEAN BANKING FORUM 
1994 

Two day international conference an 
banking and finance u which Henning 
Christopberaen of EC Jiueqnei de 
Larosfehc of EBRD, Richard Eib at IMF, 




MARCH 34 & 25 
MEDIA IN EUROPE TOWARDS 
THE MILLENNIUM 
A strategic conference held at s critical 
time In the development of the Euro pcro 
nwtfia industry to examine the robs Of the 
ragn|afcti> hardware supplier, distributor, 
media owner, adve rti s er and adve rt ising 
O jpj tcy in the media landscape as the 21st 
oenlmy approaches. 

Contact CM» de BraseBes 
Tefc 322. 77L9890 
fax: 322-770 jS671 

BRUSSELS 


MARCH 30 & 31 
CENTRAL & EASTERN 
EUROPEAN POWER 
INDUSTRY FORUM 

The latest rad fu ture developments la the 
e le c tr ic it y g enerating industry in Central 
end Eastern Europe, a forum on 
ownership Issues, creative project 
financing, competition and cooperation 
epportunities. High kveL 
Contact Perm Well CAE 
Ttofc 31-30-650963 fax: 31-30-650915 
PRAGUE 


APRIL 11 & 12 
SEifl CONSORTIA SUMMIT 
Summit meeting of 15 worldwide 
electronics Industry consortia indodlng 
JESS1 and SEMATECH la publicly 
outline future RAD plana and 
global cooperation on semiconductor 
technology. 

To register for the General Assembly, 
calk In Bnmdi, 

Tel: +32-2-736-2058 fare +32-2-734-0622 
. GENEVA 


APRIL 26 & 27 
ASIAN BJECTRTCrrr - 

The third FT Aslan power summit wifi 
review electricity developments and 
requirements in the Asia-Pacific region. 
Restructuring, Joint venture*, project 
financing and bus in ess opportunities mil 
tbo beefixesased. 

Enqui ries: P haj j Times 

Td: 081-673 9000 Poe 081-673 1335 

HONGKONG 

JUNE 13-1 4 

THE EUROPEAN 

FOOD AND DRINK INDUSTRY 

CONFERENCE 

The food and drink industry is going 
through difficult times; manufacturers and 
distribuRMB are being squeezed as prices 
aud m a rgin s ^ forced downwards. This 
caafereacs presents actions and sofanfems; 
h ow m s trike a balance between industry 
a/iutj lints sad future business 
develop m e n t. 

Contact: Anne /ones. 




i V! 


Tefc +422551480-4 
Fan +422538852 Of 333032 


Ttafc+322516 19 11 fax: +32 2 5 13 71 06 


















Set t. 




iirlss 


nee 

».(V’ : ! 


Vhrfc 

frtv' is? 


Major pressed to delay radical legislation 


By Phfiip Stephens* 

PUttieai Editor 

A powerful group of Mr John Major's 
cabinet colleagues is pressing the 
prime minister to shelve plans for fur- 
ther radical legislation. 

The move looks set to delay indefi- 
nitely privatisation, of the Post Office 
and to defer for a t least a year other 
controversial reforms covering dere- 
gulation, privatisation and local gov- 
ernment reorganisation. 

Mr Major is being told by the 
socafled "consolidators’’ in his cabi- 
net to eschew Thatcherite radicalism 


in favour of entrenching past shake- 
ups of the education, health and other 
public services. 

The ministers believe that with the 
government already committed to dif- 
ficult legislation nert year on social 
security benefits, pensions and 
Europe, it cannot afford to take 
unnecessary risks. 

That view runs counter to the 
Instincts of Mr Kenneth Clarke, chan- 
cellar of the exchequer, who wants 
the government to maintain the 
momentum of change. Mr Clarke is 
bached by the handful of right-wing 
ministers in the cabinet. 


Power prices 
forced down 
by competition 


The division promises to cause a 
protracted struggle over the next few 
month s as the cabinet frames the leg- 
islative programme for the parliamen- 
tary session starting in aut umn 
But after a series of unexpected 
political rows, defeats in the House of 
Lords ar>d embarrassing U- turns dur- 
ing the past few months there is a 
Strang mood in favour of retrench- 
ment on the Tory back benches. 

The consolidators’ group, which 
includes Mr Douglas Hind, the foreign 
secretary, Lord Wakeham, the leader 
of the House of Lords, and Mr Richard 
Ryder, the chief whip, see as their 




first target the proposed break-up of 
the Post Office. 

Several have warned that privatisa- 
tion of the Royal Mail would invite 
strong opposition both in the Lords 
and among Tory MPs because of the 
potentially damaging im ptieaHnrw for 
rural services and post offices. With 
the support of other ministers such as 
Mr Tony Newton, leader of the House 
of Commons, Mr Michael Howard, 
home secretary, and Mr William 
Waldegrave, pubhc services minister, 
they are also resisting Treasury calls 
for an “omnibus” privatisation mil 

The Treasury wants to streamline 


By Michael Smith 

Prices in the electricity pool, 
tbe wholesale market for 
power in England and Wales, 
have hit record lows as 
National Power and PowerGen, 
the two largest generators, 
engage in a fierce battle for 
market share. 

The price fells are an unex- 
pected bonus for several thou- 
sand industrial power users. 
Including Imperial Chemical 
Industries, whose bills are 
related directly to pool prices 
and who have long complained 
about ini'Tpqg Pc 

Domestic consumers, whose 
supplies are protected by 
long-term hedging contracts, 
will not benefit uniaas prices 
stay at such low levels for 
some months, which is 
unlikely. The biggest loser is 
Nuclear Electric which earns 
more of its income through 
selling to the pool than the two 
largest generators. 

In the pool system, genera- 
tors bid to the National Grid a 
series of prices for electricity 
for each of the power stations 
they operate. The National 
Grid then chooses which 
plants will supply electricity 
the next day. Electricity from 
the pool is bought by regional 
elec tr ic i ty companies and large 
energy users. 

Ironically, the record low 
prices come at the end of a 
financial year in which Profes- 


sor Stephen LtttlechiZd, indus- 
try regulator, threatened to 
refer National Power and 
PowerGen to the Monopolies 
and Mergers Commission after 
earlier price rises. 

Last month he decided 
against a referral after a deal 
with National Power and 
PowerGen in winch the genera- 
tors agreed to keep prices for 
electricity bought Cram the 
pool below 2.4p/Kwh on aver- 
age in the next two years. 

This suggests that the main 
component of prices, the 
so-called system marginal price 
(SMP), should be kip at most 
The SMP is the bid price of 
electricity from the most 
expensive power station 
n eeded to meet an demands. 

Last weekend, March 5 and 
6, SMP was l.lp, the lowest 
daily averages since the pool 
was set up in Mar ch 1990. 

The average for all days this 
month was L5p, compared 
with a peak 2J5p last May, SLSp 
in January and 2.1p in Fehra- ; 
ary. If the March trend were to 
continue it would he the lowest 
for any month since December 
1990 when the first power com- 
panies were privatised. The 
previous lowest was 1 . 8 p in 
August 1991- 

Market analysts are iwgttHnt 
to draw any conclusions on 
long-term prices. Most industry 
Observers Relieve prices will 
rise at tire start of the new 
•financial year next mouth. 




Miners leader Arthur Scar gill at Saturday's march in South Yorkshire marking the 10th 
anniversary of the national coal strike puuvPrwoAnaoMan 


Exam papers sale to Italy claimed 


By Cfive Coofcson 

Cardiff University has 
appointed a retired judge, Mr 
Norman Francis, to investigate 
allegations that examination 
papers from its business school 
woe sold in advance to stu- 
dents in Italy last year. 

Mr Francis is looking into 
the links between Cardiff Busi- 
ness School and the E u rope a n 
Business School in Parma. 

In 1992 the University of 


Wales - a federal institution of 
which Cardiff is the largest 
part - agreed to validate Par- 
ma’s business studies degree: 
Last year the founders of EBS 
‘lost control of the business 
school to a group of parents, at 
least some of whom were 
alleged to have Mafia connec- 
tions. 

Mr Rhodri Morgan. Labour 
MP for Cardiff West, who has 
campaigned for a fall judicial 
investigation, said yesterday 


he was concerned that the 
inquiry by Mr Francis would 
not be powerful enough to dis- 
cover the extent of alleged 
bribery and corruption, 

“If he only takes written evi- 
dence, some people particu- 
larly in Italy vdU be too fright- 
ened to take part," be said. 

1 have asked the nniversfty 
to organise oral sessions In 
Parma and Cardiff." 

MT Morgan said there was 
some troth in the controversial 


claim by Mr Michael Portillo, 
chief secretary to the Treasury, 
last month that Britain was 
one of the few countries where 
degrees could not be bought 

“In Spain ami Italy there’s 
some circumstantial evidence 
that Portillo may have been 
right,” ha said. 

“Now a shortage of money 
.may be forcing good British 
universities to offer substan- 
dard degrees in other coun- 
tries." 


Britain in brief 




the privatisation procedure by remov- 
ing the need for separate Legislation 
before each sale of public assets. But 
opponents say it would run Into cer- 
tain trouble in the House of Lords. 

Other measures facing possible 
delay are the proposed new privacy 
legislation. London taxi and bus dere- 
gulation, liberalisation of the focen- 
sing laws and alignment of British 
Summer Time with continental 
Europe. Treasury hopes that the 
nuclear industry might be privatised 
in the present parliament (which runs 
until spring 1997 at the latest) are also 
being dismissed as unrealistic. 

Miners mark 
10th strike 
anniversary 

British miners turned out on 
Saturday for what could be a 
last official farewell to two 
strikers who died on picket 
duty during the year long min- 
ers’ strike. 

The annual memorial march 
for David Jones and Joe Green 
at South KJrkby, South York- 
shire, on the tenth anniver- 
sary of the 1984-85 coal strike, I 
is likely to be the last because 
of the failing numbers of min- 
ors. I 

National Union of Mine- 
workers’ president Arthur j 
ScargiH led the march through 
the former pit village for a 
final rally at the Frickley Col- 
liery Football Club. 

Mr ScargiD paid tribute to 
the two men who, he said, had 
paid the “ultimate price" in 
defence of the miners' indus- 
try, jobs and communities. 
“They will be remembered 
10 th long after all of us are long 
<**« gone,” he said. 




Accountancy 
bodies set 
for shake-up 

The UK's six leading 
accountancy bodies have 
agreed in principle to a radical 
restructuring of their 
operations In a move that 
could lead to merger, giving 
more than 200,000 members of 
the profession the right to call 
themselves chartered accoun- 
tants. 

In a public statement expec- 
ted next week, the six profes- 
sional bodies plan to ubimuhi* 
principles leading to rational- 
isation. Details of the agree- 
ment; developed by a subcom- 
mittee chaired by Mr David 
Bishop of KPKG Peat Mar- 
wick, are still being finalised. 

The statement is expected to 
say that all the bodies accept 
the need for change, and to set 
out a series of objectives for 
tbe accountancy profession 
into the next century. 

Asylum policy 
faces challenge 

Britain’s policy of detaining 
political asylum seekers while 
their applications are reviewed 
Is this week feeing its stron- 
gest challenge. 

All but 20 of the 200 detain- 
ees in the detention centre at 
Campsfield, outside Oxford, are 
on hunger strike, and the pro- 
test is believed to be spreading 
to other centres such as Haslar 
prison near Portsmouth. Over 
600 asylum seekers are 
detained around the country. 

The hanger strikers, from 
countries as for apart as Col- 
ombia, Zaire and Unmnnia, are 
dwuandmg to be set free while 
their cases are examined. Some 
claim to have been detained for 
over a year. 

Mr Charles Wantte, immigra- 
tion minister, has said that “a 
tiny proportion” of asylum 
seekers are detained, “if they 
don’t comply with restrictions 
while they are here." The 
Campsfield detainees say they 
have been offered no alterna- 
tive to detention, other than 
immediate deportation. 


Crime ‘cost 
retailers £2bn’ 

Crime cost UK retailers £2.3bn 
in the year 1992-93, with about 
30 per cent perpetrated by 
shop staff a report published 
today by Nene College School 
of Business shows. 

The report, sponsored by 
Boots, Dixons, Tesco, Enter- 
tainment UK, Barclay card and 
US security systems manufac- 
turer Sensormatic, is based on 
reports provided by retailers 
responsible for almost a quar- 
ter of UK retail sales. 

The report found that “ordi- 
nary theft" by customers, staff 
and suppliers totalled £l,9l6m 
- more than the BRCs figure 
of about £1,40001 - frith other 
forms of robbery and crime 
accounting for £3 77m. 

Employee theft accounted 
for about £690m, or just over 
30 per cent of losses, while 
customer theft totalled £lbn, 
or 43 per cent 

f 2m theft of 
computer chips 

Computer memory chips worth 
£2-3m were stolen over the 
weekend from a electronics 
company in Renfrewshire, 
Scotland. 

The raid on the Haven Prod- 
ucts factory in Greenock is 
believed to be the largest in a 
series of chip thefts throughout 
Europe in recent months. 

The stolen chips came from 
several manufacturers and 
were waiting to be used in 
computer devices such as 
add-on memories. 

One of Haven's largest cus- 
tomers is the IBM computer 
factory in Greenock and it is 
believed the stolen chips were 
destined for IBM products. 


Hotel recovery 
‘inconsistent’ 

Recovery in the UK hotels 
business is “patchy and incon- 
sistent”, according to a survey 
yesterday from tourism con- 
sultants Horwatb Consulting. 

Higher-priced hotels In Lon- 
don (those charging E56-E85.50 
a room) were busier last year 
than in 1992, with occupancy 
rising from 53 per cent to 57 
per cent, hut average room 
occupancy in England in 1993 
was 48 per cent, the same as in 
1992. The overall London occu- 
pancy figure was 56 per cent 
(57 per cent in 1992). 


Degussa 92/93: 
Streamlining 
Pays Off. 


In this difficult environ- 
ment Degussa held its 
ground. Market successes 
in some Activity Areas. 

..x' positive developments in 
foreign markets such as 
North America and Brazil 
and the implementation of 
restructuring measures, in 
particular, were key factors. 



Sales and Earnings 

Group sales increased signi- 
ficantly. by 1 6%, to DM 
14.9 billion. This growth is 
attributable to higher pre- 
cious metals trading sales 
and to changes in the com- 
position of the group of 
companies included in the 
consolidation. Adjusted for 
these factors, sales were at 
the previous year's level. 



The Group's pre-tax earn- 
ings fell by 14% to DM 
172 million. However, due 
to lower tax expense. 

Group net income of DM 
121 million matched last 
year's level. The Metals and 
Pharmaceuticals Sectors' 
earnings declined, while the 
Chemicals Sector posted an 
improved result 

At Degussa AG pre-tax earn- 
ings declined more sharply 
than in the Group, from 'DM 
93 million to DM 32 million. 
However, as a result of a 
negative tax liability, the net 
income of DM 60 million 
was practically even with 
the previous year’s figure. 
The entire net income will 
be distributed to the share- 
holders. As in the prior year, 
a dividend of DM 7 pier 
share will be paid. Including . 


the tax credit of DM 3, this 
results in a gross dividend 
of DM 10 per share. 

Measures to Improve 
Earnings Continued 

Personnel and other costs 
were cut by DM 200 million 
in the 1992/93 fiscal year. 
As savings of a similar 
amount were achieved in 
the previous fiscal year, this 
represents a total annual 
saving of over DM 400 
million. 

Leyboid Sold 
Oerlikon Buhrle Holding 
AG, Zurich/Switzerland, will 
acquire all the shares of our 
subsidiary. Leyboid AG. 
Hanau. The transaction is 
contingent on approval by 
the German Antf-TTust 
Department (Bundes- 
kartellamt). 


Capital Expenditure 
Reduced According to 
Plan 

Group capital expenditure 
on property, plant and 
equipment amounted to DM 
498 million. This was well 
below the high level in the 
preceding years and was 
tower than depredation. 
Over half of the capital 
expenditure was undertaken 
abroad. 


41.5% to 43.7 %. Net 
monetary indebtedness and 
interest expense declined. 

Number of Employees 
Reduced 

The number of employees 
declined further. The Group 
had 32,094 employees on 
September 30, 1993. This 
is 4 % fewer than in the 
previous year. Excluding 
changes in the group of 


of 2,638 employees were 
involved in research and 
development worldwide. 

Outlook 

In the current 1993/94 
fiscal year the restructuring 
measures will increasingly 
take effect We expect an 
increase in profits. Group 
pre-tax earnings were up 
25 % in the first quarter of 
1993/94. 


From the Income Statement 

Group 


| Consolidated DM millions ( 

Sales 

14.901 

Cost of materials 

9.379 

Payroll costs 

2.724 

Depredation 

Income from 

552 

Investments 

54 

Net income 

12l 

Upon request, a com at our 


Anal Report may be onised tram 

the Pubtt Relations Department. 
Degussa AG. 

60287 Frankfurt. Germany 



Degussa Group 

Consolidated Balance Sheet at September 30. 1 993 



f^adisekisureunder Artfctes326a«1328ofyTeCommerdaJ Code; J 

Assets 

DM mflDons 

Eouttv&UabBIttes 

DM millions 

Property, plant & 


ksnuri capital 

429 

equipment 

2.810 

Revenue reserves & 


Investments 

654 

profit avafeMe for 


Non-current assets 

3.464 

cfistriOution 

1356 

Inventories 

1.529 

Shareholders equity 

1.785 

Liquid assets & 


Provisions 

2.191 

receivables 

2334 

Long-term liabtBties 

1399 

Current assets 

4.063 

Short-term t«to8rttos 

2.152 

Total assets 

7.527 

Total equity a Sabffities 

7327 





Balance Sheet Ratios 
Improved 

The reduction in capital 
expenditure led to a decline 
in the Group’s financing 
requirement from DM 1.14 
billion to DM 0.94 billion. 
95% of the finanang 
requirement was covered 
internally, in the Group the 
equity ratio improved 
slightly from 23.4 % to 
23.7 %, while at Degussa 
AG it increased from 


companies included in the 
consolidation, there was a 
decline of 8 %. 

Market-Driven Approach 
toR&D 

The integration of research 
and development into the 
operating Divisions has been 
successful and research 
results are being brought to 
the market faster. Group 
R&D expenditure amounted 
to DM 469 million, A total 


Frankfurt am Main. 

March, 1994 

Degussa Aktiengesellschaft 
The Executive Board 








• » . 4^ 


BUSINESS TRAVEL 


FINANCIAL TIM KS MONO A V MARC H M ,w4 


P lanni ng to do business in 
eastern Germany that 
requires a lot of time on the 
road? Then get up early and 
hit the autobahn at 5am. If you don't, 
you will end up sitting in traffic jams. 

Just like the capital Berlin, the 
roads in eastern Germany are virtual 
building sites. Teams of diggers, bull- 
dozers and cranes stretch along the 
motorways to Leipzig, Dresden, Ros- 
tock and Erfurt More than DMSObn 
(£3lbn) is being spent on upgrading 
the region's Infrastructure. By 1996, it 
should be bliss to drive in eastern 
Germany - but that is of little com- 
fort to those using the roads today. 

There are three golden rules for 
road users to remember, and some 
local habits to bear in mind. 

First, listen to the radio. The local 
radio stations for Berlin. Brandenburg 
and all the other eastern states pro- 
vide the best travel information. 
Their traffic service people often fly 
over the motorways in helicopters, 
relaying news of the latest accident or 
roadworks. Take them seriously: they 
will tell you which side roads to take. 

The side roads run through small , 
cobble-stoned villages and towns. The 
only problem is that, without warn- 
ing, you are likely to come across a 
small yellow sign with black lettering 
saying Umleitung, or diversion. 

These diversions are a bit like a 
long German sentence. You have to 
drive miles for the verb. 

If you have time, you can get an 
extraordinary glimpse of rural eastern 
Germany: the slow pace of life has no 
comparison In the west. You will also 
see a great deal of construction taking 
place, with former owners, osstes (east 


Judy Dempsey takes to the road in eastern Germany 

Autobahn etiquette 


Germans) and wessies (western Ger- 
mans). renovating the houses. 

The second rule is adhere to the 
speed limits. West Germans, brought 
up with no limits and East cars, must 
be heavily subsidising the eastern 
road-building programme from the 
fines meted out to them. 

There are few cameras monitoring 
speed - except for a few miles outside 
Berlin and particularly on the two- 
lane motorway from Berlin via Mag- 
deburg to Wolfburg, the headquarters 
of Volkswagen. But don't be deceived 
The police are UberalL Unless you 
have a hired car. sooner or later a 
summons will land on your desk. 

And the penalties are stiff. You are 
fined DM1 for every kilometre over 
the speed limit, and DM1 for every 
kilometre of the speed limit If you 
exceed the maximum 130km per hour, 
your licence could be confiscated. 

The third rule is to leave enough 
time. Do not believe your colleagues 
when they say it will take only two 
hours to reach Rostock, or less than 
three hours to reach Dresden from 
Berlin. Stretches of motorway are 
often reduced to single-lane or narrow 
double-lane traffic, and even these 
roads are bumpy. The speed limit is 
often 60km an hour, sometimes even 
40km, and lasts for about 25km. Even 
if you have a trouble-free drive, it can 
take an hour to get from the motor- 



Jamming : drivers stretch their legs during a traffic hold-up in east Germany 


way to the centre of some main cities. 

A case in point is Leipzig, Saxony, 
which is set to become one of the 
most prosperous cities in eastern Ger- 
many. As you turn off the ESI, or 
number 9 motorway, towards the cen- 
tre, you will see that hardly a patch of 
grass has been left unturned. Inves- 
tors, with their armies of construction 
workers, are building shopping cen- 


tres, garages and factories. This has 
attracted an unprecedented amount of 
traffic - and Umtetungen. 

Unless you really know the small 
side roads and streets into the centre, 
follow the signs. Whether you should 
also follow the local driving traditions 
is another matter. West German driv- 
ers are not known for their patience 
or courtesy. They rarely give way. 


They have little time for the assies 
driving their two-stroke engine Tra- 
bants. If you take pity on a Trabby 
driver, who has been waiting an era 
to pull out of a side street, the 
chances are the BMW driver behind 
you will hoot loudly, flash the lights, 
and speed past you at the first oppor- 
tunity with a snarL 

One of the few former East German 
laws that have been incorporated into 
new regulations is that you do not 
have to stop at traffic lights leading 
right on to a main road, if there is a 
little green arrow beside the lights. 
The trouble is that wrest Germans still 
wait at the lights, while the assies 
behind quietly fume. Perhaps a boot 
is in order? 

Despite all these drawbacks, there 
arc many positive aspects to driving 
in eastern Germany. Apart from the 
scenery - particularly through the 
lush plains of the northern state of 
Mecklenburg-western Pomerania - 
you actually see the progress being 
made. For example, the roadworks at 
Zehlendort the former border cross- 
ing from west Berlin into eastern Ger- 
many, have finished. And the stretch 
of motorway along the E13 just before 
Dresden is complete. 

Above all, once you reach your des- 
tination. you’ll no longer have to face 
the drab, communist-style hotels, 
where receptionists said they were 
full when they were empty, and wait- 
resses said the restaurants were 
packed as the loud band played to a 
few weary travellers. You’ll no longer 
have to wonder about the availability 
of phones and foxes. In fact, it will 
almo st have been worth setting out 
at 5am. 


LAcely weather in the toading bus***®* «•"**’** 


Mon The 


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New York 


L Angeles 28 


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Muxtonm tompwntijws in CeMus 

*Mp|Wa Oj 1 fcWvo Conw ihd Neowiiarw* 



L ike Captain Cook and 
the convicts who fol- 
lowed him, the modern 
traveller's point of 
entry to Sydney is Botany Bay. 
The runway or Kingsford 
Smith airport. 8km south of 
the city’s business and tourism 
centre, juts into the bay. 

Although the journey to Aus- 
tralia is much foster than in 
Cook's day, getting out of the 
airport can be slow. The inter- 
national terminal is over- 
stretched, and luggage may 
take some time to reach the 
reclaim halL 

Expect customs officials to 
ask suspicious questions about 
everything of an organic or edi- 
ble nature that might be in 
your luggage, particularly if 
you’ve arrived from Asia - 
although travellers are no lon- 
ger greeted with flight atten- 
dants spraying their aircraft 
with insecticide. 

Many travellers smuggle 
pots of Marmite through cus- 
toms for pining British expats, 
but if these are found they will 
be confiscated and you will be 
heavily fined 



Sydney: the business district 
overlooks the opera house 


Sizing up Sydney 

Kate Bevan explains how to get around the city 


Luggage trolleys can only be 
freed from their ranks with 
A$2 coins - so break into a 
note on the aircraft 

The business and tourist 
areas are concentrated in the 
oldest part of the city, much of 
which has views of the har- 
bour bridge and the opera 
house, although the suburbs 
sprawl in all directions around 
the harbour. Most business 
travellers will stay and work in 
that central downtown area. 

The efficient transit system 
boasts two bus services from 
the airport, running from the 
international terminal via the 
two domestic terminals into 
the city. Information leaflets at 
the airport will help you decide 
which route to take. 

The first service. Route 300, 
goes to the Central railway sta- 
tion through the business dis- 
trict and then on to Circular 


Quay, the central ferry wharf 
for harbourside suburbs. Route 
350 runs via Central station 
through Kings Cross, east of 
the business district. Look 
after your belongings in Kings 
Cross at night. The trip on 
either bus costs ASS (£2.-101, or 
A38 for a return ticket, and 
should take about 30 minutes. 


T here are also a couple 
of privately operated 
bus services which 
run to city-centre 
hotels and those in the new 
tourist complex at Darling Har- 
bour, which is not on the air- 
port bus routes. 

However, if your destination 
is outside the central business 
district, you will find yourself 
dragging luggage on to con- 
necting services. Sydney's 
CityRail connections cover 
most of the city south of the 


harbour and a line runs to 
North Sydney, a growing busi- 
ness district north of the har- 
bour bridge. The best place to 
make your connection is Cen- 
tral station, where both airport 
bus services call, or Wynyard 
station, also the main inter- 
change for commuter buses. 

Otherwise, it is worth using 
the cheap ferries to get to har- 
bour-side suburbs. They all 
start from Circular Quay, 
which is simple to use and has 
clear signposting. 

Bus services to and around 
the north shore from Wynyard 
station are frequent, but travel- 
lers with heavy luggage might 
consider getting the airport 
bus to Circular Quay - the 
nearest point to the water - 
and then getting a taxi across 
the bridge or through the har- 
bour tunneL 

Taxis are plentiful into the 


city and will set you back 
about A$20 from the airport for 
a trip south of the harbour 
bridge or tunneL Taxi drivers 
expect single passengers to sit 
in the front with them and, 
although tipping is not the cus- 
tom in Australia, they won’t be 
averse to accepting one. 

For getting around the city, 
several travel passes are avail- 
able based on the rather con 
fusing zone system, as well as 
the Sydney Pass, which is valid 
for three, five or seven days 
and costs from A $50. That cov- 
ers all the city buses and fer- 
ries - but not the trains - as 
well as some tourist buses, 
plus your return fore on the 
airport bus. You can buy a 
pass when you arrive at the 
airport, on the airport bus, or 
at various locations around the 
city. 

Transport around the city is 
tightly regulated and efficient. 
But you are on your own if you 
hit the tourist trail - dozens of 
unregulated operators are will- 
ing to relieve you of your dol- 
lars for a spin around the har- 
bour or a cuddle with a koala. 


Tourists 
attacked in 

Egypt 

Suspected Moslem militants 
fired at a tourist boat on the 
river Nile yesterday, as 
security forces took a tight 
grip ou the rest or Egypt as 
Moslems celebrated the end 
of the holy month of 
Ramadan , Reuter reports from 
Cairo. 

No one was injured In the 
attack on the cruiser, which 
took place near the Moslem 
fundamentalist stronghold 
of Assiut, 320 km south of 
Cairo. The militant Gama’a 
al-Zslamiya group has claimed 
responsibility for eight 
previous attacks on Nile 
cruisers. 

In Assiut Itself, a stronghold 
of the Gama’a. security forces 
prevented the group from 
holding a mass gathering at 
the dawn prayers marking 
the end of the month-long fast 
of Ramadan. 

Polish flights 

The Polish airline LOT’S first 
passenger flight to London for 
four months left Warsaw 
yesterday following the 
resolution of a (lighUilkuation 
feud with British Airways. 

Under an agreement 
announced earlier this month, 
each airline has been allotted 
nine flights a week during the 
winter season ending March 
26 and up to 15 flights a week 
during the summer season. 

The two carriers will each 
have 12 flights a week between 


TRAVEL 

UPDATE 



the end of March ;uid the peak 
summer season (June to 
August) when three additional 
flights will be added. 

The Anglo Polish dispute 
erupted last October when 
Warsaw refused British 
Airways permission to double 
its number of flights between 
tho two countries. tandem 
retaliated by banning LOT 
flights to Britain, and Poland 
replied in kind. 

I.OT business manager Jan 
Mich said the airline had lost 
about S\ million in ticket 
revenues during the dispute. 

South Africa 

The number of visitors 
travelling to South Africa rose 
by io.5 per cent to 618.000 last 
year despite the rise in 
violence in the run np to the 
elections. 

US aircraft 

Aircraft parts of questionable 
design and quality are in 
common use in aircraft repair 
shops approved by the Federal 
Aviation Administration 
throughout the US according 
to a government report issued 
last week. 



II Mi 


When Britain goes away on business, more companies go via Hogg Robinson. We handle 
every aspect of every trip for over 6,000 British organisations, including 34% of the FTSE 100 
They deal with us for exactly the same reasons as our smallest client - we keep travel costs 
under control without compromising quality or convenience. Call today for an information 
pack, or contact Les Middleditch, Director of Sales on 0252 372000 (tel.) or 0252 371200 (fax) 


HOGG ROBINSON 

dirtiness Travel International 



BUSINESS TR.WKI. 
INTERNATIONAL 


Hogg Robinson Business Travel International is wholly owned by Hogg Robinson p.l.c. 














FINANCIAL TIMES MONDAY MARCH 14 1994 


9 


MANAGEMENT 


Good 
omens 
for MCA 

A “minimal" increase In 
the combined fee Income 
of members of the 
Management Consultancies 
Association in 1993 masked an 
encouraging (Trial quarter for 
the industry. 

According to Brian OTtarke, 
executive director of the MCA, 
the return to what he called 
“pre-recession" income levels 
in the last three months was 
“a good omen for the coming 
pear”. Total fee income in 1993 
for the MCA's 31 members, 
which account for more than 
half the fee-earning management 
consultancy in the UK, 

amounted to £868m. 

Information technology work 

was agai n by f ar the bluest 
Income contributor, with 
financia l and aflirmii a i mi i uu 
systems and production and 
services management in second 
and third places. Overseas 
earnings, largely thanks to work 
elsewhere in the European 
Union, rose by 6 per cent 
While last week's figures give 
cause for optimism, MCA 
president Keith Burgess, who 
is managing partner of Andersen 
ConsnMng UK. niw highlighted 
afew concerns. 

Referring to complaints by 

wimpmlpa that consultants 0TB 
too expensive, he urged 
members “to ensure that all our 
deliverables are measurable 
that improvements to our 
clients’ operations are real and 
tan gihift . . . We should leazn. 
to Quantify results, so no tion* 
of imprecise benefits resulting 
from consultants’ work become 
a thing of the past”. 

ftiTTguoa ylsn matte a p ointed 

reference to sole practitioners, 
whose numbers have swelled 
in recent years and who by 
many accounts are providing 
significant flnwiprthrtinn at the 
margin for bigger firms. “Unlike 
sole practitioners we {MCA 
members! are able to provide 
the knowledge capital of our 
organisations, the development 
and education of our people and 
financial back-up to the work 
we undertake. The contribution 
of a consulting firm is more than 
the sum of the Individuals who 
work in it" 

Tim Dickson 


T he problems faced by Dis- 
tal Equipment, once second 
ooly to Internat i onal Busi- 
ness Machines as a com- 
puter manufacturer, are brutally 
clear. It is losing money, its s^Ibs 
are declining, and it is supporting a 
cost structure several percentage 
points Mgher than the marlfpf fan 
afford. 

Across the world. Digital is seek- 
ing its salvation through cost cut- 
ting, successful sales of its “Alpha” 
chip, the world’s fastest micropro- 
cessor, and market acceptance cf 
the company’s approach to “client- 
server” systems, which customers 
are beginning to favour over older, 
centralised approaches to data pro- 
cessing'. 

But in Europe the company’s 
hopes are pinned on a specific plan 
which involves a ftmdgmwntai shift 
in its approach to distributors, soft- 
ware houses and systems integra- 
tors, the “business partners” who 
sell Digital computers directly to 
customers, adding value in the form 
of special software and services. . 

Digital's problems are particu- 
larly acute in Europe which now 
provides about 50 per cent of its 
global revenues. In a fr ank report in 
the company's European newsletter 
last month Ed Lucente, corporate 
vice president for sales and market- 
ing, warned top managers that: Digi- 
tal faced its toughest third and 
Iburth quarters: this after two years 
with only one quarter in profit He 
said: “We are being outgunned in 
the marketplace.” 

The plan, to put this right has 
been put in place by Vincenzo Dam- 
lani, a 53-year-old former IBM 
senior e xe cutive who became the 
company's president at the begin- 
ning of the year. 

It will involve substantial 
res tr uctur in g. Some 6,000 of the 
European organisation's 29,000 
employees will be made redundant 
this year. Analyses carried out by 
special project teams have 
suggested that Digital’s productiv- 
ity is half the industry average. 

hnc made marr y mistakes 

over the past decade. It was slow to 
understand that personal computers 
would become tile dominant force 
in the industry. It was slow to real- 
ise that high-powered workstations 
would form the basis of client- 
server computing. Worst of an it 
failed to manage its distribution 
channels in a consistent fashion. 

The trouble is that the business 
model Cor success in the computer 
industry h»» changed irrevocably, 
hi the heyday of the mainfr ame a 
small number of major manufactur- 
ers sold computers commanding 
high gross profit margins to their 
customers through big; expensive 
direct sales forces. Customers wrote 
their own software or lured soft- 
ware companies to do it for them. 

Today, the profit margin on hard- 
ware is too sHm to support such an 


After Digital’s big job cuts in Europe, 
Alan Cane explains the company’s 
plans to revamp its distribution 


Tuning the 
channel 



Damlani: Ms strategy must woric If MsMtatoaunriwiasaforcain data ptoca iai ng 


expensive structure and the relative its. IBM, which has had to learn 
importance of business partners - about channel management just as 
the “channel” - has grown enor- painfully as Digital, was criticised 
mously. Channel partners not only by distributors until recently for 
distribute hardware but sell pack- pricing policies which made It diffi - 
aged software, help customers cult tor them to make money, 
develop their own programs and Second, a guarantee that the man- 
work with them on installing com- ufacturer will not compete with the 
pier networks. distributor or systems house either 

What is necessary tor successful by setting directly or by developing 
dnmnel.mazfagement?^Flrst, a sen--, customer software- The spectacular 
sible discount structure so the growth of Compaq, the world’s lead- 
channel can make reasonable prof- ing high-performance personal com- 


puter manufacturer, was helped by 
a policy of celling only through dis- 
tributors. 

Third, manufacturer and channel 
must work together to their mutual 
benefit, agreeing; for example, joint 
investment In product promotions. 

It is no exaggeration to say that a 
computer company's success today 
is likely to be directly proportional 
to its ability to manage its channel 
relationships. This is particularly 
tine of smaller customers (expen- 
sive to reach through a direct sales- 
force), who will look to distributors 
smtd resellers for systems and ser- 
vice. Europe’s 2m to 3m smaller 
customers are nevertheless the best 
hope for growth, so it is worrying 
for Digital that its products are rep- 
resented in only about 20,000 to 
30,000 of them. 

Enrico Pesatori, general manager 
of Digital’s personal computer busi- 
ness unit, flyrt the rawipany 
has “never had a rational or coher- 
ent approach to our channel part- 
*ners”. Damiani says: “The nub is 
how well we do in future with our 
partners. You have to comple me nt 
rather than antagonise”. 

He refers continually to working 
with partners rather than through 

lhwn [ nnH jjjgists fhte fS more *haT^ 

mere semantics: “To work through 
partners gives a very dear idea that 
the two parties are not working at 
the same level," he chides. “We 
must select partners with care. We 
should not have hundreds, hot only 
the ones we need.” 

The plan, which riaminni dobs his 
“Go to Market” strategy, has three 
elements. First, Digital's 500 or so 
key European accounts will be man- 
aged directly by account executives. 
They win represent Digital to their 
customers and have the responsibil- 
ity for making the customer's voice 
heard within the organisation- The 
success of these account executives 
will be measured an the percentage 
that Digital takes of the customer’s 
total data processing budget, no 
matter what channel Is used. 

Second, the small to medium com- 
pany market will be served by a 
combination of the direct sales force 
ami channel partners. The principal 
aim here will be to persuade cus- 
tomers to move to systems based on 
Digital's Alpha chip. Attracting new 
customers will depend on strong 
relationships with software houses 
and value* dded resellers. 

Third, the large piece of the mar- 
ket represented by very small enter- 
prises and individuals will be 
directly managed by distributors 
and (he larger value-added resellers. 

Damiani’s plan for Digital’s Euro- 
pean business partners is a model of 
the way the company must trans- 
form Itself globally if it is to survive 
as a force to data processing. Pesa- 
tori is to no doubt the partners 
must believe Digital has changed: 
“This time,” he says, “we have to 
persuade them we are for reaL" 


New route to the 
top position 

Richard Donkin on a report that 
predicts personnel directors’ 
increasing clout in the boardroom 


The comments appear to reded 

a recognition that people are now 


P ersonnel as a corporate 
function has changed 
radically to the past 10 to 
15 years from a comparatively 
low-grade advisory position to 
one that fills a strategic role to 

business n . mng prmmt 

Who says so? Personnel experts 
do, perhaps not s urprisi ngly, in 
an attitude survey* carried out 
by Spencer Stuart, the 
hwwUnmHwg company. 

The survey, which quotes 
anonymously from some of the 
leading experts in the field, 
suggests that the role has evolved 
markedly in recent years to the 
point where it is now being 
treated as vttal in many 
boardrooms. 

In line with its greater 
importance, however, there has 
been a streamlining of personnel 
management and more frequent 
farming out to contrac to rs 
of several personnel 
responsibilities. 

“Narrow personnel specialists 
in areas such as training, 
remuner ati on, pensions and 

selection will increasingly be 
outside the company," it says, 
leaving those personnel directors 
who survive at the core of the 
organisation to assume more 
gener al responsibilities in the 
future. 

The report says that while it 
has been exceptional for 
personnel directors to become 
chairman to the past, tt will 
became more common as they 
gain the breadth of experience 
that will make them candidates 
for the job. 

Is tide wishful thinking? 
Certainly, there is a consistency 
to the comments collected to the 
interviews. One executive said: 
“Personnel people are now modi 
more part of running the 
business. They are getting credit 
for understanding the badness 
and some will eventually end 
up running it” 

Another argument was that 
the best personnel official was 
to a position to see tiie totality 

of the organisation. “Personnel 
has the unique opportunity to 
see aixoss all business lines, to 
a way that even finance cannot,” 
observed one respondent 


considered to be the most 
valuable assets of many 
businesses. Perhaps this has long 
been the case but it is only 
comparatively recently that 
senior executives have been 
saying so and addressing what 
this means to terms of corporate 
strategy and organisation. 

Among the findings to the 
report was a deep resistance to 
the term "human resource 
manager”. Many saw it as 
meaningless American jargon, 
reflecting a ruthless manipulative 
approach towards people. Others 
saw it as distinguishing the 
new-etyle strategist from the 
old-style professional involved 
to caring and looking after 
people. Some pointed out that 
personnel had a very limited 
meaning in the US. 


Tersonnel has the 
unique opportunity 
to see across all 
business lines, in a 
way that even 
finance cannot’ 


Whatever the nomenclature, 
the general feeling was that if 
personnel responsibilities were 
only administrative there was 
so justification for a personnel 
manager taking a seat on the 
board. A boardroom personnel 
role involved defining, 

inspiring and guiding 

organisational change, said the 
respondents. 

Nigel Dyckhoff, the Spencer 
Stuart partner who compiled the 
report, says: “The main 
condnsiou is that whereas 10 
or 15 years ago we were 
talking about personnel as 
an advisory ftmction, in 10 
years* time it will probably be 
the best way to the top. It is 
moving from a caring job to a 
strategic job." 

*Point of View, Spencer Stuart 
and Associates, 16 Connaught 
Place, London W32ED. Telephone 

0714981238. 


Kewlar ; Nomex : Zemdrain : 
Helping move Europe into the 
21st century. 


T ransportation links betwoen countries are Improving 
as European integration comes dosin’ to reality. 

New air connections, highway systems and high-speed 
trains are reducing travelling times between cities. Many 
of these modes of transport are being enhanced by products 
from DuPont 


For example, often without even know- 
ing it, millions of car drivers through- 
out Europe enjoy the benefits of 
DuPont KEVLAR para-aramid fibre. This 
product is an extremely light, heat- 
resistant fibre which does not corrode, 
is extremely strong and is non- 
magnetic. KEVLAR is being increasingly 
used for diverse applications in cars; 
from the reinforcement of asbestos- 
free clutch, brake linings and 
cylinder head gaskets to noses and 
tyres. 

C m a pa u m ts ranfercBd with KEtfULB 


KEVLAR is also being used to 
strengthen V-beits for auxiliary 
systems such as cooling system 
pumps, blower fans and hydraulic 





pumps, as well as 
automatic transmis- 
sions and industrial 
gaskets. Here the deci- 
sive factors for the use 
of KEVLAR are its supe- 
rior flexibility, its heat, 
friction, tear and oil 
resistance, as well 
as its good shape 
retention: 

The problem of grease stains on cloth- 
ing from car door checks is now a 
thing of the past thanks to another 
DuPont development; ZYT6L' reinforced 
with KEVLAR A completely new door 
restraining system has been developed 
with a composite of these two 
products, which requires no lubrica- 
tion. tt has exceptionally good slip 
behaviour and is highly abrasion 
resistant 

KEVLAR has also demonsbated its 
strength in a completely different field. 
An innovative bridge in the Scottish 
town of Aberfekfy is constructed 
entirely from lightweight materials. The 
63-metre long bridge platform is 
suspended from 17.5 metre high piers 
by cables of KEVLAR. The DuPont 



aramid fibre was the 
natural choice as it is 
live times as strong as 
steel for equal weight 
and does not corrode. 
In its paper term, 
NOMEX, another aramid 
fibre from DuPont, is 
helping to bring 
pioneering technolo- 
gies to commercial 

reality. Take the example of high speed 
trains. Insulating paper made of 
NOMEX is an important factor behind 
the impressive performance of the 
German ICE and the French TGV trains. 
Because of its exceptional thermal 
resistance, NOMEX provides highly 
effective insulation material for the 
electrical transformers in these trains, 
which reach speeds in excess of 
250 km/h. 


NOMEX Bakes high-speed trains 

Tighter ami mne states. 

And because NOMEX is light (only 
0.9 g/cc), it has been possible to 
reduce the weight of the ice's two 
transformers by 270 kg each, cutting 




the traction unit’s total weight by 
over half a ton. 

The celebrated designers Pininfarina 
and Fiat exploited another advantage 
of NOMEX in the design of the Italian 
high-speed trains ETR 500 and Pendo- 
lino; the fibre’s combination of low 
weight and high strength. Honeycomb 
structures made from NOMEX paper 
are veiy light yet extremely rigid. 
Similar constructions have already 
proven their worth in aircraft and 
marine applications. 


ZEMDRAIN formwork liners are a DuPont 
polypropylene specifically engineered for 



optimum water conductivity and solids 
retention, to deliver low water/cement 
ratios at the construction site. 


DuPont is an innovatoL Over $1.3 
billion is spent annually in more than 
80 R& D and customer service labora- 
tories worldwide to continually 
improve products and services. 

DuPont 

Engineering Fibres and Nonwsvens 

P.O.Box 50 

CH-1218 Le Grand-Saconnex (Geneva) 
Tel. ++41-22-71751T1; Fax 717 51 09 


ZBUDRAlll for wore durable ancrete. 

Concrete structures built with DuPont 
ZEMDRAIN formwork liners have less 
pervious, harder, smoother and more 
uniform surface. Penetration by corro- 
sive substances from the environment 
are drastically curtailed. The lifetime 
of bridges, tunnels, dams and other 
structures is significantly lengthened, 
as compared to that of structures 
erected using standard techniques. 



KEVLAR; NOMEX* and ZEMDRAIN* were 
developed by “DuPont Engineering 
Fibres and Nonwovens" as were 

sontara; teflon; twhc typar; 
cordura* and high tenacity NYLON. 
AR of these products continue to add 
new benefits to ail manner of applica- 
tions - from household goods right 
through to space traveL 



'MMnVMnMM 








Survivor in a 
youth industry 

Peter Bonfield tells Lucy Kellaway why 
he is content to grow older with ICL 


I f Peter Bonfield, chairman of ICL. 
could be anyone in the world who 
would he choose? The younger 
and richer Bill Gates? The head of 
Fujitsu. ICL's parent company? 

Far from it: Bonfield's hero is veteran 
guitarist Eric Clapton. He loves the 
music, admires the man, and even 
copies his taste in footwear with a pair 
of Timberland boots. 

At Clapton's concert in the Albert 
Hall last month, the chairman of ICL 
was to be seen clapping and stomping 
at the front while his guests watched at 
a polite distance in the corporate box. 

Both Clapton and Bonfield are Peter 
Pan figures in their professions. This 
year the businessman celebrates his 
50th birthday and his tenth anniversary 
r unnin g ICL. making him - lik e the 

guitarist - a successful elderly survivor 
in a youth industry. 

What Bonfield admires most about 
Clapton is bis ability to change. That, 
too. is what he is most proud of in his 
decade at ICL On Wednesday the com- 
pany will announce results that will 
show ICL is still outrunning most of the 
European competition. 

The day I met him in his unassuming 
Putney office he was not wearing his 
Timberland boots, but was looking a 
dapper Jack the Lad in a pair of woven 
black leather shoes and double breasted 
suit Neither was he jumping up and 
down, but sitting bolt upright on the 
edge of his sofa, answering questions 
briefly, directly and openly. 

In his lapel he was wearing a little 
enamel badge with a tick - a sign of 
ICL's commitment to quality and part 
of the uniform of the ICL manager. Bon- 
field is never without his badge - or 
almost never. When, at a recent week- 
end ICL brainstorming conference, he 
turned up for breakfast without it. he 
was challenged by his colleagues. “1 for- 
got to take it off my pyjamas." he said. 

It was a joke, but only just. Bonfield 
takes this sort of thing very seriously. 
Total Quality Management, benchmark- 
ing. empowerment, investing in peo- 


ple . . .every good practice In the man- 
agement book - you name it. Bonfield 
embraces it. 

He is a classic workaholic - working 
punishingly long days, weekends, and 
alm ost never taking holidays. He says 
he feels no stress: he just loves the job. 
When he is not working he is running 
or peddling furiously away on his exer- 
cise bike. And when he is not doing 
that he is asleep. Is he, I wonder, like 
Margaret Thatcher, the kind of person 
who thrives on just five hours sleep a 
night? “Oh no. I'm not like Margaret 
Thatcher at all." he says, his face dead- 
pan but eyes shining to suggest he has 
made a joke. “I'm a quite different per- 
son." 

His wife, also a fitness freak, sees him 
seldom, although last year they did go 
whitewater rafting together. It was his 
first holiday in a decade, and was such 
a success that Bonfield may even take a 
few days off this year to take her for a 
c limb up Ben Nevis. 

A man who sets such high standards 
for hims elf might be expected to be a 
nightmare to work for. Especially one 
who unfailin gly takes the tough deci- 
sion - most famously he closed down 
the factory in which his own father 
worked. Yet even those who by rights 
should dislike him speak as if Bonfield 
is their best friend. “Peter is a vision- 
ary.” says Professor Garry Hunt, an ex- 
director of ICL who lost his job in a 
reshuffle. “He's got respect in the indus- 
try.” 

Even trade unionists who have quar- 
relled with ICL over its attempts to 
push them out of the picture feel admi- 
ration for the company's chief. “He 
understands the importance of high 
technology and the need to promote it 
to a wider audience," says Larry Brooke 
of the MSF manufacturing union. 

Bonfield makes it his business to be 
involved in industry matters beyond 
the corporate confines of ICL He is on 
the board of the British Quality Foun- 
dation. is a member of an EU technol- 
ogy task force, and (unusually for a 



Lydto van der Wear 


British businessman) sits on the board 
of various US and European companies. 

He says - half seriously - that when 
he became managing director of ICL at 
39 be was already “getting on a bit", 
and ten years later be refers to hims elf 
as an “old grey beard". The key to sur- 
vival in the business is to be “very 
fast-moving, very international and 
very flexible. If you've got those it 
doesn't matter how old you are". 

Bonfield appears to have all three 
traits. This south Londoner with his 
fiat vowels is one of Britain's most 
international businessmen. After uni- 
versity he spent ten years working for 
Texas Instruments in the US, which he 
says shifted his focus forever. “The 
thing that really changed me was that 
six months out of university 1 was run- 
ning a team in Dallas. My mates were 
still in digs in Leicester ” At ICL he has 
been immersed in the European com- 
puter market, and since 1990 he has 
been r unning a company 80 per cent- 
owned by tbe Japanese. 

Even though be can't speak Japanese, 
(he admits to being barely able to speak 
French) he goes down well in Japan. 
Contrary to the popular fear that 
Fujitsu would swamp ICL. Bonfield has 
continued to run the company autono- 
mously. "A lot of people wouldn't 
believe that Fujitsu has dumped $1.3bn 


into this company and left me to run 
it" he says. Part of the reason is that 
ICL has performed, making profits 
when almost every other European 
computer company was making losses. 
But it is also due to a personal affinity 
between Bonfield and his Japanese 
bosses. He says his approach to busi- 
ness is similar to theirs. Both, he says, 
are “open, transparent, trusting, and 
think in a long-term strategic way". 

The dip side of his success is the 
danger that be has made himself too 
important to the company and its rela- 
tionship with its parent Hunt argues 
that his one serious mistake is not to 
have paid enough attention to groom- 
ing successors. 

The problem is made worse by the 
fact that Bonfield combines the roles of 
chairman and chief executive, thus 
committing a serious sin of the modem 
boardroom. He excuses himself by argu- 
ing that with two major shareholders 
breathing down his neck there is no 
shortage of checks and balances. 

That would change if the company 
f ulfils its ambition and floats on the 
srockmarket, in which case the roles 
would be split Bonfield has hinted in 
the past that he might go when the 
company floats, but that possibility is 
receding. “I'd never float the company 
and run off,” he says. 


Personae . . . 

Calvin 
Klein 
takes 
strides to 
Europe 

By Lucia van der Post 

Calvin Klein, the American 
designer so beloved by the well 
heeled, has just woken lip to 
the feet that Europe is big and 
rich and he can't think why 
he neglected it for so long. 

“I just had no idea my 
ranges would be so 
successful,” he says. “Fve lived 
most of my life in New York 
and l design for the women 
I know. I thought this sort of 
modem, working, liberated 
woman was mainly found on 
my side of the Atlantic. What 
I have discovered to my great 
surprise is that women all over 
the world now want to dress 
that way.” 

Calvin Klein’s life has clearly 
been full of lovely surprises. 
Underwear was another. He 
had no idea It would be so big. 
In the first year (November 
1983-1984) that his underwear 
designs hit the stores, women 
bought some $70m worth of 
fly-front boxer shorts, briefs 
with white elastic bands, and 
assorted T-shirts. Nobody, not 
even Calvin predicted that. 

“I just tried to take it beyond 
the classic and the predictable, 
to give it more meaning. So 
now people lounge in it, swim 
in it. go out in it." And, he 
might have added, leave the 
tops of their jeans undone so 
that their excellent taste in 
underwear can be more widely 
noted. The other day he sold 
the underwear company to 
Warnaco for nearly $70m. 

Fragrance was another of 
his happy surprises. His 
fragrance business, owned by 
Unilever, does “half a billion 
dollars a year in the US & 
Europe." That is nothing like 
as large as the fragrance 
businesses of cosmetic houses 
such as Estee Lauder or 
Revlon but it is big business 
for a single American designer. 

A less happy surprise was 
the financial difficulty in 
which he found himself in 1993 
when David Geffen, the 
Hollywood producer and a 
long-time fan, rescued him by 
buying up some long-term debt 
“because Calvin was having 


trouble with repayment of the 
principaL" 

The sticky moment seems 
past Expansion is on Klein's 
mind. He plans to open his 
Calvin Klein shops in almost 
all major cities (St Moritz. 
Barcelona and Zurich have 
got them - Geneva, Hong 
Kong, Singapore are on tbe 
drawing-board, London, Paris 
and Milan are being 
considered). In addition he 
wants to manufacture in 
Europe, which could bring his 
prices down by some 25 per 
cent Given that a suit from 
bis top range. Hu Collection, 
costs about £L200, and a 
sweater some £350. this would 
seem a good move. As he puts 
it, “if they are selling now at 
those prices. Imagine tbe 
business we could do if we can 
get them down.” 

The financial dim ensions 
of Klein’s business are bard 



to establish. The holding 
company is privately owned; 
figures are a matter of 
guesswork. Calvin Klein 
himself professes not to keep 
track of these details. Fortune 
magazine estimated in 1981 
that his personal annual 
income before tax was some 
$&5m. The Calvin Klein 
organisation says its 
worldwide sales at wholesale 
prices are more than Slbn a 
year, including licensed 
products. 

Klein is 51-years-old, tall and 
thin with the air of a slightly 
rumpled, world-weary Yves 
Montand. Then he starts to 
talk and he couldn't be 
anything but a New Yorker. 

He has considerable charm 
and knows it 

Bom in the Bronx he was 
fascinated by clothes from an 
early age and started to sketch 
them at five. In 1969 he 
produced a small collection 
of six coats and three dresses • 
which by accident were seen 


by a Bonwit Teller buyer. 

From that moment his career 
look off. Like all the most 
commercially successful 
designers he has a business 
partner. Barry Schwartz, a 
childhood friend who gave him 
the £2,000 he needed to launch 
himself and who is credited 
with much of the business 
acumen- 

Klein has a clear idea of bis 
ultimate customer. “I don’t 
design for trophy wives or the 
woman who likes to decorate 
herself for her man. 1 dress 
the woman who is very busy. 
She has a job and children and 
boardroom meetings and 
lunches. She goes out to the 
theatre or to see friends. For 
this she needs clothes but 
clothes that are soft, easy. 

comfortable." 

In common with Armani, 
with whom his clothes are 
often compared, he carries the 
cult of simplicity to almost 
oppressive lengths. The girls 
in their entourages are almost 
interchangeable - open-faced, 
bare of make-up, simply cut 
shining hair, no nail-polish 
and sober colours (navy-blue, 
charcoal grey, black) comprise 
the prevailing aesthetic. 

His work exemplifies certain 
truths about fashion. While 
fashion may be about change, 
truly beautiful clothes need 
no adornment. Where there 
is fine cut no tricks are needed. 

To the charge that he is not 
a genuinely creative designer 
Calvin Klein suggests that 
what be offers may be subtle 
but is not without innovation. 

“I give women a reason to 
buy something new by using 
a new fabric, a new shape, a 
new combination, new colours 
- but the philosophy behind 
the clothing never changes." 
All through the eighties when 
many were producing what 
he called "frankly trashy 
clothes" he went on doing his 
own thing, “I don’t know how 
to do any thing else," he says. 
When it comes to mens wear 
he designs the sort of clothes 
he likes to wear himself. “They 
should, above all, be 
comfortable.” 

In the week after the fashion 
industry has been short of 
inspiration, beauty and 
glamour, it might give the 
international catwalk kings 
and queens, cause to reflect 
that while their models are 
strutting about in furry 
G-strings and lycra-stretch 
mini-skirts. Calvin Klein is 
doing great business by 
offering cool, sober, classic 
clothes that speak of class and 
that fit effortlessly into the 
lives of women the world over. 


* 


l 




THE WEEK AHEAP 

UK COMPANIES 



lo get ahead 

in business 
you need the 

redit title. 


FT Review of Business Books- 

On Tuesday, March 15 the Financial Times will publish a 16 page 
quarterly review of the best and most enlightening books about business. 

It is the definitive guide for those who want to keep abreast of current 
thinking and ideas. 

So to be sure you're up to date on the lastest business titles, the title 
you need is the FT. 

FT. Because business is never Mack and white. 


■ TODAY 
BOARD MEETINGS: 

Finals: 

Alliance Trust 
BSM Group 
CaMertMim 
Costain Group 
Eng Safi China Clays 
Fairey Group 
Greggs 

Guinness Peat Group 
JIB Group 
Jourdan (Thomas) 

Medeva 

Merchants Trust 
Pe r s i mmon 
Rugby Group 
Scotia Hldgs. 

Spring Ram Corp. 

Stag Furniture Hldgs. 

Wa tmou ghs (WkJgs.) 

Interims: 

Automagic Hldgs. 

European Leisure 
MAI 

■ TOMORROW 
COMPANY MEETINGS: 

CHy Site Estates, Forte Crest Hotel. 
Bothwefl Street, Glasgow. 11.30 
Division Group. HBton International 
Hotel. Reddiff Way. Bristol. 

12.00 

Osprey Communications, Osprey 
House, 10 Little Portland Street. 

W.. 10.30 

Wttan Inv. Co-, Royal Horticultural 
HaB. Vincent Square, S.W. 7.00 
BOARD MEETINGS: 

Finals: 

Broadcasts 
Church A Co. 

Crocktords 

Delta 

Emess 

Evans Hatehaw Hldgs. 


Fleming FledgeBng LT. 

Graseby 

Hampden Group 

Heywood WRSams Group 

Jones (A.) ft Sons 

Lionheart 

Martey 

Mner Group Newspapers 

Rea Brothers Group 

Saatchi ft SaatcM 

Schraders 

SeafteW Reso u rces 

Wassail 

WSRams Hldgs. 

Intanms: 

CastJe Communications 
Everest Foods 

Foreign ft Colonial High bvcome 
Paterson Zochonis 
Schotes Group 
Woteetey 

■ WEDNESDAY MARCH 16 
COMPANY MEETINGS: 
looco, SL Clements House, 2-16 
Cotegate, Norwich. 10.00 
London Scottish Bank, SL James' 
Club, SL James’ House, Charlotte 
Street, Manchester. 12.00 
Level (YJ.), Stationers' HaB, Ave 
Maria Lane, EC. 12.00 
BOARD MEETINGS: 

Finale: 

British Mohair Hldgs. 

Britton Grom 
CU E n v i ro n mental Tst 
CMcHaln Group 
Costs ViyeSa 
EFM Dragon Tst 
EFT Groip 
Ind. Insurance Group 
Murray Euro tnv. TsL 
Nichols (JN) (Vimto) 

Premier Cons. Oilfields 
Reed IntL 
Rent oka Group 


Sleepy Kids 

Spandex 

Spectator** 

Teispec 

Trade Indemnity 
WSP Group 
Interims: 

Attwoods 
Guinness 
Mertvale Moore 
Mnorco 
Wescol Group 
Zambia Copper Inv. 

■ THURSDAY MARCH 17 
COMPANY MEETINGS: 

Brunner Inv. Tst, 10 Fenchcrch 
Street EC. 12. AS 
CanSfT Property. 56 Station Road, 
Eg ham. Surrey, 12.00 
Hotspur Investments, 12 
Tokenhouse Yam, EC. 

12.00 

Selective Assets Trust, 1 Charlotte 
Square, Edinburgh. 12^0 
BOARD MEETINGS: 

Finals: 

Aijo Wiggins Appleton 
Baynes (Charles) 

Br. Borneo Pet Syndicate 
Cairn Energy 
Courtautds Textiles 
Dairy Farm IntL Hldgs. 

Daniels (5J 
Davis Service Group 
Dawson Group 
Edmond Hldgs. 

Elsevier 

Gartmore Inv. Tst. 

Haden MadeOan Hldgs. 

Jupiter Tyndall Group 
Kwtk-Rt Hldgs. 

Legal ft General Group 
OGC ML 
O fiver Group 
Rosebys 


Sanderson Bramafl 
Travis Perk i ns 
United MmuKb (Hldgs.) 

Vinten Group 
Interims: 

Pochin ' s 

■ FRIDAY MARCH 18 
COMPANY MEETINGS: 

Davenport Vernon, BuN Hotel, 
Oxford Road. Genante Cross. 
Bucks., 12.00 

Seacon Hldgs^ 38 West Fairy 
Road. E. 12.00 

Second Market Investment Co„ 
13 Southampton Place. W.C. 

10.00 

BOARD MEETINGS: 
finals: 

Aroolectric (Hldgs.) 

Argos 

Doeflex 

IBbflmtan Group 

Moftns 

Interims: 

Allied Leisure 
Fortnum ft Mason 
NM Smater Australia Co’s. 
Sirdar 

■ SATURDAY MARCH 19 
BOARD MEETINGS: 

Finals: 

Astec (BSR) 

Company meetings am annual 
general meetings unless otherwise 
stated. 

Please note: Reports and accounts 
are not normally available until 
approximately six weeks after the 
board meeting to approve the 
preliminary results. 


DIVIDEND & INTEREST PAYMENTS 


■ TODAY 

Aaed-Lyens ADH SO 136 
ASLK-CGER Stepped Coupon Gtd. NM. 
1935 €50,000 

BankAmenca $0.40 

Bank of Ireland Undated FftN Capital 

Nta SSI .63 

British Gas 10*% Gtd. Bds. 1998 
C$101 .25 

Chase Manhattan FRN Sub. Nts. 2009 
St 32. 7 T 
Crabtree 2p 

Fu# Bank lull Finance 8<*.% Sub. Gtd. 

2001 566.250 

General Motors Acceptance Corp. 

Nls 1996 *45625 

Honda Motor 6*% 1396 T687.500 

Honeywei 50.24 

Hongkong a Shanghai Banking Cap. 
Primary Cap. Undaied BIN S63 >9 
Japan Artmea Co. 7% 1996 Y700,000 
Marubeni Inti. Finance 6Wh Series A 
Dud Ctrrancy YerVS 1997 Y6SO.OOO 
Do. 6W% Series B YB50.000 
DO. Fuad Rate 1996 Y735.000 
Do. Variable Hate 1966 YS45.000 
NODO 2p 
NORWEB S.7d 

nagoy QIC. FRN 1997 $13,662.64 
Sapporo Breweries FRN 199? *584.543 
Smith (David S 1 (Https.) 2.75c 
State Sank of New Sottfti WUm 10»4% 

2002 AS 107 50 

Temple Court Mortgagee (No .2) Class 
A Multt-Cfcea Mtg. Sacked FRN 2031 
£(43.50 

TR Smarier Companies In*. T*L 1 5p 
Viclorun Public Authorities Finance 
Agency t1% Grd. 2002 AS110 
Wbolwtcti BWg Society FRN 1964 
SM3S.73 

Young’s 6 Co. Brewery 9fc% 2018 £4.75 

■ TOMORROW 
Altai tic RtehfteU SJ J7& 


Be» Steams FRN 199« $89.06 
Bradford A Bwigtey Bldg. Society FRN 
1995 Cl 36.96 
BnrowiCK Corp. 50.11 
Capital Strategy Fund Pig. Rd. Pt. (AS 
Deposit) A50.Q319 

Do. (Australasian Deter Development 
Fund] ASQ.008 
Do (British Field) 3,34p 
Da (DM Shs) DM0.3045 
Do. (Ecu FunifeigJ EcuO.0713 
Do (Emerging Markets] 0.1 Zp 
Do. (French Franc Deposit Ftnd) 

case 

Do (Global Reeotratt) 30.004 
Do. (IntL Bwxi M 50.0682 
Do. (IntL Growth) 50.0162 
Do. (North American) 50.0135 

Do. (PnijBr Boon/ SO. 006 

Do. (Slerixig Shs.i UMp 

Da plotting Bondi FI .93 

DO. (Swiss Franc} SFnJ.174 

Do. (US DOBS} $0.0187 

Do. (Ten Ste 1 77.55 

Chnstnta Bank og Kredrtkasae FRN 

1997 £263.96 

Do. FRN 2001 5163.40 

CSX SO 44 

Do. Dae|an I2p 

□ana 50.40 

Dover Carp. 

Edinburgh in*. Tst 3.65% Cm. Pt. 1.82Sp 
Gartmore American Scarifies 1 1 %% 
2014 £5.6875 
Gann FRN 1998 SI 77.23 
United 50.09 

Louisiana Land & Exptorattan Co. S0.25 
tutdtend Bank Nou-Cm. Oolar Pt. Series 
A1 $0,355 

Do. Nvn-Cm. Nan-Vtg. Dofiar PI. Senes 
A2 $0.08875 

Midland Ml Ftnaneuil Services GW, FRN 
1999 5251-39 

Mcmson (Wnvj Superrroricela St>«% Rd. 
Cv. PI. 2.825*. 


Newcastle Bldg. Society 12%% PtBS 
£63.125 

NTT Data Communications Systems Corn. 

3-3% 1999 Y87.0B3 

PenraoBSO.75 

Province of Quebec 125*% Ln. 2020 
C6125 

Royal Bank of Canada Fttg. Rale Dba. 
2085 589.06 

Sotheby’s Ctesa A Ltd Vtg. SOW 
Sptrtab FFN 1998 $89£6 
Sumitomo Realty 8 Development Co. 
a 06% Nto. 1897 YB0.468 
DO. &55% 1999 Y93£B0 
Do. 3B0% 2000 YT 00277 
Sweden (Kingdom of) 9fe% Ln. 2014 
£487 JO 

Thomson Cap *0.1 13 
Time Warner *0.08 
Trinova $0.17 
Trio HJdgfL 1.5p 
TRWRM7 
Whirlpool 50505 

■ WEDNESDAY MARCH 18 
Bear Steams FRN 1996 593.13 
Dixons ADR 50095 

Honda Motor Corp. 38% 2001 VI 02389 
Leeds Permanent Bldg. Sea FRN 1998 
Cl 37.18 

Ltoyas Bor* series c Var. Rate Nts. 199s 
C147.64 

Santander Financial issuances Undated 

Var. Rate Nts. $2,579.13 

Sore Berk of New South Watea 8% 

Bear Nts. 1994 Y8JJ0Q.0W 
Do. 8% BUI NB. 1994 Ya.OQO.OOO 
Suratomg Chemicd FRN 1997 
United Kingdom 2% Index-Linked Treas, 
1398 £207 

Woolwich Bldg. Society 8% Nts 1994 
£400 

■ THURSDAY MARCH 17 

BP Capua Nts. 1S84 5912.50 
Export-Import Bar* of Ja»n 9H% 1999 
5475 

Henkyu Corp FRN 1996 V 60.625 
JaSmtoe Tranche A FRN 2003 Y2.181.91 7 


London Scottish Bank 2_37p 
Nchenen Fixed to Rfg. Rata Notes 1938 
Y68.7S0 

Da Ntssho htai 3.40% Fixed to Fhg. 
Role Nto. 1998 Y87.833 
Piter 30:47 
Wttan Inv. Co. 3. ip 


Beatrix Mines R033 

Bracken Mines RO. 10 

Biritetelontan Gold Mining R165 

Cartsn Property 1.8%) 

ate & Everara 2.4Sp 

French (Thomas) & Sons 2.1 7Sp 

Genba) tevs. R0.10 

Gold Inti. Finance Tranche B FRN 2 

Y705.C33 

Da Tranche C FRN 2002 Y2.206.S4 
GrooMd Proprietary Mines R0.25 
Hotspurlnvs. 7Sp 
fncoSa.10 

v^S“,!2 L nrtarKM 0M- StefvDown 

>282.500 

Kinross Mhds RO 90 
iMUe Gold Mines RQ.15 
SL Hcfena Gold Mines Rl.30 
Soutfrvasl rtdgs. R2.70 
SHIfanten Gold Mnng R0.75 
Sumitomo «*wy 6. l%«ts. 1998 
Y610POO 

Da 6.15% Nts. 1999 YG 15,000 
On. 62% Nts. 2000 V 620.000 
Do. FRN 199a Y58.361 
Td^^ceiCurae*) Undated R 

Trane-Natal Coal c™ ROja 

Unteet Gold Mean 00.05 

E 'P tora1 *on * Mteng R7. 
Western Deep Levels R3.05 
Wintruet X3p 

■ SATURDAY MARCH 19 

Cm. Pl.1525p 

Umtea king*** 1 1 '*% Trees. 2001, 
04 £S./5 

■ SUNDAY MARCH 20 

Unfled Kingdom IQVbW Excri. 2005 


0 » 



4 



. 





FINANCIAL TIMES MONDAY MARCH 14 1994 


11 


ARTS 


F or three shffUng g and six- 
pence in 1961 it was possi- 
ble to buy A Pocket Guide 
to Modem Buildings in 
London by Ian McCaOmn, 
who was then the editor of the 
Architectural Review, hi this elegant 
little guide book the author wrote 
about the buildings of the Festival of 
Britain beside the Thames. 

"On the South Bank partkutaziy 
can be shown how brQHaiice, colour, 
drama, surprise and even prettiness 
are fully within the range of modem 

architecture, for so lon g considered 
proficient only in the fa rri**** flp y) of 
austere puritanism. For the public 
this means not only light and 
warmth but a way of life that has 
once again some glamour In it - 
green things, pleasant textures, cot 
ours, vistas, urbanities which were 
once the perquisite of privilege.” 

Bow wrong can yon be? The phi- 
losophy that informed the Festival of 

Britain was supposed to extend to 
the permanent development of the 
South Bank site once the exhibition 
b uilding s bad gong »nd only the Fes- 
tival Hall remained. Today the Sooth 
Ttap’k Hm uri iw untouched by urban- 
ity and, to a large degree, ruthlessly 
ugly. Although the Royal Festival 
Hall does remain a distinctive mod- 
em bnilrfing of some quality, there is 
little elm* af any merit on the 
Last week 1 walked around the 
whole of the 27 acres, which comes 
under the control of the South Bank 
Board, with Nicholas Snowman, the 
board’s chief executive. 

The Board has decided under its 
recently appointed chairman. Sir 
Brian Corby (chairman of The Pru- 
dential), to hold an international 

comp etition tO find a Twaatar plcrrrapr 

for the king overdue transformation 
of the site. My walkabout was a grim 
experience not mUflte a tour of a 
part of a city that had been partly 
destroyed in a war and then occu- 
pied by a motley group of tramps 
and culture vultures. 

We started our walk by Waterloo 
station where in a few months the 
first of the anticipated lSm annnai 
visitors from Europe will emerge 
from their fftiannpi Tunnel experi- 
ence. Will they notice any diffamnr*. 
as they burro w beneath the railway 
arches (some of them blitzed or occu- 
pied by tramps) and struggle to 
reach a glimpse of the river? At pres- 
ent it is impossible from ground 
level to find your way with ease to 
any of the cultural destinations. 

If you stray too far you may well 
find yourself in the “cardboard city" 
of the homeless that still disgraces 
the huge sunken traffic island near 
Waterloo Bridge. Once you get near 
to the foo thills of the Hayward Gal- 
lery, the only real hope you have of 
reaching the light is by citmhing 
what look like concrete fire escapes 
leading to the concrete uplands of 
the world of the walkways. As far as - 
I know no one finds fids environ- 
ment acceptable. Access is confusing 
and the quality of the public spaces 
is visually repellent 



Brutally ugly: concrete ‘fire escapes’ lead to a grim network of overhead walkways in a 1960s creation which has become an insult to London and its people 

A lifeline for the South Bank 

The rebuilding of London’s riverside arts centre must be uncompromising, says Colin Amery 


it is worth dwelling for a while an 
the merits of the three main cultural 
buddings. First of all the Royal Fes- 
tival Wall - ghe yHis awririat- all this 
concrete squalor like some faded 
starlet who has seen better days. She 
ban had tor make-Up renewed and 
one or two transplants so that she 
can keep that air of 1960 b refinement 
and alight apartness from her. cruder 
neighbours. I think people like the 
old girl because she is not aggres- 
sively modem and has a definite 
sense of style and lightness. Nowa- 
days she has to carry the burden of 
being a Gbade I listed b uilding - and 
it is encouraging that her owners see 
her virtues and are trying to Temove' 
Mi me of Hie detritus of commerce 
that fitters the spacious foyers and 
detracts from the sense of transpar- 
ency and light that makpg it an 


intriguing and festive building by 

day and at night 

Then there are the two ugly sisters 
- the Hayward Gallary and the 
Queen Elizabeth HaS. They never 
got to the ball in 1951 because they 
were bom too late. The tragedy is 
that they were not aborted. As archi- 
tecture, they are not only without 
distinction but they are a product of 
the 19606 when a cell of LCC/GLC 
architects thrm ght it was clever and 
avant-garde to insult both the city 
and the public by the erection of 
monsters. The present regime at the 
South Bank Board and their immedi- 
ate predecessors anem prepared to 
tread the path of mere expediency. 
They fed they have to try to do 
something to improve th ese horror 
b uildings simply because they are 
there. 


There Is only one solution to 
humanise that part of the South 
Bant and that jg to destroy these 
vile creatures of the 1960s by demoli- 
tion. Only then can the true value of 
the site be appreciated again and 
only than ran a master plan of any 
real civic value be achieved. 

Today is the last day for any archi- 
tect, designer or urban planner in 
the world to submit his two sheets erf 
A4 paper about “the role of cultural 
centres in the 2lst century". Their 
names will be vetted by a p r e tty 
sinister committee of taste that com- 
prises eight people - four of them 
part of the South Bank Centre; three 
architects and an' artist The archi- 
tects are Eldred Evans (designer 
with her husband of the St Ives Tate 
Gallery); Alan Stanton, a good exhi- 
bition designer who is currently 


sadly wrecking the Ashmolean in 
Oxford; and tha amusing and possi- 
bly liveliest member of the gro u p, 
Christian de Portzamparc, a chic 
favourite of Parisian architectural 
circles. The artist is an inevitable 
Turner Prizewinner - Anlsh Kapoor. 
1 pin my hopes for a sane solution 
upon the down to earth skills of Sir 
Brian Corby. 

Ten names will be chosen to go 
ahead and be given the foil brief 
and by the middle of August three 
shortlisted “winners” will have pro- 
duced their schemes for our delecta- 
tion. Will the public have any 
involvement? These decisions are 
too important to be left to an artistic 

cliijne. 

I do not feel that the South Bank 
Board realises that so much of the 
site has to be completely rethought. 


The monsters have to be taken away 
to some Jurassic Park for architec- 
tural relics and a major town plan- 
ning exercise must be carried out 
that involves the whole capital 
city. 

New bridges, new Tate Galleries, 
new sport facilities, and above all 
sew landscaping and new thinking 
about cultural ghettos are essential 
if some feeble compromise erf expedi- 
ency is to be avoided. The proposed 
budget is almost pathptimliy inade- 
quate - of course you can improve 
thing s for £S0m over five years but 
there is a real danger that British 
compromise and philistine parsi- 
mony will produce a result that 
larks real vision and architectural 
quality. Something more than a few 
gestures are needed in this grave- 
yard of hni taliam. 


Concert/Richard Fairman 

Rattle's music of 
political upheaval 

no slump, no sign of artistic 
energy lying untapped. For 


Theatre/Andrew St George 

True grit under the flag 

in country style, for it is set in 


The “Towards the Mill enni um" 
music project, instigated by 
Simon Rattle, is gaining new 
allies. As it progresses decade 
by decade on its exploration of 
the 20th century, the BBC 
Symphony Orchestra and the 
Nash Ensemble have joined 
the musical line-up, whale cov- 
erage of the other arts has 
expanded to take in fiteratnre, 
education and environmental 
artists. 

Perhaps the lure of the 1930s 
for this year’s programme was 
just too great That was the 
decade in which mu si c became 
caught up in momentous politi- 
cal upheaval and reflected 
world affairs more urgently 
than at any time before. Barely 
any European composer 
remained unaffected. Some 
(Bartfik and Schoenberg) were 
uprooted from their home 
countries. Others wrote openly 
(Britten and Tippett) or ambig- 
uously (Shostakovich) in pro- 
test 

The stockmarkets may have 
crashed, but in the world of 
mode there was no depression. 


Rattle the choice was almost 
impossibly wide, given the 
number of strong personalities 
clamouring for inclusion. By 
and large he has not tried to I 
grow the composers in schools 
or nationalities. The City of 
Birmingham Symphony 
Orchestra’s concerts simply] 
bring together acknowledged i 
masterpieces in balanced pro- 
grammes. . 

It may come as a surprise to j 
realise how central a place the 
mu&c of the 1930s plays in our 
concert-life. Almost all the 
music in Battle’s series is 
familiar, bar a couple of the 
short Gershwin pieces and 
Stravinsky’s Persephone, which 


is not heard that often. In 
Thursday’s concert there was 
also Vartse’s Ionisation, a five- 
minute display of percussion 
which has acquired rarity 
value on account of asking for 
13 players on 40 different 

tlK li i IMWltt 

The two main works called 
for equally large orchestral 
forces. In Berg’s Violin Con- 
certo, representative of the 
Austro-German tradition, the 
soloist was Gidon Kremer. He 
was not relaxed and deeptoned 
in the music like Anne-Sophie 
Mutter at the Proms, but wiry, 
nervously introspective, the 
tension coiled tight within. In 
the closing pages he could 
hardly have played more qui- 
etly U was a alunne that 


the CBSO could not match his 
hushed eloquence. Unwanted 
strands of the orchestral 
accompaniment kept protrud- 
ing at the wrong moments. 

Although it does not carry 
any specific agenda, Shost- 
akovich’s Fourth Symphony is 
one of the key political works 
of the decade, withdrawn 
before its first performance in 
fear of Stalin’s disapproval No 
wonder, when its music is 
nearly anarchic, setting out to 
break the symphonic status 
quo. The programme-note 
talked of a mechanical ele- 
ment, but Battle was anything 

but Tnpohflpirnl In hl« hands 
passag es of sadness and long- 
ing, of humour and sincerity 
appeared alongside the sar- 
casm and savagery. The CBSO 
was on sharper form here. A 
performance of this symphony 
should always be shattering 
and this one was no exception. 


Sponsored by Bankers Trust 
Company. Further concerts in 
"Towards the IfiHenmum* on 
March 16, 17, 20 ami 25 


The UK has a new institution 
created by one of its oldest 
The Moving Theatre Company 
has been founded by Vanessa 
and Corin Redgrave; their co- 
directors are Lenka Udovfcki 
of former Yugoslavia and 
Helena Kaut-Howson of Theatr 
CLwyd. Its first production. The 
Flag, at the excellent Bridge 
Lane Theatre, sets t he fame for 
the company’s work: gritty and 
trenchant. This w^Vbs a foa 
debut Brechtian drama follows 
in April. 

The Flag, written by Alex 
Ferguson from the novel by 
Robot Shaw follows the for- 
| tunes of a left-wing clergyman 
back from the horrors of 
trench warfare and dizzy with 
hopes of the 1926 General 
Strike. Shaw’s novel, the first 
of an uncompleted trilogy, 
looks to George Orwell in con- 
tent and George Ewart Evans 


a sleepy parish in Suffolk. 

The central figure, John Cal- 
vin (excellently played by 
Corin Redgrave) is not a char- 
acter but a magnet for noncon- 
formity: sexual, political and 
religious. He is brought to Suf- 
folk by a mischievous and 
libidinous dowager who loves 
him and his politics: “Wonder- 
ful news.” she reports, Tve 
found a socialist, a real social- 
ist ... in Manchester.” Calvin 
duly offers the recalcitrant 
parishioners new forms of 
faith. The Red Flag hangs in 
the church, a totem for the 
play’s action. 

Ferguson’s adaptation makes 
sporadically powerful theatre. 
The original novel’s impact lay 
in its picture of the world 
rather than to the pattern of 
exchanges between individuals 
as stage. The play has to give 


up social description for dra- 
matic action. Corin Redgrave's 
direction (with Gillian Hamble- 
ton) moves deftly between 
tunes, and switches sharply 
among the large cast of charac- 
ters: Calvin's malcontent wife, 
his pubescent children, his 
erstwhile comrades in arms 
and the bevy of bucolics. 

What remains at the end is 
the sense that something Idl- 
ing has happened, and regret 
that the play leaves so much 
unsaid- Beneath runs the fear 
of capitalism and disappoint- 
ment in the labour movement 
Socialists in 1926 must have 
held their breath, face to face 
with something commensurate 
to their capacity for action. 
But only the miners stayed out 
on strike. 


Bridge Lane Theatre until 
April 2 


Opera 

Glorious 

Lulu 

Nothing less than a 
sensational performance can 
do justice to Alban Berg's 
great opera Lulu, for it is an 
intrinsically sensational work. 
So mucb so, as you may 
remember, that his widow 
Helene did her puritanical best 
to prevent anyone from com- 
pleting his ncxt-to-last 
sketches for Act 3: Friedrich 
Cerha had to carry out bis 
faithful labours Id conditions 
of secrecy. Without that. Lulu 
would have remained an excit- 
ing torso, a very black sex- 
comedy with a whiff of trag- 
edy. The complete version is, 
as it ought to be, an over- 
whelming experience. 

In the Royal Festival Hall on 
Friday (and no doubt at Bir- 
mingham on Sunday too), Lulu 
was sensational and over- 
whelming. Nobody who heard 
it will forget it for a long time. 
With the BBC Symphony and a 
superbly Chosen international 
cast, Andrew Davis led a scari- 
fying performance. Billed as a 
“concert performance”, it was 
much more than that 

Most of the singers were vet- 
erans of staged Lulus. Not only 
could they do without scores, 
but they acted their roles to 
the hilt without props - well, 
just one pistol - In the long, 
narrow space in front of the 
orchestra, something like an 
allotment planted with micro- 
phones at every turn. Some- 
how Davis managed to keep 
them vividly audible, while 
taking fall advantage of his 
exposed band to render Berg's 
intricate score more transpar- 
ent than is ever possible from 
an orchestra-pit 

It sounded glorious: opulent 
intensely expressive, horribly 
affecting. And without stage 
paraphernalia, we even 
seemed to see the opera with 
new clarity, unhampered by 
any prodimer's "concept”; the 
gestures and physical inter- 
play were enough. At the cen- 
tre of it all. or course, was 
Lnln herself, miraculously 
incarnated by the American 
soprano Patricia Wise. 

She had everything: liquid 
silver at the top of the voice 
(where Berg’s demands are 
almost unnatural), a gleefully 
indecent gown, tee practised 
maimers of a sex-kitten and a 
subtle way with phrases - but 
also a mature, comprehensive 
insight into the role. Though 
sex-kitten victims are oommon 
enough, it is a rare Lulu who 
can pronounce herself to he 
nothing more than what men 
see in her with such poignant, 
unwinking candour. The role 
is cruelly taxing, and most 
Lulus try it on for only a few 
years; I pray that the Royal 
Opera will revive its excellent 
production for Miss Wise with 
an possible haste. 

There were no weak links 
among the other principals, 
too numerous to praise as 
deserved - Wolfgang ScbSne 
dignified and tortured as 
Lulu’s “protector" (and mon- 
strous as Jack the Ripper); 
Ryszard Karczykowski, Theo 
Atom and Robin Leggate well- 
seasoned as luckless Aiwa, 
creepy Schigolcb and the 
ruined Fainter; a warm, sad 
lesbian Countess from Jane 
Henscbel and an ebullient Ath- 
lete by Lenns Carlson. The 
supertitles were patchy and 
erratic, so it was doubly a pity 
that the Hall ran out of pro- 
grammes before the start - 
Wedekind’s plot is too compli- 
cated to guess at 

David Murray 


1 1 IMZXNATIONMI | 

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■ BERLIN 

OPERA/DANCG 
Deutsche Oper The main event 
this week Is the premiere on Sun 
of a new production of 
Schoenberg's Erwartung and 
Bartok’s Duke Bluebeard’s Castle, 
staged by Gfitz Friedrich and 
conducted by Jlri Kout. with a cast 
headed by Doris Soffel, Richard 
Cowan and Karan Armstrong. 

Repertory also includes Fbgoletto, 
Don Giovanni and Ffdefio (341 0249) 
Staatsoper tarter den Linden Peter 

Seftreier sings Belmonte in 
EntfDhrung on Wed and Sat This 
week also has three performances 
of Patrice Bart’s production of 
Wnkus’ ballet Don Quixote. A new 
production of Etektra opera on 
March 27 (200 4762/2035 4404) 
CONCERTS 

Schauapieihaus Tonight Michael 
Schoenwandt conducts Berlin 
Symphony Orchestra In works by 
Cherubini, Ravel and Beethoven, 
with piano soloist Nfichel DaSberto. 
Thurs: soprano Frangolsa Poflet 
Joins members of the BSO in an 
evening of French chsnber music 


and song. Fri: Karl Anton 
Rfckenbacher conducts Berlin Radio 
Orchestra and Chorus In works by 
Messiaen. Zbmlnsky and Strauss. 
Sat, Sun, More Radu Lupu plays 
Mozart’s Piano Concerto No 23 
with Berlin Symphony Orchestra 
(2090 2156) 

Phflharmonto Tonight: Alan Marks 
piano recital. Tomorrow, wed: Georg 
Solti conducts Berlin Philharmonic 
Orchestr a and Radio Chorus in 
Beethoven’s Missa SoJemnis, with 
soloists Including Julia Varady. 
Tomorrow (Kammermusiksaal): 
Nikolaus Harnoncourt conducts 
Chamber Orchestra of Europe In 
symphonies by Schumann and 
Brahms. Thurs: German hom 
virtuoso Ludwig GQtder is soloist 
in a Bach programme- Frr. Wolfgang 
SawaOtsch conducts Vienna 
Symphony Orchestra in symphonies 
by Beethoven and Bruckner. Sat, 
Sun: Vladimir Ashkenazy conducts 
Berlin Radio Symphony Orchestra 
In Stravinsky, Ranch, Roussel and 
Messiaen (2548 8132) 


■ NEW YORK 

THEATRE 

• Angels in America: Tony 
Kushner’s epic two-part drama 
conjures a vision of America at the 
edge of disaster. Part one is 
Millenium Approaches, part two 
Perestroika, played on separate 
evenings (Walter Kerr, 219 West 
48th St 239 6200) 

• Four Dogs and a Bone: John 
Patrick Stanley's comedy about 
movie-making and power plays in 
Hollywood was one of 

off- Broadway’s biggest hits last 
autumn (Lucille Lortef, 121 
Christopher St, 924 8782} 


• The Birthday Party: the 
Independent Theatre Company's 
production of this 1958 play by 
Harold Pintersummons up the 
necessary mix of brutality and 
banality. Final week (House of 
Candles, 99 Stanton St, 353 3088) 

• Blown Sideways Through Life: 
Claudia Shear’s 65th job is 
performing this hit monologue about 
the previous 64 - everything from 
waiting fables to answering phones 
in a bordello. A funny end moving 
evening (Cherry Lane, 38 Commerce 
St, 989 2285) 

• Pounding Nells into the Floor 
with My Forehead: Eric BogosJan’s 
monologue on life In the 1990s 
mows down aU the sacred cows 
of poetical correctness. A scathing, 
scatological, exhaaratlng rant 
(Minetta Lane, 18 Marietta Lane east 
of Sixth Ave, 307 4100) 

• Carousel: Nicholas Hytner’s 
award- winning National Theatre 
production of the 1945 Rodgers 
and Hamm e rstein musical transfers 
from London to Broadway wtth 
Michael Hayden at tha head of an 
American cast In previews (Vfvian 
Beaumont Lincoln Center, 239 
8200) 

• Heflo Again: Michael John 
LaGhlusa's sexy, adventurous 
musical fa the new off-Broadway 
hit of the season. TH March 27 
(Mitzi E. Newhouse, Lincoln Center, 
239 6200) 

OPERA/DANCE 

Metropofitan Opera This month's 
highlitfrts are Adriana Lecouvreur 
with Mirefia Rani (SI March 28) and 
a new production of Otefio, opening 
next Mon with cast headed by 
Pladdo Domingo. Repertory 
Includes il barbtere di Siviglla with 


Susanna Mentzer and Vladimir 
Chernov, Poulenc’s Dialogues des 
Carmelites with Dawn Upshaw and 
Teresa Stratas, and La boheme with 
Diana Soviero and Richard Leech 
(362 6000) 

State Theater Dance Theatre of 
Harlem is in residence tOI March 
27 with old favourites like Firebird 
alongside a revival of last year’s 
hit A Song for Dead warriors and 
choreographies by BUty WHson. Glen 
Tetley, Michael Smufn and Alvin 
ABey (870 5570) . 

City Center Merce Cunning ha m 
Dance Company is in residence 
m Sun (581 1212) 

CONCERTS 

Carnegie Hall Tomorrow and Wed: 
Leonard Slatkfn conducts Saint 
Louis Symphony O rch estra In two 
programmes, including the Mazzetti 
version of Mahler's Tenth and works 
by Bolcom, Vaughan Wiliams and 
Richard Strauss. Thure: The 
Chieftains. Sat Isaac Stem violin 
recital. Sun afternoon: Paid Lustg 
Dunkel conducts American 
Compo se rs Orchestra. Next Moa 
tvo PogoraJich piano recited. (247 

7800) 

Avery Fisher Hall Wed: Kurt Masur 
conducts Neiw York PhHharmonlc 
Orchestra in works by Schumann 
and Brahms, with piano soloist 
Maurizto PollinL Thurs, Fri morning. 
Sat; next Mon: Masur conducts 
Mozart, Bartok and Schumann, with 
violin soloist Glenn Kcterow. Fit 
Charles Dutoit conducts Orchestra 
National de France In Prokofiev, 
Debussy and Revel, with piano 
soloist Martha Argerich. Sun 
afternoon: Vassily Sinaiski conducts 
Moscow Philharmonic Orchestra 
in Musorgsky, Rakhmaninov and 


Stravinsky, with piano soloist 
Vladimir Viaido. Sun evening: Dennis 
Russell Davies conducts Orchestra 
of the Bonn BeethovenhaBe In 
Ullmann, Brahms and Beethoven, 
with piano soloist Vladimir Feftsman 
(875 5030) 

JAZZ/CABARET 
Rainbow and Stars Suzannah 
McCorkle, rn residence till March 
26, takes her audience on a 
Jazz-Inflected stroll through the last 
70 years of American popular song. 
Closed Mondays (30 Rockefeller 
Plaza, 632 5000) 


■ PARIS 

DANCE/OPERA 
Palais Gamier Tonight young 
dancers of the Opera Ballet in 
ex tracts from ballets by 
BoumonviHe, DoCn, Vinogradov and 
others. The rest of the week is 
devoted to an Op6ra Ballet 
production of three new works by 
Roland Petit, daily except Sun t8l 
March 22 (4742 5371) 

Opera BasHle Tonight Ren6 KoBo 
song redtaL Tomorrow, Thurs, Sat 
next Mon: Serge Baudo conducts 
Jose- Luts Gomez’s production of 
Carmen, with cast headed by Marta 
Senn, Daniel Gahrez-VaBejo and 
WUHam ShimeU (4473 1300) 
Cfdtetot Tonight WflUam Christie 
conducts Les Arts Flortesants In 
concert performance of Cleoflde, 
three-act Italian opera by 18th 
century composer Johann Adolf 
Hasse. Thurs, Sun: Christoph von 
Dohnanyf conducts Ancfreas 
HomokTs production of Die Frau 
ohne Schatten, with Sabine Hess, 
Jean- Philippe Lafont, Thomas 
Moser, Luana DeVol and Anja SHJa. 
March 27-April 2: Peter Stein's 


production of Pell&ts gt Mfllsande 
(4028 2840) 

CONCERTS 

Th6fitre des Champs-0ys6es 
Tonight Beaux Arts Trio plays 
Schubert’s Piano Trio D898 and 
joins Prague Chamber Orchestra 
in Beethoven's Triple Concerto. 
Tomorrow, Wed, Thurs: Fouat 
Mansourov conducts Bolshoi 
Orchestra and Chorus in Russian 
liturgical songs and extracts from 
Russian operas. Sun morning: 
KaBchstein Laredo Robinson piano 
trio (4952 5050) 

Ctifttelet Tomorrow: Christoph von 
Dohnanyi conducts Philharmonia 

Orches tra in Bruckner's Eighth 
Symphony. Fri: Eltahu I riba! 
conducts Orchestra Phil harm onique 
de Radio France in works by 
Richard Strauss and Dvorak, with 
cello soloist Truls Mork. Sun 
morning: Arditti Quartet. Sun 
evening: Mariss Jansons conducts 
RoyaJ Concertgebouw Orchestra 
in Strauss and Tchaikovsky, with 
ceflo soloist Heinrich Schiff. Czech 
pianist Ivan Moravec gives lunchtime 
piano recitals today. Wed and Fri 
(4028 2840) 

Thtotre do la VHfe Fri, Sat 
Christian Zacharies joins Cherubini 
Quartet in piano quintets by 
Schubert and Brahms. March 25, 

26: Yuri Bashmet (4274 2277) 

SaBe Pleyel March 26: Jessye 
Norman (4561 0630) 
JAZZ/CABARET 
George Porto' Junior, king of New 
Orleans funk, is in residence this 
week at Lionel Hampton Jazz Club. 
March 21 -April 2 : Ernie Andrews 
and Johnny Kirkwood Quartet (Hotel 
Meridian Paris Etoila, 81 Boulevard 
Gouvion St Cyr, fa 4068 3042) 


ARTS GUIDE 

Monday: Berlin. New York aid 
Pate. 

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 Charm et FT Busi- 
ness Today 1330; FT Business 
Tonight 1730, 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 123a 

TUESDAY 

Euronaws: FT Reports 0745, 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/$uper Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730; 




FINANCIAL THVTKS MONDAY MARCH 14 1994 


Rome was not 
rebuilt in a day 

Italy’s confusing electoral reforms are likely to 
produce further muddle, says Andrew Gowers 


T he politicians who 
campaigned success- 
fully a year ago for a 
fundamental change 
in Italy’s voting laws promised 
a lot Moving from the previ- 
ous, hideously complex system 
of proportional representation 
towards a first-past-the-post 
approach more ah'n to that of 
the UK would, they claimed, 
generate more transparent and 
straightforward elections, pres- 
ent voters with clearer choices 
and even produce stabler and 
more legitimate governing 
majorities. 

Unfortunately, although the 
voters signalled in large num- 
bers that they wanted all these 
things in last April's referen- 
dum, they look like being cru- 
elly disappointed. The cam- 
paign for the election due on 
March 27 has created neither 
transparency nor straightfor- 
wardness, the choices involved 
are about as obscure as ever in 
Italian politics, and the out- 
come could well be something 
to which Italians have become 
all too accustomed in the past 
45 years: an almighty muddle. 

The confusion can only com- 
plicate the task of any new 
Italian government in dealing 
with political challenges and 
economic constraints that 
remain more awkward than 
those facing any other major 
western European country. 

Electoral reform, of course, 
was never going to be a pan- 
acea for the manifold ills 
afflicting Italy's body politic 
following the collapse of the 
corrupt old order dominated by 
the Christian Democrat party. 
Under that system, the politi- 
cians - competing on centrally 
chosen party lists - traded 
votes for patronage, and the 
result was an endless succes- 
sion of governments compris- 
ing the same parties and faces. 

But reform was supposed to 
hasten the construction of a 
new order, in part by reducing 
the number of small parties 
scrambling for a slice of power 
and by encouraging the forma- 
tion of larger political group- 
ings whose candidates would 
compete for single-seat constit- 
uencies on the basis of distinct 
policy programmes. 

That is not quite how things 


have turned out. Thanks 
largely to a provision in the 
electoral law, allowing for 25 
per cent of the seats In the 
lower bouse and senate to be 
elected by proportional repre- 
sentation and party lists, the 
small parties are alive and well 
and insistently clinging to 
their separate identities. 

In order to maximise their 
votes in the single-seat constit- 
uencies. individual parties of 
the left, right and centre have 
banded together in alliances. 
But these groupings remain 
flimsy in the extreme, their 
members united by political 
slogans but divided on Impor- 
tant policy issues, riven with 
personality clashes, and to 
some extent vying with one 
another as well as with the 
opposing alliances for votes. It 
is hard to see any of them sur- 

The forces of the 
right disguise their 
differences behind 
a presidential-style 
campaign 

viving long after the election, 
let alone fo rming the basis for 
stable government 

On the left such are the dif- 
ferences within the Progressive 
Alliance between the main- 
stream of the former commu- 
nist party and a breakaway 
harriThw» faction that the alli- 
ance’s overall leader, Mr 
Achille Occhetto, spends more 
of his time repudiating the 
extreme comments of some of 
his colleagues than in explain- 
ing his party’s programme. 

The forces of the right, 
grouped around media mogul 
Silvio Berlusconi's Forza I talia 
movement are leading in the 
polls, but largely by virtue of 
disguising their differences 
behind a vapid, presidential- 
style cam paig n focused on the 
personality of Mr Berlusconi- 
Serious policy discussion has 
been conspicuously absent 

Small wonder that the voters 
are confused, or that pressure 
is growing for another bout of 
electoral reform. Not only do 
they face the disappearance of 
any familiar element in the 


landscape (almost all the par- 
ties have changed their names 
to distance themselves from 
the past and several have split 
into even smaller fragments). 
They are also being aaimd to 
vote, on three separate ballots, 
in a system that is n»iihw fish 
nor fowl - neither PH nor first- 
past-the-post - and in igno- 
rance as to how the candidates 
of their choice wQl ultimately 
be aligned or what sort of gov- 
ernment might result 
It is scarcely a climate 
designed to foster responsible 
or coherent postures by the 
politicians themselves. Front 
runner Mr Berlusconi, in par- 
ticular, has been shameless Jy 
promising tax cuts and new 
jobs. No serious observer 
expects him to be able to 
deliver these without severely 
damag in g Italy’s painstaking 
efforts to reduce its budget def- 
icit and bring its spiralling 
government debt under con- 
trol. He has also consistently 
refused to subject his platform 
to proper scrutiny by debating 
on TV with his opponents. 

The latter are putting their 
trust not in achieving outright 
victory (the polls give them 
few grounds for hope on that 
score) but in the idea that 
forces of the centre, moderate 
left and moderate right will, 
after the election, combine to 
back a pragmatic “institu- 
tional’' wnlih'm that can put 
politics aside and get on with 
governing. For Italy’s estab- 
lishment, smoke-filled rooms 
and massaged results still 
seem more comfortable than a 
straight political fight 
What the country badly 
needs is a stable government 
capable of matching up to its 
status as the world’s fifth larg- 
est industrial power and get- 
ting to grips with its economic 
problems. Ironically, the clos- 
est it has come to that state of 
grace in recent decades is prob- 
ably with the technocratic gov- 
ernments bom out of the com- 
prehensive discrediting of the 
political class in the last two 
years. The current election 
campaign shows how for Italy 
still has to go before it creates 
a political system that can be 
relied on to produce such a 
government at the ballot box. 


W hen a lone black 
soldier turned his 
rifle on two 
wounded right 
wing whites lying in the blood 
and dust of a Bophuthatswana 
street on Friday, and pulled 
the trigger to execute them, 
South Africa reached a turning 
point. 

With any luck, that grue- 
some faiMdent - the first time 
in recent South African history 
that the aimed white right has 

confronted blacks and come 

out the loser - will turn the 
tide of events in a positive 
direction. Anyone who saw the 
terrified faces of the two 
wounded men as they begged 
for mercy, anyone who 
watched as truckloads of the 
racist wlute fled Bophuthat- 
swana with black soldiers in 
furious pursuit, cannot doubt 
that the right was dealt a salu- 
tary shock when its lunatic 
foray into Bophuthatswana 
gndftH in humiliation. 

There are already signs that 
the shock has sent at least 
some right wing leaders scur- 
rying to their senses: General 
Constant I VUjoen, the Afrika- 
ner leader who despatched 
right wing “troops" to the 
homeland in the first place, 
Said thn hn jpolariH fiagfn hart 

provoked him to drop his plans 
to boycott April’s all-race elec- 
tions. At midnight on Friday 
ni g ht t he submitted a list of 
candidates to fight the election 
under the banner of the Free- 
dom Ftont, a party created by 
him to pursue the demand for 

an Af rikaner hompland via the 
ballot box. 

By yesterday afternoon, his 
commitment to electoral par- 
ticipation appeared to be 
wavering, with his dose ally, 
Mr Rowan Cronje. foreign min- 
ister of Bophuthatswana, say- 
ing Gen Vfljoen was reconsid- 
ering Us position. But 
whatever he decides, the 
Bophuthatswana episode 
appears to have provoked a 
split in the right wing which 
cannot be hmlari, leaving the 
neo-Nazi leader Eugene Terrfi- 
blanche and the white suprem- 
acist Ferdi Hartzenberg, leader 
of the ultra-right Conservative 
Party - the real villains of the 
battle of Bophuthatswana - 
isolated from the mass of right 
wing Afrikaners, who may be 
frightened, perhaps even rac- 
ist but who recoil at racial 
confrontation. 

Such a split must be good 
news for South Africa's elec- 
tion prospects, for it will 
weaken the case for violent 
struggle and give ordinary 
Afrikaners an electoral outlet 
for their fears and a constitu- 
tional means erf demonstrating 
whether there is widespread 


Patti Waldmeir says the battle of Bophuthatswana 
has led to a reali gnm ent in South Africa’s politics 


Shocked, shaken 
but surviving 



AP 

Restoring order: Sooth African defence forces arrive to quell unrest in Mmahatho, Bophuthatswana 


support for a “volkstaat" [an 

Afr ikaner ho meland ]. But the 

split could hold as much threat- 
as promise: for the paramili- 
tary right has been held in 
check, at least partially, 
through Mr Terrdblanche’s alli- 
ance with Gen Viljoen, an alli- 
ance which now appears irre- 
vocably ended. 

Marginalised by the new pol- 
itics of the right, and enraged 
by the execution of right wing 
whites by Macks in Bopbuthat- 
swana, Mr Terrtblanche’s 
AWB could prove more rather 
than less dangerous. Of the 
many snapshots of horror pro- 
vided by last week's events in 
Mmabatho and its twin city, 
Mafikeng, the most shocking 
image was of black bodies 
slumped in the streets of Mafi- 
keng, killed by whites who 
drew fire in their turn from 
black troops and police. As a 
black South African television 
c ameraman said at the time : 
“the race war has begun". 

African National Congress 
leader Popo Molefe, candidate 
for premier of the new North- 
west province which includes 


Bophuthatswana, appeared to 
endorse the killing of whites, 
saying that the execution 
“leaves me cold”, repeating the 
comment made by Minister of 

Police Jimmy Kruger nearly 20 
years ago, that the de at h of 
black liberation leader Steve 
Rilm left him, similar ly, “cold”. 
South Africans must hope that 
the turning point reached on 
Friday was the be ginning of 
the gnd of the ext reme white 
right, r ather than the start of a 
new r acial conflict 

South African newspapers 
were quick to declare yester- 
day that the battle of Bop 
marked the definitiv e defeat Of 
flie p aramilitar y right. Unfor- 
tunately, events do not bear 
that out: the whites who 
invaded Bophuthatswana in 
the dark of Thursday night left 
in confusion and humiliation 
on Friday: but they were not 
routed. Most withdrew under 
orders from their commander. 
Gen VUjoen, without ever 
entering the capital: some 3,000 
spent the day at an air base 
several kilo metres from Mma- 
batho, and withdrew under 


escort of South African troops, 
after Bophuthatswana presi- 
dent Lucas Mangope (since 
removed from office) asked 
Gen Vifioen to send them 
home. Those chased through 
the streets of Mafikeng by 
black troops were a minority. 

What the white right learned 
at Hamabatho was that it 
could not take an an army - 
whether the 3,500 strong 
Bophuthatswana Defence 
Force, or the for more powerful 
South African Army. But 
largely, they knew that 
already; direct confrontation 
between right wing and loyal 
South African armies was 
never the main threat to the 
country's transition. Small 
groups of fanatic right wingers 
en g a g ed in sabotage and ter- 
rorism posed the greatest dan- 
ger; they still do. The battle of 
Bop may have deflated the bra- 
vado of the right, but it has not 
removed the menace. 

Still Gen VUjoen 's defection 
to the political centre (assum- 
ing he does not reverse it in 
coming weeks) will strengthen 
the critical mass of parties. 


Accepting the new constitution, 
and broaden the tegitimacy of 
the election- One major party - 
arguably the most important of 
the dissenters, the Zulu-based 
Inkatha Freedom Party of 
Chief Mangosuihu Butheiezi - 
remains publicly committed to 
boycotting the election. ANC 
KHre hoping that Chief 
Butheiezi will suffer the same 
fete as President Mangope: a 
civil servants’ revolt, coupled 
nritYi nnlirA mutinV. toppling 


B ut Gen Viljoen’s deci- 
sion to stand for elec- 
tion has split not only 
the white right, but 
the whole of the right-wing 
Freedom Alliance, which used 
to include Inkatha, Viljoen’s 
Afrikaner Volksfront and the 
Bophuthatswana government 
Now the Bop government has 
been removed from power, the 
Afrikaner Volksfront is disinte- 
grating after Gen Viljoen’s res- 
ignation to head the new party 
(the Freedom Front), only 
inkatha is left boycotting the 
election. 

The threat of countrywide 
disruption bad been based on 
the feet that the white right is 
distributed throughout South 
Africa, while Inkatha’s influ- 
ence is localised. The week- 
end’s events must undermine 
the geographical scope of a 
boycott outside Inkatha' s 
heartland of Natal province, 
and certain townships of the 
East Rand near Johannesburg. 
But Natal is the country's most 
populous province, and dis- 
rupted elections there would 
seriously undermine the 
result’s legitimacy. 

The lesson of the past few 
months of negotiations has 
been that no breakdown is 
ever, quite, Anal. Time is short, 
Inkatha is still protesting 
loudly that it will resist the 
poll, and April's ballots are 
already being printed. But the 
ANC still holds out hope that 
inkatha will make a late deci- 
sion to Enter the pall. 

The battle of Bop has gener- 
ated a realignment in South 
African politics; but if the 
scene has been shaken up, it 
has not yet settled down. 
Today, Gen Viljoen is due to 
meet Chief Butheiezi for what 
could prove another decisive 
showdown. Perhaps the white 
right will persuade black con- 
servatives to accept elections; 
perhaps the opposite will be 
true. For the moment, the situ- 
ation in South Africa remains, 
as it has been for months, 
fluid. If anything, the recent 
dramatic events may have 
mmie the poflous transition to 
democracy slightly easier. 


LETTERS TO THE EDITOR 


A good is a 

a C(DNlNlOMnry LEABDE®— 


and a ff(DO<EEMA»f, 


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0495 

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Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be deaity typed and not band written. Please sec fox for finest resolution 


Level playing 
field is 
required for 
UK Nasdaq 

From Mr Edmond Jackson. 

Sir, Ronald Cohen and Sir 
Andrew Hugh Smith present 
contrasting views on the mer- 
its of a separate smaller com- 
panies stock market (Personal 
View: March 8). 

What do private investors - 
key buyers of growth stocks - 
think on this longstanding 
issue? 

Having watched the rise and 
demise of 1980s Over-The- 
Counter and Third Markets, I 
recall more wealthy share pro- 
moters than Investors who 
backed fledgling issues. 

Standards of disclosure out- 
side the London Stock 
Exchange were appalling. 

Sir Hugh’s concern for qual- 
ity reporting is therefore 
imperative. Shouldn't investors 
have “information rights" to 
glean most of what is required 
to value shares from the finan- 
cial statements? 

Mr Cohen doesn't even men- 
tion disclosure, and as a ven- 
ture capitalist he must ensure 
a market for his seed corn 
investments. 

Buyers beware. 

But the London Stock 
Exchange hardly champions 
investors outside City circles. 
Representatives of Its member 
firms have privileged access to 
company results briefings, 
where the future is evaluated 
and quickly factored into share 
prices. 

"Sid” has no accsss to these 
meetings, and is also disadvan- 
taged by smaller company 
share placings which favour 
institutional hives tors. Even in 
a major offer for sale, individu- 
als typically receive a prospec- 
tus only 48 hours before the 
applications deadline - with 
imniffirient time for consider- 
ation. 

If Mr Cohen's proposed “UK 
Nasdaq" will radically reform 
new issues for private investor 
participation, list detailed com- 
pany announcements on TV 
Ceefax and uphold reporting 
standards, it could win strong 
public support 
Edmond Jackson, 

Chemes, 

Butlers Dene Road, 

Woldmgham, 

Surrey, 

CR3 7HH 


Scottish salmon also subsidised 


From Mr Roderick Thomas. 

Sir, I refer to your editorial 
comment " Salmon wars" 
(March 10). While it is no doubt 
true that the Norwegian 
salmon industry has received 
considerable state aid, the 
same must also be said of the 
Scottish industry. 

Since the late 1970s Scottish 
salmon farming companies 
have received UK and EU 
direct aid in the form of grants, 
interest relief subsidies and 
cheap loans; in certain cases 
direct aid has exceeded 50 per 
cent of the start-up costs of 
Scottish salmon farming ven- 
tures. 

In addition the Scottish (and 
Irish) industries are protected 
by an import tariff of 2 per 


cent which is significant in 
such a low margin business. 

The real problem is that Nor 
way enjoys several fundamen- 
tal advantages over Scotland: 
in general, sites are more shel- 
tered and less prone to storm 
damage; the temperature and 
day length regimes engender 
foster growth and a lower inci- 
dence of disease; the size of 
forms is strictly limited by the 
licensing authorities and as 
such Norway has not suffered 
some of the appalling disecono- 
mies of scale witnessed at large 
units in Scotland where dis- 
ease has resulted in drastic 
losses. 

Without the benefit of state 
aid the efficient family-oper- 
ated, medium-sized Norwegian 


salmon form is profitable at an 
average price which is perhaps 
20-30 per cent below the stated 
average cost of production in 
Scotland. 

The real worry now is not 
Norway but Chile: its nascent, 
fast-growing industry is produ- 
cing salmon even more cheaply 
than Norway. 

Whether Norwegian salmon 
is excluded from the EU or not, 
international competition in 
the maturing salmon market is 
to mtenffliy . 

In the long term, salmon 
prices are unlikely to recover. 
Roderick Thomas, 

Mactennan Seafoods. 
Caversham, 

Reading, 

Berks RG47TQ 


Commercial leases costly 
for UK retail businesses 


From Mr Peter J Baguley. 

Sir, In the letter “No foul 
play over rent reviews for com- 
mercial properties" (February 
25), Mr William McKee, 
referred to research under- 
taken by the British Property 
Federation which concluded 
that there is no evidence that 
the upwards-only rent review 
provision in commercial leases 
has exerted inflationary pres- 
sures on occupational rents. 

This is misleading and con- 
trary to our own research, 
which employed a s imil ar 
methodology, but was tailored 
specifically to the retail prop- 
erty market 

• The retail rental value index 
has been at a higher level than 
the index of “high street” retail 
price inflation (measured using 
the retail sales deflator) in just 
under half of the last 22 years. 

• This upward inflationary 
pressure in the retail property 
market has not been compen- 
sated for by downward pres- 
sure during periods of rela- 
tively low inflation, for 
example the late 197 0s and 
early 1980s. The rapid rise in 
retail rents during the late 
1980s more than covered the 
lower rental growth (relative 
to price inflation) during the 
period 1975-1985. 

• On average, retailers in the 
lost 22 years would be paying 9 
per cent more rent under a 
conventional lease with UORR, 
compared with the rent which 
would be payable under a 
regime of annual inflation-in- 


dexed Ge finked to retail sales 
inflation) leases. For leases 
agreed during the period 
1975-1987, this p r op ortion rises 
to 20 per cent, peaking at 28 
per emit in 1977. 

In summary, our evidence 
Indicates that the structure of 
the institutional lease has 
resulted in the majority of 
retail businesses in the UK 
paying more rent than they 
can afford to cover through 
price inflation. 

With the prospect of a low 
inflation decade, fliig fa likely 
to inhibit expansion by retail- 
ers which in turn, could 
impact on a national economy 
placing reliance on consumer 
expenditure to lead the recov- 
ery. 

There is, however, one 
important area where our 
views depart from those of Mr 
V A G Tregear (Letters: "Out- 
law upwards-only provisions 
on commercial rents", Febru- 
ary 9). In common with the 
BFF, the Boots Group, in its 
response to the government’s 
consultation paper on the com- 
mercial lease structure, has 
argued for non-intervention. 

Nevertheless, we fir mly 
believe that the property mar- 
ket must face up to its own 
inherent inefficiencies and 
work towards achieving 
greater flexibility, as any mar- 
ket should. 

Peter J Baguley, 

director of proper® investment. 

Boots Properties, 

Nottingham NG2 3AA 


MEPs will stick 
to guns on vote 

From Mr David Martin, MEP. 

Sir, Klaus Ktnkel was quite 
right to state that the UK posi- 
tion on qualified majority vot- 
ing in an enlarged Community 
is unacceptable to the Euro- 
pean Parliament and that the 
latter would reject any such 
solution (“Vote dispute threat- 
ens EU expansion”. March 9). 

The reasons are simple: the 
UK position would render deci- 
sion-taking in the EU even 
more difficult Binq at present. 
Citizens of all 16 member 
states have a right to expect 
the EU to be capable of taking 
decisions in those areas where 
it holds responsibilities. The 
UK position is a recipe for 
more paralysis in the EU. The 
European Parliament will cer- 
tainly stick to its guns. 

David Martin, 

MEP, 

Strasbourg 


Knave or 1 

From Mr Martin L 
. Sir, I recall tb 
island populate! 
knig hts, who alw 
truth, and knaves 
do. The logical pn 
you meet a native, 
a question the ansi 
will tell you un 
whether your into 
knave or a knight 
haps a parliament 
which would do th 
Martin Lam 
Wembley, 

Middlesex HA9 9 Q, 



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Sch ! 


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FINANCIAL TIMES MONDAY MARCH 14 1994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel- 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Monday March 14 1994 


T he smart money is an a 
deal But whatever the 
outcome of tomorrow’s 
emergency foreign min- 
isters meeting in Brus- 
sels, the latest crisis over enlarge- 
ment of the European Union seems 
certain to have far-reaching reper- 
cussions. 

Much more than a few thousand 
tonnes of Norwegian fish is at 
stake. Either through miscalcula- 
tion or as a matter of principle, the 
HE has forced its EU partners to 

confront the one issue which most 
would prefer to ignore; the distribu- 
tion of power in an expanded Union. 

The resulting cl psh hag pushed 
the enlargement talka to the brink 
of collapse. Britain, and to a lesser 
extent Spain, stand accused of 
breaking the pledge of the twelve to 
wrap up negotiations by early 
March so that Sweden, Finland, 
Austria, and Norway can enter the 
Union by January 1 1995. 

The row has exposed the faul- 
ritnfw in the Union which the Maas- 
tricht treaty failed to close: between 
a rich north and a poorer south; 
between big and small member 
states; between sovereignty-con- 
scious countries such as the UK, 
which hankers for a looser Union 
based on inter -governmental 
co-operation, and te derabst s such as 
Belgium and the Netherlands which 
want fasts- integration and stream- 
lined 

Diplomats in Brussels remain baf- 
fled at the readiness of Mr John 
Major's government to risk sacrific- 
ing enlargement, a policy which 
seemed central to its aim of a wider 
Union. "The British are playing pol- 
itics at any price,” said one German 
ryffiriai t “but tbfa is a very danger- 
ous game.” 

There has always been a paradox- 
ical rfwwimt in plana to expand the 
Union. Increasing the number of 
member states wHL at some point, 
require a reform of collective deci- 
sion-making. Without such an over- 
haul, the Union risks grinding to a 
halt, says Sir Leon Brfttan, chief BIT 
trade negotiator and the senior Brit 
ish commissioner in Brussels. 

Yet tile basic cogs in the ECTs 
wiafihma have remained mv*hangfd 
for 35 years, in spite of a doubling 
of member states from, six to 12. The 
number of commissioners and offi- 
cial languages has crept up to 17 
and ninn respectively, though some 
are visibly underemployed. Above 
all, the EU still runs by a “weighted 
voting” system, whereby the voice 
of the bigger countries is reduced so 
as not to drown smaller neighbours. 

At the Lisbon summit in June 
1992, the 12 agreed that it was more 
important to press ahead with 
enlargement than tinker with the 
institutional hnlanw* of the Union. 
Leaders concluded that it was bet- 
ter to delay reforms until the next 
batch of entrants, the central and 
east Europeans. Malta and possibly 


Stupide 

Albion 


Mr John Major’s government is European, elections approach, 
lurching towards another pothole. At the »mip time he has yet 
The foreign secretary, long again presented his EU partners 
regarded as the cabinet's “safe with the image of 'Britain as a 
pair of hands”, has landed Mr negative, obstructive force, bent 
Major with a new political drama an blocking any k-tnd of reform or 
which again threatens to divide advance, even one which it pur- 
his party. ports to favour. If he does not 

The enlargement of the Euro- back down the result will be 
pean Union to admit Austria, Not- either to abort toe enlargement 
way, Finl a nd and Sweden was not process altogether - if the Euro- 
a purely British idea. But Mr pean parliament goes through 
Major had pushed it, especially with its threatened veto - or to 
during the UK presidency in 1992, make enlargement a prescription 
against -the reticence if not out- for even greater paralysis in EU 
right opposition of several other decisionmaking, as the majority 
member states; and had Insisted required for a decision will be 
on giving it priority over various greater than- before, 
other tasks, mending notably 
reform of the ED’S dedsicownak- Tr 
tag process. Voting weights 

Two weeks ago this policy Moreover, he has argued his 
appeared close to a deserved sue- case in such a way as to bring 
cess. After hard negotiations, forward the issue of the relation- 
agreements with three of the ship between voting weights and 
applicants were concluded, and population. Small states are over- 
that with Norway appeared very represented in the present system, , 
dose. Yet now the whole enter- for a reason that should command 
{arise is in jeopardy because the the British government’s sympa- 
UK, of all countries, is pressing for thy: the EU is an association of j 
a change in the qualified majority sovereign states, not a federation, 
voting system - reducing the Yet the British foreign office has : 
“blocking minority” in the EU been hinting that it might accept | 
council from 30 to 25 per cent a compromise whereby the “block- : 

Of course, that is not how the tag minority” would vary accord- 
British government presents the tag to the combined population of 
matter. By stressing the absolute the states co m posi n g it 
number of votes, as opposed to the Such a solution, would be a sig- 
percentage, it poses as defender at rrifmmt step towards federalism, 
the status quo against yet another since it would amount to saying 
onslaug ht by wfid-eyed emttaro- that the Union Is composed of 
tal federalists- At present, says Mr individual citizens - who should 
Douglas Hurd, two large states be equally represented in its tasti- 
and one small hne form a blocking tutions on the basis of one person, 
minority, yifl tviat must remain pn ft vote - rather than cf states 
the case even when there are 16 with equal -sovereign rights irre- 
member states altogether. speettye of their population. 

That federalist principle is 

rp „ - already acknowledged in the fact 

lrumpet call that gmali and large states haVB 

By putting it like that he gets different voting weights. But the 
the worst of all worlds. Euroscep- more precisely voting weights are 
tic Tory backbenchers have been aligned with population, the stron- 
roused by his anti-federalist tram- ger the federal character of the 
pet call, so that the government Union becomes, and the weaker 
canno t now accept the obvious the sovereignty of the member 
and rational solution to the prob- states. The Germans, who as the 
lam - which is to keep the per- state with the largest population 
ceniage as it is until the whole stand to benefit most from such a 
matter is reviewed at the Maas- reform, have none the less held 
tricht revision "conference ln"l906" '' "tacK fftah' pushing it they can see' 
- without provoking yet another the danger of invoking their supe- 
crisis over Europe within the Con- rior mnnbers as a reason for hav- 
servative party. So farfrom show- tag more influence in the Uhlan 
tag a safe pair of bands, Mr Hurd than the French, 
has used bis left hand to sabotage But Britain's gallant defenders 
the efforts of his right, with which of national sovereignty have blun- 
he has been trying to hold the dered in where German federalists 
party together on Europe as the feared to tread. 

Gridlock over 
London transport 


Britain’s Treasury baa bec ome the 
main obstacle to improving Lon- 
don's public transport system. 
Last week Treasury ministers 
snubbed London Transport by 
blocking the promotion of Mr 
Alan Watkins, deputy cha irman 
and chief executive, to the post of 
chaTnfl fltt Transport ministers are 
understood to have been happy 
with the appointment 

Mr Watkins’ crime was to criti- 
cise the Chancellor Mr Kenneth 
Clarice for providing insufficient 
funds in last November's budget 
for Loudon Transport investment 
Mr Watkins, a top executive at 
Hawker Siddeley before joining 
London Transport 18 months ago, 
was admired for bringing private 
sector skills to an organisation 
that is notoriously hard to man- 
age. He fare now resigned. If min- 
isters wish to attract talented out- 
siders to public jobs, they will 
have to put up with blunt talking. 

But the Treasury’s downer on 
London Transport is not limited to 
its treatment of Mr Watkins. Last 
month, it opposed a £50Gm deal to 
equip the Northern line with. 100 
new trains. Moreover, the govern- 
ment is only proceeding with, 
plans to bnfld Crossrail, a £2bn 
east-west underground railway, 
after the prime minis ter overruled 
objections from Mr Michael Por- 
tillo, Treasury chief secretary. 
Even now, observes fear Cross- 
rail could founder as the Treasury 
has yet to promise funds. 

Treasury attempts to curb gov- 
ernment spending is perhaps 
understandable given the enor- 
mous budget deficit. What is not 
sensible is that the Treasury is 
also blocking initiatives by Lon- 
doners to find their own solutions 
to the city’s transport problems. 
In particular, It has rejected a 
scheme put to it by London first, 
the business-led group, to earmark 
a portion of London's business 
rates for transport investment. 

Squalid 

This is not good enough. The 
underground is squalid, unreliable 
and crowded. Many people are 
therefore forced to traveTby car so 
clogging the roads with traffic and 
slowing down buses. This is not 
merely miserable for those living 
and working in London. It also 
harms business and undermines 
the City’s competitiveness as a 
financial centre. 


The total cost of modernising 
the underground and financing 
new projects such as Crossrail is 
put at £l7bn over 10 years. Given 
the difficulty of providing cash 
from central government coffers, 
the Treasury should welcome 
Ideas to tap other sources. 

The London First proposal 
would do just that. It would take 
advantage of the fact that Lon- 
don’s business rates are due to fall 
next year. Instead of passing all 
the savings back to companies, a 
portion would be earmarked for 
transport improvements arid chan- 
nelled through a trust The trust 
would not have to wait for the 
money to trickle in. ft could issue 
bands secured by the future reve- 
nue stream. 

Treasury theology 

This idea has fallen foul of Trea- 
sury theology. The first objection 
is that it would add to government 
spending and borrowing; as the 
scheme would be underwritten by 
the state. But there would be no 
need for such a guarantee: the 
flow of business rates would be i 
security enough. 

The second objection stems ; 
from the Treasury’s dislike of i 
hypothecation. Treasury officials 
taiir of Hib nation's fair tate as | 
“our money”. If money is ear- 1 
marked for transport in London, i 
the Treasury fears it will have to 
cut spending on projects in other 1 
parts of Britain. 

Not only is such description of 
the tax take as “our money” pre- 
sumptuous. The idea that more 
i i re nah H pnt. in the capital’s trans- 
port system must be matched by 
cuts elsewhere is also bunkum. 
According to a recent estimate, 
Londoners pay over £8bn a year 
more in taxes than is spent by 
government in the city. They 

Could maintain this relatio nship 

with the rest of the UK and pay 
taxes earmarked for transport 
because such investment would 
add value to its economy. 

Not that the London First idea 
Is perfect In every detail Money 
should be raised from domestic 
landowners and commuters as 
well as business: they too would 
benefit from better transport Lon- 
don first must also demonstrate 
that Loudon business enthusiasti- 
cally bocks such use of its money. 
That would be the best way to 
overcome Treasury theology. 


Lionel Barber explains why the EU enlargement row has 
spread into a dispute over the power balance in Europe 

More does not 
mean merrier 


Tory Euro-sceptics. There were wor- 
ries about a split in the party ahead 
of the European parliamentary elec- 
tions in June in which the Conser- 
vatives are expected to suffer heavy 
losses, possibly provoking a leader- 
ship challenge to Mr Major in the 
autumn 


Y et diplomats agree that 
Britain's stand on the 
blocking minority may 
have the perverse effect 
of arousing the Tory 
right; an arcane Euro-squabble has 
been elevated into a cause celfihre, 
making a climb-down this week or 
next harder than it might have 
been. 

Virtually none of these argu- 
ments Impress Britain’s European 
partners. Belgium. Germany, and 
the Netherlands are upset that the 
UR seems oblivious to the risk that 
the European p ar l fam»nt will block 
the enlargement agreements if the 
voting weights are not adjusted. 
Chancellor Helmut Kohl is said to 
be crestfallen at Mr Major's equivo- 
cation on enlargement German offi- 
cials complain that the C hancello r 
has had no reward for standing by 
Mr Major during ratification of the 
Maastricht treaty, or for agreeing in 
1992 to extend the British budgetary 
rebate to 1999, a concession worth 
almost £2bn a year. 

German nervousness is com- 
pounded by Britain's argument that 
voting weights need to take greater 
account of the size of population. 
The logic points to Germany, with 
80m people, moving up from 10 to 15 
votes; but this would end the voting 
parity between France and Ger- 
many, undermining the Franco-Ger- 
man partnership which In the post 
war period has depended on a deli- 
cate balance of political power. 

The more conspiratoriaUy-minded 
believe weakening the Paris-Bonn 
ark is Britain's “great game" in 
Europe. French officials routinely 
state that the UK aim in freezing 
voting weights at their present level 
is to paralyse decision-making 
inside the Union and create a 
“wider Europe” which is little more 
than a free trade area. “Major is 
trying to bring back Maggie's 
Europe,” says one senior Brussels 
diplomat 

None of this may be true. It is 
possible that the British are simply 
putting downs marker ahead of the 
1996 inter-governmental conference 
to review the operation of the Maas- 
tricht treaty. Signalling that they 
intend to protect vigorously the 
interests of the larger member 
states in an expanded Union. 

But the risk Is that if sufficient 
numbers of Mr Major’s EU partners 
believe the opposite, they may well 
be tempted to move faster toward 
Integration. He would then fees the 
choice he is desperate to avoid: 
splitting his Tory party or swim- 
ming with the continental tide. 



Cyprus. At this point, it was agreed, 
reform of decision-making in a 
union of 20-plus countries would 
become irresistible. 

Crucially, the Lisbon summit 
understanding maintained the prin- 
ciple of the “blocking minority", 
whereby a member state mustering 
sufficient support can thwart the 
legislative intentions of its partners. 

Until the latest British and Span- 
ish interventions, it had been 

awaumpd that tbfi Humber of VOtCS 

required to form a blocking minor- 
ity would rise slightly to take 
account of the four new members. 
Thus the current proposal is to 
increase the present 23 votes out of 
a total of 76, to 27 votes out of an 
expanded total of 90. The compro- 
mise maintains the proportion 
needed for a blocking minority at 
roughly 30 per cent; but it has two 
big drawbacks: 

First, the increase from 23 to 27 
further distorts the relationship 
between, a country's voting strength 
and population. It would mean that 
a combination of smaller states 
could technically outvote large 


states representing 40 per emit of 
tfii» population of Union. “This 
raises an important democratic 
principle,” says a UK iwpinmat- 

Second, the end of the 23-vote 
threshold would mean that two 
large countries and one small coun- 
try could no longer join forces to 
block measures. Spain, fearful that 
enlargement will tilt the political 
gravity of the Union to the north, 
wants to preserve the 23-vote 
threshold on core Mediterranean 
issues such as agriculture. 

British officials argue, too, that 
the power-sharing dispute is about 
vital national interests. A recent 
survey of Whitehall departments, 
says one UK official, suggested 
“there was greater advantage in 
forming a blocking minority rather 
than forming a qualified majority 
[needed to push decisions 
through]"- 

Where do the British believe they 
are most at risk in being outvoted? 
One answer is trade policy, where 
the UK has traditionally led a block- 
tag minority of free-traders includ- 
ing Germany, the Netherlands and 


cnmaHwiwf Denmark against a pro- 
tectionist camp led by France and 
Spain. 

Yet the line-up on such issues is 
for from clean Germany wobbled 
during last year’s General Agree- 
ment on Tariffs and Trade negoti- 
ations to appease the French gov- 
ernment over protection for 
agriculture; but the entry of the 
Scandinavians ought technically to 
strengthen the free-trading dub in 
the Union. 

Other British arguments on the 
blocking minority risk sounding 
defeatist. Officials fret about the 

threat of being outmanoeuvred on 

social policy- But this suggests that 
the much-vaunted opt-out of the 
social charter which Mr Major 
secured during the Maastricht nego- 
tiations. may not be as effective as 
first thought. It underlines, too, 
how the prime minister’s vulnera- 
bility at home is affecting British 
negotiating tactics in Brussels. 

UK nffiriaia confirm there was a 
“political calculation” in London 
that a change in the hlodring 
minority could provoke a revolt by 


T he “jobs conference” con- 
vened In Detroit by Presi- 
dent Bill Clinton should 
really be called a “wages 
conference” or perhaps even an 
“inequality conference”. Provided 
wages are flexible there is no rea- 
son why jobs should be perma- 
nently in short supply in a market 
economy. 

ff simply “having a job” were all 
that mattered, people would work 
for practically nothing. If necessary 
they would secure jobs by offering 
to pay employers to hire them. We 
do not observe the absurdity of neg- 
ative wages, of course, because 
what is really at stake is not 
employment but the income that 
can be derived from it. Quite 
rightly, people will take jobs only if 
wages more than compensate for 
the unpleasantness (or “disutility”) 
of working, taking into account all 
other means of sustenance. 

While conceding that the unem- 
ployed individual can perhaps price 
into work, some economists 
Hahn this option is not generally 
available. Following Keynes, they 
stress employees' dual role as buy- 
ers of goods and services as well as 
inputs in the productive process. If 
all wages were cut, the argument 
runs, consumers' purchasing power 
would foil, putting downward pres- 


A misguided focus on job creation 


White 

lightening 


■ HOw many prosperous English 
entrepreneurs ensconced in Malibu, 
California would give a microchip 
about the future of under-educated 
British youth? The Prince's Youth 
Business Trust has found one in 
Jeremy White, who takes over as 

chief executive next month. 

John Pervin, who led the trust 
through its first successful decade 
of helping undjer-privHeged 

youngsters set rqj in business, was 
a career Unilever man. White, 38, 
had a rather different start. 

He may now boast an MBA, and 

an MA in education and 
psychology, but White loathed 
school and. bad it been around 
then, would undoubtedly have been 
a candidate for PYBT funds when, 
he started his electronic securities 

company aged 20. 

Within ten yean he had merged 
with Britannia Security Group, 
at which point he crossed to the 
US. After an aoquisitinns spree 
he sold his stake and moved to 
California. There he bought Data 
Safe, a disaster-support businesfl, 
nf w hich he is stiTT rfliahTpfln. 

He inherits a dimity that is 
basically in good shape - two thirds 
of its charges are in bnamess after 


sure on product prices. So real, or 
inflatio n adjusted, wages mi ght not 
dpf.Hne. 

Tbis is an ingenious but ulti- 
mately unconvincing objection. A 
foil In wages would cause a shift in 
the composition of demand, with 
increased purchases by foreigners, 
companies and individuals not reli- 
ant cm wage income. Falling prices 
would also boost demand by 
increasing the value of assets such 
as bonds and bank deposits. The 
riggainai conclusion thus stands: in 
the absence of artificial constraints, 
unemployment is voluntary because 
it reflects people’s reluctance to 
accept jobs at the wages offered. 

The diverse jobs record of the US 
and the European Union amply sup- 
ports this unpopular proposition, hi 
Europe strong unions and restric- 
tive legislation have stunted job cre- 
ation by putting a floor under 
wages. At the same time relatively 
generous social benefits have cre- 
ated a viable alternative to work for 
many adults. In the US both sets of 
forces have been weaker: there are 
fewer benefits and wages are more 
flexible. It is thus hardly surprising 
that the EU jobless rate has risen 
steadily and now seems stuck in 
double digits while the US rate, cur- 
rently 6J5 per cent, has Increased 
only slightly in recent decades. 


two years, compared with a roughly 
one in ten survival rate for new 
ventures across America. 

FOr this, the new boss credits 
the system of attaching advisers 
to grant recipients, but their 
wisdom is no substitute for 
training, and it is with short, 
Tinmiflfldflini i! business 
mn-nggamAnt courses that White 
hopes to broaden the trust’s reach. 

He certainly returns home 
unencumbered by Iris past life - 
six hours after deriding to go for 
the job last November, his house 
was burnt to the ground. 


light on Bright 

■ Whatever versions of the truth 
politicians are expected to serve 
up to the House of Commons, the 
role of John Major’s Graham Bright 
is clear enough. As parifamentary 
private secretary to the PM, his 
duty is to relay the concerns of 
backbenchers, ta pretty much 
imaxpurgatedfonn. 

Which is why Major should take 
note of the growing unease at 
Westminster that the 51-year-old 
MP for Luton South is adopting 



MICHAEL PROWSE 

on 

AMERICA 


Yet the domestic unpopularity of 
the US approach shows that people 
care not about Jobs per se but about 
the quality of jobs - the standard of 
living they buy. Middle piagg fami- 
lies are frustrated by the slow 
growth of earnings - an inevitable 
consequence of the enormously 
rapid growth of employment 
required to absorb the baby-boom 
generation. And in urban ghettos, 
many adult men (especially minori- 
ties) have refused to take dead end 
jobs, opting instead to withdraw 
from the formal labour market The 
lesson is that while market forces 
can create jobs for all who want 
them, they cannot be relied upon to 
create jobs that meet people's aspi- 
rations or even that pay enough to 
lift low-skilled workers above sub- 


Observer 




to his colleagues’ worries. 

Those who remember the last 
Tory leadership crisis are warning 
the boss not to repeat Lady 
Thatcher’s mistake - of listening 


“Let me through - I’m a sightseer* 

too closely to her PPS Peter 
Morrison and hence 
under-estimating the strength of 
feeling on the backbenches. 


Tic tic tock 

■ The latest development in the 
battle by Catalans to promote their 
tong-n^ressed language is the 
Catalan timepiece. And we’re not 
talking Salvador Bah floppy 
watches - surreal though it is. 

Former shipping executive 
Francesc Ortiz has patented a 


jective measures of “poverty”. 

Meeting people's aspirations is an 
espetia&y formidable ta sk because 
they depend largely on relative 
rather than absolute living stan- 
dards. What is regarded as a "good" 
wage is largely dependent on what 
others are earning. Poverty is a 
notoriously relative concept In 
modem America many poor fami- 
lies have cars, colour televisions, 
videos and air conditioning. They 
live well by the standards both of 
their forebears and of the middle 

Classes in nations such as India or 
China. Yet they fed abused because 
their lifestyles compare adversely to 
those of affluent Americans. 

If a consensus emerges at Detroit 
it is likely to be that industrial 
countries can create more "quality” 
jobs by talcing steps to raise the 
skills and hence productivity of low 
paid workers. There is likely to be a 
strong emphasis on the need for 
more effective education and train- 
ing, especially for the bottom half of 
the ability range. This is an admira- 
ble policy, but it would be a mistake 
to regard it as a solution to present 
problems. Differences in ability are 
so great that better training Tor the 
low paid will only have a limited 
impact on disparities in the produc- 
tivity (and hence earnings) of vari- 
ous groups within society. 


Catalan watch-face. He argues that 
conventional watch-faces 
numbering the hours from one to 
12 reflect the Spanish, not the 
Catalan, way of telling the time. 

To Catalan speakers &30 is “two 
quarters erf seven”; what Brits 
would call "a quarter to seven” 
is actually “three quarters of 
seven”; and 7.15 is “a quarter of 
eight”. So the new watches - 
ordered from a Swiss manufacturer 
- feature the figures 1/4, 2/4 and 
3/4 where you would expect to see 
3, 6 and 9. All dear? 

Ortiz, 35. then wants the 
Catalau-nattanalist regional 
government to change all public 
docks to the same system. He 
evinces surprise that noone has 
thought erf this before. 


Elephants don't 

■ How sad that Standard 
Chartered, the international bank 
with a colourful -if at times 
problematic - past, cannot rejoice 
in a bit of history. 

Tucked away ta the personal 
columns of last Saturday’s Daily 
Telegraph Is a “BBWA Trunk Call”: 
a caB to arms, or at least drinks, 
to employees of the Bank of British 
West Africa - former emblem, the 
elephant.. 

Founded 100 years ago tWs May 

by Elder Dempster shipping 


As overall living standards rise, 
so will the minimum requirements 
for life above the poverty line and 
the wage at which work is regarded 
as dignified. If social benefits are 
raised in line with growing afflu- 
ence, unemployment will remain 
high (as it has in the EU in past 
decades) because many will find 
that work does not pay. If social 
benefits are held down and wages 
kept flexible (as has happened is 
the US), the number of working 
“poor” will multiply. Either way the 
conscience of society will be 
pricked. 

At its roots, the problem of unem- 
ployment, or its alternative mani- 
festation as Tow quality” jobs, 
reflects a fundamental feature of 
the market system: the fact that it 
rewards individual effort and ability 
and so generates grossly unequal 
outcomes. 

The way to come to terms with 
economic inequality Is to recognise 
that the market system is not some- 
thing that governments either cre- 
ated or can manipulate with impu- 
nity. Markets are sets of unplanned 
spontaneous exchanges; nobody 
plans the inequality and nobody Is 
responsible for it Inequality is sim- 
ply the price we pay for a general 
level of prosperity unimaginable 
under any other economic system. 


magnate AX Jones, it remained 
the leading financial institution 
in British West Africa throughout 
the colonial period before 
eventually being bought by 
Standard Bank in 1965. 

David Cox, who joined in 1957 
in the leisurely days when duplicate 
bills of exchange would arrive by 
sea a month or so after the 
sir-mailed originals, is hoping for 
around 300 guests at the shindig. 

Tragically, the reunion takes 
place in the distinctly uxmostalgic 
Hamilton House pub by Liverpool 
Street station (named after Lord 
Hamilton , chairman of the Great 
Eastern Railway, with no known 
connection to West Africa). For 

there is no love lost with Standard 

Chartered - not a soul unconnected 
with the original bank has been 
invited, even if Cox confesses to 
help from the p ensions department 
in tracing a few old-timers. 


Poor visibility 

■ Environment ministers from 
the G-7 countries gathering in 
Florence this weekend were 
gratified to discover a traffic-free 
city. But, before heaping praise 
upon the authorities for their 
efforts to spruce up the atmosphere, 
you might have thought they would 
have twigged that the vehicle ban 
was down to high smog levels. 






14 


brother. 

FINANCIAL TIMES 

“BUILDER,/ 
CENTER U>^. 

TYPEWRITERS • WORD PROCESSORS 


PRINTERS - COMPUTERS - FAX 

Monday March 14 1994 



Flight delays after third mortar attack on Heathrow 

UK may use army at airports 


By Michael CasseU and Deborah 
Hargreaves in London and 
Richard Tomkins in New York 

The UK government will consider 
this week whether to use army 
patrols to help boost security at 
British airports after the Irish 
Republican Army's third mortar 
attack at London's Heathrow air- 
port in Tive days. Army personnel 
and equipment were helping to 
search for further devices after 
the latest attack on Heathrow 
early yesterday morning in 
which four mortars, fired from a 
heavily camouflaged launcher, 
foiled to explode. 

One mortar hit the roof of the 
airport's terminal 4, which was 
closed for eight hours, causing 
delays to flights. The IRA's abil- 
ity to embarrass Britain's secu- 
rity forces and to provoke disrup- 
tion repeatedly will today bring 
renewed calls at Westminster for 


tighter security measures. Minis- 
ters, however, will be anxious not 
to hand the IRA the type of pro- 
paganda coup entailed in bring- 
ing in army patrols. They are 
also keenly aware that tighter 
security measures in one location 
may only transfer IRA activity 
elsewhere. 

Ministers could meet as early 
as today to decide whether to 
approve a high-profile army pres- 
ence at airports to help deter fur- 
ther attacks. Downing Street said 
last night that Mr John Major, 
the prime minister, was in close 
touch with events and any 
requests for help from the army 
would be carefully considered. 

Mr Paul Condon. Metropolitan 
Police commissioner, said some 
20 army personnel with technical 
devices were assisting in the 
search for more mortars. 

The police believe the mortar 
launchers involved in all three 


attacks were planted in the mid- 
dle of last week and timed to go 
off at various intervals. "We are 
not facing audacious terrorists 
coming hark ni ght after night to 
thwart the security forces -these 
are cowards who secreted one or 
more devices and sl unk away 
into the night." said Mr Condon. 

Police say all the mortars con- 
tained explosives, were "poten- 
tially viable" and appeared to 
suffer from a consistent mechan- 
ical defect. But bomb disposal 
experts have not yet discovered 
why they failed to go off. 

Mr Condon said it was not yet 
necessary to provide "reassur- 
ing” army patrols at Heathrow 
but he stressed that all options 
remained open and that the situ- 
ation was being reviewed hourly. 
Armed police are patrolling 
Heathrow and have set up road 
blocks on routes into the airport. 
Police say it is almost impossible 


to protect Heathrow from the 
threat of attack, but Mr Condon 
urged the public not to "give in 
to the despair and despondency 
the terrorists want" 

Hotels In London are fearful 
that the IRA attacks on Heath- 
row will lead to cancellations by 
businessmen and tourists this 
summer - particularly US visi- 
tors. "It is almost inevitable that 
this sort of thing leads to cancel- 
lations by Americans," said one 
official at London’s Hilton Hotel 
But passengers setting off for 
London from New York's Kenn- 
edy airport said they thought it 
would have little immediate 
effect. One businessman boarding 
yesterday afternoon's BA Con- 
corde flight to London said: "My 
sense is that incideiiis like this 
simply lead to tighter security, so 
it all balances out. My main con- 
cern is that the extra security 
will increase delays”. 


G7 summit squares up to jobs crisis 


By George Graham 
in Washington 

Finance and employment minis- 
ters from the Group of Seven 
leading industrial nations gath- 
ered in Detroit last night for a 
two-day brainstorming session 
on tackling the nnemployment 
that besets their economies. 

Although US officials insist 
there will be no final communi- 
que or any attempt at formal pol- 
icy co-ordination. President Bin 
Clinton wants to use the confer- 
ence conclusions as the basis for 
the July G7 summit in Naples to 
agree on a jobs plan. 

For Mr Clinton, who will open 
the conference this morning, the 
meeting provides an opportunity 
to focus on themes central to his 
administration's programme, 
after weeks of being dogged by 
the Whitewater affair. The rami- 
fications of Mr Clinton's invest- 


ment in this Arkansas property 
venture in the 1980s brought 
about the resignation a week ago 
of Mr Bernard Nossbaom, the 
White House counsel and on Fri- 
day dragged White House and 
Treasury officials before a grand 
jury for questioning. 

Ministers from other G7 coun- 
tries expect the Detroit meeting 
to agree on the need for labour 
market flexibility, education and 
training investment, and open 
trade. 

Mr Larry Summers, US Trea- 
sury undersecretary for interna- 
tional affairs, says die employ- 
ment issue is critically 
important for all G7 countries. 

“If you asked on what criteria 
these democratically elected gov- 
ernments were going to be 
judged by their electorates, the 
answer was jobs. If they don’t 
succeed in achieving that, they 
are very unlikely to achieve 


whatever else they want to 
achieve," Mr Summers said last 
week. 

But the seven nations are not 
unanimous on how big a role 
economic stimulus, through 
lower interest rates or tax cuts, 
should play in jobs policy. 

US officials do not want to 
turn the Detroit meeting into a 
shouting match with Germany’s 
Bundesbank, but they continue 
to argue that Europe needs fur- 
ther interest rate cuts to spur 
gr o wth and job creation. 

Ms Laura Tyson, tbe chief 
White House economist, says she 
is yet to be convinced that 
Europe’s unemployment prob- 
lems are as much ex plaine d by 
structural problems, such as 
rigid labour market rules, as her 
European counterparts argue. 

"Between 1986 and 1990 the 
European G7 countries added 
about Sm jobs and the unemploy- 


ment rate went down from about 
9 per cent to about 6.9 per cent 
Since 1990 the unemployment 
rate has gone up to about 9.2 per 
cent and tbe level of employment 
has gone down by about 2m," 
said Ms Tyson. 

"Unless you are willing to 
make the case that structural 
rigidities improved a lot between 
1986 and 1990 and then got 
worse again, a lot of that deterio- 
ration has to be cyclical." 

With Whitewater still dominat- 
ing conversation in Washington, 
Mr Lloyd Cutler, the veteran 
lawyer brought in as the new 
White House counsel to help 
clean up the mess, yesterday 
promised "a good deal of disclo- 
sure". But he said he thought the 
investigation would uncover lit- 
tle in the way of wrongdoing. 


Rare consensus, Page 4 
Michael Prowse, Page 13 


Italy to fund 
Dva early 
retirements 


Tokyo meltdown as unlucky 
coins lose all their glister 


Continued from Page 1 


restructuring settled, the group’s 
privatisation will be accelerated. 
It is being split into two -flat 
products and special steels 
- while a third company will pre- 
side over nva's liquidation. 

Last week the second phase of 
bidding for the two new steel 
companies closed. 

Two groups are said to be 
interested in the flat products 
division based around Taranto. 

One comprises local Taranto 
interests. Italian steel producer 
Falck. and foreign investors 
beaded by Mr William Miller, US 
Treasury' secretary under Presi- 
dent Carter. The other is led by 
Italy's Luccbini steel group, and 
is reported to be backed by 

France's llsinor Sacilor. 


By Kenneth Gooding, Mnfaig 
Correspondent, in London 

An ill-starred issue of gold coins, 
minted to honour former 
Emperor Hirohito, has turned 
into a meltdown for the Japanese 
government - financially as well 
as literally. 

The finance ministry stands to 
lose about Y270bn (£l.72bn) on 
the sale of 90 tonnes of gold 
obtained from melting down the 
coins, which were issued in 1986 
and 1987 to commemorate Hlrohi- 
to’s 60 years on the throne. Lead- 
ing traders say the loss is proba- 
bly the largest any government 
has suffered through a gold 
sale. 

The coins have been dogged by 
controversy and scandal. They 
were issued with a face value of 


Y100.000 each, but contained gold 
worth only half that. The govern- 
ment initially seemed to have 
made a profit of about Y500bn, 
but in 1990 Tokyo police churned 
that counterfeit Hirohito coins 
were being imported Into Japan. 
The report caused so much 
uncertainty that many Japanese 
sold their coins back to the Bank 
of Japan. 

The “melt value" of each coin 
has fallen to about Y25.000 
because tbe Japanese currency 
has strengthened and the gold 
price has fallen since they were 
issued. As the Bank of Japan has 
had to redeem all returned coins 
at face value, it could lose 
Y 75, 000 a coin. 

The 90 tonnes of coins men- 
tioned by the finance ministry 
last week is equivalent to about 


4.5m Hirohito coins, each con- 
taining 20 grams of gold, accord- 
ing to gold dealers. 

Mr Paul Davies, a British coin 
dealer from whom 3,200 allegedly 
counterfeit coins were confis- 
cated, repeated at the weekend 
his belief that the coins in ques- 
tion were genuine. No charges 
have been brought against him. 
He is pursuing court actions 
against the Japanese authorities, 
seeking the return of the confis- 
cated coins and asking for com- 
pensation. 

The meltdown could affect sen- 
timent in the gold market Mr 
Andy Smith, analyst at the Union 
Bank of Switzerland, said’ "The 
amount of gold is insignificant 
and the market will easily absorb 
it But the symbolism of this is 
immeasurable." 


Europe today 

Low pressure will bong cloud and ra In to 
western and northern Europe. A cold front 
from the north will reach England and 
Wales in the evening. Rain win spread 
south as a frontal disturbance moves 
towards the continent, reaching southern 
Norway in the course of the day. Low 
pressure over Scandinavia will bring snow 
to Finland and eastern Sweden. 

Benelux, Denmark, Germany and the Alps 
will be overcast with rain and strong wind. 
Spam and Portugal will have sunny spells, 
but the north will be cloudy. Italy. Greece 
and western Turkey will have periods of 
sun. 

Five-day forecast 

Low pressure will dominate the northern 
half of Europe by pushing frontal 

disturbances from the Atlantic towards the 
continent As a result it will remain 
unsettled and at times windy In the UK and 
northern continent Most of Sweden and 
Finland will be cold with frequent snow. 
The Mediterranean will be sunny with 

spring temperatures. 


TODAY'S TEMPERATURES 


Atm Dhabi 

Accra 

/Vgiers 

Amsterdam 

Athens 

B. Ajnre 

B.ham 

Bangkok 

Barcelona 

Bailing 


FT WEATHER GUIDE 



Situation at 12 GMT. Temperatures maximum for day. Forecasts by Metoo Cansu/t at Netherlands 


M awnurtt 

Betted 

SlKMW 

12 

Cardiff 

doudy 

13 

Frankfurt 

shower 

15 

Malta 

Ceisfcn 

Belgrade 

doudy 

21 

Chicago 

rain 

10 

Geneva 

cloudy 

IS 

Manchester 

far 

30 

Berlin 

rain 

11 

Cologne 

shower 

16 

Gibraltar 

far 

18 

Manila 

sun 

33 

Bermuda 

doudy 

20 

D’SdMffl 

tor 

31 

Glasgow 

shower 

B 

MeOouirw 

far 

20 

Bogota 

tor 

21 

Dakar 

Ml 

23 

Hamburg 

rain 

10 

Mexico City 

shower 

13 

Bombay 

sun 

34 

Date 

doudy 

IS 

Hekmki 

sleet 

3 

Miami 

sun 

19 

Brussels 

doudy 

16 

Dear 

tor 

32 

Hong Kong 

doudy 

18 

Mian 

sun 

32 

Budapest 

cloudy 

19 

Duaal 

fair 

31 

Honolulu 

tor 

27 

Monbed 

doudy 

14 

Ghagan 

rain 

a 

DuUkn 

ram 

12 

Istanbul 

doudy 

13 

Moscow 

fair 

35 

Caro 

sun 

19 

Dubrovnik 

fair 

18 

Jersey 

doudy 

16 

Munich 

far 

IS 

Cape Town 

tor 

23 

Edrtiurgi 

dnjwer 

10 

Karachi 

sun 

34 

Narott 

sui 

9 

Caracas 

tor 

25 

Faro 

3U1 

21 

Kuwait 

sun 

24 

Naples 


Quality flights made in Germany. 

0 Lufthansa 

German Airlines 


L Angeles 

Las Palmas 

Lima 

Lisbon 

London 

Liocbowg 

Lyon 

Madera 

Madrid 

Majorca 


sun 

cloudy 

fair 

tor 

cloudy 

cloudy 

cloudy 

doudy 

tor 

tan- 


26 Nassau 
22 New York 

27 Nice 
21 Nicosia 

16 Oslo 
14 Parts 

17 Perth 

19 Prague 

20 _ 

18 


tor 

rain 

doudy 

doudy 

fair 

tor 

doudy 

cloudy 

deet 

shower 

tor 

doudy 

fair 

shower 

fair 

tar 

doudy 

doudy 

sun 

rdn 

tor 

snow 


18 Rto 

13 Riyadh 
32 Rome 
18 S. Frees 
2J Seed 

ZS Singapore 
20 Stockholm 

1 Strasbourg 

2 Sydney 
ifl Tangier 
28 Tel Aviv 
'8 Tokyo 
27 Toronto 

B Tails 
18 Vancouver 

14 Vencs 
6 Vienna 

18 Warsaw 
36 Wa shi ngt o n 
12 WeUngton 
3* Winnipeg . 
-1 Zurich 


fair 

sui 

fair 


30 

28 

17 


tor 22 
fair 4 


cloudy 

snow 

drzzl 

shower 

tab- 

tor 

doudy 

fair 

fair 

rafci 

doudy 

drzd 

shower 


31 

0 

18 

24 

20 

18 

8 

4 

18 

11 

17 

18 
8 


fob- 13 


ahov*w 

Mr 

doudy 


2a 

6 

17 


THE LEX COLUMN 

No call for rights 


One change in the UK equity market 
between this year and last is that 
while rumours of rights issues have 
continued at full flood, the supply of 
new paper has slowed to a trickle. The 
annual results season usually provides 
cover for companies to pass the hat 
round. Yet so for this year the only 
substantial issues have been from Bur 
ford to acquire some of Ladbroke's 
property, and GEN in its attempt to 
snare Westland. 

In part that, and some unexpectedly 
generous dividend increases, reflect 
the improved financial position of 
companies. From a record financial 
deficit of 4 per cent of GDP five years 
ago the corporate sector has now 
moved back to surplus. In 1993, more 
than £10bn was raised in rights 
money, repairing balance sheets and 
forming a base for recovery. That 
additional equity, retained earnings, 
and reductions in working ca pital are 
probably sufficient to fund most inter- 
nal needs. There may be some smaller 
issinm from the harder hit and strug- 
gling businesses which often bring up 
the Fear of the reporting season. But 
even here many of those companies 
which have not already had one rights 
issue have had two. 

Large-scale equity may still be 
raised to fund acquisitions. Returns on 
capital have remained high through 
recession, and companies may view 
equity raised at current ratings as 
cheap, even given the recent softness 
in the market Yet there is still great 
scepticism in boardrooms and institu- 
tions about the wisdom of bids. What- 
ever else may depress investors, rights 
issues are unlikely to slow equities 
down in 1994. 

US bonds 

The hunt for US inflationary 
demons will reach a peak of activity 
this week. Producer and consumer 
price figures for February, followed by 
the monthly report of the Philadelphia 
Federal Reserve, are likely to contain 
at least one scrap of data to suggest 
that infiati nnary pressure Is growing. 
That points to another difficult week 
for US bonds, which on the basis of 
recent experience would send ripples 
through European markets too. 

True, bears of US Treasuries have 
had precious little real evidence to 
chew on since Mr Alan Greenspan 
launched his pre-emptive strike on 
inflation by raising short-term rates. 
But It is a measure of the heightened 
sensitivity that indicators which 
would normally be given scant atten- 


US Interest rates 

lOyaar Ttaasuybond ractemptiaT yield W 

7.0 1 



Sowck Datastman 

tion - such as the National Associa- 
tion of Purchasing Managers price 
index and the Philadelphia Fed report 
- have been thrust to centre stage. 
Besides, there is more to the nervous 
state of the bond market than the 
immediate economic indicators. Last 
week's tumble had more to do with 
President Clinton’s growing embar- 
rassment over Whitewater, which is 
unlikely to be relieved quickly. 

Politics aside, calm will only be 
restored when bond market investors 
have a clearer view of Mr Greenspan's 
intentions from here on. That will 
probably take either another rise in 
short-term rates - already priced into 
bond yields - or evidence that the US 
economy has slowed decisively from 
the heady growth rate achieved in the 
final quarter of last year. Until that 
ha ppms QS Treasuries remain in dan- 
ger of being spooked by shadows. 

Water 

After a deluge of information last 
year, water company shareholders are 
suffering a drought. That unhappy sit- 
uation is likely to continue until July 
when Ofwat, tbe industry regulator, 
unveils companies' price limits for the 
second half of the decade. Since the 
companies themselves will know 
Qfwat’s decision in May - and will 
have to distribute the figures inter- 
nally for p lanning purposes - the 
weeks running up to the official 
announcement are likely to be espe- 
cially choppy. Let’s hope that the 
Stock Exchange's watchdogs will be 
more than usually alert 

Capital spending plans for most 
water companies have been edging 
down as the government has relaxed 
water quality targets. Since lower 
spending means less borrowing, the 
companies might live comfortably 


with a tighter price cap as a result. 
But the benefit has not been spread 
evenly. Thanks to its peculiar geogra- 
phy. for example. Northumbrian 
Water’s spending plans have crept 
higher. There must be a chance that at 
least one of the water companies will 
appeal to the Monopolies Commission. 

A price cap which pushed Interest 
cover dose to two times might pro- 
voke such an appeal, on the grounds 
that the company would be unable to 
raise sufficient funding. Welsh Water s 
recent sterling bond included a cover 
ratio of 1.5 times in its covenants. But 
lenders will demand greater protection 
as water companies start to borrow in 
earnest Whether Ofwat will be pre- 
pared to give ground on this issue if 
faced with the threat of appeal 
remains an open question. 

Advertising 

Employing the appropriate hyper- 
bole, the prospects for the advertising 
industry seem absolutely fabulous. 
WPP has just reported a near-seven- 
fold increase in annual pre-tax profits 
- admittedly from an extremely 
depressed base - after its revenues 
grew 4 per cent in constant currency 
terms. Abbott Mead Vickers, which is 
more heavily exposed to the UK mar- 
ket, has reported a 26 per cent 
increase in underlying trading profits. 
The Advertising Association forecasts 
revenue will grow by 4 to 6 per cent in 
1994 while many more bullish predic- 
tions abound. Those rising revenues 
flowing over trimmed cost bases 
should ensure rapid earnings growth 
and popping champagne corks in 
many a West End bistro. 

Sadly, Saatchi & Saatchi is unlikely 
to share In the excitement when it 
reports its results on Tuesday. 
Rumours of hoard room friction have 
dogged the company. The remaining 
management time appears to have 
been absorbed in its attempts to get its 
bloated cost base under control. 
Whether that has proved successful 
will be revealed tomorrow, although 
the market has its doubts. The bigger 
worry is that Saatchi has taken its eye 
off the trading ball, shedding an 
embarrassing amount- of market share. 
It warned in December it would lose 
£30m of revenue in 1994 following the 
loss of accounts with Chrysler and 
Helene Curtis. Saatchi has underper- | 
formed the market by 24 per cent over 
the past year when its rivals have 
substantially outperformed. That calls 
for no more creative excuses but some 
concrete solutions instead. 




m YC E 





•_ having Z 06 / Ckx®b • 

^ • V’. ^ ^ ’ Brazil . 

• - •; 7 v- v : ' : '• ■/ : v f .v/. ..v ; • • 

:■ j?ttV5 MILL IQ N ORDER FROM . i v-i/ 
NATIONAL GRID ' 






.Tntnsfoiiners, part of the Rolls-Royce 
. Industrie is to supply two of the largest poyver 

^ "feoosteES m to The National Grid Company. 

ife two 2000MVA 400kV quadrature boqsters will be 
. installed at Deride ^ help control the flow^of power at certain 
points oh; me electrical gild network- These boosters fonn part 
of a rerent £115 million order from The National Grid Company. 


Th e symbol of powei 

ROLLS-ROYCE pic, 65 BUCKINGHAM GATE, LONDON SW1E6AT. 







IS 


YOUNG WORKING 
town SEEKS UVEEY 
intelligent company. 


RwAill details including pLotas. pime 0052 293262 


Telferd. 


FINANCIAL TIMES 

COMPANIES & MARKETS 

©THE FINANCIAL TIMES LIMITED 1994 





itFBAME 


Specified 

Worldwide 



1 _B. Plastics Limited 

Tel: 0773 852311 


Monday March 14 1994 


Gas venture 
links Russia 
and Finland 


By Robert Corzine hi London 

Gazprom. the Russian 
monopoly gas company, is to 
take a 25 per cent stake in a 
new joint venture with Neste, 
the Finnish state energy group, 
in a deal that will lead to a 
substantial increase in 
Russian gas exports to 
Finland. 

Neste will place its natural 
gas division into the joint ven- 
ture, which is due to begin in 
May. In 1992 the division, 
which is the sole supplier of 
gas in Finland, accounted for 3 
per cent of Neste’s total net 
sales and 2 per cent of its 
investment. 

The new company would 
have net sales of around 
FML5bn ($250m). Total capital 
in the venture will be FM2.5bn, 
of which 40 per cent will be 
equity. Gazprom’s stake of the 
equity capital would be around 
FM250m, according to Mr 
Jaakko Ihamaotila, Neste’s 
chief executive officer. 

“The intention is to seek a 
stock exchange listing for the 
company," he said. That could 
happen as early as May next 
year. 

The deal with Gazprom 
includes a new 20-year gas sup- 
ply contract, under which 
Finnish imports of Russian gas 
could rise to more than 4bn 


cubic metres a year from the 
present level of 2.9bn cubic 
metres. 

Neste said it had encouraged 
Gazprom to enter the joint ves- 
ture because the holding wQl 
strengthen Gazprom's interest 
in developing the Finnish gag 
market It wQl also encourage 
Gazprom to increase its trans- 
mission capacity to Finland, 
say Neste officials. 

Natural gas accounts for 
about 8 per cent of total Finn- 
ish energy de mand , with the 
main users being power sta- 
tions wild large industrial cus- 
tomers. Demand is expected to 
grow strongly in coming years, 
although there has been uncer- 
tainty over the source of future 
supplies. 

Russia has supplied gas to 
Finland since 1974. and 
although there hpgn tin dis- 
ruption in shipments in recent 
years, Finns have looked at 
ways to lessen their depen- 
dence. Neste has been investi- 
gating the feasibility of a pipe- 
line linking Norway’s offshore 
gas fields to Sweden and Fin- 
land, a project whose future 
may now be in some 
doubt 

Gazprom, the world's largest 
gas producer, has a number of 
partnerships and joint ven- 
tures in Austria. Germany, 
France and Italy. 


Flotation may value 
Ashanti at £1.5bn 


By Kenneth Gooding, Mining ' 
Correspondent, In London 

Preparations for the biggest 
gold mining company flotation 
for many years - that of 
Ashanti Gold Fields of Ghana 
- are to be stepped up this 
week in London. 

Brokers James . Capel and 
merchant bank Morgan Gren- 
fell are expected to give an 
indication in the pathfinder 
prospectus of the range in 
which the shares will be 
priced, because the Ghana 
Exchange, where 5 per cent of 
Ashanti will be sold, insists 
this is provided. The brokers 
are likely to ask for a slight 


premium over most South Afri- 
can gold mining companies, 
suggesting Ashanti will be val- 
ued at £L5bn ($2_2bn). 

The Ghanaian government, 
the majority shareholder, is to 
sell 25 per cent of Ashanti. 
Lanrho, the UK-based trading 
group, baa indicated it will not 
sell any of its 49 stake. 

There have been some indi- 
cations that Ashanti might use 
the opportunity to raise new 
capital The group is coming to 
the end of a substantial invest- 
ment programme, so that in 
1996 it will join the handful of 
gold companies producing 
more than one mil lion troy 
ounces a year. . 


IBM and Motorola’s chips pose a real challenge, writes Louise Kehoe 

Apple launches 
assault on Intel 



A pple Computer’s intro- 
duction today of Mac- 
intosh computers 
based on a new PowerPC 
microprocessor drip win kick 
off a high stakes technology 
battle in the personal com- 
puter industry. 

Apple and its PowerPC 
allies, Business 

Machines an ^ Motorola. } ^ m to 
end the hegemony of Intel, the 
world’s largest chip maker, 
which last year supplied about 
80 per cent of the microproces- 
sor chips used in PCs and 
recorded $L3bn in net profits, 
more than the rest of the top 10 
US manufactur- 

ers combined. 

The PowerPC, manufactured 
by Motorola and IBM, is the 
first credible challenger to 
Intel’s dominant microproces- 
sors in over a decade. Based on 
IBM Reduced Instruction Set 
Computing (RISC) technology, 
it is faster, smaller and 
cheaper than the current ver- 
sion of Intel’s top-of-th e-line 
Pentium diip 

For IBM, PowerPC repre- 
sents a chance to grab a bigger 
share of the profits to be mario 
in the desktop computer busi- 
ness, and to be lew ? de penden t 
upon Intel. The new chip 
refreshes Motorola’s fading 
microprocessor technology and 
gives the performance of 
Apple’s Macintosh a much 
needed boost. Microsoft, the 
leading PC software company, 
cannot lose. Whatever the out- 
come of the technology battle, 
It is likely to remain the big- 
gest software supplier. 

Motorola and IBM are drum- 
ming up support for PowerPC 


among computer manufactur- 
ers to establish it as a new 
industry standard. IBM is 
expected to launch its own 
range of PowerPC personal 
computers later this year. 

Apple's "Power Macintosh" 
will, however, be the critical 
market test of the new technol- 
ogy. Apple today will introduce 
three new models, ranging in 
price from $L839 to $5309 and 
aimed at business users. Over 
the next three years, Apple 
plans to replace all its products 
with PowerPC versions. 

Apple's prices are aggressive, 
undercutting the well-known 
PC brands such as Compaq 
and Dell rising Intel Pentium 
drips. However, the Intel camp 
has a huge advantage in the 
vast selection of software appli- 
cations available for its PCs. 

A pple says that 150 inde- 
pendent software 
developers are commit- 
ted to riftsjgrrmg "Power Macin- 
tosh ap plicatio n s over the nwrt 
few months. Yet computer buy- 
ers visiting stores this week 
are unlikely to find any Power 
Macintosh programs. Early 
purchasers of the new comput- 
ers will have to use software 
designed for Apple's estab- 
lished Macintosh computers, or 
for Microsoft's Windows oper- 
ating system. 

When forced to mimic other 
computers, the PowerPC slows 
down significantly, to the 
speed of a low-end Intel chip or 
one of the older Motorola chips 
used by Apple. With its perfor- 
mance advantage stifled, the 
Power Macintosh becomes a 
less compelling product 


For Apple, the introduction 
of “Power Macintosh** also rep- 
resents a tricky product transi- 
tion. Apple has followed the 
"conventional wisdom” by 
offering Power Macintosh to 
business users first Home buy- 
ers, it believes, will be satisfied 
with slower Macintosh models. 
Only toward the end of its 
planned three-year transition 
to PowerPC does Apple plan to 
' offer such high performance in 

rwncrrmof products. 

However, sales of existing 
Macintosh products to busi- 
ness users have slowed in the 
past couple of months, Mr Ian 
Diery, Apple’s executive vice- 
president, acknowledges. Con- 
sumer sales are currently 
growing fester. Almost half of 
all PCs sold last year went to 
home users - whether for per- 
sonal or home use. 

Meanwhile, Intel is accelerat- 
ing the pace of its micropro- 
cessor technology development 
in a bid to speed away from the 
PowerPC and mounting compe- 
tition from other chip makers 
that “clone" its chips. Last 
month Intel slashed its prices. 
Earlier this week, the chip 
maker announced new ver- 
sions of its Pentium micropro- 
cessor that outperform the 
PowerPC chips used by Apple. 
While it may be several 
months before PCs with the 
new chips come to market, 
Intel is already working cm its 
next generation of micropro- 
cessors, code-named P6, which 
are expected early next year. 

Even by combining their 
efforts, IBM and Motorola will 
be hard pressed to keep up 
with Intel’s $lJbn 1994 product 


development budget and the 
$2.4bn that it plans to spend on 
new plants awl equipment. 

last year Intel shipped more 
than 30m microprocessors to 
PC manii f afttr irgr a . In compari- 
son, Apple's goal of selling one 
miUinm Power Marfatrash com- 
puters over the next 12 months 
seams quite modest 
Yet Intel is keenly aware 
that PowerPC could pose a real 
threat if it gains market 
momentum. IBM’s introduction 
of PowerPC computers later 
this year will plapo Tntrf in the 
awkward position of competing 
with its largest customer. 


Unlike Apple, IBM does not 
plan to replace its current per- 
sonal computer products with 
PowerPC computers. Instead, it 
has formed a new division that 
will effectively compete with 
its own Intel-based PCs. 

For Intel, therefore, the chal- 
lenge is to minimise the im part 
of PowerPC in the personal 
computer market until IBM 
sorts oat its priorities. This 
makes Apple, as the advanced 
guard erf the PowerPC, a target 
of hitel’s notoriously tough 
competitive tactics. Ready or 
not, Apple may be in for the 
fight of its life. 


UK dividend rises exceed expectations 


By Maggie Urry in London . 

With the UK results season 
well in train, thB London stock 
market has reason to be 
encouraged by the reports 
from the corporate tattle front 
There have been few nasty 
shocks among large compa- 
nies, while dividend Increases 
have exceeded e xpec tations. 

Nearly all of the financial 
sector has reported on 1998, 
while around a third of indus- 
trial groups have announced. 

If there has been any disap- 


pointment with reported prof- 
its figures, it is largely due to 
“higher than expected provi- 
sions. Perhaps the largest sur- 
prise came from British Gas, 
which announced a £l.65bn 
($2.4bn) restructuring charge, 
while Unilever set aside £49Qm 
for reorganisation, and British 
Aerospace’s profits were bit by 
a £308m exceptional charge. 

Even so. some take comfort 
from the view that one year’s 
provisions are the next year’s 
profit in creases. 

The forecasts for corporate 


profits are distorted also by the 
introduction of the FRS 3 
accounting standard, which 
has put such provisions above 
the lira*- Thus many brokers 
have two forecasts, one for 
FRS 3 profits and a second of 
underlying profits. 

Mr Mark Brown, strategist at 
Ho are Govett, the stockbro- 
kers, says he is disappointed 
by the results so far but 
blames the higher incidence of 
provisions. His forecast of an 
ERS 3 pre-tax profits rise of 35 
per cent for the Industrial sec- 


tor has been undershot so far 
by 18 percentage points. 

By contrast. Mr Roger 
Barker, equity strategist at 
UBS, the securities house, says 
he is happy with the results he 
has seen. He expects his 13 per 
cent forecast for underlying 
industrial profits growth from 
the top 250 companies in 1993 
to be beaten, with the outturn 
probably at around 16 per cent 
by the time the results season 
winds up at the end of this 
month- That ties in with Mr 
Brown's calculation that earn- 


ings growth stripping out 
exceptionals has been 17 per 
cent from industrial companies 
that have reported so far. 

like UBS’s Mr Barker. Mr 
Robert Buckland at NatWest 
Markets says that the results 
so far have been much in line 
with expectations. There has 
been no rush to downgrade 
1994 forecasts as there would 
have been if companies had 
disappointed, he says. 

The good news has been on 


Continued on next page 


Markets 
this week 

Starting on page 18 


MARTIN MCKSON: 

GLOBAL INVESTOR 

The statistics 
for US 

inflation due 

out tomorrow 
and 

Wednesday, 
allied to the 
.^continuing 
Whitewater 
scandal in Washington, 
could lead to nervousness in 
the US capital markets this 
week. Page 18 



MARTIN WOLF: 

ECONOMIC EYE 

The “new 
liberalisation" 
of developing 
countries’ 
trade policies 
may not just 
be a knee-jerk 
response to a 
deteriorating 
current account and could 
lead to a big expansion of 
international trade. Page 18 



Bonds: 

After under-performing 
conventional UK 
government bonds during 
the recent bond market 
sell-off, index-linked gilts 
could outperform the 
conventional sector. 

Page 20 

Equities: 

Bond markets are still 
capable of throwing UK 
equities back on their heels 
and are likely to present 
fresh challenges this week. 
Page 21 

Emerging markets: 

The Hong Kong stock 
exchange wants to 
strengthen its rale as a 
financial centre by 
embracing Wall Street's 
standards and philosophies. 
Page 19 

Currencies: 

Key CPI and PP1 releases in 
the US will provide a focus 
for foreign exchanges 
nervous about interest rates, 
page 19 


STATISTICS 


Base lending rates 

FT-A World indices 27 

FT Guide to Currencies ...... 19 

Foreign exchanges .. — -....27 

London recent issues 27 

London share service ..-27-29 
Managed fund service ..21-25 

Money markets ........ 27 

New Irrt bond issues — 20 

World stock mkt Indices — 22 


This weeks Company news 


BAYER/BASF 

Chemicals may 
soon yield a 
sweeter smell 

Germany’s recovering chemicals stocks 
are expected to be given a further boost 
tomorrow whan Bayer, star of the 
domestic sector, officially closes its 
boobs for 1693. 

Although Mr Manfred Schneider, 
chairman, has already as good as 
promised an unchanged DMll ($620) 
pay-out for the year, noting in January 
that fourth quarter earnings and sales 
seemed better than expected, the 
market is hungry for any snippets 
which support its view that the 
chemicals cycle is out of the dumps. 

If T uesday ’s announcemenL following 
a meeting of the supervisory board, 
follows tradition, there will be little 
indication of progress In the current 
year. 

A clearer picture of present 
conditions and prospects can be 
expected on Thursday and Friday, 
when BASF and Bayer host their 
annual press conferences. BASF, which 
is considered the most sensitive of 
the German chemicals groups to the 
vagaries of the cycle, last week 
unveiled a DM2 cut to DM8 in its 1993 
pay-out But that had long been 
discounted by the markets, and the 
news did nnfftnig to affect the stock's 
recent sharp climb. 

Hoechst, which meets the press a 
week tomorrow, has also proposed 
a DM7 dividend - down DM2, but better 
than many expected. 

While none of the big three's 
fftiflir men is likely to be remotely 
bullish, analysts like what they have 
seen in the past 12 months. 

Looking beyond feUing 1993 profits 
- figures worsened by high 
ra tionalisa tion costs - deals like the 
merger of Hoechst and Wacker’s PVC 
businesses, BASF’s purchase of ICTs 
polypropylene division, and Bayer’s . 
recent move into the US generic drugs 
market, have persuaded them that 
substantial restructuring and a 
purposeful search for new profit centres 
are under way. 


United Biscuits 


Share pdee ffifatfre to the FT«EA AB-Sbare / 



UNITED BISCUTTS 

Questions of survival 
if results disappoint 

With luck. United Biscuits 1 frill year 
figures on Thursday will be bad. 
Otherwise they will be awfoL The chief 
uncertainty is how much UB wifi write 
off in closures and restructuring at 
its struggling US subsidiary, Keebler. 
However, it seems clear that profits 
wifi be down not only in the US. but 
in UB’s British heartland as welL 

The worse the figures, the more 
questions will be asked about UB’s 

survival as an independe n t entity. 
While the food industry becomes more 
global. UB risks going the other way. 
Even in 1992, the UK made up three 
quarters of its profit At fids rate, the 
company could end up more dependent 
on its home market than a decade ago. 
In a world Increasingly dominated 
by monsters like Nestle this is not 
a sustainable strategy. 

A best guess for pre-tax profit is 
around flTQm (S24&20) compared to 
£162m the year before. Thfe allows 
only for exceptional events already 
anno unced: the closure of one US 
factory and the Bale of the Ortiz 
business in Spain, more than offset 
by the profit on toe sale of Terry’s 
chocolate. In other words, underlying 
profits may be down for thB second 
year running. Stated earnings may 
be down too, though with luck the 
dividend wifi be held AH that is on 
the basis of only £12m write-offs at 
Keebler. Much more than that, and 
the vultures could start drding. 


OTHER COMPANIES 

Reed Elsevier under 
post-merger scrutiny 

Reed Elsevier, the Anglo-Dutch 
publishing group, will announce on 
Thursday its first foil-year results since 
the merger. Analysts are forecasting 
pre-tax profits of around 2530m 
($773^m). Mr Derek Terrfngton, media 
analyst at JOeinwort Benson, says that 
as well as a pre-tax figure of 2530m 
- £280m for Reed's share - he wiH be 
looking for ftzrther evidence that the 
merger is producing benefits. Ms Loma 
Tilbian of S.G. Warburg is looking for 
£535m - £283m accounted for by Reed 
During tiie year the group finally took 
over Official Airline Guides, sold its 
stake in British Sky Broadcasting and 
expanded into legal publishing in 
France and Italy. More small-to-medium 
“filling in" acquisitions are now 
expected to add to Reed Elsevier's 
professional and specialist publishing 
activities. 

■ Hoogovens : The Dutch steel and 
al uminium nranpany will publish 
annual figures on Thursday which 

are expected to show an improved trend 
In steel but continued difficulties in 
aluminium. The company, which raised 
FI 362m ($18£tm) through a rights Issue 
in late 1993, Is struggling to contain 
costs bat it is also at the mercy of 
factors beyond its control, such as the 
flnnri nf r ft pfl p ahrmtntnm fmm the 
former Soviet Union- 

■ LVMH; Investors have long been 
prepared for gloomy news when the 
French luxury goods group publishes 
its 1968 results on Thursday. Mr 
Bernard Arnault, chairman, warned 
last autumn that 1990 had been a tough 


UMH T ’ ' 



net prefits to have slipped to FFr29bn 
(3480m) in 1993 from FFr3bn In 1992. 
Mr Arnault can offer the consolation 
that the recent reshuffle of LVMHTs 
cross-shareholding with Guinness has 
revitalised its finances. 

■ Nordbankem A row over the extent 
of state aid doled out to keep Sweden’s 
Nordbanken afloat last year is set to 
deepen as the bank, cleansed of its 
bad loans, pumped frill of new capital 
and strengthened by its takeover of 

a similarly laundered Gota Bank, 
announces 1993 profits on Thursday 
comfortably higher than any of its 
rivals. 

■ SocWte Gdndrale de Surveillance: 
'The unique Geneva-based group that 
inspects shipments and tests products 
for governments and manufacturers 
throughout the world, puts itself up 
for inspection tomorrow morning. Net 
profits for 1993 are not expected to 
be much differen t from the SFxl94m 
($131m) earned in 1992, but the 
assessment of the group’s prospects 
by Mr Thierry Chereau, the new chief 
executive taken from Source Perrier 

a year ago, win be inspected carefully. 


year. Hoare Govett m Paris expects 


Companies in this issue 


Apple Computer 

15 

Biro Dteney 

17 

itei 

IS 

Aatianti Gold FWd* 

15 

FtaodUe Mamrfg 

16 

Microsoft 

17 

BASF 

15 

Gazprom 

15 

Motorola- 

ib; i 

15 

17 

Badgerine 

18 

Gkkfings & Lewis 

16 

Neste 

Radio Marconi 

Bayer 

15 

Hamtoys 

16 

Samsung 

United Biscuits 

17 

British Petroleum 

18 

Henkel 

17 

15 

DCS ' 

18 

IBM 

15 

Ytag . 

17 

Dresdner Bank 

17 

9*a 

1 

YorioNre-Tyne Teoa 

16 




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FINANCIAL TIMES MONDA Y MARCH l ^1994 


COMPANIES AND FINANCE 


Hamleys to float with £40m tag 


By Nefl Buckley 

Hamleys, the Regent Street toy 
shop, is to be floated on the 
Stock Exchange to fund more 
store openings. 

The company revealed its 
intentions as it announced a 50 
per cent increase in operating 
profits from £2. 4m to £3.6m for 
the year to January 29. Turn- 
over grew by 17 per cent to 
£20 5m (£17.$m). 

The flotation, which will be 
primarily through a share plac- 
ing, is expected to value the 
company at between £35m and 
£40m. 

The proceeds will pay off 
debt of about £Um and fund 
more store openings. 

After opening outlets at Lon- 
don's Covent Garden and at 
Heathrow and Gatwick air- 


DCS rights to 
fund purchases 

DCS, the computer software 
supplier. Is calling for £ 1.05m 
net via a rights issue of 2.33m 
new ordinary shares on a 
l-for-3 basis at 55p a share, to 
fluid two acquisitions. 

These are Motls, and the 
DMS division of GSI UK - sup- 
pliers of computer systems 
and services to the automotive 
industry. 

Motis will receive £300,000 
in cash plus the allotment to 
certain vendors of 126,866 new 
ordinary shares worth £85,000. 
The maximum consideration 
for DMS is £400,000. 


ports, the company Is consider- 
ing stores in overseas airports, 
the Channel Tunnel complex, 
and other areas with high tour- 
ist densities. 

Hamleys recently did a deal 
to operate toy concessions in 
some House of Fraser depart- 
ment stores. It also sees oppor- 
tunities for “Limited expansion 
overseas” and development of 
the Hamleys brand. 

The company's operating 
profits have almost trebled in a 
three-year development pro- 
gramme implemented by Mr 
Howard Dyer, chief executive 
and former head of US 
operations at Williams Hold- 
ings. and operations director 
Mr Stephen Woodbridge, a for- 
mer colleague from Williams. 

Hamleys was acquired in a 
gWm management buy-in from 


Lowndes Queensway led by 
Citicorp Venture Capital in 
1989, shortly after Jimmy Gul- 
liver’s group bought Harris 
Queensway from Sir Philip 
Harris. 

Citicorp invited Mr Dyer to 
draw up a management plan 
for the business in 1991. He 
reduced costs, improved the 
retailing operations, purchas- 
ing and management systems, 
and carried out a £3m revamp 
of the Regent Street store. 

His reward Is to be promoted 

to chairman now the company 
is seeking a listing, while Mr 
Woodbridge becomes manag- 
ing director. 

Mr Rupert Hambro, non- 
executive chairman si nce 1989. 
remains as a non-executive 
director and chairman of 
newly-appointed audit and 


BP cuts finding costs 
to $3.51 per barrel 


By Robert Corzine 

British Petroleum succeeded 
last year in Lowering its find- 
tng costs and more than replac- 
ing Its oil and gas production, 
according to the company's 
annual report 

Figures show that the com- 
pany's reserve replacement 
ratio for oil and gas was more 
than 125 per cent. Finding 
costs fell to $351 (£2.40) per 
barrel of oil equivalent com- 
pared with $4.41 in 1992. Any- 


thing under $4 is considered 
good, according to analysts. 

Revisions to existing 
reserves helped to boost the 
reserve replacement figure. 
Such revisions are often made 
after new production fields are 
brought on stream. 

The good finding cost figure 
reflects, in part, toe cost con- 
trols which have been imposed 
in BP’s exploration and pro- 
duction division, according to 
Mr Jeremy Hudson, an analyst 
with Lehman Brothers. 


remuneration committees. 

Mr Dyer sees important 
opportunities for Hamleys as a 
“retailer to the tourist trade”. 
But ha does not intend to fol- 
low the example of Sir Philip 
Hams, who opened other Ham- 
leys stores, such as those in 
Birmingham and Edinburgh, 
which were unsuccessful 

Analysts suggest that the toy 
trade is too seasonal - with up 
to 75 per cent of sales being 
made at Christmas - for Ham- 
leys stores to be profitable in 
cities without the tourist traf- 
fic of T^nrinn- 

But its Heathrow Airport 
and Covent Garden stores have 
proved a success, as has its 
deal with British Airways to 
provide child passengers with 
packs of toys branded with the 
Hamleys name. 


Hardy quits 
Yorkshire TV 

Mr Allan Hardy has resigned 
as group commercial director 
of Yorkshire-Tyne Tees 
Television, writes David 
BlackwelL 

Last December the company 
warned of losses for the year 
pnHpH that September, but the 
deficit Of £758rn, nnnniinrpri in 
January, was lower than 
expected. 

Directors said it had been a 
difficult year, “because certain 
sales policies were pursued 
which damaged the company 
both In terms of its reputation 
and perception.” 


UK fund 
managers 
cautious 
on Europe 

The weakness In global equity 
and bond markets during Feb- 
ruary did not produce many 
significant shifts in Invest- 
ment policy among UK fund 
managers, according to the 
monthly Smith New Court/ 
Gallup survey of Investor 
intentions. 

Although less inclined to 
ran down their holdings of 
European equities than last 
month, the latest survey found 
that managers continue to be 
much more cautious about the 
near-term outlook for Euro- 
pean equities than was the 
case towards toe end of last 
year. 

The German market Is toe 
one where fund managers 
were most likely to reduce 
their exposure. In contrast, 
the UK and Japanese markets 
continue to be ones which 
managers expected to do best 
over the next three months 

Fund managers’ optimism 
about the outlook for the UK 
economy has faded a little, 
however, with toe p ercentage 
expecting conditions to 
improve over the next 12 
months remaining at 88 per 
cent Only 17 per cent expect 
toe economy to get “a lot bet- 
ter” compared with 21 per cent 
In February. 

Institutions have also raised 
their forecasts on dividend 
growth from 65 per cent to 65 
per cent. 


Flexible Manufacturing 

sold to Giddings & Lewis 


By Andrew Baxter 

The UK subsidiary of Giddings 
& Lends, the US machine tool 
producer, has bought the key 
assets of Flexible Manufactur- 
ing Technology, the Brighton- 
based mflrhiwp tool builder 
which called in the receivers 
last mouth. 

The sale effectively ends the 
presence of UK-owned compa- 
nies in the production of big 
machine tool cells and 
systems. Mr Mike Bright, for- 
mer chairman and driving 
force behind FMT, is not 
included In toe deal. 

The deal for which terms 
were not disclosed, was 
clinched last Thursday with 
Ernst & Young, the receivers. 

G&L, which has its UK base 
at Knowsley, Merseyside, 
fought off bids from a number 


of potential buyers. It is buying 
the FMT name and that of 
Kearns-fiichards, the Altrin- 
cham-based FMT unit, along 
with engineering and patent 
rights, and the service, spare 
parts and machine rebuild 
businesses. 

The acquisition does not 
i nri'id* any of FMT's facilities, 
nor FMT’s Noble & Lund unit, 
which makes big milli ng 
machines. 

G&L said on Friday it would 
be taking on about 30 FMT ser- 
vice en gineer s and other staff. 
T his would leave between 50 
and 60 employees at FMT, but 
the receivers are making some 
further redundancies at 
Brighton. Work in progress is 
being completed there over the 
next few months. 

G&L said the acquired busi- 
nesses would ultimately be 


moved to Knowsley. The deal 
would expand its customer 
base and underline its finan- 
cial strength through Us abil- 
ity to acquire struggling busi- 
nesses. 

if it wished, G&L would be 
able to manufacture m a ch i nin g 
centres under the FMT name, 
although observers consider 
this unlikely. But it will In any 
case be gaining a profitable 
spares and service business. 

The deal is another twist in 
the chequered history or FMT, 
whose predecessor companies 
employed thousands in the 
1950s and 1960s. 

A deal in 1973 created Kear- 
ney and Trecker, Marwin, 
which became a subsidiary of 
Vickers in 1977. In 1988 Mr 
Bright led a management 
buy-out of what was then still 
called KTM. 


Badgerline warns of losses 


By David Blackwell 

Badgerline, the Avon-based bus company which 
last Monday annonnnad doubled pre-tax profits 
for 1993, is likely to be in the red alter restating 
the figures following the rejection of planning 
permission for a supermarket at one of Its 
depots. 

The planning refusal will lead to a £55m 
write-down of toe depot’s value in toe compa- 
ny’s balance sheet, with a net £5 5m being writ- 
ten off pre-tax profits, directors explained. 

Badgerline, which was floated last November, 


achieved pre-tax profits of £6.9m, compared with 

A public inquiry concerning toe company's 
Kensington depot in Bath, where Safeway 
wanted to build a supermarket, closed on Janu- 
ary 20, but early last week the company was 
still awaiting a decision. Two other schemes for 
supermarkets in Bath were also turned down. 

Mr Trevor Smallwood, executive chairman, 
said the group was disappointed by the Secre- 
tary of State’s rejection of the plans. He said the 
write-down would bave no impact in terms of 
the group's continuing profitability. 


UK dividend increases exceed expectations 


CROSS BORDER M&A DEALS 


Continued from previous page 

the dividend front. Large or 
unexpected increases have 
come from Vickers. Glaxo, 
SmithKline Beecham, Reuters, 
BTR, Standard Chartered wnri 
BAT Industries. At the other 
end of the scale, Fisons and 
Ladbroke have each roughly 
halved their payments. 

As a result, forecasts of divi- 
dend growth in 1993 will have 
been too pessimistic. UBS's 
forecast of 3 per cent growth 
could turn out to be 2 percent- 
age points too low, says Mr 
Barker. At Hoare Govett. Mr 
Brown says dividends reported 
so far by large industrial 
groups are up 8 per cent. 


Analysts had expected com- 
panies to rebuild their divi- 
dend cover before increasing 
payouts significantly. But it 
appears that companies are 
taking advantage of their 
much strengthened financial 
position to reward sharehold- 
ers and possibly they are suf- 
ficiently convinced that the UK 
has entered a low-inflation era 
to feel comfortable with lower 
levels of cover. In addition, pep 
haps they are showing in divi- 
dends a greater confidence 
about 1994 than they have been 
prepared to express in chair- 
men's statements. 

This also explains the lack of 
rights issues. Only last week 
Barclays Bank, BAT and Cad- 


bury Schweppes all denied 
plans to call on shareholders 
for new capital. Only two 
rights issues so for thin year 
have exceeded £l00m, from 
GKN and Burford Holdings. 
Those and the third largest, 
Bertsford International’s 
£56. lm call were all to finance 
acquisitions. 

After £30bn of rights issues 
in the past four years, the cor- 
porate sector is now sporting a 
financial surplus instead of a 
deficit. Takeover activity - 
aside from the three mentioned 
- has been low. 

In tbe coining months one 
question exercising the mhnte 
of companies and economists is 
whether that financial strength 


will be channelled into invest- 
ment to build new capacity, 
which will be required as 
demand in the economy picks 
up. 

If the results season has 
been generally better than 
expected, it has not been 
reflected in toe performance of 
the stock market. Equities 
have been affected by other 
concerns, such as toe perfor- 
mance of the bond markets 
and worries over interest rates. 
As Mr Barker observes, many 
companies need to produce 
good profit increases simply to 
justify tbe ratings tbeir shares 
are on. 

At Hoare Govett, Mr Brown 
is advising investors to stick 


with the companies which are 
increasing dividends by more 
than the average. With uncer- 
tainty abounding in markets, 
investors are attracted to 
higher yields and fester divi- 
dend growth. 

These, he feels, will come 
from the consumer and service 
sectors, where dividend cover 
is higher and the potential for 
growth better than in the man , 
ufecturing area, where profits 
may recover but dividend 
cover is still low. Glynwed, for 
instance, reported a 47 per cent 
rise in profits, but it has paid 
the same dividend for five 
years in a row and this is the 
first time in three years it has 
been covered by earnings. 


BIDDB1/MVESTOR 

Mercedes-Benz 

(Oermanyf/TofooflntBa) 

Tomkins (UK) 

Care America (US) 

CPC MBmationaKUS)/ 
Tongaat-HutetgS Africa] 

ACALQJK) 

Tlckefmastar (US) 

let (UKV Amoco (US) 
c 

ArgentarlafSpaln) 
Euromoney (UK) 

Thom SMI (UK) 


Mercedes-Benz 

tndlafJV) 

Units of Noma 
Industries (Canada) 

Unit of C E Heath 
IntT (Australia) 

CPC Tongaat 
Foods (JV) 

EAF (Netherlands) 


Pacer Cats (UK) 


Yizheng Chemical 
Fibre (China) 

Unit of WMI 
(US/UK) 

Engel Publishing 
(US) 

Inter cord Ton 

(Germany) 


SECTOR 

VuNcte 

manufacture 

Garden 

equipment 


Computer 

services 

Ticketing 


Waste 

management 

Pubfishing 


COMMENT 

Car assembly 
venture 

Price to be 
flnaBsed 

Heath setting 
California arm 

SA re-tnvest- 
ment continues 

Maximum price 
payable 

Wembley debt 
cut sale 

Small stra te gic 


WMI selling 
40% stake 

Profit-related 

price 



AMER GROUP LTD 


AMF.R GROUP LTD USD 75,000,000 6 l/ i PER CENT. 
SUBORDINATED CONVERTIBLE BONDS DUE 3003 

Holden of ihc above-mentioned bonds (the “Bonds") are here- 
by notified that Araer Group Ltd (die ‘Company") propose to 
sect the approval of the shareholders at the Annual General 
Meeting of the Company to be held on 15 March 1994 for a 
rights issue up to 4,738,491 new A (lures. Holders of A shares 
will be entitled to subscribe for one A share for every four 
A shares already held and holders of K shares will be entitled to 
subscribe for one A share for every four K shares already held. 
The subscription price will be FTM 100 per A share. The record 
date for the issue is 21 March 1994 and the subscription period 
will he 21 March 1994 to 29 April 1994. The issue will not be 
underwritten. 

In accordance with Condition 7 (b) (iv) of the Terms and 
Conditions of the Bonds and Clause 9 (B) (iv) of the Trust 
Deed (the Trust Deed") dated (5 June 1993 constituting the 
Bonds, the initial Conversion Price for the Bonds of FIM 144 
per A share will (subject to approval of the issue as described 
above) be adjusted to FIM 133.80 assuming subscription in 
full of the new A shares. Notwithstanding the provisions of 
Clause 9 (B) (iv) of the Trust Deed, the final adjustment of the 
Conversion Price canuot be determined until the Board of 
Directors has approved the subscriptions which is expected 
lo take place on or about 5 May 1994. Accordingly, the 
Bondholders arc hereby notified that any Bonds in respect of 
which the Conversion Date falls on or after 18 March 1994. but 
before the date of such determination will be treated as having 
converted at the adjusted Conversion Price. 

Pursuant to Clause 9 fK) of the Trust Deed the Auditors have 
certified to the Company and the Trustee that the above repre- 
sents an appropriate adjustment to the Conversion Price. 
Capitalised terms used herein have the same meaning ;ia in the 
Trust Deed. 

Helsinki, 14 March 1994 



The Financial Times reaches more senior 
business decision makers on Corporate Finance 
Services than any other European Publication.* 

If you wish to reach tills Influential autflence fay 
advertising In the Survey please contact: 


Tim Hart 

(NEW YORK) 

Tek (212) 782 4500 
Fax: (232) 319 0704 



Continuing activities 

Total - all activities 


mi 1991 Increo,*; 

1993 

1992 

* 

Turnover 

£m.9M ,£837.4M . 7.5% 

£965.8M 

£908.3M 

6.3% 

Profile before Interest j£5S.1M £463M 19.0%.. 

^55.6M 

X;42.9M 

29.6% 

Pre-Tax profit 

' j£45.4M £j43M . mi% 

,£45.5M 

X30.9M 

47.2% 

Earnings per Share 

l'4.57p 10.4! p 40.0% 

I4.91p 

9.20p 

62.1% 

Dividend per Share 

U.65p tl.65p ■ .V . 

11.65p 

U.65p 










A nTr 

| 


... ,V .'TT'fvj 


U.S. $150,000,000 



Hannah PursaH 

[LONDON) 

Tab 071 873-4167 
Fax:071873-3078 


FT Surveys 


HUREL-DUBOIS 

groupe 

NAVIGATION MIXTE 


Sarah PatanhmfWrfsfc 

(HONGKONG) 

Tat (862) 868 2868 
Fax:(882)6371213 


GZ3 


Bank or Ireland 

(Este&Safied frWs/rrf t>y Charter in >7 S3, end Having tunned hoMty) 

Undated Floating Rate Primary Capital Notes 

in accordance wftb the provisions of the Notes, notice is hereby 
given that for the three month Interest Period hum March 14, 
19S4 to June 14, 1994 the Notes wffl carry an Interest Rate of 
4.125% per annum. The interest payable an the relevant Interest 
payment dale, June 14. 1994 will be U.S. $105.42 per U.S. 
$10,000 principal amount. 

By: The Chase Manhattan Bank, N A. 

London, Agent Bank achase 

Man* 14. 1994 


Ik REUTERS lOOO TT7] 

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CONSUMER PRODUCTS ■ PLASTICS • METALS • ENGINEERING • BUILDING PRODUCTS 


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FINANCIAL TIMES MONDAY MARCH* J4 1994 


COMPANIES AND FINANCE 




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Managers 
in buy-out 
at Radio 
Marconi 

By Peter Wise in Lisbon 

A group of 40 managers at 
Badio Marconi, Portugal’s 
intercontinental telecommuni- 
cations operator, plan a 
EsSObn ($i70m) management 
buy-out 

The government has wel- 
comed the bid for the state’s 
51 per cent holding; a manager 
said. f 

The plan also has the sup- 
port of 1 UK and US institu- 
tional investors who own 30 
per cent of company, he said. 

The management group, led 
by Mr Francisco Murtelra 
Nabo, president of the holding 
company for Radio Marconi's 
overseas subsidiaries, aims to 
complete the buy-out by June 
with financial hacking from 
foreign and domestic banks 
and investors. 

Under the plan. Radio Mar- 
coni would hand over its con- 
cession to operate interconti- 
nental telephone services to 
Portugal Telecom, the single 
Operator to be formed in April 
from the merger of Portugal's 
two other wholly state-owned 
telecommunications compa- 
nies. 

The managers want Radio 
Marconi to keep - and possi- 
bly increase - its 33 per cent 
shareholding in Telecom m! ca- 
coes Morels Nationals (TMN), 
a mobile telephone operator, 
and the business of 40 subsid- 
iaries operating in 18 coun- 
tries. 

Radio Marconi’s sales were I 
Es4&5bn in 1993 and net prof- I 
its totalled Es4-2bn. 

The buy-out would resolve 
what otherwise threatens to be 
a complex question of the state 
reaching - agreement with 
Radi o Marconi's private share- 
holders on a merger with Por- 
tugal Telecom. 

However, officials indicated 
that the government may be 
reluctant to allow a wholly 
private-sector Radio Marconi 
to keep its stake in TMN. 

The group plans to invite Mr 
Goncalo Sequeira Braga, 
Radio Marconi president, and 
other members of the execu- 
tive board to join thpm in the 
buy-out 

Employees in all of Portu- 
gal's Mwwmmmriftiftinn com- 
panies. would also be invited to 
invest. - ' 

Euro Disney 
chief forecasts 
more losses 

Euro Disney faces losses for 
1993-94. even if creditor banks 
and Walt Disney, Its largest 
shareholde tv agree on a finan- 
cial rescue package for the 
struggling amusement park 
owner, AP-DJ reports from 
Paris. 

In a report to be presented 
at today's stockholders 
meeting, Mr Philippe Bour- 
girignom, the fjuinmm of Euro 
Disney, says that the deficit 
will continue in the second 
half of this . year, ending Sep- 
tember. 

Euro Disney is working 
against a March 31 deadline to 
agree a restructuring plan 
with its banks and Walt Dis- 
ney on its FFr21bn ($3.5bn) of 
debt. The company lost 
FFr5-3bn in 1992-93. 

“If the restructuring is car- 
ried out, these measures ought 
to improve the financial situa- 
tion of the group, ” Mr Bonr- 
girignon says. “But even so, 
the group should find itself in 
a deficit situation for the first 
and second halves of fiscal 
year 1994." 

Mr Bourguigmon says in his 
report that the “deeply unbal- 
anced financial structure of 
Euro Disney 1ms become intol- 
erable to toe point of endan- 
gering the existence of the 
enterprise." 

The future of the park 
depends almost entirely on the 
negotiations with the 63 banks 
and Walt Disney, which owns 
49 per cent of Euro Disney, he 


Viag gets a Bavarian ring-fence 

Christopher Parkes on Germany’s biggest privatisation to date 

A nyone who still Viag executives, keen to pro- Wag . -■ found the partner oz 

believes Germany’s mote the group as an interna- required to give it cril 

revived enthusiasm far tianal business (30 dot cent of Sw* pile* relative to DAX index m its most pr omis ing 

112 — r- ; 


A nyone who still 
believes Germany’s 
revived enthusiasm far 
privatisation will open the way 
tor participation in key sectors 
by outsiders needs look no fur- 
j ther than this week’s sale of 
Bavaria's state-owned electric- 
ity utility to Viag to confirm 
I that this js hardly the case . 

In a deal described as Ger- 
many's biggest privatisation to 
date, Viag agreed to take frill 
control of Bayemwerk and all 
its appendages, including a 2A3 
per cent stake in Viag. In 
return, the Bavarian govern- 
ment is to walk away with a 
thumping DM2L3bn (8L3bn) in 
cash phis a minority Mocking 
stake of 25.1 per cent in the 
enlarged Viag group. 

Just to be on the ride, 
the rin g -fence around Viag is 
reinforced by hefty stakes in 
the safe custody of other 
Bavarian institutions. Local 
banks, led by the Bayerische 
Vereinsbank have 15 per cent 
and Mr August von Flack, of 
the famous local banking fam- 
ily, has 13-5 per cent 
Announcing the deal on 
Thursday, Mr Edmund Stoiber, 
Bavarian prime minister, sol- 
emnly underscored his com- 
mitment to privatisation local- 
style with a promise that the 
25.1 per cent in the enlarged 
Viag (which is to move its 
headquarters from Bonn to 
Munich! would be sold within 
the next five years. It would 
go, he said, to a “sensible" cir- 
cle of shareholders - in the 
interests of securing a “solid 
energy policy for Bavaria". 


Viag executives, keen to pro- 
mote thp group as an interna- 
tional business (30 per cent of 
toe stuck Is held by non-Ger- 
man investors) declared them- 
selves comfortable with a loyal 
local band around them. It 
offered “protection against 
raiders'' while they got on with 
the job of restructuring. 

“Raiders” was also a 
notional threat which worried 
Mr Werner Lamby, former 
chairman. But that WHS back 
in 1989, one year after the 
Bonn government sold its last 
60 per cent stake in Viag. At 
that time the group's rapid-fire 
acquisitions were attracting 
favourable attention, while 
rumours of a looming break-up 
hid were exciting speculative 
share buyers. 

V Lag’s shares had consis- 
tently outperformed toe stock 
market since the first stage of 
privatisation in 1988, and were 
to continue to do so until late 
199L 

T hat was when markets 
decided the buying 
spree and diversification 
bad gone far enough and it was 
time for a little consolidation. 
Now, involved in nine dispa- 
rate industrial divisions - 
energy, aluminium, transport, 
trading, packaging, paper, 
refractory products, chemicals 
and a fledgling corporate com- 
munications business - Viag 
suggests it is ready to pot a 
litrift more ra ptfal investment 
behind its helpful if rather hes- 
itant progress so tor. 
to the recent past the VAW 


aa' 9 — i — ^ 

' 1998 *4 - 

SoUrcreOteMbawn * ' 

alnmiminw buSHfiSS bag bene- 
fited from investments to 
increase output of packaging 
materials. A new plant to sup- 
ply engine blocks tor Ford 
reflects a potential-oriented 
policy move towards the motor 
vehicle industry. But VAW still 
runs Germany's largest alu- 
minium smelter, even though 
production costs are a third 

higher than in other lndUStria- 

lised countries. 

Mr Georg Obenneier, finance 
director, who two years ago 
spoke of “dressing toe VAW 
bride” in preparation for a 
part-flotation, accepts that a 
primary source of toe metal Is 
not an essential adjunct to a 
successful aluminium proces- 
sor. 

The SKW Trostberg chemi- 
cals business has been largely 
purged of loss-making 
operations, but it has still not 


found the partner or partners 
required to give it critical mass 
in its most promising business 
supplying the construction 
industry. According to Mr 
Obenneier, negotiations to 
fake a body-b uilding gfafrp in 
the Goldschmidt group are 
well-advanced, and “promis- 
ing"' talks are under way on at 
least two other fronts. 

Paper production is a “not- 
so-core" business, he says. The 
same goes for Didier-Werke, 
the refractory products special- 
ist, which has suffered from 
contraction gpd fatting invest- 
ment among some of its princi- 
pal customers in the steel 
industry. 


U nvefitog the new-look 
Viag at a press confer- 
ence on Thursday, Mr 
Obenneier and his H Im fw 
strove purposely to present a 
picture of newly - dynamise d 
group poised for a renewed 
surge of growth. The company 
would not shy away from dis- 
. investment or finding new 
homes tor some businesses, 
declared Mr Jochen Holzer, 
supervisory board chairman. 
Mr Obenneier promised strong 
future growth and an early 
return to a progressive divi- 
dend policy. 

The FTankfUrt stock market, 
unable to r ush to judgment on 
Thursday, when Viag shares 
were suspended for the 
announcement of the terms of 
the Bayemwerk deal, delivered 
It the following day, marking 
Viag shares down more than 6 
per cent to DM458 .50. 

Dresdner 
Bank forms 
research unit 

By David Waller in Frankfurt 

Dresdner Bank, Germany's 
second biggest hank, has set 
up a new research unit to beef , 
up its international nwcuriHes | 
markets activities. 

Dresdner International 
Research Institute (DHU). will 
provide research into equities 
and fixed-income securities as 
well as advice on investors’ 
asset allocation strategies. 

Mr Bernhard. Waliher, chirf 
executive, says the move will 
hrip the batik compete more 
effectively with research pro- 
vided by An g lrv AmHrinan and 

Japanese securities institu- 
, turns based primarily in Lon- 
don. 

The move follows a similar 
step from Deutsche Bank, Ger- 
many's biggest bank, which set 
Up DB Research in 1992. 

The aim is to provide a high 
degree of independence from 
the parent hank, with the aim 
of Ironing out possible conflicts 
of interest with buyers of 
stocks and bonds. 

These conflicts are accentu- 
ated by the German universal 
banking system, which allows 
banks to provide a vast range 
of lending and advisory ser- 
vices under one roof and trade 
securities on their account 
Although Mr Klaus Fried- 
rich, Dresdneris chief execu- 
tive, is managing director of 
the new institute, the bank’s 
macroeconomics research will 
be not he absorbed into DIRL 

South African 
papers split 

By Raymond Snoddy 

South Africa’s two leading 
newspaper groups, Argus 
Newspapers and Times Media, 
are to separate their interlock- 
ing publishing jntpr ast g , 

Under the R61m (913-5m) 
deal, Argus Newspapers is to 
acquire Times Media's minor- 
ity holdings in Argus's Cape 
Town, Durban and Pretoria 
Newspapers. Joint printing and 
distribution arrangements trill 
be retained. 

The agreement follows last 
month's announcement that 
Argus Newspapers is going to 
be listed. 


Microsoft to test PC network 


Microsoft; the world’s largest 
computer software company, 
plans to test its new cable tele- 
vision network dedicated to 
personal computing in April, 
Reuter reports from Lisbon. 

Mr Bill Gates, Microsoft’s 
chairman, said over the week- 
end: “WeH set up five or six 
pilot stations, one of them defi- 
nitely in Europe. The first tests 
should take place in April 
1995.” 

He told a news conference at 
a seminar In Mahon that loca- 
tions far the other channe ls 
had not yet been decided. . 

Plans for setting up the new 
channel , which is being formed 
with Tete Gommunicattoha, the 
hugest cable TV operator in 
the US, were announced last 
week. 

The cable netwo rk w ill 
review new types of software, 
video games and fmnnMai soft- 
ware, and is expected to be 
available within 18 months. 

“We want to create an easy- 


£ . 


Bill Gates: Looking tor ways 
to boost European exposure 

to- use interface on a lot of 
applications. Next year’s pilot 
will see if its worthwhile 
aggressively building the rest 
of a high-speed optic fibre net- 
work,” Mr Gates said. “We’re 
betting on the market and 


investing over $i00m a year." 

He said that Microsoft would 
not make any programmes for 
the rhnnngi but would provide 
software applications. 

The two c ompanies ai y> plan 
to test a joint interactive cable 
TV system based on Micro- 
soft’s software and Tele- 
comm’s digital interactive net- 
work. 

Europe provided a growing 
market for home personal com- 
puters, Mr Gates said. “The 
market has already taken off 
in the United States and we're 
anticipating that in Europe 
over the next several years.” 

Ha said that Microsoft was 
looking into ways to boost dis- 
tribution, availability and 
exposure of ppr so nal computer 
products in the European mar- 
ket 

“The PC user is different 
from the corporate one. These 
are not things we'd do for our 
historic products,” Mr Gates 
said. 


Henkel hit by rationalisation 


By DnridVMer 

The costs of implementing 
rationalisation measures 
helped depress Henkel’s pre- 
tax profits by 7 pot cent to 
DM375m (|2I8m) last year, the 
German chemicals, cosmetics 
and cleaning products group 
said. 

The rationalisa t ion stood to 
benefit the group this year, 
however. It was likely that the 
group would develop in a posi- 
tive way this year despite diffi- 
cult economic conditions in 
many important markets. 
Henkel said. 


Stripping out the costs asso- 
ciated with the reduction of 
employee numbers from 42^44 
to 40,480 last year, operating 
profits rose in 1994, the group 
said, without -giving details. 

Turnover for the group 
dropped by 2 per cent to 
DM18. 9bn but Henkel 
explained that without the 
impact of currency fluctua- 
tions - which led to a 3 per 
cent drop in sales - turnover 
would have risen. 

Turnover in Germany 
dropped by 3 per cent to 
DM4.16bn while sales gener- 
ated abroad dropped by L7 per 


cent to DM8.95bn- This was 
mainly due to a sharp fall in 
turnover in continental 
Europe. Outside Europe, sales 
increased 13 pef cent 

The group's two biggest busi- 
nesses are chemicals and 
cleaning products, which 
account for 27.4 and 3L3 per 
cent of group sales respec- 
tively. 

Henkel said it was pleased 
with a 4 per cent increase in 
sales in this market segment, 
reflecting recovery in the US. 
There was a 4 per cent fell in 
eiftarnng products sales, chiefly 
due to currency fluctuations. 


Samsung suffers 23% profit decline 


By John Burton In Seoul 

Samsung Corporation, South 
Korea’s largest trading com- 
pany, and the biggest subsid- 
iary within the Samsung 
group, has reported that net 
earnings for 1993 dropped by 
22 3 per cent to Wonl2.2bn 
($l£9m). Sales rose by 10-5 per 
cent to Wonl&SOObn. 

Samsung Heavy Industries 
suffered a 23 per cent fell in 
net profits to Won73bn due to 
price competition in the 


domestic construction equip- 
ment sector. Sales remained 
flat at Wanl,810bn. 

A 33 pot cent drop in sales of 
industrial machinery offset a 
SI per cent rise in revenues for 
its shipbuilding operations, the 
nation's third largest 

Samsung Aerospace recorded 
a 18 per cent increase in net 
earnings to Wnns ahn as sales 
surged by 40 per cent to 
Won6809bn. 

Turnover rose in all the aero- 
space offshoot’s divisions, 


including a 36 per cent jump at 
the defence division to 
WonlWbn and a 42 per cent 
rise in the optics division to 
WanlTTbn, supported by strong 
camera sales. 

Samsung EJectroMechamcs, 
Korea’s largest electronic com- 
ponents manufacturer, 
achieved a 10 per cent increase 
in net profits to Won8.1bU- 
Sales rose by 21 per cent to 
Won731.6bn due to strong 
demand from electronics com- 
panies. 


This announcement appears as a matter of record only. 

DEG 

DM 15,000,000 

Long-Term Credit Line 


INDUSTRIAL DEVELOPMENT CORPORATION 
OF SOUTH AFRICA LIMITED 

NYWERHEID-ONTWIKKELINGSKORPORASIE 
VAN SUID-AFRIKA BEPERK 




To Finance Investment Projects 
of Small and Medium-Sized Companies 
in the Republic of South Africa 

Granted by 

the German Investment and Development Company 

DEG - Deutsche Investitions- und 
EntwicklimgsgeseHschaft mbH 
Cologne 

March, 1994 





fauio fans Mo6*l 
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DWVKAMmro Ct ESHADAS D£ SOOAGEM DA BAHIA - D883A. COMS&iO FBMteMf OE UCJWCAO. CteflltO 
ADMN51KA11VO DA SAMA - SAUMDQK • BAHA- UASL CEP 41.746-900 • FAX: [071)370-2256. 


JffM 


First Internation a l Funding Co. 

Hosting Rata Notes 

Pmuantto the Warture dated as of 
June 3, 1993 among the Issuer, 
State Street Bank and Trust 
Company as Thistee, and Financial 
Security Assurance Inc. as the 
Insurer, notice is hereby given that 
for the Merest Accrual Period from 
Mwch 3, 1994 to June 3. 1994, toe 
applicable Note Interest Rates are: 
for the Notes dim 1996, 4.16875%; 
for he Notes due 1998, 4.26875%; 
and for the Notes due 2000, 
4.41875%. 


THE ROYAL BANK OF CANADA 

US. 5300,000000 Aosting Rate 
Dotenturo Notre du« 3085 
NOTICE IS HEREBY GIVEN tftet tor 
the Interest Period commencing on 
15th March, 199*. the Notes will 
bear interest at the rets of 4X>% 
per annum. The interest payable on 
ran June, 1994 against Coupon 
No. 33 will be U.S. SKL3&1944 per LLS. 
Si .000 nominaL 

Agent Bank 

ROYAL BANK OF CANADA 
«8tt EUROPE LIMITED 


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NOTICE OF EARLY REDEMPTION 

ALLIANCE ■■■LEICESTER 

Alliance & Leicester Building Society 
£150,000.000 

Floating Rate Notes due 1995 
of which £126.990,000 wns redeemed at the 
option of the Noteholders as at Udi May 1992 

Notice is hereby given that pursuant to Condition 6 (b) of the lenra and con- 
ditions of tbc remaining £23.011X000 FToaiing Rale Notes due 1995 (Ihc "Nates"), 
the Alliance & Leicester Building Society (the “IssuetH will redeem all out- 
standing Notes at their principal amount on I tfh May 1994 (the "Redemption 
ItaiO. Notes should be presented for payment together with all immaiurcd 
Coupons at aay Paying Agent specified below. Upon the dare on which any Notes 
becomes due tmd payable, unmanned Coupons appertaining thereto (whether or 
not attached) shall become void and no payment shall be nude in respect ihetmf. 
Notes and Coupons will become void unless presented Tor payment within 
periods of H> years and S yean respectively from the Redemption Dure, in 
respect thereof. 


respect thereof. 

Union Bank of Switzerland 
Bahnhobtrasse 45 
CH-8021 Zorich 


Union Bank of Switzerland 
190 Liverpool Street 
London EC2M2RH 

Wlh March. 1994 
IS1N: CB OOUH6U32 


Morgan Guaranty TYust Company 
of New York 
Avenue do Arts 35 
B-UM0 Bnusete 

Union de Bnnqnes Subset 
(Luxembourg) SLA. 

36-38 Grand ’Rue 
L-20I 1 Luxembourg 

By: Union Bank of Switzerland 
Zurich 


^ DAEWOO TELECOM LTD. 

NOTICE 

To the Holdaa of d>e ftw t ran d in g 
USD fOjOOOjOOO 

is ptr t*mt- CtmttU. Boo* Oh 20M 

triM-boOT) 

<rf 

DAEWOO TELECOM LIMITED 

(the "Goenpany''} . 

NOTICE IS HEREBY GIVEN oo the hoktax of the bood* chat The 
Stock Dividend of 3% wn» ap pw ed b, a Gcnaal Memos of 
Sha ch ol dea held M 28th Febtwr 1944. Punuaatio die pawinot u 
ofthe Time Deed oooaltoriog t he Bnwh die Goov ct non Price of the 
txxub hat been adorned asa ttadt of the dividend ioshsn &om 
Won 23,217 to Woo 22.776 dfcanc Bom In January 1994. 

March 1994 Daewoo Triocom Ltd. 


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i The Chase Manhattan Corporation 
U.S. $400,000,000 
Floating Rate Subordinated Notes due 2009 
Foe the three months 14th Match, 1994 to 14th June, 1994 
the Notes will cany an interest: rate of 5)5% per annum with a 
coupon amount of U.S. $134.17 per U.S. $10,000 Notes, payable 
on 14th June, 1994- 


B Bankers Trust 

Com pany, London 


Agent Bank 


HongkongBank <» 

The Hongkong and Shanghai Banking Corporation Limited 

(Jncorpomlad in Hang Kong with GrrUtad SebSty) 

U.S.$400,000,000 

PRIMARY CAPITAL UNDATED FLOATING RATE NOTES 
(second screes) 

Nodes Is hereby given the! the Rale ol lntere« hsa been fixed at 
6% and that the interest payable on the relevant Interact Payment Daw 
June 14, 1904, In respect ol USSS.000 nominal or the Notes will 
be 56368 and In respect of OS$l 00,000 nominal or the Notes will be 
SI ,277.78. 

Match 14, 1994, London PrrfD/l ili/mw 

By; CMbanfc. NJL. (leauer Sendees). Apent Ban* W I /D/lmv. 


Forex or Futures prices from £49 per month 
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Notice to the Holders of the Warrants 
to Subscribe for Shares of Common Stock of 

KISSEI PHARMACEUTICAL CO., LTD. 

(the “Company") 

Issued in conjunction with 
U.S. $100,000,000 
1 Vi per cent Bonds 1996 
(the “1996 Warrants”) 
and 

U.S. $100,000,000 
1% per cent. Bonds 1998 
(the “1998 Warrants”) 

ADJUSTMENT OF SUBSCRIPTION PRICES 
NOTICE IS HEREBY GIVEN pursuant to Condition 7 of 
the Tferms and Conditions of the Warrants in relation to 
the 1996 Warrants and 1998 Warrants, respectively, that 
the Board ofDirectors of the Company passed a resolution 
on 28th February, 1994 (Japan Time) to make a stock split 
of shares of its common stock effective as of 20th May, 
1994 to the shareholders of the Company of record on 31st 
March, 1994 (Japan Time) in the ratio of 0. 1 new share for 
each one share held. 

As a result of such stock split, the Subscription Prices at 
which shares are issuable upon exercise of the 1996 . 
Warrants and 1996 Warrants will be adjusted as follows: 

(1) The 1996 Warrants 

Before adjustment: 73,849.10 per share 
After adjustment: 73,499.20 per share 

(2) The 1996 Warrants 

Before adjustment: Y5.935.00 per share 

After adjustment: ¥5,395.50 per share 
Such adjustment to the Subscription Prices shall be 
effective as of 1st April, 1994 (Japan Time). 

IBJ Schroder Bank & Tirtast Company 
on behalf o£ 

Kissei Pharmaceutical C<k, Ltd. 

Dated: 14th March, 1994. 








The Markets 


FINANCIAL TIMES MONQAV MARCH M 


THIS WEEK 


Global Investor / Martin Dickson in New York 


A nasty splash of Whitewater 




The curious 
American polit- 
ical melodrama 
known as 
Whitewater has 
started to pro- 
duce a whitish 
a knuckle or two 
in the US capi- 
tal markets. 

Nervousness over the impli- 
cations of the affair for the 
Clinton presidency could be a 
significant feature of the mar- 
kets this week, together with 
the central issue worrying 
Wall Street, which is the statis- 
tics for US inflation due out 
tomorrow - the producer price 
index - and on Wednesday - 
the consumer price index. 

The Whitewater mess - it is 
not yet. and may never be 
worth dignifying with the word 
scandal, despite all the baying 
for blood on Capitol Hill - has 
been building for months, but 
it was only late last week that 
it began to impinge signifi- 
cantly on the consciousness of 
Wall Street. 

The market's initially 
relaxed attitude was under- 
standable. 

The controversy revolves 
around some arcane invest- 
ments. made more than a 
decade ago. by Mr Clinton and 
his wife Hillary, in the White- 
water Development Company, 
an Arkansas real estate ven- 
ture. and that company’s ties 
to a failed Arkansas savings 
and loans business. Madison 
Guaranty. 

When a group of Investiga- 
tive journalists initially started 
asking whether the Clintons 
had benefited improperly from 
this web of relationships, the 
question seemed of largely his- 
toric Interest, and not one that 
impinged too closely on the 
credibility of the Clinton 
administration. 

However the issue has been 
so badly handled by the White 
House that the Attorney Gen- 
eral has had to appoint an 
independent special prosecutor 
to investigate and over the 


US inflation and high technology investment 


Annual % change 
fai consumer prices 
16 


In ve stment ki office and computing equipment 

Aaa of total real Investment in producers duraWa equipment 


12 



25 



reinforced by the events of the 
past two weeks. 

That may be good for stocks 
in the health care sector, 
which have been hammered by 
expectations of government 
price restrictions. In the short 
run, a restricted health pack- 
age might also give a little fil- 
lip to economic expansion, 
ameliorating companies’ fears 
that hiring workers would bur- 
den them with a big rise in 
healthcare costs. 


Price change in local currency to 11/3/04 


period. 

Japan Gennany fance 


Cash 
Week 
• Month. 
Year .’ 


0.06 0.04 0.12 0.12 0.15 0.10 

q_28 0.19 0.51 0.54 0.70 0.43 

3.50 3.03 0.75 £L75 10.75 556 


Bo nds’ 3-5 year 

Week -035 0.45 0.12 0.45 058 0.22 

Month ’ -1.41 -1.31 -1-02 -1-07 -1-89 -1-05 

Year ' 3.34 4.89 6.94 11X10 20.43 - 7.78 


Inflation 




1970 75 

Source: Oatastraam 


past two weeks the focus of 
attention has switched from 
the propriety of investments 
made long ago to whether the 
White House has tried to 
"cover up" the affair. This in 
turn has allowed Republicans 
to draw a parallel with the 
Watergate "cover up" which 
toppled President Nixon. 

On the present evidence, it is 
preposterous to suggest that a 
similar fate could befall Mr 
Clinton. But several events last 
week brought home to the mar- 
kets the extent to which White- 
water is consuming the Presi- 
dent's time and possibly eating 
into his political popularity, 
even though most Americans 
seem to regard the affair as an 
incomprehensible storm in a 
Washington teacup. 

In quick succession last 
week the markets saw White- 
water claim a White House 
staff member. Mr Bernard 
Nussbaum, who resigned over 
his contacts with federal inves- 
tigators; saw Mr Clinton 


besieged at news conferences 
with questions about the mat- 
ter and watched White House 
aides appear for the first time 
before a federal grand jury 
looking into the matter. 

The cumulative effect was to 
create an impression of a 
White House under siege and a 
climate where wild market 
rumours could flourish. And 
they did last Thursday, when 
an unsubstantiated report in 
an obscure Washington news- 
letter raised questions about 
last summer's suicide of Mr 
Vincent Foster, a White House 
aide and Arkansan friend of 
the Clintons. The bond market 
plunged, and equities and the 
dollar dipped. 


Weak dollar 

The market hates political 
uncertainty and is growing 
concerned lest Whitewater 
should weaken Mr Clinton, at 
least temporarily. Traders ask 
whether he might then be 


tempted to take populist mea- 
sures to restore his popularity, 
such as tough trade sanctions 
against Japan or spending pro- 
grammes which might push up 
inflation. 

Political uncertainty also 
weakens the dollar, and that 
inflates the cost of Imported 
goods. At tbe same time, a 
lame duck president would be 
unable to take tough foreign 
policy action on some of the 
world's trouble spots. 

That, together with political 
violence in South Africa, helps 
explain a sharp rise last Thurs- 
day in the price of gold, a tradi- 
tional safe harbour against 
political turmoiL 

However, last week's market 
reaction to Whitewater says 
more about Wall Street's 
extreme jitteriness, which is 
the result of the Federal 
Reserve's tightening of mone- 
tary policy last month, than it 
does about the political risks of 
Whitewater to equity and bond 
values. 


At present the risks still 
seem very small, though there 
is no real way of knowing what 
dirt the investigative hounds 
may throw up. Still, the cli- 
mate is such that all sorts of 
rumours can be set running 
over the next few months, 
allowing market speculators to 
make some quick killing s. Past 
investigations by special prose- 
cutors have always been 
accompanied by a constant 
drip of leaks and this one 
seems unlikely to be different. 

Unless Whitewater turns 
into a genuine scandal, the big- 
gest effect of the affair could be 
to weaken the political clout of 
the unelected Mrs Clinton, who 
is overseeing that central piece 
of the White House legislative 
agenda, its heath care reform 
package. 

Even before Whitewater, 
Congress had been expected to 
approve a far less ambitious 
reform package than Mrs Clin- 
ton was seeking and this pros- 
pect has been greatly 


Politics apart, Wall Street's 
central focus this week will be 
on the US inflation figures for 
February, which are expected 
to show producer prices rising 
at a rate of about 03 per cent, 
up from 03 per cent in Janu- 
ary, and consumer prices up by 
a similar amount, compared to 
no change in January. 

Figures like this are hardly a 
sign of rampant inflation but 
the market is currently so 
bearish that it tends to dis- 
count almost all good news 
and pounce with relish on fig- 
ures that are worse than expec- 
ted. So getting through this 
run of statistics without a fur- 
ther bond market dip may not 
be easy. 

The futures market is 
already suggesting the yield on 
the benchmark 30-year issue 
may top 7 per cent before the 
bear run is over, and as Mr 
John Lipsky of Salomon 
Brothers points out: "The 
structure of forward rates now 
anticipates much higher short 
rates and significant yield 
curve flattening." 

This stems in large measure 
from market expectations that 
the Federal Reserve is likely to 
tighten monetary policy again 
in tbe next few weeks, possibly 
on March 22, when its policy- 
making Open Market Commit- 
tee next meets. 

The sharp and unexpected 
drop in global bond markets 
which accompanied February's 
tightening may make the Fed 


Bonds 7-10 year ’ . 

Week -0.69 -0.04 a 50 056 037 0.70- 

Month -2.95 -2.63 -235 -2.15 -437 -2.68 

" Veaf • 2.95 439 a 58 1332 29.65 1032 


Equities 

Week 035 -054 1.59 -0.50 Z78 -2-43. 

Month-' -0.74 036 -253 -6.54 -131 -7.01 ' 

Year 2.40 20.12 19.22 1431 3034 10.42 


Source: Cash A Bonds - Lehrfun Brothers. BquWaa-49 WatWasi Sa cariSp . 

The fT-Aot«*tea YYorid an jointty owned by TTw RnaxSai Times UiTKed, 

Goldman Sachs & Cn. and NatWast Secuiuee United. 


cautious about further tighten- 
ing until the market calms 
down, yet it Is unlikely to do so 
while the world waits for the 
Fed to move. 


The bull case 


US economists are deeply 
divided over the need for the 
Fed's February tightening, its 
first in five years. Most argue 
that It was a timely, even over- 
due, response bo the threat of 
inflation, which was already 
evident in the sharply rising 
price of financial assets. Yet 
some argue that Mr Alan 
Greenspan, the Fed chairman. 
Is fighting an Inflationary 
demon which does not exist. 

One of the most bullish of 
this school is Mr Edward Yar- 
deni, chief economist at CJ 
Lawrence, the brokers, who 
reckons that US inflation will 
run at only 2 per cent this year 
- the consensus is about 3 per 
cent His central argument is 
that this is not a typical recov- 
ery because of new, powerfully 
disinflationary factors around 
the globe. 

For one thing, the end of the 


Cold War has opened up huge 
pools of cheap labour in the 
Eastern bloc, putting down- 
ward pressure on Western 
wage rates. For another, the 
US is in the early stages of an 
information technology revolu- 
tion, demonstrated by a huge 
jump recently in its spending 
on high-tech capital equip- 
ment This should feed through 
into a big increase in produc- 
tivity. again ameliorating infla- 
tionary tendencies. 

Mr Yanleni reckons that the 
Fed Funds rate will end 1994 
where it is now, at 3 VI, and that 
the yield on long bonds could 
fall to the 5 per cent range in 
1995, with the Dow Jones 
Industrial Average hitting 
5000. Hence his current slogan: 
"5/5 in 95." 

ft is certainly not a main- 
stream view, but at the least it 
is a useful reminder, amid tbe 
gloom oT the current market 
correction, that the economic 
outlook in the US remains 
bright, that the bull market in 
stocks may have some way yet 
to run, and that next year 
could see Europe emerging 
from recession- 



Economic Eye / Martin Wolf 

Global implications of the 
‘New Liberalisation’ 


On Friday, March 18 the Financial Times is publishing an In-depth survey of Poland. 
Poland Is the biggest and most strategically placed country in Central and Eastern 
Europe with its economy expanding faster than any other European country. 

But is it the big investment opportunity the world has been waiting for? 

Among other issues the survey will take a close look at the restructuring of the 
country's industry and banking system as well as the booming stock exchange. 

FT Poland Surve y. 


FT. Because business is never black and white. 


In the course of 
the Uruguay 
Round of multi- 
lateral trade 
negotiations, 
set to be com- 
pleted next 
month in 
Marrakesh, 
more than 60 developing and 
former communist economies 
notified the secretariat of the 
General Agreement on Tariffs 
and Trade of unilateral trade 
liberalisation. This represented 
a policy revolution, historically 
unrivalled in terms of the num- 
ber of countries and human 
beings affected. 

An important question is 
whether this shift in policy 
direction will prove temporary. 
An important book*, published 
last year, suggests a subtle rea- 
son why it will not It does so 
in calling attention to what the 
authors call a "new liberalisa- 
tion", in which "deterioration 
of the current account led to a 
package of crisis policies that 
included trade liberalisation". 

There is a general awareness 
in developing countries of the 
benefits of the market and, 
more specifically, of liberal 
trade and greater exports. But 
policy-makers have also come 
to accept what industrial coun- 
tries realised a decade or two 
ago. namely, that restrictions 
on imports are not just an 
inappropriate response to bal- 
ance of payments crises, but 
actually a damaging one. 

A country’s ability to do well 
in the long run depends partly 
on how well it navigates past 
short run obstacles. The 1970s 
and 1980s threw down a series 
of such obstacles: a synchron- 
ised global boom, two oil price 
shocks, the explosion of bank 
lending in the 1970s, the US 
monetary and fiscal shocks 
under Paul Volcker and Ronald 
Reagan, the debt crisis of 1982 
and then the oil price collapse 
of 1986. 

Wanting to learn how devel- 
oping countries had coped with 
this turbulence, the World 
Bank commissioned a study of 
18 developing countries. This 
book summarises the results. 

The lessons drawn by the 
authors seem solid co mm on 
sense, perhaps the mast impor- 
tant being that It is not exter- 
nal shocks, but domestic 
responses that determine suc- 
cess or failure. 

The authors note that there 
are profligate dictatorships and 


How liberalisation boosts openness to trade 


South Korea 
Trade ratio* 

0.5 


Chile 
Trade ratta* 
0-8 



IMS-68 

70-74 BO-08 


1965-69 75*79 83-90 

70-74 - ao-as 


Thaland 
Trade ratio* 
03 


Indonesia 
Trade ratio" 
0.8 




1 


_ . 75-79 
70-74 80-86 


Turkey 

Trade ratio* 
0.8 


Mexico 
Trade ratio* 
0.8 


1065-69 _ 75-79 85-90 

78-74 80-6S 



Sourcn: Wtxtd Bank, fri Ultte of <*J_ 


70-74 

-Sum of <*XporT3 and Imports ov«r OOP 


prudent democracies; that the 
convictions of those who deter- 
mine policy are decisive, but 
that experience can change 
beliefs, even in Argentina; that 
macroeconomic stability is 
good for long-run growth; that 
sudden increases in invest- 
ment are likely to prove waste- 
ful; that it is foolish to assume 
loans will be refinanced; that 
beneficial windfalls cannot be 
expected to last; that policies 
and economies must be kept 
flexible; that rapid export 
growth is essential, as is fiscal 
control; and that foreign aid 
can be helpful in a crisis. 

They also conclude that high 
Inflation is lethal, in itself and 
because of the costs of lower- 
ing it, while moderate inflation 
is not obviously damaging; 
that inflation is ultimately 
home grown; and that liberali- 
sing imports, while using the 
exchange rate as an "anchor” 
for inflationary expectations, is 
very risky. 

This last point relates 
directly to the new liberalisa- 
tion. Historically, note the 


authors, the standard response 
to a balance of payments crisis 
was increased restriction of 
imports. But because a 
restraint on imports is also a 
restraint on exports, those 
restrictions would not reduce 
external deficits, except in the 
short term. 

Instead, current account defi- 
cits would tend to re-emerge, 
but at a lower level of trade. 
The resulting vicious circle of 
import compression would, 
when crisis struck, lead to 
what the authors call "import 
starvation". 

Article KTI of the Gatt 
allowed industrial countries to 
use quantitative import restric- 
tions for balance of payments 
purpose. Over time, however, 
they realised that what was 
needed, instead, was macroeco- 
nomic adjustment. Article 
XVTH gave developing coun- 
tries a comparable authorisa- 
tion, but many of them contin- 
ued to use it to justify import 
controls decade after decade. 

The new liberalisation indi- 
cated developing country 


acceptance of tbe modem the- 
ory of balance of payments 
adjustment: that trade policy 
should be assigned to long run 
economic efficiency, while bal- 
ance of payments management 
depends on fiscal and mone- 
tary adjustment, combined 
with exchange rate flexibility. 
With this realisation, an impor- 
tant obstacle to sustaining 
trade liberalisation disappears. 

The charts show what has 
happened to the trade of those 
developing countries that 
dared to undertake liberalisa- 
tion during the past 30 years: 
Korea from the mid-1960s, 
Chile from the mid-1970s. Tur- 
key from 1£B0, Indonesia in the 
mid-1960s and again in the 
1980s and Mexico and Thailand 
in the 1980s. In all these cases, 
ratios of trade to output rose. 

In the 1950s and 1960s trade 
grew faster than output for 
most industrial countries. 
Thereafter, the Impulse to 
growing openness lost momen- 
tum, partly because liberalisa- 
tion was for advanced already. 
Now It Is the turn of develop- 
ing countries. In 1978, Korea's 
imports were 7 per cent of 
those of the US; in 1991, they 
were 16 per cent, while it had 
also become the world's 12th 
largest import market. But 
Korea has been only a forerun- 
ner of far bigger players, such 
as China and India. 

The new liberalisation sug- 
gests that the developing coun- 
tries are now on the same 
Intellectual footing as the 
industrial countries, so far as 
balance of payments adjust- 
ment is concerned. But many 
of their policy-makers tend 
also to have a better apprecia- 
tion of the efficiency benefits 
of trade liberalisation. This 
means that their vast potential 
for further trade expansion 
will probably become reality, 
with even balance of payments 
crises failing to stop them. 


2*® Richard N Cooper. 
W Max Corden and Sarath 
Rmpatirana, Boom Crists and 
Adjustment: the Macroeconomic 
experience of Developing Corn- 
to* gtew Fort* Oxford Vnhvr- 
fir toe World Bank. 

/OT/. 


The graphic which accompan- 
Kd the Economic Bye column 
tost ueek was attributed to the 
wrong source. It should have 
been attributed to Mr Erik 
Jones. CEPS. Brussels. 


ifit. 


-? v- 

i**- ' ' 


Marius 


* h ; 








U\ 


FINANCIAL TIMES MONDAY MARCH 14 1994 


19 




* It 






V' 




-'I 


IN Ol’tl 




EMERGING MARKETS: This Week 


The Emerging Investor / Louise Lucas 

Hong Kong’s blueprint for reform 


The Hong Kong stock 
exchange is growing op. Last 
year it doubled its market capi- 
talisation; oiled the wheels of 
trading with, the introduction 
of automated order nmtrfrmg 
and execution and a central 
clearing system; and brought 
six mainland state-owned 

enterprises to market 

It has feeed criticism too: the 
listing process is clearly less 
than healthy, with many issues 
being heavily oversubscribed, 
and regulators have been 
accused of ovar-zealausness 
when it comes to vetting both, 
these and disclosure state- 
ments. The listing of the Chi- 
nese wimpunipa riiri not p flffg 
without mutterings, mainly 
over the way in which they 
were brought to market 

Now, however, the stock 
exchange wants to go farther, 
strengthening its role as the 
financial centre of one of the 
most exciting regions of the 
world by embracing standards 
and philosophies used on VfaH 
Street 

If market practitioners 
accept the ambitions proposals 
laid oat in the consultative 
paper distributed last week, 
China will inherit a world class 
exchange which has won the 
full confidence of investors, big 
and small, across the globe. 

What Mr Paul Chow, thief 
executive of- the exchange, 
wants to create is a market 
which is both efficient and 
competitive in the interna- 
tional arena. He wants to focus 
on China, making Hong Kong 
its international capital mar- 
ket, but his plan includes local 

TfgHng a of wml+Hiatinwalg and, 


CURRENCY MARKETS 


possibly, the creation of Song 
Kong Global Depositary 
Receipts- 

To this end. his blueprint for 
reform - which is tip for dis- 
cussion over the five 
weeks - provides for a greater 
onus on Issuers, directors and 
substantial shareholders and 
their advisers, based on higher 
disclosure and backed by sanc- 
tions for abusers; the extension 
of automation to member 
offices and perhaps overseas; 
and a fully fledged derivatives 
and debt market. 

Prefacing its options, the 
paper notes: “In view of the 
increasingly competitive inter- 
national environment in which 
it operates, the Exchange 
believes that when considering 
development issues it must 
place the emphasis on an 
'international’ solution. US 
market practice, or the prac- 
tice of other developed mar- 
kets, may provide such inter- 
national standard. “ 

But while investors broadly 
endorse the goal, there is more 
scepticism over the means rec- 
ommended. Two key issues 
Edit mark et users, and inform 
the direction they wish to see 
Win gynhaw gp hiVo- tb£ matu- 
rity of the market and its abil- 
ity to fake on board a radical 
switch towards greater self-reg- 
ulation; *!>«!, at fag«p. in any 
discussion, self interest 

Many merchant bankers sm ^ 
fund managers welcome the 
proposed switch, in listing phi- 
losophy from the existing com- 
mon law based regulatory sys- 
tem towards the seif-vetting US 
model, which does away with 
stock exchange vetting an new 


Ten beet performing stocks 


Stock 

CBmtry 

Friday 

doao 

WtA ao aaak danga 
* . % 

Light Services de Qeetrcade 

Brad 

03433 

0.0880 

2«7 

Bactrobras (pfd) 

Brad 

0.2800 

0.0484 

20.90 

Branco Bradesco (pfd) 

Brazil 

00178 

0.0026 

16A9 

Compenhia Sumo {pfd) 

Brazil 

4.0978 

CL5572 

15.74 

Koc Vafam 

Turkey 

2.0418 

02740 

1554 

Usrnknas (pfd) 

Brad 

0.0011 

0.0002 

15.04 

Petiobras (pfd) 

Brazil 

0.1892 

0.0232 

13AB 

GSN 

Brazil 

0.0350 

0.0043 

. 1336 

Baglay 

Argentina 

34804 

0.4797 

13.70 

Sadia Concordia fndustria (pfd) 

Brazil 

0.0105 

□.0012 

1333 


sauce Baring Sacufltra 


issues and disclosures and so 
speeds the process. 

But there Is a 
contingent which feels that 
Hong Kong is not ready for 
such a step: its emerging mar- 
ket stains can be interpreted in 
this way and foreign investors, 
in particular, may feel uncom- 
fortable with a regime more 
akin to self regulation. 

Mr Richard Witts, managing 
director of United Mok Ying 
He, a local brokerage and a 
member of the stock 
council, says that the move 
redes on quality advisers. “The 
question is whether we have 
sufficiently good advisers. Can 
our advisers be trusted?” 

Mr Wilts's argument is not 
directed solely at market prac- 
titioners in the colony: the 
model has proved far from 
flawless in the US itself, where 
a spate of scandals has plagued 
regulators. 

Creating an environment 
where scandals are more likely 
to breed - which is the pri- 
mary concern when wiping out 
the rede of the regulators as 


Btwi arbiters of ifatfag applica- 
tions — is far more likely to 
deter institutional investors 
rather than pn tirg them in, he 


The r wwnm«»nrffltifwi to abol- 
ish mfryiirnTTn commissions, 
now standing at 025 per cent, 
will not pass without a battle, 
either. Fund management 
operations and securities 
houses often sit together in the 
same group. 

Some say that the com mis- 
sion issue is a bargaining 
counter in the dispute over 
stamp lowering the one 
could pave the way lor a reduc- 
tion in the other. The exchange 
hag already opened discussions 
with the government with a 
view to reducing, and ulti- 
mately scrapping the stamp 
duty levy, which stands at 0.15 
per rent on buyer nuri seller. It 
argues that the international 
trend is to eliminate such 
taxes. 

Leading the attack on the 

abolition of minimi im rYimmit - 

sion, Mr Robert Thomas, man- 
aging director of Jartttne Flem- 


ing Investment Management 
says: “It is very detrimental to 
Hong Kong to abolish mini- 
mum commission because I 
thirst the minute you do that 
you encourage the market 
maker role to come in, which 
affects the whole broker/client 
relatio nship 

“it encourages deals to be 
done off market, and to my 
mind the most efficient market 
is if all deals go through one 
point" 

The less contentious recom- 
mendations put forward in the 
consultative paper would serve 
to uTifterifa* Hong Kang's role 
as a window on the biggest 
emerging market of all - Hhb>« 
- and to draw increasing vol- 
umes of foreign money into the 
mainland, while developing a 
strong capital-raising base in 
the colony. 

A key pfenic; to thin vision is 
one of the more nuts-and-bolts 
proposals: extended automa- 
tion and increased trading 
hours. Although Hong Kong is 
the biggest market in Asia out- 
side Japan, last year it was 
only fourth in terms of trading 
volume. 

With an efficient central 
clearing system in place, lon- 
ger trading hours are now per- 
fectly feasible. They are seen 
as long overdue. Open for just 
thiee-and-a-half hours a day, 
Hong Kong seriously lags 
behind the rest of the region. 

They would also be a means 
of winning back «rmw» of the 
business lost to London. 
Recently, the London share in 
the turnover of Hong Kong 
stocks quoted or listed there 
has been about 15 per cent 


Markets seek clarity on interest rates 


A critical week lies ahead for 
foreign exchanges with the 
release of inflation data in the 
US and uk, and a B undesbank 
council meeting, likely to paint 
the way to futur e interest rate 
developments on both sides of 
the Atlantic. 

The focus of attention win he 
the mid-week publication of 
February producer and con- 
sumer prices in the US. These 
data will set the scene for the 
meeting of the (policy making ! 
Federal-Open Market Commit- 
tee on the March 22. 

Financial markets have had 
the jitters about US inflation 


ever since the Fed lifted inter- 
est rates by 25 basis points last 
month. But some analysts 
argue that the central bank 
wffl tighten less aggressively 
than the market believes. 

The US currency remains 
v ulner able to fall-out from the 
Whitewater political scandal, 
but atfantirm this week sbnnW 
focus on the economy. 

The dollar is likely be stron- 
ger against the yen following 
the weekend settlement of a 
long-running cellular phone 
dispute between the US and 
Japan. The deal improves and 
accelerates the US company 


Motorola's access to the Japa- 
nese market 

It is a dear victory for the 
strong-arm tactics of the US, 
and ctirmiri kelp the two coun- 
tries resolve their broader 
trade dispute. Recent history 
suggests that progress in these 
talks favours the dollar. 

In Europe the market will be 
watching to see whether the 
Bundesbank uses Germany’s 
improving fa fl* firm outlook to 
quicken the pace of interest 
rate cuts. The central bank’s 
council meets on Thursday. 

.. Foreign exchange s wiH also 
he watching yesterday's elec- 


tion for the Lower Saxony 
state parHampwt the first in a 
series of 19 regional and 
national polls In Germany 
between now and October. A 
strong protest vote against the 
political establis hment could 
weaken the D-Mark. 

In the UK, the release of pro- 
ducer inflation data, retail 
sales and unemployment fig- 
ures will set the fane for inter- 
est rates. There is no consen- 
sus about the direction of the 
next move in rales, and there 
are indications that the market 
may fake its lead from the US 
rather than Europe. 


DoOwr 

Against the DM (DM part) 

- 1.78 — > 



1A8. 


F 0b 1994 

Sourfa: FtGnipMa' 


n 


FT GUIDE TO WORLD CURRENCIES 


Dm table below ghra# th* latest mMIt ness 


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Three times the miles. 

From 1st hebrui'Jry to 3C)th April 1994. triple milea ge is available 
on all international JAL flights. Call your nearest JAL office for details. 


■ Kuala Lumpur 

Malaysia's year-old Securities 
Commission is considering 
more roles to stamp out 
insider trading and stock 
market manipulation, Munir 
Majid, the chairman has 

annmirxrffl l 

Malaysia's Registry of 
Companies said two “middle 
level** company officials were 
befog investigated for tn<dH«w 
trading and six had been put 
on a “scrutiny list". 

■ Beijing 

The number of xharrtinmng 

Wmpwriiw In Chfafl l»4t yflf p- 
rose by 9,440, to 13,000 with 
total capitalisation of 
Yn20S.63hn. listed companies 
numbered. 122, with 215 stocks 
traded on the Shanghai pnri 
Shanahan prrhangpg Vany 
state-owned activities have 
been reorganised into 
ghnmhrii/ftng emapanies in 
what could be a first step to 
a formal listing. 

■ Mexico 

Foreign investment in Mexican 
stocks trading locally and 
abroad £^L by & per cent in 
February from January levels. 
and total foreign investment 
in Mexican stocks at the mid 
of February was SSA2bn. the 
stock exchange reported. 

■ Brazil 

Details of of the privatisation 
of Brazil’s electricity industry 
should be ready by middle 

of 1994, according to Mr Jose 
Loiz Alqueres, president of 
state electricity holding, 
Eletrobras. The industry, 
which has a book value of 



News round-up 



945hn. has been restructured 
along market-oriented lines 
and long-standing debts owed 
by Eletrobras subsidiaries to 
the holding company and the 
government have been 
resolved, he said. 

■ Manila 

The stock exchange has 
adopted a set of trading rules, 
most of which are currently 
being observed by the Manila 
and Makati bourses, for the 
planned unified exchange. The 
rules include an automatic 
freeze on a price of an issue 
if it moves up 50 per cent or 
fells by 40 per cent on a 
particular day from its 
previous close. 

The Philippine National Oil 
Company is to offer ihn shares 
of Patron, its most profitable 
subsidiary, in May. priced at 
between 6 pesos and 16 pesos. 
A third of the shares will be 
targeted at foreign investors. 

■ India 

Prices erf Indian shares listed 
abroad have fallen sharply in 
the past week and the 
downturn is likely to delay 
several Euroissues in the 
pipeline, brokers have warned. 

However, analysts in London 


and Bombay said the fell in 
overseas-listed shares had not 
dimmed foreign interest and 
a $lbn telecom issue, India's 
largest, would still go ahead. 


■ Warsaw 

A Polish parliamentary 
commission is to ask the State 
Protection Office and the 
National Auditing Office to 
investigate possible 
wrongdoing during the 
privatisation of Bank SlaskL 
The commission wants to 
know if the bank manipulated 
profits in first half of 1993 to 
cut the issue price. 

■ Taipei 

Taiwan’s state-run Fanners 
Bank of China plans a rights 
issue of 250m shares and will 
list on the stock market in July 
as part erf the government's 
privatisation programme. 

The rights issue will expand 
the bank's paid-in capital to 
T$7.5bn from TSS.Obn. reducing 
the government's stake to 61£ 
percent 

• Further coverage of 
emerging markets appears 
daily on the World Stock 
Markets page. 


Baring Securities emerging markets indices 


Index 

11/3794 

Weak on week onwnint 
Actual Percent 

Month on month TOWart 
Actual Porcont 

Vav la data mmermnt 
Actual Parcarrt 

World (248) 

Latin America 

—164.24 

0.89 

054 

-18.47 

-1011 

-4.17 

-2A8 

Argentina (19} 

11324 

-0^4 

-0.74 

-2043 

-15£9 

-2.14 

-1.B0 

Brazil pB) 

195.10 

2098 

12.05 

-15.82 

-750 

55.45 

39.71 

Chile (12) 

172J07 

5J57 

3.41 

-5.48 

-3.09 

24.53 

16.83 

Mexico (24) 

148.57 

-6.01 

-3.86 

-27.10 

-15.34 

-11.70 

-7^6 

Latin America (75) . 

—159.36 

2.78 

1.78 

-21.44 

-11.86 

10.12 

078 

Bid* 

Greece (14) 

100.04 

1^4 

138 

5-06 

-523 

1094 

20.39 

Portugal (14) 

130.10 

5.74 

4.62 

2.06 

2^4 

17J7 

1003 

Turkey (2 2) 

90-20 

-2.20 

-2J38 

-8.17 

-8 JO 

-7U1 

-4422 

Europe (50) — 

As* 

-.111.28 

2.80 

2.58 

1.44 

1J1 

-0-95 

-0.85 

Indonesia (17) 

158.34 

0.09 

005 

-18.40 

-10.41 

-12.70 

-7.43 

Koreans) 

12328 

-034 

-0.75 

-097 

-0.78 

13A8 

12.38 

Malaysia (22) 

207.65 

-OJ23 

-0.11 

-10.69 

-4 JO 

-45.40 

-17.94 

Philippines (11) 

252.05 

-4.86 

-1^9 

-46.08 

-15.48 

-7042 

-21^4 

Thailand (21) 

206.15 

-8^3 

-3.84 

-25.09 

-10.85 

-57.40 

-21.78 

Taiwan (29) 

135.36 

-7.70 

-5^8 

-2821 

-1 7.25 

-1835 

-11.94 

Asia (123) 

-188.10 

-3^2 

-1.79 

-18.08 

-8.77 

-33.31 

-150)5 


Al Mm ki 0 toon*. .January 7tti iBB&rfOX Sant Bering SacwMat 


We are pleased to announce that 

James F. Curley 

has joined 

Republic New York Securities Corporation 
as a 

Director 
and as 
President 

of its newly formed 
Futures Division 



Republic f||§ New Yoik Corporation 


SIEMENS 

Notification of Dividend 

Thfl Annual SharshoMars' Meeting of Siemens AO on March 10, 19&4, has resolved to 
distribute the net Income of DM 727,662.767 for the financial year 1992/93, and has approved the 
payment of a dividend of DM 13 per share of DM 50 par value of the capital stock entitled to a 
dividend. The amount attributable to treasury stock, a total of DM 4.273,542, shall be carried 
forward. 

The following payment win be made against Dividend Coupon No. 38 at the paying agent 
listed below: 


Per share of DM 50 par value 
less 25% with baking tax . 


DM 13.00 
DM 3.25 

DM 9.75 


In accordance with the U.K^G orman Double Taxation Treaty of November 26. 1964. as 
amended in the protocol of March 23, 1970, the German withholding tax is reduced from 2S% to 
15% for shareholders resident In Great Britain. To daim this, shareholders must submit an 
application for refund to the Bundesamt for Rnanzsn, FriedhofstraBe 1, 0-53225 Bonn, by 
December 31 , 1 998. 

In the United Kingdom payment will be effected through the following bank: 

S.G.Warburg & Co. Lid. 

Paying Agency, 2 Finsbury Avenue, London EC2M 2PA. 

Berlin sod Munich, March 10, 1994 

Siemens Aktlcngcsdlsduft 
The Managing Board 







FINANCIAL TIMES MONDAY MARCH 14 1994 


WORLD BOND MARKETS: This Week 


NEW YORK 


Richard i omklns 


LONDON 


Philip Coggan 


FRANKFURT 


David VVaiier 


Reason may argue that the 
rise in US bond yields has 
already more than discounted 
the possibility of another 
increase in interest rates, but 
sentiment continues to dictate 
otherwise. Last week the 
Treasury 30-year bond yield 
rose to &98 per cent as the 
market ran scared again, this 
time on political uncertainties 
caused by the investigation 
into the Whitewater land deaL 

This week, the market Is 
probably in a mood tor 
consolidation. But it is 
unlikely to get it It faces what 
Salomon Brothers describes 
as the statistical equivalent 
of a daylight bombing run as 
three key price reports are 
published on three consecutive 
days. 

The raid starts on Tuesday 
with the publication of the 
producer price index for 
February. Salomon predicts 
the index wOl rise by 0.5 per 
cent the largest monthly gain 
since last April - though 
excluding the volatile food and 
energy sectors, it believes the 


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Increase could be a more 
palatable 0.8 per cent 

Wednesday sees the 

publication of tiw consumer 
price index, with analysts 
predicting an acceleration from 
January’s 0.1 per cent to 0.3 
or 0.4 per cent for February. 
Then, on Thursday, the 
Philadelphia Business Outlook 
Survey could scare the market 
if, as expected, it shows an 
increase in the proportion of 
manufac tur er s expecting input 
and output prices to rise. 


After several weeks of being 
buffeted by overseas 
influences, the gflfe marke t 
will have some chunky UK 
economic statistics to chew 
on this week. But traders win 
still be watching for signs of 
Federal Reserve tightening 

and R iTnripghank (wiring 

“Gilts are being driven by 
what is happening across the 
Atlantic" according to Mr 
James Barty, UK economist 
at Morgan G renfell Many 
analysts have argued that the 
ppopfimif* f undamentals do not 
justify the recent falls in 
European bond markets, which 
started when the US raised 
interest rates on February 4. 
European markets. Bay 
analysts, should be able to 
decouple from the US 
mfluerire; but so Ear they have 
failed to do so. Gilts have Eared 
particularly badly, and 
suffered once more cm Friday. 

“The ftmdamtfwtaln may 

allow gflts to decouple at the 
shorter end of the yield curve, 
but we are not yet at the stage 
where the market can decouple 


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at the longer end," reckons 
Mr Baity. 

This week's Infnrrmatinp 
includes ^ir unnplo y niMrf and 
retail sales, which will be 
scrutinised for signs of the 
strength of the recovery; and 
producer prices and average 
earnings, which willbe 
monitored for inflationary 
pressures. Mr Barty says next 
week’s data “will help the gilts 
market if it shows continued 
low inflation and modest 
growth”. 


Awra riing to Mg Alisnn 

Cottrell at Midland Global 
Markets Research, investors' 
rtt«ap pn tntivw*nf with the 
meagre 3 basis point cut in 
t he rep o rate last week was 

a “t r himph of imaginatio n OVET 

experience”. 

She points out that the 
Bundesbank rarely cuts the 
repo rate Ity 10 points (fr more 
without following up with a 
cut in the discount rate. 

This is currently unlikely, 
she says, in the aftermath of 
embar r assing ly high gimwtb 
in M3 money supply in 
January (the annualised, 
seasonally adjusted growth 
rate was revised up 
from 20.6 per cent to 2L2 per 
cent on Friday), however 
strong the f undamentals in 
terms nf paging- inflationar y 
pressures. 

Thus this Thursday’s 
meeting of the Bundesbank’s 
policy-making council is not 
tipped to cut the discount rate 
from its current level of 5.25 
percent. 

The central bank may take 


Germany 


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the opportunity to announce 
a fixed rata tender for next 
week, thereby ushering money 
market rates down further, 
but the best that can be hoped 
for this week is a further 
minuscule cut in the repo rate 
after another variable rate 
tender. 

The market wiQ also reflect 
on the outcome of yesterday’s 
elections in the state of Lower 
Saxony and the impact, of last 
Friday's pay settlement for 
public sector workers. 


With seasonal profit-taking 
ahead of the March year-end 
almost over, volatility on the 

government bond mariret is 
expected to subside this week- 
Bond traders believe the 
worst Is over for the JGB 
market, as the yield on the 
No 157 10-year benchmark 
dosed last week at 334 per 
cent, off its week’s high of 4.1 
per cant 

Brokers S.G. Warburg in 
TOkyo believes bond yields 
have risen too quickly. It says 
the recent plunge has pushed 
real bond yields up to die 
avaage of 1991 and 1992 and 

considering the still sluggish 

economic conditions, there 
is room for the 10 -year bond 

yield to fall to 3.6 per cent 
Japanese band market 
participants will also be 
focusing on US interest rates 
this week. The recent fall on 
the Tokyo market has been 
exacerbated by the sell-off in 

Iwtiwnatininfll hq mri markets. 
Sentiment will remain jittery 

as long as the US Treasury 
bond market is unstable. 


Benchmarit yield curve (W 
1U aa*_ Mcmffi>oo <= 

64 

O 5 yews tt 
"M yWds era mart** 

Some Marti Unch' 


The Bank of Japan is 
expected to keep a loose grip 
on short-term money m a rke t 
rates. Demand for funds is 
expected to rise as a new 
reserve maintenance period 
for banks’ deposits at the 
central hawk starts on 
Wednesday. Mr Yasushi Mteno, 
BoJ governor, last week 
warned of the negative impact 
of higher long-term Interest 
rates on the economy, and is 
likely to continue to prevent 
a rise in overnight call rates. 


Capital & Credit / Richard Waters 


Banks return to acquisition finance 


The financin g of takeovers in 
the US passed a significant 
milestone last week. As an all- 
cash, S2bn battle broke out in 
the defence industry for Long 
Island-based Grumman, the 
message to the financial mar- 
kets was loud and dear the 
banks are back. 

A $lSbn offer from Martin 
Marietta, launched at the start 
of the week, was underwritten 
in its entirety by JJ. Morgan 
and Bank of America, with the 
two banks making an addi- 
tional $500m available an top. 
By Thursday, rival Northrop 
had responded with a $2bn bid, 
backed by total commitments 
of $2.8bn from Chase Manhat- 
tan and Chemical. 

The extra «wh available to 
both bidders immediately 
raised the spectre of a bank-fi- 
nanced bidding war, pushing 
Grumman’s market value on 
Friday up to $2J2bn. 

Neither offer Is Hi g hl y lever- 
aged. Northrop has minimal 
gearing at present, with debt 
only 10 per cent of total capi- 
tal. Standard & Poor’s calcu- 
lates that Martin Marietta's 
gearing would go up from 36 
per cent to 54 per cent if it 


wins the battle for Gramman. 
Yet the willingness of some of 
the US’s biggest financial insti- 
tutions to lay more than flbn 
each on the line inevitably 
prompts comparisons with the 
debt-financed acquisitions of 
the 1980s, known for their 
leverage. 

Starved of opportunities to 
lend, a whole array of US and 
foreign hanks have pinpointed 
acquisition finance as one area 
of growth. 

“There is a great deal of 
bank money chasing far too 
few deals." says Mr Stewart 
Boswell of North Carolina- 
based NationsBank, one of a 
number erf banks whose ambi- 
tions to play a pr ominent role 
In big corporate transactions is 
making the bank fending mar- 
ket increasingly competitive. If 
banks are so eager to lend 
a gain can reckless leverage be 
far behind? 

Until recently, the US’s lat- 
est takeover wave had been 
carried along by a buoyant 
equity market, prompting a 
rash of all-share bids. Now, 
two things have changed. 
First, with short-term US inter- 
est rates widely expected to 


rise further, the stockmarket 
has lost some of its shine. 

Second, equity Investors are 
no longer so confident in the 
ability of acquisitive compa- 
nies to mrpand without diluting 
their earnings. The SlObn bat- 
tle for Pa ramount Communica- 
tions did much to ffrang a senti- 
ment As the share prices of 
bidders Viacom and QVC came 
under pressure, both fell back 
Increasing l y on Hank financ e 
to support their offers. 

The banks are more than 
ready to fill the gap. Acquisi- 
tion financing could help to 
plug part of the hole left by the 
slide in banks’ lending to their 
big business customers so far 
fal the 1990S. Total cnmmnrrifll 
and industrial lending by US 
banks has picked up slightly 
from its low point in the third 
quarter of last year, but is stQl 
around gLOObn lower than the 
peak $600tm reached in 1990. 

More important to the banks, 
thoug h, are the fees for under- 
writing big transactions. Equi- 
ty-financed deals favoured 
Wall Street’s investment 
banks, which reaped big under- 
writing profits last year. Trans- 
actions backed with debt, on 


the other hard, will boost the 
fee income of commercial 
banks - particularly now (hat 
the biggest of them have the 
ability to arrange band deals 
as well as syndicated loans. 

Underwriting fees vary 
greatly, depending on the 
amount of leverage involved. 
For committing ?l00m to bads 
Loral’s acquisition of IBM’s 
aerospace business, for 
instance, banks were offered 
fees of (L5 basis points. On the 
other hand, fiima* committing 
$2Sm to the $l.5fon transaction 
to releverage Jefferson Smurfit 
in the US are being paid 150 
basis points. 

A handful of money-centre 
hanks are coming to dominate 
the business. The Grumman 
battle is unusual in that just 
four h anks have committed 
more than $5bn between than. 
Two of the four - Morgan and 
Chemical - also featured in the 
hank financing of the rival bids 
for Paramount, acting for Via- 
com and QVC respectively 
(Citibank al^o acted as a joint- 
lead for Viacom.) 

The availability of bank 
money - together with the 
renaissance last year of the 


junk bond market - has also 
kicked the leveraged buy-out 
business back into life. The 
$l-5bn Jefferson Smurfit deal 
(Sl.Sbn of it underwritten, in 
the bank market, with another 
$250m of junk bands) Involves 
the first leveraged bank financ- 
ing of more than jibn since 
1990, when the buy-out market 
last ground to a halt 

How far will it go? The limi- 
tations on leverage at the 
moment are being imposed by 
buyers, rather than financiers. 
The equity component in a typ- 
ical leveraged transaction has 
Mien to 20 per cent or less, 
from 25 to 30 per cent Last year, 
hut is Stffl higher than the 5-10 
per cent level common in the 
1980s. 

“Leverage is back. It’s just a 
question of how far companies 
want to go,” says Mr James 
Lee, managing director in 
charge of structured finance at 
Chemical, probably the most 
aggressive hank in the lever- 
aged buy-out business at the 
moment With such views now 
common among bankers, it 
may not be long before the 
multi-billion leveraged buy-out 
is back. 



International / Conner Middelmann 


Starts 11 (Um op to RnYMO) 

bdl13%cc1894 101 A 

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• -Top- stock. IT Tn-ftM to nuMMidantB on npp fca don. E Aucasn baw. m> Ex towtoixL Ctoatog iHU-priea* va ihonwi to pounds. Waal* panartaQ* rtinopaa *ia ctoc uto to d on a Fruey to Friday Oasis 


Standard & Chartered 


ROYAL BANK 
OF CANADA 


Standard Chartered PLC 


US$400,000,000 Undated Primary Capital 
Floating Rate Notes 


In accordance with the provisions of the Notes, 
notice is hereby given that for the Interest 
Determination period from 14th March 1994 to 
14th April 1994 the Notes will carry interest at 
the rate of 4.25 per cent per annum. 


Interest accrued to 14th April 1994 and payable 
on 12th July 1994 will amount to US$36.60 
per US$10,000 Note and US$365.97 per 
US$100,000 Note. 


West Merchant Bank Limited 
Agent Bank 


Dividend No. 427 
NOTICE IS HEREBY GIVEN 
THAT a (Svktefld of 29 cents 
per share upon the paid up 
common shares of this Bank 
has been declared payable tor 
the cuirertl quarter at the Bank 
and its branches on and after 
May 24, 19W to shareholders 
of record at dose of business 
on April 25. 1994. 


By Order of the Board 

JsneE. Lawson 
Sw&ViG&PnadM&Socniary 



After underperforming 
conventional UK government 
bonds in the recent sell-off, 
index-linked gilts could outper- 
form the rest of the market in 
mmmg months, some analysts 
say. While UK inflation fore- 
casts vary, the uncertain infla- 
tion outlook may foel interest 
in the index-linked sector. 

Meanwhile, other countries 
are wanning to index-linked 
bonds, with Sweden planning 
to kick off its index-linked sec- 
tor with an issue of 20-year 
zero-coupon bonds in April 

Index-linked gifts were cre- 
ated to offer investors a hedge 
against inflation, as measured 
by the Retail Prices Index. 
Interest payments and the 
amount due at maturity are 
adjusted to reflect changes in 
the RPL If retail prices rise, an 
index-linked gilt provides a 
nominal g»h\ from purchasing 
the stock at issue and holding 
it to maturity. If retail prices 
fall the expected redemption 
value of an index-linked stock 
also declines, but retains its 
value in real terms. 

In the UK there are currently 
15 index-linked stocks in issue, 
with an outstanding nominal 
value of around £21.5bn - 
about 11 per cent of the total 
gflt market 

Since the beginning of the 


year, conventional gilts have 
posted a total return of minus 
3.7 per cent, compared with a 
loss of 4.5 per cent in the 
index-linked sector (to Thurs- 
day’s dose), says Mr Chris Bil- 
low, UK economist at Nomura 
Research Institute. 

The recent sell-off in gilts 
was largely sparked by exter- 
nal factors: a rise in US yields 
following the Federal Reserve’s 
monetary tightening, frustra- 
tion at toe slow pace of Bund- 
esbank easing , and heavy bond 
sales by highly leveraged spec- 
ulators. The resulting rise in 
conventional yields dragged 
index-linked yields higher. 
Indeed, Index-linked fared 
worse than conventional gUs 
because their lower yield base 
and longer duration means 
their price is more sensitive 
and will move more sharply on 
identical shifts in yield. 

According to Mr Dillow, 
index-linked yields are deter- 
mined not by “real economy” 
factors, but by conventional 
bond yields minus inflation 
expectations, where conven- 
tional yields are determined 
principally by shortterm rates 
and overseas yields, and where 
inflation expectations include 
an allowance for inflationary 
risk. 

“Index -linked yields have 


risen because conventional 
yields have risen by more th an 
inflation expectations," he 
says. 

This suggests that index- 
linked gilts can outperform 
conventionals in the next few 
months, mainly because faTHng 
overseas yields may push UK 
yields lower, he says. 

In tire US this would be a 
stabilisation in yields after the 
recent sell-off. 

In Germany, the case for 
lower yields Is stronger, with 
the Bundesbank aggressively 
cutting short-term rates as 
inflat io n and M3 money supply 
growth weaken, he says. 

Moreover, the gap between 
index-linked and conventional 
yields could widen as index- 
linked gilts benefit from rising 
UK inflationary expect a tions. 

For example, the yield gap 
between the 9 per cent gilt due 
2008 and the 214 per cent index- 
linked due 2009 has widened to 
4JI per cent on Friday, from 
3.60 per cent on December 31 

Meanwhile, Sweden is set- 
ting up its own index-linked 
market It plans to raise up to 
SKrIObn in an auction of 20- 
year zero-coupon bands in the 
week of April 18, says Mr Staf- 
fer! Crona, director-general at 
the Swedish National Debt 
Office. 


Sweden is the first country 
to issue zero-coupon index- 
linked hands, which Mr Crona 
says offer better inflation pro- 
tection and are easier to price. 

“We hope to attract institu- 
tional investors with a 
long-term view, such as life 
insurers and the national 
Swedish pension fund. They 
are very keen on having 
investments that offer real 
interest rates over a long 
period, as they often have to 
make payments to their clients 
in 20 or 30 years’ time,” he 
said, adding “some of them 
have already shown great 
interest”. 

If the results of the first 
issue are satisfactory, “we will 
probably continue issuing 
index-linked bonds to toe insti- 
tutional market, and may filso 
issue bonds with smaller 
denominations to attract retail 
investors”, he says. The first 
band will probably be issued in 
de nomin a ti ons of SKrlOOJXlO or 
SKrlm. 

Liquidity in the index-finked 
sector will be limited at first, 
Mr Crona says. "I don't think 
the market will be as liquid as 
the big ben chmar k loans in the 
Swedish government bond, 
market, but it is our amhftion 
to a create liquid market for 
index-linked bonds as well." 


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21 


FINANCIAL TIMES MONDAY MARCH 1'4 1994 


EQUITY MARKETS: This Week 


Or. 


■'iO 




NEW YORK 


Investors 
optimistic 
oh inflation 

In. recent weeks, long-term US mierest 
rates have climbed rapidly amid 
growing concerns aboot resurgent 
inflation and the concerns have 
spread to the stock market, where 
prices have struggled to make 
headway in spite of mostly bullish 
news on the economy. 

This week, the stock market will 

have the opportunity to judge for 
itself whether infla tion Is really on 
the rise again, and some good news 
should allow stocks to shake off their 
inflatio n fears. 

Tomorrow, tiie February producer 
prices index is- released, and a day 
later, the consumer prices index Is 
published. Although analysts expect 
the two indices to show slightly 
stronger growth than in January 
(the brokerage house Donaldson, 
Lufkin & Jenrette forecasts that both, 
the PPI and CPI rose by 0.4 per cent 
last mouth), the inflat ion alarm hell 
is likely to stop ringing. 

If analysts' forecasts prove correct, 
the annual consumer inflation rate 
will measure close to 2A per cent 
That is a fall point below the 
c ompar able rate recorded at the same 
stage of 1998, a remarkable reduction 
considering the economy over the 
past two months has been growing 
at a significantly faster pace than 
in the same period a year ago. 

A hint of how the markets are 
likely to respond to favourable 
inflation reports came last Friday, 
when after a poor start, share prices 
rose steadily on the back of declining 
bond yields. Stocks firmed on Friday 
as investors tamed more optimistic - 
about this week's inflation Hy+a 
Above all, they were able to take 
a step back from some of the 
economic, and political, analysis that 
disr upte d trading earlier in the week. 

Yet, even if the inflation picture 


iirick Harverson ! II LONDON 


Tern, Bvland II OTHER MARKETS 


■Dow *1 baa* faS fa f Average - 


*3860 V 


■3840 —V 


■ r ■ ~ . 

v’4 “-/»*■*«* 1004 ii 

Sotace: FTOMpMt* \ 

brightens, political problems that 
have unsettled investors recently 
are unlikely to fads into the 
background especially quickly. Most 
of Wall Street agreed by the end of 1 - 
last week that the fuss the band 
market, and later the stock market, 
made over rumours swirling around 
the Whitewater affair was overdone, 
but the White Bouse is unlikely to 
emerge from the clouds erf the 
“scandal" particularly soon. 

As long as the perception holds 
that President Clinton is politically 
hampered by the growing inquiry 
into Whitewater, and by press 
revelations of a possible cover-up, 
then it is of concern to investors. 

Why? While that is not easy to 
answer, it is often said that if the 
President gets into deeper trouble, 
so does his political agenda, which 
TT K»h»tog gnrh g market-sensitive 
pmg ramwipa pg Tienlthca ro flfld 
welfare reform. 

Politics aside, the stock market's 
hn mediate future depends on what 
happens nert to long-term interest 
rates. The yield on the 30-year 
government bond has leapt more 
than 100 basis points, to 63 per cent, 
since October. While the yidd may 
edge a hit higha- from here, bond 
investors may soon realise the 
Treasury market correction has gone 
far enough. This scenario would give 
the stock market some much-needed 
breathing room, and allow investors 
to digest the events of the past few 
weeks in a more considered faiw™ 


Signs that 
confidence is 
recovering 

The stock maritet is trying hard to 
revert to its traditional role as a 
measure of performance of Great 
Britain pic, but the process is not 
proving easy. Bond markets, both 
in Europe and the tJS, are still 
capable of throwing UK equities back 
on their heels and are likely to 
present fresh challenges week. 

The problem appears to be one 
of general nervousness rather than 
simply of interest rate prospects, 
or what the Bundesbank or the 
Federal Reserve may or may not do. 
For equities, the warning is that any 
tremor in the bond markets can still 
wipe out the fragile recovery of 
confidence in n» stock market. 

But there are dear signs that ■ 
confidence is recovering as the flow 
of company results and, more 
importantly, of dividend statements, 
indicates that economic recovery 

k wilnng Ifemlf toW 

- There have been increased 
dividends from the banking sector, 
and from Glaxo and HSBC, two of 
the biggest companies in the market 
Last week's high-flyer, in terms of 
trading volume and share 
performance, was BTR, another 
dividend-boosted stock. 

NatWest Securities, noting that 
since last April, the gross dividend 
base of the market has risen by 5 
per is lifting its own dividend 
growth forecast to 7 per cent for 1594, 
which, it calculates, r epresents a 
real increase of around 4 per cent 

Si gnificantly , NatWest now predicts 
a switch away from the consumer 
sector as the likely engine of 
economic recovery, preferring the 
diversified manufacturing stocks; 
cqnsumemriented sectors are still 
suffering a flow of downgradings 
in profit forecasts. 

Forecasts for earnings growth in 



JR3N& Ali-ShamEndwc 


haso-'-r 


1.830 . 


i i.. . .. • 

■ ' March IS** -. 11.' 

Bwfacc fT&wftw / ■. 

the retail sector are, significantly, 
only around 13 per cent for this year, 
compared with about 16 per cent for 
the market as a whole. The likely 
impact next month of the Budget 
changes in taxation, *h» confident 
view on domestic interest rates and 
the generally lacklustre image of 

have combined to cast a cloud over 
the sector. 

• O rmns arid both havp fallen 

out of fevour in the market and are 
now seen in some quarters as 
yesterday's stocks. Dixons, having 
pleased the stock market and nation’s 
high streets alike with its aggressive 
marketing of electronic goods, has 
never quite recovered after a 
disappointing statement on Christmas 
trading. Now the spotlight has turned 
on the implications of the OFT 
investigation fate warranties. 

Burton is regarded as a victim of 
its policy of discounting at its 
Multiples chains, which are believed 
to have weakened brand names. 

A similar nl rniri fan: fatten rwnf 

the commercial property sector, 
whore anticipation, at least on the 
part of some investors, continues 

te witrnn pe r f nrmartrp firniflrlwM* 

in a long-awaited recovery in office 
pro p er t y in the City of London has 
been jotted by the first of the 
December results statements. 

Far the near term, the focus wifi 
be an prospects in European property, 
with Br ftfr m ifafa teff and Hammere on 
reporting soon. 


FRANKFURT 


a 






Thureday sees the last Bundesbank 
wimril minting fnr a mnnHi ITUS 

says that after the wetter of 
comments from the Bundesbank 
about the demotion of BIS, it would 
seem that we are now in for a period 
of further cuts in repo rates, but in 
small steps, even with further 
progress in the wage round. DBS, 
however, does not expect any further 
cut in the discount rate until the 

end of April 

Consensus estimates are for a 35 
per cent fell In profits from BASF 
on Thursday and a 9 per cent decline 
from Bayer on Friday. 

Sobe ri ng is today expected to report 
a slight increase in sales for the start 
' of 1984, but investors will be more 
interested to hear what the company 
has to say about the outlook for sales 
of its Betaseron multiple sclerosis 
treatment in the US. 

AMSTERDAM 

Ahold, the Netherlands' largest 
retailer and one of the top 10 largest 
food retailers in the US through 
ownership of four chains, reports 
on Thursday and consensus estimates 
are fora 13 per cent rise in 1993 net 
profit Hoare Govett says the 
company will be one of the major 
hA flpffHarip-g of dollar strength white 
the scope for recovery In earnings 
at FNS East (now renamed Edwards) 
and at Finest Ohio is »> e w ^cgn t. 

PARIS 

LVMH, the world’s largest luxury 
goods group, reports an Thursday, 
and forecasts are for a 5-10 per cent 
decline in full-year net profit BSN 
is seen posting a 5 per cent decline 
in 1993 net profit on the mhib day. 
HnauUrPrtntemps, the retail group 
which has triggered protests from 
minority investors with its all-share 
offer for foil control of La Redoute, 
its nydi order subsidiary, reports 
on Friday. Consensus estimates are 
for a 13 per cent decline in net profits. 

MILAN 

Parmalat, the diary products group 
whose shares slid at the end of last 
week after it said it would seek a 
mandate from shareholders to raise 
up to IfiOObn over the next five years 
through bonds and warrants, is in 
Edinburgh today and London 
tomorrow with presentations to 
analysts. 

TOKYO 

Volatility may increase as more 
companies announce downward 
revisions of earnings forecasts for 
the year to the end of March. 


RISK AND REWARD 


Learning lessons 
from failed 
hedging strategies 


Here’s a test 
for all budding 
'TC* risk managers. 
Your company 
has a problem. 
*JtT It has been 

y very ambitious 

&S» in developing 

ifff sales of its 

“* main products, 

which are all oil-based. Deliv- 

ery commitments under 
price contracts run as much as 

10 years into the future. If the 
price of oil goes up, your com- 
pany will suffer. 

Your predecessor as risk 
manager thoug ht he h^d the 
answer. He bought futures and 
swaps to match the sales com- 
mitments, barrel for barrel A 
good hedge? The problem is, 
there is liquidity only in 
short-term oil derivative con- 
tracts. So he placed all the 
hedges in short-term instru- 
ments. 

You can guess what hap- 
pened n e xt oil prices plunged. 
With a position of around 160m 
barrels in the derivatives mar- 
kets, this led to same pretty 
big margin calls, hi foci the 
cash calls ran into hundreds of 

milliftng of dollars, ha-nVg had 

to be persuaded to save the 
company from bankruptcy, the 
chief executive was 
This is where you come in. A 
new iMwagwnmt hnc inher- 
ited the mess, and wants you 
to sort it out 

No prizes for guessing that 
tills is MetaUgeseDschaft. The 
company sacked Mr Arthur 
Benson, the person it blamed 
for tiie mess. It replaced him 
with Ms Nancy Kropp, an oil 
trader with a history of fire- 
fighting (she had helped Deut- 
sche Bank, MG's main banker, 
with a rfniflar - though lesser 
- disaster at German company 
Ktaekner in the 1980s.) 

The first option faring you, 
as the new risk manager, is 
simply to do nothing. In your 
heart, perhaps, you think the 

011 price won’t foil much fur- 
ther. 

The company has already 

fakgn the pain of maating the 

margin calls. Also, if the oil 
price stays low. the future prof- 
its on contracts with custom- 
ers win eventually match the 


derivatives losses. It will all 
come out in the wash. This 
was certainly the view of some 
derivatives experts when the 
MG problem blew up last 
December. 

The second option is to keep 
the existing positions, and buy 
anothpr big hedge. This was 
Mr Benson's preferred route. 
His solution: buy a huge pot 
option, to protect the company 
from any further fall In the oil 
price. 

This, in the view of the new 
management, was aldn to shut- 
ting the stable door after the 
horse had bolted. 

The third option is to shrink 
both sides of the book: end 
some of the delivery contracts 
with customers and sell the 
matching “hedges," drastically 
reducing the company's posi- 
tions. This is the route chosen 
by Ms Kropp. 

Mr Benson, who is suing MG 

and Deutsche Rank, rlalma her 

approach bas ted to real losses, 
rather than just the paper 
losses incurred under his stra- 
tegy. She sold at the very bot- 
tom of the market, he soys. 

Ms Kropp’s derision appears 
to have been based largely on 
the impractfcaUty of running 
such a vast derivatives book. 

According to one person 
familiar with the new MG 
hedging strategy, rolling over 
the short-term hedges waa 
causing losses (real not paper) 
of |50m a month: MG com- 
prised such a large part of the 
market that nothing - ft did was 
invisible. 

As it lumbered forward, it 
was prey to other traders. “I he 
position was self-defeating. 
With such a large position, you 
become the market The whole 
market was watching.” 

The right answer? Who 
knows. MG is not about to 
reveal details of its remaining 
positions, or the cost of the 
partial H qiririaHnn. 

There is one clear lesson 
from all of this, though: hedg- 
ing strategies that look fine on 
paper often don’t work in prac- 
tice, particularly when they 
involve handling large vol- 
umes in thinly-traded markets. 

Richard Waters 




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IS 



Bank of Greece 

Athens, Greece 
U.S. $250,000,000 
Floating Rates Notes due 1999 

"For the six months 14th March, 1994 to L4th September, 1994, the 
Notes will carry an Interest cate of 4)1% per annum with a coupon 
amount of U-S- $230.00 per U.S. $10,000 Note, payable on 14th 
September. 1994. ' 


BwikenThut 

Company, London 



Agent Bank 


VSS5M,MO£M 

U narim B afa- S i ih enM aa t e dL— 
PattMp a tloaGtrtififatenIn cM M 
, famed .by JLP. Morgan GmbH 
far Ifai purpose of faarifagaod 


TbcDaUcMKoagy Wmlr,T tmhrrt 

Notice fa heccBy gfata dau the nde of lateres apffi^de lo payneots ander ifcs ewti&caim 
c a o eipon i ga g to payments at tatecea voder the tom fa, te the burnt Period fan Mti 
Much, 1994 to 1 4th Jnae, 1994, 4.1i5% per imm, with ■ Coo pot Amooit of 
0SS2^Q542 per US* 2SOTO0 Ortifinu e. p»yibte am 141hJme, 1994. 

Dri-fcfei Kiqgjo Bed (Lunanboog) SA 
AgertBuSt 


Heart II Untiled 
inifuam 


ta aeaxdmm wfih the ptovfafaoi of (he Nate*, notion fa heodbj dm 
Period Dam 14th Mwch 1994 to I4tfa Joe 1994, the Notts will beat 
4.125% per tawsoL 

The lateral smosotpsysHo « 14tt Jado 1994 wiB be US* U34^Sa 
OoMeM Sfaogf* Bate - 


that fat te telenet 
■ tee of interest of 


The Industrial Credit And Investment 
Corporation of India Limited 

(incorporated in the Republic of India rcith limited liability} 

U.S.$200,000,000 

2%% Convertible Bonds due 2000 


Convertible into Shares of The Industrial Credit And 
Investment Corporation of India Limited 


I Agjml Bank 





UA $105,000,000 

G uang zhou Investment 
Convertible Bond (1993) Limited 

(incorporated with limited liability 
under tbe laws of the Cayman Itimds) 

45% Convertible Guareoteed Bonds Doe 1998 

convertible into shares iit and guaranteed by 

Guangzhou Investment Compuny Lfcnifed 
(focoiponted with limited liability 
under the laws of Hong Kong) 

Adjustment of Convenioa Price 

NofcK is hsrrfjy given that as a result afaplaceirierU of 340 JXXVXX) 

new chans by Guangzhou Investment Ccmpany limited oa 25th 
ftteuaryiwithe conversion price of theConveriNe Bonds has in 
aoxudanoe with the Trust Deed dated 8di October 1993 bean ad- 
justed from HK$2<48li>HK$240wilhe&rtfioiii25lhFebnaiyl99L 

THE The Bank of New Yoric 

BANKOF CfoPrixtipri toying Agent) 

NEW On behalf of die Issuer 

March 14, 1994 YORK 


PUBLIC NOTICES 

New Quota 
Arrangements on 
Imports from China 

Import of certain goods from China have to meet 
new quota arrangements throughout the European 
Community from Tuesday 15 March 1994. 

The arrangements replace existing national 
restrictions with a system of Community-wide limits on 
quantities of imports and a surveillance system of licensing 
Which are administered In the UK by the DTI. 

Limits will appiy on the quantities of imports of 
certain glovBs, footwear, tableware and kitchenware made 
of porcelain and ceramics; glassware, radio-broadcast 
racrivers and toys. 

. Limits do notappiy but surveillance licences are stBf 
required for certain food preparations, chemicals, footwear, 
ceramics, glassware, tine, bfcydes, toys and brushes. 

These products may be imported into the UK arty 
: under the .authority ol an imfividual import licence unless 
prior to their importation into the UK they were in free 
clrcuiaBon in the Community or unless they were already in 
transit from China before 10 March 1994. 

Ait other non-textile goods originating in China, 
North Korea and Vietnam which were previously subject to 
limit restrictions no longer need import Sconces so 'can be 
Imported Into the Community in any quantities from 15 
March 1994 . 

.. These new arrangements put In place measures to 
harmonise the treatment of imports into the European 
Community following completion of the Single Maifcet 

A Notice to brqxHlere giving full details of the 
new licensing arrangements will be published In 
"Lloyd’s List” oh 17 March 1994. 

Meanwhile, Importers requiring 
further I n for ma tion should contact • 

-the DTTs import Licensing Branch: ^• M -4 ■ .te 

Telephone: 0642 3643291364337 I II J 
-Fax: 0642533557. - 


J.P. Morgan Securities Ltd. 

Merrill Lynch International Limited 


Barclays de Zoete Wedd Limited 
D res drier Bank 

Afc flengfwi l farii o ft 

HG Asia 


Indosuez Capital 


Nomura International 


Febniaryl99± 



Thk announcement appears as a mnUerof record anfy. These securities 
fume not been registered under the US Securities Act rtf 1933 and, 
stdtfect to certain exceptions, may not beared or sold within the United 
States. The securities mew not be offered or sold dinetty or indirectly in 
India or to. or for the account or behtfit of any resident rtf India. 








FINANCIAL. TIMES MONDAY MARCH 14 1994 


WORLD STOCK MARKETS 


12V 1124 12V 

!$ S.l IS 



B* 840 

Bamaki Z-58S 
to® 660 
BtAnj 40080 
a IMS 364,50 
BtSan 1JO07 
ErBSff 9M 
EfHCH 859 
Ex* 758 
Ftoc 3280 
firm 2200 
EuRSCa 625 
EulOtt 38.75 
Rad 172 
FoneLy *» 
FimW 5.570 
GIMEnt 492 
GaUI Z«BB 
Gmsrrt 870 
GWn 800 
HBW8 «0 
ImeW 6» 
InanFr 715 
Immbnq 99ft 
HPtan 11160 
KIM 513 
IntK 850 
IVMH 3.902 
LOEOP 470.90 
LOreW 1225 
loomd 5 .KO 


Ux ttt 

11 10 


1993/4 

JMj low 


Owrtp9n277> 2054329 20784 44 212792 2547X40 lB/zm 1Z167JB BBSS 

tatak 

fiaorthmestin wi 21531 2155.1 21488 234060 KW 149800 1371/53 

MMhkignn.llQ I01B.1 1003 6 9882 1138,10 3/2/94 3B4JD 131^3 

(Ml MMSa'ISM 44428 445 JM 443.42 46068 20W 30026 1*1/93 

iQOBd WMC'lfflt) 119243 115721 1153.14 12»J5 1/2/94 71208 1571/33 

Mgt n 

BS20 1171/911 151041 151568 151261 1&424S 9/2/94 11246 471/33 

Bmcsn (29712/83) 1X674) 126690 126020 120874)0 1 1/3(94 71.47 4/1A3 

Cxwta 

Heats mt4r>975) 3695 oa 366619 368107 3QU3 1/2/94 274131 2171793 

compoa* (1979 444890 444120 4444.45 4591 JO 1094 327160 21/1/93 

RxtMb§§ (47I.TU1 710156 339841 2107 JJ MPM 1/3W 172067 2171/SJ 

Oh 

PM Gal (31712/80) 4444.7 44625 44312 -4867410 4/2/94 201238 10/933 

CspertnspfiKl 1/831 397.51 4014)2 401.19 41579 MW 261.90 4/1/93 

FWMd 

to GwenlCWIMa 18794 19113 19214) 187Z00 4094 00.10 22/1/50 

SBF ZSH31/12SQ 1472.43 148152 149118 TS55ZJ 2/2/94 111418 28/1/90 

CAC 4001/12871 217491 218458 21 9964 2/391 177221 29/1 «3 

Gaamy 

fK AMenOI/iaOO) 806J3 B1578 8 032 65607 471 /W 50032 1471/93 

CraimerfaW/1 2,531 230 1. TO 2338.40 2E1.50 M5M0 4/1/94 169420 14/1* 

DAk (3ft12/B7)I 210349 2141.10 211609 2257.00 3/1/94 151650 1371/93 

Bm 

WHS SS31/1ZD0) 1074SJ 107620 106641 119158 IOT/94 W7J2 S9« 

H <*0 **0 

Hano SW0P177.V4 9905.66 1012905 1022438 1330UW 471/94 5437*0 471/93 

Ml 

BSESmmSTS 3747 J! » 3807 7 4287JD 2MW 210067 ZM-S) 

tedMMta 

jaMQ conmioanq w sii3i 51457 oizao an/94 27131 571/93 

Mod 

m Qrntwm 1010.89 192756 1921.19 200.16 amt 1101,10 11/153 


251033 2506147 253106 2881.17 mm 150118 2572/93 


C8S nSMerCnd 83) 
CBS M Eft (End 83) 

Ntw zmm 

Can. 40 (1/7/86) 

Manor 

Qdo SBMK2/I.B3) 
Mb*» 

Mztb Camp C/1/E5) 

Portugal 

BTA (13771 

StSAI^imaiV75> 
SaoOi Africa 
.SE Cdd (269/76) 

JSE mo. eas-78) 
Sob* Kona 
KaMCmgEii4/1/90r 
Spate 

MaOU SE 00712/95) 


4315 4364 4346 
2733 782.8 2810 


45430 3171794 29670 4/1/33 

29100 31/1/94 19830 1371/93 


221624 222674 220620 243384 3/Z/94 22JD0 220/94 

115645 11 74 2D 118224 1211.10 26/294 06693 27/1733 

255073 2552547 25Q7J3 330637 471/M 127HB0 4/1/93 

31lfifi0 310910 31202 323600 1B/2S4 100020 14/1/K) 

57136 57552 581.22 641 21 4/1/94 39110 13/1/03 


13330V 18990 18650 

59620V 60180 5979.0 


233100 4/1794 77500 5/1793 

601800 10/3/94 433300 19/VS3 


90107 87856 87705 97425 2/2/94 60993 6/3/93 


33138 335.71 33620 353.31 31/1/94 21550 4/1/93 


tadasktefcs 38B2JO 3630/62 38SX41 387930 324105 367628 4122 

(31/1/94) (2071/99 (3171/94) 087/32) 

Heme Bonos 1IE31 10202 10175 10977 10131 10977 5439 

(16710/03) (I1/3M) (1871093) (1/lOWI) 

Transport 1721.04 172179 174333 188279 145304 188123 1232 

P/2/94) (4/1/93) 12/2/94) (6/7/32) 

units 20979 208.15 21038 25648 20729 25648 1050 

(31/B/BO) (24/2/94) (31/8/83) (8/4/32) 

HI M. Off* 1*01 387203 (38E&51 J Low 380689 (380103 ) (HwotbUcH*) 

Off* Ngh 3882.70 (385031 ) Low 381 S. JO (361480 ) (Actuate 


46644 48190 46706 4824)0 42905 

mm p/i/93) 

54750 54555 54672 56659 46648 

mm (2CW931 
4323 4252 4250 4040 3959 

EMfl3) (6/1/33) 

25653 25722 25678 26721 23621 

mm pn/93) 

465.96 48478 46679 49728 39584 

(2/2/94) (671/93) 
76629 78958 79385 80647 64587 

P1/1AQ (26/4793) 


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ntssentta fi/2/37) 150150 152430 152970 1 60350 mm saw 28/1/33 


Safes Bk IU (31/1256) 
SBC Gaud (17*671 
Tain 

WB0M>ij3a«G6r 

Ibdnd 

SET (30H/75) 

TnfcBT 

tfrow Qnp+Un 19BG) 

MHD 

M5 CvU n (1/UTDjS 


133386 134614 133670 
99427 10068* 100189 


532787 swum 546889 


142384 3V1/M 90480 11/1A3 

106029 31/1 /W 67670 1J/1/B3 


131641 1332 39 135856 17S3.73 4/1/94 81684 14M3 


I4509J 137318 137063 • 


6lKr 619.7 6167 64180 1/2/M 46660 13/1/33 


anaComUOSTa 665JB 66374 66289 69983 18/2/94 
MB Grad (4/Mffl 10640 1061.0 10560 110280 18/2/94 


44633 fl/l/93 
94600 10/1/94 


MM 225 P6/5K9) 
MM 300 (1/1 two 
1(4*114/1*8) 

M Section (4/1*6) 

Iteteftt 

KLSEQW«4/4/B6) 


20115313X8671 1933616 2114611 13/993 1607671 2911/93 

29642 3627 29580 30684 10/11* 24984 2961® 

161980 161651 1605.49 169687 3/3* 1X086 35flfl3 

21903 218663 2179.10 239487 7)S93 B61J2 26rtl93 


EudTXl 100CE/ia9a 143185 144626 144647 B«U9 31/1(94 106382 13/1/83 

&« Top-100 CESSQ) 122949 124272 1M181 131181 2/2/94 8B273 13/U93 

ApaDrons (31/12*0 M 32623 32981 395.13 S/D94 16682 4/1/B3 

brtH) 8 ibbl(7/1/9£) 16424 16603 16661 18272 14/Z/94 9681 4/2/93 

■ CAC-4Q STOCK BS3EX FUTIWES (MAT1F) 

Opan Sert Price Ctengn High Low EsL ml Open HL 
Mar 2188.0 2181.0 -1?.0 21950 2174.0 23888 47555 

Apr 21995 2191.5 -17.0 2205.0 2187.0 1815 2844 

May 22038 2195.5 -170 22038 219JLO 314 5807 

Open Irtarcal Igurea te pnku day 


104646 100600 1056(43 131446 571/94 


Dow Jaw tnd. Dw. Yield 2.62 
Mar 9 

S & P Ind. D)v. yield 287 

5 4 P hd. P/E ratio 2483 

■ CTiUttUUIP *11 POORS BOOM 

Open Sett price Change 
Mar 48485 486. IS +385 

Jun 46485 46740 +2L25 

Sep 466.00 469.45 +280 

Open ram nym aw lor prmoua day. 


■ HEW YOWL ACTIVg STOCKS 

Frtd>r Stacks One Change 

traded pries an cbqr 

Hanson 25.777.700 20)4 +tt 

4* ISere 10 , 688,100 XV, 

Tdaton 5842.700 05 -H 

Unfay* 6405.700 1554 +«* 

Mar Lid* 2864.700 43H +2H 

Gramnan 2837800 6444 +3 

An TAT 2388,000 30ft -H 

Bay A0t 2,359,000 20ft 

M* Start £281600 22H -ft 

onewp £270800 38ft *lft 


Feb 25 Feb IS Year ago 
2.82 2.59 2.99 

Mer 2 Feb 23 Year ago 
249 £36 £48 

2*34 2609 26.18 

■XWmvgSSSOOBmeslndec 

tflflh Low EsL vat. Openi/iL 

467.00 462.30 34871 96,446 

46623 46380 89284 114,678 

470.15 40180 38 £422 


■ TMDIHO ftCllVITY 

• VokteHlaCM 

Mar 11 MarlO Mar 9 

New fork SE 303211 333.4W a&aoz 

MW 18523 18240 23857 


£746 £778 £760 

1,114 70S 1806 

954 1X74 1.1M 

070 600 851 

43 47 60 

100 113 66 


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□ Pleaw tsL Lnr far mew whnuriaa abaul 6 and 24 mnMfr wb*eri|3«iaD run. nr rm, 

uwiffffMrimpxd. 

tPiens* speafyi 


Fats 

ItariongM 
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New Ian 


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MnAfl - soor Atam Tmooa aajo. HEX Geo. MB Oen_ B8 Kso. CAC4H Eun Top-im. iSEa ouanii: Terem cempyiMaa & 
Mnotata and D4X - ad 1.000 JSE GoU - 255.7; JSE 26 nwustrteli - 20*0; NYSE M Cammoi - 50 and Sandanl and Port - 10. §§ 
MonuaaL * Toronto w CtotU. M Lfaavalttift J BS3/DAX ahar+wura inOs*. Mar 11 • 2i0i.SC -2£tt 


t Cumdkn. * C*i *»4cd 44 1500 OmY. • Ejccfr«ax> bcndx t tadustrU. r*JB UHh Bnondd and TVanaporndcn. 

4 Th* OJ ML «d*. IKRnfrQd day-a Mghi and tom am 0m amagai at tha Nohote and to-fft p«a» iwmbad during me day by atOi 
stock wbareaa ma acted Oafs rtolai and Km fnwpBM by Tddud twawwA! ■» Ngboit and Ihh <Mms gist tan ndu has reached 
ttrtiB Hw dff ■ ima Bpraa in braraam are pnwioua dayNft y Budget to aticM iwiduiiaitoi. 


CsMpff* 

AAfrm w afeidi 1 maid like my Twaidal Time* deTnoaL 


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27 


FINANCIAL TIMES MONDAY MARCH 14 1994 


CURRENCIES AND MONEY 


MONEY MARKET FUNDS 


POUND SPOT FC.RvVARO AGAi,\\3~ THE 


Ctafrig Chum* BUMsr Day's MU Om month Throe north* Onejoar Bankaf 
on day agnate lw Mi ftBA Rate %PA RM km Eng. Ha 


DOLLAR SPOT FORWARD AGAINST THE DOL 

m 


dosing Chengs Bldfaff* Day's mid One north Una montha One year JJ> Morgen 
On day vpmad Nrf> tow Bate *BA Rate ftp* rob ftPA Mk 


(Seh) 17.6966 


Brigtom 

(BR) 

52.0160 

Denmark 

WW) 

08489 

Ftafamd 

m 

82271 

Frma 

(mj 

55774 

Germany 

w 

22210 

Greens 

w 

367,180 

Iretand 

m 

1.0408 

Briy 

(U 

348728 

Luxambaag 


52jnea 

Nothadands 

« 

22334 

Sfarway 

SNKO 

109428 

Portugal 

&) 

2BO308 

Spam 

Pta) 

207245 

Swadtei 

(B«r) 

11.7870 

Swkzariand 

(SFf) 

2-1291 

UK 

n 


Ecu 

— 

12050 

SORT 

— 

1934185 

Awnrtoai 

Argentina 

FteO) 

12023 

Brad 

fpn 

1 OBS20 

Creteda 

m 

22*49 

Mexico (New Peso) 

IflfiOB 

USA 

m 

12025 

ri¥ti rttaiai 

■ EawtMMca 

Auetrrta 

(AS) 

2.1143 

Hong Kong 

8«S) 

112078 

fadta 

w 

47.1338 


898 - 091 
642 -4B9 
401 >510 
188-373 
727-821 
196-223 
638 - 634 
397 *418 
602 - 994 
842-489 
317-9S1 
966-481 
148-470 
201 - 489 
674-765 
276-305 


173545 173785 
522848 513871 
9-8930 93135 
82770 82060 
83265 82S10 
23385 23120 
368.705 386.130 
13431 13371 
250835 2488.15 
522848 613671 
23478 23231 
11311B 108070 


03 173901 02 - 

-13 52.1568 -1.1 5SL4288 -83 

"1.1 83688 —13 83044. -06 

-13 83039 -13 83322 -08 

-13 g-gm - pff g gflw _OS 


-13 13436 

-33 251833 
-13 62.1568 
-03 23348 
OS 103497 
-43 283328 
-33 20939 

-28 113226 
03 2.1239 


-1.1 13504 -03 

-44 2571.73 -83 
-1.1 524266 -06 
-02 23318 Ol 

>03 103408 03 

-43 

-04 2194 1 -23 
-13 113315 -14 
13 2.1031 13 


Austria 

Boitfurn 

Danmark 

mnd 

Prance 

Germany 

Graam 

Ireland 

Italy 

LuombourB 


11.7800 -Ol 775 ■ 825 113560 11.7766 113002 -2.1 11327B -13 11353 -03 1CM 

943200 *0.18 100-300 343100 943550 34385 -23 34325 -24 35.13 -13 1043 

63531 -03387 513 - 648 83821 83373 83681 -2.7 63891 -22 63358 -13 1033 

54796 -03329 708 - 806 53092 54648 6.4808 -12 64888 -13 3305B -03 764 

67088 -03401 076 - 100 8.7375 53060 6723 -32 5744 -23 5u7B31 -13 1043 

13779 -30114 776 - 782 13880 1.6730 1-6818 -2.0 13866 -2.1 13B35 -03 1048 

244360 -135 100-600 245.190 243300 248-173 25435-172 28335-163 

14437 403031 427 • 447 14(78 14388 1.4404 27 1.43S3 23 14202 13 

168235 -03 180 - 330 166835 168830 109936 -3.1 189135 -43 172136 -33 

34.5200 -0.18 100-900 343100 343560 34395 -28 3432S -24 35.13 -13 

13859 -0311 853-863 139S0 13804 13888 -13 13828 -1 A 1397 -03 

73831 -03411 813-848 73285 73828 73914 -14 73041 -13 73106 -04 

173350 -1.15 200 - 300 174350 172300 174.10 -OS 17535 -03 181.1 -43 

138300 -1.175 950 - 050 139320 127.700 1&6 -83 139395 -43 143-33 

73318 -03722 278 - 353 73047 73115 73S68 -3.7 73931 -3.1 73941 -21 

14170 -0305 185 - 175 14230 14116 14177 -OB 14177 -02 14095 03 


+0303 017-028 1302B 14945 

t-1736 960 - 035 110030 107830 


403333 418 - 699 43610 43210 


Mtagyata (MS) 43683 +00027 664-912 43913 43699 - - - 

New Zealand <NZ$) 26233 -03001 208-258 23333 23120 28282 -13 26305 -1.1 26391 -03 

PMpphN Ps®3? 413940 -00475 548 - 331 413806 403238 

Saud Arabia (SR) 53341 403039 314-987 53397 53093 - - - 

Stegapcae (8$) £3800 -03026 784-815 23827 £3699 * - - - 

S Abtca (CoroJ m. 6.1561 -03116 519-583 5.1710 5.1290 - - - 

S Africa (pin) (RJ 63289 +0.1021 181 -387 63924 8.7545 - - - 

South Konaa (Won) 121139 -047 061 - 157 121235 120538 - - - 

Tdaai OS 393284 -00187 077 -481 307400 394600 - - - - 

TlwBsnd (BQ 373983 403103 706-259 383260 373410 - - - - 

190R rata far /far m flkltoBw apraedi to tea Raate Spot WMa aha* oNy iha tea teas cfartirt ptocaa. Fcawri aware nr* rta a rrt y quoted to 
M an tovM by gum knauaa. Scaring tartar ertaiaad by aw Bar* el Engtand. Baaa ewe MB » wood. Cater ana MHM to be 
da Ddar Scot MW daM tarn THE NMnaiTBS CU36MO SPOT RATES. Soma 4 m mb runted by the FT 


CROSS RATES AND DERIVATIVES 


- 

- 

- 

- 

. 

. 

807 

UK 

CO 

12Q25 

+aooi 

020 - 030 

12040 1.4957 

12005 

12 

14879 

12 

1.4932 

06 

12072 

-12 

12098 

-12 

121 SB 

-OS 


Ecu 


1.1507 

+0.0066 £02 - 511 

1.1628 1.1445 

1.1478 

32 

1.1433 

£8 

1.1326 

12 

- 

- 

- 

- 

- 

- 


SORT 

- 

140081 

- 

- 

- 

- 

- 

- 

- 

- 

- 








JMaartcaa 












- 

- 

- 

- 

- 

re 


Argenttaa 

(Paso) 

ftunpg 

+0.0015 

998 - 909 

Q2C » 02997 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

te 

re. 

Brad 

(Or) 

732.095 

+11205 

090-100 

732.110 732280 

* 

- 

- 

- 

- 

- 

2.0422 

1JS 

22391 

1.T 

22371 

04 

864 

Canada 

(C5) 

12809 

+02031 

BOB - 012 

12815 12555 

12611 

-02 

12818 

-03 

12873 

-OS 

- 

- 

- 

- 

- 

re 


Mexico (New 

Pee<4 

32950 

+0.02 

900 - 000 


gpQRR 

-02 

£2984 

-05 

321 

-05 

1J005 

1-6 

1-4979 

12 

1X932 

08 

Ax n 

USA 


- 

- 

- 

- 

- 

- 

- 

- 

- 

- 








PacNIcMddte Eest/AMoei 










2.1128 

OJS 

2.1104 

017 

2.1085 

02 



(AS) 

14072 

+0.0012 

067 - 077 

1416a 14053 

14082 

-02 

1.4111 

-1.1 

14186 

-02 

11J946 

12 

112882 

OLE 

112401 

02 

_ 

Hong Kong 

(HKS) 

7.72S5 

-0201 

2SD-260 

7.7273 7.7250 

7.7262 

-ai 

7.7302 

-02 

7249 

-03 

- 

- 

- 

- 

re 

re 


India 

m 

312700 

re 

675 - 725 

312750 312650 

31.435 

-22 

3127 

-22 

re 

■ 

187 ^ae 

22 

158281 

22 

163.501 

22 

184.7 


(V) 

105.125 

-027 

100 - 150 

105.000 104.730 

10623 

1.1 

104.72 

12 

102.795 

£2 

- 

- 

- 

re 

- 

re 


Mateyeia 

(M5) 

2.7210 

- 

200 - 220 

2-7220 £7195 

£715 

22 

£2985 

£3 

2.771 

-12 

22262 

-12 

2.6305 

-1.1 

22391 

-06 

_ 

Nam Zarate 

<NZ0) 

1.7480 

-0X012 

449-470 

1.7525 1.7445 

1.7478 

-1.1 

1.7521 

-14 

1.7863 

-12 

- 

- 

re 

- 

- 

re 



(P oao) 

£72500 

-0.05 

000 - 000 

27.7500 £74000 

- 

- 

- 

- 

- 

- 


- 

- 

ra 

- 

re 


Souefl Arabia 

(SR) 

3.7496 

+02001 

493 - 603 

3.7510 3.7490 

£7822 

-02 

£7565 

-07 

3^753 

-07 

% . 

- 

- 

. 

_ 

. 

_ 


tSS) 

12840 

-aOQ28 835 - 845 

1J58H 12830 

1284 

02 

1284 

02 

12078 

-12 

- 

- 

- 

- 

re 

re 

_ 

S Africa (Com. 

(H) 

34310 

-tun 

300 - 320 

34400 34120 

£4453 

-52 

34743 

-62 

32715 

-4.1 

- 

- 

- 

- 

. 

re 

ree 

S Africa pa) 

M 

42450 

+0065 

400 - 500 

42700 42000 

4270 

-02 

424 

-84 

- 

- 

. 

- 

- 

- 

re 

re 

_ 

South Korea 

(Wort 

806250 

_0lH5 

000- 100 

806200 805200 

80925 

-42 

81225 

-32 

831.05 

-3.1 

- 


• 

. 

_ 

re 


Tfetean 

on 

282750 

-023 

700 - 800 

284600 282700 

264776 

-AJ 


-32 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Thafiand 

(BO 

252900 

-a 01 

800- 000 

292000 252300 

2526 

-32 

262 

-£3 

25.84 

-1.4 


1*0R rate far Mr 10. Wd faH i r i — ad a In tea I 
ui fcoood by cuient Marest rare. UK. I 


i quoted In US Conner- JJ». Mogai kaftwa *xma lor Maria I 


FIXED INTEREST RATES 


EXCHANGE CROSS RATES 


MgAan 

eF» ioo 

1823 

1649 

4248 

2201 

4802 

5446 

Dannwfc 

(PKl) 5223 

10 

6.711 

2260 

1257 

2S3T 

£837 

Branca 

(FB) 6025 

1148 

10 

2239 

1214 

2912 

3303 

Germany 

(pkQ 2023 

£908 

3402 

1 

0413 

QQfl P 

1.124 

Ireland 

« 4827 

945B 

8239 

£422 

1 

2400 

£721 

Briy 

(U 2282 

0384 

0243 

0.101 

0242 

IOO 

0.113 

neteateenJa 

Ffl 1826 

3475 

£028 

0890 

0267 

8012 

1 

Norway 

000) 4725 

SLOOO 

7240 

2204 

0252 


£590 

Portuflpl 

(Ea) 1928 

£783 

£295 

0288 

0400 

050.7 

1.098 

Spate 

pm) 25-00 

4.750 

4.137 

1218 

0202 

1205 

1267 

Bara dan 

(8Kl) 4420 

8265 

7287 

£142 

0884 

2122 

2407 


(SFf) 2443 

4225 

4229 

1.184 

0480 

1173 

1231 

UK 

ft 5222 

8246 

8277 

£521 

1241 

2496 

2233 


ICJ) 2544 

4215 

4.194 

1233 

0209 

1222 

1285 

(IS 

($) 3421 

6251 

5.707 

1277 

0293 

1662 

1285 

Japan 

CO 3202 

B£3£ 

5428 

1526 

6289 

15810 

1723 

Ecu 

3923 

7239 

8287 

1230 

0.707 

1913 

£169 


ftn par ijDODt Danter Krona, French From, rlrmnijm Kitnar retd ftuHi Kronur par ID; Bai^tei 


MCr 

Ea 

Ptu 

SKr 

SFr 

e 

Gt 

S 

Y 

Ecu 

2128 

5004 

3982 

2223 

4203 

1222 

3231 

£889 

3037 

£511 

11.11 

2644 

2102 

H26 

£162 

1216 

£077 

1227 

1602 

1226 

12.78 

303L5 

241.7 

1172 

2482 

1.166 

£384 

1.752 

1842 

1223 

4240 

1032 

8223 

4200 

0LB48 

0207 

£011 

0296 

8227 

0219 

1021 

9xn n 

199.1 

1121 

£045 

£961 

1264 

1444 

1512 

1255 

0438 

1042 

0299 

0471 


0240 

£082 

£060 

6225 

£052 

3262 

9128 

73.17 

4.155 

£752 

£353 

£722 

£631 

85.77 

£481 

10 

2372 

1802 

10.76 

1246 

£914 

1299 

1274 

1444 

1.194 

4203 

100. 

7024 

4222 

0213 

£384 

£736 

£577 

60.70 

£502 

5277 

1252 

100. 

6278 

1227 

£482 

0206 

£725 

7822 

£630 

oaax 

2212 

178.1 

10 

1200 

0250 

1.737 

1277 

1842 

1.110 

5.130 

1222 

0727 

A A9A 

1 

£470 

£961 

£706 

7421 

0213 

1024 

2602 

2072 

11.77 

£129 

1 

£045 

1203 

158.0 

1206 

6250 

1272 

1014 

£786 

1241 

£489 

1 

0235 

7728 

£638 

7279 

1732 

1372 

7231 

1417 

£605 

1261 

1 

105.1 

0289 

6924 

1647 

1312 

7449 

1£47 

£329 

122* 

9213 

1000. 

6268 

8277 1002 158.7 

Franc. Escudo, Lke wid Paaa 

9212 

a pa 100. 

1230 

£788 

1268 

1.151 

1212 

1 


MONEY RATES 

March 11 Oar One Throe 

night month rathe 


week ago 


One 

yaar 

Lamb. 

inter. 

Dto. 

rate 

Rapa 

raw 

6% 

740 

£00 

_ 

6ft 

740 

520 

- 

58 

£10 

- 

7.75 

6 

£10 

- 

775 

543 

£78 

525 

SJM 

522 

678 

525 

£97 

8M 

_ 

_ 

£75 

6% 

- 

- 

£75 

B* 

_ 

h nn 

£92 


- 

£00 

£92 

£18 

- 

£25 

- 

5.1 B 

- 

525 

- 


31 8325 
4 6325 


W1W» (prfM) DM 125300 per DM 

Open Sattpdoe Change Writ low 

03853 03938 -03018 0.5877 03333 

03018 03908 -00018 OSS46 05898 

05880 05890 -00018 0392S 06867 

■RAMC WTUW0 QMM) SFr 125300 par SFr 

07074 07030 -00044 07083 07022 

017058 07028 -00044 07078 07018 

07075 07035 -00045 07080 07030 


EsLvd Open W. 
17374 81318 

89,184 77328 

271 2704 


4324 28220 

34348 34411 

.120 183 


UK INTEREST RATES 


LONDON MONEY RATES 

Mar 11 On*- 7 daya 




■ I II MIM i YMH Hlfl— (AM Yen 123 par Yen 100 

Open Sett price Change Wgh Lew EaLwol Open bit. 
Mar 03505 09517 400009 09540 03500 10388 53.100 

Jui 03543 OBS54 400008 03583 09532 36399 42432 

Sap 09823 03605 400007 03623 03600 65 1328 

■ CTMJMO WfHMMtt gkftg BB£S0Q per £ 

Mar 14982 13002 -00082 13060 14966 2704 32183 

Jun 14988 14054 -00036 13002 - 14910 ' 25.756 23J8£ 

Sep' • • . ■- r'1.4920- -oooar- 14980 140X3 ' 97 820 

Doc - 14810 -00038 14980 14890 3 30 

■ HR4DRHM 80 CA0F1WM8 231350 feenla par pourafl 


Mar ii Omr- 7 daya One Three Six One 

notice momh months montha year 

Martwnk Staribifl 8-3% 5-4% 5%-G 5% - 5 5% - 5 S& - 5& 

Startng COa - - 5*-5A 5A-S& 5& - 5 54-5* 

Treasury B8e 4%-4» 4%-4ft 

Ba*BS& - - 4% -4a 4%-4fi 4%-4g 

Loral arthorty tope. B&-5& 5ft - 5& 5»« - 5 5>a - 5 5^-5 5% - 31, 

Dbcort market depa. 5>z-4% *H - 4fi| - 

UK dealing bank baaa landtag rata 5% per cant torn FWmray 8, 1984 

UP to 1 1-3 1 . 34 8-9 9-12 

• monBi mcndi mo txha im u Uia montha 

Carta oT Tax dapL (210030q I 1 ! 4 3% 3% 3h 

Can, d UK dap. under OOOiflno M Hapt Swart* riMaai kr aarii %pa 
Aea. tandar rate of (fraud 4JW1pc. ECQO trad rate Stto. Eqjor* Ftaanoa. Mteta up day Manny 28, 
iMCAipaadnto lor parted Itw 26 1M4M Apr B, 1M4 OdaanW 6 ■ giaifac. inference mm lor 
period wb^I. IBM to FW> 22 1MM.8diainaalV8 V5JEfl8p& Ftaanoa Hsuaa Baaa Roe 5%pc Mm 

BANK OF ENGLAND TREASURY BAX TENDER 

■aril Mr 4 Mr 11 Hr 4 


us 

3 % 

3* 

3ft 

4ft 

44 

week ago 

bft 


2« 

4ft 

4ft 

Japan 

zv. 

2% 

» 

2ft 

24 

week ago 

ZVk 

2 M 

2% 

2ft 

2ft 

■ SUBOR FT London 





A--- ■ ■- OkLna 

KltDIfHIflK HXftig 

- 

3ft 

3ft 

4ft 

4ft 

week ago 

- 

3ft 

31 

*4 

4ft 

US Dci>«r COa 

- 

£48 

£70 

4JQQ 

443 

week aoo 

- 

346 

328 

325 

424 

SDR Ltnkod Da 

- 

3% 

3ft 

3ft 

4 

week ago 

- 

3% 

3ft 

3ft 

4 


linked; 


straw 

Price 

Mar 

~ CALLS — 
Apr 

MV 

Mnr 

— PUTS — 
Apr 

May 

1400 

&7B 

922 

927 

£02 

- 

£08 

14» 

724 

724 

723 

£02 

£04 

027 

1450 

425 

426 

525 

£02 

024 

027 

1475 

£40 

227 

£48 

£02 

£75 

127 

1200 

£06 

123 

£12 

£09 

175 

£47 

1225 

- 

£86 

1.18 

245 

321 

£96 


BMt oa sflir ■ •' S200M E2D0m Top accaptrl nia 

Totdd appBcdbna ETDBta EBOBta Aw. rW> of Ann* 

IMd rikcatnl . £200d E2D0m Mange jMri 
Mh. rapid Md £98300 08800 oar m aatt Bndr 

Mobned at Ida. lawl SOM 02% Mh. accapt IM 182 dm 


Hr 11 Mr 4 

48132% -43132% 
47891% 4.7761% 
43459% 43337% 
£200n £200n 


ECU Udad 0a arid mmc 1 ndK 88: B mha: U; 0 Mho; ejt 1 yaan S3. S UBOR Hartw* taU 

raua am aMred naaa tar Shtai quMad to iha mariot by taw mnrna bartn at Ham each mtti 
day. Ilia Danfea anc Banfaara TOw. Bank Ot Tokm, Dmelaya tad NHtand Wtmkiiliii. 

Md rates an ihowt tor taa demsatk; Money Mae. US C COaandSOR Ltakad Dopeaba pa). - 

EURO CURRENCY INTEREST RATES 

Mar 11 Short 7 days One Three Sbt One 

term nottaa month montha montha year 

Belgian Fane 8% -8% 6% - 6% 6* - 8* 6A-0* 5% -6 Blj^e 

Danish Krona 5% -5% 6% - 5% 0%-5% 6%-5% 6-5% 5% - 5% 

D-Mwk Bjk-fiU 6&-6K 6ft - 6|| 5%-&% 5&-&* 6& -5* 

DuidiGuMr SH-&Z V.-5* 5% - 5% 54-5,4 5% - 5% 5* - BA 

French fimne 6%-6% 6% - 8% 6% - 8% 6% - 8% 6i-5fi 5H - 5jj 

Portugoeea Esc. 0%-9 10-0% 42-Ofi 9% - 9% 0*-t>% 9%-8% 

Spanish Peseta 8ft - 8% 8%-8% Bft-8% 8% - 8ft 8% - 8ft 8% - Oft 

Staring S%-5% 6ft-5ft S% - 5% 5% - 6ft Sft-5ft 5ft - 6ft 

Swfsa Franc 4%-4 4% - 4 4%-4 4ft - 3« 3S3 - 3H 39-38 

CaiLOHr 3%-3% 3%-3>z 3%-3% 4ft -38 4^-43, 5ft - 4B 

US Ddar 3ft - 3ft 3ft-3ft 3%-3>2 3U - 3» 4ft - 4ft • . 4% - 4* 

Baton Ura g-7*a B%-7% 8% - 7% 8% - 7% 8% - 7% 712 - 7 % 

Yen 2%-2ft 2% - 2ft 2% - 2ft 2ft-Z% 2ft-2% 2%-2ft 

Asian S&ig 3% - 2% 3% - 2% 3% - 2% 4-3 4-3 4%-3% 

Short tarn imaa are cal tor tha U8 Datar and Van, other* two day* notice. 


■ THFBBK WKTH KUMOPOtLAta l 


| Sim potato o( 100% 


FT OUDE to WORLD CURRENCIES 


table erei bo fcxmd on page 21 bt 


■ Mo— dl ta Maw York 


today's pcHon. 


Preriow ttayta id, OaBi «S.1«r Puts 17.782 . Preit dr's open U, CMa 830328 Pun 880304 


ran 

— Oraa — 

-Frmt dow 

ttori 

12000 

12035 

Into 

14979 

12015 

ara 

14952 

14988 

ijr 

148BB 

1.4835 



Open 

Salt prica 

Change 

HW 

Low 

EeL wl 

Mar 

98.12 

9&13 

+£01 

9£14 

96.11 

55274 

Jun 

9621 

9628 

+£04 

9627 

95.60 

125276 

Sep 

9522 

8529 

+£05 

9820 

95.18 

85.721 


M USTHKAMMPf BMXHJTTWaMHfi 31m per 100% 




9628 

96.10 

+004 

96.11 

9626 

£738 

30203 


Sap 

- 

B&77 

+£06 

95.77 

95.74 

438 

8282 


Dec 

- 

9543 

+£07 

9543 

9526 

6 

2231 


FT- ACTUARIES WORLD INDICES 


ddndy comptod by The Ftaendd Tin— Ud, <5oUmen, Sacha & Co. and NatWaet Sacuttaa Ltd. In oonfuncEon with tha Inattiito of Actuaries and iha RuUty of Actuaries 
NATIONAL AND 

REGIONAL MARKETS FRSDAY MARCH 11 IBM THURSDAY MARCH W IBM DOLLAR INDEX 

Figures In par w nthaa e a US Mchg Pound - - Local Local W Ore— US Pound Local Yaar 

afxnr number of tr— Dollar Mnce Starting Yon DM ' Currency chg fiom Dta. Dollar Staritag Yen DM Cunoncy 1983/94 1993m ago 

c* tootk index WtMB tod— Indax Index Indw 81712793 YkM Index tadw todapt tattan todaw Ugh Low fepproiQ 

Australia (09) 17334 3.7 170.74 11439 15034 18135 -Id] 334 17333 171/14 11650 15248 18238 189.15 13219 13223 

Austria ft 7) ; 191.16 33 18263 127.03 16275 15228 -21 083 19010 187.71 127.01 16295 16277 19241 13263 14280 

Belgium (43 17078 20 16250 113^7 14296.14279 05 292 17056 16040 11285 148.76 146L37 17076 141 X. 14217 

Canada (107) 13548 -02 133JH 9003 11218 13251 £5 2S2 13522 134.11 9075 11926 133^4 14231 121 >18 123.71 

Denmark (32) 27078 25 287.19 17923 23220 24153 26 026 27159 26227 18152 23280 24358 275.78 19628 20121 

Finland P2) L- 14296 21.7 14727 9925 13081 17233 121 077 15256 15023 10122 . 13326 17236 1S272 7002 73.76 

Ranee (99} 17723 08 17428 11724 154.42 15253 -2.7 £93 17726 17*2? 11229 15549 15927 18527 14920 15275 

Germany (59) .13424 -29 13325 8280 11722 11722 -7.1 1.78 13621 134. K) 9127 11071 11271 14228 10729 11429 

Hong Kong (58) 40427 -172 39011 2B27B 35222 401.17 -17^4 222 41329 40729 27299 382.79 40077 60258 23324 2S523 

Ireland (1^ 191-15 3L2 18922 12722 156J4 18056 07 020 18225 190122 128 J 1 16019 18828 20923 14096 144^45 

My (69) 7824 112 7523 5073 6629 94.78 8.1 1.78 7622 74.67 5052 0041 9423 7823 5521 6047 

Japan (483) 15428 182 15223 10228 13426 10258 11.7 079 15329 15126 10242 13423 10242 18521 11421 11423 

Malaysia (09) 49146 -162 4842S 32628 42071 51523 -18.1 147 48065 48250 32048 429.18 51 226 621 23 £7440 27828 

Mexico (18) 2187.10 -02 213037 144000 188024 7BU7.17 -3.7 025 221003 2182-18 147054 19*086 791047 264726 K31.17 154728 

Nathartand (20) 00128 12 199.01 13422 17093 17328 -12 015 20220 20035 13556 17020 17S2B 20743 161.72 16444 

New Zealand (14) 6054 09 6724 45L55 59J9 8355 -14 328 8022 8034 4024 8079 64^2 7729 45.45 4620 

Norway (23) 19074 106 196.10 13228 17038 19048 7.1 124 20127 19013 134.74 177.11 20049 20642 14019 14827 

Stagaporo (45) 32022 -12.7 31067 21025 27924 2342S -142 1J5 32324 31096 21523 29071 23022 3708? 21327 21078 

South Africa (80) 26425 -09 26124 17529 23123 26010 62 Oil 28928 26848 16031 23721 26427 28026 18129 18625 

Spa*) (42) 146.14 42 14420 97.11 12747 152.78 12 063 M5L90 144.06 9748 12013 15323 155.79 11033 12741 

Sweden C*f) —220.18 ’ 12.1 £1726 14621. 19227 2S527 62 1S2 £2027 £1720 14727 19072. £5008 23022 164.79 19221 

Switzerland (48) 183.18 12 • I8T21 10043 14034 14035 -22 157 16445 18228 10927 14442 14428 17068 11227 11420 

United Kingdom (£16) —19723 -32 19427 131.10 17229 19427 -52 375 19078 19728 13348 17345 19726 21426 16046 17081 

USA gig 16071 -Ol 187.19 13006 16548 1B071 -Ol 2.78 18084 18027 12003 16527 19064 1962* 17621 18625 

EUROPE (745) 16022 05 16728 11252 147.70 16014 02 228 1706* 18829 11324 146.77 10126 17058 13088 14020 

North; (113) £1347 122 £1084 14125 18020 £1070 09 129 £1420 21129 14327 13640 21851 22060 14525 151.19 

Pacific Bwto (732) 163-78 122 10129 10082 14225 11325 72 127 16324 16098 10823 143.19 11037 16820 119.11 12028 

Euro-Pad&c (1467) 16622 72 ■ 183.72 1102B 144.73 131 .75 42 123 16621 16322 11021 145.79 13229 17078 12722 12053 

North America (823) 18034 02 18327 12322 16254 18622 Ol 2.77 18036 18002 12324 182J9 18422 192.73 17070 181.45 

Europe Ex. UK <S9G) 15072 2.1 U8J2 10015 131.47 13033 42 222 15120 14039 10129 13228 14074 15073 12023 12225 

Pacific Ex. Japan (2SM — — 25528 -102 20127 16928 222.75 23454 -1£2 £60 2S728 25424 17220 22048 23088 29021 18424 172.71 

World Ex. US (HMB) 16728 04 105.14 11121 14528 13525 42 124 16755 16044 1112* 147.16 135.72 17251 12045 12070 

World Ex. UK (1956) 17150 4.7 16923 11097 14060 14726 32 221 17123 18827 11426 15020 14723 17558 144.13 14620 

World Ex. So. AL (2110) 17323 4.1 17023 115.11 151.11 15128 25 2.1 B 17227 17079 11558 15120 151.42 17058 14820 147.42 

World Ex. Japan (1701) 18622 -09 18356 12321 16226 18129 -OB £78 18021 T8327 10421 16354 -1B158 19S20 18322 16005 

The World Indax piTO) 173.79 42 17127 115 l48 16158 15013 25 2.18 1735S 17126 11095 1S£41 16220 17097 14031 147/44 

COpyrteM, Ow FtawieU Tlmsa LMMCL GeMman, Sadia 8 Co. and NtoMtai Staafllaa LtaAxL 1BB7 

Bom NUr Dm 31 . IfiM - 100; Finland: Doc 31. TB87 - 115537 013 3 Ma* BOTBI poend Startnd and S4JM Ooed); Nenfic Dae SO. 19BB - mas »JB • tadwX 11*48 (Peund 8tM*ns| aed 12322 fixxafi. 


20128 

12 

1S921 

13422 

17523 

17328 

-12 

£18 

20220 

20025 

13526 

17020 

17528 

20743 

161.72 

10444 

-2824 

£9 

8724 

45L65 

5979 

0325 

r14 

320 

6922 

8034 

46.24 

8079 

6422 

7729 

45.45 

4620 

.198.74 

1£8 

10£1O 

13228 

17326 

198.48 

7.1 

124 

20127 

199.13 

13474 

177.11 

20049 

20042 

14019 

14827 

22022 

-1£7 

318.07 

21325 

27924 

23425 

-142 

173 

32324 

31828 

21523 

28371 

can 90 

37082 

21057 

21078 

26425 

-02 

2612* 

17529 

2S123 

263.10 

62 

£11 

28928 

26848 

18021 

23721 

26427 

28028 

10129 

18625 

.146.14 

42 

14420 

97.11 

12747 

1S2.78 

12 

£63 

14520 

14406 

9748 

12013 

15083 

155.79 

11033 

12741 

22£t8 T 

12.1 

21726 

14821 

19227 

25527 

GJ3 

IfiZ 

22027 

21720 

14727 

1BOT2 

25828 

230.02 

164.19 

16221 


Al Opan Mareat (go. are far pnrtOBa dqr 

BANK RETURN 

BANKING DEPAITT)l4BHT 

UafaBOaa 

Capital 

Pubflc deposits 
Bankers dapoato 

(toaanre and other acoounto 

Assets 

Government aacuMaa 
Advance and oflwr accounts 
Premtap, equipment and dhar aoca 
Notes 

com 

ISSUE D6FAHTMBU 

I IshHlas 

Nates In dmiAatian. 

Notes bi Banking Dapre truant 


Gowrenant debt 

Other Govammant aacuWaa 

Other SocuriHas 


Wachaaday 
March 9, 1994 
£ 

14553200 

127127B525 

1553233255 

0750383230 


6290147.110 -1267216,705 


1202257289 

4218200783 

464200408 

7580324 

217,168 


0390147.110 -1.067216.705 


10121 10043 14234 14325 

19427 131.10 17229 19427 


184.45 16238 10927 14422 14428 17658 11227 11420 

19078 19728 13048 17045 19726 21436 16048 17081 


-£1 

187.19 

'12006 

16548 

19071 

-0.1 

£78 

18064 

18027 

12623 

10527 

10064 

19624 

17621 

16625 

£5 

16720 

11222 

147.70 

16014 

02 

22B 

17024 

16039 

11094 

14077 

10120 

17058 

13828 

14020 

122 

21064 

14125 

1BO20 

21070 

62 

129 

21450 

21129 

14037 

13048 

21051 

22080 

14526 

151.19 

122 

16129 

10082 

14225 

11035 

72 

127 

18324 

16009 

10093 

14019 

11327 

16080 

119.11 

12028 

72 

. 16072 

11026 

1*473 

131.75 

42 

123 

16621 

16322 

11021 

146.79 

13229 

17078 

1Z722 

12099 

£0 

18007 

12322 

10224 

18622 

£1 

£77 

18623 

13022 

12084 

18079 

18422 

19073 

17070 

181.45 

£1 

14872 

10015 

101.47 

13033 

42 

£32 

15120 

14929 

10129 

13228 

14074 

15073 

12023 

12225 

-102 

26127 

16929 

222.75 

23424 

-122 

oan 

25728 

25484 

17220 

22648 

23828 

29621 

18424 

17077 

£4 

16014 

11121 

14529 

1!W(W 

40 

124 

107-55 

16544 

11124 

147.16 

135.72 

17051 

12045 

129.70 

47 

16923 

11327 

14920 

14726 

£4 

£01 

17122 

10087 

11426 

15020 

14723 

17528 

14413 

14620 

41 

17023 

non 

151.11 

15126 

£5 

£1B 

17097 

17079 

11528 

15120 

151.42 

17050 

14620 

147.42 

-£9 

18055 

12321 

16226 

10129 

-02 

£78 

16021 

18327 

13441 

16064 

■18149 

19820 

16322 

10025 

40 

17147 

11548 

16128 

15013 

£5 

£18 

17088 

17120 

11825 

15041 

15220 

17097 

14031 

14744 


17250430676 

7569224 

17260000000 

11215,100 

7,474,151280 

9.77423Q040 

17260000000 


LONDON RECENT ISSUES: EQUITIES 

laaua Amt Mto. Ooaa 

price paid cap 1883/9* prica 

p up ffmj Ugh Low fltpek p 


+46296243 
aOI 03.757 

+50200200 


+1207,182222 

-1257.162222 


Nat Dhr. Gre 

djy. cov. ytd 


STOCK INDICES 

-MUM- Stacennp. 

taw 11 Mw 10 Mar 9 Me 8 Mar 7 Htfi low Hdi Low 

FT-SE 100 31912 3Z332 32482 32844 33052 3SZOS Z7372 . 38233 9882 FT-8E Bntncfc 100 

FT-5E m 250 38S7A SOU 39110 39211 39377 41523 28703 41528 13714 FT-SE Embtah £00 

FT-ffi MM 23Q K IS 387214 39222 38205 39392 38622 *1997 29742 41997 13793 FT Onfetay 

FT-SE-A 330 16217 16*3.1 18405 15504 16742 17793 13487 17782 6645 FT Bnt SSMtlaS 

FT-SE SaaMCte £30848 201953 202241 202080 2028.17 £09*29 137728 209(28138379 FT Rnd btereat 
FT-SE StariEkn ex Cs 1990X6 2000-17 200354 208727 200927 2S8972 138088 208972 136179 FT 6 dM Htaea 
FT-SEA mJBMB 1B15121B3SA91B4088 19*820188455 1794.11 1330.191794.11 6122 FredtararGaMMaea 


FT GOLD MINES INDEX 


- msa 6JS • tadwx 11448 (Pound Btelnsl aed 12322 pxxnA. 


— mam— soon 

Mto 11 Mm 18- Mar 9 Iter 8 Iter 7 Htft Low Hub 
143155 144S2B W4S47 14SBL23 146044 154919 106322 154919 
147159 149425 149623 1511.16 1518.19 M07.10 1 144,79 1897.10 

26197 25472 25932 £5692 25844 27132 21247 27136 

10021 10127 16027 10T34 10124 18729 9328 12740 

12237 12222 125.17 12X56 12221 13X87 10627 13327 

202EJS8 202X34 19S92B 1S3520 115LB8 239740 022.16236740 
2123 211.1 2052 204$ 2952 2772 BOO 7347 


- FA 309 248 

140 FJ>. 28X3 178 

- FJ. 1.10 6% 

105 FP. 3X1 118 
ISO FP. 902 160 
124 FP. 2X2 188 

60 FP. 1344 50 

130 FP. 312 155 

- FP. £62 10212 

170 FP. 74.1 171 

183 FP. 232.1 206 


- 

FJ». 

B3* 

74 

— 

F2. 

623 

29^2 

100 

FJ». 

BS2 

103 

- 

F2. 

050 

53 

— 

FJ». 

- 

485 

50 

FJ». 

204 

53 

— 

FJ». 

226 

28 

— 

FJ». 

524 

200 

125 

FJ>. 

134 

133 

100 

FJ». 

572 

96 

— 

FP. 

426 

43 

— 

FP. 

5707 

SOB 

200 

FP. 

322 

216 

118 

FP. 

542 

140 

153 

FP. 

532 

160 


f karadutaon.'f Ptactag plea, 
to tha Guide V *0 London a 


24S Abbuat N Dawn C 
103 /kpfta Abporta 
1 fCan UK Vhts 
101 CattaRWa 
147 C W ro ed anoa 
142 CBrical Campdkig 
47 Edta New Tiger 
130 Finetet 
98 Hanfing Japan C 
159 Goktabarcugh HBi 
IBS Graham Greup 
68% Guangdong Dript 
18la Do Warants 
94 Hamid bw Tat 
45 DoWnenta 
488 Mareuy Ban Pwtn 
49 Mhraa InvTat 
25 Do Wananta 
196 FtamitoBn Inn C 
120 Radstona Tech 
94 Sreacen VMua 
38 DoMtereres 
493 Schredar UK Gotti 
208 THtat 
129 Trtag Inti 
153 UrAod Carriers 
FP. Rfiy fwM saarty-FPri 


; -1%e RN4JJ3 zz 32 
! HN121 22 £2 


■h - - - 

-1 R32 £3 22 

Jj - - - 

WIN32 22 24 
-3 LN42 22 22 



tacrease or 
dacrease far amok 


+3258,101 

-1X350277 

-1280222289 


-3,780200 
-1280,789277 
+453213 
+X 103.757 
+620 2 


BASE LENDING RATES 


Tf 31W» 19 

UMnHam 2 mm -42 » om 


Mfaaa ytaM % M^ law 
HU) 126 296749116329 


Mricans 274944 -162 273550 1220 2BL50 621 344020 1357211 

• mil n 254379 -42 £44122 828 1424 142 301329 118*72 

Narth JtaMtaa (LI) 174127 -84 178524 2720 5926 054 203B2S 110325 

Hfl5»?ta bnclSira^^nuSbar'ot ^ taSritaa- Baali U8 Peaare._B*>a tartuaa; 100020 JVtgBa. 


Hi« narnrlal usolfer the rrffaur Inww 


Market-Eye 


London stock exchanob 


Attam A Company £25 

AMad Treat Bark 525 

AS Bank 528 

•HarayAnabachar..— . 525 

Bmk d Bwcda 826 

Banco afaso Itocsya- SL2S 

BankotOgsua &£& 

Bank □( Ireiand 626 

Barlolinda.^. 525 

Baric of Soofeni 675 . 

Bandaya Baric 526 

Bit Bkcllfid East 526 

•BmonShfaley &2S 

CLSaritNatoctad S25 

CtfaaricNA 525 

OydsodfltoBpfc 525 

The Copper afan flreir.&as 

Ooufe&Co 525. 

Creek Lycxineto S2S 

pKnaPbpUarBank^us 


% 

Dmanltearia 525 

Exeter Bank Umfiad- 029 
FkmM&GanBank- 6 
•Robert FteringftCD- 525 

Cbobaric 825 

kOrinmasIMxm 525 

- HM*> Bank AG 2taWl. 523 

■Hambraa Bank— -825. 

HariaUa & Gan bar Bk. 528 

MtMSamieL 525 

C Hoaie 8 Co 625 

Hongkong SShanttWi-326 

JUMn Hodge Bank S2S 

•LscpoU Joseph &9cn 525 

UoydaBraic 5J5 

Itetfnl Bank Lid 525 

MUandBadc 925 

•Mart Banking 6 


*ftHEugl»GuamntH 

Oarporefion Untia d tano 
taggradhafeals 
aberMngtaateMorL 8 
Royal Bk at Scodand- G25 
•SnWb&Utemm Sees. 525 
SQndard Chartered — 525 

TSB 528 

teUMedBkorKkwalt^. 52S 

Uky Tut Bank Pfa,„ 525 

Waafam Tnst 525 

WWB unay Laidaw— 523 
Yorkshire Bank 525 

• Members ot British 
Maichant Banking & 
SacurttkM Hauaaa 


FIXED INTEREST STOCKS 

tasue Amount Latest 
prise paid Retain. 1993/94 
£ up d— Ugh Low Hteck 


R55 22 34 
mX8 XI X7 


dosing +or- 
prioe 
£ 


FOREXIA FAX $ € Dm * 

A 9 VEM PUBUC RECOftO OF ACCURATE SHORT TBWI PORBON EXCHANGE FORECASTWO 

DAILY FOREIGN EXCHANGE COMMENTARIES. 
CHARTS, FORECASTSAND RECOMMENDATIONS 
Tel: +-44 81 946 8316 Fax: +44 81 948 8469 

FOREXIA FAX - by using hand eel on your fax maehlrw Maf +44 81 332 7428 


* frr a dpht tori tan 


FP. 

PP. M/a 
FP. 

- FP. • - 

RIGHTS OFFERS 

fetal* Amount Latest 

price paid Barren. 

p up data 

20 W 11/3 

92 M 11/4 

173 M 5/4 

4% M 14/4 

42 M 14/4 • 

15 Ml 25/3 

12 Ni 13/4 

120 NB 21/3 

315 NI 30/3 

pm Prtao at a pwnWait 


- lOBp lOSp Created Land 8pc Or Ln 

M/3 284p 283p GKN Unfia C* Ln '94/99 

111p 11Mb MN&9pcOrM 

103 102% Ptarmigan Ml 3%pc Or Bd 


1993/94 

Kflh Law Steele 

36pm 3pm BtebfanJ 

14pm 11pm Btrfaad 

27pm 17pm jClp. & Ragkxial 

6pm 3pm Care UK 

18pm 4pm Coread Atbht 

4pm 3pm Creatan Land 

13pm litem Hrth (CM) 

45pm 33pm jGreawnr tana 

64pm 52pm Wetbanaxxxi JD 


dosing +or- 

P*» 

* 

ITjpm 

*§«» -h 

3pm 
12wn 
3Spm -3 

52pm <2 



Ei»n »«I ill r 5 lEli wwrl iili BBI* smhi «I»i *. » h . « ...l I 




















28 


















































simssn 















































FINANCIAL TIMES MONDAY MARCH 14 1994 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


MUM 

■* Us Suck 
16% 11% ma 
23% IZftALlrtsA 
97% 54% AMP 
72% SSftAMR 
S IftAtt 
56% 29% ASA 
3D%22%Afata& 
13% 8% AMHPr 
15% 8%tartnaki 
36 Eft ACE LM 


12% 10ftACM&lta* 1JB 14 
10% &% M3I GuOpp l 1B0 17 
10% Bft AOIEM^x 0*112 
12% 10ft ACM EM Se * IX 102 

12 % s%Manmx ixmm 

§ B$ACUIteg0l 0J3 1 1 
7ft AcmeOv 044 47 11 
11% 8% tana Bed 34 

28% 18% Aeon*) x 060 22 14 


YU> ft Sta One Pm. 

Db> % f lost Mp lew IW* Brae 

046 295*5 63U16% 16% 1B% *% 

016 1.1 37 378 1B% 16% 16% 

IX 25 22 681 Xft 64% 64% 

30 2970 62% 60% 62% t% 

16 206 4% 4% 4% 

£00 4.4 29 1488 46% 45 46% -1% 

078 2.7 IB 6654 28% 27% 28% tft 

050 16 6 2 1713% 13% 13% -% 

21 71 11% 11% 11% 4% 

040 15 4 228 2$»2 26 26% -% 


MS 26% 26 26% 

86 11% 11% 11% 
34 9% 8% 9% 
208 9% B% 9% 
362 10% 10% 10% 
328 10% 10% 10% 
tffl 8% 8% 8% 
84 9% 9% 9% 
137 8% 7% 8 


56% 41%tagon ADR 153 2.4 11 5 51% 51 51 
68% 43% Arts* 276 48 103115 57% 58% 57% 


2% t% 
46 % -% 
38% -1% 
22 *% 


8% 5ftAdrart&p 018 04 10 47 8% 8% 6% +% 

24% 14% Admire 010 05125 41 19 18% 18% -% 

Sft 41%/tagBiADR 153 2.4 11 5 51% 51 51 -% 

68% 43% ArttoL 278 48 103115 57% 58% 57% -ft 

34 24ft Alac 040 15 12 1781 30 29% 29% -% 

22%16%AMTO 088 5.1 11 2857 17% 18% 17% +% 

7% 1% Mhi he 3 73 2% 2% 2% +% 

S 37ft AkftC 052 £0 25 936 46% 45% 46% -% 

18% AfcfiM Fit 030 08 22 2529 37% 38% 38% -1% 

28 SpMTBhE 38 467 22 21% 22 *% 

15% lOftAHfiam 154 115 11 182 15% 15% 15% 
n*% 101 AbPuLIS 8.10 75 3 104 104 104 

18% 12%*Bkatt 020 12 61105 17 16% 17 tft 

21 14% Aim H x 055 1.7 34 228 20ft 20ft 20ft -*2 

28% 3)%AUA5 028 1 2 15 41 Z>% 22% 22% 

25% 17 AKtfur A 028 1.4 15 25 20 19% 20 -% 

23% 23% Atatsn 044 1.6 22 1654 28% E$ 28 -% 

25 18% rtCnrt 030 15 43 1870 23% 23% 23% •% 

58% 35% AfcoSt 150 181® 1126 55$ 55% 55% -ft 

J0% 19% AnftuM 050 2.1 B 358 28 28ft 2B% -% 

28% 17% AlexAlx 1 00 52 35 402 19% 19% 19% +1% 


68% 43% ArtraL 276 4 8 10 3115 
34 24% Alx 040 13 12 1781 

22% 16% Aimr® 058 51 11 2857 
7% 1%Mmlc 3 73 

S 37% AkftC 092 25 25 936 
18% AfcfiH Fit 030 08 22 2529 
28 SpAkgratne 38 4G7 

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31 


FINANCIAL TIMES MONDAY MARCH 14 1994 


4pmamiim»ii 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


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COTtoffn 41798 3$ 3 

tondnW. 1 10 3% 3% 

Cndas 0 47 2% 2% 

Canon Inc 059112 26 81$ 81$ 
Canonic 1 41 4$ 3$ 

Qnffgi 012 » 144 46% 46$ 
CtMtooCBxaM 24 100 25% 29 

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CtafyS DOB U 397 12$ 12$ 
Cdgcra 7 SB3 55 8 

CWtota B 334 195 18$ 

CBMCp 19 52 12% 12$ 
CMBXfai 1B818TO 55 5 

tontoctr 2 2555 11$ 11$ 
CntrtRd 1.12 ID 824 29% 28$ 
CnkfSpr 271080 13% 12$ 
torndhr 12 50 8$ 6$ 
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CtonOi 009 T72T97 12$ 12% 
Ctamtta 41 4439 na% 85 
Ctaotob 17 8 125 11% 
CtauAt 1 290 5 d% 
Ctampoanr 13*100 3$ 3$ 
OtalTa 8 5181 8% 5$ 
CUmnCp 75 3448 77% 75$ 
CtonHn 108 13 223 565 54$ 
CHtoCpx 017 29 K8 30% 305 
Cbrudff 3717480 36% 35% 
OS TeeS 1751403 3% 3 

QecoSyn 439123 805 78$ 
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Ctoan HOT 30 54 8% 8% 
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CodaAtom 28 S 10% 10% 

CQ0KH CP 31 130 ff 19>4 

togras 113 99 12$ 12% 

Coherent 15 432 12% 11$ 

CoCagan 92 823 23 22$ 

0DMG» Iff 15 23 23 £25 

COM Grp am 8 413 24d23% 

Cottar 004 152857 23% 21$ 
Cmcxtft 132 2A 3507 205 19% 
CmatAEp 008237940 19$ 19 
CtmilWiftai 11 Z7B 32% 32 

Comma Off S3 326 18% 17$ 

Omprijdre 42 790 13$ 12$ 

Coretare 54 64 12 11% 

toantodfl 5732SB 5 A *31 
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toratoM 13 158 8$ 85 

CMM 1*4 172523 10% 105 
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topytoia Iff 403 11$ 10$ 
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Carp OTA 431972016$ 15*2 
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CnvCrenp 110145 2$ 2 

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tort toll 013109 81 98$ 85% 38$ +2$ 

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Dtote 30 485 7$ 7% 7$ +% 

DMaKtpg 15 4SS 185 15$ 18$ +$ 

DanphUp 092 11 234 23$ 22$ 23$ +% 


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Off 21 371 255 2S 
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Off 52 14 52% 
30 6385 205 
22 51 7$ 

27 1442 6$ 
S3 IBB 15 
68 298 2$ 
4 537 4% 
010 21 203 4% 
0*8122 6393 445 
1711 9$ 

00 354 185 
27 7898 215 

14 ff 11$ 
14 680 20 

OIO ff 827 17% 
ff 852 16% 


6% 65 •% 
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14% 14$ -$ 

31% 52% -% 

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17$ 17$ -% 
20$ 215 +% 
11$ «$ -At 
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15$ 16 


11 46 55 
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Fmtmrix 004 58 <72(07 $ 
HP tad 181238 295 

nudes 4 298 3% 
HATM Iff 14 340 47$ 
Hdy 08 10 43 8 

HggtoA Off ff 908 10% 
Rant 371«29uZ7$ 

RMxmxlff 10 600 315 
TMAB OM 7 £640 30$ 
FatBcOido OM 11 2 24$ 

MtoCk Off 17 SI Uff 

fttSaetf Iff 11 810 295 

M Tam Iff 0 BI1 38% 
FxtWestn 038 S 162 7$ 
HMk 05 10 750 24$ 
ROBVX Iff 11 304 47 

Hretnta » 189 7 

Fbare a 1455 21% 

HmU 18 306 6% 
Food* Off 102712 65 
FeodLB 000625 8 78 6$ 
Foremost iff 11 14 34% 
ftndngr 14 184 15% 
FkMSloe 030 ff 24 -1% 
FbatarA 41 10 3$ 
RflxHn Iff 11 73 27$ 
FstEastn 1.12520 48 2B 
RflFMx 0*0 8 a 165 
ftottoMil 1.1810 174 275 
RdlerHB 050 25 58 405 
HVMftt am 13 72 245 
FM DM 21 87 17$ 


4$ 4$ 

5$ 5$ -% 
30$ 37$ ■% 
25$ 26% +$ 
35 3$ -% 
At 47% +5 
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38$ 395 +$ 
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20 $ 20 $ 

8$ 6% 

6 65 

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33% 345 +% 
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27% 275 -5 
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14$ 155 
28% 28$ -5 

30% 40% +% 
235 245 
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GrenetBi 

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- Q - 

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Off 23 722 15$ 

010*1 5% 
20 215 4$ 
018150 102 6% 
0*0 15 24 155 
18 2a 4% 
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400 379442 23% 
7 180 4$ 
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0*0 14 360 22$ 
012 19 580 25% 
Off 19 10 17$ 
11 ff 5$ 
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41 282 2% 
Off 75 238 23 

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1 2336 1ft 
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737 89 155 
14 140 205 
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14$ 14$ -% 
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19 19$ +$ 
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24$ 255 -5 
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Homo Nub 
HomaOfca 
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12 BOB 6% 
11 387 7% 
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Lam Radi 42 1131 
tancremx am 19 ffi 
lure off 20 m 
Lnsmietok a 914 
LMopear 13 52 


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IB 5083 
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WW Off 52 » 16$ 
NbHnoGE Iff 14 81 335 
EtagmaPinr 141370 31% 
AtagnHp 076 12 ffi 18$ 
MW Box 132924 9% 
ItanmCp a 714 1<5 
Marina Dr 15 241 5$ 
MtaWCp 10 77 44 

HngMt 0 » 1$ 

Hantotta 18 10 8% 
MmSrnM044 11 12 11% 

MtatoM Off 11 611 215 
Utxtatat 41 907 54% 

MRdvCp 05553 7$ 

HctoWiR 04D O 5 16$ 
McCohSto 048 17 1988 £1$ 
MCCMG 436446 48% 
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Iktosx toe X 0.18 23 ff iT$ 
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tadantna Off 8 35 6 

HMdvCp 018 K 247 16$ 
IMG Off 191737 13$ 
MOTtalB Off 102165 18$ 
Manny Ox 070 83850 39 

Marital Iff 11 1347 21% 
MMrei 2111775022% 

Methods A 006 IB 421 16% 
UcttMlF 020111300 105 
Web IMS 200292 833 645 
Herein 14 11 65 
Manage 22 780 30 
Honan 4 311 5% 
Mkxpgfie 129355 75 
Maputo 55118 75 
Heft 2310918 825 

lid ASM 343644 39% 
Htadto 100 107085 27% 
Mdnftgta Off 25 10 30$ 
Ward 002 24 B52 33% 
MOcm 1138 »% 

Mkwtoch 10 291 12% 
HditoTlI 44ZZ7V 18% 
Modem Cb Off 21 28 6% 
Mo&ibW 0*8 21 627 29 

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Motor he 00428 548 365 
Moacam 004 17 1103 10$ 
Mottoes P Off a 105 335 
Mr Coffee 171186 14% 
MlSSpg* Off 12 27 325 
Utotaf 13 1131 305 
Mjcngn 3 207 9$ 


24% 24$ +5 
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325 32% +5 
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102 10 19 25 

21 361 54 

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914 285 27$ 27$ -% 
52 10% dIO 10 
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702 17 18$ 17 

279 26$ 25$ 25$ -5 
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144 6% d5$ 0 -% 

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130 29% 28% 29 +% 

921 175 16% 175 +5 
34 4% 4% 4% .5 

311 28 255 255 -1% 

393 112 111111% -% 
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187 6% 8 6% 

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1*0 23 802 71 70% 

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3 15 4% 

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22294 13 

Off a 87 105 

372292 12% 
Off 28 48 22% 
29 824 22$ 
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2 1 378 6$ 
503556 95 
054 17 963 24% 
088 82215 18$ 
020 42 Ml 205 
0*0 121278 285 
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2 942 3ft 
40 445 30% 

1*0 10 025 385 
Off 162632 37$ 
12 2035 165 
00616 134 22$ 
006 23 822 21% 
Off 2 308 8% 
146 337 21% 
1.10 It 122 22% 
302320 15% 
Off 263886 335 

28 14 16$ 
Off 71 408 20$ 
004 12 364 19$ 

581420 34% 
15 93 8% 

mom 29% 
27 350 20$ 
5631Mu48% 
27 852 15% 
Off 17 682 17$ 
72 368 3% 

3 357 12 

43 14 10% 
2210988 25 

M2 192113 17 

35 807 22 
17 422 6 


5556% -% 
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33$ 335 -1 
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119$ 20 +% 

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24 24$ -5 
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27$ 27$ 

24% 24% •% 

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TWta 41 877 58% 

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26$ 27% +% 
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*"7 




32 


financial times 


MONDAY 


G7 targets unemployment 


^ nanceaD ^ 

Wit social affairs 

nft' A commissioner 

for a jobs sum- 
mi L The gathering, called by US presi- 
dent Bill Clinton (above), is the first 
of its kind specifically to address 
employment issues. The US is likely 
to press European countries to cut 
interest rates. 

US- Russian relations: Warren 
Christopher. US secretary of state at 
the end of his 10-day Asian trip, meets 
Andrei Kozyrev , Russian foreign minis- 
ter. in VI adi vos took. 

They are likely to discuss Bosnia 
and the timetable of Russian troop 
withdrawals from Latvia and Estonia, 
as well as co-operation in peacemaking 
efforts in the Middle East and fall-out 
from the recent arrest of an alleged 
Russian spy in the CIA. 

World environment: Negotiations 
on the restructuring and replenishment 
of the Global Environment Facility 
will resume in Geneva (to Mar 16). 

The objective is to tie up the $2bn 
replenishment package and set up 
the Facility as the financial mechanism 
for administering the 1992 global envi- 
ronmental conventions. 

European transport: The Second 
Pan-European Transport Conference, 
organised by the European Parliament 
and the European Commission, takes 
place on Crete. Greece. It will explore 
ways to develop a pan-European trans- 
port network, involving the many new 
countries that have emerged since 
the first conference in 1991. 

Euro Disney, the hard-pressed theme 
park near Paris, holds its annual gen- 
eral meeting, which is expected to 
be stormy. Its shares stand at a third 
of their value a year ago. 

India's prime minister, P.V. 
Narasimha Rao, on an official visit 
to Britain, meets Prime Minister John 
Major and Foreign Secretary Douglas 
Hurd in Downing Street. Talks will 
focus on the improving relations 
between the two countries, Indian 
economic reform and British invest- 
ment in India. India’s dispute over 
Kashmir with neighbouring Pakistan 
will also be aired. 

Commonwealth Day: The Queen 
starts the Commonwealth Games Relay 
Message from Buckingham Palace 
then attends Commonwealth Day 
Observance at Westminster Abbey. 

Holidays: Much of the Moslem world 
celebrates the two-day festival of Eid 
al-Fitr. 


TUESDAY 

EU enlargement crisis 

European Union foreign ministers 
hold an emergency meeting in Brussels 
to discuss the enlargement crisis. The 
ostensible purpose is to try to hammer 
out an agreement on Norwegian entry 
to the Union, mainly a matter of set- 
tling fish quotas. However, the issue 
of admitting the four Efta applicants 
has raised the contentious question 
of the distribution of power in an 
enlarged Union. 

The dispute centres on national veto 
rights. While most member-states sup- 
port a rise in the blocking minority 
in the council of ministers from 23 
population-weighted votes out of 76 
to 27 out of 90. the UK, backed by 
Spain, is opposing this move. The 
whole process of enlargement is at 
risk. 

US producer prices Index: 

Markets will be watching this indicator 
- and Wednesday's consumer prices 
index - for signs of inflationary pres- 
sures. If the figures turn out higher 
than the consensus forecasts, they 
will trigger fears that the Federal 
Reserve may increase interest rates 
again. 

Romania's government has said 
It will introduce a new minimum wage 
of Lei58,000 (US$37) a month from 
today, well below the Lei7S, 000-92,000 
(USS5G-59) demanded by trade unions. 
The unions are threatening further 
strike action if the government fails 
to come up with a better offer. 

Waste at sea: Japan. Russia and 
South Korea are to begin a survey 
on the effects of nuclear waste dumped 
in the Sea of Japan. 

Finland's prime minister Esko 
Aho begins a two-day visit to Estonia, 
where he will hold talks with his oppo- 
site number Mart Laar. 

Illinois primaries: 

Illinois holds 
gubernatorial 
and congressio- 
nai primaries. 
'&Lit " 'lilk'iutiJ National atten- 
tion has been 
focused on 
ml the struggles 
of Democratic 
JjH| representative 
Dan Rosten- 
kowski(left) 
to win a further 
term, while undergoing a federal ethics 
investigation. 

World Aviation, Education and 
Safety congress opens in Bombay (to 
Mar 18). 

Italian elections: The Pope is to 
pray for Italy ahead of next week's 
general elections. 

Norway's National Gallery has been 
given until today to ransom the stolen 
painting The Scream by Edvard Munch. 
Following its theft last month, a 
demand for $lm has been received. 


WEDNESDAY 

UK economy in focus 

Figures for UK unemployment in 
February are expected to show a fell, 
after the surprise 15.500 rise In Janu- 
ary. Analysts predict a seasonally 
adjusted drop of around 20,000. A fur- 
ther rise would prompt serious doubts 
about the health of the UK recovery. 

With April's tax increases looming 
on the horizon, the markets will also 
pay close attention to data on Febru- 
ary's retail sales for evidence of con- 
sumer confidence. The consensus is 
for a 0.2 per cent month-on-month 
increase, making the annual rise 3.1 
per cent, but recent retail sales data 
have shown a tendency to surprise. 

Thatcher in Brazil: 

H Lady Thatcher 
(left), the for- 
mer British 
prime minister 
begins a visit 
to Brazil as 
guest of Banco 
Garantia(to 
Mar 19). Her 
trip is sand- 
wiched between 
the recent tour 
of bankers 
and industrialists led by Michael Por- 
tillo, chief secretary to the treasury, 
and the arrival of Douglas Hurd, the 
UK foreign minister, in ApriL 
British exports to Brazil nearly dou- 
bled last year. Lady Thatcher will be 
preaching the virtues of privatisation. 

Thailand’s prime minister Chuan 
Leekpai begins an official visit to Viet- 
nam (to Mar 19). Vietnam's expressed 
desire to join the Association of South 
East Asian Nations trill be on the 
agenda, ahead of a meeting of Asean 
foreign ministers in Bangkok, the Thai 
capital, in July. 

Stena Line, part of Sweden's 
diversified Stena Group, holds an 
extraordinary general meeting in Goth- 
enburg to secure the go-ahead for a 
rights issue to finance two ferries. 

CeBIT, Europe's largest computer 
and communications show, opens in 
Hanover. The exhibition fills every 
hall in Hanover’s vast showgrounds 
and is depicted as a shop window for 
European information technology. 

A traditional launching pad for new 
products, this year the list includes 
Texas Instrument's superfast multime- 
dia chip, partly designed in the compa- 
ny’s UK laboratories. 

FT Survey: Information and 
Communications Technology. 

Football: European Cup Champions' 
league group matches. In Group A, 
Barcelona (Spain; play Spartak Moscow 
(Russia) and Galatasaray (Turkey) 
play Monaco (France;. In Group B, 
Werder Bremen (Germany) plays AC 
Milan (Italy) and FC Porto (Portugal) 
plays Anderlecht (Belgium). 

Holidays: Indonesia and Malaysia 
(markets closed). 


THURSDAY 


Partners in peace 

US defence secretary William Perry 
starts a trip to Rusria, Kazakhstan, 
Ukraine and Belarus. He will discuss 
military and other ties with the former 
Soviet republics. 

The proposed links are to include 
regular meetings between military 
and defence officials, training with 
the US armed forces, and technical 
assistance. 

Bundesbank meeting: The 

policy-making council of the German 
central bank holds its regular fort- 
nightly meeting, amid regular specula- 
tion as to whether It will reduce 
interest rates again. 

Sky wars: US transport secretary 
Federico Pena Is due to say whether 
he will approve extension of a “code- 
sharing” arrangement between the 
UK's British Airways and USAir. Under 
the code-sharing deal, which lapses 
today, the two airlines market each 
O ther 's flights under the same ticketing 
code, making it easier for them to feed 
passengers to each other. 

The Clinton administration is threat- 
ening to scrap the agreement unless 
US airlines secure greater access to 
British airports, especially Heathrow. 

Macedonia’s president, Kiro 
Gligorov, holds talks in Bonn with 
German foreign minister Klaus KinkeL 
President Gligorov will be hoping for 
Germany to put pressure on Greece 
to scrap its embargo on the fledg lin g 
former Yugoslav republic. Last week. 
Greece allowed a train of fuel tanker 
trucks to cross into its neighbour. 

French protest: Unions have called 
a national protest against plans to 
allow employers to take on the young 
unemployed at 80 per cent of the mini- 
mum wage. A quarter of those under 
25 are out of work. 

Wartime collaborator Paul Touvier 
goes on trial In Versailles, France, 
on charges of crimes against humanity 
for p icking Jewish hostages for execu- 
tion by the Nazis during the second 
world war. 

St Patrick's Day: 

« Holiday in all parts 
of Ireland in honour 
of the patron saint. 

In London, the Queen 
Mother presents sham- 
rock to Irish Guards. 

In the US, Irish premier 
Albert Reynolds is guest of honour 
at a dinner given by President Bill 
Clinton at the White House. 

Cricket: Second test march between 
En gland and the West Indies begins 
in Georgetown, Guyana (to Mar 22). 
Also, the second test between South 
Africa and Australia begins in Cape 
Town (to March 21). 

The Tote Gold Cup, one of the 

leading events of Britain’s National 
Hunt horse-raring season, is run at 
Cheltenham. 






1 


if 

V- 





r'-t 


White Gerry Adams of Shm Fein seeks daificatlon, the IRA campaign of violence continues 


FRIDAY 

Apec gathering In Honolulu 

Finance ministers of the member 
countries of the Asia Pacific Economic 
Co-operation forum meet in Honolulu. 
The gathering is modelled after the 
regular meeting s Of finance minis ters 
of the G7 industrial countries. 

John Hume, a member of the British 
Parliament from Northern Ire land, 
is to address the US National Press 
Club in Washington. 

Cuba In focus: Anticipating the 
New Cuba, a conference sponsored 
by the World Economic Development 
Congress, begins in New York. 

Spain’s ruling socialist workers' party 
begins its 33rd congress (to Mar 20). 
Against a background of recession, 
high unemployment and falling popu- 
larity. the differences between the 
pragmatic, market-orientated govern- 
ment and leftwing elements in the 
unions may come to the fore. 

Science week: Britain begins a 
National Week of Science, Engineering 
and Technology. It is intended as a 
“celebration and an illumination of 
science and technology". 

FT Surveys: Poland. Scotland 



WEEKEND 


Hosokawa visits China 

Japan's prime minis ter Morihiro 
Hosokawa begins a twtwlay official 
visit to China on Saturday. He is 
expected to meet premier Li Peng and 
will be seeking to improve trade and 
diplomatic ties with Japan's second 
largest trading partner. 

Five Nations rugby: England play 
Wales in London and Scotland play 
France in Edinburgh on Saturday. 

Sunday sees a spate of elections. 
Tunisia holds presidential and 
parliamentary elections. 

El Salvadoreans vote for a 
president, vice-president, a National 
Assembly and a full slate of mayors. 
Argentfadans choose delegates for 
a constitutional assembly to consider 
allowing President Carlos Menem to 
run for a second term in 1995 and con- 
tinue his economic reforms. 

Schleswig-Holstein, Germany's 
northernmost state, holds local govern- 
ment elections. 

French local elections (first round). 


Compiled by Patrick Stiles. 
Fax: (+44) (0)71 S73 3194. 



Fly Singapore 

Airlines 
and collect 

AIR MILES. 


r s 




ACROSS 

1 Make the connection, my 
friend (9) 

6 Spotlight the diplomats 
caught by America <5> 

S Sailors having a party on 
front deck (5) 

10 Furnish with material which 
will raise the case (9> 

11 In a single column feature in 
May or June about oil spill 
over Guernsey ( 10) 

12 Avoid direct light outside hos- 
pital (4) 

l-l The SAS look round for pro- 
tection against the elements 
(7) 

IS List word on a sound bargain 
(7) 

17 End of the road for an inexpe- 
rienced Romeo (3,4) 

19 Lock away integral missing 
article i7» 

20 Fog at the motorway's junc- 
lion (4) 

22 Shows the wrong way to gain 
straight access to the school- 
ma'am ( 10 ) 

25 Experimental housing for a 
PeronisLt comeback (9) 

26 Put a stop to It i5) 

27 Shrink from the stockman? 
to) 

28 Communist worker and Ger- 
man insert are not wanted (9i 


DOWN 

1 A Liberal member could 
cause concern (5) 

2 The blackguard closed 
National Union of Railway- 
men's operation (9) 

3 Final trick from Clive took us 
in (10) 

J Leaning against a water rank 
with Vice-President Gore (7) 

5 Relaying other people's views 
(7) 

6 More heard to have last their 
footing (4) 

7 Get hold of the tune (5) 

8 Tight circle in second mar- 
quee (9) 

13 Hood, somewhat corpulent, 
produced a circular (5.5) 

14 The magic part could be 
based on fact c9i 

16 Battle gear - it's capital! (9) 

18 Wetter prince 17) 

15 Russian leader is traditionally 
fiery tempered (7) 

21 Is coming up with fresh 
strength (5.1 

23 Exhausted writer, way out i5; 

24 Young salmon for Catherine 
(4) 


MONDAY PRIZE CROSSWORD 

No.8,403 Set by ADAMANT 

A prize Of a Pellkan New Classic 390 founudn pen for the first correct 
solution opened and five runner-up prizes of £45 PeUk&n vouchers will be 
awarded. Solutions by Thursday March 24, marked Monday Crossword 
8,403 on the envelope, to the Financial Times, 1 Southwark Bridge, London 
SE1 9HL. Solution on Monday March 28. 


Address.. 


Winners 8,391 

Alexandra Thomas, Woking- 
ham. Berkshire 

J. F. Chamberlain, Appleton 
Roebuck, N. Yorks 

K. Penn, Baswich, Stafford 
GAL Kent, Caterham, Surrey 
T.L. Richardson. London SWl 
Mrs J. Roberts, Brighton, 
Sussex 


Solution 8,391 


ULSrifJElLULJl^O QClEtLE 

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□ □ q h □ a 

sacinBQa hqsqdqb 

□ □ □ □ □ □ 
□nan BHnnsciGiBCiH 

□ □□OQQOO 

gnsnaHiiQB qqddh 

□ b a □ o □ g □ 
aacaaia □□□odoubb 




Singapore Airline', offers AIR MILES w British Airway** 
Executive Club members. So when you Hy Singapore Airlines 
First Ot Raffles Class, you can cam AIR MILES* by giving your 
Executive Club number at rescrvat.cn* or check-, n. If you ate 
no, already a member of Executive Club or would like further 
information, call Singapore Airline* on 08! 747 t!007 or jAl 
your travel agent. SINGAPORE AlftLIhES jjfy 

_-S,^ 1 porr Airli an otlrn ,h, w A , R MILa ^ 0|fcf[ j||||Bgt 

! Of broking and jobbing the Pel, kans fond. 

See /tort- sweelly he puts your word onto bond. 

Shlikan © 


JOTTER PAD