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Cartsbtt and Accor 

4, 000 branches but 
will the tree grow ? 


Pflg0l2 



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Leavingthe 

arrogancehehind 



la Ids iiwniroris 

DeBenedettion 
the Italian elections 


ill! 




FINANCIAL TIMES 


China and Hie US 

d Who-cwe? 

2 who a favour? 


Pago* 


•% 





Fast growth in US 
puts spotlight on 
short-term rates 

The US economy is continuing to ragmnH rapidly, 
increasing the chances of another rise in short-term 
interest rates, figures from the Federal Reserve 
show. Industrial production rose an unexpectedly 
large 0.4 per cent in Fehruary, following a 0.5 
per cent gain in January. The figures suggest 
industrial output is growing at an annnai rate 
of 74J per cent in the first quarter. Page 14 and 
Lex 

Japan’s (IS trade surplus falls: Japan’s 
tante surplus with the US fell for the first tone 
in nine months in February, the Ministry of 
Finance said. The surplus was $4J34hn, a fell of 
0.9 per cent compared with the same month last 
year. Page 4 

Bayer lifts German hopes: Hopes of an end 
to the German rhpmiraia industry’s four-year 
profits slump were raised by better-than-expected 
earnings from the Bayer group. Pre-tax profits 
were down 12.6 per cent to DM235bn f$L33bn). 

Page 15 

Sir Peter Inge to be UK defence supremo 

. . General Sir Peter Inge 

(left) became chief 
of the Defence Staff 
- Britain’s top military 
officer - in succession 
to Sir Peter Harding, 
who resigned after 
newspaper allegations 
of adultery. Sir Peter 
Inge, 59, a Sandhurst 
officer who became 
chief of the General 
Staff two years ago, 
had been acting as caretaker military adviser 
to the government He becomes a field marshal 
Page 8 

China wanted in Gatta Members of the General 
Agreement on Tariffs and Trade, with the exception 
of the US, expressed strong support for an early 
resumption of China's Gatt membership. Page 6 

Italian Journalists strike over pensions: 

Italian Journalists began a four-day strike in protest 
over plans by the government to place some of 
the surplus in the Journalists' pension fund in 
the main state-operated pensions scheme. Page 3 

Portugal's consumers hit banks: Portugal's 
consumers organised a 24-hour boycott of direct 
debit cards in protest at an attempt by banks 
to charge commission on use of the cards. Page 2 

Germany to lose 100,000 engineering lobs: 

Export growth will help Germany’s engineering 
industry increase sales by 2 per cent this year, 
but a further 100,000 Jots will be lost before a 
recovery emerges in 1995 or 1996, according to 
the VDMA industry association. Page 2 

Nine Somali bandits killed: Indian 
peacekeeping troops In Mogadishu shot dead 
nine Somali bandits who attacked a relief convoy. 

Deloltte to pay $31 2m damages: Deloitte 
& Touche, US accountancy firm, is to pay $3 12m 
to settle a string of government charges that 
it failed properly to audit several banks and savings 
and loan institutions which collapsed in the 1980s. 
Page 4 

Wofseley of the UK, the world's biggest suppler 
of heating and plumbing equipment, reported 
an 83 per cent rise in interim pretax profits to 
£87 m Page 16; Lex, Page 14 

Mirror Group Newspapers or the UK marked 
its independence from administrators and the 
legacy of the late Robert Maxwell with higher 
than expected pre-tax profits of £73 An (£1 07.7m). 
Page 16; Lex, Page 14 

Brussels to act on telecoms ventures: 

The European Commission said it intended taking 
a more active role in policing joint ventures in 
the fast growing telecommunications market. 

Page 14; Merchant bankers brave disdain erf 
Athens, Page 2 

Radi costs disclosed: Companies which take 
over British Rail's passenger operations can expect 
to pay about £500m (S730m) a year to lease trains 
in addition to the £2 Jbn they will pay for the 
right to use the rail network. Page 7 

Lyonnafse des Eaux-Dumez, French utilities 
and communications group, reported net profits 
for 1993 more than doubled at FFrfiQGm <$133m). 

Page 15 

Fire hits California phones: A fire in a 
telephone switching centre disrupted telephone 
service to hundreds of thousands of people across 
southern California. 


Microsoft reorganises to meet market challenges 


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By Alan Cane En London 

Microsoft of the US. the world's 
largest personal computer soft- 
ware company, yesterday 
announced a worldwide reorgani- 
sation to improve decision mak- 
ing and market responsiveness. 

It said the new structure was 
necessary to achieve its goal of 
doubling sales over the next four 
years. Last year the company had 
net income of $953m on sales of 
SS.75bn. 


Microsoft says the reorganisa- 
tion will not lead to job losses, 
unlike many computer compa- 
nies which are actively cutting 
staff. “It will not reduce our over- 
all headcount but it will allow us 
to grow without increasing our 
headcount as much as our cur- 
rent organisation would require’’, 
the company said. 

A memorandum sent to 
employees says the company 
could seize ‘incredible opportuni- 
ties" in the next few years, but 


implies that competitors, includ- 
ing Lotus and Novell, are supe- 
rior in sales and marketing: “We 
cannot just follow and react to 
what others are doing”. 

Restructuring is expected to 
take between two and three 
months with all the key elements 
in place before the start of Micro- 
soft's new finanrini year in the 
autumn. 

The company denied the reor- 
ganisation was a response to an 
investigation of its business prac- 


tices being carried out by the US 
Justice Department. Last year, 
the US Federal Trade Commis- 
sion failed to agree whether to 
proceed against the software 
company after more than three 
years of investigation of whether 
Microsoft had abused its position 
as market leader. 

Microsoft, boosted by sales of 
MS-Dos and Windows personal 
computer operating software has 
shown quarterly earnings growth 
of between 25 and 55 per cent 


over the past few years. In the 
first quarter of the current year, 
however, growth slowed to 14 per 
cent, causing analysts to suggest 
that the company was maturing 
and that competitors were eating 
away at its market share. 

The reorganisation is designed 
to accelerate decision making, 
simplify' its marketing messages 
to customers and business part- 
ners and improve business effi- 
ciency. Seven product groups are 
to be created to cover, for exam- 


ple, personal operating systems 
and desktop applications. New 
customer units will have respon- 
sibility for individual computer 
users, organisations and compa- 
nies which build Microsoft soft- 
ware into their own products. 

Microsoft believes central 
Europe could become Us single 
largest market with the potential 
of SI bn in yearly sales. 

Regrouping to get closer to tbe 
customers. Page 18 


G7 urges IMF to 
release $1.5bn for 
Russian reform 


By John Lloyd in Moscow 

The Group of Seven leading 
industrial countries, fearftil that 
the Russian economy may col- 
lapse, are pressing the Interna- 
tional Monetary Fund to agree to 
lend the second gljfon tranche of 
its fond to assist reform. 

Mr Michel Camdessus, IMF 
managing director, is expected in 
Moscow tomorrow. During his 
five-day visit be will have to 
decide whether to recommend to 
the fund’s board to pay the sec- 
ond tranche of the systemic 
transformation facility or again 
delay payment because of fears 
that the budget will not be 
adhered to and that inflation - 
down to a monthly 9 per cent in 
February - will again soar, as 
expected. 

A continued fall in production 
and the huge indebtedness in 


Russian industry have meant 
that government income is run- 
ning at half of the budgeted fig- 
ures for the first two months of 
this year. 

Meanwhile, powerful lobbies, 
especially the military, are 
demanding higher allocations 
than the present budget allows - 
with General Pavel Grachev, 
defence minis ter, warning that 
his troops will go unfed unless 
the allocation to defence of 
Rbs37,000bn ($21.6bn) for this 
year are more than doubled. 

One senior western financial 
expert in Moscow said yesterday: 
“Tiie base to support the infra- 
structure of the country is 
shrinking and at some point soon 
you will not have enough 
resources to support the mini- 
mum services." 

Mr ' Victor Chernomyrdin, 
prime minister, has sought to 



impress on the IMF - which has 
a team negotiating with Russian 
ministers in Moscow - that he 
and senior colleagues are at least 
as pro-market as radicals such as 
Mr Yegor Gaidar and Mr Boris 
Fyodorov, who left the cabinet 
this year. 

The G7 countries had relaxed 
their pressure on the IMF and the 
other international financial 
institutions such as the World 
Bank to lend to Russia after the 
December elections, as the out- 
come led them to believe that 
further reform was unlikely. 

Mr Chernomyrdin has drawn 
up a list of companies to be 
declared bankrupt, has enthusi- 
astically endorsed the sell-off of 
state and collective farms to indi- 
viduals, and says he will repel all 
advances from the military. 

Continued on Page 14 Welcoming hands greet Nelson Mandela in Mmabatho, capital of Bophuthatswana. Page 14 


Reuter 


EU expansion talks face collapse as UK holds out 


By David Gardner hi Brussels 
and Roland Rudd in London 

Talks among European Union 
foreign ministers to settle the 
row over power-sharing if the 12 
take in four new members next 
year were on the verge of col- 
lapse last night, with the UK 
holding out for yet another meet- 
ing to settle the issue. 

Any further delay on the vot- 
ing rights dispute might sink 
chances of Austria, Finland, Nor- 
way and Sweden joining the EU 
next January as planned, and 
brake the momentum behind the 
Union's expansion. 

The UK, which with Spain is 
resisting any dilution of its right 
to block decisions in the EU 


Council of Ministers, predicted 
last night that further negotia- 
tion would be needed - possibly 
at a summit of European leaders. 

A senior British government 
official said: “There will be 
another meeting, but we don't 
know the level, the time or the 
place." But he made clear that 
the government could not yet 
work its way around the voting 
rights dispute, which it acknowl- 
edges may sabotage prospects for 
the “wider Europe" London says 
it espouses. 

"You have to realise how (any 
weakening of UK veto rights] 
could play in Westminster" 
among right-wing. Europhobic 
members of the British parlia- 
ment, the official said. 


Mr John Townend, chairman of 
the powerful Tory backbench 
Finance Committee, said opposi- 
tion to watering down Britain's 
rights was spread right across 
the party. “This is a case of 
blackmail, to put it bluntly. The 
Commission is proposing 
watering down voting rights to 
have enlargement of the Commu- 
nity." 

Mr John Major, the UK prime 
minister, asked in parliament to 
clarify the government's negotia- 
ting position at the foreign minis- 
ters' meeting, said: “What we 
need to ensure is that democratic 
legitimacy and the rights of 
minorities are sustained within 
the European Union." 

One right wing backbencher 


said privately: “The prime minis- 
ter has been told that he risks his 
majority in the Commons if he 
allows the Foreign Office to agree 
to any compromise over our 
blocking veto." 

However, Sir Norman Fowler, 
Conservative party chairman, 
predicted that there would be no 
revolt by Conservative Euro-scep- 
tics over UK voting rights in 
Europe. 


In Brussels, enormous pressure 
was being placed on the British, 
including calls for a vote that 
would expose them as the obsta- 
cles to the move from a Europe of 
12 to 16. Germany, France, the 
Netherlands and Denmark all 
suggested that those who 
opposed the will of the EU major- 
ity on how to manage this first 
stage of expansion should “go 
away and reflect”, as the Da- 


nish foreign minister, put it. 

Hie UK wants to change the 
proportion of weighted votes in 
the Council of Ministers needed 
to block EU laws and regulations. 
Currently, 30 per cent of the 
votes - distributed roughly 
according to size among member 
states - can form a “blocking 
minority". 

Ian Davidson, Page 12 


Jobs summit promotes free 
trade and labour flexibility 


By George Graham, David 
Goodhart and Stephanie 
Flanders in Detroit 

Ministers from the Group of 
Seven leading industrial nations 
agreed yesterday that free trade, 
labour market flexibility and a 
stable economic environment 
were essential to tackle the per- 
sistent unemployment that has 
afflicted all their economies. 

However, the unprecedented 
two-day conference in Detroit 
produced “no single solution, no 
one idea or action that will work 
for every country," said Mr Lloyd 
Bentsen, the US Treasury secre- 
tary and meeting c hairman. 

The conference yielded a con- 
sensus that countries must bal- 
ance the right macroeconomic 
policies with measures to attack 
structural joblessness. 

“Structural reforms can make 
our labour markets and employ- 
ment systems Ear more adaptable 
to change. We need, carefully and 
in our own ways, to pursue poli- 
cies to take down barriers and to 
strengthen our markets,” Mr 
Bentsen said. 


Ministers agreed on the need to 
improve the education, training 
and skills of their workforces, 
bat Mr Bentsen warned that the 
G7 countries could produce all 
the highly trained workers they 
wanted, "but it does no good 
unless we've created the climate 
in which the corporate world has 
jobs waiting for them”. 

■ Lucky few hog the Jobs hi the 

summit city Page 4 

■ Editorial Comment Page 13 

The Detroit conference’s con- 
clusions will form the starting 
point for the sherpas preparing 
July's summit meeting of G-7 
leaders in Naples. But beneath 
the apparent harmony, divisions 
emerged, particularly on the rela- 
tive Importance of government 
and the private sector. 

“I won't say that there were 
sharp exchanges, but there were 
some courteous sharp disagree- 
ments." said Mr Robert Reich, 
the US labour secretary. 

Participants said the meeting 
had brought together labour and 


finance ministers who in some 
countries seemed scarcely to 
speak to each other, and tbe mix 
had produced some very frank 
discussions. 

Among the most radical ideas 
that received support was a sug- 
gestion to allow employees to 
work a fixed number of hours in 
the year, rather than each week, 
allowing greater flexibility both 
for employers to deal with sea- 
sonal variations and for workers 
to plan their own free time. 

“At a time when modern tech- 
nology gives us more and more 
flexibility, why should work time 
still be planned as it was at the 
beginning of the industrial revo- 
lutionr said Mr Henning Chris- 
toph ersen. European Commission 
vice-president. 

Mr Bentsen said ministers had 
agreed to ask the Paris-based 
Organisation for Economic 
Co-operation and Development to 
study the relationship between 
productivity, technology and job 
creation and to expand a study 
already under way to improve 
statistics on joblessness in the 
industrial world. 




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UK Nam 

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U* 2Z-W GoUUste* 28 

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i —Sept 


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whether you're raising j£lm or ^lOm. 

And because you’re the customer we think yon 
should decide if and when it’s time to sell - an approach 
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Whether you require equity capital for a manage- 
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Trevor Jones or a member of his team on 071-606 6474. 

You’ll find they're well worth talking to. 


GRESH 


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Member of Tbe Sccartua ami Fuuim Aotbttiry. 


lWTUl . fsiuAMn A! .TIM ES LIMITED 1994 No 32,318 Week No 11 LONDON ■ PARIS - FRANKFURT - MEW YORK - TOKYO 




-/ 






NEWS: EUROPE 


Balladur 
settles 
feud on 
defence 

By David Buchan In Parts 

Prime Minister Edouard 
Balladur has settled a feud 
between bis defence and bud- 
get ministers over future mili- 
tary expenditure by deciding 
that armaments spending 
should rise annually by 0-5 per 
cent in real terms imtn the end 
of the century. 

Mr Balladur engineered the 
compromise as the government 
prepares to present to parlia- 
ment next month the 1996-2000 
military framework law. This 
does not absolutely tie a gov- 
ernment's h q p ds Over anrinnl 
defence budgets, but since 
France is likely next year to 
elect a president from the 
ranks of the governing coali- 
tion - even perhaps Mr Balla- 
dur - it will be a good guide to 
future defence spending. 

Mr Francois Leotard, the 
defence minister, had pushed 
for a rise In military equip- 
ment spending of 2L5-3 per cent 
a year, taking as his text the 
recent government-approved 
defence white paper. It said 
real “annual growth of at least 
3 per cent" was needed to fond 
all programmes underway, 
though it acknowledged 
greater efforts could be made 
to keep arms suppliers' 
charges down and foresaw 
some savings through “a cer- 
tain pause” in modernising I 
France’s nuclear deterrent. I 
Mr Nicholas Sarkozy, the 
budget minister, argued that 
the armed forces should be 
subject to the financial 
discipline as the dvil sector. 
The government’s five-year fis- 
cal programme, designed to fit 
France to enter monetary 
union with Germany and other 
European partners by the late 
1990s, calls for an average 0.4 
per cent cut in public spending 
in each of the next three years. 

Mr BaUadurts decision to 
allow arms spending to con- 
tinue to rise modestly will 
appease the strong defence 
lobby inside the government 
coalition, but win mean more 
severe cuts in civil pro- 
grammes. France's 1994 
defence equipment budget of 
FFrl00.4bn (£ll_5bn) is already 
higher than that of other Euro- 
pean allies, with Britain plan- 
ning to spend about 60 per cent 

- and Gennany only 27 per cent 

- of the French level this year, 
according to French defence 
officials. 

President Mitterrand's two- 
year old moratorium on 
French nuclear tests in the 
south Pacific has provoked 
strong complaints from within 
the government majority, but 
without saving much money 
because the government has 
started research into labora- 
tory simulation of such tests. 
The Elysfie yesterday wel- 
comed President Clinton’s deci- 
sion to prolong until autumn 
1995 a similar moratorium. 

Another general drain on the 
defence budget has come from 
France's heavy involvement in 
United Nations peace-keeping 
operations in ex-Yugoslavia 
and elsewhere. Last year this 
cost France FFr7bn, of which 
only FFrl.5bn will be reim- 
bursed by the UN. 

• The German government 
yesterday approved new guide- 
lines for the armed forces 
which call for the build-up of 
rapid-reaction forces under 
Nato’s post-cold war strategy 
of crisis management, Reuter 
reports from Bonn. 

The guidelines, laid down in 
a policy document to be pub- 
lished next month, spell out 
Germany’s new international 
role after unification and detail 
changes in the military force 
structure. “This is the first 
bunding block of the future 
Bundeswehr (Federal Armed 
Forces),’’ Mr Volker ROhe, 
defence minister, said. There 
were instances in international 
crisis management where “mil- 
itary means are necessary to 
prevent, limit or end violence.” 
he said. 


THE FINANCIAL TIMES 
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Merchant bankers brave disdain of Athens 

The Greek socialists know they must pay the price as telecom sell-off brings back the fee seekers, writes Kerin Hope 

U ndeterred by Greece's foil- tory last year, sacked the previous hostility towards foreign investment of another 14 per cant of the com- tors from SOL, a quasi-government involved, have submitted free 

ure last year to carry out a government’s two leading advisers bankers within the ruling Panhel- pauy on the Athens stock exchange, body of Greek-sworn accou n t a nts. posals. Howeve r, co nfldei 

planned partial flotation of on privatisation, N M Rothschild lenic Socialist Movement (Pasok). expected to raise about DrlOObn strong among newcomers, > 


U ndeterred by Greece's fail- 
ure last year to carry out a 
planned partial flotation of 
thw state telecommunications com- 
pany, OTE, western investment 
bankers are pushing back into 
Athens for another by. 

With the socialist government 
committed to relaunching its con- 
servative predecessor’s privatisation 
programme, to help cover a rapidly 
widening budget deficit, the sale of 
25 per cent of OTE is being set pro- 
visionally for October. 

However, plans for the notation 
are still vague, not least because the 
socialists, after their election vie-. 


tory last year, sacked the previous 
government’s two leading advisers 
on privatisation, N M Rothschild 
and Credit Suisse First Boston, 
without appointing a replacement 

Moreover, in the absence of Mr 
Gknrgos Gerniimatas, the economy 
minister, who is undergoing treat- 
ment for cancer, the prime minister, 
Mr Andreas Papandreou, has not 
indicated who will be responsible 
for awxuding the mandate for the 
OTE sale. 

It will be a delicate political deci- 
sion, given the opposition to the 
sale voiced by OTE's powerful trade 
union, and a prevailing mood of 


hostility towards foreign investment 
hankers within the ruling Panhel- 
lenic Socialist Movement (Pasok). 

A senior socialist official said: 
“We’re naive perhaps, but we were 
stocked at the size of the fees the 
conservatives were prepared to pay 
to foreign consultants.” 

B oth Rothschilds and CSFB 
were advising the previous 
government on its plan to 
sell a 85 per cent strategic stake in 
OTE to an inte rnatio nal operator. 

In addition, CSFB and J Henry 
Schroder Wagg were appointed 
global co-ordinators for the flotation 


of another 14 per cant of the com- 
pany on the Athens stock exchange, 
expected to raise about DrlOObn 
(£ 274m). Rothschilds, together with 
Morgan Stanley and Paribas, were 
originally appointed joint lead man- 
agers of the offering's international 
tranche. But both the sale and flota- 
tion were cancelled when the con- 
servatives lost power in the general 
election last year. 

The socialists’ disdain for interna- 
tional advisers ex t en d ed to firing 
Arthur Andersen, the accountants, 
who were preparing OTE’s first 
audit np to international standards. 

They are to be replaced by andi- 


N evertfaeless, ec on o m y minls- 
try officials now accept the 
need to appoint an interna- 
tional bank as co-ordinator to 
ensure the success of what will be 
the largest local offering to date. 

However, the ministry is already 
admitting flat political criteria will 
affect the final choice. “Obviously, 
we can’t reappoint the old team, 
even though a few players may be 
asked to participate again,” a gov- 
ernment adviser said. 

Almost an the banks previously 


involved have submitted fresh pro- 
posals. However, confidence is 
strong among newcomers, among 
them Bear Stearns, Lehman 
Brothers, Barings and Barclays de 
Zoete WeddL 

The government hopes to realise 
Dc250bn from the OTE sale, with up 
to 60 per cent of the issue being 
placed abroad. 

"They appear to be counting on 
the current appetite for telecoms 
issues FTPprcg international inves- 
tors to offset delays in restructuring 
old-fashioned management and a 
lack of transparency in the 
accounts,” said one analyst 



SPD election victor 
puts party on alert 


A tradesman working yesterday on part of the Iron Curtain which is being rebuilt as a tourist attraction near the town of 
Hbtensleben, west of Berito. Most of the barrier was torn down after the Beilin Wall was breached on November 9, 1989 **** 

GERMAN TOWN ANGERED BY NEW IRON CURTAIN 


The euphoria in the eastern German town 
of Hbtensleben, some 185km west of Ber- 
lin, when the Iron Curtain was disman- 
tled has turned to amazement and anger 
since their local leaders derided to rebuild 
part of it as a monument to the cold war, 
Reuter reports from Berlin. 

Eager to halt the decline of Hbtensleben 
since German unification, a small group 
of civic dignitaries last year began 
rebuilding a 330-metre (L, 080ft) section of 
the “death strip” which kept east Ger- 


mans from escaping to the west Hoping 
to slow a sharp rise in unemployment and 
reverse a demor alising westward migra- 
tion of many of its 2,600 citizens, they 
decided to capitalise on the town’s Iso- 
lated location daring the cold war with a 
unique tourist attraction. 

They have spent DM135,000 (£52^500) 
- some of it government money - to 
repair and rebuild it complete with guard 
towers, spotlights and attack dogs. 

“It’s pure insanity,” said Dr Franz 


Wehe, a retired surgeon who lives next to 
the rebuilt wall. “That damn thing was 
here for 30 years so why do we have to 
look at it now?” Nearly 500 people In 
HOtensleben have signed petitions protest- 
ing against the monument. 

The monument was to have been com- 
pleted by 1996 but the protests brought a 
quick halt to federal funding. Annoyed 
and undaunted, the proponents are seek- 
ing DM300,000 in private tending to com- 
plete tiie monument. 


By Quentin Pee) hi Bonn 

A supremely self-assured Mr 
Gerhard SchrOder, the victori- 
ous Social Democrat prime 
minister in the state of Lower 
Saxony, swept into Bonn yes- 
terday to warn his party col- 
leagues against over-confi- 
dence in their own coming 

election « n np«ignt! 

It was a moment of vindica- 
tion for Mr SchrOder, who was 
defeated last year in the con- 
test to Imwwrw waHnmil le w for 
of the Social Democratic party 
(SPD) by the altogether more 
modest Mr Rudolf Scharping, 
the state premier of the Rhine- 
land-Palaflnate. 

This time he was coming 
back as a winner from the very 
first poll of Germany’s 1994 
election marathon, which win 
see 18 more polls culminating 
in the general election on Octo- 
ber 16. 

His emergence from Sun- 
day’s state election in Lower 
Saxony with an absolute 
majority - albeit only of one 
seat - means that he can rule 
without any coalition partner. 
That is a luxury enjoyed by the 
g overn m ent in only five other 
states of the 16 in tiie federal 
republic. 

Mr SchrOder was magnani- 
mous in his victory. Hie paid 
tribute to the Greens who had 
been bis partners in the first 
red-green coalition in Ger- 
many, and will undoubtedly 
still be needed to provide seme 
support for his wafer-thin 
majority. At the end of Sunday 
night, his SPD had won 81 of 


the 161 seats in the Hanover- 
based state parliament, against 
67 for the Christian Democratic 
Union, and 13 far the Greens. 

The biggest losers were the 
Chancellor Helmut Kohl’s 
GDU, which, lost 5.6 percentage 
points to win just 36-4 per cent 
of the vote, and the Ftee Demo- 

One man had shown 
he could make a 
difference for die 
CDU; the arrival of 
Mr Kohl hims elf 
showed that the 
ruling party could 
still boast a notable 

campaig ner 

erotic Party (FDP), his coali- 
tion partner in Bonn, which 
foiled to gain the minin um i 5 
per cent needed to win any 
seats at all. 

Yet Mr Schrader's main 
warning was to his own SPD 
party colleagues, not to relax 
in the forthcoming election 
campaigns and regard them as 
good as won. 

And lie spoke out strongly 
a gainst national policies Which, 
might prove disastrous vote- 
losers in the campaign, such as 
a national speed limit an' the 
autobahns, and an increase in 
taxes an petrol and oil prod- 
ucts. 

Mr SchrOder, whose victory 
is seen very much as a per- 
sonal triumph, admitted he 


was faring an exhausted CDU 
in Lower Saxony, with a seri- 
ous shortage of personalities in 
its leadership. 

Yet one man had shown he 
could make a difference in the 
last two weeks of the cam- 
paign, he said: the arrival of 
Mr Kohl himself showed that 
the ruling party could still 
boast “a notable and battle- 
hardened election, campaigner" 

who FfamM never he underes- 
timated. 

It was no doubt a neat 
reminder to bis erstwhile SPD 
rival, Mr Scharping, about the 
harsh struggle ahead. Mr 
SchrOder pledged his loyal sup- 
port to bis national leader, but 
he firmly ruled out any future 
role in Bonn for htmaeif- 

He was speaking just five 
days before the next test in the 
plartiim wtaraHin r^ when 2.1m 
voters in the state of Schles- 
wig-Holstein must elect new 
local councils an S unday - »m*i 
where the SPD itself is faring a 
haririaflh in the polls. 

State officials of the CDU are 
hoping to push the SPD into 
second place and to emerge 
came again as tiie largest party, 
reversing the positions of 1990. 

The biggest loser from the 
Lower Saxony election was the 
Free Democratic party, which 
failed to gain even tin mini- 
mum 5 per cent needed to win 
seats in the state parliament 

And in spite of its loss of 
power in the coalition, the big- 
gest winner was the Green 
party, which pushed up its 
vote from 5.5 to 7.4 per cent 


Exports boost for engineering sector in Germany 


By Christopher Parities In Frankfort 

Export growth will help Germany’s 
engineering industry increase sales 
by 2 per cent this year. But a further 
100,000 jobs will have to go, and a 
sustained recovery will not emerge 
until 1995 and 1996, according to the 
VDMA industry association. 

Stronger growth was not possible 


because of weak domestic demand, 
and the industry’s average net 
return on sales of less than 1 per 
cent was too low to finance invest- 
ment, modernisation and new jobs, 
Mr Jan Kleinewefers, association 
president, said. 

Growing demand from outside 
Europe for German machinas had 
been apparent for a year, and in the 


past two months there had been 
signs of a change for the better in 
west European orders, which were 
no longer slowing, he said. 

However, average capacity utilisa- 
tion was still at a record low of 75.6 
per cent at the end of Last year. Only 
four sectors - steel plant, textile, 
packaging and woodworking 
machinery - were working at satis- 


factory rates of 85 per cent or more. 
Highlights of last year - the worst 
since the war, and marred by a 11 
per cent slump in industry-wide 
sales to DM209bn (£81 .3 bn) - 
included a 10 per emit increase in 
sales to the US, Mr Kleinewefers 
said. The US was now the industry’s 
biggest single foreign market. 
Exports to China doubled to DM4bn, 


helping bolster sales to east Asia by 
15 per cent- However, domestic 
orders' fell a real 15 per cent, and a 
drqp of 13 per cent in demand from 
other European Union countries 
meant total foreign orders rose only 
1 per cent 

Turnover from export deliveries 
fell a real 7 per cent to DMllOhn, but 
machinery imports also shrank 12 


per cent leaving the sector showing 
a trading surplus of more than 
DM50bn. Between tiie onset of the 
recession in 1990 and the end of last 
year, the plan t and machiner y indus- 
tries -second only in terms of sales 
to the automotive sector-bad seen 
output fall by 20 per cent Some 
200,000 jobs had been lost in the west 
of the country. 


Consumers boycott debit cards in protest against surcharge 


Russia to raise tariffs 


Portuguese take on banks on range of imports 


By Peter Wise hi Lisbon 

Portugal’s hard-pressed 
consumers took on the coun- 
try's big banks yester- 
day - organising a 24-hour boy- 
cott of their widely used direct 
debit cards in protest at an 
attempt by the banks to charge 
commission on use of the 
cards. 

They were responding to an 
angry appeal by consumer 
associations, supermarket 
chains, petrol stations and 
other businesses to protest 
against a decision by banks to 
charge a commission of 1 per 
cent on purchases made with 
the cards. 

Shop owners said banks 
would earn EscSbn (£30.7m) to 
EsclObn a year from the 
charge, due to be levied from 
April. They warned they would 
be forced to pass on the extra 
cost to consumers because 
retail profit margins were 
already low. 

The Multibanco card system 
in Portugal, considered the 
most advanced in Europe, 
allows consumers to shop, pay 


utility bills, dine out and book 
train tickets without using 
cash or cheques. The cost is 
immediately debited from their 
bank accounts and paid into 
the account of the supplier. 

. The system, run by Socie- 


that led the call for a boycott 
“They all plan to introduce the 
samp, charge at the gamp limp 
without offering consumers 
any choice." 

Mr Luis Cid, SIBS director, 
said it was natural that hanks 


‘We want banks to be flooded with 
cheques as a result of the boycott 
to remind them of what a boon the 
Multibanco system has been to them 9 


dade Interbancaria de Services 
(SIBS) far almost all Portu- 
guese banks, provides 3,000 
automatic teller machines 
countrywide where cardhold- 
ers can withdraw and deposit 
money, consult their accounts, 
and order cheque books. Retail 
outlets are equipped with 
30,000 electronic points of sale 
(Epos) integrated into the sys- 
tem. 

“We will take the banks to 
court for operating a cartel," 
said Mr Jorge Morgado of the 
Deco consumer association 


should seek to regain opera- 
tional costs through a charge 
for a service that has been free 
since it was introduced in 1985. 
Three years ago British consul- 
tants estimated each Multi- 
banco operation cost EslOO, 
considerably less thaw the cost 
of processing a cheque. 

The decision to levy a charge 
on card use comes as falling 
interest rates are sharply 
reducing earnings from loans 
and deposits and hanks are 
seeking to improve their bal- 
ance sheets through commis- 


sions and fee-based income. 
However, the use of cards has 
allowed banks to reduce staff 
levels. It has also improved ser- 
vices for customers, who until 
recently had to wait in long 
queues for the simplest of 
banking services. 

“We want banks to be 
flooded with cheques as a 
result of the boycott to remind 
them of what a boon the Multi- 
banco system has been to 
them," said Mr Morgado. He 
said Deco had been over- 
whelmed by messages of sup- 
port and challenged a state- 
ment from SIBS that use of the 
Multibanco system yesterday 
was normal or even above 
average. 

Paying for his lunch yester- 
day with cash instead of a card 
as usual . Mr Paulo Garcia, a 
computer engineer said: “The 
banks have enticed us into the 
Multibanco system over the 
past eight years by levying no 
charges. “Now they want us to 
pay. I support the boycott and 
will stop using my card for 
purchases altogether if they go 
ahead with the charge.” 


By John Uoyd in Moscow 

Pressure from Russia’s 
powerful industrial and 
agricultural lobbies, coupled 
with fears of rapidly falling 
government income, have 
persuaded the government to 
bring in sweeping new import 
tariffs. 

The tariffs, the subject of 
several decrees not yet 
published, are reported by tiie 
Interfax news agency to raise 
the average tariffs from 6-7 
per cent to 15 per cent 

All imported food will be 
subject to a 15 per cent tax, 
while white sugar will carry a 
20 per cent tariff and 
cigarettes a 30 par cent import 
tax. Tariffe on cars and 
perfume will also go up 
sharply; the changes will 
mean that foreign cars will 
cany a tax of between 40-60 
per cent 

The move appears to mark a 
success for Mr Alexander 
Zaveryukha, the deputy 
premier with responsibility to- 

agriculture, who had argued 
for a 25 per cent rise in white 


Russia will not only cut grain imports to a minimum this year, 
but intends to export 2m tonnes, the deputy agriculture minister, 
Mr Vladimir Shcherbak, told a government commission mapthig , 
Reuter reports from Moscow. 

RIA news agency quoted him as saying domestic supplies were 
sufficient to meet most demand, but there would still have to be 
some small imports of certain types of grain. 

These should include 100,000 tonnes of com seed, already cov- 
ered by preliminary agreements and waiting in western ports to 
be delivered, Mr Shcherbak said. But foreign companies were 
seeking finance ministry payment guarantees before making 
shipments, and the agreements could still fall through, he said. 

Russia imported about Zlm tonnes of grain in 1993, down from 
25m tonnes in the previous year. 

Mr Shcherbak gave no details of the planned exports. 


sugar prices to protect 
domestic producers. At tiie 
same time, however, tariffs on 
Im po rte d spare parte needed to 
retool industry have fallen to 
5 pear cent 

The other main reason for 
the increase in tariffs is the 
rapidly decline in government 
incomes, with the take from 
taxes running at little over 
half of what was expected. The 
shift to tax foodstuffs which 
are bought largely by the 
minority of wealthy Rnwri«n« 
and the foreign community 


who buy at largely 
forelgn-owned shops can be 
put through With a uiiniinirm 
of political pain. 

At the same time, the riudee 
of goods which are subject to 
the new tariffs shows that the 
government has not 
abandoned itself to wholesale 
protectionism, leaving large 
sectors unprotected and 
imposing on only a very few 
commodities - weapons, 
caviar, matches and 
concentrated alcohol - a 100 
per cent tariff increase. 


Suzuki cutbacks 


By Tom Bums in Madrid 

The future of Suzuki's Spanish 
subsidiary remained in doubt 
yesterday after workers flatly 
refused to negotiate drastic job 
cuts demanded by the Japa- 
nese company. 

Suzuki told union leaders it 
intended to reduce the labour 
force at its main plant in Un- 
ares by 70 per cent from 2,437 


to 941. The company also plans 
to reduce production of the 
four-wheel drive vehicles that 
the factory produces by 50 per 
emit to 25,000 units this year 
and to impose a two-year wage 


Earlier this week Suzuki said 
it would drop a threat to dose 
the plant If unions agreed to 
job cuts. Santana, which is 
some 80 per cent owned by 


Suzuki, applied for receiver- 
ship last month saying it had 
sustained accumulated losses 
of Pta21bn ($l5lm) in the past 
three years. 

Union leaders said Suzuki 
had delivered a “take it or 
leave it” ultimatum which was 
completely unacceptable. They 
said there was no point in far- 
ther talks and that they would 
now concentrate on mobilising 


the Linares area in southern 
Spain, where Santana repre- 
sents the sole industrial activ- 
ity and provides for more than. 
30,000 indirect jobs. 

The anger in Linares has 
been fuelled by the failure by 
both Suzuki and the regional 
government to implement an 
agreement signed last year. 
Suzuki had agreed to wage 
increases of between 4-6 per 


cent and to raise output to 
50,000 units a year, while the 
authorities had promised subsi- 
dies. 

The Santana union leaders 
are understood to be preparing 

big (I pmfmglTaUnTK tn Madrid 
at the weekend when the rul- 
ing Socialist party meets to 
holds its national congress. 
Yesterday, plant workers pot 
up road blocks around Linares 


and temporarily occupied gov- 
ernment nffirwa In the nearby 
provincial capital of Jaen. 

The future of Santana, which 
previously made Land Rover 
vehicles, has been In doubt 
since early last year. 

The Issue came to a head 
when the company filed for 
protection from creditors on 
February 18, provoking fierce 
public reaction in Linares and 


the surrounding region. 

The strength of the Santa™. 
protest against the parent com- 
pany Suzuki has created con- 
cern in the government about 
its possible impact on the di- 
mate for foreign inva dinpnt m 
Spain. 

The dispute has also gener- 
ated political worries, with 
regional elections in Andalucia 
less than three months away 


I •: •• 


dfipJJl LM> 



FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


MEWS: EUROPE 


EUROPEAN NEWS DIGEST 

French car sales 
drive pays off 

Government measures to stimulate the French motor industry 
I?n V ^S ron,pted a response and should result in at least 
150,000 extra car orders this year. Mr Gerard Longuet, the 
industry minister, said yesterday. The measures include a 
payment from the government of FFr5.000 (£572) for car own- 
ers who trade in vehicles more than ten years old to buy a 
new one. helping to prompt 54,000 extra orders in February 
compared with January, according to Mr Longuet He forecast 
continued improvement and estimated that total car this 
year should exceed 1.9m, compared with 1.73m in 1993. The 
measures, which also include extra tax breaks for company 
fleets, have been matched by discounts freon car producers. 
French manufacturers have benefited most, with Renault and 
Peugeot enjoying a stronger increase than the average 35 per 
cent. Mr tanguet said it was vital to revive car sales, which 
feu more than 18 per cent last year. Mr Longuet said that it 
was vital to revive the depressed car sector, which was 
severely hit by recession last year and contracted by more 
than 18 per cent ‘'The automobile sector is one of the princi- 
pul motors of the economy and represents more th an one 
million jobs" he said. “It is an ideal target to help stimulate 
consumption.” John Ridding, Paris. 

Hedge fund row 'exaggerated’ 

The importance of hedge funds to the financial markets hac 
been exaggerated in the recent debate over whether such 
funds should be regulated, according to Mr Edgar Meister, a 
member of the Bundesbank board. The main wish of the 
world's central bankers, including the Bundesbank, was for 
more transparency to observe more carefully the impact of the 
growing derivative business on the markets, specifically on 
market interest rates and on money supply, Mr Meister 
Hedge funds were only one of several powerful forces contri- 
buting to turbulence in the bond markets. There were also 
mutual funds, banks and brokers, Mr Meister «airf Private 
investors should be calmed by the feet that the volatility in 
the capital markets was only temporary. Germany did not face 
big credit risks on account of hedge funds because the borrow- 
ing activity of such funds was regulated and limited in Ger- 
many, unlike in the US, Mr Meister said. AP-DJ, Frankfurt 

Mayor may lose immunity 

Tbe French National Assem- 
bly is to consider a Judge's 
request to strip Lyons Mayor 
Michel Noir (left) of his par- 
liamentary immunity for sus- 
pected embezzlement. The 
request from Judge Philippe 
Courroye was a further blow 
to the mayor of France's sec- 
ond city, once regarded as a 
possible presidential con- 
tender. Mr Courroye said he 
wanted to place Mr Noir 
under judicial control while 
he investigates suspicions the 
mayor used up to FFr7m 
(£800,000) in city funds for his 
own election campaign. Reu- 
ter, Paris. 

Krona to keep on floating 

The Swedish krona is likely to float for an extended period and , 
remain outside the European Union's Exchange Rate Mecha- 
nism. Mr Thomas Franzen, deputy governor of Sweden's cen- 
tral bank, said yesterday. “The lesson we have learned from 
developments in recent years is that we must first get tbe 
(Swedish) economy in order," he told a seminar in Stockholm. 
He predicted that European interest rates would continue to 
decline. “Monetary policy is unchanged in Europe despite the 
recent turbulence Lin markets], which means continued suc- 
cessive interest rate cuts." AP-DJ, Frankfurt 

Museum fee ‘discriminatory’ 

Spain should stop letting its citizens visit its museums free of 
charge because the practice of only charging tourists is dis- 
criminatory, tbe European Court of Justice ruled yesterday. 
Spaniards, foreigners living in Spain and holidaymakers under 
21 can visit any state museum free of charge, but foreign 
tourists over 21 have to pay. The European Commission took 
the Spanish government to court arguing it was breaking 
European law by discriminating against people on the grounds 
of nationality. Charging foreigners effectively restricted their 
freedom of movement since museums were “one of the deter- 
mining reasons" tourists were attracted to a country, the 
Commission said. Spain said it believed its open doors policy 
was not discriminatory since it included some nationals from 
other EU states. Reuter. Luxembourg. 

ECONOMIC WATCH 



German retail sales edge up 


Western Germany 

Ratal sates volume 
Annual % chanoe 
6 — 


Retail sales in western 
Germany were 2 per cent 
higher in January than in the 
same month last year. Sales 
in the whole of Germany 
were up 3 per cent, 2 per cent 
higher than in December. The 
increase was led by a 14 per 
cent year-on-year rise in sales 
of cars and components. Phar- 
maceuticals sales were up 11 
per cent, and home furnish- 
ings 9 per cent There was a 1 
per cent drop in sales of food, 
drink and tobacco, and a 4 
per cent fall in textiles, cloth- 
ing and shoes. Overall eco- 
iaa2 98 94 nomic activity in Germany 

source; cwtastream “increased noticeably" 

around the turn of the year, the economics 
ministry cited growing foreign demand, lively" housebuilding 
and "further clear progress" in eastern Germany^ recovery as 
factors underlying this resurgence. 

■ Russia's industrial output rose 23 per cent in February 
from January, but was 24.1 per cent below the MQfayrar 
earlier the sharpest drop since start of reforms in 1992. Some 
4 280 enterprises shut down some or all production last month. 

■ Spanish industrial producer prices r ? se . “J 

JarmanT compared with a 02 per cent rase in December and 
S«nt in Janua ly 1993. The monthly increase brings the 
rate for the year to 3.6 per cent in January. 



Ciller to pay at polls for cash crisis 

John Murray Brown on the Turkish government’s first political test 
after presiding over a sharp fall in the lira and a liquidity squeeze 


T urkey’s prime minister, 
Mrs Tansu Siller must 
have told them their 
cheque was in the post. That at 
least is how one observer 
explains the gloomy feces of 
Turkish motorway contractors 
when they left a meeting with 
tbe prime minister still owed 
seven months in payments. 

After less than a year in 
office, Mrs Ciller’s conserva- 
tive-led coalition is facing a 
desperate search for cash to 
meet its ongoing expenses. 

It is a problem that will 
almost certainly affect tbe per- 
formance of Mrs pilfer ’s Troth 
Path party (DYP) in municipal 
elections across the country on 
March 27. 

Turkey is in the middle of 
the most damaging . financial 
crisis since the hanking col- 
lapse of the early 1980s. After a 
decade of capital market 
reform, recent currency turbu- 
lence has underlined just how 
vulnerable the economy is to 
policy error. 

With interest rates on gov- 
ernment paper having risen to 
125 per cent and the interna- 
tional bond markets for devel- 
oping country debt suffering 
the jitters in the wake of the 
rise in US rates, Turkey is find- 
ing it increasingly costly to 
borrow. Privatisation receipts 
have not been as large as proj- 
ected. Meanwhile, most of the 
tax changes recently intro- 
duced will not have an impact 
on revenues until 1995. 

The government's problems 
deepened last week when it 
was forced to “poll" its S750m 
global bond issue. There are 
civil servants and public works 
contractors to pay, form prices 
to subsidise, and debts to ser- 
vice. and bankers are worried a 
big liquidity crunch is on the 
way. 


Journalists 
strike in 
pensions 
protest 

By Robert Graham in Rome 

Italian journalists yesterday 
began a four-day strike in pro- 
test over plans by the damp! 
government to place some of 
the surplus in the journalists' 
pension fund in the main state- 
operated pensions scheme. 

The strike provoked dismay 
among political parties who 
have been relying on the media 
for coverage in the final 11 
days of the general election 
campaign. 

Tbe stoppage will affect all 
newspapers today and Thurs- 
day, and television and radio 
on the following two days. 

The stoppage Is the result of 
a long-running battle between 
the journalists union and the 
government over the pension 
fund. As part of an effort to 
boost tbe fast depleting coffers 
of the state-operated pension 
scheme, the Ciampi govemm- 
ment decided last year to raid 
the surpluses of separately 
operated, but state-run entities, 
controlling the pensions of the 
various professions. 

The strike conies as Italian 
journalists have for tbe first 
time come under investigation 
for corruption. Three promi- 
nent economic writers are 
being investigated by Milan 
magistrates for allegedly 
receiving money from the Fer- 
ruzzi-Montectison group. 

The investigations follow 
revelations by Mr Carlo Sama, 
the former managing director 
of Ferruzzi -Montedison who 
has admitted large-scale illicit 
funding of political parties. 

Mr Sama said he had submit- 
ted to Milan magistrates the 
names of several journalists 
who had been paid sums of 
money to help improve Ferruz- 
zi-Montedison's image. 

Tbe journalists deny the alle- 
gations. They are Mr Giuseppe 
Turani, of La Repubblica, Mr 
Osvaldo De Paolini, former 
City editor of the business 
daily Sole-24 Ore, and Mr Ugo 
Bertone of La Stampa. 

Italian journalism has claime d 
much credit for exposing the 
corrupt links between business 
and politics. 


Notice to foe Bondholders of 

CAPCOM CO., LTD. 

(toe “Company”) 

Yen 12 000,000,000 1 V* per cent. Convertible Bond* 1997 

’ (foe "Bonds") 

Adjustment of Conversion Price to be 
mode as a result of the Stock Spilt 

■ that with respect to the issuance of new shares for a Stock Spilt authorised 
i mat wtui ~ «~y. 1994, the nharehotows 

l be located 
i following 

adji^tmenr of the Conversron rr^ *' fQ °* 

T«m«i and Condiuons of fo® Bonds, 
terms ana adjustment Yen 8.713.00 per share 

U PriS SStSStment Yen 7^60.80 per share 

1] iMS— 1st « l994(Japan time) 

CAPCOM CO., LTD. 

Osaka. Japan 



16th March. 1994 


The road builders are just 
the latest creditors to come 
knnpfrmg on the government's 
door. The contractors had to 
settle for a package of tax 
relief and three-year bonds in 
lieu of the $7O0m owed for 
work completed. The work pro- 
gramme for 1994 has been 
sharply curtailed 
The government's response 
to the crisis and tbe run an the 
lira has been far from convinc- 
ing. Sir Leon Brfttan. tbe Euro- 
pean trade co mmiss ioner, dur- 
ing a visit to Ankara last 
month, urged the Turkish 
authorities to introduce auster- 
ity measures to underpin the 
gains from the 12 per cent 


local and international confi- 
dence in Mrs Color's leader- 
ship. The bold rhetoric that 
accompanied her appointment 
has never been matched by the 
reality of her policies. Her 
reformist instincts have been 
frequently blocked by opposi- 
tion from her coalition part- 
ners, the Social Democratic 
Populists. 

"Everyone has lost out," said 
one disillusioned Turkish busi- 
nessman." Tbe central bank's 
reputation has been damaged, 
so has the Treasury’s. Reserves 
are depleted And the small 
Investor has got badly burnt." 

Polls suggest that in the 
municipal elections on March 


The currency turbulence has 
underlined just how vulnerable 
the economy is to policy error 


devaluation fan January. 

Instead Mrs Qfller set alarm 
bells ringing by suggesting 
Treasury bin liabilities should 
be converted into new five-year 
paper, in effect a domestic 
rescheduling. 

What was puzzling was the 
Treasury’s announcement that 
it is to issue convertible bonds 
in the state telecom company, 
even though the telecom com- 
pany is still not privatised and 
an moves to prepare it for sale 
remain blocked by the courts. 
There were even press reports, 
quoting government officials, 
that undercover agents had 
been ordered to infiltrate the 
money markets in the belief 
that it was Kurdish separatists 
who were trying to destabilise 

them. 

The crisis reflects the loss of 


27 Mrs Ciller’s DYP will limp 
in a poor fourth behind the 
Motherland party Anap, the 
main opposition party, the 
Social Democratic Populists, 
and the Islamic based Refah 
RP. 

The election is the first real 
test of Airs Ciller’s popularity 
since she was voted party 
leader by the DYP congress 
last June. 

A professional economist 
and a political outsider. Mis 
Ciller seemed to offer the best 
hope of restoring the country’s 
fortunes and forging its west- 
ern identity. Today if Mrs 
(filler survives the current tur- 
moil it will probably be less 
the result of any real political 
achievement than the fact that 
the DYP is unable to find a 
credible alternative leader. 


Her policies, centred on find- 
ing ways to finance the budget 
rather than addressing the 
need to bring the deficit to 
heel Are attacked by leading 
economists. Her attempts at 
more structural changes, such 
as pushing through large-scale 
privatisation, tax reforms and 
curbing dvfl service pay rises, 
have been limited because of 
divisions to her coalition and 
have done little to ease budget 
pressures. 

Also criticised hag been her 
management style on which 
the resignations of two succes- 
sive central bank governors 
have been blamed. What was 
seen as her mishandling of the 
12 per cent devaluation in Jan- 
uary badly dented the bank’s 
prestige. Moreover central 
bank reserves have fallen by as 
much as $3bn since the begin- 
ning of the year to about 
$4£bn early this month. 

Some bankers say Mrs (filler 
has in large part brought the 
troubles on herself Tbe local 
bond market hag an but dried 
up as a direct result of her 
unorthodox and ultimately 
felled attempt to push down 
domestic bill rates. The cur- 
rent uncertainty has pushed 
rates on government paper up 
30 points since the second half 
of 1993. Even at 125 per cent for 
one-year paper, there are few 
buyers. As one banker put it 
“If s no longer enough to have 
an interest rate policy. Some- 
thing more is needed.” 

After 7 per cent growth in 

1993, forecasts for this year are 
being marked down. One west- 
ern economist says Turkey 
could see negative growth in 

1994, making it even more diffi- 
cult for business to rebuild. 

In such a climate, said one 
economist, bankruptcies would 
be unavoidable, particularly 



(filler, once seemed to offer the best hope of restoring the 
country's fortunes and forging its western identity 


for those dependent on govern- 
ment payments, such as con- 
tractors. Banks too, will feel 
the pinch, caught out with 
large foreign exchange expo- 
sure at a time when tile lira's 
depreciation is accelerating. 

Today Turkey displays all 
the symptoms of an economy 
where inflation is heading out 
of control No one wants to 
hold lira. On pay day, Turkish 


civil servants rush to tbe 
exchange shops. Even divorces 
are sometimes settled in hard 
currency. 

Some foreign banks worry 
the lira could fall even more 
sharply unless a serious struc- 
tural reform programme is 
introduced. Few Turkish 
observers hold out much hope 
of that in the current political 
uncertainty. 




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NEWS: THE AMERICAS 


Japan trade 
surplus with 
US declines 


■ wm ww wai ■ i ■ k— a u w ■ a-— ■ ■■ 

George Graham, David Goodhart and Stephanie Flanders report from Detroit 

Flexible harmony marks G7 j obs talks 


L abour and finance ministers 
from the Group of Seven lead- 
ing industrial nations yester- 
day wound up two days of discussions 
in Detroit about unemployment and 
job creation in a warm glow of appar- 
ent harmony. 

“It seemed to me that there was a 
new conventional wisdom emerging 
about the whole question of unem- 
ployment,” said Mr Padralg Flynn, 
the European commissioner for social 
affairs. 

Ministers emerged from their meet- 
ings to say they were in broad agree- 
ment on the need for macroeconomic 
policies that promote sustainable 
growth with low inflation, but also 
that they shared a problem of struc- 
tural unemployment that would not 
be solved by growth alone. 

"Everyone agrees it’s both struc- 
tural and cyclical,” said Mr Paul Mar- 
tin, Canada’s finance minis ter. 

At the same time, everyone agreed 
on the role of small business as an 
engine of job creation, the need to 
improve education and vocational 
training and the importance of offer- 
ing the long-term unemployed a way 
to re-enter the workforce. 

With considerably less unanimi ty. 


the participants also spoke approv- 
ingly of labour market flexibility. 

Even when they used the same 
words, however, different ministers 
brought different underlying mean- 
ings to them, reflecting both national 
and functional divergences. 

Besides occasional national splits - 
“the Anglos against the rest”, as one 
Italian official put it - some delega- 
tions showed internal differences both 
between the different political parties 
in their coalition governments and 
between the different outlooks of 
labour and finance ministers. 

"I’ve got a sense of cultural guffs in 
other delegations,” said Mr Kenneth 
Clarke, the UK chancellor of the 
exchequer. 

On macroeconomic policy, the usual 
topic of G7 meetings, the Detroit con- 
ference showed some of the custom- 
ary disagreements. 

The US argues that a considerable 
portion of the G7’s current high 
unemployment rates, particularly in 
Europe, must be attributed to the 
recession, and therefore requires 
efforts to boost demand-led growth - 
by interest rate cuts in Europe and by 
fiscal stimulus in Japan. 

Japanese and European officials 


coolly noted the US argument, which 
Mr Edmond Alphandfry, France's 
economy minis ter, said had become 
“quite standard”. He noted that 
although continental Europe had 
higher unemployment because it was 
at an earlier point in the recovery 
cycle, it was emerging foster and with 

4 We’ll be able to 
say ... we all have 
the same problems’ 
- Bill Clinton 


less pain than the UK and US had 
done. 

Ms Laura Tyson, the chief White 
House economic adviser, insisted at 
the opening that she would not accept 
the argument that structural policies 
could replace cyclical policies as a 
recipe for dealing with unemploy- 
ment 

US officials had expected some- 
thing of a row with the UK on this 
issue, but other participants said 
that the argument quickly fizzled 


out when noone disagreed. 

“We have never said that structural 
adjustments could replace a good 
macroeconomic framework, ” said Mr 
Henning Christophersen, vice presi- 
dent of the European Commission. 

On the issue of labour market flexi- 
bility, the division became dearer. 
“Some seem to define flexibility as the 
freedom to fire workers and lower 
wages,” complained Mr Robert Reich, 
the US labour secretary, calling for 
more worker empowerment and train- 
ing to help mobility. 

Mr Clarke, the Implicit target of Mr 
Reich's jibe, denied any substantial 
rift between the UK and the US. 

“The Americans in their presenta- 
tions put less emphasis on labour 
market flexibility than we do but the 
reason is that they already have a 
deregulated labour market, ” Mr 
Clarke said. 

While ministers agreed on the need 
to reduce the cost of labour to 
employers, they differed on the extent 
to which this reduction should come 
from the wage packets of their work- 
ers. 

Canada and France urged an attack 
on payroll taxes, which Mr Martin 
described as “a cancer on job cre- 


ation”, as well as a weeding out of 
social security programmes that can 

harm job creation- 

“We feel we can eliminate part of 
the social support system which is a 
disincentive to work and keep the 
basics,” Mr Martin said. 

All sides drew a sigh of relief, how- 
ever at the complete absence of sup- 
port for ideas such as protectionism 
or a shorter working week. 

“The idea of a generalised reduction 
of the working week was raised by 
noone. Noone proposed closing their 
frontiers to fight unemployment. No- 
one we should tackle unemploy- 
ment by slowing the rate of techno- 
logical progress. The most tangible 
thing to come out of it was the refusal 
to simplify the problem," said Mr 
Alphand&iy- 

In their efforts to resist populist 
demands such as protectionism, G7 
countries hope that the Detroit gath- 
ering will provide them with useful 
political cover at home. 

“We’ll be able to say, see - the 
Germans and the French and the 
nanwifanfi and the Italians and the 
Japanese - well, we all have the same 
problems,” concluded President Bill 
Clinton. 



Small business role in 
job creation questioned 


MAN IN A HUBBY: President Bill Clinton is pressing bard for 
Group of Seven action over jobs 

High pay for the 


By Paul Abrahams In Tokyo 

Japan's trade surplus with the 
US fell for the first time in 
nine months in February, the 
ministry of f inan ce said yester- 
day. 

The slight drop in the sur- 
plus will help reduce tension 
with the US. But Washington 
will need further and more 
substantial falls over an 
extended period before it is 
convinced the problem has 
been solved. 

The surplus with the US was 
$L344bn (£L9bn) In February, a 
foil of 0.9 per cent compared 
with the same month last year. 
Imports from the US rose 15.1 
per cent, while exports grew by 
6.S per cent. 

Car sales in the US were 
down sharply, hindered by the 
strong yen. but exports of 
semiconductors continued to 
rise. Imports or US computers, 
food and machinery surged in 
February, as did aircraft deliv- 
eries. 

Analysts said the level of the 
surplus with the US, which 
was below expectations, would 
help support the dollar against 
the yen. 

Japan's overall trade surplus 
was up 3 .3 per cent in Febru- 


By Nancy Dunne in 
Washington and 
Mchiyo Nakamoto In Tokyo 

US-Japanese trade and 
economic relations are 'In seri- 
ous disrepair." Mr Mickey Kan- 
tor, the US trade representa- 
tive, said yesterday. 

Japan must take “its full 
share of responsibility in pro- 
moting global economic 
growth." he told the House 
trade subcommittee, it had not 
yet done that in bilateral talks 
with the US or in the Uruguay 
Round. 

Mr Kantor. who has pursued 
a tough line in efforts to 
encourage Japan to produce a 
market-opening package con- 
taining “numerical indicators 
of progress," won warm sup- 
port Tor his stance from both 
Republicans and Democrats on 
the committee. 

“Unless or until Japan is pre- 
pared to take their share of 
responsibility we're not going 
to resolve these problems." 

The US. he said, bad been 
“somewhat victimised” with 
the characterisation that it was 
proposing miuiaged trade solu- 
tions. “The Japanese have 
practised managed trade for 
years." he said. "We're trying 
to unmanago trade in Japan.” 

Meanwhile it emerged in 
Tokyo that the US has pres- 
ented Japan with detailed pro- 
posals for measures to promote 
deregulation and market 
access. 

The proposals, contained in a 
discussion paper, were deliv- 
ered to Japanese officials in 
January during the framework 


ary compared with the same 
month last year, reaching a 
record $ I0J912bn, although the 
increase was lower than that 
in previous months. In Decem- 
ber and January, the surplus 
rose 15.5 per cent and 17 per 
cent respectively. In yen terms, 
the surplus, which had risen in 
January, dropped 9.1 per cent 
to Yl.lSBbn. 

Japanese exports rose 5.6 per 
cent to $29.532bn. while 
imports grew 7 per cent to 
SiS.62bn. Imports of food, 
including foreign rice, were up 
20.3 per cent year on year. 

The growing importance of 
Japan's trade with other Asian 
countries was underlined by a 
2.6 per cent increase in exports 
to Asean nations and a 0.7 per 
cent rise in imports. Exports to 
China were up 0.8 per cent 
while imports rose 3.6 per cent. 

The markets were surprised 
by a rise in domestic machin- 
ery orders placed by the pri- 
vate sector during January. 
These orders represent a lead- 
ing Indicator of capital invest- 
ment intentions. A foil of about 
6 per cent had been expected, 
but they increased 1.9 per cent 
against the previous month, 
data released by the Economic 
P lanning Agency showed. 


negotiations and cover 45 spe- 
cific areas where the US would 
like improved foreign access to 
Japan's markets. 

The Japanese government 
has resisted demands made by 
the US under the framework 
negotiations to set specific 
objective criteria in opening up 
its markets. Instead, it has 
hoped to deflect criticism over 
Us huge trade surplus by tak- 
ing the initiative in compiling 
the deregulation plan. 

The US proposals include 
steps in four broad areas cover- 
ing competition policy, admin- 
istrative transparency, deregu- 
lation and distribution. 

In competition policy, the US 
is calling for the abolition of 
exclusionary business prac- 
tices, active application of 
criminal charges under the 
anti-monopoly law and sub- 
stantial relaxation of rules gov- 
erning transport, airline, ship- 
ping and trucking fees. 

In administrative transpar- 
ency, the US wants more for- 
eign participation in govern- 
ment advisory groups, while in 
deregulation it seeks establish- 
ment or an Independent organi- 
sation to supervise progress in 
deregulating the markets. 

In distribution, the US is ask- 
ing for Infrastructural invest- 
ment to improve rail and road 
access to Japanese ports and 
airports, more warehouse 
space for imports at Narita Air- 
port, introduction of computer 
systems to handle import mat- 
ters before goods arrive in 
Japan and increased handling 
of foreign products by small- 
scale retailers. 


By David Goodhart 

Just five miles down the road 
from the jobs summit 
conference centre in Detroit 
the brand new Jefferson North 
Chrysler car plant is a 
standing affront to much of 
the G7 debate about job 
creation. The highly 
automated plant, which 
produces the Grand Cherokee 
jeep, is one of the success 
stories of the town’s 
revitalised car Industry. 

None of the jobs summit 
delegates would object to the 
200 robots or the automated 
paint spraying and welding 
at the plant, which reduces 
the number of employees to 
about 3,000. But the 
policymakers would not 
approve of the fact that, in 
a town where unemployment 
is double the national average 
at 13 per cent, so much 
employment is hogged by the 


securely employed “insiders”. 

Average weekly working 
hoars at the two-shift plants 
are 55 to 60 hoars, with 
average annual take-home pay 
of more than 850,000 (£34,246). 
Most employees work from 
6am to 3.30pm, phis three 
Saturdays in four. 

Chrysler and the United 
Auto Workers union collude 
to maximise work and income 
for those already in a job, and 
until recently most new 
recruits were relatives of 
existing employees. Yet 
Detroit has lost 250,000 
auto-related jobs in the past 
10 years and there are 23,000 
people on the books of the 
state employment agency who 
want to work at Jefferson 
North. A few hundred of them 
may be lucky if the plant 
decides to put in the third 
shift. Anybody who gets a job 
will find a plant with 
harmonious working 


By George Graham 

Small businesses have for 
years commanded the pro- 
found obeisance of politicians 
and economists as the most 
fertile source of new jobs, and 
minis ters gathered in Detroit 
this week continued to pay 
homage. 

But economists working 
under the aegis of the US Com- 
merce Department's Census 
Bureau have taken a swipe at 
the idea that small businesses 
create more jobs than larger 
ones, in a new study examin- 
ing the performance of manu- 
facturing industry from 1972 to 
1988. 

Economists Steven Davis, 
John Haiti wanger and Scott 
Schuh found that although 
smaller companies created new 
jobs at a much foster rate than 
did larger employers, they also 
destroyed jobs much more 
quickly. 

few in a 


relationships and strong 
powers for organised labour. 
The HAW not only has a 
closed shop, it also has equal 
representation on the key 
committees which decide most 
of what goes on. 

Mr Charles Matthews, a 
semi-skilled assembly line 
operator, who bas worked for 
Chrysler for 30 years, said: 
“The hours are long hat this 
is the best plant I’ve ever 
worked in.” He retires in two 
months, aged 55. 

Unlike some other US car 
makers Chrysler took on 
existing workers when the 
new plant opened up, which 
meant an average age of over 
50. There were big retraining 
programmes for technicians 
but training in general seems 
less important thnn many 
summit delegates assume. 

One Chrysler supervisor 
admitted that many of the 
semi-skilled jobs take only 


Companies with fewer than 
20 employees added an average 
of 16.5 per cent to their work- 
forces each year, the study 
showed, but they also 
destroyed an average of 18.8 
per cent of their Jobs. 

At the same time, companies 
with more than 50,000 employ- 
ees created new jobs averaging 
6.3 per cent of their total work- 
forces each year and destroyed 
8 per cent on average. 

In a nutshell, net job cre- 
ation behaviour in the US man- 
ufacturing sector exhibits no 
strong or simple relationship 
to employer size,” the study 
says. 

The Census Bureau econo- 
mists also note that newly cre- 
ated jobs at small manufactur- 
ing plants are much less likely 
to survive than new Jobs at 
large plants. 

They complain of fallacious 
statistical presentations of the 
data on job creation, snggest- 


about half an hour to learn. 
There is no job rotation for 
those on repetitive tasks but 
most workers are part of a 
small team and training for 
less skilled workers 
concentrates on building np 
team-working skills. 

Jefferson North would make 
only a small dent in Detroit's 
unemployment problem even 
if it was maximising rather 
than minimisi ng employment 
opportunities. Although the 
town’s prospects are 
Improving, and it has a 
dynamic mayor in Mr Dennis 
Archer, the Clinton 
administration has exposed 
its unemployment sores to the 
world by staging the job 
summit here. 

Indeed, Detroit Illustrates 
that despite the good US job 
creation record, its 
unemployment record is less 
good than the national rate 
of 6.8 per cent makes it 


ing that if a company drops in 
size below the cot-off point for 
email businesses it ran seem to 
increase employment in the 
small business sector, even if it 
really represents a loss of jobs. 

Since large companies 
account for most of manufac- 
turing employment, they also 
account for most of job cre- 
ation and destruction. Small 
businesses, the study shows, 
account for less than one fifth 
of job creation. 

But from Mr Kenneth 
Clarice, Britain’s chancellor of 
the exchequer, to Mr Raul Mar- 
tin, Canadian finance minister, 
delegates in Detroit this week 
hailed small businesses as the 
engine of job creation. 

“There's an enormous 
amount of creative destruction 
in small business. I think 
there’s job loss is small busi- 
ness but there's also a lot of 


appear. Mr Robert Reich, 
labour secretary, told a 
summit briefing that the US 
figures failed to pick np many 
people who have dropped out 
of the labour market 
altogether. He said that “adult 
male non-employment” was 
close to 12 per cent in the US. 
“That is not all that different 
from Europe* 1 ” be said. 

But in Detroit, a 
predominantly black city, even 
standard unemployment 
figures are high, although it 
Is difficult to be precise 
because of difficulties in 
defining where the town ends. 

In central Detroit the 
unemployment rate climbs 
to 17 per cent and blades aged 
16 to 19 have an 
unemployment rate of 41 per 
cent Sobering statistics for 
those Europeans who thought 
the American labour market 
had all the answers. 


Pressure 
for social 
clause in 
Gatt deal 

By George Graham 
in Detroit 

France and Italy are leading a 
drive to include restrictions on 
rhnri labour and forced prison 
labour in next month's final 
round of negotiations on the 
Uruguay Round of trade 

liberalisatio n talks. 

Mr Edmond Alphandfiry, 
France's economy minister, 
urged this week's Group of 
Seven jobs conference in 
Detroit to press for “a 
minim um of rules applied at 
the international level". 

Italy strongly backed the 
French initiative, and both 
Canada and Greece, which 
attended the Detroit meeting 
as current president of the 
European Union, also 
expressed Interest In some 
form of social clause to the 
Gett agreement. 

French officials also expect 
partial support from the US, 
which Introduced similar 
protections in its North 
American Free Trade 
Agreement with Canada and 
Mexico, and has been pressing 
similar demands in its talks 
with China about the 
extension of Most Favoured 
Nation trading privileges. 

“I am well aware that the 
social clause is far from 
receiving unanimity.” said Mr 
Michel Giraud, France's labour 
minister. 

International trade union 
organisations have been 
pressing for a broader social 
clause covering work safety 
standards, union rights and 
protection against 
discrimination in the 
workplace. 

But other G7 countries are 
reluctant to reopen the Gatt 
deal at this stage, and trade 
experts say it is extremely 
unlikely that a social clause 
could be inserted in the face of 
strong opposition from many 
Asian countries. 


Kantor says ties 
with Tokyo in 
serious disrepair 


job creation,'' Mr Martin said. 

city out of work 


Ministry to probe 
construction groups 


Clintons try to divert attention away from the Whitewater affair 

solace in a friendly crowd 


The US has informed Japan it 
is considering claiming dam- 
ages against Japanese con- 
struction companies which 
allegedly fixed contracts to 
build a US navy base in Japan, 
government officials acknowl- 
edged yesterday, writes Mich- 
iyo Nakamoto. 

Mr Kozo Igarashi, minister of 
construction, said the ministry 
will investigate US allegations 
that 73 Japanese contractors 
conspired to fix contracts to 
buiW the US navy's Atsugi 
Base between 1984 and 1990 
and charged inflated prices for 
their work. 


The US has informed Japan's 
foreign affairs ministry that it 
is preparing to seek damages of 
Yl.lbn (Si0.4m) against the 
Japanese contractors, Mr Igar- 
ashi said yesterday. “As the 
ministry which oversees and 
instructs the industry, we will 
look into the matter and deal 
with it appropriately,” the min- 
ister said. 

The US move comes at a deli- 
cate time in US-Japan relations 
and as the Japanese govern- 
ment has been considering 
strengthening its competition 
policy as part of its market 
opening measures. 


US nuclear 
test ban 
extended 

President Clinton has told 
Congress that he is extending 
the US moratorium on nuclear 
testing until September 1995, 
the White House said yester- 
day. Renter reports. 

White House spokeswoman 
Dee Dee Myers said the deci- 
sion was based in part on the 
restraint of other declared 
nuclear powers in not resum- 
ing testing in response to Chi- 
na's test last October. She also 
credited the encouraging prog- 
ress in comprehensive test ban 
talks since they opened in Jan- 
uary- 


Seeking 

By Nancy Dunne 
In Washington 

President Bill Clinton began a 
campaign-style swing through 
New Hampshire yesterday, 
vowing to keep his eye on 
domestic policies despite 
attacks from “people who are 
giving me hell in Washington.” 

Mrs Hillary Clinton also con- 
tinued administration attempts 
to divert attention from the 
Whitewater affair, stemming 
from the Clinton's financial 
dealings in Arkansas in the 
1980s, over which they have 
come under heavy fire from 


Republicans in Washington. 

Mrs Clinton was due to 
address a rally in St Louis on 
the second day of a trip promo- 
ting the administration's 
healthcare reform plan. 

On Monday night the Presi- 
dent la unch ed an impassioned 
attack on his Republican crit- 
ics and made a plea for a 
nationwide debate over what 
he called the issues of concern 
to Americans. 

“This overriding negative, 
intensely personal, totally 
political devoid-of-principles 
attack is not good for the coun- 
try" he said, "ft is inconsistent 


with the tradition of Abraham 
Lincoln and Teddy Roosevelt” 

He described himself as “an 
old-fashioned" man. who 
believes in the contest between 
good and bad and that good 
wins out 

“We have to appeal to what 
is good in this country," he 
said. “We have to ask people to 
face hard truth and debate 
hard Issues and come together 
and think new thoughts about 
problems that we are frankly 
not solving today.” 

Mr Clinton appeared yester- 
day morning at a gathering of 
citizens In the small New 


Hampshire town of Nashua, 
where he got heavy support in 
his campaign for president 

In the friendly New Hamp- 
shire crowd, he found at least 
one who agreed with his 
attempt to refocus the national 
debate. 

“I’m 68 years old," one 
woman told him. “Whitewater 
is for canoeing and rafting. 
Shame on those who would 
detract and distract from the 
important work you're doing 
with universal health coverage 
and jobs.” 

“Thank you. ..bless you," Mr 
Clinton said. 



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Deloitte to pay $312m 


By Patrick Harverson 
in New York 

Deloitte & Touche bas agreed 
to pay 8312m (£2Q9m) to settle a 

string of government charges 

that the big US accountancy 

firm foiled properly to audit 

several banks and savings and 

loan institutions which col- 
lapsed in the 1980s. 

Yesterday's settlement 
resolved 15 lawsuits brought 

against Deloitte by various 

government agencies seeking 

Sl-Sbn in damages. 


The lawsuits charged 
Deloitte with professional neg- 

ligence, claiming that the Ann 
issued dean audits for institu- 

tions that later proved to be 
insolvent 

The settlement is the second 
largest paid by a professional 
firm involved in the S&L and 
bank failures. 

In 1992 accountancy firm 
Ernst & Young paid $400m 
after reaching a similar accord 
with federal authorities. 
Although analysts believe 

that a large part of the S3 12m 


settlement would be paid by 
Deloitte’s insurers, the firm’s 

partners are expected to con- 

tribute toward the cost of the 
agreement 

However, Mr Michael Cook. 
Deloitte’s chief executive, 
described the settlement as a 
“business necessity" and 
“fair." 

The Deloitte settlement is 
not likely to be the last of its 

land in the long-running S&L 

and banking affair and further 
settlements are expected. 


Colombian army 
‘caused deaths’ 

Amnesty International, the 
London-based human rights 
organisation, yesterday 
accused the Col ombian armed 
forces and related paramilitary 
groups of responsibility for 
most of the 20JXJ0 political kill- 
ings in the country since 1985, 
writes Stephen EMler. 

Amnesty said governments 
had escaped international criti- 
cism in part by hiding behind a 
public relations smokescreen, 
which portrayed a “myth" that 
drug traffickers and guerrillas 
were mainly to blame. 


Mexican 

financier 

kidnapped 

By Ted Bardacke 
in M«xico Ctty 

The head of Mexico's largest 
financial group has disap- 
peared in what police are treat- 
ing as a kidnapping. 

Eyewitnesses said Mr 
Alfredo Harp Helu, president of 
Banamex- Accival , was inter- 
cepted by a group of armed 
men on Monday morning as be 
was being driven to work in 
central Mexico City. 

The kidnappers have yet to 
make public their demands but 
have been in contact with the 
Harp family, according to the 
police. 

When news of Mr Harp’s dis- 
appearance reached the Mexico 
City stock market, Banacci B 
shares fell sharply, closing on 
Monday down 186 per cent on 
very heavy volume. Shares 
continued to slide yesterday. 

The New York security com- 
pany Kroll Associates is 
believed to have been brought 
in to handle the case. It won 
the release of two businessmen 
kidnapped in 1992. 

Professional kidnappers have 
been targeting Mexican busi- 
nessmen with increasing fre- 
quency with over 2,000 kidnap, 
prngs reported in the past five 
years. 









, . ' J in. 


or 


i il’ 


*(> 


_ FINANCIAL TIMES WEDNESDAY MARCH 16 1994 

Settlers ready 
to be martyrs 
or heroes 


Hebron Jews could spark 
war, writes Julian Ozanne 

A photograph of Rabbi Mrs Shani Horowitz, orii 
Meir Kehane, the slain nally from New York, mov 
Jewish racist whn »■« Uohmn i 


NEWS; INTERNATIONAL 


A photograph of Rabbi 
Meir Kehane, the slain 
Jewish racist who 
advocated religiously sancti- 
fied Jewish violence against 
Arabs, is proudly displayed in 
the bedroom of a 1 a- year-old 
boy in Hebron, the city that 
has become a flashpoint of 
Israeli -Palestinian violence. 

“I don't agree with Kehane 
but when a boy grows up and 
his father is stoned and bis 
friend's father is murdered by 
Arabs, you must understand 
why he might see Kehane as a 
hero," says the boy’s mother, 
Mrs Ruth Hizmy. 

Rising Jewish settler mili- 
tancy has become the greatest 
political threat to the govern- 
ment of Mr Yitzhak Rabin and 
the Israeli-Palestinian peace 
process. At the least, the set- 
tlers promise a nationwide 
campaign of civil disobedience 
to resist evacuation from Pales- 
tinian areas. At worst, rising 
emotions, fears and Jewish 
religious fundamentalism 
could explode into a Jewish- 
Arab civil war and even 
Jewish-on-Jewish violence. 

The 40 Jewish families set- 
tled in Hebron are in the van- 
guard of Jewish militancy. 
Hebron is the breeding ground 
of the two Jewish terrorist 
groups. Each and Kehane 
Lives, banned by the govern- 
ment this week. 

The Hebron massacre has 
worsened the settlers’ . ten- 
dency to be an insular commu- 
nity sustained by the belief 



Rabbi Moshe Lavinger, 
founding father of the Jewish 
settlement movement in the 
occupied lands, sits facing a 
charge of ignoring army 
orders, in Jerusalem yesterday 

they are on a mission from 
God to maintain a Jewish pres- 
ence amid the 110,000 Arabs 
who live in Hebron, burial 
place of the biblical patriarchs 
Abraham and Jacob, and an 
area sacred to both Moslem 
and Jew. 

They refuse to see Hebron as 
occupied. For them it is an 
Intrinsic part or the land of 
Israel promised to the Jews by 
God. Part of their cultism is 
reflected in their deep belief 
they are being victimised, not 
only by the Arabs but by their 
“treacherous" Jewish govern- 
ment. They believe all outsid- 
ers do not understand them 
and are part of a conspiracy to 
defeat their religious goals. 

Like all messianic cults, they 
have martyrs and heroes and a 
powerful faith in the sanctity 
of dying for one’s beliefs. They 
strongly believe In expanding 
their numbers by breeding; the 
average family has six chil- 
dren, talking to the chil- 
dren is like talking to the 
brainwashed. 


l Mrs Shani Horowitz, origi- 
i nally from New York, moved 
1 to Hebron because she wanted 
■ to live somewhere "where by 
just sitting I was doing some- 
i thing for the Jewish people." 

In passionate and often 
angry tones, she says the 
Hebron settlers are like the 
early Jewish pioneers who 
built the state of Israel through 
settlement. “Hebron is spiritu- 
ally and geographically the 
centre of Jewish life. Because 
we live here, Jews can come 
and visit the sites and holy 
places. We are the messengers. 
We are sitting here for the rest 
of the country. 

“Evacuating Hebron is like 
evacuating the Wailing Wall 
Hebron is the second most 
important Jewish city after 
Jerusalem. We are very much 
on the front line, on a mission 
as soldiers. We are holding on 
tight to the land of Israel. We 
are redeeming this place from 
being barren of Jews." 

The government's timid 
moves against the settlers has 
exposed the weakness of Mr 
Rabin's political will He fears 
that acting against the Hebron 
settlers will fuel right-wing 
opposition to the peace process 
and force the government into 
surrendering a powerful pawn 
in the drawn-out negotiation 
with the Palestinians. 

But the government's refusal 
clearly to state the long-term 
line of its withdrawal from 
occupied Arab land has bound 
all 125,000 settlers together in 
common cause with the 
Hebron settlers. The belief is 
that any move against Hebron 
is the thin edge of the wedge. 
Most of the cabinet realise that 
Hebron and some other settle- 
ments will have to be evacu- 
ated sooner or later; the more 
the government delays, the 
more strongly organised the 
settlers become. 

Yesterday, hours before an 
anti-government demonstra- 
tion, the Yesha council of Jew- 
ish settlements said: "It is i 
inconceivable that a Jewish 
government could make 
Hebron Judenrein (clean of 
Jews)...Tbe Rabin government 
has no mandate for an ‘ethnic 
cleansing' of Hebron or to 
carry out its policies of capitu- 
lation (to the PLO]." 

The settlers are preparing a 
campaign of fierce civil disobe- 
dience against any effort to 
evacuate them. They have 
urged the army to disobey 
orders, and implicitly threaten 
violence. "If the government 
tries to evacuate Hebron it will 
be a declaration of war against 
the Jewish people," said Mr 
Noam Amon, a Hebron settler. 
"We are not going to move. We 
are not going alive. They will 
have kill us.” 

Mr Amon says settler lead- 
ers are calling for non-violence 
because they know that vio- 
lence damages their cause. But 
he warns that if the army 
leaves, Hebron settlers will 
take up arms against the Arabs 
in a civil war. Jewish law has 
a strong prohibition against 
J ewisb-on-Jewfeh violence, but 
Mr Amon says that if the army 
tried to evacuate Hebron by 
force, “with deep emotional 
and religious feeling, people 
might lose self-control. Then, 
horrible, terrible things might 
happen." 

With up to 15,000 army- 
issued automatic weapons in 1 
the settlers’ hands, ten of thou- 
sands of licensed handguns 
and the possibility of secret < 
arms caches, these are threats ] 
the government cannot take 
lightly. But the more the gov- ] 
eminent delays a political deci- < 
sion on settlements, the more ] 
the settlers threaten the fragile i 
peace process, and the stability 
of the government itself. ] 



S’sffr TOM — 01 

Strike hits S Africa gold mine for second day 


By Matthew Curtin n Johannesburg 

A strike over free political activity 
halted underground work at the Kloof 
mine, one of South Africa's most profit- 
able gold producers, for the second day 
running yesterday. Kloof is responsible 


for about 5 per cent of the country’s 
gold output of 620 tonnes a year. 

The strike, by 11,000 of the mine's 
16.000 workforce, is the biggest in the 
sector since 1091. Ft comes in the middle 
of a campaign by the National Union of 
Minewoikers to win concessions from 


Gold Fields, Kloofs parent company. 

An NUM official said workers had 
given a list of grievances, including an 
alleged ban on political activity on 
mine property. The union had not 
received a response and this had led to 
the strike. A Gold Fields official said 


the management bad responded. 

Gold Fields has before now declined 
to take part in the industry's wage bar- 
gaining forum, unlike the rival minin g 
houses Anglo American, Gencor, Johan- 
nesburg Consolidated Investment and 
Randgold. 


Honesty 
urged over 
failure 
in Africa 


By Michael Holman, 

Africa Editor 

A leading British charity 
yesterday colled for *nn 
open acknowledgment ut 
the scale of sub-Saharan 
Africa's development fail- 
ure". 

In a strongly- worded attack 
on the World Bank's latest 
report on the region. Oxfam 
said that bank-supported 
structural adjustment 
programmes bad failed to 
“generate sustainable growth 
and significantly reduce 
poverty". 

The charity, which is heavily 
involved in Africa, declined 
that adjustment programmes 
“were preoccupied with 
lowering inflation through 
interest rates and unrealistic 
money supply targets. 

“Poorly planned and 
sequenced import 

i liberalisation measures" had 
"exposed potentially 
competitive local industries to 
ruinous competition from 
imports" Oxfam said in its 
statement. 

The British charity accused 
the bank of “complacency" in 
the face of what it called 
Africa's “deepening 
development crisis". 

The charity also attacked the 
bank's classification in its 
report of Zimbabwe as a 
successful adjusting country as 
"bordering on outright 
deception". 

Zimbabwe's adjustment 
programme did not come until 
operation until 1991. says 
Oxfam: "Since when there has 
been no sign of recovery 
in investment or export 
growth". 


IAEA ‘was 
blocked in 
N Korea’ 

The Internationa] Atomic 
Energy Agency (IAEA) team 
inspecting nuclear facilities in 
North Korea has been obstruc- 
ted in its work, the organisa- 
tion said yesterday, Patrick 
Blum reports from Vienna. 
“Restrictions were applied, 
stopping us making some 
tests " the IAEA said. 

The team which spent 15 
days in North Korea was able 
to visit all seven declared 
nuclear facilities as agreed 
with Pyongyang last month. 
One of the plants where the 
experts faced curbs was at the 
main nuclear complex at Yong- 
byon, north of the capital. The 
team will report back this 
morning. A formal IAEA board 
meeting could be called next 
week. 

CFA zone plea 

Leaders of seven former 
Ftench West African colonies 
gathered yesterday to lobby for 
more foreign help to cope with 
a 50 per cent devaluation of 
their common currency, the 
CFA franc, Renter reports 
from Ouagadougou. 

International Monetary' Fund 
officials were present to hear 
the plea. The IMF is rushing 
through soft-loan agreements 
to help CFA countries get relief 
from international creditors. 

Death for fraud 

The mastermind of one of Chi- 
na's largest fraud schemes has 
been sentenced to death and a 
former vice-minister jailed! for 
20 years for corruption in the 
case, it was revealed yesterday, 
Renter reports from Beijing. 

Shen Taifu was sentenced on 
March 4 for organising the 
Great Wall Machinery and 
Electronics Group, a pyramid- 
style scam that sucked up 
Yuan lbn ($li4m) from unsus- 
pecting small investors. 


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By Kteran Cooke in Kota 
Kinabalu, East Malaysia 

The national front coalition 
government in Malaysia led by 
Prime Minister Mahathir Moh- 
amad appears likely to assume 
power to the state of Sabah, 
East Malaysia, after several 
members of the dominant local 
political party voiced support 
for Dr Mahathir. 

Sabah is one of only two 
states in the Malaysian federa- 
tion not controlled by parties 
in Dr Mahathir's national 
front. In bitterly fought state 
elections last month the locally 
constituted Parti Bcrsatu 
Sabah (PBS), led by Mr Joseph 
Pairin Kitingan. the chief min- 
ister, narrowly defeated the 


national front and retained its 
control of the Sabah assembly. 

But in recent days PBS’s 
majority has been threatened 
by a number of defections by 
its assembly members to the 
national front. Yesterday Mr 
Jeffrey Kitingan, a younger 
brother of the chief minister 
who was elected as a PBS 
assemblyman in last month's 
elections, announced he was 
forming a political party which 
would join Dr Mahathir's 
national front coalition. 

Mr Jeffrey Kitingan, who 
was recently released after 
being detained for three years 
on suspicion of wanting to take 
Sabah out of the Malaysian 
federation, has said that Sabah 
could progress and develop 


through membership of the 
national front. 

Dr Mahathir has made no 
secret of his antagonism to the 
PBS and to Mr Pairin Kitingan 
in particular. The PBS accuses 
Dr Mahathir of withholding 
federal funding for Sabah's 
development and says the 
national front has paid mil- 
lions of dollars to win support 
of PBS assembly members. 

The national front now 
seems certain to command a 
majority in the state assembly, 
which is due to hold its first 
meeting on Friday since the 
recent election. Earlier this 
week Mr Pairin Kitingan asked 
the Sabah governor to dissolve 
the assembly and for new elec- 
tions to be held. 


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Gatt members warm to China’s entry 


By prances WDHams in Geneva 

Members of tbe General 
Agreement on Tariffs and 
Trade, with the notable excep- 
tion of the US. yesterday 
expressed strong support for 
an early resumption of China’s 
Gatt membership and wel- 
comed recent moves to liberal- 
ise trade and relax foreign 
exchange controls. 

However, the row between 
the US and China over human 


rights, which could lead to 
non-renewal of C hina ’s most- 
favoured-nation trading status 
in the US market, is proving a 
big stumbling block to faster 
progress in the negotiations on 
Gatt entry terms. 

China is anxious to rejoin 
Gatt by the end of this year, so 
that it can become a founder 
member of the World Trade 
Organisation which succeeds 
Gatt in 1995. 

Entry negotiations resumed 


yesterday after a six-month 
gap, allowing Chinese officials 
to present details of Beijing's 
latest foreign exchange and 
trade reforms. These included 
the unification of exchange 
rates and a managed float of 
the Chinese currency since 
January this year, with a 
pledge of ftill convertibility by 
the year 2000, as well as tax 
reform and reductions in a 
wide range of tariff and non- 
tariff barriers. 


Tbe response yesterday was 
generally favourable. The 
European Union said the 
reforms appeared to be going 
in the right direction, and It 
and Japan expressed hopes for 
an acceleration of the negotia- 
tions. However, the US said it 
was not p repared to subscribe 
to “an artificial deadline" for 
Chinese membership. 

At the same time, western 
nations are united in pressing 
China to pay a still higher Gatt 


entry Gee. including lower bar- 
riers to trade in Industrial 
goods and agriculture, 
improved market access for 
foreign services companies 
such as banks, and better pro- 
tection of intellectual property 
rights. Gatt members are also 
seeking further moves by Bei- 
jing to cut state intervention in 
the economy and ensure trade 
rules are applied consistently 
across the country. 

China was an original mem- 


ber of Gatt but pulled out in 
1950 after the Communists 
came to power. The Beijing 
government applied to re-enter 
Gatt in 1386 and talran a 
full part in the Uruguay Round 
of global trade talks. However, 
progress in tbe membership 
talks, which began in 1987, has 
been slowed by human rights 
concerns as well as the diffi- 
culty of getting to grips with 
China’s rapidly-evolving trade 
regime. 


Beijing and the business of human rights 

Nancy Dunne on US company fears of losing their fastest growing market 

W hen Mr Warren and 17 per cent last year. Most The US view of China trade ' exports. It was unlike 

Christopher, the US of the market is in sophisti- - - - China’s quota share w 

secretary nf state, rated technoloev. canital 'Trade ■ reaistrihntpd the tuuu 


W hen Mr Warren 
Christopher, the US 
secretary of state, 
confronted Chinese officials in 
Beijing at the weekend on the 
vexed issue of human rights 
and trading rights, it was the 
American who blinked first 
Since last June the adminis- 
tration of President Bill Clin- 
ton has vowed to ann ul Chi- 
na's Most Favoured Nation 
trade status unless it improved 
its human rights record. How- 
ever, in spite of compromising 
noises made by Mr Christopher 
as he left Beijing on Monday. 
China has not only foiled to 
make any “significant'’ prog- 
ress to which tbe secretary of 
state could point it has yet 
even to offer political cover for 
what appears to be a US 
retreat. 

China has bad dangled 
before it the possibility of per- 
manent MFN status but has 
remained insistent that tbe 
human rights of its citizens is 
its own business. Its officials 
are of tbe view that the US 
needs China as much as C hina 
needs the US. They might be 
right. 

US companies have commit- 
ted or invested SIDbn (£6.8bn) 
in China. It is their fastest 
growing export market, accord- 
ing to Ms Pam Baldinger. com- 
munications director of the 
Business Coalition for US- 
China trade. The group of 1,000 
companies warns that loss of 
China's MFN status, and sub- 
sequent reprisals, would put 
ail the investment at risk. 

American exports to China 
soared by 19 per cent in 1992 


and 17 per cent last year. Most 
of the market is in sophisti- 
ca ted technology, capital 
equipment and aerospace, 
industries which provide the 
high wage jobs Mr Clinton has 
promised to increase. 

More than anything, it is 
China's potential that draws 
hungry companies in droves. 
According to tbe Business 
Coalition, tbe potential market 
looks like this: $40bn over the 
next 20 years for aerospace; 
$90bn over the next seven 
years for power generation 
equipment; $29bn over five 
years for telecommunications; 
$iS£bn over three years for oil- 
field and gas machinery and 
$4.3bn over the next eight 
years for computers. 

Withdrawal of MFN would 
make a gift of these markets to 
European and Japanese com- 
petitors. It would also cost US 
consumers an estimated $16bn 
they save buying cheap Chi- 
nese goods. 

"Loss of MFN would poison 
the trade environment," said 
Mr Bill Lane of Caterpillar, 
which bad a 20 per cent surge 
in sales of construction and 
mining equipment to China 
last year. With Japanese sup- 
pliers still in the lead, “it’s crit- 
ical that MFN be renewed", he 
said. 

American Telephone and 
Telegraph has been making 
deep inroads in China. Mr Ran- 
dolph Lumb. government rela- 
tions vice president for AT&T, 
said the company can generate 
$6-58 through trade with its 
China subsidiaries for every Si 
invested there. 



a US exports to CMts 

■I U3 Imparts -from China . 



US exports to China 
9y sector (1993) 


Power oener^ng 



"American 

exports to China 
' in 1993 
. supported 
1684)00 US 
jobs. Thousands 
at. these jobs are 
In high-wage. 
Nghrtechnoiogy 
fields." 


(arUSOha Turin 



Swacs: US Department at Convnoee 

In Guangdong province, the 
company has beaten formida- 
ble competition from 
entrenched companies such as 
Alcatel, the French telecoms 
equipment maker, and Erics- 
son, the Swedish group, to win 
big switching and transmission 
contracts. Its joint venture in 
Shanghai is the leading sup- 
plier of telecom transmission 
equipment in the country. 

Sales of switching and trans- 
mission systems are rising. 
AT&T Network Systems has 
fibre optic and transmission 
joint ventures in China with 


switching and microelectronic 
ventures under negotiation. 
AT&T Bell Laboratories is 
working with the Chinese gov- 
ernment to set up a research 
and development operation in 
the country. 

China also offers hope for 
the US commercial aircraft sec- 
tor, which has been hit hard by 
competition from the European 
Airbus consortium and by 
recession abroad. McDonnell 
Douglas has been in China 
since 1375 selling aircraft and 
producing components. 

“It took 10 years to get that 


Christopher: unrequited 
compromising noises 

project off the ground." said 
Mr Mark Schlansky, a McDon- 
nell Douglas spokesman. “It 
required a great deal of 
patience. Trust had to be built 
on both sides. Progress had to 
be incremental. Now we’ve 
learned their values, and 
they’ve learned ours." 

One sector - textiles and 
apparel - projects gains if 
China was to lose its MFN sta- 
tus. Tbe American Textiles 
Manufacturers Institute says 
China has become the largest 
foreign US textile supplier, but 
higher tariffs would cut into its 


exports. It was unlikely that 
China’s quota share would be 
redistributed, the association 
said. The gain would be for US 
companies. 

Most exporters anonymously 
fault the Clinto n administra- 
tion for taking seriously the 
president’s rhetoric on C hina 
during his election campaign. 
Like Mr Cal Cohen of the 
Emergency Committee for 
American Trade, they argue 
that the development of Chi- 
na’s market economy promotes 

hitman rights more than any 

o t h er measure. 

Companies Wimplain that the 

administration has sent mixed 
signals. Tbe commerce depart- 
ment put China on top of its 
Big Emerging Markets list, a 
strategy for pushing exports in 
10 regions outside the Euro- 
pean Union and Japan. At the 
Rama timw the president and 
the state department were issu- 
ing threats. 

Exporter s are weary of the 
annual MFN renewal exercise. 
They hope that, given any rea- 
sonable progress, the adminis- 
tration will give China a multi- 
ple year renewal or look 
elsewhere for a less ruinous 
issue with which to put pre- 
sure on Beijing. 

On Capitol Hill, where the 
Democrats used to assail Presi- 
dent George Bosh regularly for 
not pro mo ti ng human rights, 
sentiment has begun to shift 
towards renewing MFN. 
"There are too many jobs at 
stake.” said a long-time con- 
gressional aide. “The momen- 
tum now has gone the other 
way.” 


trade news digest 

GEC resolves 
S Korea rail row 

srtKrssts gs~s» 

derail a Mm (ELBbri) contiuct 

vitesse (TGV) for the country’s new high-speed rau system. 

S?row erupted last November when OBMUtem * 
Hyundai Precision and Industry mstea d of 
Industries to head a consortium to build the TGV under 
licence in South Korea. , . „ , 

Daewoo protested, calling the decision unfair. It ^ £ it bad 
been GEC- Ais thorn’s main partner when the *”££*?** 
group bid for the high-speed train contract against Siemens of 
Germany and Mitsubishi of Japan. GEC-Alsthom said Hyundai 
was selected as tbe consortium leader on the basis of its 
industrial an d technical capability. 

Daewoo, expressing fears that it would not have access to 
technology transfers if it remained a junior partner in rae 
rvmgnrHum filed a suit to block talks between GEC-Alsthom 
and the South Korean government on a final contract 
Following the dismissal of the suit last month by a South 
g nr ftan court Daewoo has now agreed to join the TGV consor- 
tium with the guarantee that it will have full access to 
technology transfers. GEC-Alsthom said. 

Thirty-four of the 46 TGVs ordered will be built in South 
Korea. Hy undai and Daewoo will have an equal sh are in the 
production of the en gines , while Hanjin Heavy Industries will 
be responsible for the carriages. John Burton, Seoul . 

Qantas plans China service 

Qantaa , the large Australian airline in which British Airways 
holds a minori ty stake, has said that it wants to re-start a 
service to on June l - a move which could sound the 
death knell for the fledgling Australian carrier Australia Air 
International AA secured rights to China last year from the 
International Air Services Commission, which allocates Aus- 
tralia's international routes. 

At that stage. Qantas. which ceased operations to China in 
1387. did not makp an application. AA had hoped to start 
operating in 1993, and even published proposed schedules but 
the carrier subsequently failed to meet 1ASC financial require- 
ments. Qantas plans a once-a-week flight to Beijing via Guang- 
zhou, using a Boeing 767 aircraft. Nikki Tost, Sydney. 

Swiss diesel deal for VM 

VM, the Italian diesel engine manufacturer, has won a con- 
tract worth more than L20bn (£8m) to supply six-cylinder 
engines for the Swiss army's new Dura troop transporter. The 
contract is with Bucher Guyer of Niederveningen, which will 
produce 2,000 vehicles over the next four years. VM, which is 
based near Bologna and supplies Alfe Romeo, Ford and Rover, 
is to provide the Ecosystem Power (EF) 638 LI engine which 
has a maximum speed of 100km per hour and meets European 
Union emission standards due to come into force at the end of 
1995. John Stmkms, Milan. 

John Brown wins US contracts 

John Brown, part of Trafalgar House of the UK. yesterday 
announced two Mg US contracts totalling $70m (£47m), both 
awarded by European chemicals companies. The larger deal, 
worth $4Qm, is to design and construct a speciality chemicals 
plant in Theodore, Alabama for HQls, the German chemical 
company. John Brown has also won a $30m contract to pro- 
vide engineering and proc ai ament services for Solvay Poly- 
mers' polyethylene finishing complex at Deer Park. Texas. 
Andrew Baxter. 



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FORTS & PALACES 

FRIDAY, OCTOBER 7 TO SUNDAY, OCTOBER 23, 1994 


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

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

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


BRIEF ITINERARY 

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tmpoamg Agra Port and the Ttf MahaL Day-trip to Gwsfe 

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Kambagh Palace. Trip to Samode, to see the nmina Kriah 
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FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


svs n :, 


NEWS: UK 


London hands car pricing case over to Brussels 


By John Griffiths 

The UK government yesterday 
effectively handed over to Brussels 
responsibility for implementing the 
Monopolies and Mergers Co m mi s- 
sion recommendations for Increasing 
competition in car sales. 

to doing so it has acknowledged 
its failure to make carmakers Call 
into line with the watchdog's find- 
ings and at the same time angered 
consumer groups which claim that 
car prices are excessively high in 


Britain compared with the rest of 
Europe. 

Motorists and other parties must 
now wait to see what conclusions 
the Commission reaches in its cur- 
rent review of “block exemption," 
the selective distribution system 
which allows carmakers to sell 
through exclusive networks. 

It is this system, requiring an 
exemption from normal EU competi- 
tion rules, which consumer groups 
blame for allegedly making UK car 
prices higher than In many other 


parts of Europe - and on which 
much of the MMC's own case rests. 

The exemption, granted in 1985, 
runs out on June 30 next year. The 
motor industry has already been 
warned by the EC competition direc- 
torate that renewal will depend 
largely on manufacturers' adherence 
to EU limits on car price differen- 
tials across Europe and other signs 
that consumers are not being disad- 
vantaged. 

It is clearly the hope of the UK 
government that the MMC's con- 


cerns will be adequately addressed 
by the Commission, and that no fur- 
ther action will be needed by West- 
minster. 

The MMC's report on car distribu- 
tion and sales, published almost 
exactly two years ago, found that a 
complex monopoly existed in favour 
of 24 car suppliers arising out of the 
exclusive distribution system. 

The MMC identified a number of 
restrictions Imposed by suppliers in 
agreements with dealers as operat- 
ing against the public interest. 


It also found that a scale monop- 
oly existed in favour of Ford, as the 
UK market leader together with its 
wholly-owned subsidiary. Jaguar, 
but did not find that this scale 
monopoly operated against the pub- 
lic interest 

Ford and other makers have dug in 
their heels against the recommenda- 
tions, insisting that they are too 
prejudicial to their interests. 

Consumer groups have been con- 
sistently critical of both manufactur- 


ers and dealers, claiming that medio- 
cre service and repair performance 
undermines the whole concept on 
which block exemption itself had 
been based - namely that cars are so 
complex, and have such big safety 
implications, that a dedicated, exclu- 
sive sales and after-sales network is 
warranted. 

Consumer groups want a market 
free-for-all, with manufacturers 
obliged to supply cars to virtually 
any outlet which wishes to sell 
them. 


Rail companies 
face £500m bill 
on rolling stock 


By Charles Batchelor, 
Transport Correspondent 

Rail companies which take 
over British Rail's passenger 
operations can expect to pay 
about £500 in in charges to 
lease the trains and carriages 
they will need. 

This sum is in addition to 
the £2_2hn which the govern- 
ment announced last month 
they will pay for the right to 
run their trains on the nnHrwini 
rail network. 

The government's pro- 
gramme to privatise BR envis- 
ages the creation of three 
rolling stock leasing companies 
which will take over BR's 
existing trains and carriages 
and also buy new ones for leas- 
ing on to the train operators. 
The operating companies will 
not be required to lease their 
rolling stock but most are 
expected to do so. 

Details of the leasing 
arrangements have been 
eagerly awaited by potential 
bidders for BR franchises 
which are expected to go on 
sale next year. 

Negotiations between the 
department of transport, the 
Treasury. BR and Hambros, 
the merchant bank which is 
advising on the rolling stock 
companies, are still continuing. 
The government is keen to 
establish a commercial regime 
for pricing the leasing deals 
but this is proving difficult in 
the absence of an existing mar- 
ket for rolling stock leases. 


The £50 Om leasing charge 
will in theory not prove a bur- 
den to the companies which 
take cm rail franchises because 
it will be matched by an 
Increase In the Treasury sub- 
sidy. Any increase in the sub- 
sidy requirement could how- 
ever demotivate managers, 
some of whom have already 
expressed concerns at the 
amount of track charges they 
will have to pay. 

Potential bidders for rail 
franchises are concerned that 
very few details have been 
released about the rolling 
stock companies less than 
three weeks ahead of the for- 
mal creation of a devolved rail- 
way network on April L 

The government plans to 
establish three rolling stock 
companies which will each 
take over a mix of BR existing 
rolling stock. Two of the 
rolling stock companies will be 
based in London, with a third 
in Sheffield. 

The department of transport 
expects to reach an agreement 
on the leases by June and to i 
have concluded agreements 
with the present BR operating | 
companies by September or 
October. No detailed agree- 
ment has yet been reached an 
bow the leasing char ges would 
be allocated to the 24 BR oper- 
ating companies which are to 
be franchised. They are 
unlikely to mirror the alloca- 
tion of track charges however, 
because they will depend . on 
type rolling stock. 


Bubbles 
to battle 
oil spills 

Air bubbles have become the 
latest weapon in the battle to 
contain small oil spills from 
tankers, Robert Corvine writes. 

Shell has installed a bubble- 
based containment system at 
its Stanlow manufacturing 
centre at Ellesmere Port in 
Cheshire, pictured right 

A wall of air bubbles 
released from hundreds of 
small holes in hoses anchored 
to the bottom of the Manches- 
ter Ship Canal is strong 
enough to confine minor spills 
of oil or chemicals, giving 
crews time to activate more 
substantial containment 
systems, tike inflatable booms. 
The system was first tested by 
the Royal Navy at Plymouth. 

Captain Brian Davies-Pat- 
rick. Shell’s marine superin- 
tendent at Stanlow, says the 
bubble barriers are akin to 
"immediate first aid”. The 
company, however, says it has 
had few spills From tankers at 
the Ship Canal berths. 



Planners urged to discourage use of cars 


By Charles Batchelor, 

Transport Correspondent 

Local authorities to England will be 
encouraged to take planning decisions 
that limit the scale of out-of-town devel- 
opments and reduce reliance on private 
cars under guidance issued yesterday. 

Mr John Glimmer, environment sec- 
retary. announced planning guidelines 
intended to reduce the growth of car 
and commercial vehicle journeys and to 
increase the scope for use of public 
transport. 


The planning guidance note repre- 
sents the most detailed statement on 
transport policy since the government 
committed itself to an environmental 
strategy at the 1992 Rio Earth Summit. 

Three main aims of the new p lanning 
policy are: 

• To ensure that new developments 
which necessitate journeys are built 
where there is a choice of transport 
Shops, offices, cinemas and leisure cen- 
tres should be close together so one 
journey can serve several purposes. 

• To provide housing developments 


with public transport links and nearby 
local services so journeys can be made 
on foot or bicycle. 

• To improve the quality of life to 
towns and cities - which are efficient 
transport locations - while maintaining 
the vitality of the countryside, to 
reduce the need for long-distance com- 
muting. 

Consistent policies to reduce the need 
to travel could result to a 15 per cent 
reduction in fuel consumption and 
exhaust emissions over 20 years, Mr 
Gummer said. 


The impact of the new policies will be 
gradual because only 1 per cent to 2 per 
cent of the country's stock of buildings 
is renewed each year. But over time the 
new policy, combined with the govern- 
ment’s plan to raise fuel duty by at 
least 5 per cent a year, will make a 
difference, 

Environmental group Friends of 
Earth said traffic growth would not be 
cut while “motorway mania is allowed 
to continue”. The transport department 
will soon announce a review of its 
£23bn road-building programme. 


PM firm 
on fight 
against 
terrorism 


By David Owen 
and Michael Cassell 

The IRA cannot bomb its way 
to the negotiating table, Mr 
John Major told MPs yester- 
day, as the government 
stepped op efforts to co-ordi- 
nate a convincing response to 
the latest wave of terrorist 
outrages In a scries of behind- 
dosed-doors meetings. 

A 50-minute meeting yester- 
day morning between the 
prime minister and Mr James 
Molyneaux focused on the 
political talks process and 
security, with the Ulster 
Unionist party leader calling 
for pressure to be put on Dub- 
lin to crack down on terror- 
ism. 

The UUP leader later 
released a to ughly- worded 
statement describing Dublin's 
“updated" arrangements for 
dealing with terrorists as 
“seriously flawed” and the 
lack of results as “quite scan- 
dalous.” 

He dealt a blow to the gov- 
ernment’s hopes of pressing 
ahead with the three-stranded 
political talks process, saying 
that institutionalised struc- 
tures for dealing with north- 
south relations - such as those 
advocated by nationalists - 
would not serve any practical 
purpose and “merely create 
suspicion." 

Pressure for the government 
to ensure that a tougher line is 
taken against terrorism will 
increase tomorrow when the 
Tory backbench Northern 
Ireland committee holds its 
next meeting. 

Meanwhile, Downing Street 
hinted that moves might be 
put in train to stage another 
meeting between the prime 
minister and Mr Albert Reyn- 
olds, his Irish counterpart, 
before their next scheduled 
get-together in June. One 
informed source said he was 
certain the two men would 
meet before June. 

it was announced yesterday 
that Mr Molyneaux will In 
April lead a four-man delega- 
tion to the United States to 
meet senior politicians and 
White House and state depart- 
ment officials. 



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FINANCIAL TIMES WF.nNESPAY MARCH 16 1994_ 


NEWS: UK 


Consumer spending cut back by tax fears 


Britain in brief 




K5H OP* 


Fortex shelves 
lamb scheme 


By Emma Tucker and Andrew Taylor 


Evidence that UK consumers reined 

back their spending in February 
ahead of next month’s tax increases 
yesterday raised expectations that the 
government may have to ease the bur- 
den of higher tax bills by cutting 
interest rates again. 

The Confederation of British Indus- 
try said its new distributive trades 
survey confirmed that unimpressive 
sales in January were more than a 
“□ash tn the pan”. The data showed 
that last month retailers reported the 
lowest year-on-year increase in sales 


since volumes started to rise in Janu- 
ary 1933. 

But other figures yesterday pointed 
to robustness in the UK building 
industry. Construction orders won by 
contractors were 30 per cent higher in 
the three months to January 31 than 
in the corresponding period 12 
months earlier. 

The figures, published by the 
Department of the Environment, indi- 
cated that the upsurge in orders since 
the autumn was continuing to provide 
further evidence that the recession in 
the industry may be coming to an 
end. 


The CBI said it was not particularly 
concerned by the slowdown in retail 
sales growth. Mr Nigel Whittaker, 
chairman of the confederation's dis- 
tributive trades panel, said it proba- 
bly reflected the act that some con- 
sumers were already anticipating the 
impact of tax increases due to take 

effect in April 

“Equally, other consumers may also 
be holding back until they are sure 
just how much their pay packets will 
be affected", he said. 

Retailers were confident they would 
“weather the storm” of tax increases. 
“It will cause a bit of a blip for a 


month or two. But the underlying 
trends suggest we are going to emerge 
from it in a satisfactory way,” said Mr 
Whittaker. 

Overall, 40 per cent of retailers sur- 
veyed business was higher than 
in February 1993, while 30 per cent 
said it was lower. The IQ per cent 
difference between the two figures 
compared with a positive balance of 
15 per cent in January, and was the 
smallest since January 1993. 

Only 16 per cent of retailers said 
sales were good for the time of year, 
while twice as many - 33 per cent - 
thought they were poor. 


Inflation continues to show few 
signs of picking up, according to the 
survey. A positive balance of 20 per 
cent of retailers reported that prices 
were up on 12 months earlier. With 
the exception of January's balance, 
this was the weakest mice trend since 
the survey began in 1983. 

The survey also showed that 
Imports are increasing their presence 
in British shops. The CBI said the 
proportion of deliveries from suppli- 
ers accounted for by imports 
increased in the year to January. A 
positive balance of 1 per cent in Janu- 
ary rose to 7 per cent in February. 






Cable seeks 
TV deal over 
Wimbledon 


Hopes that up to 700 jobs could 
be created in Scotland or cen- 
tral Wales were dashed when 
the Fortex Group of New Zea- 
land shelved plans for a forge 
lamb processing plant. Fortex 
blamed the decision on disap- 
pointing half-year results, 
which it said were due largely 
to loss of livestock in severe 
storms in New Zealand. 


Cammell Laird 
shipyard sale 
is ‘imminent’ 


By Ian Hamilton Fazey, 
Northern Correspondent 


Cammell Laird, the Merseyside 
military shipyanl which dosed 
last year, is within weeks of 
being sold to a ship repair com- 
pany, which plans to employ 
1.600 people there by the end or 
next year. 

VSEL. the Barrow-based 
nuclear submarine builder 
which owns the yard, yester- 
day confirmed that the sale 
was imminent, with a March 31 
deadline imposed for comple- 
tion. 

The bidder is Coastline 
Industries, which already 
leases C amm ell Laird’s dry 
docks and other facilities and 
has taken on about 600 work- 
ers in the last year to fill con- 
tracts with several shipping 
lines and owners. 

Coastline was founded five 
years ago by Mr John Stafford, 
a former Grant Thornton 
accountant, to exploit ship 
repairing opportunities follow- 
ing the recovery of the port of 
Liverpool and intensification of 
Irish Sea trade. 

The deal was negotiated in 
January by Mr Amin Amiri, 
corporate finance partner of 
Grant Thornton in Liverpool 
but completion has been bog- 
ged down by legal arguments 
over site values and long-term 
environmental liabilities. 

These are understood to 
have forced VSEL to lower its 


price, while confining future 
use of the site to shipbuilding 
and ship repair. 

VSEL has imposed the 
March 31 deadline to force sale 
or withdrawal. Mr Norman 
Broadhurst, VSEL finance 
director, said: “There are other 
shipbuilding companies now 
interested. We gave Coastline 
exclusivity, but it is now up to 
them to complete." 

Mr Jonathan Diggines, direc- 
tor of the Manchester office of 
Murray Johnstone, the Glas- 
gow-based fund manager, yes- 
terday confirmed it would be 
underwriting the deaL The 
price is not being disclosed, 
but about £l0m is understood 
to be available. Allied Irish 
Banks is providing loan and 
working capital for Coastline's 
expansion. 

Rival bids for Cammell Laird 
are understood to depend on 
the European Commission 
allowing intervention funding. 
Labour and Tory MPS from the 
area discussed this in Brussels 
yesterday. 

However, VSEL has been 
consistently refused EU help 
for Cammell Laird because it 
made warships - intervention 
funding is limited to civil yards 
faced with closure. 

IT the deal is completed. 
Coastline will take over Cam- 
mell Laird's all-weather con- 
struction hall, three dry docks j 
and its wet basin. Some of the 
facilities may be leased later. 



Company 
carves out 
contract 


Victor Jarvis works on an ornamental font at the Thompson factory in Yorkshire 


A small Yorkshire factory 
specialising in hand-carved 
furniture has won its biggest- 
ever order - born the owner of 
one of America's largest funu- 
ture companies. 

When Edwin J Shoemaker 
wanted to restore a Lutheran 
chapel In Monroe, Michigan, 
tn m emory of his late wife, he 
could not find the craftsmen to 
do the job in the US, despite 
owning 18 ftmritme factories. 
So he turned to the firm of 
Robert ‘Mousey 1 Thompson, in 
Kllburn, N Yorks, whose 
pieces bear the distinctive 
carved moose trademark. 

When the £170.000 contract 
for pews, altars, doors, and a 
crucifix is finished next week, 
32 staff will have pot in 10,000 
man-hours over 9 months. 


The cable television industry 
proposed co-operation with the 
BBC over acquiring rights to 
the Wimbledon lawn tennis 
championships. The BBC's 
four-year agreement with the 
dub comes to an end this sum- 
mer and British Sky Broad- 
casting, the satellite venture 
banked by Pearson, owners of 
the FT, has said it will bid 
against the BBC. 

The cable industry, which 
has become more interested in 
acquiring exclusive rights 
wants to be able to televise 
play on the outer courts rarely 
covered by the BBC. In return 
cable could help the BBC with 
the cost of acquiring the rights 
to televise Wimbledon. 


Top military 
post filled 


General Sir Peter Inge, below, 
became Britain's top military 
officer in succession to Sir 
Peter Harding, who resigned 
as Chief erf the Defence Staff 
after allegations of adultery. 


VAT cut in 



Manx budget 


Fishermen urge renewal of seal cull 


By James Buxton, 
Scottish Correspondent 


The hi ghl y controversial issue 
of c ulling seals is to be raised 
by UK fishermen when they 
meet a government environ- 
mental agency later this 
month. The fishermen say 
seals are threatening their live- 
lihoods by the damage they 
cause to fish stocks and to fish- 
ing gear. 

The fishermen, from the 
seals working group of the 
Scottish Fishermens’ Federa- 
tion, will tell Scottish Natural 
Heritage, the government's 


environmental agency for Scot- 
land, that it is time for 
renewed culling to reduce seal 
numbers. The group includes 
representatives of fishermens' 
organisations in En gland and 
Ireland. 

Culling was abandoned in 
1978 when the then Scottish 
Secretary bowed to intense 
pressure from environmental 
groups. It is widely accepted 
that the numb er of grey seals 
around the UK coast has risen 
since then: the fishermen 
believe it has gone up from 
70,000 to between 100,000 and 
110,000, and is increasing by 


about ten per cent a year. 
About 90,000 grey seals are 
thought to be in Scottish 
waters. 

Mr Roddy McColl, chairman 
of the group, says it has scien- 
tific evidence suggesting that 
seals are eating up to 240,000 
tonnes of fish a year, of which 
half is of commercially exploit- 
able species. With some Euro- 
pean Union fish quotas 
amounting to about 100.000 
tonnes a year, this moans that 
“seals have a substantial EU 
quota to themselves." 

Scottish Natural Heritage, 
which will be meeting the 


fjshpmipn on March 29 at their 
request, said yesterday: “We 
feel the case has to be well 
proven that seals are causing 
the damage before protection 
can be lifted. So far the evi- 
dence is not conclusive." 

The fishermen, who last 
raised the issue of culling seals 
about three years ago, hope 
that the SNH mi ght at least 
recommend carrying out more 
research into seal numbers and 
their effect on fish. 

Under the 1970 Conservation 
of Seals Act fishermen can 
obtain licenses to shoot indi- 
vidual marauding seals. 


Value added tax is to be cut on 
some tourism-related services 
in the Isle of Man in a bid to 
boost the industry. Measures 
announced in the Island's bud- 
get also included a six-month 
penalty and interest remission 
scheme from April 6 for those 
with inmme tax and VAT lia- 
bilities relating to income 
omitted or understated in dec- 
larations since April 1987. 

The treasury hopes the 
amnesty, designed to enable 
people and companies to regu- 
larise their liabilities without 
incurring penalties or interest 
charges, will produce several 
million pounds of estimated 
outstanding tax debts. 



The 59-year-old officer became 
Chief of the General Staff two 
years ago after service in 
Hong Kong, Malaya, Libya, 
and Germany, had been acting 
as the caretaker military 
adviser to the government 


Kop for sale 


Curbs sought 
on wind farms 


Restrictions on wind farms are 
hacked by the Wales Tourist 
Board in a new strategy for 
tourism. It endorses the poli- 
cies of the Countryside Coun- 
cil for Wales which Is opposed 
to wind farms in national 
parks and other designated 
areas. 


Fragments of the stepped ter- 
race known as The Kop at 
Liverpool Football Club are to 
be sold for charity. The 
pmhankmpnt, on Which 20,000 
fans can stand, was named 
after the hillside on which the 
battle of Spion Kop took place 
in the Boer War. The terrace Is 
to be bulldozed at the end of 
the season under new safety 
guidelines. Pieces of concrete 
from The Kop. which to many 
fans is a symbol of the club's 
former domination of domestic 
soccer, are to sell at between 
£2^9 and £32. 


x ..x.x/' a J xa « • >1 


GLOBAL 



i 













FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


9 


MANAGEMENT 


Michael Smith explains how companies can now control electricity costs 


The power 
to choose 



Tmor Hitfnptvm 

Bectricity, not burgers: KeOh Snath with consumption charts at McOonakfs 


K eith Smith, buyer of utili- 
ties at the McDonald's fest 
food c ha i n, is beaming at a 
chart of one restaurant's 
electricity consumption. He likes 
the power it gives the company’s 
restaurant managers. 

“Look at that,” he says, ‘They've 
done all the right things there. The 
consumption foils when it should; 
the store workers have switched off 
the cookers and lights when they do 
not need them. It’s a perfect exam- 
ple to show to other stores.” 

The chart comes courtesy of East- 
ern Electricity which, from next 
month, is to supply power and asso- 
ciated services, including diagrams 
showing past consumption, to 500 
McDonald's stores in En g lan d and 
Wales. 

Eastern’s willingness to supply 
power and other facilities as part of 
the service, yet still undercut offers 
from rival power companies, was 
one reason why it won the business. 

In the past few months through- 
out Britain big companies like 
McDonald's have been evaluating 
for the first time a range of offers 
for power supplies as they and the 
suppliers gear up for the next phase 
in the liberalisation of the market 
From April l any electricity con- 
sumer using more than 100 kilowatt 
hours at the peak of its demand will 
he able to buy its supplies from any 
registered supplier intruding the 14 
mainland UK distributors and the 
two England and Wales generators. 
Until now they have had to buy 
power from their local distributor. 

The previous limit of l megawatt, 
10 times the new threshold, encom- 
passed only about 5,000 consumers. 
From April about 50,000. including 
businesses, schools, hospitals and 
leisure centres, will be able to shop 
around and many are taking advan- 
tage. 

More than 7,000 in the lOQkW to 
1MW market, a fifth of those eligi- 
ble, have already made arrange- 
ments to take their supplies from a 
company other than their regional 
electricity supplier. The industry 
expects the figure to reach about 
15,000 w ithin the next year. 

Price cuts have reached 20 per 
cent for a handful but the majority 
which have switched are estimated 
to be making annnai savings OB 
their electricity bills of between 4 
and 10 per cent. Many of those 
which have stayed with their 
regional distributor have also 

gained financially 

But the benefits of the liberalised 
market are not just in the price. 
Companies, or at any rate the large 
ones, are finding they are in strong 
position to demand a tailor-made 
service which can improve their 

As a large company, with all the 
advantages which that brings for 


bulk buying, McDonald’s was better 
placed than most prospective buy- 
ers - yet it received offers for the 
whole country from just four suppli- 
ers of the 14 approached. 

Smith was impressed by only one 
company other than Eastern. Tt 
was apparent that several suppliers 
were poorly prepared. There was 
not the expertise to deal with the 
market One company, for prampio. 
had a very good salesman but poor 
back-up. 

“Several of the offers we received 
had hidden costs,” says Smith. 
Some were able to offer charts 
showing consumption in each store 
by tbe half hour but they wanted to 
charge extra, on top of the prices 


they had quoted, and that was 
already more than Eastern’s quote. 

Smith says McDonald's has 
become much more conscious of 
energy costs in the past two years 
and now sees tbe half-hourly break- 
down of consumption as an essen- 
tial management tooL Tt gives the 
manager of a store a picture of what 
has been happening in the store 
even at times when he is not there.” 

McDonald’s estimates that it will 
save £L4m on its energy bill each 
year as a result of the deal with 
Eastern, which is worth about 
nftm a separate deal in Scotland 
for the company’s 20 stores there is 
leading to savings of more than 30 
per cent 


Another company taking advan- 
tage of the newly competitive UK 
electricity market is Stakis. tbe 
hotels and casinos group. Stakis 
Will make si gnifican t savings on its 
electricity bill after a deal with 
Scottish Hydro-Electric involving 
the 25 of its 52 hotels and six casi- 
nos which are big enough to be able 
to shop around for supplies. It 
expects its £2Jlm-a-year electricity 
bifi for the 31 units in the Hydro 
deal to fall by about £250,000. T.ikp. 
McDonald’s, Stakis was not spoiled 
for choice. Bill Gunn, in charge of 
utilities purchasing for the group, 
says only the two Scottish power 
distribution companies were pre- 
pared to make an offer covering 
hotels throughout the UK. 

Stakis 1 s main requirement was 
simplicity. "Electricity bills seem to 
us to be for too complicated with 
different charges for maximum 
demand, for supply and for different 
times of the day. We wanted a uni- 
form price for each unit of electric- 
ity which is the same for all hotels 
and for that price to include every- 
thing. 

"We have limited resources and a 
single price makes h illing far easier 
to double fthtwk it is alw useful for 
comparison purposes. If one hotel is 
u^ing for more units than another 
with similar occupancy rates we 
will know there is something 
wrong. Perhaps they leave every- 
thing on in the kitchen overnight.” 

Both Hydro-Electric and Scottish 
Power were able to meet S ta Iris 's 
request for uniform prices but 
Hydro's tends* was lower. 

Not all companies, however, have 
found it easy to shop around. At 
Fowler & Holden, John Hardy, man- 
aging director, badgered electricity 
suppliers for several months before 
be received an offer he considered 
may be acceptable. “At first 1 could 
not get suppliers to compete,” he 
says. “They seemed only interested 
in making decent offers to large 
companies. But large companies are 
my competitors and if they are get- 
ting big cuts in their electricity bills 
I want them too.” 

The first six offers made to 
Fowler would have resulted in its 
power bill remaining at about 
£26,000 a year. It was only this week 
when one company, Power&ne, the 
Midlands Electricity subsidiary, 
revised an earlier proposed deal to 
produce annual savings of about 
£2,000. 

The lateness of the proposed offer 
means Fowler will be unable to 
change supplier until after April L, 
since the electricity authorities 
need 20 working days’ notice. Hardy 
says the delay has been worthwhile. 
"Unless we had been prepared to 
wait, the introduction of competi- 
tion would have meant virtually 
nothing to us.” 


Seven strategies to 
change your company 

There is more than one way to tackle organisational 
upheaval. Adrian Furnham considers the options 


T he trouble with the idea 
and practice of 
organisational «*hangp is 
that it is both boring and anxiety 
provoking. The nnmber of 
magazine and newspaper articles, 
courses, memos and self-help 
books dealing with change is 
overwhelming. 

"Adapt or die; change or decay” 
is not a simple rallying cry for 
the senior manager, it is a reality. 
But the question is how to bring 
about successful change to 
maximise effectiveness and 
minimise pain. 

Managers choose different 
strategies with varying 
consequences. 

• The fellowship strategy: This 
approach relies heavily on 
interpersonal relations, using 
seminars, dinners and events to 
announce and discuss what needs 
to be changed and how. People 
at all levels are listened to, 
supposedly treated equally and 
conflicting opinions are expressed. 
This "warm and f uz z y” approach 
emphasises personal commitment 
over ideas - the change process 
may have serious problems 
getting going as a consequence. 
Because this strategy Is averse 
to conflict it can nii« crucial 
issues and even waste time. Many 
fellowship-types leave the 
organisation and can only be 
replaced by those who have a need 
to belong. 

• The political strategy: Here the 
power stru c ture is targeted by 
attempting to influence tbe 
official unofficial leaders. 

The strategy seeks to identify and 
persuade those in the organisation 
who are most respected and who 
have large constituencies. 

Political strategists Patter, 
bargain and compromise to 
achieve their ends. But this 
destabilises the organisation 
because of ongoing shifts in 
people’s potftiral stances. 
Maintaining credibility can be 
difficult because the strategy is 
so obviously devious. Getting 
people to show their true colours 
in this way is never simple. 

• The economic strategy: The 
cynical economist believes that 
money is the best persuader. The 
person who controls the purse 


strings can buy or change 
anything. Everybody has a price. 
This is the rational 
"bomtyeamomicos'' approach 
that assumes people act more or 
less logically but that their logic 
is based on economic motives. 

But "buying people off” can be 
costly and the effects short-term. 
The strategy also ignores 
emotional issues and all questions 
besides bottom-line profit 
• The academic strategy: This 
approach assumes that if you 
present people with enough 
information and the correct facts 
they will accept the need to 
change. The academic strategist 
commissions studies and reports 
from employees, expe r ts and 
consultants. Although such 
strategists are happy to share 
their findings it is difficult to 


Most people do not 
like being treated as 
machines and so do 
not feel committed 
to changes 


mobilise energy and resources 
after the analysis phase. Analysis 
paralysis often results because 
the study phase lasts too long 
and the results and 
recommendations are frequently 
out of date when they are 
published. 

• The eng ineerin g strategy: This 
is the technocratic approach that 
assumes that if the physical 
nature of a job is changed, enough 
people will be forced to change. 
The strong emphasis on the 
s tr uc tur al aspects of problems 
leads to a sensitivity to the 
environment which is particularly 
helpful in unstable situations. 

The concern over channels of 
communication can prompt 
struc t ural change, but fails to 
commit most people. Most people 
do not like being treated as 
TnarhiTu>g and hence do not fed 
committed. Such change can also 
break up happy and efficient 
teams. The strategy is limited 
be came only high-level managers 
can really understand it, it is 
impersonal and it ignores the 


question: What is in this for me? 

• The military strategy: This 
approach is reliant on brute force 
and sometimes ignorance. It is 

at times used by the military' and 
the police, students, pressure 
groups and political parties. Tbe 
emphasis is on learning to use 
the weapons for the fight. Physical 
strength and agility are required 
and following the plan is 
rewarded. But the change-enforcer 
cannot relax, in case the imposed 
change disappears. Furthermore, 
force is met by force and the 
result is ever-escalating violence. 

• Tke confrontational strategy: 
This high-risk strategy reckons 
that if you can arouse and then 
mobilise anger in people to 
confront the problem, they will 
change. Much depends on the 
strategists' ability to argue the 
points, as well as being able to 
stir np anger without promoting 
violence. This approach 
encourages people to confront 
problems they would prefer not 
to address but tends to focus too 
much on the problem and not on 
the solution. Anger and conflict 
tend to polarise people and can 
cause a backlash. 

Few of these strategies occur 
in isolation. Bat they do have 
different basic assumptions about 
who to influence, bow to proceed 
and what to focus on. Each tends 
to be effective at addressing 
certain change problems but very 
bad at dealing with others. The 
political strategy has problems 
with credibility; the economic 
approach with maintaining 
change, and the academic with 
implementing findings. Bnt for 
the professional who most 
demonstrate his worth to the 
organisation by implementing 
change, any of the above might 
help him. 

The trouble is that strategies 
tend to be chosen by chief 
executives for personal reasons 
rather than as a result of any 
well-considered set of options. 

An inappropriate strategy may 
cause more trouble than the 
initial reason for change. 

The author is head of the business 
psychology unit at University 
College London. 


GLOBAL FUND MANAGEMENT 

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Herald Tribune, Paris 

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THE BOND AND CURRENCY SESSION 
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Dcut-fh, GeseUsehafi fur Wettpapierspami m.b.H.. Frankfurt 
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I ml, ion 



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10 


MARCH 16 1994 


FINANCIAL TIMES WEDNESDAY 


BUSINESS AND THE ENVIRONMENT 


WORLDWIDE WASTE 

Big boys’ game 
comes under fire 

Germany’s national recycling scheme faces 
growing attack, writes Ariane Genillard 


j HHHpH Wuppertal, a 
135^ .JrB smoky town in 
the recession-hit 

j Pt coal mining region 

r JS2KP1 of northern 
L H'l Germany, is 
K J hardly inspiring. 

But for Ernst von 
Weizsficker, one 
: or Germany's most prominent 
environmentalists, this is just 
the place for an institute devoted 
to the fight against pollution. 

Von Wcizdcker, of the 
Wuppertal Institute for 
Climatology, recently announced 
that he was retiring as president 
of the advisory council of Duales 
System Deutschland (DSD), 
Germany's three-year-old national 
recycling scheme. 

Von Weizshcker calls Germany’s 
most ambitions environmental 
project a "dangerous 
manipulation" which "serves the 
throw-away society". He has 
joined the swelling chorus of 
critics who claim that the waste 
disposal scheme is misconceived. 

Von Weizsacker’s criticism is 
directed at the monopolistic 
structure that characterises DSD 
and makes the country’s recycling 
industry Increasingly 
concentrated in the hands of a 
few utilities and energy groups. 

DSD was created in 1991 by 600 
companies in response to the 
packaging law drawn np by Elans 
Topfer, the environment minister. 
This makes manufacturers and 
retailers responsible for collection 
and recycling of packaging waste. 
It also sets collection and 
recycling quotas, which increase 
over time and must be enforced 
nationally. 

Industrial groups in Germany 
set up DSD as a national waste 
collection scheme, which signed 
contracts with waste recyclers. 

To meet the cost of collection, 

DSD imposes a fee, borne mostly 
by consumers through higher 
prices and shown as a green dot 
on packaging. 

Because the law Insisted the 
system should be nationwide, DSD 
quickly spread to nearly all 
German cities. Few German 


households are without the special 
yellow bins for packaging waste 
with green dots. 

Three years after its creation, 
DSD's quasi-monopoly has 
angered middle-sized German 
recyclers and environmentalists 
who say the giant waste collector 
is squeezing ant of a profitable 
market the small players who 
represent a pool of innovation 
for new enviromnen tally-friendly 
recycling technologies. 

The Federal Cartel Office has 
admitted there is a problem but 
argues that DSD is only fulfilling 
the packaging law. Undaunted, 
the medium-sized companies are 
intensifying their lobbying efforts 
within government circles. They 
point ont that in 1992, more than 
140 waste management companies 
were acquired by larger groups. 


"Innovation and 
market strategies for 
recycling specific 
waste products no 
longer have a 
chance* 


compared with 60 in 1990. 

The medium-sized companies 
are also protesting against 10 
year-long contracts signed by DSD 
with municipalities and with the 
large utilities and energy groups. 
"Innovation and market strategies 
for recycling specific waste 
products no longer have a 
chance," explains the federal 
association of medium-sized 
companies (BVMW1. The 
association is proposing 
continuous tender processes and 
price negotiations, which would 
allow them to bid for DSD 
contracts. They add that such 
measures would also open the 
market to foreign competition. 

Waste disposal companies 
created by municipalities now 
make up one in three of DSD’s 
clients. "Municipalities 
immediately saw a tremendous 
source of revenue in this business 


and made sure the contracts did 
not escape them." says Franz-Josef 
Fraundorfer. managing director 
in the German office of Arthur 
D Little, the consultancy group. 

Large utilities and energy 
groups have also moved into 
waste recycling. EWE Entsorgung, 
the waste management subsidiary 
of RWE, Germany’s biggest utility 
group, has a turnover of more 
than DM2bn (£700m). Three years 
old. It has acquired 100 companies 
in its expansion drive, and DSD 
accounts for 16 per cent of its 
business. 

Other German concents have 
also stepped in, with Veba, the 
DQsseld orf-based energy group, 
processing 120,000 tonnes of 
plastics in a recycling plant linked 
to its oil refinery in Bottrop. And 
Tbyssen Hand elsuni on, a 
subsidiary of Thyssen, the big 
engineering and steel group. Is 
involved in building op recycling 
plants in eastern Germany. 

These groups argue that the 
future of waste itigwal in 

Germany ties with those who can 
invest large sums in complicated 
recycling plants. High investments 
also justify long-term contracts, 
DSD officials say. 

According to the Environmental 
Council, an advisory body to the 
federal states, four or five 
companies are likely to share 
some 40 per cent of the domestic 
waste market in coming years. 

DSD says the concentration 
process in the industry had 
started before it came into being, 
bnt medium-sized companies 
claim the DSD’s structure favours 
large companies. "DSD is 
dominated by companies such 
as Unilever and Procter & Gamble 
who have no interest in meddling 
with the small players. It is a big 
boys’ game,” says one 
entrepreneur. 

The government has meanwhile 
ignored critics from the smaller 
companies. Tfipfer says Us 
packaging law achieved a 13 per 
cent drop in packaging waste in 
Germany in 1993. 

Next week US. 


A novel approach to one of 
the US's most common but 
most intractable environ- 
mental problems is being 
tested by a team of scientists at a 
US federal uranium-processing facil- 
ity in Kentucky. 

The field test has nothing to do 
with radioactive waste or nuclear 
safety, however. Hie scientists are 
seeking a process for cleaning up 
leaked fuel, industrial solvents and 
other substances which have con- 
taminated the soil at thousands of 
sites in the US, The technology 
raises new hope that many of these 
areas of land can return to produc- 
tive use. It also promises to speed 
up the faltering 14-year effort to 
clean up the worst of the areas. 

"One of the things that ham- 
pered progress is a slow pace of 
technological innovation," says Bin 
Roberts, a toxic waste expert at the 
Environmental Defence Ftxnd, a pri- 
vate lobbying group. Of the 1,200 to 
1,300 sites designated as the most 
dangerous under the Superfund pro- 
gramme, set up in i960 by the US 
government's Environmental Pro- 
tection Agency (EPA) to clean up 
contaminated land, about 200 have 
been reclaimed so Car. 

The new technique, known as the 
lasagne process, involves using elec- 
trical current to draw wastes 
through "treatment zones” in the 
soil Toxic waste materials can 
often be rendered harmless in the 
zones, which resemble the layers of 
a lasagne, without being brought to 
the surface. Scientists say the pro- 
cess is effective in densely packed 
soils that are nearly impossible to 
reclaim with current techniques. It 
may also prove cheaper and safer. 

As part of a wider initiative 
announced in January by the EPA, 
the project highlights the Clinton 
adminis tration's policy of encourag- 
ing cooperation between the public 
and private sectors and among rival 
companies in the fight against pol- 
lution. Three big US industrial 
groups, Monsanto, DuPont and Gen- 
eral Electric, have taken leading 
roles in the project, together with 
the EPA and the Department of 
Energy. 

“The common denominator of the 
primary collaborators was that we 
each had difficult and expensive 
soil clean-up problems to deal with 
and were frustrated by the lack of 
cost-effective technology to do the 
job,” says Philip Brodsky, director 
of corporate research and environ- 
mental technology at Monsanto, the 
big US chemical group. “The EPA's 
willingness to play a matchmaker 
role was critical in getting the pro- 
cess rolling " 

Soil remediation lends itself to 
joint research and development. 
“There are economies of scale that 
come into play here." Roberts says. 
“There is no long-term return in a 
company investing in this kind of 
new technology by itself." 



Lasagne recipe 
for soil renewal 


A new technique for salvaging contaminated land is 
being tested in the US, as Frank McGurty explains 


The effectiveness of the lasagne 
process has yet to be demonstrated, 
however, with testing so ter limited 
to small-scale trials. The Kentucky 
site where its evaluation begins this 
spring was chosen because it is typ- 
ical. In an isolated storage area at 
the facility, the solvent trichloro- 
ethylene. widely used as a paint- 
stripper, has penetrated the dense 
soil. The EPA says it will be "a 
couple of years” before comparisons 
□f the process's cost and efficacy 
can be made. 

Currently, the main approach to 
dealing with, con taminate d land is 
to excavate the toxic material and 
either incinerate it or seal it In 
watertight pits. However, toxic sub- 
stances, leaking from ruptured 
tanks, for example, may spread 
deep below the surface. The expense 
is also prohibitive, and the risk of 
human exposure is great. 

If the contamination Is deep, but 
the soil Is relatively permeable, 
wastes may have collected in 
ground water, which can be 
pumped to the surface and neutral- 
ised. But in soils with impermeable 
clay layers, so-called “pump and 
treat” methods are ineffective. 
Residual contamination usually 
infiltrates fissures in the hard clay 


below the ground water and eventu- 
ally seeps back in. 

The lasagne process may provide 
a solution in such cases. Brodsky, 
who Initiated the project, says vari- 
ous geological conditions are pres- 
ent in most sites and it is Impossi- 
ble to pinpoint which may be 
suitable for the lasagne treatment 
But the technology may contribute 
to an overall solution in a substan- 
tial proportion of them. 

Brodsky's idea was to combine 
three existing technologies. 

First, a process called electro- 
osmosis flushes the contaminants 
out of the clay fissures. A cathode is 
inserted into the ground, which 
emits low-voltage electrical current 
that pulls the positive ions in the 
waste droplets at the rate of about 
once Inch a day. 

Second, a series of "treatment 
zones" - the lasagne's layers - are 
carved in the soil. The top and bot- 
tom strata are filled with an electri- 
cal conductor, such as graphite. 
Waste gathers in the middle layers 
when the current is switched on. 

The third step deals with the con- 
taminated material once it is there. 
Often, catalysts are available to 
help convert hazardous compounds 
to benign substances once inside 


the treatment zones. Alternatively, 
"bio remediation" systems to 
degrade the waste organically are 
being developed by a number of 
companies, including Monsanto, 
DuPont and GE. Another option, 
used in the Kentucky test, is to put 
activated carbon in the treatment 
zones to absorb the contaminants. 

The new technology has surfaced 
at a propitious time. Last month, 
the EPA proposed sweeping revi- 
sions of the Superfund law, follow- 
ing widespread perception that it 
has foiled to achieve many of its 
goals. 

Among its proposals, the EPA 
would ease standards for cleaning 
up some Superfund sites in an effort 
to encourage redevelopment of 
abandoned land. More importantly, 
the new accent on flexibility la 
likely to spill over into state and 
federal rules applying to cleaning 
np the thousands of waste sites not 
covered by the Superfund pro- 
gramme. 

Even if the lasagne project foils, 
Brodsky believes the joint effort 
will continue. “The collaborative 
paradigm has already proved very 
productive." he says, citing 
advances in bioremedia tion. soil 
flushing and other areas. 


No. 1 Lead Manager of Brazilian 
Eurobond Issues in 1993. 


No.l in terms of number of deals, excluding own issues (source: IFR/SDC Omni Base) 



Internationale 

INGllaiBANK Nederlaaden 

Bank 


PEOPLE 


Carlton adjusts its 
managerial contrast 


NatWest’s newest 
customer runs the bank 


Carlton Communications 
moved yesterday to Integrate 
the management structure of 
its ITV operations following its 
recent acquisition of Central 
Independent Television. 

Andy Allan, right, manag in g 
director of Central, is to 
became chief executive of Carl- 
ton UK Television from mid- 
April. A new managing direc- 
tor of Central Television, yet to 
be appointed, will report to 
Allan, who will also be respon- 
sible for the sales operation of 
the two ITV franchises, the 
largest in the ITV network. 

Allan, 51, has worked in 
broadcasting for nearly 30 
years, beginning as a presenter 
and producer and later becom- 
ing a programme editor in the 
light entertainment depart- 
ment of ABC television. He is a 
former head of news at 
Thames Television and joined 
Central as director of pro- 
grammes in 1984 from Tyne 
Tees Television, where he had 
been director of programmes 
and deputy managing director. 
He is also a governor of the 
National FDm and Television 
School 

Nigel Walmsley, the present 
chief executive of Carlton Tele- 


House-cleaning continues at 
the top of Sears with the resig- 
nation of Howard Perlin, the 
director in charge of acquisi- 
tions and disposals; he has 
been on the board since 1984. 

Perlin started seven years 
before that as personal assis- 
tant to Geoffrey Maitland 
Smith, the then chief executive 
and now chairman. 

Perlin, 47, says that, having 
maste rminde d the disposal of 
Satellite Information Services 
last month, he has brought the 
group to “where it wants to 
get, for the moment,” with the 
business focused on retailing 
and home shopping. 

Since Liam Strong came in 
as chief executive in early 
1992, there has been a rapid 
turnover of executive direc- 
tors. Aside from Roger Groom, 
who on to the board in 
1991, Perlin was the only exec- 
utive director who remained 
from the pre-Strong era. 
Strong’s own difficulties in 
changing the culture at Sears 
were illustrated towards the 


vision and an administrator 
rather than a programme- 
maker, will move to the head- 
quarters of Carlton Communi- 
cations as the main board 
director, with overall responsi- 
bility for group broadcasting. 



Both Carlton Television and 
Central will continue to oper- 
ate under separate boards, as 
part of the terms of their 
broadcasting licences. 

"The opportunity to take 
responsibility for I TV’s two 
largest broadcasters is irresist- 
ible." says Allan. Leslie FUEL 
chairman of the ITV Associa- 
tion for the next two years, 
remains chairman of Central. 


end of last year when Stephen 
Park, the finance director he 
had brought in from Hanson 
just 16 months previously, 
resigned. 

Perlin. who joined Sears 
from First National Finance 
Corporation, reckons he has 
"probably gathered more expe- 
rience than most merchant 
bankers, having completed 
approaching 100 transactions, 
including 30 MBQs’ia his 
time with the group. Disposals 
In which be had a band 
included William Hill and 
Asprey and he was also 
involved in the acquisition of 
Freemans. 

He now plans to put this to 
good use by setting up his own 
private consultancy - very 
much a one-man-band - with 
the aim of providing corporate 
finance and business strategy 
advice across a range of indus- 
tries. He is also building up a 
portfolio of non-executive 
directorships, and has one 
public company already 
appointment lined np. 


Even before taking up bis role 
In the new post of finance 
director for National Westmin- 
ster’s UK branch business, 
Paul Biddle has a related task 
to perform: to become a Nat- 
West customer himself. 

In moving from being 
finance director for Digital 
Equipment, the computer 
group, Biddle sees himself 
becoming a Nat West bank cus- 
tomer but not a banker. 

He says that he regards “the 
business I'm joining as funda- 
mentally a retailing business - 
it just happens to be financial 
products they’re selling,” he 
says. 

He believes his new job - 
which he takes up in mid- 
April - will enable him to 
draw on his experience in 
industry. In the past he has 
worked for Unilever and Rank 
Xerox, following his training 
as a chartered accountant 

The priority he sees for the. 
years ahead will be to find the 
right balance of ways of 


Alan Wheatley, a former senior 
London partner of Price Water- 
house, has been appointed a 
non-executive director and dep- 
uty chairman of Ashtead 
group, the fast-growing plant 
hire company. 

" Ashtead, which began as a 
£458,000 management buy-out 
ten years ago, was floated on 
the unlisted securities market 
in November 1986 and was the 
last winner of the USM com- 
pany of the year award. Its 
market capitalisation has risen 
from £8m to £127m and pre-tax 
profits have jumped from 
£533,000 to around £5 -2m in the 
current year, according to 
some stock market estimates. 

Chairman Peter Lewis, 53, 
who founded the company 
with managing director George 
Burnett, 46, says that the com- 
pany has grown to a stage 
where it needs a non-executive 
director with “bigger company 
experience”. Wheatley, 55. who 
stepped down as chairman of 3i 
last year, is a non-executive 
director of N M Rothschild, 
British Steel, Forte and r^ i 
& General. 

other non-exeentive appoint- 
ments: 

■ Francis Watts, a partner in 
Reeves & Neylan and former 
vice-chairman, as chairman at 
KENT RELIANCE BUILDING 


distributing products to cus- 
tomers, through electronic and 
telephone banking, as well as 
the traditional branch net- 
work. 

Martin Gray, chief executive 
of NatWest’s UK branch bank- 
ing, said that Biddle's respon- 
sibilities would include devel- 
oping and setting the financial 
strategy for retail banking 
operations; managing the bud- 
get planning; and liaising with 
other parts of the group on 
long and short-term financial 
strategies. 

In creating this new role is 
NatWest implying it may have 
missed out in the past, 
through not having a finance 
director for the UK branch 
business? 

Biddle says only that be sus- 
pects they have not put in 
place the appropriate manage- 
ment processes - such as plan- 
ning and budgeting - which 
are "almost taken for granted 
in the industrial environ- 
ment”. 


SOCIETY. 

■ John Herrin, chairman of 
Powerpike and PRP Optoelec- 
tronics and retired md of Crys- 
talate Holdings, at Mion Elec- 
tronics. part of TUNSTALL 
GROUP. 

■ Patrick Thomas, md of Her- 
mes. at WILLIAM GRANT & 
SONS. 

■ Billy Carfautt, a partner at 
Ernst & Young, at COMAC 
GROUP. 

■ Peter Ward, md operations 
of Vickers, at BRIDON. 

■ Sir Robert Andrew at 
SOUTHEND PROPERTY 
HOLDINGS; John Main has 
resigned. 

■ Lawrence Ziman, senior 
partner of Nabarro Nathanson, 
at N BROWN. 

■ David Bowes-Lyon. who had 
been responsible for Union Dis- 
count's operations in Scotland 
and is a director of Christie's 
Scotland, as chairman at AIT- 
KEN CAMPBELL on the retire- 
ment of Billy Carmichael. 

■ Kenneth Baker MP and Sir 
David English at ENCOM, the 
subsidiary of Bell Canada 
International. Mercury Com- 
munications and Jones Interca- 
ble. 

■ John Rudgard, chief execu- 
tive of HP. B ulmer Holdings, 
at WYEVALE GARDEN CEN- 
TRES. 


Perlin leaves Sears and goes 
shopping for himself 


Wheatley joins with Ashtead 























FINANCIAL TIMES WEDNESDAY MARCH 16 1994 



S EJ ^Thrihh* teenafie 

Xfiw r? *** farewell 
Mmder Absolutely Fabulous and 
The Man From Auntie: your 
catchphrases were “A nice little 
Barner", "Be a good girl and make Mummy 
a capumno and “My name's Ben Elton 
good night . Thursdays won't be the same 
without you. True, it would be surprising 
if we had to wait long before Elton, now 
such a wholly professional comedian, was 
back, and the BBC people claim there will 
be another series of Absolutely Fabulous 
though they cannot say when. As for 
Minder, it has run for 107 episodes, and 
although they have cried wolf before and 
then relented and given us more, it does 
seem as though one-off “specials” are all 
we shall get in future. 

The days when television schedules 
were carved in granite and changed with 
the seasons just three times a year seem 
to have gone for ever. Series which run for 
even IS episodes, never mind 26, are now 
rare. Switch on ITV next Thursday at 8-30. 
the time when A tinder has been going out, 
and you will see the first in a half-hour 
series called Outside Edge, worked up by 
Richard Harris from his splendid stage 
comedy about oddly matched couples in a 
cricket club. So far there are just seven 
episodes. 

Meanwhile, if you switch on ITV at 8JM 
tomorrow night, you can make an interest- 
ing comparison. Filling in for just one 
week is a Minder repeat, the first episode 
ever made, called "Gunfight At The OK 
Laundrette” (a spelling which could 
explain the title of Hanif Kureishi's 1985 
script My Beautiful Laundrette). From the 
upbeat signature tune to the location film- 
ing of London, from the central impor- 
tance of the tough Terry McCann char- 
acter to the subordinate role played by 
George Cole’s laughable Arthur Daley, this 
shrieks of what it actually was: an effort 
by the Thames TV subsidiary Euston 
Films to take the most notable aspects of 
The Sweeney and turn them into a vehicle 
for Dennis Waterman who had played the 
rough diamond sergeant in that police 
series. When you see in this first Minder 
episode armed police leaping from a Tran- 
sit van, filmed from overhead, there is no 
mistaking the programme's antecedents. 

As time went by Waterman's limi tat ion s 
and Cole’s strengths became clear, and the 
centre of gravity changed. Once McCann 
ceased to be the flywheel of the series 
there was less need for violent action and 
Minder became more a comedy of manners 
and character. Making the last episode 
mirror the first, by having Arthur instead 
of his minder taken hostage, served to 
emphasise the ways in which it had 
evolved. On the other hand Absolutely 
Fabulous has rarely been anything more 
than a comedy of manners. There have 
been one or two powerful inventions to 
relish, for instance the loathing of Patsy, 
the sixties reprobate, for Saffron, the sanc- 
timonious greenie teenie, a loathing which 
cuts right across the grain of today's adu- 
lation of yoof and environmental agonis- 
ing. 

However, that has been the exception, 
not the rule. The rule in Ab Fab has been 
a type of comedy which relies upon dia- 
logue in a way that makes it almost as 
suitable for radio as for television. Inter- 
estingly, and somewhat ironically, the 
comedy series starring Dawn French, Mur- 



Television/Christopher Pimkley 


Farewell to a nice little era 


der Most Horrid, which now provides a 
comedy substitute an Thursday nights, is 
far more concerned with dramatic "busi- 
ness" and the physical aspects of comedy. 
(Perhaps French and Saunders could get 
together and pool their varied talents; 
what a partnership...) Unlike so many 
series. Murder Most Horrid folly justifies 
the phrase “situation comedy". 

In the opening episode French's attempt 
to hang herself was interrupted by the 
arrival of a professional assassin intent 
upon killing a man in a building across 
the street She fits French with a walk- 
ie-talkie and sends her across to do the 
dirty work, but security guards present 
problems. Persuaded over the r/t to offer 
them “blow jobs”, a phrase which means 
nothing to her, French bumps them off 


one at a time in the gents. Written by 
Steven Moffat, this had the same sort of 
appeal as A Fish Called Wanda. Remark- 
ably Episode 2, with a script by Paul 
Smith and Terry Kyan. proved equally 
good and just as funny, with French 
appearing to be the unbearably gossipy 
hostage of a bank robber but in the end 
turning all the tables. 

The small spate of new series in what 
would once have been mid-season was 
swollen on Sunday night by two in succes- 
sion from BBC1: yet another comedy, and 
yet another drama series about an oddball 
police detective. On the evidence of the 
opening episodes, they do not look likely 
to challenge French or Saunders for com- 
edy laurels, or Minder for the qualipop 
drama crown. The comedy. Honey Far Tea, 


stars Felicity Kendal as a drop-dead gor- 
geous American widow who has brought 
her hunk of a son, Jake, to Cambridge to 
inveigle him into the college funded by his 
late father, while wheedling herself a job 
in the bursar’s office. 

It is a good enough scenario, bnt Mich- 
ael Aitkens. creator of the superb Waiting 
For God. has mystifyicgly opted for Amer- 
ican and British stereotypes which are two 
generations out of date. Silly ass Cam- 
bridge dons baffled by Americanisms went 
out with mortar boards: today they take 
their cue from David Lodge and earn for- 
tunes on the international conference cir- 
cuit And rich Americans, raised on a PBS 
TV diet of British costume drama, do not 
split their sides at the notion of hunting 
anything as small as a fox. 


As for Pie In The Sky, with Richard 
Griffiths as the reluctant detective who 
wants to leave the police and run a res- 
taurant but is being blackmailed into stay- 
ing (a thin variation on the old “one last 
mission” routine) we shall have to see. So 
far the foodie content looks more convinc- 
ing than the police element, but the impor- 
tant question will be whether this is writ- 
ten from the character outwards, or is just 
another contrived formula: “Let's put him 
in a wheelchair! Oh no. Ironside. Well 
make him an antique dealer then - damn. 
Lovejoy. How about a gourmet cook? Yes. 
that’ll do...” Still, you never know: 
Minder was produced to a formula with a 
purpose rather than bursting from the 
breast of an impassioned writer, and that 
lasted 15 years. 


Music in London/Richard Fairman 

Stars in their own right 


T he great composers of the roman- 
tic era are fair game these days 
for conductors from the period-in- 
strument movement. Twenty 
years ago Bach and Handel were still 
being played by symphony orchestras; ten 
years ago people argued that “authentic” 
Haydn and Mozart would never catch on. 

Each decade the authentic brigade 
moves on to its next hunting ground. Nor- 
rington and Gardiner have already tackled 
Berlioz and Brahms, both making a partic- 
ularly good job of the latter’s German 
Requiem. Now Nikolaus Harnoncourt, 
known in his earlier days for his Monte- 
verdi operas and Bach cantatas, has 
caught up with them. The enormous suc- 
cess of his Beethoven symphony cycle 
made further progress into the 19th cen- 
tury inevitable. 

There is one big difference with Harnon- 
court. When he conducts classical or 
romantic music he prefers to work with 
conventional orchestras - although he 
does his level best to turn them into hon- 
orary period musicians. The admirable 
young players of the Chamber Orchestra 
of Europe look wholehearted converts: the 
double-bass players play standing up, the 
timpanist sits on a low chair and the vio- 
lins renounce their usual vibrato. 


In Harnoncourt's hands they become a 
lithe, red-blooded orchestral animal, with 
lean strings and snarling brass, ready to 
pounce at their conductor’s next com- 
mand. There is a high quota of aggression 
in Harnoncourt’s conducting and it made 
itself felt from the beginning of Friday’s 
Barbican concert with a trenchant perfor- 
mance of Beethoven’s Corioltm Overture. 

There was no soloist, which may 
account for a disappointing audience 
(though a noisily appreciative one). The 
central work was Schumann's Fourth 
Symphony, so different in style from Lep- 
pard's recent Schumann cycle that regular 
Barbican concert-goers might have won- 
dered if they were listening to the same 
composer. Where Leppard was fluent and 
graceful, Harnoncourt dug into the music 
with zealous determination. 

This is a conductor who always likes to 
spring a surprise. In Brahms's First Sym- 
phony he did not drive relentlessly along, 
as one might have expected, but found 


time for relaxation as welL If the music 
still sounded stark, one suspects that for 
Harnoncourt overturning a century’s tra- 
dition of glowing romantic performances 
is half the delight As he raced trium- 
phantly through the final brass chorale, 
the adre nalin count hit danger IeveL Other 
Brahms conductors, beware. 

E ducation work in the community 
has become a prime responsibility 
of Britain’s orchestras, but it 
costs money. On Monday the Lon- 
don Symphony Orchestra held a gala con- 
cert in aid of the LSO Endowment Fund to 
raise support for its education programme 
and invited Jessye Norman as the star 
attraction - a useful insurance policy if 
the ticket prices are going to be that high. 

A solo recital on the South Bank earlier 
this year proved that Jessye Norman can 
fill a hall alone at prices most orchestras 
in this country would long to charge for 
large-scale symphony concerts. As that 


occasion showed, she has been adventur- 
ous in learning new music, while the spon- 
taneity has been going out of the old. 
Perhaps a singer needs constant renewal 
as an artist to keep up the momentum. 

For this concert she was joined by Colin 
Davis, LSO Principal Conductor elect and 
a long-time colleague (they share a record 
company). They had put together a pro- 
gramme equally shared between two com- 
posers. tempting speculation that each of 
them would excel in one half: Britten for 
him, Strauss for her. Of course, it never 
works out that simply. 

Britten's late cantata Phaedra was writ- 
ten for a mezzo (Janet Baker) and has 
usually been sung by mezzos, but it falls 
very comfortably for Jessye Norman's low- 
ish soprano. Alone of the singers I have 
beard in it, she experienced no strain at 
tbe top. The very fullness of the voice adds 
another side to the character. In some of 
her singing of late, the extrovert outward 
signs of involvement have concealed a 


deadness at the core, but not here; Phae- 
dra's inner torment and shame were fully 
alive, tbe beating heart of a rounded por- 
trayal 

There was no lack of heart in her 
Strauss, the closing scene from Capriccio. 
In fact, the sheer generosity of the voice 
and the personality was too much of a 
good thing. There is a cool, elegant poise 
written into the music of Strauss's Count- 
ess, which is smothered if the vocal line 
bulges with heated emotion and verbal 
emphasis. True Strauss stylists like Jan- 
owitz take a more refined line. Neverthe- 
less. Jessye Norman was in lustrous voice. 
The star appeal still shines brightly. 

In between came two orchestral items 
which were definitely not fillers. It is a 
luxury to bear the Four Sea Interludes 
from Britten's Peter Grimes played by a 
top orchestra and tbe LSO showed what a 
difference it makes. The partnership with 
Davis is promising a splendid future, his 
mature wisdom and their panache combin- 
ing in a fine performance of Strauss's Don 
Juan. If the LSO continues to play as well 
as this, it can be the star in its own gala 
concert next time. 


LSO concert sponsored by American Air- 
lines; it is repeated on March 17 


Ballet in Paris 

‘Etoiles’ go 
for gold 

T he Paris Opera Ballet occasion- 
ally gives its brightest young 
dancers a run of special perfor- 
mances in which to show their 
very considerable mettle. So, at the week- 
end, the aspirant itoiles, feet as bright as 
their hopes, technique as burnished as 
their confidence in their training, made a 
bid for glory, it was, as always, an exhila- 
rating spectacle. The Pal ais Gander was 
crowded and the atmosphere charged with 
that special French belief in gloirc. And 
on Saturday afternoon tbe young went for 
gold. 

Chief ballet-master Patrice Bart centred 
this year’s sessions around the Romantic 
ballet. So there was Boumonviile. looking 
- shall wc say - a bit French-polished, 
and evocations of Marie Taglioni's roles: 
tbe enchanting VivandiOrc sextet which 
has survived for a century and a half 
thanks to notation, and Petipa’s Paquira 
trio. We saw golden gifts; we must hope 
for golden futures and golden rewards. 
Certainly the performance demonstrated 
the grace and security or French training 
- the Opera's ballet school produces 
superb talent year after year - and the 
technical and artistic assurance that the 
Opera engenders in its dancers. 

The style is Fran co-Italian, brilliant in 
beaten steps and tarns, stylish and sophis- 
ticated as to feet - the girls have virtues 
in point-work undreamed of by British 
teaching. There is nothing unern photic or 
unduly modest abont what wc see, and no 
English Missery (I'm tempted to write 
"English misery"). The young are there 
on stage because they want to succeed: 
failings have to do with a desire for public 
approval: but regardez-moi is not the 
worst of mottos. Lyricism is at a premium 
- a famous dancer described it to me as 
"dancing too slowly” - while that gran- 
deur of scale and phrasing we admire 
with Russian training is largely absent 
Bnt in matter of polish, of physical wit 
and clarity - the language fast, light, 
quickly accented - the Jeunes danse urs 
are a delight I loved the sextet from Nap- 
oli done with southern vivacity, and was 
charmed by Sandrme Henault's exquisite 
feet in the Flower Festival in Genzano 
duet: every step was diamond-cut. Her 
partner was Eric CamiUo, buoyant, beau- 
tifully sure, and playing with real charm. 
Equally fine Bertrand Belem, who sizzled 
through devilish solos in La Vivandiere, 
and Paquiia. and Gil Isoart as James in 
the second act of La Sylphide. Why, con- 
science asks, cannot our young Royal Bal- 
let aspirants do as well? 

T he Opera's other young virtuoso 
is Emmanuel Thibault 1 reported 
on him last year. Slight in build, 
be has a technique which dazzles 
by its easy elegance as by Its prowess. In 
the Napoli pas. and then in a fragment 
from Le PapiUon. he showed a phenome- 
nal facility - a circuit of the stage inter- 
spersing raring leaps with tight, dear pir- 
ouettes was astonishing. He is teacher's 
pet, seemingly able to do with grace what- 
ever he is asked, and unspoiled and gentle 
in manner. He comes to life as he dances: 
curtain calls suggest a young man almost 
shy of applause. 

He was partnered in Le Papillon by 
Veronique Doisneau, ideally matched 
with him in lightness, speed, and a sweet 
fragility, her dancing as effortless and 
beguiling as his. Very pretty, too, the 
sylphide sketched by Miteki Kndo, lead- 
ing her James through the glens of Bour- 
nonvi lie’s second act, and turning and 
posing with delicious innocence. Grandly 
soaring was Sandrine Marache, who 
bounded proudly through a VivandiJre 
solo. My only complaint about the perfor- 
mance is the fact that Anton Doha's ver- 
sion of tbe Pas de Quatre in which four 
divinities of London’s ballet in 1845 were 
brought together in a contest of charm 
and steely temperament, was lightly 
guyed. The steps, like the Pugni score, are 
pretty, and need to be prettily danced. 
The mock rivalries, and the mopping and 
mowing between Saturday’s participants, 
was all too roguey-poguey. Real-life ten- 
sions among ballerinas who have incar- 
nated their great predecessors have been 
more subtly masked and far deadlier than 
this warfare of pink tulle and moues. 

Clement Crisp 


\\ INTERNATIONAL ft 

Ari 

rs 

Gun 

DE 


■ COLOGNE 


ie Tonight Wolfgang 

onducls Vienna 
Jrchestra in Beethoven s 
i phony and Bruckner s 
n afternoon: Borodin 
i evening: Andras Schiff 
. Mon: Nina Corti 
aning. Tues: Earths Kitt. 
jtred Brendel. Next 
i Hvorostovsky. James 
others (0221-2801) 

This month's repertory 
oletto with Alexandre 
Leonlina Vaduva. Harry 
duction of 
Vs The Nose and 

h's choreography of 

I Aten Donath gives a 
next Wed, and Ben 
as the title role in a new 
if Peter Grimes opening 
(0221-221 8400) 


il HAGEN 


; The main event this 
st night tomorrow 
uction of Fidel'O. 

Paavo Berglund and 


staged by Dieter Kaegl. Casts 
include Pout Bming, Tina Kiberg 
and Leif Roar. Repertory also 
Includes Otello. Carmen, Helgi 
Tomasson’s production of Sleeping 
Beauty and new ballets by Anna 
Laekesen and Laura Dean (tel 3314 
1002 fax 3312 3692) 


■ DRESDEN 

Semperoper Tonight, Sat: La 
traviata Tomorrow. Harry Kupferts 
new production of Handel's 
Belshazzar, with Iris Vermillion and 
Jochen Kowalski. Fri: Salome. Sure 
Der fliegende Hollander with 
Ekkehard Wlashicha and Reiner 
Goldberg. Mon, Tues: Zubin Mehta 
conducts Dresden Staatskapelle 
in Mendelssohn's Octet and 
Mahler's First Symphony (0351-484 
2323) 

Kulturpalast Sat Wolfgang 
SawaMsch conducts Vienna 
Symphony Orchestra in Beethoven's 
Second Symphony and Bruckner's 
Seventh. Sun (Schloss 
AJbrechtsberg): members of Dresden 
philharmonic play chamber music 
by Sutermeister, Mahler, Haydn, 
Busoni and others (0351 -486 6666) 


fKFURT 


anight I Mustei di Roma 
j concertos. Sat- Mikis 
presents an evening 
iusIc. Sun morning, 
j: Emmanuel Krtvine 
ankfurt Opera Orchestra 
Blacher, Prokofiev and 
violin soloist Midori 
; Saal): Nathalie 
ong recital. Tues: Dirk 


Joeres conducts West German 
Sinfonla in Saint-Saens, Mozart and 
Brahms, with clarinet soloist Eduard 
Brenner. Next Wed: Lorin Maazel 
conducts Bavarian Radio Symphony 
Orchestra (069-134 0400) 

Oper Tonight, Fri, Sure Sytvaln 
Cambrefing conducts Herbert 
Wernicke's new production of Duke 
Bluebeard's Castle, with Honk Sm it 
and Katherine Clesinski. Tues: 
Ensemble Modem plays works by 
Webern (069-236061) 


■ GOTHENBURG 

Konserthuset Tonight Iona Brown 
directs Academy of St Martin in 
the Reids. Fri evening, Sat 
afternoon: Jun’ichi Hirokami 
conducts Gothenburg Symphony 
Orchestra in works by Verdi, 
SandstrSm and Delibes, with 
trombone soloist Christian Lindberg 
(031-167000) 


■ HAMBURG 

Staatsoper This month's repertory 
Indudes a Ring cycle conducted 
by Gerd Albrecht with Gabriels 
Schnaut Simon Estes and Siegfried 
Jerusalem in leading roles, and a 
new production of Henze's Die 
Bassarlden, staged by Christine 
Miefttz and conducted by Markus 
Stenz. Dmitri Hvorostovsky gives 
a song rec ital next Mon 
(040-351721) 

Musikhalle Tomorrow: Wolfgang 
Sawaflisch conducts Vienna 
Symphony Orchestra in Beethoven's 
Second Symphony and Bruckner's 
Seventh. Fri: Alfred Brendel plays 
Beethoven piano sonatas. Mon: 


B.B. King. Next Thurs: Andras Schiff 
(040-354414) 


■ HELSINKI 

Finnish National Opera Tonight 
Sat Tues: Otello. Tomorrow, Fri: 
new Stravinsky ballet programme, 
including world premiere of Jorma 
Uotinen’s Petrushka. Sun afternoon: 
Academy of St Martin in the Reids 
(0-4030 2211) 


■ LEIPZIG 

Gewandhaus Tonight: Udo 
Zimmermann conducts MDR 
Chamber Philharmonic in official 
opening concert of 1994 Leipzig 
Book Fair. Tomorrow, Fri: Marek 
Janowski conducts Gewandhaus 
Orchestra and Chorus in works by 
Schnittke, Mozart and Beethoven, 
with piano soloist Lars Vogt Sun 
evening: Gewandhaus Quartet plays 
string quartets by Haydn, 
Mendelssohn and Beethoven. Mon: 
Thomas Zehetmair is violin soloist 
with Amsterdam Bach Soloists 
(0341-713 2280) 

Opamhaus Fri: Lothar Zagrosek 
conducts revival of Ruth Berghaus’ 
production of JOrg Herchet's 1993 
opera Nachtwache. Sat two ballets 
by Uwe Schotz. Sun: Rdelio. Next 
Tues: Scholz’s version of Coppdia 
(0341-291036) 


■ LYON 

Op6ra Tonight, Fri, Sun: Neville 
Marriner conducts concert 
performances of Mozart's II re 
pastore. Next Tues: first of eight 
performances of ballet mixed bill 
featuring choreographies by Bill 
T. Jones, Stephen Petronio and 


Susan Marshall. March 24: Kent 
Nagano conducts Debussy and 
Ravel. March 30-April 3: Pina 
Bausch Tanztheater Wuppertal (tel 
7200 4545 fax 7200 4546) 
Autftorium Tomorrow, Sat Peter 
Csaba conducts Orchestra National 
de Lyon in works by Schumann 
and Liszt (7860 3713) 


■ MARSEILLE 
Op6ra Tonight, Fri, Sun afternoon, 
next Wed: John Burdekin conducts 
Alain Marcel's new production of 
Lalo's Le Roi d*Ys, with cast 
including Nadine Denize, Alain 
Fondary and Luca Lombardo (9155 
0070) 


■ MUNICH 
Staatsoper The main event over 
the coming week is the premiere 
on Mon of Richard Jones' new 
production of Giulio Cesare, 
conducted by Ivor Bolton, with a 
cast headed by Ann Murray, 
Kathleen Kuhlmann. Trudeliese 
Schmidt, Pamela Cobum and 
Christopher Robson. Repertory also 
includes Lady Macbeth of Mtsensk. 
Der fliegende Hollander and Peter 
Wright's production of Giselle. There 
are performances of Die 
Meiatersfnger von NQmberg on 
March 25, 28 and April 4 
(089-221316) 

Gasteig Tonight an evening with 
Peter Ustinov. Tomorrow, Fri: Lorin 
Maazel conducts Bavarian Radio 
Symphony Orchestra in works by 
Berlioz, Weber and Bartok. Sun: 
opera concert with Munich Radio 
Orchestra and vocal soloists. Mon: 
Franz Welser-M6st conducts London 
Philharmonic in Haydn, Schumann 


and Shostakovich, with piano soloist 
Mitsuko Uchida (089-4809 8614) 


■ OSLO 

Kortserthus Tonight. Frf: Nelio Santi 
conducts Oslo Philharmonic 
Orchestra and Chorus in a concert 
performance of Bellini's Norma, 
with cast including Monica 
Pick-Hieronimi and Bonaldo Giaotti. 

Tomorrow. Iona Brown directs 
Academy of St Martin in the Reids 
in works by Britten, Mozart. 
Penderecki and Haydn (2283 3200) 


■ STOCKHOLM 

Konserthuset Tomorrow: Roland 
Pbntinnen piano recital. Tues: 
Barbara Hendricks song recital. Next 
Wed, Thurs: Academy of St Martin 
in the Reids (08-102110) 

Royal Opera Sat: song recital by 
Helena Doese, accompanied by 
Geoffrey Parsons. Repertory 
includes La boheme. Suppe's 
operetta Boccaccio and Natalia 
Makarova's production of La 
Bayadere (08-248240) 


■ STUTTGART 

Staatstheater Tomorrow, Sun, next 
Thurs: Philippe Auguin conducts 
revival of Gotz Friedrich's production 
of Der Rosenkavalier, with Ellen 
Shade and Helmut Berger-Tuna. 

Fri: Marcia Hayd6e's version of 
Glazunov's ballet Raymonds. Sat, 
next Wed: Achlm Freyers 
production of Der Fre'rachCitz. Tues: 
Johannes Schaaf s production of 
RJgdetto, with Wolfgang SchOne 
in title role (Q71 1-221 795) 


ARTS GLIDE 

Monday: Berlin, New York and 
Paris. 

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

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV' 

(Central European Timel 
MONDAY TO FRIDAY 
NBC/Super Channel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730. 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Euronews: FT Reports 0745, 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Supar Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430. 
1730: 










FINANCIAL TIMES WF.DNESPAY MARCH 16 1994 


Ian Davidson 


Is bigger better in the global business travel 
industry, ask Michael Skapinker and David Buchan 

Essential, or just 
extra baggage 



It is hard to 
make strategic 
sense of the 
British govern- 
ment's cam- 
paign to 
restrict major- 
ity voting in 
Europe. Yes. r 
know ministers are frightened 
of the anti-Europeans in their 
party; and presumably they 
hope to appease them with a 
vigorous stand in defence of 
national sovereignty. But the 
problem is that this is a cru- 
sade which is certain to fail in 
the medium term, and proba- 
bly in the short term as welL 
In any case, why go out on a 
limb now? The Maastricht 
treaty was such a miserable 
experience for Mr John Major 
that you would think the 
prime minister would do his 
best to steer clear of ail ques- 
tions of principle about Europe 
and its development for as long 
as possible. Yet here he is. tak- 
ing a combative stand on an 
issue which is bound to 
involve a battle on two fronts; 
it must lead to an unwinnable 
confrontation with his partners 
in Europe, but it must also stir 
up the anti-European cam- 
paigners among those who are 
nominally his own supporters. 
This is a spectacular exercise 
in political masochism. 

This crusade is doomed to 
defeat, because its underlying 
objectives set the UK. at odds 
with virtually all its European 
partners. The government pre- 
tends that it is oniy asking 
that the voting rules which 
protect blocking minorities in 
the Council of Ministers should 
be kept at the present level 
even after the admission of 
four more member states: 23 
votes, or the equivalent of two 
big countries and one small. 

The reality, of course, is that 
the British government is try- 
ing to make majority voting 
more difficult than at present; 
whereas effective decision- 
making in a larger Union will 
obviously require more major- 
ity voting, not less. 

The puzzle is that the Con- 
servative government seems to 
have been manoeuvred by its 
Euro-phobic wing into relight- 
ing the last war but one. The 
windmill it is tilting at is the 
old fantasy that Britain's 
national sovereignty is threat- 
ened by the sinister federalists 
hi Brussels; and it appears to 
Imagine that It can creep by 
stealth back in the direction of 
a national veto. It does not 
seem to realise that the terms 
of the debate have been 


Futile 

and 

flawed 

The UK cannot 
impose its 
vision of 
Europe on its 
EU partners 

changed beyond recognition. 

Many years ago. in 1965-66, 
the Community had a shatter- 
ing confrontation between 
France and the rest, over the 
rights and wrongs of majority 
voting. That was before major- 
ity voting was due to come into 
force os part of the Communi- 
ty’s normal regime, and the 
French were trying to prevent 
it happening. After a six-month 
confrontation, a truce was 
signed in 1966 which was after- 
wards called the Luxembourg 
Compromise, even though 
there had been no compromise 
on anything. Nevertheless, the 
psychological shock of the cri- 


It is perhaps 
slowly dawning 
that the opt-out is 
not a satisfactory 
type of solution 


sis effectively deterred major- 
ity voting for 20 years. 

But the Luxembourg Com- 
promise was wiped off the slate 
by the 1966 Single European 
Act, which explicitly broad- 
ened the scope for majority 
voting; and the agenda on the 
slate was rewritten by the 
Maastricht treaty, which also 
carried the majority voting 
trend even further. 

As a result, toda/s central 
question about majority voting 
is the reverse of yesterday’s; it 
is not whether a member state 
can be compelled by majority 
vote to do things it would 
rather not do. but whether it 
can use its national veto to 
prevent most or all of its part- 
ners from doing what they col- 
lectively want to do. 

It is now clear that the first, 
old-fashioned question can 
have several different answers. 
Most rational people now 


recognise that the purpose of 
majority voting is not to out- 
vote the recalcitrant, but to 
persuade them to negotiate 
and to compromise. But for 
those who will not negotiate 
and will not submit, there is 
the alternative of the opt-out if 
you don’t like the journey, you 
can leave the ship. 

That was the double lesson 
of Maastricht the other mem- 
ber states could not compel the 
UK to accept the social chap- 
ter, or the Danes to accept 
monetary union or indeed any- 
thing else in the treaty; but 
□or. in the last resort, could 
Britain and Denmark prevent 
the others from going ahead 
with the treaty they had com- 
promised on. In the long run, 
the majority will get the Mwd 
of Europe they want, and the 
options for those who disagree 
will essentially be quite siraple: 
to compromise, to submit, or to 
stand aside. If majority deci- 
sions are blocked inside the 
Council of Ministers, through 
systematic legal obstruction, 
they will be taken outside, in 
some other way. 

If the British government is 
now trying to strengthen the 
legal methods of obstruction, it 
is perhaps because it Is slowly 
dawning that the opt-out is not 
a satisfactory type of solution. 

The plan for economic and 
monetary union may well 
prove an acute test case, and it 
is likely to come to a head dur- 
ing the 1996 Inter-Governmen- 
tal Conference to review and 
revise the Maastricht treaty. 
At that moment, it will be 
clear which member states are 
still committed to monetary 
union. And it is quite passible 
that an inner core will be 
ready to go ahead to a single 
currency, conceivably in a very 
near future. Mr Major will then 
be left holding his opt-out, 
which means he cannot stop 
them, just as it means he can- 
not join them. 

Note that the concept “block- 
ing minority” does not exist in 
any European treaties. What 
they lay down is the number of 
positive votes required to pass 
a measure; at present 54 out of 
76. The underlying assumption 
Is that the gove rnments which 
signed the treaties share a 
broad political consensus on 
the purpose of their associa- 
tion. That consensus did not 
exist in 1965. But the French 
lost that battle for one simple 
reason: they could not impose 
their view of Europe then, and 
it is time the British saw that 
they cannot impose their view 
of Europe now. 


I f employees of Poseco, the 
Birmingham-based metal- 
lurgical company, try to 
book business class tick- 
ets when they should be flying 
economy, Wagonlit Travel will 
let Mr John Lamb know. 

Mr Lamb, Foseco’s chief 
accountant, says the compa- 
ny's contract with Wagonlit 
gives it far greater control over 
business travel casts than it 
could ever achieve alone. 

Wagonlit’s technology 
enables Mr Lamb to obtain, at 
24 hours' notice, a computer- 
ised record of where employees 
have travelled recently and 
whether they got the best deal 
available. If they have not, he 
asks them why. 

Wagonlit, which is part of 
Accor, the French hotel and 
catering group, yesterday 
announced of its plan to 
combine its business travel 
interests with those of Carlson 
of the US to create a worldwide 
network with combined reve- 
nues of $l0-8bn. operating from 
4,000 locations in 125 countries. 

Two main competitors, 
American Express and Thomas 
Cook, each operate from about 
2JJ00 locations - either their 
own offices or those of client 
companies. 

The two sides in the partner- 
ship said the new company. 
Carlson Wagonlit Travel, 
aimed to “service the growing 
needs of the global business 
traveller, to market the new 
brand worldwide, develop new 
global business travel technol- 
ogy and pursue immediate 
expansion into new business 


Pacific regions”. 

Mr Curt Carlson, the founder 
of the Carlson empire, says the 
combined travel company will 
be able to improve services to 
clients such as General Elec- 
tric, which places its $350m-a- 
year travel business with Carl- 
son in Phoenix, Arizona. 

Mr Carlson, whose compa- 
ny’s other interests Include 
Radisson Hotels and TGI Fri- 
day’s restaurants, which are 
not part of the merged venture, 
says: “Big companies often 
have difficulty with their 
travel, operating in new coun- 
tries where agencies often just 
speak the local language and 
airlines use different [ticket] 
codes.” 

Carlson will contribute its 
strengths in the US to Wagon- 
fit’s strong position in Europe. 
The newly-merged company 
will invest an initial $40.m in 
setting up or buying agencies 
in Asia, the Pacific region, 
Latin America and Africa, 
where it is under-represented. 

Why did they choose each 
other? Mr Hervb Gourio, presi- 


dent of Wagonlit Travel, says: 
“Carlson is the best partner for 
us because we are about the 
same size in the travel busi- 
ness and at the group level. 
Neither is predominant, Euro- 
pean or American." 

Mr Travis Tanner, president 
of Carlson Travel, promises “a 
real working union to create 
the number one in bumness 
travel. Not a paper partner 
ship, nor a smoke and mirrors 
arrangement” He said Carlson 
“needed a prominent position 
in Europe - to have done it 
ourselves would have taken a 
great deal of time and money”. 

Rivals in the industry, how- 
ever, were quick to cast doubt 
on the prospects of merging 
two organisations with such 
different cultures. “This is not 
a marriage made in heaven,” 
said one rival business travel 
executive. “I can’t see the 
Americans being run by the 
French, or vice- versa." 

The new company will have 
two chairmen, one from Carl- 
son and one from Wagonlit, 
and two chief executives, also 
one from each side. Although 


be in London, the two sides 
said “daily operations will be 
coordinated from Minneapolis 
and Paris respectively”. 

Carlson, one of the largest 
privately-owned groups in the 
US. is seen in the travel indus- 
try as ran with a firm hand 
from Its Minneapolis headquar- 
ters. Wagonlit, which has gone 
through a series of changes 
and acquisitions, is regarded as 
still formulating its culture. 

Accor acquired Wagonlit, 
which had taken over the UK 
business travel interests of 
Pickfbrds, in 1992. The com- 
pany was then called Wagons- 
Lits, but changed its name to 
Wagonlit last year to distin- 
guish itself from Accor’s rail- 
way services division, which 
still uses the old name. 

The planned new company 
brings together some of the 
oldest names in the travel busi- 
ness. Carlson’s travel business 
began as the Ask Mr Foster 
travel agency in St Augustine, 
Florida, in 1888, making it the 
oldest travel agency In the U5. 
Its name came from a local res- 


ident, Mr Foster, who was the 
unnffiriai keeper of train time- 
tables. Carlson acquired Ask 
Mr Foster in 1979. 

Wagonlit was founded in 
1872 to provide sleeping cars 
for overnight travellers on 
European trains. In 1928 it set 
up travel agencies in rail ticket 
offices throughout Europe. 

For over 60 years, Wagonlit 
had an alliance with Thomas 
Cook. The thinkin g be hind the 
tie was that Thomas Cook’s 
strength in the old British 
Empire would complement 
Wagonlifs power in continen- 
tal Europe. The link was dis- 
solved in 1989. 

In a pointed statement yes- 
terday, Mr Christopher Rodri- 
gues, Thomas Cook’s chief 
executive, said: "Since we 
decided to sever our relation- 
ship with Wagonlit, we have 


been building the Thomas 
Cook network by working with 
like-minded partners who put 
customer service first Forming 
alliances is only the beginning 
of the relationship and major 
industry players such as our- 
selves will be watching the 
progress of this alliance with 
interest However, it will be 
customers who will judge its 
real value.” 

Not all Wago nlits customers 
see merit in the merger Or in 
the idea that companies need a 
single business to handle their 
travel requirements worldwide. 

Mr lamb says Foseco does 
not even have the same travel 
agents as Burmah Castrol, its 
parent company, which uses 
Thomas Cook. Foseco was 
already using Wagonlit when it 
was acquired by Burmah Cast- 
rol in 1990. Although the com- 



markets throughout the world, 
in particular the Asian and ' the company headquarters will 


oany asks different agencies to 
bid for its travel account every 
two or three years, it has seen 
no need to abandon Wagonlit, 
which has two staff members 
based at Foseco’s premises. 

Mr Lamb says that Foseco 
and Burmah Castrol did decide 
jointly to seek discounts from 
airlines as their larger com- 
bined purchasing power 
enabled them to get a better 
deal. They have investigated 
using a single travel agency 
throughout the group, but 
decided there were no similar 
ravines to be made; The larger 


M r Lamb believes 
there are advan- 
tages to having 
two travel agen- 
cies working for different parts 
of his group. He says: “We 
believe it keeps both of them 
on their toes.” 

Mr T.amh is sceptical of the 
t-iaim ♦hat combining Wagonlit 
with Ca rl so n will enable the 
combined group to deliver a 
more competitive service. He 
says: “My answer to that Is: if 
getting much bigger means 
you can purchase so much 
more efficiently, kindly tell us 
how much that’s going to bene- 
fit us in discounts.” 

The proposed merger does 
have Its champions, however. 
Mr Andrew Solum, travel man- 
ager or Inmarsat, the interna- 
tional satellite organisation, 
winch is also a Wagonlit cus- 
tomer, says it should bring sig- 
nificant benefits. 

After taking on Wagonlit last 
year to handle travel arrange- 
ments from its London head- 
quarters, Mr Solum was suffi- 
ciently impressed to ask them 
to do the same for Inmarsat’s 
offices in Princeton, New Jer- 
sey. Six weeks ago, the organi- 
sation opened an office in Bei- 
jing, where Wagonlit is not 
represented. Mr Solum hopes 
the planned merger will enable 
Carlson Wagonlit Travel to 
open an office there. 

He says the idea of a global 
travel agency network is more 
than mere hype. If his organi- 
sation's employees are bumped 
off flights in different parts of 
the world, he says a call from 
Wagonlit to the airline often 
gets them back on the aircraft. 
The wider a travel agency net- 
work's reach, the more places 
there are where It can perform 
such services. 

He says: “Wherever you are 
in the world, if you’ve got a 
Wagonlit ticket, you can go 
into a local office if you've got 
a problem. You’ve got some- 
where to go if you've been 
robbed.” 


I have a conventional exterior 


and a 



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YOU* 

J t A I 
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7 



LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SEI 9HL 

Fax 071 873 5938. Letters transmitted should be clearly typed and not hand written. Please set fax for finest resolution 


Appearance 
is not 
everything 

From Mr Derek C Jenkins. 

Sir, Colin Amery (”A lifeline 
for the South Bank”, March 14) 
falls into the trap which 
catches so many of those who 
write about architecture - he 
assumes that external appear- 
ance is everything. In praising 
the Festival Hall, while damn- 
ing the Queen Elizabeth Hall 
and Hayward Gallery, he takes 
no account of the ability of 
each building to fulfil its true 
function successfully. 

In the ways In which a con- 
cert hall can enhance a musi- 
cal performance and its enjoy- 
ment. by the musicians and 
audience, the RFH is the worst 
venue, not just in London, but 
In all the main centres in 
Europe. The QEH, on the other 
hand, ranks with the Wlgmore 
as the best in this respect 

Among galleries, the Hay- 
ward exhibition space comple- 
ments 20th century works in a 
way that is matched by no 
other leading London site. To 
suggest that buildings do not 
fulfil their real purpose 
superbly, merely because a 
vocal section of opinion deems 
them to be ugly on the outside, 
is a very poor application of 
values and priorities. 

Derek C Jenkins. 

41 Spice Court. 

Asher Way, 

London El 9JD 


Heading down unhealthy path 


From Mr Alan Both MP. 

Sir, Alison Smith’s report, 
“Building societies aim to 
shake off shackles" (March 10), 
underlines the hostility of 
some building society execu- 
tives to any form of account- 
ability to their members, 
whose capital they manage. 

When I raised this issue of 
accountability in a speech to 
the Building Societies Associa- 
tion a few months ago. I 
received an intriguing mixture 
of public criticism and private 
support The leading article in 


Mortgage Finance Gazette 
asserted in reply that society 
boards and the Building Societ- 
ies Commission should take 
active steps to prevent the elec- 
tion as directors of people not 
chosen by the current direc- 
tors, and questioned “whether 
mutuality meant anything 
more than not being required 
to pay shareholders divi- 
dends”. 

The government even sug- 
gests that building societies, 
which constantly mail adver- 
tising material to their mem- 


bers, should be relieved of the 
burden of notifying them by 
post of their voting rights at 
the annual general meeting. 
Some people in the industry do 
recognise that a complete 
absence of accountability, even 
if regulation became more 
effective, would be extremely 
unhealthy. However, that Is 
the way things are heading. 
Alan Beitb. 

Liberal Democrat deputy leader 
and Treasury spokesman. 
House of . Commons, 

London SWLA 0AA 


Why Wales resists change 


From Josephine Farrington. 

Sir, I read with interest 
Philip Stephens’ article, ”PM 
urged to shelve radical plans” 
(March 14), on growing pres- 
sure for the government to 
delay implementing local gov- 
ernment reorganisation in 
England until after the next 
general election. 1 hope the 
same “consolidators” to whom 
he refers wifi also press the 
prime minister to drop the 
unpopular proposals for chang- 
ing Welsh local government 

Only one in five in the prin- 
cipality supports the govern- 
ment's plans to establish 21 
so-called unitary authorities at 
a cost of £20lm. u the people of 
Wales, members of the Confed- 
eration or British Industry. 
Trades Union Congress, volun- 


tary organisations and the 
overwhelming majority of 
Welsh MPs oppose this pro- 
posal, how can English MPs 
justify forcing it on them? 
They could not have sent a 
clearer message to Whitehall. 
For a government that claims 
to want to listen to the people, 
it is certainly keen to ignore 
the wishes of the Welsh. They 
have not been given an inde- 
pendent commission to exam- 
ine council structure. 

We can only hope the same 
ministers now making such 
pragmatic noises about reform- 
ing English local government 
will speak up for Wales. 
Josephine Farrington, 

Eaton House, 

66a Eaton Square, 

London SWiW 9BH 


Time for minister to speed up the search 


From MrJML Stone 

Sir, Mr John Gummer, the 
environment secretary, has 
called for councils to handle 
standard enquiries “within 10 
working days” (“Quicker land 
searches urged”. March 12). 

In the last years or the 20th 
century this is an absurd call. 
Mr Gummer should seek to 


ensure, as a matter of urgency, 
that the whole of the convey- 
ancing process should become 
a real-time screen-to-screen 
process. The hardware, the 
software and the technical 
know-how to effect this are all 
immediately available to his 
department At a stroke, con- 
veyancing could, if the will 


were there, become a fast effi- 
cient and cheap process which 
would benefit 99 per cent of the 
nation at the expense of 1 per 
cent (the lawyers). 

J M L Stone, 
chairman . 

Property Intelligence, 

13-15 John Adam Street, 

London WC2N 6LD 


Not a recent change in English company law 


From Mr E A Coleman. 

Sir, Mr Jean Thibaud’s 
article on recent developments 
in French banking and com- 
pany law was most Informative 
(Business and the Law: “Over- 
throw of ancien rdgime”, 
March 8). 

Allow me. however, to cor- 
rect what appears to be an 
inaccuracy in the article. Mr 
Thibaud states, in the fourth 


paragraph, that "England has 
recently accepted netting Jie. 
set-off] as a basic principle of 
Insolvency law. . in point of 
fact, bankruptcy/insolvency 
set-off has been the rule in 
England since the time of 
Queen Anne (see s.il of 4&s 
Anne c.17), if not before (see s. 2 
of the 1570 statute. 13 Eliza- 
beth, c.7). 

Perhaps Mr Thibaud’s refer- 


ence to a “recent” acceptance 
of netting in England was a 
reference to the (somewhat 
belated) recognition by the 
financial law panel of the prin- 
ciple of insolvency set-off (see 
the panel's guidance note on 
netting of November 19 1993). 

E A Coleman, 

43 Trinity Court. 

Gray's hm Rd. 

London WCLX SJZ 


Scottish 

salmon 

competitive 

From Mr Jim Payne, 

Sir, In the letter ’Scottish 
salmon also subsidised” (March 
14), Mr Roderick Thomas 
wildly exaggerates the level of 
support which has been 
received by the Scottish 
salmon fanning industry. 
Moreover, in every case, any 
support for the industry has 
been completely in accordance 
with European Union rules. 

Contrary to what he states, 
Norway has no natural advan- 
tages over Scotland for grow- 
ing salmon. Ibis is why the 
performance of Scottish farms 
is now as good, or possibly 
better, than those in Norway. 

There is no truth in the 
statement that Norwegian 
salmon farms are profitable at 
a price of 20 per cent to 30 per 
cent lower than the cost of 
production in Scotland. The 
most careful analysts reveals 
that costs of production are 
roughly comparable in both 
countries. 

Mr Thomas is also wrong 
about the threat from Chile. 
Chile can compete only in 
Europe on frozen salmon. The 
freight cost for fresh salmon 
from Chile to Europe makes 
that business uneconomic. 
Otherwise, of course, there 
would be fresh salmon arriving 
In Europe now, at a time 
when the Chileans are vigor- 
ously searching for new mar- 
kets. 

Jim Payne. 
chairman, 

Scottish Salmon Growers Asso- 
ciation, 

Drummond House. 

Scott Street, 

Perth PHI SEI 



I 








A! 


£ 



FINANCIAL TIMES 

Number One Southwark Bridge, London SEI 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Wednesday March 16 1994 


Summit for 
good jobs 


The jobs summit in Detroit was 
never likely to come up with excit- 
ing new solutions. What it could 
do was register agreement on the 
importance of the topic and indi- 
cate the nature of the emerging 
consensus on what to do about it. 
This the summit has done, in 
breaking new ground for the dis- 
cussions among the group of 
seven industrial countries, it may 
even have given that intellectually 
moribund body new life. 

Not that the GTs familiar mac- 
roeconomic disharmony was 
entirely absent One of the recur- 
ring leitmotifs of its two decades 
has been the US effort to persuade 
the Germans to adopt more expan- 
sionary policies. The jobs summit 
was partly an imaginative new 
way to achieve that old objective. 
The pitch adopted by US labour 
secretary. Robert Reich, was that 
“cyclical unemployment which 
persists may turn into structural 
or classical types of unemploy- 
ment, which are more difficult to 
address”. The argument is correct, 
but it cuts two ways. Rising infla- 
tion must also be avoided, because 
it leads to recession as surely as 
night follows day. It is not clear 
that the Clinton administration 
understands this point 
If a transatlantic consensus on 
macroeconomic policy is la cking 
the agreement elsewhere was 
encouraging. The summit has, for 
example, rejected protection 
against imports and embraced 
innovation, rightly so, in both 
cases. Labour intensive imports 
and new technology will make 
industrial countries richer. But, as 
Mr Reich observes, they also exact 
a price. “The primary structural 
labour market problem,” he notes, 
"is a shift in relative labour 
demand against less-educated 
workers and those doing routine 
tasks and towards workers with 
problem solving skills.” 

Increased inequality 
In the US. the result has been 
increased inequality, with workers 
in the higher earnings bracket 
enjoying a 4.4 per cent increase in 
real wages over the past 20 years, 
while those on the bottom suffered 
10.3 per cent real decline. 
Because there was no overall real 
wage growth, US employment also 
grew by some 40 per cent In conti- 
nental Europe, by contrast, aver- 
age real wages grew rapidly over 
the past two decades - by 76 per 


cent in France and 43 per cent in 
Germany. There was also very lit- 
tle increase in pay inequality. But 
these countries enjoyed virtually 
no employment growth, while 
unemployment rose, cycle by 
cycle. 

The question then is not 
whether jobs can be created. It is 
obvious that they can be. The 
question is whether those new 
jobs can be combined with sus- 
tained rises in average real wages 
and the pay equality to which. 
Europeans, in particular, are 
attached. The chaiieng* is not just 
more jo bs; it is “good jobs” for 
everyone. 

Holy grail 

Secretary Reich's own suggested 
solution is the trio of European- 
style education and tr aining . US- 
styie labour market flexibility and 
expansionary macroeconomic pol- 
icy. So is this the holy grail for 
jobs? Only up to a point, Mr Reich. 

Yes, education and training 
matter, but high-quality basic edu- 
cation matters most, a policy that 
may never work for afl and cer- 
tainly will not act quickly. Yes, 
labour market flexibility Is essen- 
tial, but this is a euphemism for 
policies that will lower the rela- 
tive and quite possibly the abso- 
lute real wage of the unskilled. 


precisely what Europeans - and 
increasingly Americans - find 
objectionable. And yes, macroeco- 
nomic policy must accommodate 
growth, but even Padraig Flynn. 
European commissioner for 
employment, agrees that “there is 
a new conventional wisdom that 
cyclical recovery will not be the 
way out”. 

There is room for a great deal of 
imaginative new thfukmg of the 
kind contained in a new pamphlet 
from the London-based think-tank 
Demos on “the end of unemploy- 
ment”. But at the heart of that 
thinking must be ways to lower 
the cost of hiring new employees. 
If at the same time rewards are to 
be sustained, large employment 
subsidies for the unskilled will be 
required, instead of the taxes 
often imposed upon them. But 
that would necessitate higher 
taxes elsewhere. Combined with 
subsidies for training and radical 
labour market deregulation, this 
is the only policy likely to 
put industrial countries on 
the path they are apparently 
seeking. 


Better fewer 
but better 


There is growing concern at 
Westminster over the way that 
legislation is drafted and passed. 
On Monday, Mr Howard Davies, 
director general of the Confedera- 
tion of British Industry, added the 
voice of the business community 
to such worries. In a speech at the 
European Policy Forum, he called 
for an overhaul of the legislative 
process, with more consultation, 
better drafting and improved scru- 
tiny. 

The case for reform is strong. 
The weight of legislation is grow- 
ing - this year's Finance Bill, at 
471 pages, is the longest in his- 
tory. Yet an increasing amount of 
time is spent on remedying the 
defects of recent legislation. Last 
year's Criminal Justice Act 
repealed sentencing reforms intro- 
duced in the 1991 Act. A one- 
clause bill is needed to restore tbe 
powers of transport police, inad- 
vertently watered down in last 
year's rail privatisation act 

A telling indicator of the need 
for change is the growing number 
of amendments the government 
has to table to its own legislation 
in the Lords. These have more 
than doubled during the 1980s 
according to evidence submitted 
by Lord Howe to the Hansard 
Society commission on the legisla- 
tive process which reported last 
year. The late drafting and tabling 

of ame ndm ents inevitably makes 

parliamentary scrutiny less thor- 
ough. It also makes it harder for 
business and other organisations 
to make an informed contribution 
towards shaping legislation. 

Drafting quality 

Some of the blame for this has 
been laid at the door of the parlia- 
mentary counsel who draft legisla- 
tion. The European Policy Forum 
has recently suggested breaking 
their monopoly to improve the 
quality of drafting. Involving out- 
side lawyers in the work would 
Ulow departments access to a 
larger pool of talent. Contractmg- 
jut would also force departments 
:o define their objectives clearly 
tnd devise reasonable timetables 
hat legal firms could work to. 

However, it is not bad drafting 
vhich has led to repeated amend- 
nents to the Police and Magis- 
r.ues Courts Bill currently pass- 
ig through the Lords. It is the 
tilure of the home secretary Mr 
lichael Howard to convince peers 


of the wisdom of centralising con- 
trol over the police service. Mr 
John Patten, education secretary, 
has also had to concede amend- 
ments to his Education Bill to 
address scepticism over his pro- 
posals to curb student unions and 
to allow schools to control teacher 
training. Better drafting could 
Improve the quality of legislation 
- but ministers have much more 
to contribute. 

Ministerial machismo 

Too much legislation is rushed 
through parliament too hastily. In 
some cases, this is to deal with 
political crises such as a surge in 
joy-riding or a spate of attacks by 
dangerous dogs. But in most 
cases, it is ministerial machismo 
which sees pushing through radi- 
cal reforms as the best way to 
fiimh the greasy pole. Frequent 
ministerial reshuffles encourage 
this belief, since minis ters move 
on before the trouble they have 
created manif ests itself. 

A more serious approach to con- 
sultation on contentious changes 
in the law would help counter 
such tendencies. Mr Davies says 
that some departments consult 
business in “an unsatisfactory or 
perfunctory way". He cites the. 
Home Office failure to consult on 
fire safety regulations, scrapped 
only after direct intervention by 
the CBI. And just three weeks was 
initially given for comments an 
complex proposals to reform pen- 
sions law Issued in January. Min- 
isters should give adequate time 
for consultation and report more 
fully on tbe outcome. 

Another useful step would be to 
limit the number of contentious 
pieces of legislation passed in each 
session. This would allow more 
time for legislative “housekeep- 
ing". such as legal reforms drafted 
by the Law Commission. Uncan- 
troversial measures needed by 
business such as amendments to 
the Sale of Goods Act, legislation 
on tbe Privity of Contract and a 
new Restrictive Practices Bill 
have all been ready for years but 
denied parliamentary time. 

There are other measures that 
could improve the legislative pro- 
cess, such as creating two finance 
bills to separate technical tax 
r fHmp»a from more radical policy 
changes. But the key to better leg- 
islation is have less of it, and do it 
better. 


I nternational Computers, the 
UK-based computer company, 
used to epitomise arrogance 
and insularity. Even “Interna- 
tional” in the company’s 
name begged an invidious compari- 
son with International Business 
Machines, the world's largest com- 
puter company. 

Stories of its conceit abounded. 
The chief salesman for a region, it 
was said, would put up in the best 
hotel and announce he would be 
available that evening in the par- 
lour to take customers' orders for 
computers. 

Since its acquisition, first by the 
UK telecommunications company 
STC in 1984 and then by Fujitsu, 
Japan's leading computer make r, in 
1990, that arrogance has evaporated. 
“Today we are humbler and nim- 
bler." says Mr Peter Bonfieid, ICL 
chafrmaTi and rhtof executive. 

Mr Koshiro “Kit” Kitazato, 
Fujitsu’s man in ICL’s headquarters 
in Putney, west London, is charged 
with co-ordination between the Jap- 
anese computer giant and its UK- 
based subsidiary. He says ICL has 
learnt reliability from Fujitsu, while 
Fujitsu has learnt flexibility from 
ICL. 

Fujitsu set several strategic objec- 
tives at the time of the takeover. 
ICL would be autonomous, operat- 
ing at arm’s length from its parent 
It would retain its European base, 
seek maximum commercial 
cooperation with Fujitsu and. even- 
tually. float on the London Stock 

BrriiangP 

The first few conditions have 
been f ulfill ed; the recession has 
delayed tbe flotation. Both compa- 
nies agree they should work more 
closely together to share research 
and development, and marketing 
costs. 

There have been some positive 
developments: ICL’s new mid-range 
computers are the first to be sold 
under the two companies' names; a 

pioneerin g t rafnep nrrhangp scheme 

is under way; the two groups are 
collaborating on check-out systems 
for supermarkets; ICL’s office soft- 
ware has been rewritten to be mar- 
keted in Japan. 

- Despite these achievements, ICL’s 
1993 results, scheduled for release 
today, will not be mdtfqg Turn- 
over will be higher than last year’s 
£2.5bn, but pre-tax profits are expec- 
ted to be well below the £38- 6m 
recorded for 1992. Profitability has 
been on the slide since 1989, when 
ICL made £148. 6m before tax. The 
1993 figure represents little more 
than break-even, though it is 
respectable in an industry undergo- 
ing global restructuring. 

ICL's top management is taking 
steps to safeguard the group’s prof- 
itability. Earlier this year, the com- 
pany raised £100m through a rights 
Issue wholly taken up by Fujitsu - 
the first time the UK company had 
turned to its parent for funds. 


More flexible, and 
less arrogant Mend 

Alan Cane examines the outlook for a UK-based 
computer company in a cut-throat marketplace 



The issue reflects the group’s pes- 
simism over short-term prospects in 
tbe computer marketplace, as the 
industry moves towards low-cost, 
low-margin operating systems based 
on common standards. 

Cash is one bulwark against a 
highly competitive market; an 
increasingly efficient and lean oper- 
ation is another. Mr Rr>n field points 
to the steady decline in the group's 
overheads. In 1987 operating 
expenses as a percentage of turn- 
over were 2&8 per emit; in 1992 the 
figure was 22S per cent and it is 
expected to have fallen further in 
1993. The company employs about 
25,000 and is cutting jobs at about 5 
per cent a year. 

The reason for ICL's drive for 
economies is the relentless decline 
in gross profit margin. Standing at 
47 per cent in 1987, ft is now less 
than 35 per cent as the shift to 
lower-cost systems continues. 

Nevertheless, ICL remains the 
only consistently profitable broad- 
based computer manufacturer head- 
quartered in Europe; worldwide, it 
Is one of the few traditional com- 
puter companies not floundering in 
red ink. By comparison. Siemens 


Nixdorf of Germany and Olivetti of 
Italy are losing money; and Groope 
Bull of France is dependent on 
repeated restructuring grants from 
the French government 
Mr Banfield’s reputation is high, 
both with Fujitsu and the industry 
at large. He was recently asked by 
Mr Martin Bangemann, European 
Union commissioner for industry 
and telec omm imitations , bo join the 
High Level Group on Information 
Technology, set up to consider the 
impact of information technology 
on Europe. This is an indication 
that ICL has restored its Euro cre- 
dentials after being bundled out of 
high-level European policy meet- 
ings following the Fujitsu takeover. 

But restoring adequate profitabil- 
ity has proved more difficult. 
Though it still manufactures main- 
frame computers, more than 50 per 
cent of ICL’s revenues come from 
the services sector. Competitors 
now include services companies, 
such as Electronic Data Systems 
(EDS), and personal computer mak- 
ers. such as Compaq, as well as its 
traditional rivals, IBM. Unisys and 
Digital Equipment 
According to Input a US consul- 


tancy which tracks the computing 
services business. ICL’s improve- 
ment in market share in services 
ranks it fourth in Europe behind 
the US companies Microsoft, Ander- 
sen Consulting and EDS. 

Tbe company has been split into 
26 semi-autonomous businesses, 
each with profit and loss responsi- 
bilities. There are three groups; 

• industry systems, including 
countries such as France and Portu- 
gal. under Mr Richard Livesey- 
Haworth; 

• services, including Workplace 
Technologies and Sorbus Europe, 
the maintenance company ICL 
owns with BeU Atlantic, under Mr 
Paul Whitwam; 

• and technology businesses, 
exemplified by Design to Distribu- 
tion, ICL’s manufacturing consul- 
tancy. under Mr Ninian Earfie. 

These changes, made over the 
past year, are evidence that the 
company is going through a second 
significant restructuring. The first 
took place more than a decade ago 
when, under Mr Robb Wilmot, ICL 
forged a technological alliance with 
Fujitsu and pioneered the shift to 
standard systems. That was when 


ICL abandoned cherished notions of 
setting the technological agenda 
and accepted that it would have to 
buy its technology from the best 
sources. Despite what many saw as 
the dead hand of STC, ICL pros- 
pered during the buoyant economy 
of the late 1980s. 

Both ICL and STC were aware, 
however, that tbe company needed 
an owner with deeper pockets and 
greater commitment to the informa- 
tion technology’ business than STC. 
The solution proved to be Fujitsu. It 
bought the company just before the 
US and western Europe moved into 
recession. At the same time, the 
cost of computer hardware fell pre- 
cipitously, helped by a fierce price 
war between personal computer 
manufacturers. 

ICL's survival is a consequence of 
a flexibility uncommon in large 
companies: “In storms we are quite 
quick up the rigging, even if tbe 
planks are leaking," Mr Livesey- 
Haworth says wryly. 

Much of this flexibility comes 
from a trio of acquisitions: Data- 
checker. a US retail automation 
company which is tbe cornerstone 
of ICL's ambitions as a global retail 
systems company; Nokia Data, tbe 
Finnish personal computer com- 
pany. which ICL bought in 1992: 
and Technology, the UK's largest 
personal computer distributor. 

D atachecker. as ICL's 
senior managers 
recall, was a case 
study in how not to 
manage an acquisi- 
tion. The company sent in its own 
manager and accountants who ran 
rough-shod over local management. 
Sensitivities were bruised, so the 
assimilation took longer and cast 
more than envisaged. 

When ICL acquired Nokia Data, it 
was determined not to make the 
same mistake. PC operations were 
consolidated in Scandinavia. The 
chief impact however, was cultural, 
a pattern repeated with tbe acquisi- 
tion of Technology. “We needed a 
shot of the faster-moving PC cul- 
ture." Mr Eadie says. 

So what is ICL's future? It is 
likely to remain medium sized; it is 
unlikely to make more money this 
year than in 1993. as Mr Bonfieid 
sees no improvement in the market. 
He believes, however, that ICL's 
reorganisation will be complete this 
year. Largely freed from debt 
through the rights issue and from 
restructuring charges, the company 
should return to significant profit- 
ability in 1995, he predicts. This 
could mean profits eventually 
reaching 5 to 6 per cent of revenues. 

The worry now is not compla- 
cency, but battle fatigue: “We drive 
this company hard, but it’s the only 
way to do it," Mr Bonfieid says. Mr 
Todd agrees: “We have gone 
through world war three, but we 
cannot relax. The fight goes on.” 


Time for the new Italy to take power 



Economic growth 
and competitiveness 
are the world’s dom- 
inant political 
themes today. In 
North America and 
Asia, the wmin con- 


PE &°™ L own of pwernmeut 


Y IE 2 L — and business is how 

to achieve a strong position in the 
global economy. Ideology has been 
abandoned in fovour of a pragmatic 
search for the quickest, surest way 
to boost competitiveness and 
growth, and to turn tbe prospect of 
a new cycle of international eco- 
nomic growth into reality. 

In Europe, on the other hand, the 
break with the past is not so 
clear-cut Political attention seems 
to focus on tiie past rather than the 
future; on defence rather than 
attack; on rejuvenating the old 
rather than creating the new. The 
result is yet another year of missed 
business opportunities for Europe, 
and rising unemployment to 
socially unacceptable levels. 

This contradiction is even more 
evident in Italy. Here, political 
debate has either failed to take 
account of the future now emerg- 


ing; or It is confined to impromptu, 
demagogic assertions that ignore 
the global competition Italy should 
he preparing to meet, if it wishes to 
avoid being excluded from the 
ranks of industrialised nations. 

Now, in the run-up to an election 
that will be decisive for the coun- 
try’s future, the electoral scene is 
for from inspiring. 

On March 27 and 28, Italians go to 
the polls under a new electoral sys- 
tem - the outcome of a referendum 
which vetoed the intolerable regime 
of corruption and inefficiency gen- 
erated by the lack of alternatives to 
the dominant political system. For 
months, debate centred on how to 
create an electoral system that 
would permit alternation between a 
progressive pole and a conservative 
pole, enabling Italy to stand along- 
side the great western democracies. 

But partly because tbe new elec- 
toral law was the reluctant product 
of a parliament forced to act by the 
result of the referendum, the elec- 
tions will fak p place in a climat e 
dominated by three main factors. 

• First, the reality of transforma- 
tion: to a great extent these elec- 
tions are in the hands of the off- 


spring of the old political system, of 
whom the most brazen representa- 
tive is the standard-bearer of Forza 
Italia, together with the embalmed 
remains of certain areas of the left 

• Second, the risk to economic 
self-sufficiency; a real risk which 
lies beneath the wonder cures prom- 
ised by the right or the sermons of 
the outdated apologists of the left 

• Third, confusion: the contest is 
riddled with, left-over ideologies 

Behind all the 
manoeuvrings of the 
politicians there is a 
country which has 
decided to move on 

which have been disinterred for the 
occasion. 

Such suicidal behaviour may not 
be surprising coming from the new 
right; but it is alarming when it 
appears among the more serious 
elements of the centre and the left. 

What politicians should be doing 
is explaining to the electorate that 
Italy is not the centre of tbe world. 


or even of Europe; and that if we 
want to remain at tbe forefront of 
world markets, we have to identity 
our competitive advantages and 
abandon rearguard actions and ver- 
bal wars. 

Behind all the manoeuvrings of 
the politicians, old and new, in this 
vital election, there is a country 
which has decided to move on: this 
is the real Italy. The country has 
grown. You need look no further 
than today's great moral clean-up 
which, in its pursuit of a whole gen- 
eration of corrupt politicians, has 
reached a scale unparalleled in any 
other country. 

Or the spirit of sacrifice displayed 
by countless citizens in the face of 
an often chaotic, punitive fiscal sys- 
tem and an inefficient, oppressive 
public sector. 

Or tbe vigour and innovative 
capacity of an entrepreneurial class 
that has reasserted its competitive- 
ness despite the constraints under 
which it operates. The remarkable 
improvement in the trade balance 
in 1993 from L4,000bn to L50,000bn 
was not due entirely to devaluation. 

This Italy must be represented 
politically by dignified action and 


thought The growing interest in Us 
financial markets demonstrates 
that Italy's international image is 
changing. And foreign observers’ 
view of the new Italy is for more 
accurate than the picture created 
by the election campaign. 

Italy cannot afford to forego the 
chance to take part in a new cycle 
of growth in an ever more intercon- 
nected world. This will require 
rational decisions, calculated sacri- 
fices and an acceptable balance 
between recovery and growth. It 
means social consensus and a gov- 
ernment capable of plotting an 
intelligent, pragmatic and credible 
course. 

There is no room here for slogans 
and miracle makers. In today’s 
world, non-alignment with other 
nations means economic and social 
decline, with the risk of losing tbe 
basic values of democracy and free- 
dom. 

This is tbe “Italian risk" two 
weeks before the elections. 

Carlo De Benedetti 

The author is chairman of Olivetti 


Observer 


Nails out at 
Birmingham 

■ Masochistic voyeurs have 
enjoyed watching Bi rm i n gham's 
local government draw up a list 
of candidates to recline on the bed 
of nails marked chief executive; 
the present occupant, Roger Taylor, 
has decided to go early. 

Why should intelligent 
bureaucrats step in between the 
waning fiefdoms of council 
departments and combative 
councillors? It has to be the eighth 
deadly sin: amb ition. Brum Is 
England's largest metropolitan 
authority. 

The council is silent over who 
wants the £80,000 a year job. but 
word is that among the 10 names 
in tbe frame are two women - 
Sheffield’s Pamela Gordon and 
Southwark’s Anna Wyatt. There 
is thus the intriguing possibility 
of a female alliance emerging. 
Theresa Stewart the current 
Labour leader, faces difficult 
elections in May. Does she favour 
either Gordon or Wyatt? The last 
woman chief executive in the West 
Midlands - at Sand well - 
eventually decamped for New 
Zealand. Must be something in the 
water... 


Removal time 

■ Sounds of merchant banks on 
the move in the City of London. 


No sooner has BZW, Barclays’ 
international investment bank, 
been given the green light to move 
in to its parent’s soon- to-be-vacated 
Royal Mint Court headquarters, 
than word reaches Observer that 
Barings, the City’s oldest merchant 
bank, is also flitting. 

Barings, which has been at 8 
Blshopsgate since 1807, is coy about 
its future movements. However, 
it is clear that if it goes through 
with its plan to combine its 
merchant bank and fast-growing 
securities business under one roof 
there is not going to be enough 
roam for everybody at 8 
Bishopsgate. 

The obvious choice is for Barings 
to regroup at Baring Securities’ 
vulgar America Square 
headquarters near the Tower of 
London. 

But that would mean Barings 
giving up its precious EC2 postcode, 
which it shares with the Bank of 
England and other pokka members 
of the British banking community. 
No doubt the young turks now 
r unning Barings couldn’t care less 
about their postcode. 

But there are still some 
customers who worry about such 
things. 


Zebra crossed 

■ Not everyone hates Britain’s 
motorway cones. Footballers like 
to use them to practice their 
dribbling. 

Indeed, Newcastle United has 



is preferable to being In a 
sex scandal* 

became so attached to the cones 
at its Durham training ground that 
it has just had them kitted out in 
the dub’s colours. 

Apparently, the Department of 
Transport's regulation red and 
white strip for its motorway cones 
is identical to the colours of 
United’s rivals - Sunderland. 

So United’s manager Kevin 
Keegan turned to dub 
vice-president. Tom Brown, for 
help. When Brown is not watching 
United, he’s chairman of 
Northumberland-based RTM Group, 
which supplies cones and 
contra-flow cylinders for motorway 
contractors. 


No sooner had Keegan blown 
the whistle than Brown had paid 
£L000 to have his team's 50 red 
and white cones recovered in 
different colours so they wouldn't 
clash with United’s black and white 
team strip. 


Reptile house 

■ Who says that members of tbe 
European parliament don’t have 
a sense of humour? 

Take Jobanna-Christina Grand, 
a German Euro-MP. She has floated 
the notion that, given the high 
annual rent for tbe new 
parliamentary debating chamber 

- EculOOm annuall y for 27 years 

- visitors should be charged an 
entry foe. 

She says it sbould “be at a similar 
level for national museums, zoos, 
etc in Belgium”. MEPs might 
occasionally be mistaken for stuffed 
exhib its and sometimes behave 
like animals; but really. let's have 
a pan-European aggregate rate. 
please. 


Scandal fiasco 

■ When does the Whitewater 
brouhaha tom into a scandal? The 
resignation of Webster Hubbell, 
the US associate attorney general 
and US presidential buddy, raises 
a question which is vexing careful 
newspaper editors. 

Up to yesterday. Observer's 
electronic database showed a total 


of 347 references to Bill and 
Hillary's Whitewater problems. 
There were 178 mentions of 
‘scandal’ and just 111 ’affairs’. Poor 
old uproar, fiasco, furore, blemish 
and slur don’t warrant a mention; 
fuss gets just one. 

Of course statistics are no guide 
to anything. With the tally to date 
standing at one suicide and two 
resignations, the verdict of one 
ex-member of President Bush’s 
administration is: “Right now it's 
an affair. Four more resignations, 
then it's a scandal." 


Rapid progress 

■ Whether or not Whitewater is 
more than an affair, it has clearly 
gripped the imagination of London's 
stockbrokers. In less than a week 
various bits of Warburgs, James 
Capel and UBS have sent out 
research with the same heading 
- Whitewater Rafting. 

Hey guys, let's show a bit more 
creativity. In an effort to raise the 
Standard of headline writing among 
City stockbrokers. Observer is 
offering a bottle of the finest malt 
for the most original Whitewater 
headline on a piece of published 
research. 


Strafed 


■ What’s the difference between 
Nato and the IRA? 

The IRA knows how to enforce 
a no-fly zone. 


14 



FINANCIAL TIMES 

Wednesday March 16 1994 


Q3 Shepherd 

y ^ Design & Build 


Frederick House. Fulfbtd Road- Yoric Y014EA. 
Telephone 0904 $32401. Fax: 0904 610256. 


Mandela sends Zulus a 
warning on ‘toy tyrants’ 

Patti Waldmeir sees ANC chief triumph in Mmabatho 


Mr Nelson Mandela, leader of the 
African National Congress, yes- 
terday made a triumphal entry to 
the Bophuthatswana capital 
Mmabatho. congratulating the 
people of the black “homeland" 
for ousting President Lucas Man- 
ge pe, and issuing a veiled warn- 
ing that the same might happen 
to Zulu Chief Mangosuthu Buthe- 
lezi. 

Some 40.000 people cheered 
wildly as Mr Mandela entered the 
futuristic Independence Stadium 
built to commemorate Bophu- 
thatswana's granting of indepen- 
dence from South Africa in 1977. 
a sovereignty which only Pre- 
toria recognised. 

He had harsh words for Chief 
Buthelezi. leader of the KwaZulu 
black homeland, saying last 
week's events in Bophuthat- 
swana would “send a signal” to 
him and to the white right wing. 

“The people have risen and 
tyrants have fallen. This message 
will not be lost on people living 
under other toy tyrants in this 
country." he said. The comment 
bordered on a direct invitation to 
the people of KwaZulu to revolt. 

Mr Mandela's remarks will not 


improve the political climate in 
Natal, where at least nine people 
were killed yesterday in fighting 
between supporters of the ANC 
and Chief Buthelezi ’s Zulu-based 
Inkatha Freedom party. 

Nor do they improve prospects 
for the success of talks later this 
week between Mr Mandela and 
Zulu King Goodwill Zwelethini, 
ni m e ri at ensuring Inkatha's par- 
ticipation in the first all-race 
elections in April. The king has 
strong links to Inkatha through 
Chief Buthelezi. who is chief 
adviser to the monarchy. 

Mr Mandela denigrated the 
threat from inkatha saying he 
would suffer “no sleepless 
nights” over its promise to dis- 
rupt elections. The right wing, 
and by implication Inkatha. were 
“no more than those who bark 
without being able to bite.” he 
said. 

ANC leaders, who previously 
expressed grave concern at the 
right's potential to disrupt elec- 
tions, have gained confidence 
since armed rightwing whites 
were chased out of Bophuthat- 
swana on Friday. This new confi- 
dence is likely to undermine the 


ANC's commitment to bring 
Inkatha, the only remaining 
party boycotting the poll, into a 
constitutional settlement. 

Mr Mandela arrived in Mma- 
batho yesterday morning to a 
low-key reception in the streets. 
Later in the day the largest 
crowd ever for a public event in 
Bophuthatswana turned out at 
the Independence Stadium, but it 
remained about a third empty. 

The stadium is widely seen as a 
symbol of President Mangope’s 
rule. 

Mr Mandela condemned the 
looting which destroyed Mma- 
batho’s shopping district, but 
ANC officials made clear to busi- 
ness people that an ANC govern- 
ment would not compensate 
them for what the officials 
implied was a necessary part of 
the liberation struggle. 

However. Indian business peo- 
ple. many of whom lost all their 
stock, tinned out to greet and 
garland the ANC leader. One 
Asian businessman said: “The 
Indian community are jum ping 
on the bandwagon. They used to 
support Mangope. now they sup- 
port Mandela.” 


Joint ventures accused of restricting competition 

EU to tighten telecom rules 


By Lionel Barber In Brussels 

The European Commission 
yesterday served notice that it 
intends to take a more active role 
in policing joint ventures in the 
fast-growing telecommunications 
market 

Mr Philip Lowe, head of the 
Commission's merger taskforce, 
said Brussels would look closely 
at industry proposals for 
co-operation that might restrict 
competition. 

He told the Brussels Telecom- 
munications Forum, a private 
grouping, that technology was 
moving so fast that it was out- 
stripping decision makers and 
posing a challenge to regulators. 
“Frankly, we have to watch it.” 

Mr Lowe predicted the Euro- 
pean Union would have to accel- 
erate its agreed timetable for Lib- 
eralising national markets for 
voice telephony from January 
1998 - a view shared widely 
inside the Commission. 

Mr Lowe's speech provided the 
first clues on future regulatory' 


policy in telecoms, a booming 
market which could see most of 
Europe's state companies priva- 
tised before the end of the 
century. 

Mr Lowe suggested two areas 
where the competition director- 
ate would either extend its pow- 
ers or “clarify" its jurisdiction: 

• Lowering the thresholds 
above which Brussels automati- 
cally vet deals, from Ecu250m 
l$275m) annual turnover in the 
EU market to EculOOm. Mr Lowe 
said telecom ventures usually 
started with a low turnover but 
could grow very quickly. 

• Examining the definition of 
industrial “co-operation”. Joint 
ventures may not amount to mar- 
ket concentration but they could 
still restrict competition, Mr 
Lowe suggested. 

In the past year, the director- 
ate’s merger taskforce has vetted 
10 cases involving telecoms oper- 
ators, including a British Tele- 
com proposal to provide valued 
added services with MCI. a US 
telecoms company. Overall, it 


looked at 200 cases in all indus- 
trial sectors. 

In one case Philips, the Dutch 
electronics giant, withdrew a pro- 
posed joint venture with Sie- 
mens. the German industrial 
company, for a big optical fibre 
cable project 

Mr Lowe reminded industry of 
the advantages of co-operating 
with Brussels. Takeovers of a cer- 
tain size are automatically inves- 
tigated within a month. Where 
serious doubts exist about their 
effect on competition, they are 
subject to a four-month inquiry. 
Separately, companies consider- 
ing joint ventures or mergers can 
seek informal guidance. 

• The Commission approved 
BMW’s purchase of the UK car- 
maker Rover from British Aero- 
space yesterday. Also, in its first 
ever ruling in the newspaper 
publishing sector. It approved the 
Mirror Group-led consortium's 
purchase of Newspaper Publish- 
ing. which publishes the Indepen- 
dent and Independent on Sunday 
in the UK. 


G7 urges IMF to let Russia have $I.5bn 


Continued from Page l 


industrial, energy and agricul- 
tural lobbies fur more credits. 

However, lie has also tried to 
make clear to the IMF the sever- 
ity of the crisis lie races. The 
drafi budget - which has not yet 
gone to the slate duma, or lower 
house of parliament, for the 
required ratification - envisages 
expenditure of Rbsisa.uuobn and 


income of about Rbsi20.000bn - 
leaving a budget deficit of about 
10 per cent of gross national 
product, a figure generally 
regarded as tight in. present cir- 
cumstances. 

The income, however, is 
already proving wildly optimis- 
tic. Government insiders said 
yesterday that government 
income, mainly from taxes, was 
running at only some 


Rbs70.000bn to Rbs80.000bn a 
year. 

Even to produce the figures he 
has. Mr Sergei Dubinin, the act- 
ing finance minister, sharply cut 
the bids of ail the main minis* 
cries - limiting the military to 
Rbs37.000bu when officers are 
prophesying army mutinies 
unless it is given Rbs80.000bn. or 
more than 40 per cent of pres- 
ently budgeted expenditure. 


Fast US 
growth puts 
spotlight 
on rates 


By Michael Prowse 
in Washington 

The US economy is continuing to 
expand rapidly, according to fig- 
ures released yesterday, increas- 
ing the chances of another rise 
in short-term interest rates. 

The Federal Reserve said 
industrial production rose an 
unexpectedly large 0.4 per cent 
in February, after a 0.5 per cent 
gain in January. Most analysts 
had expected production to be 
flat or down as a result of the 
severe weather last month. 

The figures suggest that indus- 
trial output is growing at an 
annual rate of 7-8 per cent in the 
first quarter. 

That indicates little slowdown 
in economic growth from the sec- 
ond half of last year, when gross 
domestic product grew at an 
annual rate of more than 5 per 
cent 

The Fed also reported a sharp 
increase tn the rate of capacity 
utilisation in manufacturing 
Industry to 82.6 per cent - only 
fractionally below the level tra- 
ditionally associated with rising 
inflationary pressure. 

Separately, the Commerce 
Department said producer prices 
rose 0.5 per cent last month. 
However, the increase mainly 
reflected higher energy prices. 
“Core” producer prices - which 
exclude volatile food and energy 

- rose only 0.1 per cent less 
than expected. 

On Wall Street, bond prices 
rase in early trading as investors 
interpreted the encouraging core 
producer price figures as a sign 
that rapid growth was not yet 
putting upward pressure on 
inflation. 

However, the strong produc- 
tion figures and the higher 
capacity utilisation rate indicate 
that the economy is growing fas- 
ter than its long-term potential 
rate of growth. That raises the 
chance that Fed governors and 
regional presidents - who meet 
in Washington next week to dis- 
cuss interest rate policy - will 
tighten monetary policy another 
notch in coming weeks. 

On February 4, the Fed raised 
short-term rates a quarter point 
to 3.25 per cent - the first 
increase for five years. That led 
to a sharp increase in long bond 
yields, now about 6.9 per cent, 
on the assumption that this was 
the first in a series of tightening 
moves. 

Hopes on Wall Street that eco- 
nomic growth would slow 
sharply, taking pressure off the 
Fed to raise rates, are evapora- 
ting: JJ*. Morgan, the New York 
bank, is projecting economic 
growth at an annual rate of 6 per 
cent in the second quarter, after 
a brief weather- related slow- 
down to 3 per cent in the present 
quarter. That would be not far 
short of the 7,5 per cent growth 
rate of the final period of last 
year. 

Recent signs of strength 
include a surge in production 
and sale of cars and light trucks 

- usually evidence of buoyant 
consumer confidence. 


THE LEX COLUMN 


Wolseley builds higher 


Wolseley has a habit of exceeding 
market expectations. Yesterday's 8 per 
cent rise in the shares following the 
release of half-year figures is a case in 
point. The company's reticence is 
partly the cause. More segmental 
information and an interim cash flow 
statement, for example, might help 
investors form a clearer view of what 
the future holds. The Stock 
Exchange's new disclosure guidelines 
are certainly no justification for clam- 
ming up. While the going Is good 
shareholders will doubtless forgive, 
but such shyness cuts both ways. Wol- 
seley 's creditable history of outper- 
fo nuance is punctuated by some 
uncomfortably sharp corrections. 

Yesterday’s interim statement gives 
no imwiftHiata cause for concern. True. 
Wolseley will not enjoy the conditions 
of the 1980s unless the housing market 
is stoked into another frenzy. With 
inflation low, neither ran it count on 
stock profits to boost margins. But the 
12 per cent increase in UK sales shows 
how sensitive Wolseley’s distribution, 
business is to even a modest upturn in 
building activity. Since profits from 
European distribution rose by more 
than 50 per cent - with presumably 
little cheer coming from France - the 
operational gearing is clear. 

The acquisition of Brossette in 
France two years ago might also pro- 
vide the foundation for a wider Euro- 
pean distribution network. If Wolseley 
can avoid tripping on the acquisition 
trail there should be growth as well as 
recovery to come. While the recent 
run-up in the shares argues for 
caution, that prospect leaves 
long-term holders with little incentive 
to selL 

Williams Holdings 

Slowly but surely W illiams Holdings 
is digging itself out of the hole In 
which it Tell after its Racal bid failed. 
Full-year results show a rapid advance 
of operating profit in the second half 
thanks in large measure to a broader 
distribution bice in the US. Cash gen- 
eration is also Improving with £4 7m 
left over after capital spending, inter- 
est, tax and dividend payments have 
been met. Just the same, in marking 
the shares up by a quarter since late 
November, the market may have 
become carried away. The balance 
sheet does not look strong enough to 
sustain much by way of cash acquisi- 
tions. More paper might well meet 
resistance, especially since dividend 
growth is likely to be pedestrian. 

A significant part of the cash-flow 


FT-SE Index,- 3267.4 (+37,0) 


Wolseley 

Share price relative to the 
FT-SE-A AtGhare index 

600 1 : — 



1 1 1 1 i 1 11 J umiiiUi if 1 1 1 

1971 74 76 7» 80 82 84 88 88 9092 9* 
SaieeMBtani 


improvement came from a squeeze on 
working capital continued restraint of 
capftal spending, which is less than 
half its peak in 1989, and a virtual end 
to spending of restructuring provi- 
sions. Williams now needs to generate 
cash from its basic operations. The 
presumption is that there will be a 
large beneficial effect from increased 
volumes once recovery gets under 
way. 

Yet Williams still does not seem to 
have much scope to raise prices. 
Higher interest rates in the US and tax 
increases in the UK do not seem par- 
ticularly conducive to volume growth. 
There may be some years of dividend 
restraint before Williams meets its tar- 
get of two times cover. In the mean- 
time Hanson is on a higher yield and 
BTR seems likely to offer faster earn- 
ings recovery. 

US economy 

Yesterday’s US producer price data 
confirmed the Federal Reserve's view 
that America does not have an infla- 
tion problem. But industrial produc- 
tion and capacity utilisation figures 
show why the bond market thinks it 
may be about to get one. By most 
calculations, the US has closed the 
output gap which opened during the 
recession. With capacity constraints 
now at their tightest since 1989, fur- 
ther growth above the long-term trend 
will probably stir inflation. 

Growth may. however, moderate 
automatically - last year’s fall in the 
savings ratio is not sustainable and 
the recent rise in bond yields will slow 
the housing market But since most 
consumers will sit tight with low-cost 
fixed-rate mortgages, rising yields are 


not as effective a brake as falling 
yields are a stimulus. And while the 
Fed's initial increase in short-term 
interest rates has had a powerful psy- 
chological impact on markets, its 
effect on the real economy is small. If 
the Fed becomes concerned about the 
pace of expansion, it will have to push 
up short rates more decisively. 

That worry will probably keep the 
bond market on edge over the next 
few months. Once the Fed acts, how- 
ever, longer yields may stabilise and 
fall if the threat of rising inflationary 
expectations recedes. Shares have 
remained resilient despite the high 
anxiety of the bond market. That 
decoupling may continue. If the rising 
output and falling unit wage cost fig- 
ures are any guide, there is a strong 
profits recovery out there for someone. 

Mirror Group 

Mirror Group Newspapers is in 
something of a bind. Tabloid newspa- 
per sales are in long-term decline with 
the Sun’s price offensive sharpening 
the Daily Mirror's falls. MGN is there- 
fore keen to diversify. But with lowly- 
rated shares and gearing of 73 per 
cent, the group is severely disadvan- 
taged against rivals boasting cash in 
hand and high-priced paper. MGN’s 
proposed allian ce with Newspaper 
Publishing may yield some cost 
savings but the deal remains mar- 
ginaL The ingenuity of MGN's manag- 
ers in unearthing expansion opportu- 
nities will be fully tested. 

At least MGN can keep profits mov- 
ing by running its existing businesses 
more efficiently. Trading margins - 
excluding restructuring charges - 
have already risen to 24 per cent. But 
further gains should come from mov- 
ing to Canary Wharf and improved 
utilisation rates at its print plants. 
Advertising revenue has been growing 
strongly as a result of some smarter 
newspaper supplements and the gen- 
eral market bounce. 

Arguably, MGN has been sensible in 
not responding more aggressively to 
price wars. But the 1 per cent fall in 
circulation revenue suggests it is now 
being badly burnt by the Sun. The real 
worry comes if the Mirror's decline 
endangers its advertising rate card. 
With such doubts in mind, one can 
only admire the prescience of the 
administrators in placing their stake 
last September. Having outperformed 
the media sector by 44 per cent in the 
six months before the placing, MGN 
has underperfoimed by 13 per cent in 
the six months since. 



Europe today 

A cold front, separating mild atr in southern 
Europe Irom cool air In northern Europe, will 
form over iho Alps, ihe Balkan states and 
Belarus. There will be cloud and rain, fn the 
Alps, some snow is expected above 1300 
meters. South of Ihe front, conditions will 
remain mild with sunny periods over the 
former Yugoslavia and Italy. Southern 
Greece. Turkey. Cyprus, Spain and Portugal 
will have abundant sunshine. Highest 
temperatures an? expected in the Algarve (in 
excess of 2SQ. North of the front, cold air 
Irom the arctic will flow into Scandinavia. 
Denmark, the British Isles, the Benelux, 
Germany and Poland. There will be frequent 
wintry showers, accompanied by westerly 
winds occasionally approaching gale force. 

Five-day forecast 

Conditions over the northern ha W of Europe 
will become unsettled as cold air from 
northern latitudes flaws south. There will be 
snow showers and hall with thunder. It will 
be unseasonably cold- Conditions in 
southern Europe will remain settled and dry 
with spring-like conditions and plenty of 
sunshine. 



TODAY'S TEMPERATURES 



Situation at i 

2 GAIT. Temperatures .T-usmum fcr day. , 


Maximum 

Belfast 

hal 

8 

Cardiff 

Shower 

10 

Frankfurt 

shower 


Celsius 

Bdyade 

fair 

is 

Chcago 

sun 

s 

Geneva 

fair 

Abu Dhabi 

fair 

29 

Berlin 

shower 

10 

Cologne 

shower 

11 

Gibraltar 

sun 

Accra 

fair 

32 

Bermuda 

cloudy 

23 

D' Sataam 

dm-er 

31 

Glasgow 

simt 

Af«*ere 

fjtf 

22 

Bogota 

fair 

20 

Dakar 

sun 

23 

Hamcuxg 

hod 

Amsterdam 

shower 

9 

Bombay 

sun 

34 

Daflos 

far 

23 

Helsinki 

far 

Athens 

sun 

20 

Brusseb 

shower 

10 

Delhi 

tar 

34 

Heng Kong 

drzzl 

B Aires 

snower 

25 

Budapest 

fair 

15 

Duba 

tar 

29 

Honolulu 

fax 

B ham 

shower 

11 

C.tugen 

slum 

7 

Dublin 

shower 

□ 

Istanbul 

sun 

Bangkok 

doudy 

35 

Cairo 

sun 

22 

Dubrovnik 

far 

17 

Jersey 

shower 

Barcelona 

sun 

>8 

Cape Town 

sun 

25 

Edinburgh 

windy 

7 

Kaachi 

doudy 


fair 

n 

Caracas 

fair 

25 

Faro 

31X1 

21 

Kuwan 

fair 


Quality flights made in Germany. 

© Lufthansa 

German Airlines 


L- Angeles 

Las Palmas 

Lima 

Lisbon 

London 

Liuuboutg 

Lyon 

Madera 

Madrid 

MjfCrco 


snower 

fair 

fan 

sun 

shower 

shower 

fair 

fair 

Sun 

sun 


13 Malta 
13 Manchester 
20 Mania 
i Mafeoume 

8 Meaco City 
3 Morn 

20 Milan 

26 Montreal 
IS Moscow 

9 Munich 
33 Nairobi 
25 Naples 
20 Nassau 
22 New York 

27 Nice 
22 Nicosia 
IT Oslo 
10 Paris 
Id Perth 

19 P rague 

Rangoon 


21 


20 Reykjavik 


sun 

windy 

ckwdy 

lar 

fair 

fair 

sun 

snow 

cloudy 

shower 

thund 

sun 

fair 

sleet 

sun 

sun 

cloudy 

fair 

sun 

fair 

fair 

cloudy 


19 Rio 

9 Riyadh 
33 Rome 

16 S. Freco 
24 Seoul 

26 Singapore 

20 Stockholm 
O Strasbourg 
3 Sydney 

10 Tangier 
29 Td Aviv 
18 Tokyo 
26 Toronto 
6 Tunis 

17 Vancouver 
17 Venice 

5 Vienna 
12 Warsaw 
36 Washington 
10 Wellington 
36 Winnipeg 
-1 Zurich 


Blind 

sun 

SU1 

rain 

cloudy 

shower 

lair 

shower 

fair 

fdr 

fair 

drzzl 

snow 

fair 

rasi 

hazy 

far 

cloudy 

shower 

rain 

far 

doudy 


28 

26 

18 

16 

8 

31 

4 

14 
24 
20 
19 
13 
-1 
21 
12 
16 

15 
7 
9 

18 

O 

12 


4 

i 

i 

i 


On winning awards. 


To win five awards counts for 
a great deal. Whai counLs even 
more* is that the awards arc a 
statement of our clients' trust: 
We've just been named by 1FR 
as the "1993 Swiss Franc Bond 
House of the Year." “Commercial 
Paper House of the Year.” "Equity- 
linked House of the Year.” "Swap 
House of the Year" and “Options 
House of the Year.” Thank you. 



Swiss Bank 
Corpor a tion 


CffponKiun r. i tctuIct >■! iftc Stcuiui jn.1 hun> Awhwv a |] K i,y.; 




IS 






* \ henry 
butcher 


International Property 
& Plant Consultants 


071-405 8411 


FINANCIAL TIMES 

COMPANIES & MARKETS 

©THE FINANCIAL TIMES LIMITED 1994 Wednesday March 16 1994 


DAROME Teleconferencing 


Conference calls: 
tke key to improved 
business communications. 
For the best service call... 

0800 lO 16 lO 



IN BRIEF 


JP Morgan backs 
Banesto board 


The caretaker board of Banesto believes it has 
won the support of J. P. Morgan of the US for 
a major dilution of the troubled Spanish bank's 
equity as part of a rescue plan. Page 16 

Wall Street greets bid 

The prospect of a second big takeover in the mutual 
fund business in the US in a matter of months 
lit up Wall Street yesterday. Shares in Kemper, 
the Chicago-based asset management, life insurance 
and broking company, leapt 50 per cent from 
Monday's dose on an uninvited bid from GE 
Capital. Page 18 

ADR move leads the way 

An American Depositary Receipt programme 
launched by Companhia Vale do Rio Doce. the 
world's largest iron ore exporter, is meant to 
be a first step in a plan to finance joint ventures 
with foreign companies. Page 17 


Venezuela 

Composite Index ('000) 

■SO 


Tax tremors in Caracas 

A new tax proposed by 
the Venezuelan government 
covering most debit transac- 
tions at domestic banks 
has sent tremors through 
the Caracas stock exchange. 
When a series of tax bills 
were presented to congress, 
the Caracas index fell *L3 
per cent, and over the 
week shed more than 10 
per cent in local currency 
terms. The market has 
returned to positive territory this week. Back 



Williams Holdings fells by £4JSm 

Williams Holdings, the UK fire protection, building 
products and security group announced a € 4 - 2 m 
drop in profits to £153 .2m ($224m). page 22 

Medeva founder quits 

Mr Ian Cowrie-Smith, the Australian entrepreneur 
who founded Medeva, the UK drugs group, is 
resigning his executive position. Page 22 

Maid shares at 110p 

Shares in Maid, the UK on-line business informa- 
tion supplier, were priced at llOp valuing the 
group at £89.1m - well below expectations. 

Page 22 

Bad time at Saatchi 

Charles Scott, group chief executive of Saatchi 
and Saatchi, described the past 18 months as 
the worst in his life. Page 22 

MGM celebrates 

Mirror Group Newspapers, the UK newspaper 
publisher, celebrated its independence from admin- 
istrators and the legacy of the late Robert Maxwell 
by announcing higher than, expected pre-tax profits. 
Page 16 

Wolseley shares rise 

Shares in Wolseley. the world's biggest supplier 
of heating and plumbing equipment, soared by 
69p to 971p yesterday as the UK group surprised 
with a sharp rise in profits. Page 16 


Companies In this Issue 


Accor 

Accord 

Andrews Sykes 

Aston Martin Lagonda 

Avesla Sheffield 

Aviva Petroleum 

BAe 

Banesto 

Bayer 

British Airways 
Brown & Jackson 
CVRD 
Carlson 
Delia 

Dongiang Bectrical 
Emess 

Evans Hatefww 

Everest Foods 

Fannie Mae 

Finmeccanica 

Ford 

Fujitsu 

GE Capital 

Generate de Banque 

Graseby 

HaU Engmeenng 

Heywood Williams 

IBM 

ICE . 

1SS 

JP Morgan 
KOP 
Kemper 
Kolbenschmidt 


12 

KugeWscher 

20 

16 

Uonheart 

2* 

23 

Lyonnaise das Eaux 

15 

24 

MGN 

16 

17 

Maid 

22 

25 

Medeva 

22 

IS 

Microsoft 

18 

16 

Wnebea 

2D 

15 

NKK 

20 

22 

Norsks Skog 

16 

22 

Owen SRoWnson 

22 

17 

Paterson Zochonte 

23 

12. 16 

Post) panted 

20 

25 

Ransomee 

24 

20 

Robert Wiseman 

25 

22 

Royaie Beige 

16 

24 

Rugby Estates 

25 

25 

SGS 

16 

18 

Saatchi 8 Saatchi 

22 

18 

Santos 

20 

24 

Schotes Group 

25 

13 

Seafleid Resources 

25 

18 

Sotheby’s 

17 

18 

Stone-Consolidated 

18 

25 

Tiphook 

23 

24 

Unites 

20 

25 

United Biscuits 

24 

17 

Vea 

23 

13 

WaWwmes 

24 

18 

Wassail 

23 

16 

WaUams Holding 

22 

20 

Wlmpey 

23 

18 

Wolseley 

16 

16 

Welters Klumer 

16 


Market Statistics 


^Annual reports service 28-29 

Benchmark Govt hoods 21 

Bond futures and options 21 

Bate prices ate yekts 2t 

Commodities pnces 2fi 

Dividends announced, UK 22 

BUS currency rales 34 

Eurobond prices 21 

fiw d Inter esl indfces 21 

FT -A world maces Bart Pago 

FT Gold Mines index Bart Page 

FT/JSMA rrrtJ bond SVC 21 

FT-SE Actuaries indfces 27 


exchange 3* 

Gffis prices *1 

Lltte equity options Bart Page 
tendon share service 2MB 
London trad! options Bart Page 
Managed hates service 30-34 
Money markers 3* 

Hen rtf bond issues 21 

Recan issues, IK 27 

Short-term kit rates 34 

US Interest rates 21 

World Ska* Markets 3S 


Chief price changes yesterday 


FRANKFURT PHI 

Bara -Hypo 45fi ♦ 

Oceans Bank W + 

GoUscmnns BUS * 

Pond* 912 ♦ 

Sctertag 1 07 * * 

Fdi 

Bar S Bnger *91 - 

MEW YORK {SI 


105 

75 

to 

22 

37 

29 


AS) 

1425 

+ 

53 

□organs 

1487 

+ 

62 

L’Ortd 

1313 

+ 


Raflutocte 

553 

+ 

34 

IMn immofi 

Ml 

7D0 

■f 

28 

GTM-&OTpa» 
TOKYO l»w*» 

080 

” 

28 


Him 

CBS hr 
Tmtetaite 
Starbucks M> 
Fells 
Gmpa Rack) 
tonga Co 
vtmtnW 
PJUBSfFFl) 


110 * 7»j 

341. * 2*» 

9BW ■» 6 

25 'i - m 

23 - 4 *. 

22ft - 2»* 


mess 

feati) Optical 

Fuj4a W*° 

tonutau 

MoNnStEd 

ToyoTteUM) 

Felts 

Tori 


509 + 17 

2400 + ISO 

972 - 33 

436 + 20 

410 + 25 

680 -19 


New York pried* 123q*n. 


LONDON (Fence) 

A/Wws&Kes 40 

+ 

5 

EMMI 

113 

* 

B 

Banins 

555 

+ 

22 

EfiM 

21 

* 

4*i 

fmss 

32 

♦ 

2'lr 

EwrcH atnw 

549 

♦ 

17 

&W0S 

773 


20 

Ua*ra 

155 

♦ 


Worm W0 

5 «S 

♦ 

Una Giav 

147 

rt 

1 

Onwi & Han sen 

3J 

* 

8 

SCtofes 

210 

♦ 

11 

Scada wags 

271 

♦ 

16 


Sedgwick 

tyu* 

muter 

FoO* 

Avne* 
Bjkyna* 
towns Jack's 
Everest Wore 
togtam 
Ueenea 
Idea* 
tMsv«v(OI 


2IM + in* 
55 + 5 

975 + 73 

BO - 8 

335 - 12 

2 »i - 3 » 

88-8 
111-31 
226 - 16 

249 - 17 

210-8 


Regulators move to limit risks on OTC derivatives 


By Norma Cohen, Tracy Corrigan 
and Laurie Morse hi Chicago 

British and American securities 

regulators yesterday announced 
a joint effort aimed at limiting 
risks to the international finan- 
cial system posed by the explo- 
sive growth of over-the-counter 
derivative instruments. 

These instruments are not 
traded on exchanges, have no 
official market price, and are tai- 
lor-made to suit the needs of indi- 
vidual counterparties. Because 


their design is not standardised 
and there is no objective way to 
measure their value, hanfa and 
securities firms may assess the 
risk differently. 

Regulators have no desire to 
stifle product innovation but are 
concerned that securities firms 
have proper internal manage- 
ment controls to help them 
account for and understand the 
risks they take and to ensure 
adequate capital is set aside. 

The agreement is between the 
UK Securities and Investments 


Board, and two US bodies, the 
Securities Exchange Commission 
and the Commodities and 
Futures Trading Commission. 

“Everyone feels there is no 
sense in trying to regulate this 
product," said Mr Andrew Large, 
chairman of the SIB. 

“What we want is to ensure 
that securities firms have the 
capital base, the controls the 
understanding of the risk." 

The move stemmed from talks 
last year between the SEC and 
the SIB and follows a s imilar 


agreement between US and UK 

hanking fi rms 

Mr Carter Beese, a commis- 
sioner at the SEC said: “Over the 
past year there has been a very 
high level of co-operation 
between banking and securities 
authorities in the US." 

In addition to promoting inter- 
nal management controls, the 
SEC and the SIB want to ensure 
that firms understand how 
“severe market conditions" affect 
the value of their securities, that 
there be a common approach to 


the accounting recognition, mea- 
surement and disclosure of posi- 
tions and that there be enhanced 
information sharing. 

Mrs Barbara Holu m. acting 
chairman of the CFTC. said the 
near-collapse of MG Corp. the US 
arm of the German group Metall- 
gesellschaft. due to oil and gas 
derivatives dealings, underscored 
the urgency of such an agree- 
ment- 

Over-the-counter derivative 
traders gave cautious endorse- 
ment to the pact, saying it paral- 


lelled the agenda of international 
banking regulators. “The agen- 
cies appear to be moving along 
the sa pie lines as the hanking 
regulators." 

“We had been concerned that 
the securities regulators might be 
moving in a different direction." 
on issues like transaction net- 
ting, said Mr Joseph Baumann. 
President of the International 
Swaps and Derivatives Associa- 
tion. and director of global deriv- 
atives trading for Citibank. 
Background, Page 21 


Bayer lifts 
hopes for 
German 
chemicals 


Building and public works arms to combine B Much reduced exceptional costs 


Lyonnaise des 
Eaux-Dumez 
doubles profit 


Lyonnaise des Eaux-Dumez: recovery tmder way 


Stare pace {FFij 
800 


By John Ridding In Paris 

Lyonnaise des Eaux-Dumez. the 
French ntiiitiw and communica- 
tions group, yesterday 
announced both a strong recov- 
ery in 1993 profits and a restruct- 
uring of Its construction and pub- 
lic works activities to strengthen 
their position in international 
markets. 

Mr J£rdme Monod, chairman 
said preliminary results showed 
net profits of FFrtiOOm ($133m) 
last year, more than double the 
FFi379m achieved in 1992, but 
still below the previous year’s 
FFrL17bn. Turnover rose by 3.5 
per cent to FFr93. 6bn. 

According to Mr Monod. the 
Improvement in results and signs 
of recovery in the construction 
sector helped explain the group’s 
decision to merge the building 
and public works activities of its 
Dumez and GTM-Entrepose sub- 
sidiaries. 

The combined company, to be 


called Dumez-GTM, will have 
annual sales of about FFi25bn 
and a workforce of 33,000. 
According to the chairman, it 
should allow the group to com- 
pete more effectively for signifi- 
cant infrastructure and public 
works contracts in France, other 
parts of Europe and in south east 
Asia. 

Industry observers, however, 
expressed caution about the ben- 
efits. “It may bring more clout, 
but there is unlikely to be a large 
reduction in costs from merging 
two construction groups." said 
one. 

The group said that no job cuts 
would be involved in the reorgan- 
isation. 

Mr Andre Jarrosson, chairman 
of GTM-Entrepose, said the 
changes should be completed by 
the summer. Dumez-GTM will be 
held 50-50 by GTM-Entrepose and 
Dumez. Lyonnaise des Eaux-Du- 
mez will continue to hold 60 and 
100 per cent respectively of GTM- 



.1890 
Scwce; nmaUnjTT 


Entrepose and Dumez. 

GTM-Entrepose, which also has 
significant non-construction 
activities such as engineering 
and offshore contracting, will 
retain its market listing. 

Shares in GTM-Entrepose foil 
by FFr28 to FFr480. reflecting 


concerns about the impact of the 
restructuring on minority share- 
holders and a reduction in net 
profits from FFr2Q2m to FFrl70m_ 
By contrast, Lyonnaise des Eaux- 
Dumez exceeded market expecta- 
tions with its turnaround, push- 
ing shares up FFr8 to FFr592. 


Last year’s improvement 
reflected a reduction in excep- 
tional charges for property and 
construction. “The rise in profits 
was more the result of lower pro- 
visions than organic growth," 
said Mr Ben Uglow, construction, 
analyst at Robert Fleming. 


Emotional attack on Rover’s sale to BMW 


By Kevin Done, 

Motor Industry Correspondent 

Rover group, the last 
British-owned volume car pro- 
ducer, wOl officially pass into the 
ownership of BMW. the German 
carmaker, on Friday, but only 
after a bitter expression of oppo- 
sition from small shareholders in 
British Aerospace. 

The takeover cleared the two 
final hurdles yesterday, when it 
was approved by both the Euro- 
pean Commission and BAe share- 


holders. Shareholders at BAe's 
extraordinary general meeting 
voted 111 to 42 on a show of 
hands to reject the deal hut it 
was passed overwhelmingly by 
proxy votes of 119.6m to 23m. 

BMW is paying £800m cash and 
taking over £200m of net debt 
and £700m of off-balance sheet 
funding to purchase an 80 per 
cent stake in Rover. 

The BAe board has faced the 
unremitting hostility of small 
shareholder s to the sain Outside 
the meeting a handful of demon- 


strators with one 23-year-old 
Land Rover protested, armed 
with a couple of union flags and 
two placards declaring “Sale of 
Rover Industrial Dunkirk" and 
"European Union means death 
for British industry". 

Inside the meeting the atmo- 
sphere was much tougher, and 
Mr John Cahill, the departing 
BAe chairman, floundered as he 
was bombarded with fierce criti- 
cism and emotional outbursts. 

The BAe board was accused of 
“ sellin g the family silver" a n d of 


damaging Britain's relations with 
Japan. The sale of Rover to Ger- 
many was called “offensive" and 
“objectionable”. 

The integrity of the board was 
attacked, it was accused of telling 
"half truths and untruths", of 
selling the wrong business, and 
of failing to win written guaran- 
tees for keeping Rover jobs and 
its technology base in the UK. 

There was loud ironic applause 
when Mr Cahill was told, “you 
are on your way back home to 
the US with a £3J»m bonus", and 


the BAe chairman struggled to 
control the meeting. 

Why did BAe have to increase 
its borrowing limits when it was 
receiving £800m in cash, won- 
dered one shareholder. 

But after two hours of rancour, 
the BAe proxy votes ensured that 
Britain will no longer own a vol- 
ume carmaker. 

The European Commission said 
yesterday that BMW's takeover 
of Rover would “only have a lim- 
ited effect in terms of industry 
concentration.” 


By Christopher Parkas in 
Frankfurt 

Hopes of an end to the German 
chemicals industry’s four-year 
profits slump were raised yester- 
day by the release of better-than- 
expected earnings figures from 
the Bayer group- 

In line with the group's fore- 
cast, the dividend was un- 
changed at DMll and sales fell 
0.5 pm* cent to DM41bn ($23bn). 

Although Mr Manfred Schnei- 
der, chairman, had suggested in 
January that earnings would be 
better than forecast, net income 
of DM1.37bn, down 1 ZZ per cent, 
and pre-tax profits of DM2 J&bn, 
down 12-6 per cart, were ahead 
of many analysts’ expectations. 

When Bayer reported pre-tax 
p rofits and sales down 19 per 
cent and 2 per cent respectively 
for the first nine months of 1993, 
the manag ement said it expected 
a fall of 20 per cent in gross 
earning s for the full year. 

The group, which had previ- 
ously predicted flat profits for 
1994, is likely to offer a clearer 
view of prospects at its annual 
press conference on Friday. 

Bayer has traditionally fared 
better in recession than its main 
domestic rivals, Hoechst and 
BASF - both of which 
announced a DM2 cut in their 
1993 dividends - because of its 
strength in healthcare and rela- 
tive lack of reliance on baste 
chemicals. The drugs businesses 
generate two-thirds of profits. 

Healthcare sales were 5 per 
cent np at the nine-month mark, 
despite reductions in domestic 
health services. 

The supervisory board yester- 
day agreed to propose an end to 
voting restrictions, imposed in 
1975, at this year’s annual meet- 
ing. Shareholders' voting rights 
have been limited to 5 per cent 
regardless of the size of holding. 


Barry Riley 


Break-up threat to pension 
fund fantasy league 


It Is the annual 
results season for 
the UK's occupa- 
tional pension 
schemes. Trustees 
are poring over 
sheets of opaque 
investment num- 
bers, the two main 
measuring agencies are about to 
publish their aggregated returns 
and fund managers are preparing 
variously to boast or to make 
excuses. But as the annual 
league table exercise nears its cli- 
max, there is a strong feeling 
that the game is changing. 
Britain’s unique focus on a 
■shrinking universe of so-called 
balanced managers who are 
engaged in the tweaking of near- 
consensus strategies may be 

shifting 

As pension plans become ever 
mare mature - that is, they move 
towards a position where they 
will pay out more in benefits 
than they receive in contribu- 
tions - their risk tolerance grows 
gmaiier and their need to match 
their assets in a customised way 
to their individual liabilities 
becomes greater. 

Yet if the old order is going 
out, it is retreating in some Style- 
According to provisional figures 
from one of the measurers, Caps, 
the median fund returned 29 per 
cent last year, a result only 
beaten once (in 19S9) in the past 
decade. The five-year average 
annual rate of return for the 
median fond now works out at 
16L7 per cent, a long way above 
aoenympri actuarial returns which 
are based on a small margin over 
growth in average employee 
earnings. 

Certain managers achieved 
exceptional returns last year, 
such as Schraders with almost 33 


per cent. Morgan Grenfell did 
well too, and among the smaller 
contenders Newton hit 35 per 
cent The market leader Mercury 
Asset Management keeps its fig- 
ures to itself - there is a wide 
dispersion among its hundreds of 
client funds - but Gartmore and 
Phillips & Drew Fund Manage- 
ment both had unexciting years: 
Gartmore was pulled just above 
the median at the end of the year 
by Hong Kong but PDFM stayed 
just below after its bearish dash 
for cash proved ill-timed in the 
final quarter (though it will have 

As pension plans 
become more 
mature, their 
risk tolerance 
grows smaller 

enjoyed this year so far). 

But with equity and bond mar- 
kets booming worldwide the 
value added by the average man- 
ager does not seem to have been 
substantial. No great strategic 
initiatives appear to have been 
taken in 1993. According to Caps, 
exposure to UK equities drifted 
by 2 percentage points to 58 per 
cent of the average portfolio, 
while overseas equities expanded 
by 15 points to 215 per cent 
Overseas bonds at 6 per cent 
scarcely budged, nor did UK fixed 
interest bands at 25 per cent (the 
UK government’s ESObn ($73bn) 
gilt-edged selling programme 
passed pension funds by). 

The biggest current bets 
appear to be in international 
equity allocations, where the US 
and Japan together accounted for 


only 30 per cent of overseas equi- 
ties at the end of 1993 although 
they represented 65 per cent of 
the world ex-UK capitalisation. 
Many managers, however, have 
recently been going back into 
Japan and moderating the 
extreme exposure to continental 
Europe and the Pacific Rim (ex- 
Japan). The latter two regions 
accounted for 65 per cent of pen- 
sion food overseas equity hold- 
ings, but for only 24 per cent of 
the world ex-UK market 

Despite these tilted weightings, 
the present allocations of UK 
pension funds can be almost 
wholly explained by the passive 
cumulative impact of past 
returns. Instead of targeting an 
asset allocation and then periodi- 
cally rebalancing (by selling 
assets that have outperformed 
and buying others that have 
underperformed) the managers 
have let their winners ran. That 
may sound reasonable but it 
ignores the accumulation of risk. 

Now the balanced managers 

have reached an 82 per cent expo- 
sure to equities. Some pension 
plans such as that of British Rail 
are beginning to buckle under 
the strain and set up dedicated 
bond portfolios which are better 
matched to their ever-shortening 
liability structure. 

More generally, the fuUy-dis- 
cretionary mandate is being 
phased out in favour of bench- 
marks, usually set in terms of a 
combination of indices (or for a 
specialist mandate, only one). 
This process Is rapidly turning 
the general performance table 
into a kind of fantasy league, 
which will have to be replaced by 
many different specialist league 
tables. 

It will be a whole lot more 
rational but a whole lot less fun. 



GERMANY 


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

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

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


Fuchs Consult 


Kreuzberger Ring i>4 ■ Wiesbaden 

Telephone (x 49 61 1 > 70 00 4H ■ Fax (x 4* ol 1 ) 71 04 04 


FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


=^-T6- 

INTERNATIONAL COMPANIES AND FINANCE 


ISS increases profits but 
leaves dividend unchanged 


Banesto wins JP Morgan support 


By Hilary Bames 
in Copenhagen 

ISS, the industrial cleaning 
group which plans a listing on 
the New York Stock Exchange 
this year, reported an increase 
in pre-tax profits to DKr593m 
tSfiOmi in 1993 against 
DKr377m in 1992. 

Net profits advanced to 
DKr462m from DKrtfifim, while 
turnover was up at DKrl3.30bn 
from DKrlI.35bn. of which 38 
per cent was in the US. 35 per 
cent in Scandinavia and 24 per 
cent in Europe. Croup employ- 
ment increased to 125.900 from 
115.000. 

The group said the 17 per 
cent advance in turnover and 
13 per cent increase in operat- 
ing profits took place while 


By Gillian Tett in Brussels 

Royale Beige. Belgium's largest 
insurance group, yesterday 
said that an expansion in its 
life insurance businesses had 
helped push profits up by 11 
per cent last year. 

Consolidated profits for 1993 
were BFr4.9bn <S94m). up from 
BFr4.4bn in the previous year. 
Turnover rose ahove BFrlOObn 
for tiie first time, to BFrl04.4bn 
in 1993. 

The board is proposing a div- 
idend of BFrl60 a share, up 


Wolseley shares 
soar on result 

By David Blackwell 
in London 

Shares in Wolseley, the 
world's biggest supplier of 
heating and plumbing equip- 
ment. soared by 69p to 971p 
yesterday as the UK group yet 
again surprised the City of 
London with a sharp rise in 
interim profits. 

Pre-tax profits for the six 
months to January 31 rose by 
83 per cent to £87m (8127.02m) 
from £47.6m. Analysts had 
expected around £70m. 

Turnover rose from £l.l5bn 
to £1.54 bn. including £92.5m 
from acquisitions. 

Lex. Page 14 


important markets such as Fin- 
land and Sweden were in reces- 
sion and against a background 
of currency turbulence. The 
Swedish and F inni sh curren- 
cies depreciated against the 
krone by around 20 per 
cent. 

The $93. 5m acquisition of the 
National Cleaning Croup of the 
US on June 1 doubled the size 
of the group's North American 
operations. An unchanged 
DKrlQ per share dividend will 
be paid, but after a one-for-five 
subscription issue last year the 
total pay-out increases to 
DKr51.9bn from DKr43.3bn. 

• The East Asiatic Company, 
the trading group with exten- 
sive interests in East Asia, 
moved back into the black 
with a net profit of DKrl44m in 


from BFrl47 the previous year. 
Mr Jean-Pierre Gerard, chief 
executive, said that the 
improvement had been helped 
by the healthier financial cli- 
mate and the restructuring 
programme which the com- 
pany has implemented in the 
past four years. 

This restructuring, which is 
expected to lead to a 20 per 
cent cut in the workforce over 
eight years, has divided the 
group into two specific 
operations, one of which deals 
with independent brokers, the 


By Raymond Snoddy 
in London 

Mirror Group Newspapers, the 
UK newspaper group, yester- 
day celebrated its Indepen- 
dence from administrators and 
the legacy of the late Robert 
Maxwell by announcing 
higher-than-expected pre-tax 
profits of £131.9m ($192.57mj. 

The turnround from a loss of 
£88.7m In 1992 included an 
exceptional gain of £58.1m, 
against charges of £l21-2in. The 
group was able to release pro- 
visions of £60.8m as more 
money was recovered for plun- 
dered pension funds. 

Sir Robert Clark, chairman, 
said 1993 had been "a year of 


1993 compared with a loss of 
DKrl.l8bn in 1992. 

Profit after net financial 
items increased to DKr275m 
from a 1992 loss of DKrl28m. 
Sales were up at DKrll.l2bn 
from DKrl0.29bn for the com- 
panies continuing in the group. 
The group has undergone 
major surgery over the past 18 
months under a new chief 
axecutive, Mr Michael Fiorini, 
selling off its container line 
shipping services and the 
Plumrose food processing com- 
panies in the UK. the USA, 
Australia and New Zealand. 

Net interest-bearing debt has 
been reduced to DKriL9bn from 
DEr5.9bn over the past year, 
while return on capital 
invested improved from 3.6 in 
1992 to 6.3 per cent last year. 


other with salaried agents. 

With Royale Beige now pre- 
paring to expand into other 
parts of the EU insurance mar- 
ket, the group would be aiming 
for a profit increase of between 
8 and 15 per cent in 1994, its 
board of directors said. 

But although the group had 
seen strong results from the 
life insurance sector, which 
forms 31.4 per cent of its bum- 
ness in Belgium, its fire and 
automobile insurance sectors 
had recorded a loss in the pre- 
vious year, the group admitted. 


success and transformation for 
Mirror Group Newspapers”. 

Trading profits rose 19 per 
cent to £ll5.9m on turnover up 
2 per cent at £476. lm for the 53 
weeks to January 2. Profits 
before tax and exceptional 
were £73.8m, against £32 .5m. 

Underlying earnings per 
share rose to 15.1p from 5.8p 
and the company planned to 
resume dividend payments. 

The strengthening of MGN"s 
balance sheet - net borrowings 
during the year fell from £392m 
to £335m - meant that the 
company intended to return to 
the banks to restructure and 
negotiate more medium and 
long-term debt 
Lex, Page 14 


Business 
travel tie-up 
for Carlson 
and Accor 

By David Buchan In Parte 

Carlson Companies of the US 
and Accor of France are pool- 
ing their business travel 
operations in a joint venture, 
Carlson Wagonlit Travel 
(CWT), which they plan to 
develop globally for their cor- 
porate clients. 

With more than 4,000 travel 
agencies in 125 countries pro- 
viding flO.Sbn in revenue, 
they said tbe joint venture 
would have 8 per cent of the 
world business travel market, 
20 per cent ahead of their 
nearest rival, American 
Express. 

Through their combined 
purchasing power and syner- 
gies in computer reservation 
systems and in developing a 
new travel credit card, the 
CWT joint venture Is aiming 
for a cheaper service for cor- 
porate clien ts. 

The CWT joint venture win 
be “a real working onion, not 
a paper partnership,” claimed 
Mr Travis Tanner, president of 
Carlson Travel. However, the 
two parent groups will keep 
their respective hotel activi- 
ties, and even in business 
travel only envisage a fall 
merger after their joint activi- 
ties are working smoothly. 
Essential - or just extra bag- 
gage? page 12 

Dana Corp buys 
47% stake in 
Kolbenschmidt 

By Christopher Parices 
in Frankfirt 

Dana Corporation of the US 
has agreed to boy a 47 per cent 
stake in German vehicle com- 
ponents maker Kolbenschmidt 
from the troubled Metallge- 
sellschaft metals and engineer- 
ing group. 

No price was put on the 
deal, which is yet to be 
approved by cartel authorities 
and both companies’ boards, 
but the agreement marks the 
biggest step so far in the 
promised sell-off at MetaDge- 
sellschaft. Dana, based In 
Toledo, Ohio, has animal sales 
! of around DM8.6bn ($4-88m). 


By Tom Bums in Madrid 

The caretaker board of Banesto 
believes it has won the support 
of J. P. Morgan of the US for a 
major dilution of the troubled 
Spanish bank's equity as part a 
rescue plan. 

Backing from J. P. Morgan. 

which controls Banesto’s big- 
gest shareholder, would 
remove a doubt hanging over 
Banesto's AGM, scheduled for 
March 26, when shareholders 
will be asked to accept a 43 per 
cent write-down in the par 
value of Banesto shares. It 


By Ian Rodger hi Geneva 

Societe Generate de 
Surveillance, the Swiss inspec- 
tion and insurance loss adjust- 
ing group, reported a 13 per 
cent rise In net income in 1993 
to SFrl96.1m ($91m) in spite of 
a SFr27JJm exceptional charge 
for discontinued activities. 

Earnings per share grew fos- 
ter. 7.15 per cent to SFr22.02 
per registered share and 
SFrHO.lQ per bearer share, due 
to the successful campaign last 
year to boy back for cancella- 
tion 5 per cent of. the share 
capital. The directors have rec- 
ommended a 7 per cent rise in 
dividends. 

Mrs Elisabeth Salina Amo- 


By Ronald van da Krol 
in Amsterdam 

Wolters Kluwer, the Dutch 
publisher which is expanding 
rapidly overseas, posted a 23 
per cent increase in net profit 
last year, with a large part of 
the rise due to a recent string 
of foreign acquisitions. 

The company, which said 
yesterday that it expected to 
expand into five more Euro- 
pean countries this year, saw 
net profit rise to FI 318m 
($165m) from FI 258m in 1992. 
Turnover grew to Fl2.62bn 
from F12.36bn, while the divi- 
dend is to be raised to FI 1.52 
from FI 1.32. 

The importance of recent for- 
eign expansion is reflected by 


would also pave the way for 
the troubled bank's recapital- 
isation by tbe domestic finan- 
cial sector. 

J. P. Morgan advised Mr 
Mario Conde, Banesto's former 
chairman dismissed by the 
Bank of Spain, in December 
after inspectors discovered the 
bank had grossly over-valued 
its assets. J. P. Morgan engi- 
neered a large rights issue for 
Banesto last year and, through 
the Corsair Fund that it man- 
ages, had invested 8175m of US 
institutional funds in the Span- 
ish b ank. 


rini, SGS chairman, said the 
group looked forward to the 
current year “with confi- 
dence", expecting that the 
affects of internal restructur- 
ing and the economic recovery 
in the US and the UK would 
boost profits. Mr Serge Pahud, 
finance director, said no fur- 
ther restructuring charges 
were expected this year. 

Revenues last year were up 
6.8 per cent to SFr2.6bn. thanks 
to 6.3 per cent of internal 
growth, 1.5 per cent from 
acquisitions and a negative 1 
per cent from exchange rate 
adjustments. Operating income 
advanced 8.9 per cent to 
SFr237.4m. 

Mr Thierry ChGreau, chief 


the foct that more than half of 
last year’s 21 per cent increase 
in operating profit was gener- 
ated by companies acquired 
during 1993. 

Mr Mqndert Ververs, chair- 
man, said Wolters Kluwer, 
which specialises in profes- 
sional. scientific and educa- 
tional publishing, hoped to be 
able to announce deals in the 
Czech Republic and Hungary 
within the next few months. 

The total spent on acquisi- 
tions in 1994 is likely to be less 
than the FI 700m spent on 
acquisitions and fixed-asset 
investment in 1993, he said. 
But in keeping with last year, 
acquisitions in 1994 would be 
financed from internal 
resources. 


A spokesman for Banesto 
said yesterday that although 
J. P. Morgan bad still not deliv- 
ered its support to the new 
board in writing there had 
been fruitful and fluid 
high-level contacts in the past 
weeks with the US bank. Rela- 
tions with J. P. Morgan had 
been cool following Mr Conde’s 
sacking. 

The spokesman said there 
had been no contact with Mr 
Robert Mendoza, the J. P. Mor- 
gan vice-president who intro- 
duced the Corsair Fund to Ban- 
esto and masterminded the 


executive, said brisk business 
in Asia, Africa and Latin 
America offset sluggish perfor- 
mances in Europe and North 
America. Revenues from Euro- 
pean countries were fiat at 
SFrL19bn, with growth in east- 
ern European countries pre- 
venting a decline. Revenues 
from North America were up 9 
per cent to SFr648.6m while 
income from the Asia-Pacific 
region advanced 11. 1 per cent 
to SPr562-7m. 

Net financial revenues eased 
only marginally to SFr59m. in 
spite or the downward trend of 
interest rates last year, but 
pre-tax profits dropped IB per 
cent to SFr289-2m because of 
tbe restructuring charges. 


Wolters Kluwer’s biggest 
acquisition last year was the 
takeover of Sweden's Liber 
Group, which fits the compa- 
ny’s strategy of expanding in 
countries that are poised to 
become increasingly involved 
with the European Union. This 
policy also lies behind its inter- 
est in eastern Europe. 

The company expects to see 
a further increase in 1994 
results, in line with its goal of 
achieving an average 15 per 
cent Increase in profit per hilly 
diluted share in the years until 
1996. In 1996. it hopes to gener- 
ate 70 per cent of its operating 
profit abroad, compared with 
62 per cent in 1993. Turnover in 
1996 is projected to Increase to 
between FI 3.3bn and FI 3-5bn. 


rights issue. He said J. P. Mor- 
gan's office in Madrid, which 
had a limited role in advising 
Banesto's former management, 
had been a party to the 
renewed contacts. 

It is believed that the Corsair 
Fund could make a further 
investment in Banesto's 
restructured equity base to 
remain a significant share- 
holder in the bank. Under tbe 
proposed write-down and the 
subsequent re-capitalisation, 
the Corsair's current 7.9 per 
cent bolding in Banesto will be 
diluted to 4^ per cent 


Norske Skog 
to raise 
NKr800m 

By Karen Fossfi In Oslo 

Norway's Norske Skog. one of 
Scandinavia's largest palp and 
paper producers, is making a 
two-step share issue to raise 
around NKrSOOm (873m). 

In the first step, NKr400m is 
to be raised through a l-for-10 
rights offering, with preferen- 
tial rights given to existing 
shareholders to purchase 
shares of the same class. A 
subscription price of NKrl50 
per share has been proposed. 

The second step involves 
authorisation of the board to 
issue up to 2,650,000 restricted 
non-voting *B' shares, aimed 
at international investors, to 
reuse another NKr400m. 

"In order to broaden the 
company's investor base, it 
wlQ be proposed that existing 
shareholders waive their pref- 
erential rights for the interna- 
tional offering," Norske Skog 
said. 

Mr Jarle Langfiaeran, a com- 
pany executive, said the pro- 
ceeds of the two offerings 
would increase financial flexi- 
bility to undertake a number 
of planned projects. 

He said that in 1994, Norske 
Skog intended to build a new 
de-inking plant In Norway 
used for the treatment of 
waste paper. Construction is 
to begin later tins year. At tbe 
domestic Tofte chemical pulp 
mill, there is a programme to 
gradually convert the mill to 
total chlorine-free pulp. Else- 
where in Norway, a new saw 
line is to be installed at an 
existing mill, while there are a 
number of other minor pro- 
jects planned for this year. 


Life side boosts Royale Beige 


MGN back in profit 


SGS advance curtailed by 
SFr27m restructuring charge 


Wolters Kluwer advances 23% 


a 



CATHAY PACIFIC 


1993 Final Results Ifighl^Ms 

For t ho year ended 

31m December 




1993 

1992 

Change 

Profit attributable to 
shareholders 

USSM 

294 

386 

-23-8% 

Shareholders’ funds 

USSM 

1,847 

1,708 

+ 8.2% 

Earnings per share 

USt 

10-3 

13.5 

-23-8% 

Dividend per share 

use 

5.4 

5.4 

— 


“Another difficult year” 

i “Prospects. I **'.*3 was another difficult year tor the air transport industrv and 

i 

j )ri‘>4 is unlikely roslwnv any sitruihtvmr unproven jenr. However the industry 

| in «i highly cyclical one and then: are indications rlur the second half of the decade 

; will lx- smunicr cb.m the rirvr. 


The opening of the new airport at Chek Lap Kok and economic growth in China 
and elsewhere in the region will arguably make Hong Kong one of the best locations 
in the worid lor an airline." 


PDA Stitch 

Chuinuiw. Ciiriiay Pctijk Aitmiys Umiicd 
Hi'u*: Kiwi;, IO:h .M.jfcIi 1994 


•Voles. 

1 The unnec Swi«?s dollar fip.un.*'. shown arc for information oni#, ard are translated Ucm Hong Kong ooJIara at t*0 
rale of ccti.irii,* Of USS1.00 * HHi-7 SO. 

C. Cnrdonif is ftcIJiCd in Hcry, Kcnfl aoJbrr.. 


?FJ Swire Group 



And the countdown is on for the 
launch of 


DIB FI BOR futures. 


The short-term interest-rate 
future is keyed to the three-month 
Frankfurt Inter Bank Offered Rate 
(FIBOR), a recognised market 
benchmark. 

FIBOR futures fit in with DTB“s 
existing range of BOBU BUND 
and BUXL futures to grwe 
professional investors the right 
stuff to cover every point on the 
yield curve. 

As a hedge for current exposure 
or a profit-making play on 
interest- rate moves, DTB*s FIBOR 
futures are what youVe been 
scanning the horizon for. 

For all the details, contact the 
DTB Inf oservice, P.0. Box T7 02 03, 
D-60076 Frankfirt am Main, 
Phone 149J(69) 1 53 03-222. 

Fax (49)(69) 15303-310 



DEUTSCHE TERMINBOR5E 

YOUR OPTION FOR THE FUTURE 


C 







FINANCIAL TIMES WRnwccnA V i£ t nn.l 


V ; ■* 




i J Vi. 


N HrSui 







IBM chief 
expects 
a gradual 
recovery 

By Louise Kehoe 
in San Francisco 

Mr Lou Gerstner, chairman 
and chief executive of Interna- 
tiona] Business Machines, sees 
no qnick fix for the computer 
company's financial woes. In 
the annual report to share- 
holders, Mr Gerstner says that 
IBM will recover “over time". 

“It won’t all happen over- 
night, but we are making sig- 
nificant progress,” Hr Ger- 
stner says in a letter addressed 
to “Dear Fellow Investor”. He 
acknowledges, however, that 
“yon wouldn't know it from 
looking at the financial results 
for the year [1993J.” 

IBM earlier reported net 
losses for 1993 of SS.ltm on 
revenues of $G2.7bn. In 1992 
the company recorded a $5 bn 
loss on sales of $64-5bn. 

Mr Gerstner charges that 
the company “failed to keep 
pace with significant change 
in the industry”. It “has been 
too bureaucratic and too pre- 
occupied with our own view of 
the world. We have been way 
too slow getting new things to 
the market,” he states. 

“We believe we can fix these 
problems because they are 
caused by ns and not factors 
outside our doors." says Mr 
Gerstner, directly contra diet- 
ing past statements by senior 
IBM managers who blamed 
IBM's problems on economic 
pressures and market turmoil. 

Mr Gerstner, who last July 
stated that “the last thing IBM 
needs right now Is a vision,” 
now believes that "strategy is 
particularly important for 
IBM”. He is expected to begin 
to reveal those strategies at an 
analysts meeting later this 
month. 

IBM’s plans, announced last 
July, to reduce its workforce 
by 35,000 by the end of 1995, 
are unchanged. “Based on cur- 
rent business conditions, we 
think tfaafs about tbe right 
number,” Mr Gerstner says. 

Financial data revealed for 
the first time in the annual 
report point to IBM's main- 
frame computers as the crux 
of its problems. Revenue from 
mainframe computer hard- 
ware declined 27.6 per cent 
last year, to $10bn, while per- 
sonal computer sales increased 
23.3 per cent to $9.7bu. 

The company's data storage 
products division reported a 
precipitous 18-2 per cent reve- 
nue decline to $5.1bu, while 
services revenues rose 32 per 
cent to $9.7bn. 

The report also shows a 
sharp decline in European 
sales over the past year, with 
sales in the US and Asia 
Pacific regions increasing 
slightly. 

Having outstripped the US 
for the previous two years, 
European revenues fell about 
13 per cent to $21 bn last year, 
from almost $24 bn in 1992. 


Brazilian mining group prospects for joint ventures 

Companhia Vale do Rio Doce is seeking international partners through its ADR programme, writes Patrick McCurry 

A 


new American Deposi- 
tary Receipt pro- 
gramme launched by 
Companhia Vale do Rio Doce 
(CVRD), the world's largest 
iron ore exporter, is meant to 
be a first step in a plan to 
finance new joint ventures 
with foreign companies. 

The basic programme, under 
which the company's ADRs 
will be traded in the US over- 
the-counter market, is likely to 
lead to a new equity offering in 
the US next year. 

This should help fund joint 
ventures with foreign compa- 
nies, particularly in the pulp 
sector. Tbe projects will need 
heavy capital investment in 
their early stages. 

Mr Anast&cio Fernandes 
FTfljo, financial director, says 
the company embarked on the 
ADR programme, launched last 
week, to attract foreign inves- 
tors, and to increase its inter- 
national profile and share 
liquidity. Currently foreigners 
own about 3 per cent of the 
capital. 

“It will be easier to issue 
bonds or other securities with 
a wider investor base.” he 
says. 

Created during the second 


world war by Brazil, the US 
and the UK to supply the Allies 
with iron ore, and later taken 
over by the government, CVRD 
has always been regarded as 
an exception to Brazil’s other 
federally-controlled giants. 

While Brazilian governments 
considered areas such as tele- 
communications and oil pro- 
duction as strategically impor- 
tant, and took charge of key 
appointments, CVRD was 
given greater autonomy so that 
it could compete in interna- 
tional markets. As a result, its 
management has generally 
been more independent of 
political pressures. 

I ts strategy has been to 
exploit its huge landhold- 
ings and deposits by diver- 
sifying into other minerals, 
such as copper and gold. It has 
also moved into areas such as 
pulp and infrastructure. 

The company's policy has 
usually been to grow through 
joint ventures with Brazilian 
and foreign companies, often 
offering exploitation rights 
towards the cost of the project. 

These joint ventures, mainly 
in pulp, copper, kaolin and alu- 
minium, have planned capital 


investment of about. $i.5bo 
over the next five years. 

“CVRD has not neglected its 
iron ore business, and has 
taken minority shares In areas 
where it lacks experience,” 
says Ms Lika Takahashi, a 
research director with brokers 
Baring Securities BrasiL 

Despite the company's 
strong natural advantages and 
efficient management, it has 
been hit by the world slump in 
commodity prices. 

Net profits for the year to 
the end of December 1993 fell 
1 2 per cent to $262m, while net 
sales were down slightly at 
$2.1 5bn. Hie company was also 
affected by increased interest 
costs on a yen loan at its 
Albrds aluminium joint ven- 
ture. The appreciation of the 
yen against the dollar contrib- 
uted to a loss of nearly 8100m. 

CVRD's rail and port net- 
work has now been developed 
to generate profits from out- 
side users. The transport sec- 
tor was its second -largest reve- 
nue source in 1993, providing 
16 per cent of net sales. Iron 
ore and pellets still provide the 
majority of sales, accounting 
for 57 per cent last year. 

Excluding the results of the 


Avesta aims to raise SKr600m 


Trans World Airlines 

Following our report of March 
9, we wish to make ft dear 
that Trans World Airlines, 
which sought protection from 
creditors in November 1992, 
came out of Chapter ll late 
last year. 


By Hugh Camegy 
in Stockholm 

Avesta Sheffield, the 
Swedish-British steel producer, 
yesterday announced a 
SKr600m rights issue to back a 
programme of investments and 
restructuring designed to 
strengthen the group further 
after cutting losses sharply in 
1993. 

The company, formed in late 
1992 from a merger of Avesta 
with the stainless steel inter- 
ests of British Steel, said losses 
after financial items were 
reduced to SKr98m ($12. 48m) 
last year from SKrS74m in 1992. 
Sales were up 20 per cent to 
SKrl-Obn. 

It said the improvement 
came in spite of generally 


weak demand, especially for its 
cold rolled products, hot rolled 
steel plate and tubes. 

The reduced losses were 
attributed chiefly to merger 
synergies, the fell in mine of 
the Swedish and British cur- 
rencies and reduced employers 
contributions and energy taxes 
in Sweden. 

No dividend will be paid, as 
was the case last year. 

In January the company 
secured a five-year syndicated 
b ank loan of $268.75m. The 
new financing will bolster 
Avesta Sheffield - 40 per cent 
owned by British Steel - as it 
implements a SKrfiOOm invest- 
ment and restr u cturing plan, 
provision for which was made 
in the 1993 accounts. 

The plans include invest- 


ment in a new continuous 
plate production plant in the 
US and the upgrading of 
melting shops in Sheffield and 
Avesta. 

A melting shop in Degerfors 
in Sweden is to be closed 
down. 

Avesta Sheffield said overca- 
pacity in Europe continued to 
depress short and medium- 
term prospects for stainless 
steel but stronger demand in 
the Far East and the US sup- 
ported a forecast of long-term 
growth in consumption of 4-5 
per cent a year. 

The company's investment 
and restructuring plan should 
give a quick return by increas- 
ing productivity, reducing lead 
times and improving costs, it 
said. 


Chairman of LSE makes 
pitch for Chinese custom 


By Tony Walker in Beijing 

A strong pitch for Chinese 
companies to choose London 
when seeking an overseas list- 
ing was made yesterday by Sir 
Andrew Hugh Smith, chairman 
of the London Stock Exchange. 

Opening an investment semi- 
nar in Beqing. he told bankers, 
securities managers and stock 
regulators that the Loudon 
market had the breadth of 
experience and liquidity to 
benefit Chinese companies 
seeking overseas capital 

"Companies raise more 
money if they issue shares on a 
market like London's, where 
there is much investor interest 
and liquidity.” said Sir 
Andrew. 

The invisibles seminar, 
organised by the China-Britain 
Trade Group, was partly aimed 
at countering a bend among 
Chinese companies to look first 
at Hong Kong and New York 
when considering an overseas 
listing. 


Some six mainland compa- 
nies have listed in Hong Kong 
in the past year or so, and one 
of these - Shanghai Petro- 
chemical - secured a joint list- 
ing in New York. 

Another 22 Chinese compa- 
nies, including a number from 
the power sector, are under 
consideration for overseas list- 
ings. Several have indicated an 
interest in floating their shares 
in London. 

Sir Andrew, who will sign a 
memorandum of understand- 
ing with tbe Shang hai stock 
exchange to facilitate coopera- 
tion in trading and listing, said 
the London exchange would 
rationalise listing require- 
ments to eliminate differences. 

Seminar organisers said 
there was a good response 
from Chinese participants who 
indicated they had not been 
aware of the extent of business 
on the London market where 
some 200 new companies 
sought listings last year, rais- 
ing $38bn in equity capital 


Sotheby’s well 
up at $20.6m in 
final quarter 

By Richard Tomkins 
bt New York 

Sotheby's Holdings, the parent 
company of Sotheby's New 
York-based auction, finance 
and real estate operations, 
lifted net income to $20 .6m In 
the fourth quarter of 1993 from 
$11. 6m a year earlier on turn- 
over of $lQ3.7m, against $&5m. 

Net earnings per share rose 
to 36 cents a share from 21 
cents. 

For the full year, net income 
rose to 5 19.3m from $4m on 
turnover of $252 ,3m against 
$225m. Net earnings rose to 35 
cents a share from 7 cents. 

Auction sales for the year 
increased by 17 per cent to 
$1.3bn. Auction operating reve- 
nues rose by $34. lm to $235m 
and auction income before 
taxes jumped to $312m from 
$4m. 

It sold about 163,000 lots in 
1993, up 19 per cent from the 
previous year’s 137,000. 


NOTICE OF REDEMPTION 

MORTGAGE FUNDING CORPORATION NO. 1 PLC 

Class A-l Mortgage Backed Floating Rate Notes Due March 2020 

NOTICE IS HEREBY GIVEN to Bankers Trustee Company Limited (die “Trustee”) and lo die holdeta of 
die Class A-I Mortgage Backed FWmg Rale Notes Due March 2020 (die “CLsa A-I Notes") of Mortgage Funding 

Corpora lion No- 1 | J LC(dK“ksucr^lhst,purauanCtodwTn«Decdda^ 

die Issuer and die Trustee, and llte Agpncy Agreement dated 31st March, 1988 (die “Agency Agreement”), between die 
Issuer and Mupn Guaranty Trust Company of New York (the “Principal Paying Agent”) and olha^lhe Wr has 
ddwidinal dut'm accordance with die redemption pro visions set oat in theTenns and CoodHions of the Class A-I Note, 
Available Capital Funds as defined in theTcnw and Cowfiuonsinllicamoiinl of £l,500,000wai beotSsedoo3Iat March, 
1991 {vhe“R«dcmptk»n Date”) to twfccma like amount of dans A-l Notes. The Chut A-I Notes selected by drawing in lots 

ofil 00 , 000 forredcmplionondic Redemption Da wata redemption prke(lhe l TledemptionPirice”)oquallollidrprineifial 
amount, together with accrued interest thereon areas follows: 

OUTSTANDING CLASS A-l NOTES OF £100,000 EACH BEARINC 
THE DISTINCTIVE SEBIALNTJAIB£ R S SET OUT BELOW 


697 

1512 


799 

1580 


995 


1029 


1M1 


116 475 S35 M2 

I0W 1081 1370 1505 

The Class A-I Notes may he surrendered for redemption at the specified office of any of die Paying Agents, 
which arc as follows: 


Morgan Guaranty Tract Company of New York 
Avenue des Arts 35, B -1040 Brands 


Morgan Guaranty Trust Company of New lork 
IH) Bo* 161, 60 Victoria Embankment 

Lindon KOft OJ P Morgan Guaranty Trust Company of New York 

Union Jo Cnnqnc S»i«. S A. E«l®^ B-anMjA 

3.-38 UranJ-ruc NwY^VNwY^kJJMMBO 

1,3)1! Ln«n*n»r 5 Aun. Crfp»..,Tn«Opml«n. 

In reiDrtt of Bearer Class A-l Note®, the Redemption Price will be paid upon presentation and surrender, on 
or after Vhc Redemption Date of such Notes together with all unmatured coupons and talons appertaining 
thereto Such payment will be made (i> '«« >t ihc specified office of tiro Ifying Agent in London or (ii) at 

the specified oflfcc of any Paying Agent lirted shore by string dmqne drawn on, or at Jw option of thcholdcr 
bv transfer to a rirrling actounl maintained by the payee with, a Town Ueartiig branch of a bank m London- Ob 
or after the Redemption Dale interest shall cease lo accrue on the Qua A-I Notes which are tbe subject of this 

Notice of Redemption. 

MORTGAGE FUNDING CORPORATION NO. 1 PLC 

By: Morgan Guaranty Trust Company 
os Principnf Boy mg Agent 

Dated: Ifitli March, IW NOTICE 

JL*' ,L C enrnxl sparer identification number (social security or employer identification number) or 

“ r " rur “'' or 

«, u jralan if ..renting your Class A-l Notes lo the pay.ng agency. New York Office. 


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1896 

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1097 

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0330 

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17.15 

17.15 

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1091 

17.14 

17.14 

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1082 

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0500 

1092 

1796 

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1796 

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1SJ60 

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21.17 

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2194 

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14.64 

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0030 

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1993 

2195 

0900 

1450 

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2397 

0030 

1496 

5394 

SSJE 

1000 

7497 

5395 

5592 

1030 

14j87 

3023 

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16.42 

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2000 

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25,19 

24.02 

2030 

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2099 

2100 

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50.77 

2130 

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1896 

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AslAy AsfMOod 

Transport was CVRD's second biggest revenue source in 1993 


yen appreciation and govern- 
ment tax credits, profits were 
about $200m. according to Ms 
Takahashi. who expects this 
figure to reach about $450m by 
1996 if commodities prices 
recover. Partly because of the 
price slump. CVRD's shares 


appreciated by only 44 per cent 
in dollar terms last year, com- 
pared with an index gain of 
more than 100 per cent for the 
Sao Paulo stock exchange. 

Following the launch of a 
restructuring programme in 
1990, CVRD's workforce has 


been cut by a quarter to less 
than 18,000. Analysts expect 
continued improvements in 
efficiency', especially since the 
company won increased opera- 
tional independence from tbe 
federal government, which still 
owns 51 per cent of shares, in 

1992. 

CVRD's restructuring fol- 
lowed a worrying pile up of 

debt in tbe late 1980s. it 

switched 25 per cent of its debt 
from the expensive and 
short-terra local market to lon- 
ger-term paper in international 
markets. Its current outstand- 
ing debt is about $1.5bn, a debt- 
to-equity ratio of 35 per cent, 
according to the company. 
However, very large debts in 
joint ventures such as the 
Albras al uminium project are 
not consolidated. 

According to analysts, the 
company will be open to criti- 
cism while it remains govern- 
ment-controlled. Although 
CVRD's management believes 
privatisation is inevitable, it is 
beset by political difficulties 
and has fallen off the agenda 
ahead of October's presidential 
elections. 

Sao Paulo-based mining con- 
sultant Mr Juarez Fontana dos 


Santos praises CVRD as an effi- 
cient and low-cost producer. 

Nevertheless he says the 
company remains over-central- 
ised and bound by government- 
imposed restrictive legislation 
on public tenders that slow 
down decisions and purchases. 


H 


owever. be maintains 
the company is 
attempting to become 
more flexible, and that more 
independence may be achieved 
if changes are approved under 
a congressional review of the 
constitution. This is under 
way. but may not be completed 
this year. 

He says the company's prior- 
ities for this year are to 
develop its rail transport net- 
work by forming a group to bid 
for the privatisation or part of 
tbe federal railway system. 

It also intends to be more 
aggressive in its main iron ore 
market. Last month. CVRD cut 
its ore prices to Japan, its larg- 
est market, in response to dis- 
counts offered by Australian 
competitors. “This year we'il 
be more aggressive, offering 
quicker delivery and better 
quality for certain kinds of 
ore." says Mr Fernandes. 


BTR pic 


has acquired 


Rexnord Corporation 


The undersigned acted as financial advisor to 
BTR pic in this transaction. 


Dillon, Read & Co. Inc. 


February 1994 


BTR Dunlop Holdings, Inc. 


has purchased through tender 


$157,415,000 

principal amount of 

10%% Senior Notes due 2002 


of 


Rexnord Corporation 


The undersigned acted as dealer manager for 
BTR Dunlop Holdings, Inc. in this transaction. 


Dillon, Read & Co. Inc. 


February 1994 




FINANCIAL TIMES WEDNESDAY_MARCH '6 >994. 


INTERNATIONAL COMPANIES AND FINANCE 


Earnings at 
Generate de 
Banque up 
8% for year 

By Gffifatt Tea in Brussel 

Consolidated profits at 
Gtoerale de Banque, Belgium's 
largest bank, rose by 6 per oent 
last year to BETU.6tm ($333m), 
up from BFrl0.7bn in the previ- 
ous 12 months. 

Mr Ferdinand Chaffart, chief 
executive, yesterday claimed 
that all die branches of the 
bank's activities had contrib- 
uted to the growth, which was 
broadly in line with market 
expectations. 

However, he noted that the 
bank had benefited in particu- 
lar from falling interest rates 
which had boosted financial 
markets and stock exchanges. 

In spite of an overall drop in 
loans, private sector lending 
rose by 4^ per cent last year. 
Meanwhile, gross income had 
risen by 14 per cent as a result 
of an expansion of the group’s 
investment funds and foreign 
exchange activities, coupled 
with the realisation of capital 
gains on government bonds 
and the bank’s recent sale of 
its stake in ABN- Amro, Mr 
Chafihrt added. 

The board of directors has 
proposed an increase in net 
dividend to BFr340 from 
BFrS20. With the bank hoping 
to benefit further from a weak 
D-Mark, in spite of uncertain- 
ties about the scope for further 
German rate cuts, Mr Chaflart 
said he remained "optimistic" 
about the prospects for further 
growth next year. 

Finmeccanica 
reduces holding 

By Sara Webb 

Finmeccanica, the Italian 
state-controlled engineering 
group, is further reducing Us 
stake in its quoted Ansaldo 
Trasporti subsidiary, in a 
transaction expected to raise 
up to L72bn ($43m). 

Lehman Brothers and Pari- 
bas Capital Markets were 
appointed joint lead managers 
yesterday for the placement of 
10.6m ordinary shares in 
Ansaldo Trasporti with inter- 
national investors. Finmeccan- 
ica's stake wQl fall to 50.1 per 
cent from 63.6 per cat 


The world's most profitable software company is to refocus on global marketing, writes Alan Cane 

Microsoft regroups to get closer to its customers 


Mr Bffl Gates, co-founder and 
chairman of Microsoft, the 
world's largest personal com- 
puter software company, has 
nightmares in which his com- 
petitors outsmart and over- 
whelm h™ in his bid to domi- 
nate the software business in 
the home and office. 

That fear must have played a 
part in the decision, 
announced in the US last 
nf g ht, to reorganise Microsoft 
from top to bottom. 

A memorandum to employ- 
ees signed by Mr Gates, Mr 
Steve Ballmer and Mr Mike 
Maples, who collectively mate 
up Microsoft’s “office of the 
president" spells out the 
worry: “We are trying to teach 
new customers and partners. 
Competitors like Lotus, Novell 
and Electronic Arts are more 
focused. 

“To continue to be a leader 
we need to innovate not only 


in our products but in our 
sales, marketing and 
operations. We cannot just foL 
low and react to what others 
an doing” 

Lotus Development Corpora- 
tion developed the best selling 
spreadsheet 1-2-3 and market 
leading software for work- 
groups “Notes”. Novell mar- 
kets the most popular PC net- 
working software. 

What is striking about Micro- 
soft's decision to reorganise is 
that, imiika other companies 
forced to restructure because 
of falling sales or trading 
losses, it remains the world's 
most profitable software com- 
pany. 

In. 1993 it reported net 
income of 6953m on sales total- 
ling 63.75m. 

Its success Is based on a 
broad range ctf market leading 
software packages, but espe- 
cially on MS/DOS and Win- 


dows, the operating systems 
used by 90 per cent of the 
world’s 10Gm personal comput- 
ers. 

Microsoft says that if it is to 
continue growing, it n eeds a 
fast, responsive organisation 
focusing on the customer's 
needs. 

Among the changes called 
for in the plan are: 

• Microsoft’s core technolo- 
gies must be shared across (he 
company to achieve economies 
of scale and offer customers 
greater consistency. 

• The company’s product 
strategy has to be simplified. 
The memorandum says: “We 
are overloading the market 
with lots of complex messages. 
We need to develop clear 
themes that pull together what 
we say about our products.” 

This is taken to be a refer- 
ence to confusion in the 
marketplace over Microsoft’s 


McfMOfK:. 

Share pries $ 
TOO “! 


.s.»sr 


.BO.—— 


■ ft) ! I * > , » I ,* 

•r. May- 19*- ' 

SocoraFT GrBpfrta . ‘ • 

advanced Windows NfT operat- 
ing system and its derivatives 
codenamed Daytona and Cairo. 

Products are to be grouped 
in seven divisions: personal 
operating systems, business 
systems and workgroup appli- 


cations, desktop applications, 
consumer applications, soft- 
ware developer systems, 
advanced consumer technology 
and on-Hne services. 

• Sales activities will be 
grouped into three customer 
units to give- greater customer 
focus: “We will align all world- 
wide sales and marketing peo- 
ple with one of three cus to mer 
types: end users, organisations, 
or other equipment manufac- 
turers. People within these cus- 
tomer units will live, eat and 
breathe with their customers,” 
the mnmnra n ririm says. 

• A renewed focus on the 
competition: “We must under- 
stand not only competitors’ 
products but also their sales 
strategies, marketing strate- 
gies, localisation strategies and 
so on. We must be aggressive ■ 
in taking legitimate competi- 
tive actions.” 

The memorandum goes on to 


say B ff company to make 
decisions faster and be more 
efficient in marketing, sales 
and support “It must be clear 
that it is better to take a ction, 
make mistakes and be forgiven 

than to wait and ask for per- 
mission.” 

The makes 

rtoar the company is planning 
on a global basis. 

In the past, product market- 
ing groups were focused pri- 
marily on the US market and 
subsidiaries had to develop 
their own marketing pro- 
grammes. 

“In the future we will create 
global marketing programmes 
that can be efficiently deployed' 
in local geographies." 

The company denied that 
' subsidiaries would become less 
independent, arguing that it 
would collect information from 
its subsidiaries in developing 
global marketing strategies. 


Mutual fund takeover bid lights up Wall Street 

Richard Waters examines the implications of the uninvited offer from GE Capital for Kemper 


T he prospect of a second 
big takeover in the 
mutual fund business In 
the US in a matter of months 
lit up Wall Street yesterday. 

Shares in Kemper, the Chi- 
cago-based fl-Syt mgnagpmgnt, 
life insurance and broking 
company, leapt by 50 per cent, 
or 620%, from Monday’s close 
on an uninvited bid Grom GE 
Capital. 

The sharp move pushed 
Kemper's market value up to 
nearly 62.3m, above GE Capi- 
tal’s offer valued at &2bn. It 
signalled Wall Street's belief 
that either the General Electric 
subsidiary would have to offer 
more or the approach would 
prompt a rare bidding war for 
the financial services company. 

The bid approach from GE 
Capital follows Mellon Bank’s 
Slibn acquisition of Dreyfus, 
which marked fiie most aggres- 
sive move yet by a US commer- 
cial hank to enter the booming 
funds business. The share 
prices of other mutual fund 
groups also jumped yesterday, 
on expectations of further 
deals. Franklin Resources, for 
instance, rose 61%, to 648%. 

GIPs approach came in a let- 
ter from Mr Jack Welch, chair- 


man of the US group, to Mr 
David Mathis, his opposite 
number at Kemper. Although 
written on March 2, it was only 
made public by G£ yesterday 
in an apparent move to put 
pressure on Kemper’s board to 

accept the deaL 

It could also be designed to 
force a decision before any 
rival suitor has a chance to 
make a move. The market has 
been rife with rumours of an 
approach for Kemper since the 
Dreyfus deal 

Runtfi Santander, the Span- 
ish bank which took a 3 per 
cent state in Kemper in the 
late-1980s, is one name fre- 
quently mentioned - although 
its potential involvement in a 
rescue bid for domestic rival 
Banesto could give its manage- 
ment more than enough to 
think about in the months 
ahead. 

Other US domestic banks, 
seeking to emulate Mellon, are 
also seen as possible bidders. 

GE’s approach has caught 
Kemper's management in an 
unenviable position. The com- 
pany is only just emerging 
from a period overshadowed by 
problem real estate invest- 
ments. 


U> MUTUAL FUND GROUPS 
Assets (and 1993) Sbn 

Hdefity 251 JS 

Vanguard 1349 

Merrill Lynch 124.6 

Capital Research 105.1 

FranfcftnTTanpteton 94.0 

Draytus 75.0 

Federated Investors 88.6 

TIAA-CREF 81.1 

Putnam 61.1 

Oean Witter 60.7 

Smith Barney Sheareon 56.5 

Prudential 54.4 

IDS 45.7 

Kemper 44.4 

T Rowe Rice 37.4 

Scudder 35.1 

Sure li mon a i t Compaor hes 


Last year, Kemper sold off its 
reinsurance operations, and 
earlier this year completed its 
exit from the property/casualty 
business. 

In the view of several ana- 
lysts, it could he on the verge 
of a rebound in earnings - 
although its stock price before 
GE’s approach became public 
seemed not to reflect this. 

At around 640, the shares 
earlier this week were trading 
on a multiple of around 12 to 


13 times most analysts’ expec- 
tations of earnings fins year, 
considerably lower than other 
companies in the sector. 

Mr Michael Blums tein, of 
Morgan Stanley, estimates 
earnings this year of $3.75 a 
share, rising to 64j4Q in 1995 - 
a view echoed in a recent 
research note from Allen. Nad- 
Ler at Merrill Lynch. 

Ironically, it was the disposal 
of the reinsurance business 
which first left Kemper vulner- 
able to a bid. 

The sale involved the cancel- 
lation of most of the 38 per 
cent stake in Kemper owned by 
the Lumbermen's Mutual 
Casualty Company, wiping oat 
a potentially supportive hold- 
ing. 

It is not surprising that 
Kemper's management team, 
having dealt with the problems 
of the early-1990s, have not 
welcomed GE’s bid. They hate 
the fact that someone else will 
come in and take the credit 
[for their efforts 1,” said one 
person close to the company. 

Kemper's business now com- 
prises three parts: a mutual 
fund business, with 644bn 
under management; a life 
assurance operation specialis- 


ing to annuity business; and a 
regional securities brokerage. 
The company abandoned 
efforts to sell its underperform- 
ing securities arm last year, 
after it flailed to attract a high 

pnongh hid. 

For GE Capital, a Kemper 
acquisition would provide a 
springboard into the fastest- 
growing areas of the US 

The share prices 
of other mutual 
funds groups also 
jumped 

retail investment business - 
mutual funds and variable 
annuities. 

Kemper has 670bn in all 
under management, which 
together with GE’s $75bn 
would create one of the US’s 
biggest fund management 
groups. 

In a clear attempt to win the 
backing of Kemper’s manage- 
ment, Mr Welch in his letter 
dangled the carrot of a 
consolidation of all the asset 
management activities under 
the Kemper umbrella , run by 


its existing managers - 
flirtvmph under the wing of GE 
Capital 

The all-cash bid of 655 a 
share values the group’s 
outstanding ordinary shares 
at 61-Sbn, and would be worth 
$2.2bn. after taking into 
account convertible preferred 
stock and stock options. 


W hEe leaning heavily 
on Kemper’s board 
before it meets this 
Thursday, GE seems unwilling 
at this stage to , launch an 
all-out contested 

bid. 

Such an attack would be 
extremely rare in the financial 
services business. An 
unwanted deal would run the 
risk of driving away Kemper's 
best people. 

It would also have to 
win tire backing of state insur- 
ance regulators. In addition,, 
mutual fond groups have a 
powerful poison pill at their 
disposal: the boards of each 
fund run by the group could 
vote to have their assets man- 
aged by another company. 

If that were to happen, a con- 
tested GE takeover would 
became a hollow victory. 


Fannie Mae 
in scheme for 
low-income 
borrowers 


By Patrick Harverson 

in New York 

The Federal National 
Mortgage Association (Famue 
Mae) yesterday launched an 
Initiative to provide $l,000hn 
in mortgage financing over the 
next seven years to help low- 
income families in the US buy 
their own homes. 

The initiative comprises a 
series of programmes to pro- 
vide more Information to 
potential homebuyers, m a k i ng 
it easier for low-income or 
disadvantaged families to win 
approval for a mortgage 
loan, and ending racial dis- 
crimination in the lending pro- 
cess. 

By the end of the decade, 
Fannie Mae hopes to have pro- 
vided $l,000bn in financing to 
mortgage providers, and 
helped 10m families bny 
homes. 

The company is the largest 
provider of mortgages in the 
US. It does not sell mortgages 
directly to homebuyers, but 
rather invests in mortgages 
sold by mortgage companies, 
savings and loan institutions 
and banks. 

Fannie Mae said it would 
direct the programmes at low 
and moderate-income families, 
minority groups, new immi- 
grants to the US, people living 
in Inner-city areas or 
neglected communities, and 
people with special housing 
needs. 

Newsprint group 
halves its deficit 

By Robert Gibbons 
In Montreal 

Stone-Consolidated, the 
newsprint arm of Chicago's 
Stone Container, halved its 
lasses in 1993. ft said prices in 
the US w ere improving and 
in ve n tories declining. 

The 1993 loss was C$68.7m 
(US65L2m) down from CfllOm 
in 1992 on sales or CS928m, up 
1(L4 per cent Paper shipments 
were 1.3m tonnes, up from 
L25m. The company said costs 
had been reduced and strong 
timber prices and a lower 
Canadian dollar had helped. 


Sail Into Asia. 



it’s a growing economy, but an unknown market can be just as difficult as 
the roughest sea, especially in these uncertain times. \ 

The Fuji Bank, with d offices and 6 subsidiaries in Europe, is hero to help you 
navigate the Asian market, in all areas of financial management. 

What's more, with 28 offices, subsidiaries and affiliates in Asia and Oceania, 
as well as 366 offices throughout Japan, wc'rc also there to help you minimize 
the risks and maximize the opportunities. 

If you'd like to know more about how wc can h- -Ip steer you on the righi 
course, why not come and talk to us? 

You'll find wc'rc not only one of the world’s largest banks, but wo also haw i 
one of the most professional crows. 


Banking Excellence 


FUJI BANK 


Head Office: 5-5, Otomachi 1-chnmc, Chiycda-ku. Tokyo 1UU. Japan. Tel: (El-32 19-22 II 
European Network 


Hniucb l! ranch ltd: ^-2-234-0111 fox: US-2 £» *W6 Fuji kink (Itauta-Mand) AG TW: HD BM709UU KiV: 41H8-73UBM 

DuwMurf Brandi Tfcl. 49-211-18930 Ax : 49 311 :IVJ407 f'nji Rink (Liurmhourf:) SATO SB-I7W1 Yn \ . SB-HT-WW 

Ionian Branch TW: 44-71-588-2211 fox: 44-il-jW-HOO Fup Itint ViJcrLmd S.V. TW: 31 !»WilOM!l K ft :fk»-G6lttt)l 

Madrid Blanch Ttt: 341-581-9444 fox. iHI-fiSI 94-13 Fuji Bank (Shwizl All TW: 41-1 till -33D1 R»: 41 1 21I-0G29 

Milan BruKh Tbt: 39-2-8596527 Vox: :<9-2 -mu65») Piyi Captld Muriels (UK) lid. (Swaps & derhunvre) 

forts Bondi TO: 33-14413-6000 fox. :CI-I 44I3-5U6U TW 11 THBWttl fix: 44-71-K&SSB 

Berlin itefxemiuUvc Office TW; 49-30-065-0444 Fax: I94W-265-0447 ft# rrii-matiwnl Finance PfjC (Immracnl banking) 

Manduater RcpnacnuUra Office TW: 44-OI-OB4KOO fox: 44-til SW-tiTHO TW 1 I41-S5HMI fox 44-71-588-3033 
Victim Representative Office TW: 43-1-3 loaisi fox. •KM-snsBi 

!tau*u* ta Asia ud OmocU: tWtame. SjdBe*, Souk*. Bcgm. Mm. itu^rina, Stance, ft** b-ng. Mm DrCa. idjru. frod. Latam. KuaUlenpm tLnih. Srnuwr. Itarjfa*. Ik Cfci Ha* 


Notice to the Holders of the Warrants 
to Subscribe for Shares of Common Stock of 

TOMOKU CO., LTD. 

(the “Company”) 
issued in conjunction with 
U.S. $70,000,000 

2% per cent. Guaranteed Notes due 1996 

(the “Warrants”) 

ADJUSTMENT OF SUBSCRIPTION PRICE 
NOTICE IS HEREBY GIVEN pursuant to Condition 7 of 
the Tains and Conditions of the Warrants in relation to 
the Warrants, that the Board of Directors of the Company 
passed a resolution on 21st February, 1994 (Japan Time) 
to make a stock split of shares of its common stock in tire 
form of a free share distribution effective as of 20th May, 
1994 to the shareholders of record on 31st March. 1994 
(Japan Time) in the ratio of 0.15 new share for each one 
share held by them. 

As a result of such stock spirt, the Subscription Price at 
which shares are issuable upon exercise of the Warrants 
will be adjusted as follows: 

Before adjustment* Y544.40 per share 
After adjustment: 7473.40 per share 

Such adjustment to the Subscription Price shall be 
effective as of 1st April, 1994 (Japan Time). 

IBJ Schroder Bank & Tkust Company 
on behalf of. 

Tomoku Co, Ltd. 

Dated: 16th March, 1994. 


CNT 

Caisse National des 
Telecommunications 

FF 2.000,000,000 
Floating Rate Bonds 
due 1997 

Notice is hereby given chat 
far die interest Period 15th 
March, 1994 to 1 5th 
June, 1994 the Bonds will 
cany 9 Rare of Interest of 
6.234)7 per cent, per annum 
with a Coupon amount of 
FF 159-32 per FF 10.000 Bond 
and FF 1,593.23 per FF 
100,000 Bond. The relevant 
Interest Payment Cfete trill be 

Uifajune. 1994- 

n BukcaXimt 

Co m pa ny , London Agent Bank 


£5r500.00Q 

HMC MORTGAGE ASSETS 
102PLJC 
Class B 

Mor tga ge Sacked noting Rato 
Note* due March 2021 
For the bsereal Period hom 
Man* 14, 1894 to June 14, 1904 the ; 
Note Rate has been determined at , 
00675 % per ovum The Merest 
psyaWe on the relevant interest 
payment date, June 14 , 1904 w* 
be £ 1 , 334.38 per £100000 nominal | 
amount 

BytlbiCtete—Mte— MU. 
i . rel i B.>rmw»te 

March 15,1934 I 


Bradford 

&B1NGLEY 

£ 200.000000 

Rooting Rate Notes due 1995 

In BceoraBnco with the terms end 
co muttons of the Notes, the interest 
rsta for the period 15th Msrrii, 
1394 ID 15th June. 1994 has been 
fixed at 53125% per annum, the 
interest payable on IB* June. 1994 
against the Coupon 12 wW bs 
03340 per CT) MO nominal. 

Agent Be r* 
j&gfl ROW. BANK 

®SS of Canada 


US. S200.000.000 

MARINE MIDLAND 
BANKS, INC. 


Roaring Rate 

Subcninatod Nom Due 2000 


SSlstNIU'l WiMMhtSM 

IBbJm W 9 « 

kapotAifeiMpar 
u&eunwiw _ __ 

lemJwwMM ua-reraa 

@ CS First Bottom 


Adjustment of Subscription Price 

Nakano Corporation 

(the “Company") 

Bearer Warrants to subscribe for shares of common 
stock of the Company (the “Shares”) issued with 
U.S.$75,000,000 

3/4 per cent. Guaranteed Notes 1996 

Noriceis hereby pteti that the Company has resolved sethe meeting 
ofdic Hoard ofUircctots held on 4dt Much, 1994 to split die Stares 
(the “Stock Split") owned by tbcihaicfaoUefs appearing on dicdasrttg 
register ofsharcholden of the Company as at .31st Match, 1994 (Japan 
rime) at the rate of ooc point one (1.1) Stares toone (I) Share bdd by 
diem; provided, however, that the fiacrions of a faU Share occurring 
upon suchStodc Split staff be sold sa Whole and the proceeds of die 
salcstall be dhtributtd to thcstareholdeiscntided thereto in propoitioii 
todicir fractional irarfests, and asaresukofsuch Stock Split the 
Subscript! on Price for the captioned Vftnam stall be adjusted a* follows: 
t. Subscription Price before adjustment. - Y 923.00 per Share 

2. Sutacripoon Price after adjust ment ¥839. 10 per Share 

3. Effective dare ot above a^ustmenc 1st April, 1994 

(Japan rime) 

Nakano Corporation 
2-28, Kudan-Kira 4-chomc, 
Chiyoda-ku, Tokyo 

By: The Mitsubishi Trust and Banking Corporation 
as Priitripal Paying Agent 
Dated: 16th Match, 1994 


NORGE OF EARLY REDEMPflON j 

AptBCO.SA.drCV. I 

US$ 50 , 000,000 9 K percei*. Subordinated 
G m re rt fcla Debentures din 1997 Dtbriinfl 

h ocnairiontewahGvKftora 903} ond7[a} of fa Terns c>ri Conditions of fa j 

Debentur es , notice is hereby given Brat (terms defined in sudt Terms and ! 

Con da ions shdf hove ihe sa m e meanings when uvri herein): 
j la) TheOffidd Oaring Price cf 4* Se-ies A VaricHs Shares afire Gomptny 
an te leoal 35 of fee 50 cortsoajfive dectng daw ending an Manh 9, 1994 
was at least 175 per cert or tie Conversran Price in died an each sudi 

(b) occw-p/ngfy, the Company is en fifed to redeem Ihe Debentures in 
accordance vuih CcncSfaon 9 W; 

fd fre Debentures be redeemed on ihe Interest Fbyment Date folrig an 


at tw t*as of c^r of Ihe Faying trad Common Agents specked in wdi 
Beorer Dcbcnkee or, as he case may be, Debenture Gri&ate 

in oaxxxkM K Mi sudi Terms raid GondBiom.- and 

<d) tar purposes of Rie Man of the Conversion Rights attached to ihe 
Debentares in oawdanae with Corx&on 7 , sudi Conversion shd 
terminata o* dose of buun«» on May 7 , 1994 . 

March 16 , 1994 , london 

f*fA- at ftindpd Paying end C o nw q u ii T i Aged and Reg hl tr r far trad 

lUIIlfllllllllllVIIlIllllIIIHIIISIIIIIlIKIIIIflllllll 

Temple Court 

Mortgages (No. 2) PLC 

£150,000,000 

Multi-Class Mortgage Backed Floating Rare Notes 2031 
Class At £75,000,000 Class A2 £75,000,000 

The tare of interest for the period 14* March, 1994 to 
14th jane, 1994 has been fixed as foliows:- 
Oa» A2 is 5.7375 per cent, pa annum payable ar 4144.62 
per coupon. 

Coupon No. 13 » payable on 14 di June, 1994 . 

U*»s A2 aggregate principle amount of Nous outstanding at at 
14 th March, 1994 : £ 65 , 160 , 000 . 

S.G.Warburg & Co. Ltd. 

Agent Sank 

IlllflllllHIIlllllllllllIlllllllllllllDllllllHIIIU 





/ 






Some risks are clearly visible. Others hide from sight. 

The unexpected is the one thing you can 
always expect. 

Suppose that overseas political upheaval thins 
out the flow of a raw material you can’t do without. 
That’s a risk Bankers Trust can help you contain. 

Or suppose a natural disaster cripples your 
payments system. Again, with our merchant banking 
help, that risk can be dealt with. 

Like every financial institution, we trade, 


arrange financing, close deals. But everything we do is 
done with an eye to helping you profit from risk. 

Our greatest strength is putting all our skills to 
work at managing every kind of global risk. 

Life can never be risk-free. Leadership isn’t 
built on sure things. But with BankersTrust behind you, 
you’ll be leading from unparalleled strength. 


Bankers Trust 

LEAD FROM STRENGTH. 


i 


j 


19 







•• 1 


20 



of ScdttandjGfW^l^ 



fn accordance witn the Terms and Conditions of 
the Notes, notice is hereby given that for the Interest 
Period tram 16th March 1994, to 16th September 
1994, the Notes wifl bear a Rale of Interest of 
7.43286 per cent per annum. 


AGENT BANK; CHARTERHOUSE BANK LIMITED 

A Member of The Secunbes and Futures Authanty 


CHARTERHOUSE 



Chinese group powers on with HK float 

Simon Holberton visits Dongfang, a leading maker of power generation equipment 


U.S. $400,000,000 


4W 


Santander Financial Issuances Limited 

(Incorporated In the Cayman islands with United HabXIty) 

Subordinated Undated Variable Rate Notes 


with payment of interest subject to the profits of 
and secured by a subordinated deposit with 
Banco Santander, S.A. 

(Incorporated In Spain with limited HabUlty) 

Notice is hereby given, that tor the Interest Period from March 16, 
1994 to June 16, 1994 the Notes wffi cany an Interest 
Rate of 4.625% per annum. The amount of interest payable 
on June 16, 1994 will be U.S. $2,954.86 per U.S. $250,000 
principal amount ol Notes. 


By: The Chase Manhattan Bank, NJL 
London, Agent Bank 


March 16. 1994 


o 


CHASE 


Notice to the Holders of 


Yasuda Trust Asia Pacific Limited 

(the “Company”) 


US. $50,000,000 

Floaling/Fixed Rate Guaranteed Bonds Due 2002 
guaranteed by 


The Yasuda Trust and Banking Company Limited 

(the "Guarantor") 


NOTICE IS HEREBY GIVEN, pursuant to the Conditions, 
that the Company intends to redeem all, but not some only 
or the Bonds, at their principal amount on 22nd April, 1994, 
l onto 


pursuant to Condition 5(b) of the Bonds. 


Yasuda Bank and Trust Company (USA) 
On behalf of the Company 


The Bear Steams Companies Inc 

(A iMTjmr.iuon oiftDuseJ under die low) of the Sum of Dehuunr, USA) 


U.S. $200,000,000 
Floating Rate Notes due 1994 


Fur the three munch period iSrh March, 19)4 cu 1 5th June, 1994 the 
Notes will ram 1 an interest rote of per annum with an 
interest amount ot'U.S. $103.82 per U.S. $10,000 Note payable on 
15th June, 1994. 


Bankers Trust 
Company, London 


Agent Bank 




1993 RESULTS 
BONGRAIN 
secures its positions 


BONGRAIN SA 


At a meeting on the I Ith of Match 1994. the Board of Directors of 
BONGRAIN S.A. approved the 1993 annual accounts- 
In difficult economic circumstances BONGRAIN maintained its 
operating income performance without reducing investments for the 
lung term. In fact two acquisitions were made, in the Czech Republic 
and in Hungary. 

The BKliSSOR ALLIANCE and the 8RESSE FINANCES 
companies have been fully consol Ulatctl. COIOMBO Inc.'s activity 
has been included up m the 17lh of December 1993, when it was sold 
to GENERAL MILLS. 

LA COM PAGN IE LAIT1ERE EUROPEENNE's activity has not 
been consolidated. 

Net consolidated sales represent F.Fr. 9.59 bn compared to 
l-’.Fr. '».7l bn in 1992. 

The improvement i» net operating income, F.Fr. 593 m, results from 
the .strong mobilisation of all personnel together with expense 
i eduction measures initiated throughout the Group towards the end 
of wi 

The extraordinary items of F.Fr. 145 m are heavily influenced by the 
gain on the divestment of COLOMBO Inc. 


In millions nf French Francs 

1993 

1992 

% 




change 

Net -sales 

9 591 

9 706 

- 1-2 

Value added 

2836 

2806 

+ u 

Gtnvn operating income 

1000 

953 

+ 4.9 

Depreciation and operating provisions 

407 

367 

+ 10.9 

Ncl uperaiing income 

050 

+ 586 

+ u 

Earnings before extraordinary items 

+ 596 

+ 592 

+ 0.7 

Extraordinary items 

+ 145 

+ 8 

- 

bantings aftertax 

+ 479 

+ 357 

+ 34.2 

Net earnings excluding minority interests 

+ 434 

+ 354 

♦ 22-5 

Net earnings pet shore 

225.6 F 

IS4JF 

+ 214 


Capital expenditures amounted to F.Fr. 290.7 ra. 


The year ended with positive net cash and strait term investments of 
F.Fr. 592.7 m, compared to net debt of F.Fr. 301.3 m at end 1992. 
The Board of Directors has decided to purchase, from the 
BONGRAIN family, all of the shares not as yet owned by 
BONGRAIN S.A.. in ZAUSNER FOODS Corp, the holding 
company for the Group’s North American activities. 

Al the shareholders' Annual General Meeting, to be held on lbc 29th 
of April at BONGRAIN’s registered office, the Board of Directors 
wilt recommend a net dividend pci share of 61 Francs. 


I t takes nearly two and a 
half hours to travel the 59 
kilometres from Chengdu, 
the provincial capital of Sich- 
uan In China's south-west, to 
Deyang, the home of Dongfang 
Electrical Machinery. 

Through a landscape under- 
going a familiar transforma’ 
tion from agriculture to indus- 
try, the journey is enlivened by 
the anarchic quality of motor- 
ing in modem China. But it is 
one which the managers of 
Dongfang, China's third largest 
maker of power generation 
equipment, hope will not detar 
Investors. 

The company expects to be 
Boated on the Hong Kong 
stock exchange next month - 
the eighth of the first nine 
companies which the Chinese 
government nominated last 
year for listing outside China - 
with an issue of about 125m 
"H" shares. 

Nomura, the Japanese secu- 
rities bouse which is the lead 
manager, estimates that this 
offering to foreign investors, 
which is equal to 25 per cent of 
Dongfang’s capital, will raise 
about HK$350m (US$45m). A 
slightly smaller percentage of 
the company will be issued in 
the form of “A" shares to 
mainland Chinese investors 
and listed on the Shanghai 
stock exchange. 

In the Hong Kong stock bro- 
ker Jargon, Dongfang Is an 
“infrastructure play", a “war- 
rant' 1 on the feist-growing Chi- 


DongfangElectrfcal 


AC and PC „ 
motors .. 
Yuaqgftflm 


TpteHumww*' 
- YwnseoTrii 


Others 
Yuan20.lm 



SaUM Oongftno 


*YMr and Docent* -am ' 


nese economy. The company 
appears well positioned. 
According to Dongfang, it has 
a 40 per cent share oE the Chi- 
nese market for hydroelectric 
power generating equipment 
and a 25 per cent share of the 
country's steam turbine gener- 
ator market 

Overall it has a share of 30 
per cent or the Chinese power 
engineering market - a market 
which still has plenty of room 
to mature. Electrification 
touches only 67 per cent of 
households in China, compared 
with 80 per cent in Thailand 
and 82 per cent in India. 

Moreover, if China is to sus- 
tain economic growth rates of 
around 10 per cent a year it 
desperately needs more electric 
power plants. On current 
trends, demand for electric 
power is set to double between 


now and 2000. According to Mr 
Jacky Chiu, an analyst at 
Nomura Research Institute. 
this means adding an extra 
20.000MW of generating each 
year. But the gap between Chi- 
na’s need and its capacity to 
meet that need is large. The 
production capacity of the 
three mainland manufacturers 
is only 10.000MW to 12.000MW 
a year. 

“As the Chinese government 
has designated that most of the 
annual requirement for power 
generation capacity should be 
satisfied locally, local manufac- 
turers have to increase sub- 
stantially both production 
capacity technological lev- 
els In the next few years,” Mr 
Chiu wrote recently. 

Underlining the need for 
rapid development of the 
power industry is the decision 


of the Chinese government to 
offer foreign investors stakes 
in other power companies. 
Recently 22 companies were 
nominated for foreign (mostly 
Hong Kong) listings and 
among them is Harbin Power 
Plant Equipment Group, Chi- 
na's biggest manufacturer of 
power generating equipment, 
as well as four power supply 
companies. 

Dongfang’s managers say 
that increasing productive 
capacity and raising the com- 
pany’s technological sophisti- 
cation are the main benefits 
they see coming from the list- 
ing in Hong Kong. 

According to Mr Chen Wel- 
Jian, general manager, 
Dongfang plans to invest 
Yn92Qm (3105m) over the next 
three years in increasing the 
capacity of Dongfang's 
works. 

Of this, the lion's share 
(YnBTOm) will go to upgrade its 
technology in hydro power pro- 
duction. By 1997 it wants to 
increase production capacity of 
its hydro generators to 
1,600MW from 600 MW. A 
smaller awintmt. (Yn250m) will 
be allocated to increase the 
production of steam turbine 
generators with capacities of 
300MW and 600MW. 

Dongfang needs an infusion 
of capital for expansion. Its 
order book is foil until the end 
of 1996. Not only that but by 
that time China's biggest 
hydroelectric development - 


the Three Gorges project on 
the Yangtze river - is expected 
to be well under way. 

When completed the Three 
Gorges will be the world's larg- 
est lake and hydroelectric 
power system. In its first phase 
the project will consist of 26 
700WM units. Although Dong- 
fang will be just one of the 
suppliers to the project com- 
pany executives expect the 
Three Gorges to underwrite its 
future far many yeans to come. 


I n pursuit of technology, 
the mmpany is exploring 
joint venture possibilities 
with European and North 
American power generation 
equipment manufacturers. 
Dongfang is holding prelimi- 
nary discussions with GE Can- 
ada about a joint venture in 
hydroelectric power, and it 
recently signed a draft memo- 
randum of understanding with 
Siemens. 

This gives the German man- 
ufacturer 51 per cent of a 
steam turbine assembly and 
test factory. Siemens will put 
up DM26m for its share of the 
business while Dongfang will 
provide the land and erect the 
factory. Executives expect the 
joint venture to be operational 
in 1995. 

As Mr Rao Fangquan, a dep- 
uty general manager, observed: 
“The most important aspect of 
a joint venture is not the capi- 
tal but the technology, so our 
company can develop.” 


Banks warn of Haka exposure 


By Christopher Brown-Humes 
fcn Stockholm 


Three leading Finnish banks, 
struggling to recover from the 
country's financial crisis, 
warned yesterday that they 
faced further big credit losses 
after the Haka construction 
group filed for bankruptcy. 

Unitas, the country's second 
largest hanking group, said the 
collapse could produce write- 
offs of up to FM450m, but It 
stressed that this did not alter 
its forecast of a substantially 
reduced deficit in 1994. It said 
Its total exposure to Haka 
amounted to around FMl^bn. 

Kansa ilis -O ea Ite -P anltki , Fin- 
land’s largest bank, said it 
would suffer a loss of no more 


than FM200m from the bank- 
ruptcy. it added that the 
amount would be covered by a 
FM900m provision, taken last 
year, for unidentified bad 

Inana Its Haims on P faka com- 
panies total FM815m. 

A third bank, Postipankki, 
estimated potential credit 
losses at FM300m, although its 
total exposure amounts to just 
over FMSOOm. It said the nomi- 
nal value of Us collateral was 
more than FM750m. 

“The final credit and guaran- 
tee losses are dependent upon 
both the successful liquidation 
of the collateral as well as the 
orderly completion of on-going 
projects,” Postipankki stated. 

• Rautaruukki, the Finnish 
state-controlled steel group. 


yesterday unveiled a FMl44m 
($26m) profit after financial 
items for 1998, a sharp turn- 
round on the FM697m loss 
reported for the previous year. 

It benefited from firmer steel 
prices, cost-cutting and the 
weaker Finnish markka. But 
the result was held back by 
high financing costs, lower 
demand in western Europe, 
and continued losses at the 
company’s Transtech roiling 
stock unit The group said it 
would not pay a dividend for 
the third consecutive year. 

Operating profits after depre- 
dation were FM829m, or 118 
per cent of sales of FM7.Glbn. 
This compares with profits of 
FM454m on turnover of 
FM680bn a year earlier. 


Santos nearly doubles earnings 


By Nildd Tat In Sydney 


Santos, the Adelaide-based oil 
and gas company, reports a 
near doubling of after-tax prof- 
its to AJ219AU (US$157-5m) for 
1993. In the previous year, 
profit after abnormals was 
AS 112.7m. 

In part, the sharp improve- 


ment was due to a tumround 
on abnormals. In 1998, Santos 
booked a net gain of A$34fan, 
reflecting a A$46.6m surplus on 
the sale of the company's 
shares in Sagasco, which was 
taken over by Boral last year, a 
A$44.im gain from tax-related 
matters, and a A$55-8m write- 
down of capitalisation explora- 


tion expenditure. In the previ- 
ous year, there was a A$499m 
abnormal charge. 

Santos also benefited from 
lower tax and interest charges, 
with the latter frilling to 
AS382m from A$503m. Earn- 
ings before interest and tax in 
1993 stood at A$327.4m, mar- 
ginally below 1992 's A$322.2m. 


Ball bearing makers 
agree supply deals 


By Victor Mallet 
In Bangkok 


Minebea of Japan and FAG 
Ku&lfischer of Germany, 
the two ball bearing manufac- 
turers recently hit by heavy 
losses, are to supply each other 
with bearings in order to 
reduce their investment and 
production costs. 

Under the agreements - 
signed in Thailand, where 
Minebea has its largest factory 
- Minebea will supply FAG 
with miniature and small 
ball bearings, while FAG 
will supply Minebea with 
small and medium-sized bear- 
ings. 

The two companies will also 
swap technical knowhow. 

They said they would 
notify the European Commis- 
sion of the deal to obtain clear- 
ance under the European 
Union’s competition 
rules. 

Executives from Minebea, 
which Is particularly strong in 
Asia, and FAG, with its 
European base, said each com- 
pany would continue to 
market products separately 


using its own. brands. 

“Each company will benefit 
from the- manufacturing 
strengths of the other.” said 
Mr Goto Ogino, Minebea presi- 
dent, in a statement, 
“and both companies will be 
able to realise important cost 
savings at the capital invest- 
ment and manufacturing 
level". 

Mr Peter-Juergen Kreher, 
chairman of FAG's manage- 
ment board, said: “Today’s 
agreements represent a vital 
opportunity for us both to 
ensure our ability to deliver a 
wider range of ball bearing 
products at the lowest possible 
cost" 

According to the deal, Mine- 
bea will supply bearings with 
an outer diameter of up to 
24mm, while FAG will supply 
those with diameters between 
24 and 35mm. 

Both companies have under- 
gone extensive restructuring. 
Minebea ’s net loss was 
Y61J21bn ($578m)in the 
year to September 30, 1993, 
while FAG reported a net 
loss of DM439m ($260m) in 
1992. 


NKK to cut 
1,300 more 
jobs in 
restructure 


By Mfchiyo Nakamoto 
In Tokyo 


NKK, the Japanese steel 
company, plans a wide-rang- 
ing restructuring aimed at 
reducing employees by a 
further 1.300 and increasing 
profits by Yl75bn <S 1.65 bn) 
over the next three 
years. 

The company, which faces 
heavy losses this year, says 
the restructuring is 
intended to return the com- 
pany to profit so that 
it can resume dividends by 
1995^ 

Earlier this month, the com- 
pany revised Its earnings esti- 
mate for the year ending this 
month said that It expects 
pre-tax losses of 
Y25bn. 

The company is being 
forced to pass its dividend for 
the first time since it was 
stock market listed in 
1949. 

Mr shunkichi Miyoshi, pres- 
ident, said NKK aimed to 
Increase its ratio of profits to 
sales in the engineering divi- 
sion to 5 per cent from the 
current 3 per cent 

Under the plan, NKK will 
cut capital spending to a third 
of levels seem over the past 
three years, or about 
Y140bn. 

SteelznaMng operations will 
be streamlined by reducing the 
prodnet range, integrating 
production of some products at 
one plant and shifting produc- 
tion of other products to an 
affiliated electric furnace steel 
maker. 

The latest plan brings the 
total number of employee cuts 
to 4^00. Last year, NKK said 
it would reduce employee 
numbers by 3,200 by fiscal 
1995. 

Reductions would be 
achieved through transfers to 
subsidiaries, cuts hi graduate 
employees and natural attri- 
tion. 

NKK expects to continue Its 
operations in electronics and 
property development which 
are two areas the company has 
been, working in. 

It also hopes to increase its 
involvement In south-east Asia 
where it is considering local 
production of steel or joint 
ventures depending on the 
needs of each particular coun- 
try. 

The restructuring plan is not • 
expected to affect National 
Steel, the US company in 
which NKK has a 50 per cent 
equity stake. 

National Steel itself Is 
beginning to enjoy the fruits 
of Its own restructuring, Mr 
Miyoshi said, and NKK hopes 
to support the running of 
National Steel by its US man- 
agement 


NOTICE IS HEREBY GIVEN OF THE 
ANNUAL GENERAL MEETING OF SHAREHOLDERS 


to be helil at Julius Baer Bank and Trust Company Ltd., 
Kiri House, Grand Cayman, Cayman Island*, 
on the 5th day of April, 1994 at 10 a.m. 


AaiNO* 

i. lii rranc iwl rontidcr and. if 
■ bought fit. adopt the Ktoaon pn- 
kausiI by ibe Director, fur the year 
railed Hu December |4fJ tml (he 
report! of the D i rector, and Auditor* 
!. to ratify the acu of Dirceiun. 

S. lb approve ih* appointment of Price 
llatcriiouac n Auditors and aethor- 
<tt the Director, ra fi, the Auditor,' 
remuneration. 


By order of i be Board of UIJUIB-iHB. 
John Boer U S. Dollar Pam J Until td, 
HO. Bar lino, CnaJ Cayrmam 
r.mta talamdt. 


Cupid ol the Annual Repots includ- 
ing Audited Account, arc , nibble lot 

inspection and may be obtained at the 
rcgiatcteJ office of [be Company and 
from the Agent, luted below. 

There are no service contracts m 
existence between the Company and any 
at in Directors and nunc are proposed. 

Participating abates lie listed rm the 
Imndflo Stock Krthangc and pattkulan 
ol' the Company ire available in the 
Kite) Suriancal Service. 

I Ith March. |W4 


\ shareholder holding registered 
shares it ciamlcd in attend, rote anal ap- 
point one or mure primes to attend and 
vole instead nt' him. A pin,, nerd nut he 
a shareholder nl the company. 

A .hare holder holding bearer shares 
is entitled to attend and vote. Kierruc 
ut these rights in respect ol beater 
share, wdl tie NngsUol only on procn 
taiiua at the Meeting of the bearer err- 
rificaic or satisfactory evidence at the 
holding. Such evidence may be obtained 
by depositing the certificate with unc of 
the A cen 11 listed below agauut written 
receipt, which mm he produced at lbc 
.Meeting. 


Sllllrm mho ■■oiiTiir 

• Jufiui Racr Bank and 'I run (Joropany fad. 
Kirill loom. PXX Boil 100 

Grand dayman. Cayman Islands 
Allan 

• IbnL Juki, itaer A Co. lid. 
Kahdmfitmu i*. RM. Bos 
9010 Zurich, Swi p e, land 

• Beak Jokai Boer St <ae t*d. 

Bcvfe Maria I (owe, Boris M orin 
f jMvdosa KCJA 7NK 

United Kingdom 

• Socien' Baocntc JuBus Saer Ail Cottar 
Boulevard Ju-fWane 2. BO. Box 
1211 Gcauva II, Switacrlaod 


B 


L I Q U i 3 A E R 


JULIUS BAER U.S. DOLLAR FUND LIMITED GRAND CAYMAN 
A company incorporated in the Carman lalinds wilh limited liability 


THE LATIN AMERICA INCOME 
AND APPRECIATION FUND N.V. 
DIVIDEND NOTICE 


Consistent with ifae authorization granted by the Board of Supervisory Dfrccton on 
March II. 1994, notice in hereby given that the Fowl's Managing Director bu 
deduct] a donAutioo ot UJL SftW per Omj A Share mod an equivalent arnooal on a 
yield hash for Class B Shares, payable on March 29, 1494 to common shareholders of 
record at the dose of batmen on March 21. 1994, in the case of share* hdd in 
t e g atered form, or upon presentation of coupon number 7 attached to the tommoo 
share certificate to the Fund’s Administrator (on or after March 28. 1994). tn the case 
of common shares held in bearer form. 

By Order of tht Managing Director 

AdmmhJizioL Managing Dircoor rad Location of 
Principal Offke 

MeesPnoon Treat (Curacao) N.V. 

JotanS.GaishraRgti 
wmensstad, Curacao 
Netherlands Antilles 


Invcstioeaf Manager 

Scudder, Stevena & dark. Inc. 


Reminder Notice of 

Bondholders Optional Redemption Rights 

Bell Resources Financial Services N.V. 
U.S. $200,000,000 
5)4 per cent C&iaranteed Convertible 


Subordinated Bonds due 2002 

UnconcEtiana]ty guaranteed on a sifoorcfinated basis by, 
with non-detadiable suborefinated conversion bonds 
(the ’’Conversion BondaH 

issued by, and convertfote into 
Ordinary Shares of AS0.50 each of, 

Australian Consolidated Investments Limited 

A.CJVL 008 670 924 
(previously cafted Bei Resources LKl) 

In accordance with Condtian 6(C) of the U.S. S200.000.000 SA per 
cent Guaranteed Convertible Suborefinated Bonds due 2002 
(the'Bonds*}, Bel Resources Financial Services N.V. (the ’tesuen 
hereby gives notice that each Bond may. subject to the Conditions of 
the Bonds, be redeemed at the option of the holder on June 2, 1994 at 
129.45 per cent, of its principal amount provided that all unmatured 
Coupons appertaining thereto are attached or surrendered 
therewith. 

To exercise such option in respect of any Bond the holder must 
deposit such Bond (with the term erf election of earty redemption 
ertfaced on such Bond duly completed) with any Paying Agent listed 
below not earfier than Apra 18, 1994 and not later than May 3. 1994. 
Any Bond so deposited may not be withdrawn without the prior 
consent of the Issuer. 

Any holder who wishes to exercise his option under Condition 6(C) 
should deposit his Bonds In the manner set out above. 

On redemption of any Bond, the relative Conversion Bond attached 
thereto shall simultaneously be redeemed at the amount paid 
thereon, being US. $0.01 per U.S. $ 1 ,000 principal amount ot the 
Conversion Bood- 


PR1NC1PAL RAYING AND CONVERSION AGENT 
The Chase Manhattan Bank, PLA. 

Woolgaie House. Coleman Street London EC2P 2HD 

PAYING AND CONVERSION AGENTS 
Chase Manhattan Bank Chase Manhattan Bank 

Luxembourg SLA- (Switzerland) 

5 Rue Ptaetis 63 Rue du Rhine 

L-2338 Luxembourg -Grund GH-1204 Geneva 

Banque Bruxelles Lambert SA 
24 Avenue Mamix, B-1050 Brussels 


THIS NOTICE IS IMPORTANT. IF BONDHOLDERS ARE IN 
ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE THEY 
SHOULD CONSULT THEIR STOCKBROKER, LAWYER, ACCOUNT- 
ANT OR OTHER PROFESSIONAL ADVISER WITHOUT DELAY. 


The Chase Manhattan Bank, N A. 
for and on behalf of 

Bril Resources Financial Services N.V. 


o 


CHASE 


March 16, 1994 


DO YOU WANT TO KNOW A SECRET? 


The I.D.S. Gam Seminar w* show you how the msrteis really work. The 
amazing trading techniques of the legendary W.D. Gann can Increase your 
profits and contain your k»88. How? That's the secret Ring 061 474 0080 to 
book your FRH- place. 


BT Afpba PLC 

(A i -iwnp ra y IncvtyuMCtJ In HnetKhl with lliMAi Ibbthty with Nu. 23VUHI) 

co be renamed 


Bankers Trust International PLC 


Purannt to Banker, Trim Interna bona l FLCi (“BTT") pbm to nxn&muc 
in curpuRirc urmctun.* under which a wholly-owned suhuJiary, auued BT 
Alpha PLC, will acquire: substantially all of BTTs assets and business, 
notice is hereby given to the hnldera of the Warrants referred to fxrlow 
baued by BTI that, in each case in accordance with the conditions uf such 
Warrants, with effect m close of business on 3i March. 1944, BT Alpha 
PIXL to be renamed Bankers Trust International FLC (chc "New 
Company”) will he substituted its principal obligor under such Warrants in 
the pbcc of BT1. 

In relation to each such cn.ici<fW.irr.tnc*. copies or pending execution, the 
agreed text tif the Deed Poll pursuant ro which such substitution will be 
effected, of the agreement pursuant ki which the New Company will 
bct-umc party ro the Wirranr A^mancnr refitting ro such Win’anu.nnJuf 
any ocher document* which might otherwise reasonably be regarded » 
material to ike relevant W.umnchuUcra will be available for inspection sic 
the specified office of each of the Warrant Agents. 

2,000,000 Call Warrant, rotated to the 8 per cent. Treasury Stock due 
10 June 2003, issued on 30 September 1993 (Common Code: 4617540 
4.700.000 Wax rants in relation to the Ordinary Shares of J Sainsbury 
pic expiring 30 January 1998, Issued on 17 February 1994 (Common 
Code: 4884868) 

By: Bonkers Trust International PLC 
I AppoJd Street. Orondpatc 
London EC2 A 21 IE 
16 March, 1904 


BT Alpha PLC 

lA curqutiy bKuqvmirreJ m fingLasl with Itaeni) IbHfciv «ridi retrouml He 206911111 


to be ivnumcil 

Bankers Trust International PLC 

Pucuunt ro Honkers Ttnst Incerruiiurul PLC« (“nTT) pl.ui to renij;in«: 
its corporate suucnire under which a wtmllynrameil subnJUity, rwmed HT 
Alphii FLCX will acquire suhstin tally nil of RTl s :iswrs ami business, 
tunicc b.lu:rcby Riven to the hidden nf the Nuns referred cu heiow issued 
hy BTI chat, in cnch cshc m ucomJancc with the conditions nf such Ncecs. 
wilh effect at close of business on 31 March, 1994, DT Alphrf PLC, to he 
reniimcd Bankets Trust International PLC (the “New Cbmpany") will be 
substituted as principal oblijjor under such Notts in the place ,.f BTI. 

In reLitiun tn each such issue nl' Notes, copies or pending csixuriun, the 
JBrewl text of the Deed Poll pursuant to which such nibstituthm will he 
rifnaed, nf tlw iutrecmenr pursuant to which the New Company wlU 
beci ime jxiny to the Fiscal A«cncy Agreement relating co such Notes, .aid 
ot any other documents which miffhr otherwise reawjn.ddy he regarded « 
material to itlic tckniiu NutL-holden will be ava.Libfc for inspection at the 
specified 1 ifflcc of BTl. 

JtL I W, 000, 000.000 Non Recourse CTO Linked Noten due 1998, 
iuued on 20 December 1993 (Common Code: 4783573) 

£20,000,0X3 Step down Coupon Notes due 2001 with 4,700,000 
w **' Ordinary ^ Shares of J Sainsbury pie eqririog 
^ l99S .' tasued 17 February 1994 (Common Code: 

884833/4884850) 

led ian Lire 30,000,1^0^000 3.55 per cent. S«iP 500 Index Linked 
479M61)' ? amUlry 997, “ sucJ 0,1 5 1994 (Common Code: 

By: Bank*** Trust IntcrivUionid PLC 
1 Appuld Sued, Dnnd^itc 
London EC2A 2116 
16 Mureh, 1994 





ti 




<£** ■>*- r " 


9 


sy?r 


K 






life' 


111 . 


c 


• C 



German rate hopes spur big gains across Europe 


By Conner Mkldetmann 
in London and Frank 
McGurty In New York 

European government bonds 
put on another strong perfor- 
mance yesterday, boosted by 
hopes of a more rapid easing in 
German interest rates. 


GOVERNMENT 

BONDS 


Firmer US Treasuries lent 
added support, although they 
underperformed their Euro- 
pean counterparts, Mr Ifty 
Islam, an economist at Merrill 
Lynch said. The yield gap 
between the higher-yielding US 
10-year benchmark and its Ger- 
man counterpart widened to 39 
basis points, from 30 basis 
points on Monday and 24 on 
Friday. 

Retail activity remained sub- 


dued, with investors awaiting 
today’s allocation of the Bund- 
esbank’s securities repurchase 
agreements, UK retail sales 
and employment numbers, a nd 
US consumer price data. 

However, some traders 
reported substantial buy ing of 
German, French and Dutch 
bonds by US hedge funds. 

■ Hopes for accelerated Bund- 
esbank easing gave German 
bunds a strong boast, with 10- 
year maturities gaining mine 
than a point 

Looking to the Bundesbank's 
repo allocation, most dealers 
are calling for a slightly larger 
drop in the minimum repo rate 
than the three-basis-point 
declines of the last two weeks. 

“Given the current level of 
liquidity [in the money mar- 
ket] and the overnight mone y 
rate, the drop in the repo rate 
could be 8 lightly bigger this 


time," said Ms Irgeen Rust, 
economist at Westdeutsche 
Landesbank Girozentrale in 
DOsseldorf. Most traders are 
betting on a reduction of 
between five and seven basis 
points, with some calling for a 
10-basis point ease. 

The market was also abuzz 
with speculation over Thurs- 
day’s Bundesbank council 
meeting. As it Is the last meet- 
ing before the central bank’s 
Easter break, there was some 
talk that it might announce 
fixed-rate repos at lower rates 
for the following weeks. The 
next council meeting is sched- 
uled for April 14. 

■ UK gilts also gained more 
than a point, boosted by strong 
bond markets elsewhere and 
the latest Confederation of 
British Industry survey in- 
dicating that UK retail sales 
slowed in February from Janu- 


ary. Full sales data will be 
released today, along with key 
employment numbers. 

Meanwhile, traders expect 
the Bank of England to 
announce its nest gilt auction 
on Friday. Most are looking Tor 
an issue of medium-dated 
paper, possibly the 6 per cent 
gilts due 1989. The June long 
gilt future rose 1% point to 113. 

■ Italian bonds put on the 
strongest performance of the 
day, helped by the successful 
five-year bond auction and 
short-covering in the futures 
market 'Hie June BTP future 
jumped 1.62 point to 112.17. 

However, according to Mr 
Andrd de Souza, market strate- 
gist at PaineWebber, the rally 
“was not investor-driven - it 
was more of a catch-up,” retra- 
cing the losses of the recent 
global sell-off when Europe’s 
high-ytelders suffered most. 


■ Japanese bonds weakened in 
Tokyo, pressured by a lacklus- 
tre two-year auction and wor- 
ries o! further supply. How- 
ever. they steadied in London 
trading. The June JBG future 
dropped 0.68 point to 110-22 in 
Tokyo, but slipped only 0.02 
point in London. 

■ The US Treasury market 
took a measure of encourage- 
ment yesterday morning from 
a keenly-awaited report on pro- 
ducer prices. However, the pos- 
itive sentiment was tempered 
by concern over stronger-tban- 
expected industrial production 
in February. 

By midday, the benchmark 
30-year government bond was 
K ahead at 9lg, with the yield 
slipping to &SB per cent On 
the short end, the two-year 
note was 4 better at 995. to 
yield 4.929 per cent 

Despite the gloomy mood of 


the market Ln recent weeks, 
traders were able to look past a 
disconcerting headline figure 
in the Labor Department's pro- 
ducer price report. 

The overall index showed a 
0.5 per cent increase, a little 
worse than analysts had fore- 
cast, but most of that gain was 
attributed to a weather-related 
2.8 per cent rise in energy 
prices. The core PPI, excluding 
energy and food, showed a 
tame 0.1 per cent rise, against 
expectations of 0.3 per cent. 

Prices across the yield curve 
improved on the news, but 
slipped back soon after the 
government reported that 
industrial production was up 
0.4 per cent last month, twice 
as much as the experts had 
predicted. Worse still, capacity 
utilisation, a closely watched 
barometer of Inflation, came in 
at 83.4 per cent, well above the 
consensus estimate. 


Rarity value helps launch New Zealand’s FRN deal 


By Antonia Sharpe 

New Zealand's rarity value in 
the international bond market, 
combined with the likelihood 
that Moody's is about to raise 
the country’s credit rating, 
ensured a favourable reception 
for its widely-expected $ibn 
offering of five-year floating- 
rate notes (FRNs) launched 
yesterday. 


INTERNATIONAL 

BONDS 


Mr Alex Jurshevski, head of 
portfolio management at New 
Zealand's debt management 
office, said the proceeds of the 
transaction would be used to 
refinance maturing debt, and 
would allow the sovereign bor- 
rower to call outstanding float- 
ing-rate debt 

He said New Zealand 
planned to call its $250m FRN 


offering due 1996 next week, 
and that it had already called 
an old issue of sterlingdenomi' 
nated FRNs, worth the equiva- 
lent of $200m. 

Mr Jurshevska said although 
New Zealand actively used its 
$3bn Euro medium-term note 
programme, the government's 
intention, to reduce the coun- 
try's NZ$66.7bn foreign debt 
meant it would be depend even 
less on the Eurobond market 
for its funding in the future. 

Mr John Orange, senior port- 
folio manager at the New Zea- 
land debt managBmpTit office, 
said the government's strategy 
reflected its desire to reduce 
the risk associated with foreign 
currency borrowing and its 
success in developing New Zea- 
land's domestic bond 

Joint lead managers Morgan 
Stanley and UBS said aro und 
80 per cent of the notes had 
been sold by late afternoon. In 
eastern Asia, central banks 


and government agencies were 
strong buyers of the notes, 
attracted by their zero risk 
weighting for capital adequacy 
purposes. 

Sales into Japan were lim- 
ited, possibly reflecting a reluc- 
tance among investors to take 
on new commitments ahead of 
the close of the financial year 
at the end of month. Euro- 
pean sales were mainly to 
funds in Switzerland, Ger- 
many, the UK and Italy. 

The coupon on the notes, of 
three-month Libor less ft, was 
in line with market expecta- 
tions. When the notes were 
freed to trade, they were bid at 
the issue price of 99.78. 

Hydro-Quebec is expected to 
launch a 2500m offering of five- 
year notes today, via CS First 
Boston. The notes are likely to 
yield around 15 to 18 basis 
points over Libor. 

Pemex, the Mexican oil com- 
pany, raised $400m in the FRN 


NEW INTERNATIONAL BOND ISSUES 

Borrower 

Amoimt 

Coupon 

Price 

Maturity 

Fern 

Spread 

Book rumor 

m. 

% 



% 

bp 


US DOLLARS 

New 7ftafcmd<att 

Ibn 

Cb| 

&9.T8R 

Apr.1999 

0.1 SR 

w 

Morgan Stanley/ UBS 

Pdroiaos Mtedranost 

200 

(c) 

1DOOOR 

Apr. 1997 

0^7W 

w 

Chase Investment Bank 

Petniieos Maricanoat 

200 

Id) 

loaoon 

Apr. 1997 

OJ75R 

' 

Swiss Bank Carp. 

D-MARKS 

Sara Corp444 

180 

1.00 

100.00 

Mar. 1998 

325 

* 

OresGrter Bank 

YEN 

Japan Airlines Company** 

lOtai 

tn 

10026 

Apr-1908 

025 

- 

IBJ tntemational 


Rnd lams and non-cdUobte unless stated. The yield spread (over relevant government bond} at launch b supplied by the lead 
manager. AUnfeted. $Wtth oqJt y warrants, tftoating rote note. R: fixed re-ofhr price; tees are shown at the ne-otfer teveL « CMtable 
on any coupon data from Apr .96 at par. b» 3-mh Libor -Nft. c) Series ana: 3-tntfi Ubor +4.0SK. Interest accrues on (fays frtttth Ubor 
b no more than SObp Nghar or 25bp lower than the Ubor set tor the period. 4 Series two: 3-nHh Ubor *086%. e) Fbig: 2V3/94. 0 
3-mth Lfcor +1416. 


market in two three-year trans- 
actions as part of a refinancing 
of a $L5bn hank facility. One 
transaction was structured as 
a “volatility floater”, which 
offered investors the chance to 
improve their yield. 

• Standard & Poor’s h««t ra ised 
its ratings on Citicorp and 
unite and removed them from 
credit watch. S&P said the 


action reflected the progress 
the company has made in 
improving its financial 
strength. S&P raised the senior 
debt rating to A from A minus, 
and the subordinated debt rat- 
ing to A minus from triple B 
plus. 

Moody’s has placed the 
long-term ratings of Italy's sev- 
enth-largest banking group. 


Banco di Napoli, under review 
for possible downgrading. 

It said Italy's continuing 
recession made the bank vul- 
nerable to further impairment 
of its asset quality. Banco di 
Napoli's long-term ratings are 
A2 for senior bank deposits 
and A3 for subordinated hanic 
deposits and subordinated 
debt 


Regulatory pact 
marks new era in 
derivatives trade 

The UK-US agreement comes at 
a vital time, writes Laurie Morse 


Y esterday's news of a 
pact to coordinate reg- 
ulatory overseeing of 
over-the-counter derivatives 
trading in the US and UK came 
as two of the world's most 
Influential groups of traders 
prepared to open annual meet- 
ings in the US- 
The International Swaps and 
Derivatives Association (ISDA) 
opens it meeting in Chicago 
today, while international 
derivatives regulators, and rep- 
resentatives of the exchange- 
traded derivatives community 
are meeting in Boca Raton, 
Florida. 

Both organisations have put 
regulatory issues and interna- 
tional co-operation at the top 
of their agendas. Although the 
two groups see themselves as 
distinct and often at odds in 
competing for the world’s risk- 
management business, yester- 
day's regulatory announce- 
ment shows that the borders 
between the two groups have 
blurred considerably. 

The future, and the sus- 
tained growth of global deriva- 
tives trading - on and off listed 
exchanges - hinges on the reg- 
ulatory decisions of a variety 
of countries. International 
bank regulators are busy for- 
mulating capital adequacy 
requirements, disclosure rules, 
and special accounting that 
includ es transaction netting. 

With their agreement, the 
Securities and Rvrhangp Com- 
mission, the UK’s Securities 
and Investment Board, and the 
Commodity Futures Trading 
Commission have demon- 
strated they want to join the 
bank regulators’ discussion, 
and have put the over-the- 


counter swaps dealers on 
notice that they (the regula- 
tors) must be reckoned with. 

For the Commodity Futures 
Trading Commission, which is 
facing reauthorisation this 
year, its co-operative efforts 
with tbe SEC and the SIB may 
help head off Congressional 
criticism of its handling or 
exemptions for certain energy 
derivatives. Added to tbis is 
the fact that it has. at times, 
seemed ill-prepared to deal 
with a truly global futures and 
derivatives crisis. 

After four yeans of fractious 
debate. Congress gave the 
CFTC limited overseeing of 
OTC derivatives in 1992, and 
promised to revisit their regu- 
latory treatment this year. The 
CFTC’s initiative with the SEC 
may give legislators, who have 
grown to understand the value 
of derivatives, more confidence 
in tiie agency. 

Taken unawares hv the secu- 
rities regulators' initiative. 
ISDA lenders had been bracing 
this week for the release of 
another regulatory study on 
the derivatives business. 

Washington's General 
Accounting Office is overdue 
to release an extensive exami- 
nation on the industry. The 
GAO is known for its tough 
and controversial reports, and 
is not expected to soft -hand 
derivatives dealings like 
reports by Industry groups 
such as the Group of Thirty. 

Altar a year of such reports, 
and much discussion by legis- 
lators and bank regulators, the 
SIB-SEC-CFTC pact smacks of 
action and provides an agenda 
for cooperation on global OTC 
derivatives regulation. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rad Day's 

Coupon Date Price dramga 


Weak Month 
VMd ago ago 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTPJ FUTURES 
PJFFQT Lk»200ro lOOtta of 100% 


Australia 


9500 

OMM 

1133000 

-1250 

724 

7.10 

627 


Open Sett price C/wnpo 


Low 

EsL voi Opan kiL 

Belgium 


7250 

04/04 

1012500 

+0250 

699 

720 

684 

Jun 

11060 11640 +1.70 

11228 

110A5 

58348 S8S49 

Canada * 


6500 

06/04 

933500 

- 

7.44 

721 

659 

Sap 

11120 +1.60 



0 8 

Danmark 


7.000 

12X14 

1031000 

+0.630 

658 

682 

621 




Francs 

8TAN 

&000 

05798 

1082700 

+0.410 

670 

670 

637 







OAT 

5.500 

04/04 

96200a 

+6730 

615 

626 

691 

■ ITALIAN GOVT. BOND B1FI FUTURES OPTIONS (UFFEJ Lra200m lOOJhs of 100% 

Germany 


8.000 

09/03 

082500 

+0260 

618 

612 

680 






Italy 


6500 

01/04 

982900 

♦ 1.650 

9J2t 

613 

655 

Strike 

■ GALLS — - 



PUTS " 1 

Japan 

No 119 

4900 

06/99 

105.8770 

+0230 

348 

370 

307 

Woa 

Jim Sap 


Jun 

Sep 


No 157 

4500 

06/03 

102.8910 

-0.700 

407 

422 

SM 

11080 

2.80 312 


2.40 

3J2 

Naltwilands 


5.750 

01/04 

97.3800 

+0.720 

611 

611 

683 

11100 

225 2.88 


366 

358 

Spain 


10.500 

10/03 

111.6000 

+0.900 

607 

661 

728 

11150 

310 226 


390 

386 

UK Gits 


6000 

09/90 

97-28 

+18/32 

648 

640 

525 

EsL roL uri. Cafe 1368 Puts 12S6 Previous days open int. Cato 0388 Puls S14<8 



6760 

11AM 

97-28 

+36/32 

7.07 

728 

655 








9-000 

10/08 

115-22 

+38/32 

724 

724 

624 






USTteasuy 

■* 

6875 

02AM 

96-25 

+9/32 

648 

634 

6.88 








6250 

08/23 

91-29 

+11/32 

690 

682 

641 






ECU (French GavQ 

6000 

04AM 

95.8700 

+0470 

657 

681 

617 

Spain 






London ctowft -Haw Ycrt irtd-day 
t Qnn wmaJ ytaf (hdudng aftnhoUng to A 125 par art payable 
near US. UK h 33nds, olhto M daetam 

US I N TEREST RATES 


YtoUsc Local m»W (total 
by nonwldart* 

Sowar MMS ttoiatfcnri 


■ NOTIONAL SPANISH BONO FUTURES (MEFFT 


Lunchtime 


Biota ban 1 
Fed.fr 


Omou*i_ 
S Itoo north 
5 Itaeaterth. 


Trereuy BOB and Bond Yfefcfe 
125 Tim year. 


Fcdtortb * htateritn- 


3% Sfa worth . 

■ 0wyw_ 


MB Tine year- 
366 Dw pmr — 
186 10-yea 
42 9 She* 


486 

U6 

MB 

648 

SJ8 


Jun 


UK 


Open Sell price Change Hgh 

100.78 

100.62 101-50 +0.75 101.52 


Low EeL VOL Opon W. 

SO 21,746 
10060 62,468 100,701 


■ NOTIONAL UK GILT FUTURES (UFFS* ESO.OOO 32nda ot 100% 


BOND FUTURES AND OPTIONS 

France 

■ NOTIONAL FRENCH BONO FUTURES (MATIF) 



Open 

Sett price 

Change 

High 

Low 

EsL voL 

Open W. 

Mar 

12520 

12624 

+028 

12628 

12648 

219244 

96328 


12610 

12678 

+0.68 

12520 

12523 

57.190 

114211 

Sop 

12438 

12526 

+028 

12484 

12428 

200 

12,590 

■ LONG TSIM FRENCH BOND OPTIONS (MAT1F) 






Open Sett price 

Change 

«flh 

Low 

EsL vd 

Open HU. 

Mar 

111-23 113-00 

+1-12 

112-31 

111-23 

1228 

12238 

Jui 

11020 112-01 

+1-11 

112-09 

110-19 

76S37 

131434 

Sep 

111-07 

+1-11 



0 

107 

■ LONG G6.T FUTURES OPTIONS (L1FF6) S50200 B4ths «A 100% 


Strike 

CALLS 

— 


PUTS - 


Price 

Jun 

Sep 


Jun 


Sep 

110 

2-05 

2-25 


1-25 


2-33 

«1 

1-38 

1-80 


i-sa 


3-04 

112 

1-09 

1-38 


2-29 


3-44 


Strive 

Price 

Apr 

— CALLS - 
Jun 

Sep 

Apr 

— purs 
Jun 

12S 

- 

1.82 

- 

638 

1.04 

128 

065 

1.23 

- 

677 

1.50 

127 

616 

0.73 

- 

- 

302 

128 

004 

642 

665 

- 

363 

128 

- 

622 

- 

- 

- 


Sep 


Eat wL gold. Crib 21314 Putt 40.342 . Piwtoua <tey“» open W, Cafe 344.606 Pin 286383. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES ( L»-*-fcr QM2SQP00 IQOths of 100% 

Open Sett pnee Change High Lot, GaL vol Open**, 
jun qwitf 97.88 +039 97.98 98.78 192628 202930 

Sep 97.01 97.88 +0.98 97.60 87.01 


Eat voL total. Cafe 018 Puta 3423. Piwtaun day* opan ml. c* nm Puts 33246 


Ecu 

■ ECU BOND FUTURES (MAT1F) 

EsL voL Open W 
3,463 8.696 

1.897 1.799 



Open 

Sott price 

Change 

High 

LOW 

Mar 

117.06 

118.28 

+0.42 

11634 

11756 

Jut 

9160 

91 .96 

+050 

9159 

9150 

us 







■ US TREASURY BOND FUTURES (C6TT) <100.000 32nd» t>1 100% 


157 


5070 


a BUMP FUTURES OPTIONS CJFFE} OM2SO.OOQ pdnwof 100% 


Strike 

Price 


0700 

0780 


Jun 

CALLS 

Sep 

Jun 

Sep 


153 

051 

155 


150 

1.18 

1-82 

660 

159 

1.41 

151 



Opon 

Latest 

Change 

High 

Low 

EeL voL 

Opan InL 

Mar 

100-15 

106-27 

+604 

11604 

106-14 

125*50 

53559 

Am 

108-14 

108-23 

+602 

109-02 

108-10 

573457 

355552 

Sep 

107-16 

107-27 

+602 

10004 

107-15 

4.955 

39581 


Esc wt I. Crib 10344 Puts 1 WW. Prwidoua day*# open Int. Qria 233440 ftaa 214441 

■ NOTIONAL MEDIUM TERM GERMAN GOVT- BOND 

poffl-MUFFB’ PM2S0.0Q0 lOOtha ot KW* 

Open Sen price Change rtgh Low 
Jun 100.92 101.47 +0.40 101.44 100.82 


UK' GILTS PRICES 


Eat vd Open Int 
1226 3348 


Japan 

■ NOTIONAL LONG TERM JAPANESE GOVT. BONO FUTURES 

fUFFE) VI 00m IQCtfia ol 100% 

Open Close Change Hfcft Low Esl. vd Open tnL 
Jun 110.17 11025 11006 2077 0 

- UR=E cu ntwab traded on APT. AM Open Interest bp- am tor erevtoua day. 


Yield ._1«4W- 

U «ri Price £ 1- gr- Hob Lon 


_YkU— -1993/94- 

H fed War-*- Hrii tow 


0) 


M_ _ 1993/94 - 

flPrioat +cr- Hffr Low 


■(UmopbftMVflri^ 


lljfelW— 

OpcLilISW#- 

I'jpc 1994— 

pc 104$} 

1095. 


1337 

in 

12.10 

8.76 

11.33 

30B 

arc 

11.41 


c Gas BO-95 _ 

C 1095 

:vpe 1995ft — 

1096 1130 

e I998tt- 17.82 

'A 1«® 

bft ICpc 1908 ... - 
l%pei*7#_. 

IjJKIHT 

t,pera7*? 

pc 1937 

UBS — 

%pewe»tt-- 
life 190-988-. 


-S 
_ “i 
583 973 — 


jjpeWB 

* !<** 

riciastt — 


Ratio WMP Years 

Earn n't [ic 1599. ... — 
Toss lOtoc 1999 

Treat 60 c 1599 

Ceemrion I0%ps 19®- 

Bactttttt 

Tran i3pc 2000 

loncawi 

tbcoiR 

TpeWA 

0{|0C?O(E 

SfeWXJtt 

I Ope 3003 — 


an 
11 19 

941 

M3 

11.77 

a.™ 

7.04 

664 

1108 

1152 

*92 

851 


097 

MM 

6.14 

aw 

8.12 

990 

B.67 

605 

607 

BJ9 

753 

3.40 


4,94 101 

431 101A 
480 103.'. 
4.M 1(Cli 
491 10SS 
5X0 973 
5.19 

333 IlliJ 
5 JSO I14fi 
387 I1W1 
367 115* 
SSH 10911 
GX» USB 
612 

32S IOTA 
636 1Z7U 
6-45 

337 ISM 
5 18 101 B 
667 1ȣ 
3361341]* 
30 I tOU 
362 111% 


677122*18 
312 USA 
347 9708 
317 \M 
673 1 10S 
306 1307, 
7JJ1 II5» 
384 IWii 
6J» SO*. 
M2 1I6\ 
70 MW 
7.15 119* 


109A 
MSB 
1104 
106U 
111B 
08 
M9% 
116% 
♦i 120% 

125% 

120A 
+A 112% 
+A iffA 
+A iHM 

110% 

+A 13ZU 
+% II4J3 
1H 
102 % 
t,i 131% 
i4ou 
*\ l»A 
fj. IMA 


+U 126% 
+B >21% 
+43 lOiJi 
*‘l WU| 
+B 118% 
+% 1383 
rii 1224 
+B IMS 
+B 51 A 
-Q 123S 
+% 11% 
+1 127A 


TfBMlUaPC 3001-4 — 
101 Rn«g3%pC‘99-4 

101 A Conwrrioe&^sro*— 

10V. Trraa8%pc200*» 

102G 6%jb20MA. — ■ 

10512 Core 9% PC 2005 

94 IMS 12*Jpc2nD-5 

i ssss= 

JJffl Tr« 1I%PCJ00J-7 — 
non 6>]0e 2087 ft — 

or! aSS.'SSz 

uw r, “ spca “ tt 

11M 

105% 

lZ7i 

l09i« 

WJi OisHteanYeare 

VH nw8pc2009~, — . 
iSS Hess 8 iMpc 20lO_. 

1®B C6w9pCU2011tt 

T*»9pcZ012» 

,08 * T«M5%fC200B-12tt_ 
Tires Re ZOlStt— 

7%pe20T2-15tt 

ireas8%{t TCnTTt 


334 7.1B123AN 
442 324 79% 

&13 7.T7 116B 

391 7XC 97% 
39T 7SB 97% 
310 7.l61in&N 

329 70 134jj 

7.41 7.17 104% 

70 7J21 104421] 

919 7J8 127» 
747 721 110% 

9.49 7.42 142&P 
7.78 7^l15Bi1 


+H 1293 
+1A BW 
+10 12SJJ 

♦1% 10SA 

+1% 104% 
+1U 125U 
+1£ 1433 
+IA 11ZJJ 
+S 111% 
♦IS 13M 
+1A 11911 
+13 1510 
♦1% 1243 


116% 

57U 

105% 

95% 

9W 

105% 

124S 

9*11 

04,'. 

1l«i 
97A 
131 A 
M1% 


I20A 

1120 

BGfl 

112,1 

MB 

125% 

109k 


97A 


Erill 128c'13“'17. 


7.48 

753106Qrf 

+1A 

1191 

87.1 

7.40 

7.18 

91A 

+1% 

®A 

OBfl 

7.70 

T27 

IIB% 

♦ 1i 

1293 

1DD% 

757 

7XT 

117U 

♦US 

127(1 

10W 

858 

755 

BSB 

+15 

94 

70% 

7.44 

72BI07UH 

+1A 

117% 


7JS 

722 

I0(fi 


114% 

89% 

151 

121 

11% 

+ia 

129% 


&21 

7.0 

146% 

+1% 

158% 

1262 


3945. fVt hr Jma 1333; ldU) mi for January 1094 141 JL 

Other Fixed Interest 


_rkid , _1933fl4- 

H Rad PrtoE+OT' Haoa Lew 


MtfcreDN M%201O 343 7 Si 131% 

Mia Div IIPcOC 2009 834 76S 122% 

Birim lUaseSOli an 331 130% 

Wfed C» 8%ps '10 70 - 108% 

*4 Cap 1996 387 - 101% 

ijpcW'Z 11a - 112% 

H|*>ariOae 15K 2011. 90 364 1S6& 

learei31]K2G06 364 >140 


S M2A 115% 
138% lteU 


- 2 % 

-Ja 


1(2 
120 

116 

+% 130 


114 

65 

97% 

110 


Ctrertipc 


- 52fi 



LCC 3BC VO Nl - 

8J3 

_ 

38 

-1 

Harlan?%pctt 

_ 7A0 

- *7,’. 

+% 

54 H 

38% tfencfesre ii%ec2007. 

aia 

480 

126 

-7% 

CDnr3%pC61 

_ 5l5B 

- *?iw 

+% 

71 

«% HaLWc»cy_ ,.,. 

4.12 

758 

72% 

-% 

TaasSpCttML 

_ 777 

+ 33%al 

+% 

44% 

83% «V4Sefcvjfc3%sK3521. 

- 

L9b 

141% 

-l 

Coaafe J'ac — 

_ 75S 

- 



38% 

3% 4%pcL2D«_ 

- 

3.95 

138% 

-1 

Traaa. 2%pc — 

_ 7 89 

- S2%Bl 

•A 

37% 

27H UBMBtSB» 16%0C2O(B 

Ills 

- 

148 

-2% 


FT-ACTUARfES FIXED INTEREST INDICES 

Price Indoes Tue Day's Mon Accrued 

UK tWla Mar 15 change W Mar 14 


xd a dj. 

yw 


— Low coupon yield — — Morfium coupon yield— — High coupon yield — 
Mar 15 Mar 14 Yr. ago Mre 15 Mar 14 Yr. ago Mar 15 Mar 14 Yr ego 


1 

Up to 6 years (2 3) 

127.14 

+0.12 

126J9 

308 

307 

5 yra 

6.49 

659 

855 

8.71 

679 

855 

681 

650 

7.03 

2 

5-15 years (24) 

153.49 

+085 

15320 

1.63 

350 

15 yrs 

7.18 

729 

7.69 

755 

758 

8.20 

752 

7.84 

8.44 

3 

Over 15 years (8) 

17447 

♦1.11 

17356 

696 

353 

20 yra 

750 

7.40 

7.96 

727 

759 

858 

753 

755 

8.52 

4 

Inedaemabiea (8) 

20317 

+032 

20154 

375 

■1.47 

Ined-T 

7.48 

750 

638 







5 

AM stocks (61) 

149.38 

+667 

14839 

1.72 

350 



















— 

— Inflation 5% — 

— 

— 

Inflation 10% 

— 



Index-Hied 


Mar is Mar 14 Yr. ego 


Mar 15 Mar 14 Yr. ago 


6 Up la S yeart P) 

7 Over 5 years (11) 

8 AU stocks (13) 

Debentures end Loam 


18323 

183-35 

183.49 


+612 

188.00 

055 

Ml 

Up to S yra 

256 

252 

2.10 

1.74 

1.77 

150 

+694 

18257 

652 

1-29 

Owr 5 yra 

352 

359 

349 

3.05 

3.12 

3.32 

+055 

18305 

055 

159 

— 5 year yield — 

— 

13 year yield — 



25 year yield 


9 Debs & Loans (73) 
Awsgo pou le O amp C on ; 


145 JO 


♦058 145.05 2.14 2JBB 8.15 8^6 841 828 8.45 

riaow. Coupon Bad Low: OK-7WM: Mat* an- 8K-10V94; 11K and oar. f Flat yisM. ytd Year to rt+M. 


9.18 


352 


9.43 


GILT EDGED ACTIVITY INDICES 

Mar 14 Mar It Mar 10 


Mar 9 


Mar 8 


FT FIXED INTEREST INDICES 

Met IS Mer 14 Mar 11 Mar 10 Mar 9 Yr 090 mgr Low 

Govt See*. (UK) 100.50 10309 10301 101.07 10397 87.23 107.60 9328 GBt Edged bargains 107.2 831 87.0 930 973 

Rxad Wreest 12120 121S3 122.37 12222 1231T 11368 13327 103S7 5-day average 94.0 982 1039 1138 123.8 

* kv 1993194. O o vri— K Soaatloa Itfl rioos uanpCodon: 127^0 (B7VS6}, low 4ai8 071/76). Fkiod Moeat Me* rinoa compiodon: 1330T pl/v9d . tow 5063 (3ri/75) . Bass 100 Gaenancm Sacwibes 15/ 
mva and Faaad Uaareri 103* 8E aettay inrioaa wb e i ad t»74 , 


FT/ 1 SWA INTERNATIONAL BOND SERVICE 


Listed are the lata! Hamefcnd bonds tor wtiicfi tree b an adaqufe seconder RoritOL Lateat prices at 6£5 pn an Mereh 15 

taauad Bid 0«er dig. YUd Issued Bid Oder Chg. Yield 


Ofer Chg. 


U3 DOLLAR STRAIGHTS 


AUatsftowKe 9% 85 . 
16% 00 


Be* ti Tokyo 6% 98. 

Brigun9%9S 

SFCE 7% 37 

8rtbhGre021 

CamteSefi 

CCCE 9% 96. 


Qriuig Kreg Rn 5% 98 . 

Cud&eptlN 

Cre*FTOBr9%a 

Danmak9ia95 

£CSCfl% 98 

EEC 8% 06 

SB 7% 98 

339% 97 

Seeds Frets 9 98 

EuotemB%96 

Efrtn BeritJapeiao? - 
Bpod Dev Carp fll} 98 > 

Hntaod7% 97 

FtonSi E>port 9% 95 — 
Foal Motor Credt 6% 3 . 
Gen Bk Cetriri 9% 96 _ 
<31409% 96 . 


hd Be Japan Fin 7% 07 . 
Ito Mre Oer 7% 96 _ 
Rriy«%23. 


JqsnCte«Ek8%01 — 
Kanad Sec Per 1098 — 

UCBF%i897 

Ufeud«aBec7%{E> 
Mppon Ovd 8k 10% 95 . 
N*xnTe(Mg%8S_ 

Manay 7% 87 

Onrirto7%03 , 


Trias. 2pt ‘94—^1023 - - 1374 — 1374 131% 

apeV 150 2.472D0%ri +4 204% I04U 

0355} 1.73 2J3 110% tA 1UiV 10M 

Vipctfl T7BJ) 340 2.78172%Z1 +1% 175% 159 

2%SCV3 294 160jJ +1% 173% 1» 

4%pe94» (1256) 2W 195114%* .Jl 118% 1®% 

2pc9B IBM 278 J00 177% +1,i 1844 169% 

2»a *V0 (7M 299 119 160% +1.1 168,1 MJ 

2%pe*T1 (74.0) 104 321 187% +1% I7SU 146(1 

2%pc13 m 2» MB 3J4 1334 *1% IN 1 * l»A 

Jl2Se*1* <8144 114 313 147% +J* 157% 1»I3 

2>aJC to IBM 119 132142%id +1% 152}1 1W3 

2%9S74U (B7.7) 116 231 1194 +1% 123% 1CZ% 

4%pC3l^ 1135.1) 121 133 118% +1% 126(2 «»% 

P i o ap ecdve raid rederrptioiT on protected fcifledfcm ol(1) 10% 
and Q) 5%. (b( H^aes In pere n iha ee e show RP1 base lor 
Indacon (b 8 ntcnihs prior to tesue) aid hews been 3<27SM to 
redact isbaskig ol RPi to 100 in Jawary 1997. Convarrion toner 


Oser KeroeBreTc 8% 01 

PefiriCano* 7% 98 

tanjgdS%03 — 

Quebec Hpio 9% 98 — 

Oiabac Rov998 

SaririMy 9% 86 

SfiS 10 99 . 


S8AB8% 95 

SNCF9%96 

Spain 8*7 99 

SBBB>NSW6%0S. 
SwPen5%a5. 


Seeddi Boat 8% 96 — 
Tdqa Bee fewer 8% 96 . 
Tokjo Msrapob 8% 96 _ 

Topre Mata S% 96 

Unfed Kingdom 7% 02 „ 

World Bank 8% 99 

Wadd Bar* 8% 97 


M 170,', mi 
-2% 149% 128 

-1 44% J1 

48% 10% 

138% 114 

78 B3% 

166% lt7»i 
145% 115% 


DEUTSCHE MARK STTWQHT8 

Austria 6% 24 

Oedk Foxier 7% 03 — 

Demafr6%98 

France 6% 03 — 

DMdBftfin7%03 _ 

83SC8%96 

EEC 8 % 00 

EE 6% 00 — 

FWaodTlj® 

S* 7% 96 

Noway C%SC 

CWaroS 1 * (K 

Span 7% 03 

SeadenSW 


. 1000 

95% 

96 


7.14 

-600 

N»% 

105% 

-% 

528 

-400 

109% 

109% 


652 

- IDO 

105% 

105% 

t% 

SOS 

-250 

112% 

112% 


622 

_ ISO 

106% 

«S% 

-% 

5.70 

. 1600 

11% 

12 


610 

. 1000 

106% 

108% 


533 

-300 

104% 

104% 

-% 

425 

-900 

93% 

94 

t% 

722 

-100 

106% 

105% 


557 

-300 

112% 

113% 

♦% 

538 

. isn 

10U| 

104% 


474 


10S% 

105% 


573 

-100 

105% 

106% 

-% 

6l52 

-250 

104% 

105% 

+% 

540 

.1000 

110% 

110% 

-% 

603 

_ 200 

M9% 

110% 

-% 

614 

_1« 

107 

107% 


54S 

-SOO 

100% 

100% 


693 

_ ISO 

111% 

112% 


027 

-200 

104% 

1055a 

-% 

597 

-ZOO 

108% 

106% 

-% 

528 

1500 

90% 

100% 


642 

-300 

107% 

100% 


556 

-200 

105% 

106% 


691 

-200 

104% 

105*2 

♦% 

BOB 

-200 

104% 



556 

3500 

68% 

89% 

-% 

601 

-500 

10B% 

109% 


672 

-350 

100% 

100% 

-% 

554 

- 200 

106 

MBS 


602 

1000 

101% 

101% 


7.17 

-150 

105% 

106% 


567 

-200 

1M% 

W% 

»% 

454 

MOO 

103% 

w*% 

-% 

5B3 

3000 

101% 

1C 


723 

.200 

108% 

109% 


677 

-200 

103% 

104 

-% 

560 

. 100 0 

91% 

91% 


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Shift in focus leaves 
Williams down at £153m 


By Peggy HoUinger 

A shift in locus hit Williams 
Holdings, the conglomerate 
which yesterday announced a 
E42m drop in pre-tax profits to 
£153.2177 for the year to Decem- 
ber 31. 

Profits were depressed by a 
£17.1 m loss on the disposal of 
the bulk of Williams* engineer- 
ing division to management for 
£40m. The sale is part of the 
group's strategy to focus on 
three sectors - building prod- 
ucts. security and fire protec- 
tion. Excluding exceptional 
items, pre-tax profits rose by 13 
per cent to £170.3m. 

Cashflow from operating 
activities, for which Williams 
has been criticised in the past 
Improved by 15 per cent to 
£227.9ra. This represented 119 
per cent of operating profits. 

Mr Nigel Rudd, chief execu- 


tive, was bullish about the out- 
look for the group's main oper- 
ating markets, saying there 
were definite signs of recovery 
in both the UR and US. Some 
SO per cent of the group's sales 
are from those two markets. In 
Britain however, "government 
policy and consumer caution 
will limit the pace and degree 
of demand improvement." he 
said. 

W illiams was staking growth 
in spite of such difficulties. Mr 
Rudd said, through expanding 
its share of even sluggish mar- 
kets by tapping new outlets. 

The group’s sales were 17 per 
cent higher at £121bn, includ- 
ing a £66 ,9m contribution from 
acquisitions. Continuing busi- 
nesses were 21 per cent up at 
£l.lblL 

Williams pursued acquisi- 
tions aggressively during the 
year, spending £l57.6m on 


seven businesses. These con- 
tributed £6 .3m to operating 
profits, which improved overall 
by 13 per cent to £i9i.6m. 

North American building 
products showed the strongest 
advance, as a result of a cost 
reductions. Operating profits 
rose 34 per cent to £39.6m. 

Fire protection improved by 
19 per cent to £47.6m, while the 
European building products 
operations contributed £B9.im 
a gains t £59. 3m. 

The security division 
improved from £22.5m to 
£25 Sim. 

In line with its stated policy 
of seeking to improve the divi- 
dend cover to about two times, 
W illiams proposed a final pay- 
ment of 7.75p. This leaves the 
total dividend just 2 per cent 
higher at 12.75p. Earnings fell 
from L8.6p to 15.7p. 

See Lex 


Medeva chief goes as rise 
of 28% to £46m is shown 


By David Wighton 

Mr lan Cowrie-Smith, the 
Australian entrepreneur who 
founded Medeva, the acquisi- 
tive pharmaceuticals group, is 
resigning his executive posi- 
tion nine months after a profit 
warning which halved the 
share price. 

Mr Cowrie-Smith, managing 
director, and his long-time 
business partner Mr David 
Lees, who is resigning as 
finance director, will continue 
to provide the group with 
"acquisition services" on a con- 
sultancy basis. Mr Gowrie- 
SmiLh will remain a nun-execu- 
tive director. 

The resignations came as 
Medeva announced a 28 per 
cent increase in pre-tax profits 
to £46. lm for 1993. 

In July the company warned 
that profits would be about 
£10m lower than analysts' 
expectations of £53m-£57m 
largely due to problems at IMS 
and MD Pharmaceuticals. US 
subsidiaries, which would cost 
almost £7m. 

Sales jumped 39 per cent to 


£200.4m with organic growth 
excluding exchange rate move- 
ments of 20 per cent. Earnings 
per share slipped 4 per cent to 
llJBp due partly to a higher tax 
charge. The final is l.Sp (1.5p) 
giving 2.7p i225p) total. 

Mr Bernard Taylor, who was 
brought in as chairman in 
1990, insisted that the resigna- 
tions were not linked to the 
problems the group encoun- 
tered last year. He denied there 
had been any pressure on them 
to go. 

Although it is an open secret 
that Mr Taylor found it hard to 
work with Mr Gowrie-Smith 
sources close to the company 
insisted that the resignations 
were voluntary. 

“Bernard couldn't force them 
to go. In the end they went 
because they got bored." 

The shares added 7p to 155p 
yesterday. 

Both will receive £30,000 in 
compensation for loss of office 
and have been granted three- 
year consultancy agreements. 
These provide for initial pay- 
ments or £286,000 and £230,000 
and payments over the next 


three years totalling a mini- 
mum Of £700,000 and £400,000 
respectively. Mr Gowrie-Smith 
received a salary of about 
£310,000 last year, down about 
25 per cent. 

Mr Taylor revealed that the 
group pulled out of a potential 
deal after the shares slumped 
from 216p to 116p on the profit 
warning but said it still needed 
to make acquisitions. Mr Gow- 
rie-Smith said it could afford to 
make a £100m purchase with- 
out issuing more shares. 

• COMMENT 

The rather modest rise in Med- 
eva’s share price yesterday 
may reflect the fact that Mr 
Gown e-Smith's move was seen 
as only a matter of time. There 
were also a few negatives with 
the figures, which were 
boosted by booming flu vaccine 
sales, including a year delay in 
the important hepatitis B vac- 
cine programme. On forecasts 
for the current year of about 
£54m the shares are now on a 
multiple of about 12.5. There is 
plenty of scope for further 
recovery. 


Owen & Robinson price rises on 
reports of stake acquisition move 


By Andrew Bolger 

Shares in Owen & Robinson, the gold jewellery 
and sports footwear retailer, rose 8p to 34p yes- 
terday after a report that a stake in the group 
might be taken by Mr Philip Green, the contro- 
versial former chairman and chief executive of 
Amber Day. the discount retailer. 

Mr Green said last night: "At this moment. 1 
have bought no shares." ft is understood, how- 
ever. that Mr Green has had talks with Mr 
Maurice Dweck. a former chairman of Owen & 
Robinson, who still owns 15.8 per cent of its 
shares. 


Mr Green declined to comment on any possi- 
ble talks, but said: “1 always look at interesting 
situations. If it's the right deal at the right time, 
I might look at it." 

Mr Steve Foot. Owen & Robinson's finance 
director, said of Mr Green: “If he's buying 
shares, he hasn't done so yet" 

Mr Green stepped down in September, 1992, 
from Amber Day, which has since been renamed 
the WEW Group. He left with a £1.13m golden 
handshake after a deluge of adverse press cover- 
age was followed by results well below analysts' 
expectations. Mr Green also received £7.6m from 
selling his stake in the group. 


CABLES - CIRCUIT PROTECTION 



CONSISTENT STRATEGIC VISION 



IW 

1992 


£m 


Turnover 

832.7 

“85.9 

Profir before interest 

toO.O 


Profit before tax 

53.4 

55.0 

Earnings per share 

23. lp 

23.0p 

t V Jinary dividend 

14.5p 

I4.0p 


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1 1 imli'ii Wk-B t>NF. Ti-lcptiniii- iri-KJft 3535 . 


ENGINEERING • INDUSTRIAL SERVICES 


FINANCIAL TIMES WEDNESDAY MARCH 16 1994 ^ 


COMPANY NEWS: UK 


Saatchi back to black with £19m 


Saatchi & Saatchi. one of the world's 
largest advertising groups, yesterday 
reported pre-tax profits of £19 ,2m for the 
year ended December 31 1993, compared 
with a loss of £595.1m in 1992, writes 
Diane Summers. 

The figure was in line with City expecta- 
tions, which were revised downwards by 
about £6m in December, after a profits 
warning from the group- The shares closed 
down lp at 141p. 

Saatchi bailed the results as a return to 
profitability for the first time since 1988. 
However, the 1992 figure included a £6Q0m 
writeoff of goodwill associated with US 
acquisitions made in the 1980s. 

Revenue from continuing operations 
rose 10 per cent, from £731m to £806m, but 
the rise was accounted for by currency 
movements, said Saatchi. Kralnrting these. 


revenue for 1993 was fiat 

Similarly, operating costs appeared to 
rise from £71£8m to £776.6m. But once 
constant exchange rates were applied 
and severance, property credits and dis- 
posals excluded, costs dropped by 1 per 
cent 

The group warned that revenues in 1994 
will be lower than for 1993. "The revenue 
outlook for 1994 is difficult. We have lost 
two big clients, in neither case doe to the 
quality of our work, and clients remain 
cautious about their planned level of 
expenditure, particularly in Europe." 

Trading profits increased by 8 per cent 
to £36.8m (£342m). Severance costs of 
£19.im were charged and £72m surplus 
property provisions were credited. 
Excluding currency movements and excep- 
tionals trading profits increased by l per 


C8 profit margins, excluding exceptional 
items, increased from 6.1 per cent to 6.3 
per cent in 1993. Mr Charlie Scott, group 
chief executive, admitted that the group 
was not on course to meet his target of 10 
per cent margins by 1995. Meeting the tar- 
get was dependent on revenues increasing 
in tine with inflation, and that had not 
happened during 1993. he said. 

Profit attributable to shareholders 
totalled £72m (loss of £61 3. 7m), with earn- 
ings per share of 3.7p (losses of 362Bp). No 
dividend will be paid. _ 

After t aking into account a £73tn rights 
issue in June and currency movements, 
average net debt during December 1993 
was £il2m, a reduction of £S2m. Analysts 
forecast pre-tax profits of about ^£30m for 
1994, with earnings per share of 7p. 


Of relationships and bottom lines 

Diane Summers on the personal conflicts that split the Saatchi board 



Maurice Saatchi (left) and Charlie Scott: there is concern that 
their public conflict could affect relationships with clients 

To blame Mr Scott for what 


Flotation 
values 
Maid at 
£89. lm 

By Paul Taylor 

Shares in Maid, the on-line 
business Information supplier, 
were priced at llOp yesterday 
valuing the group at £89. lm - 
well below market expecta- 
tions fuelled by the company 
and its financial advisers. 

Some ll.5m shares in the 
nine-year-old group have been 

placed firm with institutional 
investors by Hoare Govett, 
stockbroker to the issue, on 
behalf of the company. 

The new shares represent a 
little more than 14 per cent of 
the shares in issue following 
the placing. 

Earlier the company had 
been confidently predicting 
that the issue, underwritten 
by Hill Samuel, would place a 
minimnm value of £100m on 
the group and provide it with 
about £16m in net new funds. 
A placing price of up to 150p a 
share had been mooted. 

However the flotation has 
been dogged with controversy, 
with some analysts and fund 
managers expressing concern 
and surprise at Maid's pro- 
posed stock market valuation 
and lack of established track 
record. 

As a result the company 
scaled down its expectations 
for the flotation price and has 
abandoned plans to spend £4m 
on a bnBding to consolidate 
the group's UK operations. 

In addition, a number of 
existing BES investors in the 
company who had been expec- 
ted to sell shares in the plac- 
ing, have decided to wait 

Nevertheless, both the com- 
pany and Its advisers insisted 
that the placing had been a 
success and defended the pric- 
ing while blaming competitors 
for “the background noise” 
surrounding the issue. 

Mr Stephen Anlsebrook of 
Hill Samuel, described the 
11 Op price as “very attrac- 
tive”, and said the placing had 
been well received by most 
institutional investors. 

“We set out to raise enough 
money for the company to 
move forward and we have 
done that,” be said, adding, “it 
is a hell of an achievement for 
a company which, as some 
people have pointed out, made 
only £600,000 in profits last 
year.” 

Mr Daniel Wagner. Maid's 
30-yearuld founder and chief 
executive, said he was 
“thrilled to bits” with the pla- 
cing while acknowledging that 
market conditions had 
resulted in the issue having to 
be priced "more competi- 
tively". 

He said the new funds, while 
somewhat less than antici- 
pated, would enable Maid to 
continue to develop its product 
portfolio, Including a planned 
version of Maid for Windows 
version of it's software. 

He dismissed the company’s 
critics who have questioned 
various aspects of its 
operations, including its 
dependence on primary busi- 
ness information providers. 
“This is a brilliant business 
and we are going to prove it in 
the market,” Mr Wagner said. 


M r Charlie Scott, 
group chief execu- 
tive of Saatchi & 
Saatchi. yesterday described 
the past 18 months as the 
worst in his life. However, he 
considers his struggle to 
reduce debts, restructure 
operations and install effective 
management is now largely 
over. 

As his statement accompany- 
ing the group’s results yester- 
day said: “All the businesses 
remaining in the group are 
now profitable, and as tr ading 
conditions in our core markets 
start to improve during 1994, 1 
am confident Saatchi will dem- 
onstrate the performance that 
our shareholders have the 
right to expect” 

Whether or not his confi- 
dence is justified will depend, 
to a large extent on two fac- 
tors. First the Saatchi board 
will need to pull together and 
overcome the embarrassingly 
public conflict between Mr 
Maurice Saatchi, its chairman, 
and Mr Scott 

Second, the revamped man- 
agement, particularly in the 
US, will need to start showing 
new business gains and 
evidence that it can reverse the 
decline in market share which 
has been eroding revenues. 

The relationship between Mr 
Scott and Mr Saatchi appeared 
to decline sharply from the 
point when, in December, it 
was announced that Maurice's 
brother, Charles, would step 
down as a director. 

It was also decided that 
Saatchi's offices in Berkeley 
Square, in the West End of 
London, would be vacated. 

There followed rumours that 
the brothers were planning a 


buy-out and that Maurice 
wanted to take over more of 
the running of the group. Now. 
a compensation committee, 
headed by Sir Peter Walters, 
will examine Maurice's five- 
year rolling contract, described 
by Mr Scott as “not within the 
spirit of the Cadbury guide- 
lines". 

Says one Maurice supporter 
“He admits he has withdrawn 
a lot over the past year, he had 
let things drift He's left execu- 
tive functions with the board 
and he now believes that was a 
mistake." 

Maurice is said to feel that 
the “beancounters” have failed 
to deliver their promises on the 
financial side. Mr Scott's sup- 
porters, in turn, say that Mau- 
rice has not delivered on his 
part of the bargain - bringing 
in new clients. 


continues to be a depressing 
picture is unjust, according 
to the heads of other 
agencies. 

S aid the chief executive of 
one large group yester- 
day: “One has to remem- 
ber ft was Maurice Saatchi who 
made the bid for the Midland 
B ank. He was also one of the 
architects of the huge, sprawl- 
ing, shambling empire. To 
begin to blame Charlie Scott, 
who seems to have done a feu- 
job of stabilising the business, 
seems to me to be desperately 
unfair. Indeed, there wouldn't 
be a business without Charlie 
Scott.” 

The head of another large 
agency pointed to the “ner- 
vousness and confusion" 
resulting from the conflict. 


which is being felt by staff at 
the Saatchi & Saatchi agency 
network, which shares the 
holding company's name. 
There ft concern that some of 
the bad press will have an 
effect on relationships with cli- 
ents. 

And it is the relationship 
with clients - particularly 
potential clients - that will 
have most influence on the 
bottom line. According to Mr 
Scott the group has lost about 
1.4 percentage points of market 
share over the past three years 
- worth about £50m a year in 
revenue - from the 20 per cent 
of the global market it 
holds. 

The problem is largely in the 
US, where big contracts to 
have been lost recently include 
the Chrysler and Helene Curtis 
accounts, worth £30m in reve- 
nue this year. 

Fixed costs are high. The 
staff of about 11,000 account 
for more than 60 per cent of 
revenue. By growing revenue, 
Mr Scott is aiming to get this 
down to the 55 per cent or so 
enjoyed by competitors Inter- 
public and Omnicom - he cal- 
culates that at least half of any 
extra revenue will flow 
straight to the bottom line. 

Mr Scott calculates that over 
the past four years, and in par- 
ticular over the past two, about 
70 per cent of the managers he 
describes as the “key drivers" 
towards these ends have been 
replaced or transferred. 

“For the first time since 1 
joined the company, we now 
have quality CEOs in all our 
operating companies. These 
people have been selected for 
their ability to grow the busi- 
ness,” he said. 



i 


Restructuring aids Emess recovery 


By Simon Davies 

Emess, the UK's largest lighting company, 
yesterday announced the reversal of two 
years of losses with pre-tax profits of £4m 
for 1993, against a £10. 6m deficit in 1992. 

The result was mainly attributable to 
improved performances from the US and 
German subsidiaries, and the impact of an 
aggressive restructuring programme. 

During 1993, group staffing levels were 
reduced by 20 per cent to 2,000, as busi- 
nesses were streamlined mid unprofitable 
product lines cut Sales per employee rose 
from £54,000 to £64,000 in the year. 


Turnover was £131 .2m, against £130 .3m 
from continuing operations in 1992. 

Mr Michael Meyer, chairman, said: “I am 
more encouraged by prospects for our 
businesses in 1994 than at any time during 
the past four years”. He added that trading 
in the first two months was ahead of bud- 
get” 

Operating profit was £6m (Elm loss). The 
UK operations contributed £5 5m (fo.lm) 
and they have seen a strong start to the 
current year. 

Brilliant the German business, had lost 
£2m in 1992, but contributed a marginal 
profit last year, after staff reorganisation. 


Also its US subsidiary returned to the 
black daring 1993. Net debt at the year-end 
was up from £2Qm to £26m, because of the 
repurchase of £llm or preference shares. 
However, average debt for the year was 
lower, and interest payments fell from 
£3.6m to £2m. 

The company has recommended an 
unchanged final dividend of O.lp, despite 
the feet that net earnings of £2.4m were 
not sufficient to cover preference divi- 
dends of £35m. 

Fully diluted earnings per share 
amounted to L5p (7_2p losses). The shares 
closed 2‘Ap higher yesterday at 32p. 


B& J puts pressure on bankers 


By Peggy HoUinger 

Brown & Jackson, the discount 
retailer which has raised £39m 
from shareholders since 1992, 
yesterday sought to put 
pressure on its bankers by 
warning it could not continue 
trading unless working capital 
facilities of £14m were agreed 
soon. 

The company’s shares fell by 
3^i to 2y,p as it revealed sub- 
stantially larger than expected 
losses for 1993 and warned of 
the difficulties in negotiations 
with its bankers. 

If working capital facilities 
for the next 12 months are not 
secured soon, the £6m sale and 
leaseback transaction which 
was due to be completed yes- 

Castle 
Comms 
rises 22% 

Castle Communications, which 
ft involved in marketing audio 
and video film rights, achieved 
a 22 per cent improvement in 
pre-tax profits from £927 jooo to 
£1.13m, for the six months to 
December 1993. 

Mr Terry Shand. chairman, 
said the company had been 
helped by substantial increases 
in licensing income and video 
product sales, and good growth 
in the German subsidiary. 

Turnover advanced by 10.5 
per cent to £18.8m (£l7m). 

After taking into account 
losses at Castle Australia, 
since sold, operating profits fell 
to £1.39m (£l.47m). 

The interim dividend ft lifted 


ter day cannot go ahead. 

Analysts held out little hope 
of a resolution, at least 
through the banks, and said 
that the group had been expec- 
ted to make farther losses this 
year. "B&J has Just passed its 
cash peak,” said Mr W illiam 
Cull urn, analyst with brokers 
Panmure Gordon, “so the 
banks will get out what they 
put in." 

The announcement was also 
a high risk gamble, he 
suggested- “If you were a sup- 
plier would you now want to 
supply B&J? This sort of public 
disagreement could be self-ful- 
filling,” Mr Cullum said. 

Mr Ian Gray, the chief execu- 
tive appointed following a res- 
cue rights issue in 1992, said 


NEWS DIGEST 


to 4-5p (4p). payable from earn- 
ings or 10.2p (82p) per share. 

The company’s shares trade 
on the USM. 

Heiton pays K8.1m 
for F&T Buckley 

Heiton Holdings has bought 
F&T Buckley (Holdings), a 
builders merchant based in the 
Irish Republic, from Harrisons 
& Crosfield for l£8.1m (£7.79m) 
in cash. 

Proceeds of the sale will be 
used by H&C to reduce borrow- 
ings. The company will also 
assume borrowings by 
Buckleys of approximately 

Heiton is also to raise Td-gm 
by way of a 4-for-7 rights issue 
Of 16.4m new ordinary shares 
of 25p at 56p apiece. 

The issue has been fully 
underwritten by AIB Capital 
Markets. 


the group had “adequate trad- 
ing facilities today". He was 
confident that the company 
would be able to trade until a 
solution was found. “We have 
a number of options," be said. 

One of the options was 
investment by a foreign dis- 
count retailer, he said. The 
group was in discussions with 
both the retailer and the 
banks. 

Midland Bank is believed to 
have decided not to provide 
further facilities in light of the 
group's most recent results 
and its past trading record. 

Brown & Jackson unveiled 
full year losses of £i2.7m 
(£6.6m) on turnover of £17Dm 
(£167m), against average expec- 
tations of an £8m deficit 


Hampden nears 
breakeven 

Hampden Group, the USM- 
traded homecare and DIY 
retailer, managed to approach 
breakeven in the second half of 
the year to January 1, leaving 

pre-tax losses at £220,000 
against profits of £482,000. 
Interim losses had been 
£198,000. 

Turnover edged ahead to 
£30m (£29. 8m). Losses per 
share came out at L47p (2.03p 
earnings). The dividend is 
being passed. Last time there 
was a total of lp. 

Ashanti 

Ashanti, one of the world's big- 
gest gold mines, will have a 
market capitalisation of up to 
$1.67bn (£U4bn) after its flota- 
tion, not £L67bn as printed in 
yesterday’s Financial Times. 


BA separates out 
engineering side 


By Paul Betts, 

Aerospace Correspondent 

British Airways is setting up 
its engineering activities as a 
separate profit centre next 
month in an effort to reduce 
the airline's overall aircraft 
maintenance and engineering 
costs, as well as expand engi- 
neering services to other carri- 
ers. 

The engineering and aircraft 
maintenance activities employ 
about 10,000 people out of BA's 
total 50,000 strong workforce 
and include facilities at Lon- 
don’s Heathrow airport and in 
Wales, where BA overhauls 
Boeing 747 jumbo airliners and 
recently opened an aircraft avi- 
onics repair and maintenance 
centre. 

The engineering activities 


headed by Mr Alistair Cam- 
ming are also expected to be 
strengthened by imminent 
management changes to boost 
the company's engineering 
manag ement ream 

BA's engineering operations 
have seen significant growth 
over the last three years. The 
company, which, outlined yes- 
terday its plans to its unions to 
transform the engineering 
business from a cost centre 
into a profit centre, sees strong 
potential for further growth in 
aircraft mawhmunwi and engi- 
neering services. 

Already about 15 per cent of 
BA’s overall engineering activ- 
ities involves work for other 

carriers and the airline hopes 
to develop this third party 
business through its latest 
reorganisation. 



DIVIDENDS ANNOUNCED 


Brawn & Jackson fin 

Castle Communs § Irrt 

Croddor de — .fi n 

Delta — -fin 

Emess ■■ ■ fin 

Evans Habhaw —fin 

Everest Foods - ...ir e 

Gfaseby — .fin 

GT CWJe Growth fin 

KaU Engineering fin 

Hampden § .fin 

Hoywood WBfiams — fin 

Uontieart fin 

Medeva fin 

Paterson Zoch ——Art 

Schotes bit 

Wassail fin 

WiCains Wdgs .—--fin 


Wbnpey (George) fin 

Wofeietoy -fttf 


Current 

payment 

Date Of 
payment 

Correa - 
poncflhg 
dividend 

Total 

for 

year 

Total 

last 

year 

nil 

- 

0.1 

nil 

0.1 

4.5| 

July 5 

4 

_ 

as 

2.5+ 

Apr 29 

- 

25 


10.3 

June 1 

9-8 

14.5 

14 

0.1 

May 23 

0.1 

0.1 

: 0.1 

9-2+ 

May 13 

7.85 

13 

1125 

1 2 

• 

12 

. 

3.7 

3.3+ 

May 17 

7.6 

6.6 

105 

eof 

Mar 31 

nfl 

120 . 

25 

3.02 

Apr 22 

544 

9.5 

9.64 

nU 

- 

0.8 

nfl 

1 

8.5+ 

- 

8 

13 

12-5. 

O 2 

July 1 

no 

03 

02- 

1-8+ 

May 23 

1.6 

2.7 

225' 

2.45 

May 6 

2.35 

. 

12.6 

1.7 

Mays 

1.6 

. 

5 

2.4+ 

May 00 

1.7 

3.4 

25 

7.75+ 

May 26 

7.5 

12.75 

125 

325+ 

May 9 

3.25 

525 

525 

4.72 

Jfty 29 

3.55 

- 

132 


ends shown pence per share net except where otherwise stated. tOn 
used capital. §USM stock. J Cents throughout 



■ifrdwiiji 







° ni - lin c 


*4 *# i\ r 




i it! i 


v sit'i 



FINANCIAL TIMES WEDWFcnA MADPU f £. 1 QOA 



COMPANY NEWS: UK 


Wimpey bounces back 
into black with £ 25 . 5 m 


By Andrew Taylor, 

Construction Correspondent 

Wimpey. following its biggest 
ever pre-tax loss of £lll.Sm in 
1992. bounced back Into the 
black last year with pre-tax 
profits of £25.5m. 

Trading profits rose 85 per 
cent from £22. Lm to £40.9m, 
boosted by a strong recovery in 
UK housing, with completed 
sales up by a quarter to 6.936. 

Group turnover fell from 
£L64bn to £l.S9bn. The final 
dividend is again 3.25p. main- 
taming the total for year at 
5J25p, just covered by earnings 
of 6.8lp a share. 

Housing, in spite of only 
breaking even overseas, moved 
from a £33 -3m loss in 1992 to a 
£25. 4m profit last year. Operat- 
ing margins in the UK. having 
fallen in every year since 1989, 
more than doubled from 3 per 
cent to 6.5 per cent last year. 
This compared with a peak of 
19 per cent four years ago. 

Mr Joe Dwyer, chief execu- 
tive, was optimistic about fur- 
ther rises in UK house sales 
and margins, with prices 
already starting to edge off the 
bottom in south-east En gfapd 

He said the company had 
seen no evidence that tax rises 
due to take effect next month 
were dampening * frmumri from 
prospective purchasers. 



Joe Dwyer, optimistic about 
further rises in UK house sales 

Wimpey would be selling its 
house building businesses in 
France, Spain, Australia and 
southern California to concen- 
trate on Its UK and other US 
housing operations. Also still 
up for sale was £i35m of com- 
mercial property investments. 

The group has raised more 
than £3Q0m from disposals, 
transforming its balance sheet 
and reducing gearing from 30 
per cent to 5 per cent, the low- 
est level for 20 years. 

Net debt of £28m at end-De- 
cember. however, is expected 
to rise this year as the group 
increases land purchases. 


Holders bid to oust 
Andrews Sykes board 

“We want to support the 
company and bring about an 
Improvement,*’ Mr Murray’s 
spokesman added 
Mr David Hubbard, group 
chairman, said the board 
would fight the rebel action 
and would seek the support of 
institutional shareholders. 

Opposition by institutional 
investors defeated Mr Murray 
IS months ago after the last 
battle for control. Andrews 
Sykes has now offered Mr Mur- 
ray hoard representation, but 
not majority control. His 
spokesman said the offer had 
not been rejected, but 
described the extraordinary 
meeting as a parallel tactic. 

Andrews Sykes shares closed 
up 5p at 90p. 


By Tim Burt 

Rebel shareholders at Andrews 
Sykes, the lossmaking indus- 
trial services group, yesterday 
launched a bid to oust the 
board in a re-run of a s imilar 
coup attempt 18 months ago. 

Dissidents led by Mr Jacques 
Murray, who holds 29.2 per 
cent of the Midlands company, 
have called an extraordinary 
meeting at which they hope to 
win management control. 

A spokesman for Mr Murray, 
chairman of Nu-Swift, the fire 
protection group, said the 
move reflected dissatisfaction 
with Sykes* performance. 

Last December, the group 
reported interim pre-tax losses 
of £2.34m (£802.000 profit). 


Visa EMEA spending 
rises 13% to $183bn 


By Alison Smith 

The amount of spending using 
Visa cards within the Europe, 
Middle East and Africa region 
(EMEA) totalled S183bn 
(£l25.3bn) in 1993, some 13 per 
cent higher than in 1992. 

The number of Visa EMEA 
card transactions rose by 
almost 5 per cent to 2.36bn, 
while the number of Visa cards 
in existence rose by more than 
5 per cent to 70.8m. 

Mr Jean-Jacques Desbons, 
president and chief executive 
of Visa EMEA. said the organi- 
sation was confident that 
growth “will continue through- 
out the next year and will 
increase further as the world 
economy starts picking up.” 

Both the increases in card- 


holder spending in terms of US 
dollars and in the number of 
cards In 1993 against the previ- 
ous year are lower in percent- 
age terms than, annual 
increases since 1989. 

Mr Desbons also said Visa 
planned to introduce its Elec- 
tron card into the UK before 
the end of the year. It is 
already available elsewhere 
and can be used only through 
electronic means. Because each 
transaction would be author- 
ised individually by the banks, 
the card would offer greater 
security, and so banks might 
be prepared to make it avail- 
able to more of their customer 
base than existing cards. 

Visa EMEA represents about 
36 per cent of Visa Internation- 
al’s worldwide sales volume. 


NEWS IN BRIEF 


BARING SECURITIES 
Emerging Markets Index 
Tracker Fund: Net asset value 
at December 31 $14.67 (£10) 
against $10.50 issue price. Net 
realised gain for period April 
15 to December 31 1993 
$814,000. 

BEAUFORD has received valid 
acceptances in respect 6.24m 
ordinary shares allotted by 
rights, representing 76.37 per 
cent of the issue. 

BORTH WICKS has made two 
property disposals for £600,000 
- in line with book value. 
BURMINE has received valid 
acceptances in respect of 19-Sm 
Europa Minerals Group ordi- 
nary shares (78.5 per cent) and 
has extended its offer to March 
29. Acceptances of the linked 
Austmin offer had been 

received in respect of 45.1m 
folly paid ordinary shares, (63.9 
per cent). 

BWD SECURITIES. Yorkshire- 
based financial sendees group, 
has completed a contract to 
purchase a freehold office 
building being constructed in 
Sheffield for £559,300. 


CANNON STREET Invest- 
ments has sold Thierry's Wine 
& Food Services for a nominal 
consideration to Mr Thierry 
Cabanne and Mr John Hayston 
who are directors of Thierry’s. 
CENTRAL EUROPEAN 
Growth Fund has received 
applications in respect of 24.7m 
ordinary shares (with warrants 
attached). Accordingly, the 
international placing has been 
increased and 175m ordinary 
shares (with warrants) have 
been placed firm, making the 
total size of the issue 200m 
shares (with warrants). Some 
$200m (£137 m) has been raised. 
Dealings are expected to start 
on March 21. 1 

COUNTY SMALLER Compa- 
nies Investment Trust: 4.97 per 
cent of open offer of C shares 
taken up. The placing and 
open offer raised a total of 
£35.8m. Change of name to Nat- 
West Smaller Companies 
Investment Trust agreed. 
CRAY ELECTRONICS has sold 
Nexus Custom Electronics to 
Jaco Electronics for $1.6m 
(£l.im) 


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London STOCK EXCHANGE 



while UK house sales are 
expected to top 7,500 during 
the period. Gearing was likely 
to reach 30 per cent, implying 
net defat of about £160m. 

Construction profits halved 
from £4. 5m to £2jan on turn- 
over down from £683m to 
£659m. reflecting the difficult 
conditions in the UK. The fig- 
ures however excluded £8m of 
interest on advanced payments 
on construction projects. 

Minerals, helped by a £7 9m 
windfall planning gain, rose to 
£13. lm (£L6m). 

• COMMENT 

Wimpey 1 s results were bang in 
line with expectations. Even so 
its share price fell 8p to 210p 
following the figures. The mar- 
ket having given the company 
credit for rebuilding its bal- 
ance sheet is concerned about 
where it goes next. There is 
concern that Us emphasis on 
first time buyers will mean 
that margin recovery may be 
restricted. The UK aggregates 
business al so compares unfa- 
vourably with its main rival. 
Tarmac. The company talks 
bravely of acquisitions and 
organic expansion, but now 
needs to deliver. Profits of 
£45m put the group on a pro- 
spective p/e of more than 20. 
The shares, after a good run, 
are now suffering. 


Paterson 
Zochonis 
rises 15% 

Paterson Zochonis, the 
detergents, manufacturer, was 
bullish yesterday shout pros- 
pects as It announced a 15 per 
cent increase in interim pre- 
tax profits to £13.6im 

The increase was achieved 
on sales 8 per cent ahead to 
£126m for the six months to 
November 30. 

The company said it was 
confident that, barring any 
unexpected currency move- 
ments, it would increase prof- 
its from last time's £25 -3m in 
tbe year to May 31. The 
interim dividend was 
increased by 4 per cent to 
2.45p. Earnings were 18 per 
cent higher at 17.69p. 

During the first half, profits 
were helped by lower interest 
charges, an increased contri- 
bution from associates and an 
improved operating return. 

Interest charges fell by 18 
per cent to £2.74m, while the 
contribution from associates 
rose by £600,000 to £1 Mm. 

The company said trading in 
parts of Africa was becoming 
increasingly difficult, particu- 
larly in Nigeria, the Congo and 
Cameroon. 

In Europe, Paterson 
increased sales of Cussons 
soaps and toiletries in a com- 
petitive market. Tbe Polish 
detergents manufacturer 
returned an encouraging per- 
formance, the company said. 


Rights bolsters Wassail advance 


By David Wighton 

Wassail, tbe conglomerate which lost the 
bid battle for Evode last year, saw pre-tax 
profits jump from £17 An to £27.6m in 1993 
on sales up 11 per cent to £277.8m. 

Profits were boosted by the £103m rights 
issue launched to fund the thwarted Evode 
bid. But the issue diluted earnings per 
share which rose 23 per cent to 11. Tp, 

Ur Chris Miller, chief executive, said 
that earnings per share would have been 
11 per cent higher but for the rights issue, 
though they were lifted S per cent by 
exchange rate movements. 

The loss of Evode, where Wassail was 
outbid by Laporte. has been followed by 
further disappointments, ipninrfjng abor- 
tive talks with Fenner. “We have got quite 
close to a number of things but most felled 
for price-related reasons,” said Mr Miller. 

u We are as confident as you can be that 
there will be an acceptable deal in the not 
too distant future," be added. 

Although Wassail is still viewed as an 


acquisition-driven group, Mr Miller 
pointed to the strong organic growth 
shown by the 32 per cent increase in oper- 
ating profit to £27. 2m. “That suggests 
there is something we are doing that is not 
straight asset-stripping." 

He said the improvement was "particu- 
larly satisfactory” given that most of its 
markets outside the US experienced little 
or no recovery last year. 

Even in the US. its DJY products sup- 
plier DAP has had to work hard to 
increase sales and most of the advance 
came from higher margins. Its operating 
profits rose from £l0.5m to £I3.7m, on 
sales £20.?m higher at £1 46.7m. 

Metal Closures, the bottle top manufac- 
turer which was the group’s first huge 
acquisition, continued to make good prog- 
ress. The South African arm, which con- 
tributes nearly 30 per cent of group profits, 
had an “excellent” year in difficult condi- 
tions and the division’s profits rose to 
£L2-2m (£9-3m) on sales of £82. Lm (£76.6mi. 

A final dividend of 2.4p gives a total up 


36 per cent at 3.4p (25pl. 

• COMMENT 

It may be that the ex-Hanson men who 
run Wassail are just too choosy when it 
comes to buying companies. But then they 
can afford to be. Their past acquisitions 
are still generating the sort of improve- 
ments that most "growth" companies 
would kill for. Perhaps most remarkable of 
all is the progress of Metal Closures’ South 
African business, where profits have risen 
from £1.5m to £8m since Wassail bought 
tbe company in 1990. This exposure may 
unsettle the nervous, though Mr Miller 
points out things would have to get pretty 
bad to hit sales of bottle tops. Tbe real 
worry is Wassail’s inability to find an 
earnings enhancing acquisition despite the 
low returns on its cash pile. Without some 
action before long, the shores' deservedly 
high rating will be hard to sustain. On 
current year forecasts of about £31-5m the 
shares at 295p. up ldp. are on a multiple of 
over 22. 


Tiphook’s shares rise on 
container sale completion 


Shares in Tiphook rose by 5p 
to 55p yesterday after the debt- 
laden transport leasing group 
confirmed the completion of 
the sale of its container busi- 
ness to Transamerica, the US 
financial services group, w ri t e s 
Andrew Bolger. 

Proceeds of £673m were 
received yesterday by Tiphook, 
which could receive a further 
£49m from the deal. 

The final consideration 


depends on changes in the net 
assets of the container 
operations between September 
30 and yesterday, and is sub- 
ject to a completion audit. 

Tiphook. which had debts of 
more than £lbn, had warned 
that its survival depended on 
tbe successful disposal 

Completion of the sale was 
conditional on consents by a 
majority of the group's US 
bondholders. 


GKN 90.9% acceptance in 
loan stock rights issue 


GKN yesterday announced it 
had received acceptances in 
respect of almost 50m units of 
non-interest bearing convert- 
ible loan stock, representing 
about 90.9 per cent of the units 
offered in its recent rights 
issue. 

The units are priced at 480p 
apiece and are payable in two 
equal instalments. 

Subscribers have been pro- 
cured at a premium for the 


4.83m units for which valid 
acceptances were not received. 

The second instalment of 
240p per stock unit remains 
conditional on the offers for 
Westland becoming wholly 
unconditional and GKN achiev- 
ing 75 per cent ownership of 
Westland. 

SG Warburg is acting for 
GKN in connection with the 
offers and the rights 
issue. 




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FINANCIAL TIMES 

LOHtmt IUUWNW ** TOM 10**0 





24 


FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


COMPANY NEWS: UK 


Evans Halshaw beats 
forecast with £7.81m 


By Paid Cheeseright, 

Midlands Correspondent 

Evans Halshaw. the Birming- 
ham-based motor distribution 
and vehicle management 
group, yesterday delivered its 
promise of a fourfold increase 
in 1993 profits and prompted a 
17p rise in the share price to 
549p. 

It announced pre-tax profits 
of £7£lm for the 13 months to 
December, compared with 
E1.7lm for 1993. 

Last November, when the 
group bought TK Motor Group, 
it forecast 1993 profits of 
£7-5m. 

Earnings per share climbed 
from 5.4p to 24.3p. providing 
cover of 1.96 times for the 
increased dividend. 

The proposed final is 9.2p 
(7.65p\ making a total of 13p. 
against ll.25p for 1992 when 
payments to shareholders were 
partially financed from 
reserves. 

Turnover rose from £341.501 
to £4tM.7m as the new and used 
car market revived. New car 
sales were 28 per cent ahead 
and used car sales 16 per cent 
ahead of 1992. 

However, the staple source 
of Evans Halshaw's profits - 
the servicing, parts sales and 



Geoffrey Dale: car sales 
buoyant in 1994 so far 

accident repair market - was 
flat until towards the end of 
the year. 

This after-market provided 
62 per cent of group profits, 
compared with 70 per cent in 
1992. There was no absolute 
decline of earnings from the 
after-market, but its share of 
group profits fell because earn- 
ings from car sales rose. 

Capital investment, notably 
in n second motor village at 
Solihull. West Midlands, where 
five dealerships are grouped 
together, totalled £5.1m last 


year. Mr Geoffrey Dale, chair- 
man and chief executive, 
expects spending this year to 
be slightly less. 

"Across the group, car sales 
have been buoyant in the first 
two months of 1994 and our 
trading results are signifi- 
cantly ahead of the same 
period last year,” Mr Dale 
said. 

• COMMENT 

Evans Halshaw is riding up the 
economic cycle and its profits 
would no doubt increase even 
if it did nothing except avoid 
silliness. In fact, it is expand- 
ing into a fragmented market 
with costs already pared. It is 
now obtaining the benefits of 
its investment of the last two 
years. Solihull alone this year 
should sell 5,000 cars. It is 
developing other streams of 
revenue like the sale of fleet 
management software. It is 
unrealistic to expect another 
fourfold profits increase, but 
feasible to think of pre-tax 
profits this year pushing 
towards £L3m to give earnings 
per share of about 40p. On a 
prospective multiple of less 
than 14. it looks as if they have 
some way yet to motor, always 
providing that economic recov- 
ery is sustained. 


Hall Engineering leaps to 
£8.6m and lifts dividend 


By Andrew Baxter 

Hall Engineering (Moldings) 
yesterday announced a sharp 
rise In 1993 pre-tax profits from 
a restated £2.36m to £S.o6iu and 
is raising its dividend for the 
year by 10 per cent to 9.5p. 
with a final of 3.02p. 

The Shrewsbury-based metal 
stockholding, steel products 
and automotive engineering 
group benefited from higher 
margins in its steel reinforce- 
ment business, especially in 
the first half, the completion of 
its UK rationalisation and 
another rise in profits from 
associated companies in the 
Pacific Rim. 

Pre-tax profits for 1992 have 
been restated for FRS 3, and 


would have been £5.6m on a 
pre-FRS 3 and p re-exceptional 
cost basis. 

Sales last year rose 8 per 
cent from £i35.7m to £l46m, 
and also by S per cent, to 
£182m. if share of associates' 
sales is included. 

Earnings per share rose to 
19.lSp, against 3.05p in 1992 
when there was a loss per 
share of 1.67p under the basic 
calculation including excep- 
tional items. 

In metal stockholding, fosses 
were cut by £800,000 to 
£133,000. while the steel rein- 
forcement business turned a 
£1.5m loss into a £62.000 profit. 

Profits in the engineering 
division fell by Elm to £3.2m. 
due mainly to reduced profits 


^nH redundancy costs in Stad- 
co’s pressings division. Profits 
in the automation division 
were slightly ahead. 

Mr Richard Hall, chairman, 
said the takeover of Rover by 
BMW could help Stadco win 
business for the first time from 
the German car group, and 
Stadco's recently-announced 
joint venture with Honda Engi- 
neering would not be affected. 

On the outlook. Mr Hall said 
he would be very disappointed 
if the company could not fur- 
ther improve profits slightly 
this year. In some businesses, 
confidence is much higher 
than at the same time last 
year, although others are still 
indirectly affected by the reces- 
sion in continental Europe. 


Wainhomes 
share issue 
priced 
at 170p 

By Andrew Taylor, 

Construction Correspondent 

Wainhomes, the Chester-based 
housebuilder, yesterday 
announced details of its plans 
to raise £30. 5m from a flota- 
tion and offer for sale at 170p 
a share. 

The total am o ant to be 
raised is £41.9m including the 
sale of 5 -8m shares by existing 
institutional shareholders. 

The issue will give the com- 
pany a market value of about 
£106 m. It plans to pku» 16m 
shares mostly with Institu- 
tions while offering a further 
8.62m shares for sale to the 
public After the sale it will 
have 62.24m shares in Issue. 

Wainhomes is forecasting 
earnings of not less than 9 -3p 
per share for the year ending 
March 31, putting the group 
on a p/e of 18.3 times the issue 
price. 

It said that if it had been 
already quoted it would have 
recommended a total dividend 
of 4.2p net, representing a 
notional gross dividend yield 
of 3.1 per cent 

The company is the latest in 
a growing list of UK house- 
builders to issue shares to 
finance land purchases to take 
advantage of the hnmdng mar- 
ket recovery. It is forecasting 
pre-tax profits of £6.1m for the 
year to the end of March, a 15 
per cent gain on the previous 
year’s £5 .3m. 

It expects to have sold about 
950 homes by the end of 
March, which should rise to 
between 1,200 and 1,500 next 
year, before increasing to 
1,800. The company will use 
die proceeds to repay borrow- 
ings - currently £17m - and to 
buy land. 

• COMMENT 

On the basis of earnings and 
yield the offer price of 170p Is 
at a slight premium to Beazer, 
a large proven housebuilder, 
which announced its flotation 
terms last week. Wainhomes 
as a small provincial builder 
however, has more to gain 
from increased volumes - and 
its margins stand comparison 
with the better builders. Given 
market demand for the sector, 
both Beazer and Wainhomes 
issues should succeed. 


By Tim Burt 

Ransomes, the manufacturer of 
grass-cutting equipment, yes- 
terday reported sharply 
K increased losses as it struggled 
with the twin burdens of large- 
scale restructuring and heavy 
debt 

The two factors led to pre-tax 
losses of £8.9m in the 12 
months to December 31. com- 
pared with a restated 1992 defi- 
cit of £600,000. 

Mr John Clement, chairman, 
blamed the decline on a 
restructuring programme 
involving a 12 per cent cut in 
the workforce, the removal of a 
tier Of senior mnnagoment and 
the contraction of its operating 
divisions. 

The programme led to a 
threefold increase in excep- 


Restructuring costs and heavy interest charges behind deficit 

Ransomes £8.9m into the red 


tional charges to £5 An- 
Operating profits, mean- 
while, Cell by 35 per cent to 
£5 An amid intense competi- 
tion In the US and flat sales In 
Europe. 

The figmes were dented fur- 
ther by interest charges of 
£8.4m (£8.7m) on net borrow- 
ings of £75 .3m (£76 Jm). repre- 
senting gearing of 450 per cent 
Despite the problems, Mr 
Clement, who took over as 
chairman last October, said its 
principal bankers had agreed 

tO maintain ex jff Hn g borrowing 

facilities of £120 ul 
T hey have also backed 
moves to reshape the group by 
Mr Peter Wilson, appointed 
chief executive last autumn. 

Mr Wilson initiated the 
redundancy programme, closed 
some overseas facilities and 


reorganised group operations 
in two new divisions - com- 
mercial and consumer. 

Profits in the commercial 
operation fell sharply to £1.76m 
(£7.1lm) following the group's 
failure to exploit market oppor- 
tunities - particularly among 
golf course operators. Its poor 
performance was offset by 
increased demand in the con- 
sumer division, which saw 
operating profits increase 25 
per . cent to £3-52m. 

Group turnover rose slightly 
to £165 An (£156 An). 

Losses per share worked 
through at 26.lp against a 
restated ILSp. 

The company, which omitted 
its interim dividend, is also 
passing the final on both Its 
ordinary and c umula tive pref- 
erence shares. 


• COMMENT 

Ransomes is payin g th e pre- 
fer its dash for growth in 1989 
when it acquired Cushman, the 
US grass machinery group, for 
$150m (£l03m). Although, the 
new management has begun to 
tackle the debt burden left by 
that purchase, it faces an 
uphill struggle. The pressure 
has been increased by its deci- 
sion to change the year end to 
September, leaving only 10 
months to produce some posi- 
tive results. Nevertheless, it 
Haims to have already stripped 
out JlOm of costs in the US and 
vi s m at home. Analysts, who 
were unwilling to make profit 
forecasts, warned the group 
would have to make operating 
gains of more than £5.7m just 
to pay its dividend liability and 
generate earnings per share. 





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Poland’s biscuit market 
crumbles to McVitie’s 


By Christopher Bobinski 
in Warsaw 

A large share of Poland’s 
biscuit market yesterday fell to 
McVitie's. a United Biscuits 
subsidiary, when the biscuit 
and snacks producer agreed to 
pay £19.lm for 80 per cent of 
the San factory in Jaroslaw. 
the country's last large 
biscuit plant still in state 
hands. 

Last year Jacobs Suchard 
bought the Olza plant in 
Cieszyn. while Bahlsen, a Ger- 
man snack producer, took con- 
trol of Skawina, another bis- 
cuit producer in southern 
Poland. 

These purchases came as 
PepsiCo Foods International 
was developing its bourse- 
listed Wedel chocolate factory, 


bought in 1991, into a salty 
snacks producer which looks 
set to double its 19S3 net profit 
of 330hn zlotys (£9.7m) this 
year. 

Both RJR Nabisco and 
PepsiCo bid for San, which 
reported a £1 An net profit last 
year, as did the French BSN 
food group which has yet to 
purchase a snacks plant in 
Poland. 

Mr Hartwig Conzelmann, of 
McVitie's said yesterday that 
his company was planning to 
build on San’s 20 per 
cent market share and “domi- 
nate the country through a 
new nationwide marketing net- 
work". 

Yesterday’s agreement also 
spake of plans for expansion 
from San's base in south east 
Polandinto Belarus and the 


Ukraine and the company is 
considering building a salty 

Rnartre p lan) 

McVitie's intends raising 
San’s capital by £6.7m this year 
and investing a farther £8.4m 
over the next two years. It will 
he preparing a prospectus for a 
Warsaw stock market listing 
within nine months and the 
£6.7m capital Increase could 
well come from the local 
capital market McVitie’s has 
promised to retain a 51 per 
cent in San for three 
years. 

The Central European Trust 
advised the Polish government 
on the transaction while 
McVitie's was advised by 
Schraders. 

McVitie’s bought Gyori 
Reksz, Hungary’s largest bis- 
cuit company in 1991. 


Lionheart back 
in black 
with £1.77m 

Lionheart, the Cheshire-based 
paint brushes and housewares 
group, returned to profit in 
1993 with El. 77m pre-tax, a 
£2 -64m turnround on 1992’s def- 
icit of £870,000. Mr Raul Lever, 
chairman, said an acquisition 
was now likely within months,' 
writes Ian Hamilton Fazey. 

Turnover rose by 7 per cent 
to £46.7m (£43.6m), giving a 
proflt-to-sales ratio of 3.8 per 
cent With earnings per share 
of 0.49p (losses 0.59p) a final 
dividend of 0.2p is proposed 
making 0.3p (0J2p) for the year. 

The group returned to the 
dividend list only two years 
ago after reconstruction under 
Mr Lever, the chairman and 
former chief executive of 
Crown Paints. 

Talks are understood to have 
begun about an acquisition 
with an announcement in the 
first half of the current year. 


A £50m magic wand from Ford 

Kevin Done on plans to revive the ailing Aston Martin Lagonda 


F ord, the US motor man- 
ufacturer, is planning to 
transform the fortunes 
of Aston Martin Lagonda. the 
UK luxury sports car maker in 
\ which it acquired a 75 per cent 
stake in 1987. 

Accounts filed at Companies 
House disclose for the first 
time the financial scope of the 
project to develop a new range 
of Aston Martin sports cars, 
the DB7, which are due to 
enter production next month. 

Ford has injected £50m in 
new equity to fond the peak 
financing requirements of the 
DB7 programme, in the process 
lifting its shareholding to 99.5 
per cent 

The DB7 programme has 
imposed a heavy burden on 
Aston Martin Lagonda’s 
finances. 

The group's losses in the last 
two years - £l8Sm in 1993 and 
£16m in 1992 - were incurred 
after charges to the profit and 


loss account for the develop- 
ment of the DB7 totalling 
£13. 7m in 1993 and £6.6m in 
1992, including £2. lm for the 
original feasibility study. 

The DB7 programme has led 
to a Car-reaching reorganisa- 
tion of the group. 

The board now includes Mr 
Jackie Stewart, the former For- 
mula 1 world champion, Mr 
Nick Scheele, chairman and 
chief executive of Jaguar, and 
Mr Tom Walkinshaw, whose 
TWR motor sports engineering 
group has played a significant 
role in the DB7 project. 

The Aston Martin L agonda 
group accounts disclose that 
JagnarSport, a 50/50 Jag- 
uar/TWR joint venture of 
which Mr Walkinshaw is a 
director, was paid £10.im in 
1993 and £5 .3m in 1992 for pro- 
viding engineering services for 
the development of the DB7. 

Jaguar is 100 per cent owned 
by Ford. 


The new Aston Martin sports 
car, expected to sell for below 
£80.000. is heavily dependent 
on outside suppliers. 

Body panels and welded bod- 
ies are to be supplied by Motor 
Panels, a subsidiary of the 
Mayflower specialist automo- 
tive engineering and design 
group. 

T he bodies will be 
painted by Rolls-Royce 
Motor Cars’ plant at 
Crewe. Cheshire, and the cars 
will be assembled at the plant 
in BLoxbam, Oxfordshire, 
which has previously built the 
Jaguar XJ220 super car. 

The plant will be taken over 
this year by Aston Martin 
Lagonda. The DB7 an gfaps will 
be assembled by TWR. 

Last year Aston Martin pro- 
duced only 144 cars at its New- 
port Pagnell plant in its tradi- 
tional Virage /Vantage range, 
which sell from £134.000 to 


£178,000. but the groin's out- 
put is now forecast to increase 
fivefold with DB7 production 
set to total 600-700 a year. 

Output of the DB7 starts 
next month with deliveries 
beginning in the UK in the 
summer and in the US and 
Canada in the autumn of 1995. 
Output next year is expected to 
total 625. 

While the DB7 has been 
under development the exist- 
ing Aston Martin business 
based on the Virage/Vantage 
range has been under heavy 
pressure as a result of reces- 
sion in the US and UK. 

Turnover fell from £27 .3m in 
1990 to £20.8m in 1991 and 
£12.4m in 1992, although sales 
began to recover to £ 15.9m last 
year with a pick-up in both the 
UK and the US. The workforce 
has been drastically reduced to 
an average 285 last year from 
359 in 1992, 448 in 1991 and 522 
in 1990. 


Invitation to the 
Annual General Meeting 


Notice is hereby given that 
the Annual General Meeting 
will be held at 10a.m., on 
Tuesday , 26 April 1994, at 
the Jahrhnnderthalle Hoechst, 
Frankfurt am Main 

Agenda 

1. Presentation of the Approved 
annual financial statements, 
rhe Group financial statements 
as well .is the summarized 
management reports of 
Hoechst Akriengcsdlsehafr 
and the Fluuehst Group for 
the financial year 1993, 
together with the report of 
the Supervisory Board 

2. Resolution on the appro- 
priation of retained earnings 

It is proposed to pay a divi- 
dend of DM 7.~ per share of 
DM 50.- nominal value. 

3. Ratification of the acts of 
the Board of Management 

4. Ratification of the acts of 
the Supervisory Board 

5. Election to the Supervisory 
Board 

6. Election of the auditors for 
the financial year 1994 


The full agenda, including the 
proposed resolutions, is con- 
tained in the Bundcsanzciger 
no. 52 of 16 March 1994. 

Shareholders wishing to be 
present and to vote at the 
Meeting must comply with 
Article 1 4 of the Articles of 
Association and deposit their 
share certificates during usual 
business hours by Tuesday, 

19 April 1994, at the latest 
until after the Meeting, at one 
of the depositories listed in 
the Bundesanxeigcr no. 52 of 
16 March 1994, or, in the 
United Kingdom, at the 
offices of 

S. C. Warburg & Co. Ltd. 

I Finsbury Avenue 

London HC2M 2PA 

I iocchst Akticngcscllsehalt 
Frankfurt am Main, 

March 1994 


Hoechst 


FirfureSource 

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Dividend increase reflects company’s optimism on prospects 

Delta falls slightly to £53.4m 


By Andrew Bdger 

Delta, the cables and 
engineering group, reported 
□at annual results yesterday, 
but signalled guarded opti- 
mism about the economic out- 
look by increasing its dividend 
for the first tune since 199a 

Pre-tax profits dipped from 
£55 Am to £53.4m in the year to 
January l, mainly because of 
higher interest charges follow- 
ing its £37m purchase of the 
outstanding 38 per cent stake 
in Delta Crompton Cable Hold- 
ings from BTR, the industrial 
conglomerate. Sales rose from 
£786m to £833zdl 

Warnings per share increased 
marginally to 23. lp (23p). A 
fi n al dividend of I03p lifts toe 
total to 14 < Mp). 

Mr Robert Easton, chief exec- 
utive. said Delta was one of the 
first US companies to freeze 
dividends as the downturn 
took hold, but now hoped it 
had seen the bottom of toe 
recession in continental 
Europe. 

The upbeat tone was care- 
fully qualified by Delta, which 
in September saw its shares 
marked down sharply after it 
warned that the UK recovery 
in manufacturing was more 
anaemic than many observers 
were suggesting. 

Mr Geoffrey Wilson, chair- 
man, said yesterday: “Whilst 
current patterns of demand 


remain patchy, early indica- 
tions suggest a Stren gthening 
in some sectors. Whilst we 
have seen transient effects 
before, there Is now greater 
evidence to suggest that the 
economic tide may be finall y 
on toe turn." 

Delta said it was another 
tough year, with co ntinuing 
depressed and fiercely competi- 
tive trading. European con- 
struction markets showed little 
recovery. 

Mr Wilson said: “Early signs 
of more encouraging activity 
In the UK soon relapsed and 
demand then persisted at 
depressed levels. Prices 
remained under pressure, par- 
ticularly in cables." 

Delta shed 800 jobs last year, 
bringing the total employed 
down to 13^00. The group has 
cut its workforce by a third 
since 1989. Mr Easton said he 
would “go on trimming - but 
the battle will moderate”. 

The cables division suffered 
particularly from UK price 
wars, with operating profits 
lower at £5J39m (£8. 68m). Cir- 
cuit protection dipped to 
£15. 8m (£17.1m) and engineer- 
ing to £19.9 (£2&2m). Industrial 
services however, rose to 
£18£m (£EL8m). 

• COMMENT 

Actions speak louder than 
words, and Delta’s willingness 
to let dividend cover fell to 1.6 


nrrSfeii 



tavHnpIMM 

Robert Eastern: hoping he had seen the bottom of the recession 


strikes a more positive note 
than the chairman's heavily 
hedged statement on prospects. 
Analysts were struck by bow 
tough thing s were in toe cable 
market, but still believe Delta’s 
willingness to reduce its cost 
base makes H heavily geared to 
any upturn. Action, rather 


than further talk, on a possible 
US acquisition would «isn be 
appreciated. The shares, down 
7p to 522p, are on a prospective 
multiple of abont 19. The 20 per 
cent premium to the market 
reflects Delta’s recovery stock 
status, but does not look unjus- 
tified. 


Cost cutting 
helps lift 
Scholes 84% 

By Simon Davies 

Scholes Group, the electrical 
Installation equipment group, 
yesterday announced an 84 per 
cent increase in pre-tax profits 
from £1.3m to £2.4m for the 
six months to December, 
despite a marginal increase in 
UK sales. 

Turnover rose 5 per cent to 
£31-lm. but this was boosted 
by exports, which increased by 
21 per cent to £3 Km and now 
account for 12 per cent of 
group sales. 

Scholes’ earnings growth 
was achieved primarily 
through farther lowering of 
toe company’s cost base, but 
also through some price 
increases in its major busi- 
ness. manufacturing switch- 
gear for the domestic housing 
market 

Operating profit margins 
increased from 5.5 per cent to 
8.3 per cent at toe interim 
stage, and Mr Bill Riches, 
chairman, said he was confi- 
dent further operational 
streamlining could be 
achieved. 

Mr Riches said: “Manage- 
ment continues to focus on 
lowering the group’s cost 
structure and pursuing ways 
of enhancing manufacturing 
productivity.'' 

Be said it would be tough 
for the company to achieve 
further price increases, how- 
ever, due to increasing compe- 
tition from European manufac- 
turers prepared to boy market 
share at the expense of profit 
margins. 

The company remains cash 
positive, and its net cash posi- 
tion increased by 37 per cent 
to £2JJra in December. 

Scholes also announced that 
it had agreed to sell its 17 per 
cent stake in Malaysian-listed 
PWE Industries. 

The company will pay an 
interim dividend of l-7p (L6p). 
Earnings per share increased 
from 2.4p to 4Kp. 


Improved production helps 
Aviva cut losses to $2.63m 


By Peggy HoHfnger 

Aviva Petroleum, toe small 
US-based oil and gas explorer, 
quoted in the UK, yesterday 
announced sharply lower net 
losses of $2.63m (£1.8m), 
against 210.23m last year, 
because of improved produc- 
tion from the group’s Colom- 
bian project. 

The better result was 
achieved on virtually static oil 
and gas sales of $10.68m, 
against $3 0.42m last thnp 

The loss per share was 
reduced from 124 cents to U 


cents. As in toe past there is 
no dividend. 

Mr Ran Suttill. chief execu- 
tive, said he was confident the 
group would be able to achieve 
profits in spite of a depressed 
oil price. 

Aviva was aiming to break 
even by the end of the current 
year, he said. 

He stressed toe potential of 
further development of the Col- 
ombian project, jointly owned 
with Ecopetrol, the state 
energy company. 

By 1995 Aviva hoped to earn 
some 24,000 barrels a day from 


its share of the Colombian 
fields, which would result in a 
net cash flow contribution of 
about 212m a year, Mr Suttill 
said. 

Net production from Colom- 
bia increased by 54 per cent to 
279,000 barrels during the year. 
Mr Suttill said the increase, 
combined with a 10 per cent 
rise in US gas prices, more 
than offset a decline in oil and 
gas volumes in the US and 
reductions in the US and Col- 
ombian oil price. Currently all 
of Aviva's Colombian produc- 
tion is sold to Ecopetrol 


Seafield ahead to £1.62m 


Pre-tax profits of Seafield Resources, the 
USM-quoted oil and gas exploration company, 
rose from £lfi6m to £lK2m in toe year to end- 
December. 

At the operating level profits were up from 
£632,000 to £l-5m. Turnover grew by 39 per cent 
from £5K5m to 27.74m, the bulk of which - 
£6Km - was generated in the UK from the 
group’s 5 per cent interest in the Victor gas 
field. 

As part of last year’s overhaul of North. Sea 
taxation rules, companies were prevented from 
offsetting exploration and appraisal spending 
against income from fields which incur Petro- 
leum Revenue Tax. 

Although the terms were ultimately modified 
to include a limited form of transitional relief 
the outcome this time suffered from a surge in 


the tax charge from £200.000 to £967,000. This 
impacted on earnings, which fell from 1.7p to 
lKp. 

Operating cash How was up 82 per cent at 
£4K4m (£2_66m). 

Mr John Raitt, chairman, said that hydrocar- 
bons had been encountered in all five UK wells 
in which the company participated. 

Two of these wells were significant discov- 
eries, and one successfully appraised an exten- 
sion to the Victor field, confirming additional 
reserves. 

The balance sheet remained strong with no 
debt, he added. 

The company said it intended to apply for 
a full listing when the simplified, low cost, 
procedure for USM companies had been 

finalis ed. 


Everest shares fall 9p on warning 
about static second half results 


Shares in Everest Foods 
tumbled 9p to 68p yesterday 
after the West Midlands-based 
egg and chip producer said it 
was unlikely to achieve frill 
year profits in accordance with 
market expectations. 

Mr Bob Gilbert, chairman, 
said the trend towards econ- 
omy products had resulted in 


severe pressure on margins. 

This meant that pre-tax prof- 
its fell from £118m to £1.08m 
in the six months to November 
30. although turnover grew by 
nearly £3m to £19m. 

The company had taken 
steps to make manufacturing 
processes as cost effective as 
possible. However, Mr Gilbert 


warned that if current trading 
conditions persisted, full year 
profits were unlikely to 
improve substantially on the 
interim figure. 

Although earnings per share 
slipped from 3.l5p to 2£p, the 
interim dividend has been held 
at 1.2p and a scrip dividend 
alternative proposed. 


Crockfords 
gambling 
profits 
rise 16 % 

By David Blackwell 


Crockfords, the casino 
company that was reversed 
into TY-am last summer, lifted 
profits from its gambling 
business by 16 per cent in 
1993. Operating profits from 
the continuing gambling side 
rose from £19 Km to £23m on 
gaming turnover up from 
£44.4m to £51.3 &l 

At the pre-tax level profits 
for the year to end-December 
were £23-2m against £38m in 
1992, with the 1992 figure 
including £15.7m of operating 
profits from TV-am, which 
stopped broadcasting on 
December 31 1992. 

Crockfords opened London’s 
first legal casino in Curzon 
Street in 1961. Last August 
the company reversed into 
TV-am. which had lost its 
licence and was p lanning a 
voluntary liquidation. 

Mr Garry Nesbitt, chair man, 
said the group was firmly 
established at the upper end 
of the London gaming market. 

While the number of casinos 
in London was unchanged at 
21, the total gaming income 
was 34 per cent ahead at 
£304m. “I believe that a 
significant proportion of this 
Increase may have been from 
the higher value players for 
whom we cater.” Mr Nesbitt 
said. 

Basic earnings per share 
were 16L18p (24.05p). 

A final dividend or 2Kp is 
proposed for the first four 
months of the year, equivalent 
to 7J>p for the full year. 

Mr Nesbitt said toe strategy 
was to develop the existing 
dub, on which £700,000 was 
spent last year, and to look 
out for other London casinos. 

It would also be seeking 
acquisitions or start-up 
opportunities “in Europe and 
other overseas areas where 
gaining is well regulated”. 

• COMMENT 

Profits at Crockfords depend 
on a small number of big 
hitters - the prospectus said 
that over three years ten 
exceptional players had 
accounted for 50 per cent. 
Clearly the company needs 
at least one more casino to 
diversify its risks. Bot it is 
highly cash generative and 
ungeared, so should be able 
to move quickly once an 
opportunity arises. Given the 
same level of business this 
year earnings could reach 
more than 16.5p. A dividend 
of 8p would represent a yield 
of more than 6-5 per cent - 
worth the gamble. 


Heywood Williams in 
sixfold rise to £35.2m 


Andrew Taylor, 

Construction Correspondent 

Pre-tax profits of Heywood 
Williams Group, the building 

and automotive components 

group, rose more than six 
times in 1993 from £5.5m to 
gflS-gm 

The company was assisted 
by significant gains following a 
series of disposals and acquisi- 
tions. Operating profits, even 
after stripping out these bene- 
fits, still rose by 86 per cent 
from £8. 02m to £14.99m. 

The £95m sale of the group's 
UK glass division to Pilkington 
added a further £15m to these 
profits. Another £2.99m came 
from the first six months earn- 
ings of LaSaiie-Deitch, which 
supplies components and fur- 
nishings for manufactured 
homes in the US. 

Interest on Heywood's cash 
balances, currently about 
£10m, increased pre-tax profits 
by another £500,000, compared 
with a debit of £3.02m. 

Bridgewater, the UK automo- 
tive glass replacement busi- 


ness acquired last autumn, and 
which is in the process of 
being re-organised, also con- 
tributed a small profit. 

Since the year end Heywood 
has completed the acquisition 
of Bristol Products, toe US 
plumbing components sup- 
plier. for $8L2m t£53.4m). The 

purchase was funded by a 
rights issue which raised 
£52. 4m at toe end of last year. 

The company, as forecast, is 
paying a final dividend of 8.5p 
(8pj making a total for the year 
of I3p (12.5). the first dividend 
increase for two years. 

Earnings per share were 
36.2p (1.7p) or 32.9p U-7p> 
diluted or 15.5p <l.7p) before 
exceptional profit on the dis- 
posal to Pilkington. Turnover 
fell from £389 .5m to £365.6m. 

The shares following the 
announcement rose 7p to 437p 
compared with a rights issue 
price in December of 280p. 

Mr Ralph Hinchliffe, chair- 
man. said: “The sale of the 
under- performing UK glass 
businesses, and the acquisi- 
tions we have made to secure 


and strengthen key market 
positions in the more buoyant 
US manufactured housing and 
recreational vehicles markets, 
has transformed our pros- 
pects." 

• COMMENT 

The tide is starting to turn in 
favour of Heywood Williams' 
main markets. US housing and 
automotive businesses, 
accounting for almost half of 
group turnover, are growing 
stronger as the economy recov- 
ers. Bod winter weather, also, 
will have had less of an impact 
on manufactured homes than 
on general housebuilding. In 
the UK. the homes market 
should continue to improve, 
while increased investment in 
depots should offset any tem- 
porary softening of toe market 
following last year's introduc- 
tion of windscreen checking in 
MoT tests. Pre-tax profits could 
approach £40m this year. A 
quality management and 
strong balance sheet mokes the 
company worth an investment 
at this level. 


Rugby Estates net 
worth will triple 
after flotation 


By Simon Davies 

Rugby Estates, toe property 
investment company run by 
the former property team at 
Hillsdown, the food group, is 
planning to raise £2Qm from a 
flotation which will triple its 
net worth. 

Rugby Estates was set up in 
1990. 51 per cent owned by the 
management, led by Mr David 
Tweeddale-Tye, chairman, and 
Mr Andrew Wilson, managing 
director, and 49 per cent by 
Hlllsdown. It started from 
scratch and had net assets of 
£6£m at the end of 1993, and a 
property portfolio now valued 
at rafl-Zm. 

The management is offering 
three-year-old company 
which made pretax profits of 
only £2m in 1993. But they 
boast a long and profitable his- 
tory with Hillsdown. which 
almost floated its property arm 
in 1987. 

Mr Tye ran Hfllsdown’s prop- 
erty arm throughout the 1980s. 
He built up gross assets of 
£100m and pre-tax profits of 
£l8m at the market peak of 
1989, and succeeded in selling 
around two thirds of its portfo- 


lio before the slump. 

Rugby will raise £l9.7tn net 
of expenses from the share 
placement, of which £4. 7m will 
be used to repay a loan to 
Hillsdown and £2 6m to buy a 
portfolio of properties from the 
food group. Gearing will foil to 
5 per cent, providing scope fin- 
new investment 

Hillsdown is selling its entire 
shareholding, valued at about 
£4m. through the placement. 
The management will own 
about 13 per cent of the 
enlarged company. 

Mr Tye said Rugby would 
continue to focus on retail 
properties, which represent 80 
per cent of the current portfo- 
lio. It is also likely to remain 
an active property trader. 

Rugby's speciality is buying 
secondary market properties 
where it can add value through 
intensive management. The 
company’s first investment, 
the Brunswick Centre, has 
appreciated by 93 per cent 
since its purchase for £2.85m in 
January 1991. 

The full prospectus will be 
issued on March 30, and deal- 
ings are expected to commence 
cm April 8. 


Likely 
£60m tag 
on Robert 
Wiseman 

By James Buxton 

Robert Wiseman Dairies, the 
Scottish liquid milk processor 
and distributor, yesterday 
issued the pathfinder prospec- 
tus for the institutional plac- 
ing which should lead to it 
obtaining a stock market list- 
ing by the end of the month. 

The placing, by Panmure 
Gordon, should raise between 
£15m and £16xn, leaving 75 per 
cent of the company in family 
hands. It is likely to value the 
company at abont £80m. 

The terms of the placing 
will be announced on March 
22 . 

Robert Wiseman concen- 
trates on supplying branded 
nrilk in cartons to stores in 
Scotland and is expanding in 
the north of England from a 
base in Manchester. 

In the 39 weeks to Jan nary 1 
1994 turnover was £ 44.26m 
and pre-tax profit was £4. 25m. 

About half the placing will 
finance a milk processing 
plant in Manchester while the 
rest wifi be to complete the 
recent purchase of Ma ride's 
dairy near Aberdeen and 
future acquisitions. 


Graseby surges ahead to £9.57m 


By Paul Taylor 

Graseby, the medical elect- 
ronics, product monitoring, 
environmental and defence 
technology group, yesterday 
reported sharply higher 1993 
profits reflecting growing inter- 
national sales, lower interest 
casts and the absence of excep- 
tional charges. 

Pretax profits for the year to 
end-December jumped to 
£9. 57m from the depressed 
£1.02m recorded in 1992. when 
they were reduced by £A3m of 
net exceptional costs. 

Earnings per share jumped 
to LL4p (L3p) and, in line with 
the board's previously 
announced decision, toe final 
dividend is being reduced to 
3Jlp (7.6p) making a total for 


the year of 6.6p (10.9p>. The 
shares closed down 5p at 181p. 

Turnover increased by 10.8 
per cent to £113.7m <£102.6m) 
including £15.4m (122.4m) from 
discontinued operations. Sales 
from continuing operations 
grew by 22 per cent to £98.7m 
with exchange rate movements 
accounting for just over a third 
of the increase. 

International sales grew by 
21 per cent, excluding 
exchange rate movements, 
reflecting the group’s reduced 
dependence on the domestic 
market. 

Operating profits increased 
to £llm (£7.85m) including a 
£501,000 contribution from dis- 
continued operations. In 1992 
discontinued operations 
reduced profits by £L32m. 


The advance was led by an 
exceptionally strong perfor- 
mance by the defence business, 
where a number of large orders 
were completed resulting in 
the technology division report- 
ing profits of £4.2m (£571.000) 
on sales up 24 per cent to 
£34 .3m. 

In contrast, operating profits 
and trading margins slipped in 
the three other divisions 
despite increased sales. 

Net interest costs fell to 
£L4m (£2Jj2m) partly reflecting 
a decline in year-end borrow- 
ings from £20.7m to £15.9m, 
representing gearing of 66 per 
cent - down from 99 per cent 

• COMMENT 

Graseby has completed its 
transformation from a group 


dependent on the volatile 
defence and component sectors 
to an international instrument 
supplier focused on four dis- 
tinct value-added markets. The 
balance sheet is now in much 
better shape and borrowings 
should foil further - even with- 
out toe deferred flotation of 
Graseby Anderson in the US. 
Although several of its mar- 
kets - including the UK medi- 
cal market - face pricing pres- 
sures. the overall trading 
margin should edge higher 
again this year towards the 
group’s 15 per cent target. Pre- 
tax profits of about £10m this 
year should provide earnings 
of about lL7p. The shares are 
trading on a prospective p/e of 
15.5 and look slightly underval- 
ued. 


This null.-.- LS Lssiirtl m ompGaiK * with Ux- n.-quli^rK-nb of Ok- fmenulkiul Exchange .4 ihe Unied 

KuwUoni onJ tin- R^Wk of irrfjnJ Limited Ulie 'LonJiin Mock Exdonp.-'J. U Joes nut wa-uiiu- an InvttJUuO iu 
any nrrw-fi lo wteffe fur or purchase any «OMln m MAJ.D p)c (HALIT}. Apptaifon has teen nude lo Ihe 
IawIw puxk VkJunff: tor all ciT tin; .-nJnuirv dunr- uf Ip v-rdi m M -A 1.0 W tv adirtned U. the Official Lba It Is 
eVK-C.-J ilur such .ulmivwm »ill hewrmr rifcclbr and that Jv-alin*. wdl com mens* on Friday March I <m 


pic 

f ANMpimiMf in FnsUnutjnd Wales under the Companies Ad 198V uiib n-giBeml number t&X/Wi 

Placing by Hill Samuel Bank Limited 
of i 1 ,500,000 ordinary shares of 1 p each at 1 1 0p per share 


payable in full on acceptance 


Share capital following the placing 

Issued and fully paid 

Amount * Number Amount 

U0 000.000 ‘>1,100.000 Ordinary shares of lp each 81,036,810 X810.368.10 


Authorised 
Number 


7“ <*■ I h.Jubv. ouvrenfr up lo and rndutfing lSih M-irdi I994 from ihe Company 

7 S MW swrt W.H, TOW. C.pd I*™™. JT 

funlTLivu Lini . London EC2N HIP (for iottcct.cn only) -and up to and including JW. March front- 


M.A I D pk 
M 4 I D House 
IN DutTerin Suw* 
Lcindi-n FCtY Nl'D 


Hill Samuel Bank Limited 
100 Wood Street 
London EC2P 2AJ 


1 loan; Gov'elt Corporate 
Finance Limited 
■1 Urazdgyie 
London EC2M 7LF. 


Bank Limited ls a member of The Securities and Futures Authority 

15th March IW 


ECU 15,000,000 
SOFINLUX SA. Luxembourg 
Floating Rate Notes doe 1999 

Notice is hereby given that for tbe 
period 28 th February, 1994 to 28th 
February, 1995 tbe notes win carry an 
Interesl Rare of 6 11/16 % per annum. 
The inieresi payable on tbe relevant 
interest payment date 28ih February. 
1995 will amount to ECU 6.78038 per 
ECU 100.000 nominal. 

Paying Ag«U 
Sodrtic Finance Limited 


LEGAL 

NOTICES 


No oa 10850 of 1993 

IN THE HXJH CCH-Orr OP JUSTICE 

CHANCERY DIVISION 

THE MATO® OF WMWUT LOOTED 
(bnocifr N»-Swttt pic) 

AND IN THE MATTES OP 
THE COMPANIES ACT 1985 
NOTICE IS UE8EHY OTVEN Dm die (Mb oi 
tbe High Coen of Jnflice (Qmerry Drvmoaj 
dared Ihe 2md Mirth 1994 eoafiraiDE the 
redaction of 0 k capital of the aboYC-aancd 
Caapaov fern S&S.OOOOO lo £1,076.148.70 
tod Ihe HwbSb ap^wmti by (he Court showieg 
with raped Lo Lbc capital of the Company as 
abend the ictenl puiiodan required by (he 
ahove-mcotioaed Aci were registered by Ihe 
Ecgarar Cl Compjni i i pa 4 Man* 1994. 

Dared (Ua llihdiy of Mate* 1991 

Benra letghma 

Adelaide Houe 

London Bridge 

LmJouEC4R9HA 

Ret IL-NXC/Z? 

Sniin^s Us ihe rboLtornd Gspuy 


PERSONAL 

PUBLIC SPEAKING Training and speech- 
•ridng by swart wtnrung sneoKer. Firs 
Mason tree-Tot (01271 051133 


CROSBY SECURITIES 

Mr J. Mark Martyrossian has been appointed 
Managing Director of Crosby Securities (H.K.) 
Limited. Mr Martyrossian. a qualified solicitor, 
practised in the corporate finance department of a 
leading City firm before completing an MBA at 
INSEAD. He has over seven years experience in 
Asian equity markets. He joined the main board 
of Crosby Securities two years ago and is also a 
director of two London listed investment trusts. 


■mmm 

0" - ,, "v n v 



fiducory Issue by KrecieibsnV SA luxetnbourgecise 
to fund a loan lo be made by it to 

ISVEKMER 

Istituto per lo Sviluppo Economico 
defHtaJia Meridionals 

Italian Lire 150.000,000.000 
Floating Rate Notes due 1997 

In accordant with the^ Terns and Cbndtons of the Noies. notice is here- 
by given that for the Interest Period from March 1 6. 1994 to Jure 1 6. 
1 994 the Notes will carry an Interest Rate of 8 9375 % per annum 

The Interest Amount payable on the relevant interest Payment Data 
June 16. 1994 wdl oe ITL 1 14,201 per m_ 5.000.000 pnnepai amount 
Of Note and fTL 2.284.028 per ffl 100.000.000 principal amount el Note 

The Agem Bank 

Krecbetbank SA Luxombourgeoise 


Alliance International Health Care Fund 

SocUte (TlnvanixsemerU & Capital Variable 
47, Boulevard Royal 
L-2449 Luxembourg 
R.C. Luxembourg B25 105 

NOTICE OF MEETING 

Deal Shareholder, 

We have pleasure in inviting yon to attend tbe Annual General Meeting of 
shareholders, which will be held on W e dn e sday. March 30, 1994 31 230 pm al [be 
offices of Suie Street Bank, Luxembourg S.A. 47 Boulevard Royal. L-2449 
Luxembourg with the following agenda: 

AGENDA 

1. To approve ihr annul report incorporating the auditors’ report and audited 
Kmimral statements of tbe Fund for the fiscal year ended November 30. 1993. 

2. To dtschai^ lbc Direaon and tbe Auditors wilfa respect lo the performance of 
iheir duties during the fiscal year ending November 30, 1993. 

3. To cEca the following seven persons as Directors, each 10 hold office omil me 
next Annual General Meeting of Shareholders and until his or ip recoeear is 
duly elected nnd qualified: 

R D Smart. CBE 
J Kent Blair, Jr 
SM Davies 
David H Dirvter 
WH Henderson 
Jun-Claude Kocb 

Edward J IjgMk 

4. To appoint Ernst A Young, Luxembourg ts independent auditors of Use Fund for 
lbc fiscal year ending November 30, 1994. 

5. To mnsaet such other busmesj as may property come before che meeting. 

Only .shareholders of record on February 28. 1994 me cmiilcd to unkc of. and to vote 
□I. tbe Annual General Meeting of Shareholders and « any adjournment* thereof. 
Should you not be able to attend the meeting in person, please dale and sign the 
enclosed proxy and return ii before March 15. 1994 by fox and by airmail in Ihe 
envelope provided 10 State Sired Bank. Luxembourg SA., 47 Boulevard Royal. 
L-2449 Luxembourg, fax number +352 470204, tel +352 464010/255. 10 the 
attention of Petra Kies, to mm that a quorum will be present at the meeting. 

By order of tbe Board of Diredore 
Jran-Cbnde Koch 
General Manager 




FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


-r 26 

COMMODITIES AND AGRICULTURE 


Fundamental 


‘Green’ paper makers find themselves out of pocket 


policy choice seen 


Buyers are reluctant to pay adequate premiums for the chlorine-free product, writes Bernard Simon 


for EU farmers 


By AHson Maitland 

European formers face a stark 
choice before the end of the 
decade between tighter 
restraints on the use of land 
and chemicals or the complete 
abolition of price support. 

This is believed to be the 
central message of a detailed 
strategy document to be con- 
sidered today by the council of 
the National Farmers' Union of 
England and Wales. 

The NFU’s long-term strat- 
egy group, which produced the 
report, believes the recent Gatt 
deal will lead to another major 
shake-up of the Common Agri- 
cultural Policy before 2000. 

“Current CAP policies are 
not going to increase consump- 
tion or bring down the produc- 
tion of cereals and beef suffi- 
ciently to allow the EU to meet 
its obligations under the Gatt 
settlement,” it says. “E 17 farm- 
ers are approaching a funda- 
mental policy choice." 

This runs counter to assur- 
ances from the European Com- 
mission and the UK govern- 
ment that no further 
fundamental change will be 
needed in sectors subject to 
current CAP reforms to comply 
with EU commitments under 
the Gatt deaf 

The report is understood to 
rule out the option of exit 
bonds, under which current 
agricultural support systems 
would end overnight and farm- 
ers would be compensated with 
a fixed, finite payment, which 
would be tradeable. 

The strategy group says this 
could push up the EU*S annual 
spending on agriculture - cur- 
rently Ecu29bn - by 60-70 per 


cent in the short term and 
would be politically unaccept- 
able because it would lead to 
high rural unemployment 

ft also dismisses the exten- 
sion of output quotas - such as 
those on milk - to new sectors, 
saying this would be compli- 
cated to administer and would 
conflict with the general reduc- 
tion in government Interven- 
tion In industry. 

The choice, therefore, would 
be between tighter controls on 
inputs - for example, by 
increasing the amount of set- 
aside land or reducing the 
amount of nitrogen used - or 
abolishing the link between 
support payments to farmers 
and their production levels. 

Farm incomes would be bet- 
ter protected under a system of 
input controls, assuming these 
would continue to be accompa- 
nied by subsidised exports and 
import tariffs. “But they may 
not be sustainable (beyond the 
1990s) if future Gatt rounds 
force lower levels of border 
protection and export subsi- 
dies,” says the report 

The decoupling option would 
expose EU fanners to competi- 
tion with world prices, putting 
the full burden of support pay- 
ments on the taxpayer. The 
report suggests EU cereal 
prices could fall by a further 30 
per cent before reaching world 
price levels and that this might 
entail an unacceptably high 
level of compensation. 

The NFU plans to consult its 
100,000 members, as well as the 
government, the wider agricul- 
tural industry, and other Euro- 
pean farming groups, in the 
difficult task of achieving a 
consensus on future strategy. 


T he environmental move- 
ment has for years 
pressed pulp and paper 
mills to cut their use of chlo- 
rine, which they claim is nec- 
essary to produce strong, 
bright pap er. 

A growing number of pro- 
ducers, especially in Europe, 
have gone all the way. Sensing 
a strong resistance among 
their customers to environ- 
mentally harmful processes, 
some mills have spent heavily 
on processes that completely 
eliminate chlorine as a 
bleaching agent in pulp and 
paper production. 

Questions are now being 
raised however, whether the 
producers have gone too far. 
Evidence is mounting that cus- 
tomers are reluctant - at least 
for the time being - to put 


By IGeran Cooke 
in Kuala Lumpur 

Malaysia's declining role as a 
commodity producer is high- 
lighted by statistics released 
here on 1993 rubber and tin 
production - two commodities 
in which, until fairly recently, 
Malaysia led the world. 

The Malaysian department of 
statistics says the country's 
total natural rubber production 
in 1993 was 1.07m tonnes, a 
drop of 98,000 tonnes, or 8 per 
cent, from the 1992 figure. 
Wi thin that smallholder output 
declined 7 per cent while estate 
production dropped 12 per 
cent 

Exports of natural rubber 
also dropped - by 9 per cent to 
937,000 tonnes. 


their money where their 
mouths are. 

Chlorine-free papers are not 
commanding the premium 
prices producers expected, and 
which are required to recoup 
their sizeable investments in a 
pioneering technology. 

Doubts about the market’s 
willingness to pay for the Ulti- 
mate In environmentally - 
friendly paper are especially 
evident In North America, 
where the vast majority of pro- 
ducers is strongly resisting 
pressures to move towards the 
elimination of chlorine from 
pulp-making processes. 

Mr Matthew van Hook, 
vice-president of the American 
Forest and Paper Association's 
pulp group, told the AFPA’s 
annual meeting last week that 
“the jury is still out on the 


The decline in tin-b>conoen- 
trates production was sharper, 
by 28 per cent to 10.384 tonnes 
in 1993. 

Malaysia’s is industriahsfng 
fast and commodities are 
playing a decreasing role in 
the overall economy. Serious 
labour shortages and low 
prices are also forcing people 
to abandon labour intensive 
agricultural activities. 

• A surge hi car sales in the 
US is bang seen as the main 
reason for a rally in natural 
rubber prices which, after sev- 
eral months in the doldrums, 
reached a five-year high on far 
eastern markets last week. 
Traders say tight supply due to 
prolonged monsoon rains in 
rubber producing areas has 
also helped prices. 


Malaysian rubber and tin 
output decline further 


MARKET REPORT 


Coffee and cocoa make further gains 


London Commodity Exchange 
COFFEE futures maintained 
Monday’s enthusiasm early on. 
the May position peaking at 
81,325 a tonne. The rally 


quickly ran out of steam as a 
sluggish New York market 
helped to take the wind out of 
London's sails but the May 
price held on to $10 of its rise 


to close at $1,316. COCOA’S 
rally also continued, with 
nearby prices touching three 
month highs late in the day. 

Compiled from Reuter 


unumouBfrocn 

(As et Monday*! dose) 
turns 


Akjmtekitn 

*230 

to2£B842S 

AhxnHum stay 

-120 

to 45.840 

Copper 

-5J25 

to 532.150 

LmC 

-175 

to 332426 

Nickel 

+942 

to 134,928 

Zinc 

+1,650 

to 1 ,073.100 

Tin 

+606 

to 23.270 


environmental impacts of 
totally chlorine-free (TCF) pro- 
cesses themselves, not to men- 
tion their technological and 
economic feasibility”. 

Chlorine ones its popularity 
as a bleaching agent to its abil- 
ity to remove unwanted resins 
and fatty adds from wood pulp 
while leaving intact the cellu- 
lose fibres required for paper- 
making. 

But chlorine is also a heavy 
polluter, adding toxic by-prod- 
ucts such as riinTrnq and chlo- 
rinated organic compounds, 
known as AOXs, to pulp mfil 
effluent 

It has increasingly been sup- 
planted as a bleaching agent 
by hydrogen peroxide, supple- 
mented in some «ises by an 
ozone-bleaching process and by 
enzymes. 


Chlorine-free pulp is espe- 
cially popular in Germany, 
where the environmental cru- 
sade against the forestry indus- 
try is strongest. 

Germany, Switzerland and 
Austria consumed almost 1 9 m 
tonnes of totally chlorine-free 
(TCF) pulp last year out of 
total European demand of 
about 3.1m tonnes. Jaakko 
Poyry, the Finnish forest-prod- 
ucts consultancy, predicts that 
European ifam wm will jump to 
between 5m and 6ra tonnes by 
the and of the decade. 

For the present however, 
supply exceeds demand. Prices 
for northern bleached softwood 
kraft pulp, the industry staple, 
are currently around $450 a 
tonne. 

Mr Martin Gxanholm, presi- 
dent of Kymmene. the Finnish 


forest-products group, says 
that the present premium for 
TCF pulp is only about 10 to 15 
par cent, which is wall below 
the figure of some $130 a tonne 
that forestry companies say 
they require to reimburse the 
extra expense of installing 
non-chlorine bleaching equip- 
ment. 

In a speech at last week’s 
AFPA meeting, Mri Granhnhn 
said it was “quite probable that 
some over-capacity will be cre- 
ated in Europe for TCF pulps. 
71118 is predicted to lower the 
price premium that TCF palps 
have had”. 

Only one mill in North 
America, a 700-tonnes-a-day 
facility in California operated 
by Louisiana-Pacific, at present 
produces totally chlorine-free 
pulp. One-fifth of its 1993 out- 


put was chlorine-free, and it Is 
gphfd »ifld to be in conti n uo us 
TCF production by September 
1995. 

The gull 's environmental 
benefits are undeniable. Its 
has a hazy, pale yellow 
tint, compared to the coffee-col- 
oured waste spewed out by 
irnlls Using chlorine. The levels 
of toxic AOX and dioxins are 
so as to be virtually 

immeasurable. 

But Louisiana-Pacific is far 
from recouping its investment 
of about $100m. Weak demand 
forced the mill to close during 
the last few mouths of 19 93. It 
reopened in January and pro- 
duced TCF pulp for just over a 
month before being shut down 
again on March 2. The com- 
pany has yet to decide when it 
mil restart 


Brazil seeks markets for orange juice 

US imports are expected to fall further, writes Ronald van de Krol 


B rasil, the world’s biggest 
exporter of frozen con- 
centrated orange juice 
with a commanding 86 per cent 
share of the international mar , 
ket, will need to step up its 
sales efforts in Europe and 
Asia to compensate for further 
declines expected In exports to 
the US. 

Mr Rogerio Braga, president 
of Cambuhy Citrus, one of Bra- 
zil’s largest orange-processing 
companies, believes that the 
country's share of the US mar- 
ket Is likely to fall to between 5 
and 10 per cent by the end of 
the 1990s, partly as a result of 
the recently agreed North 
American Free Trade Agree- 
ment This compares with the 
heyday erf Br azilian exports to 
the US in the 1970s, when 60 
per cent of Brazil’s total pro- 
duction of frozen concentrated. 
orange juice was sold in North 
America. 

“Florida and Mexico, which 
has been granted special tariff 
conditions under Nafta, will 
certainly be able to supply 
almost all of North America's 
de mand, " he told an interna- 


tional fruit conference last 
week in Rotterdam. 

Speakers at the conference, 
which was organised by the 
port of Rotterdam and Rabo- 
bank, the Dutch bank that spe- 
cialises in agri-business, said 
that the world’s fruit sector 
also faced challenges caused by 
nhang ps in the way fruit and 
fruit juices were marketed. 
Increasingly, fruit growers and 
food retailers were attempting 
to eliminate “middlemen.” such 
as brokers, import agents, 
packers and wholesalers. 

Mr Braga said the d»*Un« in 
orange juice sales to the North 
American rnarfcgt over the past 
few decades was probably irre- 
versible, meaning that Brazil 
would have to concentrate on 
Europe, already its biggest 

market, and on paw maykata in 

Asia such as Korea. 

Despite sharp increases in 
exports to Europe, there was 
room for further growth, he 
said, because consumption of 
fruit juice was barely half the 
US figure of 29 litres a person a 
year. In some countries, such 
as France, Italy and Spain, con- 


sumption is stQl in single dig- 
its. 

Consumption in Asia Is low 
in absolute terms but rising 
rapidly. 

“It took us 15 years to see 
Europeans consuming orange 
juice at half the levels of 
Americans.” Mr Braga said. 
“We might be able to get 
southeast Asia to that level in 
half rtuit thne." 

Besides shifts in trade flows, 
Brazil and other fruit produc- 
ers are grappling with the 
shake-up in traditional rela- 
tions between food retailers 
and food suppliers. 

The rise of discount chains 
and “own label" products in 
established supermarkets has 
affected every link of the 
chain, from growers to pack- 
ers. “Retailers are cutting their 
fat and have put tremendous 
pressure on the food process- 
ing industry," Mr Braga 
explained. 

At the Netherlands' largest 
supermarket chain, Albert 
Heijn, the trend was towards 
concluding partnerships 
directly with growers of fruits 


nnd vegetables, said Mr Krijn 
Dorsman, executive vice-presi- 
dent of me rchandising . “There 
are too many links in. the chain 
between supplier and con- 
sumer,” he said, noting that 
every link pushes up the retail 
price of food. 

The Dutch supermarket 
group has therefore moved 
towards a policy of working 
with one exclusive partner for 
every product or product group 
in the fruit and vegetable sec- 
tor. This partner undertakes to 
provide sufficient supplies to 
cover the supermarket chains’ 
needs. 

Mr Fred Hofinan, a board 
member of the Bremen-based 
Atlanta Group, one of Ger- 
many's biggest fruit importers, 
told the conference he believed 
that importers and brokers 
would continue to have a role 
to play. 

He added, however, that they 
would need to concentrate 
more on providing services, 
such as quality control and 
the arranging of “environmen- 
tal-friendly" transport and 
packaging. 


COMMODITIES PRICES 


CROSSWORD 


BASE METALS 

LOUDON METAL EXCHANGE 

(pftoes from Amalgamated Metal Tradteg) 

■ ALUMINIUM. 88.7 PURITY (E per tore*) 


Precious Metais continued 

■ GOLD COMEX (100 Troy at; SrtnjyazJ 



Cadi 

3 ffitha 

Close 

1 272.5-3 .5 

1301-2 

Previous 

1272-5 

1296-7 

ttgh/tow 

1263 

130471262 

AM Official 

1263-3.5 

1284.S-5 

Kerb dose 


1296-9 

Open tot. 

270.801 


Total daDy tunow 

53.833 


■ ALUMNIUM ALLOY (S per tonne) 

Cfcwe 

1220-30 

1235-40 

Previous 

1212-5 

1227-30 

WtfVlow 


1220 

AM Official 

1210-5 

1225-30 

Kerti dose 


1230-40 

Open im 

4.549 


Total da Py turnover 

660 


■ LEAD (S per tonne) 



Close 

453-4 

467-8 

Previous 

440-50 

4SL5-4 

HflMow 

4J&5 

467/448 

AM Official 

438-8.5 

453-4 

Kerb doso 


485-6 

Open tot 

30.529 


Total duty tumavor 

5J62 


■ NlCXELISpw tonno) 


Ckeo 

5530-5 

5500-600 

Previous 

6495-505 

5560-70 

WGMow 

5410/5400 

5610/5430 

AM Official 

5405-10 

5464-5 

Kerb dose 


5500-5 

Open ml 

50.907 


TotoJ daily Tumoiw 

12.319 


■ TO rS per toora) 



C*»e 

5430-10 

S48S-9 

Prevkxn 

5425-05 

5475-80 

1*0*10* 

5385 

5490*5410 

AM Official 

5380-5 

5430-5 

Kerb clone 


5450-5 

Open mt 

19.833 


Total duly turnover 

5.443 


■ ZINC, apodal Mgh grade (S per tonra) 

Qcoo 

929 30 

947-8 

Previous 

930 5-1 S 

949-50 


921.5 

947/937 

AM Official 

021-1.5 

939-9.5 

Msrt) doso 


945-fl 

Open rrt 

112.092 


Total daffy turnover 

24.064 


■ COPPER, grade A (S per lonrral 


Qcne 

1940-1 

19SS-6 

Previous 

1930.5-1.5 

1944-6 

HrgnlCM, 

192271921 

195971937 

AM Offcrel 

1922-3 

1938-9 

Sort doss 


1957-8 

Open mt 

229.012 


Total OaJy funowr 

72.871 


■ LME AM Official US rata: 1.4907 

LME Ctodng US rate: 1.4914 


SMI 4925 3n*jl JOGS C ntexl 4849 9mftKl.483S 

■ HIGH GRADE COPPER ICOMEXJ 


Kara 


Open 

am donga 

Mgft hM 

kit Yd 

Mar 9220 +1 ID 

92 30 9095 

3.745 383 

Apr 32.15 *1.25 

9100 91.10 

1,171 49 

Mar vi.is 

92.10 90.45 

37434 5.831 

JM 9155 -110 


643 3 

JN 91 10 +t 10 

91.10 H9 70 

10.104 S33 

M* 91.00 *100 

- 

408 


Ttttl 6M16 7,244 

PRECIOUS METALS 

■ LONDON BULLION MARKET 
Prices s^pfaed by N M RfOthseMd) 


Odd iTroy K) 
Clow 
■Zoning 
Monvng flit 
Afternoon ft* 

Rrv s Ttejn 
Day i Low 
Prowow dom 
Loco Ldn Moan 

I mevrm 

* ihonfa ... ... 

Smooth* 

Sewer Hx 
Spot 

9 mertfo 
fi montta 
1 year 

Odd Coin* 

Knigmand 
Mapfa Loaf 
Nf* Sove re i g n 


C oqriv. 


256.863 

2S9.607 


S pnoe 
386.00-386.50 
38CJO-388.rO 

mss 

387.10 
387.50- 387.80 
385 00-38020 
38850-387 JO 

Odd Londtog Rotas (Vs US£ 

_ -122 6 months ........ 3.49 


SMI Dafa Ogre 

price dmge M0 km W VDL 

Mar 338-9 +05 - - 81382 19J3T7 

Apr 3878 +04 3886 38B.B 3 

May 388.7 +0.4 - 37.195 1800 

Jm 388-9 +04 3908 388J &54S 135 

Aog 3823 +04 302.9 392.4 4,189 105 

Oct 3948 +04 3B5J 395.1 12£32 107 

TatM 142,432 23JS 

■ PLATINUM NYMEX (50 Troy ot; Vfroy azj 

Apr 

406.4 

+04 

4084 

4044 

11,194 

2419 

Jd 

407.4 

+OJ 

4094 

4054 

8453 

14S 

Oct 

407-fl 

+07 

408.0 

4 mo 

1.163 

00 

Jm 

4003 

+0.7 

4104 

• 

554 

16 

Apr 

4014 

+07 

4114 

- 

36 

44 

TatM 





22488 

4*14 

M PALLADIUM NYMEX fl 00 Troy CM.; S/troy oz.) 

Mar 

13455 

♦045 

13540 

. 

17 

5 

JM 

134.70 

+0.45 

13540 13125 

4fl40 

140 

Sap 

134.40 

+045 

13425 

13175 

397 

2 

Dec 

133J90 

+045 

- 


181 

- 

Tetri 





4435 

147 

■ SU.VBI COMEX (100 Troy oz.: Centwtroy ozj 

Mar 

5402 

+14 

5475 

541.0 

1.434 

193 

Apr 

5408 

♦24 

5404 

541.0 

14 

- 

Hay 

5408 

+14 

5504 

5425 72231 

19418 

M 

552.0 

+1J 

554.0 

5405 

17.753 

898 

Sap 

557.1 

+14 

558 0 

SS64 

4.396 

404 

D»c 

5614 

♦14 

5644 

5574 

9.110 

472 

Tetri 





WA 21,144 

ENERGY 






■ CRUDE Ott. NYMEX (42.000 US gaOa. S/txerefl 


Uteri 

IW* 



0P*n 



price 

eftwree 

wpfr 

Low 

let 

iw 

Apr 

14.68 

+019 

14.77 

14.43 

74407 36.779 

•Mr 

14.70 

♦016 

14.78 

14.46 

81,218 27479 

Jon 

14.78 

♦0.15 

1454 

14 57 

71963 

9433 

Jo! 

1448 

•0.11 

1433 

14.71 

34.176 

6JXJ9 

«*9 

15.02 

♦Oil 

1503 

14.86 

16415 

2779 


15-lfl 

+0.10 

15.19 

15.03 

18,718 

945 

Tori 




430852112499 

M CRUDE OR. 1PE (S/barrel) 





Uteri 

Bar’s 



Ifcira 



price 

dlrage 


Low 

M 

VN 


13-32 

♦016 

1393 

1173 44.56Q 

17.528 

tear 

1162 

+015 

1343 

1139 63444 26013 

Jan 

1160 

+0.10 

1180 

1139 22.116 

7.472 

Jul 

1171 

+024 

13.71 

1148 

11428 

1388 

Aaa 

T17S 

+020 

13.78 

1346 

7.983 

1.748 

*ra 

13.90 

+014 

1330 

1170 

425? 

602 

Tetri 




160KB 56421 

M HEATING OIL NYMEX (4i000 US <j*L eflJS fffc) 


(atari 

Oar’S 



Opra 



price 

tone 

nra 

Lear 

M 

IM 

Apr 

4135 

+044 

4420 

4120 42484 

1IU66 

Ma» 

42.90 

+046 

4105 

4210 

51,105 

5,788 

Am 

42J5 

+0.51 

4115 

42.40 33464 

3411 

Jri 

4155 

+0<6 

4360 

4340 22454 

1423 

tag 

4*^0 

+046 

44.45 

4185 

9J14 

819 

Sop 

45.45 

+051 

4540 

4520 

74 <6 

9S8 

Tetri 




181711 

25,177 

M GAS OIL PE (Stone) 





sra 

Bar** 



Qpra 



price 

dang* 


Una 

H 

M 

Apr 

137.75 

+1J5 

13840 

135.75 

32641 

7.633 

Hey 

13740 

+140 

13775 

13525 

1541 T 

3390 

JM 

13745 

+125 

137.75 

13600 

18.382 

339 

Jul 

138.75 

+1.00 

138.00 

13740 

12475 

K2 

*8 

140.75 

+125 

14075 

13940 

5.367 

205 

Bra 

14100 

+125 

14225 

14200 

3461 

ISO 

Total 




108471 

14487 

m NATURAL GAS WWX {10,000 mnBu.; StamBtuj 


Uteri 

iran 



Open 



price 

cfeenge 

Hra 

law 

m 

M 

Apr 

1075 +0425 

2.080 

2040 

16.733 

7452 

Htey 

2.120 +0011 

1130 

1100 

13420 

1424 

JM 

2.120 +0004 

2125 

2100 

9455 

1417 

Jul 

2.115 +0401 

2.135 

2105 

3463 

1430 

fcv 

2-130 +0.004 

1135 

2120 

9409 

269 

Sep 

2.150 +0003 

2155 

2140 

10.414 

343 

Total 




122KJ1 

15.786 

■ UNLEADED GASOLINE 




NYMEX (<2.000 US DM&; CAJS gribj 




129 72 morale. ITS 

335 


tadat 

price 

Oaf* 

efrongt 

»9h 

Opn 
Lew M 

IM 

Drtroy oi 

US an equt v. 

Apr 

4555 

+887 

45JQ 

44.70 31.432 

10307 

385.50 

54540 

M*r 

46.10 

+847 

4640 

4545 45.435 

7,147 

36985 

579.80 

Job 

4845 

+042 

4053 

4&80 21427 

aces 

37445 

555.30 

Jtt 

4640 

+027 

<040 

4005 7.438 

634 

36150 

56840 

flag 

4GJB 

. 

46.05 

4590 6.496 

665 

S pnw 
387-390 
397.15-399.65 
*>-96 

C eqrev. 
259-263 

®-6B 

Taw 

4590 


4085 

4000 3498 
119023 

403 

21.718 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E per tome) 



Sen 

Price 

8ay^ 

ebaaga 

Meff 

law 

tort 

M 

«al 

Mr 

10485 

+8.40 

104,65 

18180 

170 

12 

May 

10625 

+810 

10625 

105.15 

1438 

121 


106.S5 

■8.10 

10640 

loom 

504 

57 

S«P 

9Zffi 

+0.15 

9240 

9225 

247 

18 

Nor 

9150 

+045 

9140 

8100 

982 

92 

Jan 

95.40 

+020 

9020 

9540 

564 

8 

Totri 





4,W 

308 


■ WHEAT C8T p.OOObu rate; canMBOto bmhd} 


SOFTS 


■ COCOA LCE CPtennal 



SMI 
price i 

Oaf* 


opra 

Lev tat M 

Ito 

954 

+9 

960 

947 239 129 

Ma» 

969 

+12 

977 

961 22.453 6,100 

JM 

981 

+12 

967 

971 15,186 2431 

Sep 

990 

+10 

935 

981 11.175 978 

Dec 

1001 

+12 

1006 

984 17442 808 

IM 

Total 

1018 

+10 

1021 

1010 22.730 868 
106^1612451 


■ COCOA CSCE pO tames; S/tamea) 


MEAT AND LIVESTOCK 

■ LIVE CATTLE CME WOOOfca; cana/taj 

Sen Day*i DM 

pries change Ogb Low ht W 

Apr 70375 -0200 70975 78450 35201 4.834 

Jaa 74.000 4L17S 7050 73975 23 ,9 86 3j623 

Are 72.625 -0075 72875 72550 12.156 1.099 

Oct 71475 +OU75 73725 71325 3965 544 

Bsc 71600 +0050 71900 73650 2255 93 

F* 71400 +04B5 71800 73400 853 4 

TOM MOBS 10208 

■ LIVE HOPS CME <40 JXtMtBj oants/tas) 


Mar 

331* 

+1* 

333* 

329/4 1405 1,115 

N«f 

337/2 

+2/4 

338/6 

334* 80.790 11.4J0 

JU 

32B/2 

♦as 

327,0 

322/4 98425 78475 

»ra 

329* 

+3/4 

3200 

324* 17A45 1,146 

Ora 

337/0 

+2/2 

337/4 

333/4 22406 2470 

Mm 

Tetri 

338* 

+00 

338* 

338* 18 

221,100 20430 


■ MAIZE CBT ffjQO bu mte,- cert»/5«b buefteQ 


Mar 277/2 -3* 280* 

toy 2B4/2 -2* 287* 

JM 288* -2/4 290/4 

Sep 278/4 -IM 278/2 

Dec 264/4 -1/2 280* 

Its 270/4 -0* 272* 

Trial 

■ BARLEY LCE (E per tonne) 

Z77* 10325 12445 
284* 605375156365 
287*560906 78.720 
276*13405 8435 
284*291,785 53390 
270* 18390 1340 
142BU31HBS 

Mar 

10535 

40.10 

1Q52S 

UR75 

32 

53 

toy 

105 4S 

•<L05 

1QU5 

10525 

195 

11 

Sap 

913) 

- 

* 

- 

139 

• 

Nov 

9500 

- 

■» 

- 

85 

- 

Jan 

9845 

- 

• 

- 

13 

- 

IM 

9740 

- 


- 

. 


Trial 





464 

M 

M SOYABEANS (XT (SJXXto into; CCrtS/BOb tuM) 

tor 

688/4 

- 1/4 

saa* 

685* 

9325 

9.430 

taar 

689/4 

- 0 * 

602/4 

887*310320244.420 

Jri 

691* 


694/4 

888*229485 77450 

Ara 

681* 

- 0/4 

091 

880/4 38320 

1450 

Sap 

887/2 

- 3 * 

670* 

666/4 1027D 

1.700 

No* 

658/4 

- 4 * 

658/6 

855/4151.135 50475 

Totri 




777340390370 

■ SOYABEAN OS. CBT C60.000bs: cents/a^ 

IM 

28.53 

*0(77 

2847 

2025 

3452 

1,348 

taer 

2644 

+003 

28.49 

28.15 33,361 

7490 

Jri 

2033 

+004 

28J9 

2645 

2S.3</ 

1716 

Aog 

2746 

*003 

26.00 

27.70 

7419 

587 

Sag 

2734 

-003 

2740 

2736 

7.725 

494 

Od 

2848 

-009 

2095 

2080 

5.443 

356 

Total 





W4Q0 143a 

M SOYABEAN MEAL CST (100 tons: SffctoJ 


tor 

1973 

■01 

1974 

1904 

14<7 

1371 

■er 

198.1 

-OS 

1993 

1974 

30436 

2B4J7 

■M 

198.7 

-01 

1994 

1802 

21872 

11451 

Aeg 

1964 

-0.B 

1983 

196.9 

6.707 

1391 

top 

1955 

■02 

1964 

1955 

5438 

362 

Qa 

ms 

■03 

1944 

1915 

2401 

427 

Totri 





81478 43440 

M POTATOES LCE (Etonreff 




Apr 

1833 

-12 

1824 

1774 

748 

38 

to. 

2005 

■02 

2074 

1944 

548 

238 

Jea 

1300 

• 

- 

- 

2 

- 

No* 

800 

- 

- 

- 

. 


IM 

1050 

. 

. 

- 

. 

. 

Apr 

1314 

-14 

1310 

1114 

- 

16 

Tgtri 





1411 

290 

■ FREIGHT (BIFFEX) LCE (SlOrtrde* print) 


tor 

115S 

*7 

_ 

. 

300 


Apr 

1235 

♦7 

1235 

12 SB 

1.110 

115 


1235 

+13 

1235 

1220 

287 

SI 

Jri 

1120 

+5 

lia 

1 120 

580 

a 

Oct 

1265 

+7 

1205 

12E& 

241 

5 

Jm 

1303 

+3 

. 

- 

74 

- 

Total 





2487 

179 


Ctesa 

MB 





OR 

11 a 

IIS 






HtaerlWah 

European frsa maria*, from Metal BuAotn. S 
per !b n warehouse, ufrass otherwise stated 
(last week's in brackets, where c ha nge d AnU- 
monjr 99.694, $ per tome. 1.750-1 ,810 (1,700- 
1.750). Bismuth: mm. 90899*. tonne lots 2.25- 
140 (225-045). CsdnkiK min. 99.5%. 60-68 
(63-70) cents a pcamd. Cobate MB free mer- 
it*, 99.8%, 22^0-23.50 (22.0023.001; 09.3V 
17.00-18.70 (17.00-18.00). Mercury; mtn. 
99.99%. S par 76 09 Bosk. SO- 100. Mefebde- 
nun: drummed mcJy&dtc code, 2.80-2.85. 
SdenfadB rote 99.5%, 3.80-4 .55 (3.90-4 £5). 
T v mgsten Or*: standard mV 65%, S par tonne 
umt (10kg) WO, cfr. 30-43 £8-4$. VanaAata: 
mn 98%. erf, 1.35-1.45. Uranium: Numco 
exchange value, 7.00. 


tor 

1214 

-IS 

1235 

1225 

56 

31 

■w 

1235 

-15 

1252 

1232 <141213413 

jm 

1258 

-13 

1272 

>254 

18470 <300 

top 

1281 

-9 

12B0 

1278 

6478 

<74 

Dec 

1113 

-7 

1321 

1303 

6.467 

212 

tor 

1351 

-7 

1386 

1340 

9461 

306 


Total 9548820^26 


■ COCOA pCCOHSPRSnomt} 


tor 14 

Plica 

Pro*, star 

oray 



Mr M 



lOdaraKng* 

92227 

91644 

m COfTEE LCE (S'toone) 



tor 

1306 

+6 

1313 

1307 

387 

30 

tor 

1317 

+11 

1325 

1306 

11283 

2465 

Jri 

1311 

+6 

1320 

1305 

10409 

14« 

top 

1309 

+« 

1321 

1305 

4432 

347 

Mar 

1309 

♦5 

1322 

1308 

3464 

335 

Jm 

1308 

+4 

1310 

1305 

5474 

354 


Total 43288 4*81 

■ COFFEE *C* CSCE (37.500893: certsrttri} 


Mr 

70.50 

-020 

BO-25 

7940 

309 <7 

■tor 

81.40 

• 

8155 

80.00 34,171 11435 

Jri 

82.75 

+0.10 

8245 

6140 

9,425 2432 

top 

8445 

+0.10 

64.10 

6115 

5470 346 

Dae 

65.10 

+0.10 

8510 

64.50 

3495 162 

tor 

Tom 

8645 

+015 

6605 

8540 

1433 2 

XM7K444 


■ COFFEE flCQ) (US centa/pound) 


iter 14 Mea ftw. day 

Coup. ririy 7357 7440 

15 day map 7179 7180 


■ No7 PHEHMJM RAW SUGAR LCE (centa/lte) 


taw 

12J1T 

-044 

. 

. 

1468 


Jri 

IZJDt 

-515 

- 

■ 

2738 

- 

Oct 

mot 

-008 

- 

- 

IX 

- 

Jra 

I245t 

-505 

- 

- 

- 

- 

Total 





4,136 

urn 

■ WHITE SUGAR LCE (SAarme) 



tor 

33440f 

•zoo 

33740 

33100 

5201 

1418 

*og 

32560T 

-Z30 


327.00 

5496 

4 ® 

Od 

305507 

-240 30940 

30760 

1860 

IX 

Dk 

30500t 

-160 

30640 

3046D 

12S 

17 

BM 

301707 

-140 

- 

• 

418 

- 

■ra 

304.707 

-16 

* 

- 

202 


Trial 





U.107 14*8 

■ sugar *11’ CSCE ni2400be; centa/Sba) 


Her 

12.13 

•521 

1243 

1241 

616S8 127S8 

Jri 

1129 

-513 

1245 

1216 31451 

5487 

Od 

11.79 

-513 

1148 

11.73 2B6BB 1794 

Ur 

1U1 

511 

1140 

1140 11434 2405 

■tor 

1149 

•511 

1140 

1140 

1433 

87 

Jri 

1129 

-aw 

1147 

11JS 

1412 

64 


TOW 143*225, EH 


■ COTTON NYC6 (SXOOOtos; centa/bri 


■tor 

7577 

+080 

7579 

7560 23,636 5264 

Jri 

7740 

+571 

7740 

7545 

11349 Z7S2 

Oct 

7544 

*0.04 

7544 

74 SO 

1X7 

*03 

Dec 

7245 

+510 

7249 

7Z3S 

11068 

1421 

Hr 

7X55 

-505 

7340 

7327 

543 

B 

Hra 

7440 

+505 

7440 

7440 

161 

2 

tetri 





5349012403 


■ ORANGE JUICE NYCE pP.OOCfca; centa/fop) 


Star 

108.10 

-510 

109.40 

10840 

316 

78 

Mar 

11100 

-550 

11Z40 

111.10 

5979 

1403 

Jri 

114.25 

-OX 11475 

11160 

6432 

326 

top 

11545 

+505 

11840 

11640 

2J069 

121 

J tee 

11500 

-505 

11470 

H<7D 

14® 

73 

Jra 

11505 

-549 

11545 

114.75 

1417 

22 

Tetri 





194G3 1423 


VOLUME DATA 

Open te to ast Bid Volume data shown for 
m taun t s trailed on COMEX, NYMBC. CUT. 
NVCE, CME, CSCE and PE Credo 08 are one 
day In airesra. 


INDICES 

■ REUTERS (Base: IB/MIbIOO) 

Mv 15 Mar 14 month ago year ago 

1H22D 1624.5 1779.1 1778.4 


Apr 43750 -3173 47250 43700 13129 1558 
jm S1500 -0050 81900 51400 10632 1482 


Jri 

5Z525 +5100 51179 SUBS 

1212 

801 

•■I 

51575 +5100 51750 S1A00 

1748 

<24 

Oct 

<7426 +5125 47.750 47480 

1493 

115 

Ora 

Totri 

46700 +0.100 46700 48.450 

1425 

30294 

166 

8489 


■ POBK BSUE9 CME f4QOOt»ba; centaflbq) 


Mr 

54.750 +5550 55X0 

5000 

151 

65 

Mar 

55450 +5525 56400 

55-200 

6489 

1675 

Jri 

55.725 +0400 56475 55450 

2463 

1412 

Aao 

51575 +5425 54.100 

51200 

EZS 

90 

M 

58425 -5325 55950 yt/WP 

30 

11 

IM 

56350 +1.IX 58350 

floral 

3 

1 

Totri 



9485 

6473 


LONDON TRADED OPTIONS 

atrlie price S tome — Calls -Puts — 


■ ALUMINUM 


(99.7%) LME 

May 

Aug 

May 

Aug 

1275 

48 

78 

25 

37 

1300 

33 

S3 

37 

48 

1326 - - 

23 

SI 

61 

61 

M COPPSt 





(Grade A) LME 

May 

Aug 

May 

Aug 

1900 

82 

141 

24 

44 

1850 

52 

83 

41 

65 

2000 

31 

80 

72 

01 

■ COff-fct LCE 

May 

Jul 

May 

Jri 

1250 

81 

96 

14 

37 

1300 

49 

70 

32 

59 

1350 ...__ 

27 

49 

60 

88 

M COCOA LCE 

May 

Jri 

May 

Jri 

925 

65 

82 

11 

28 

950 ... __ 

38 

87 

19 

36 

975 . 

25 

53 

31 

47 

M BRENT CRUDE 1PE 

May 

Jurs 

May 

Jlffl 


81 

. 

34 

• 

1350 

59 

69 

Si 

- 

1400 . 

33 

44 

84 

99 


LONDON SPOT MARKETS 
■ CauDEQILFOB(perbenaVMari +cr- 


Dubai 

$1ZS0-240w 

+4LZ75 

Brent Btend (dated) 

*14.19-432 

+0220 

Brent Blend (May) 

61349-3. GO 

+0200 

W.TJ. (1pm raff 

*14.71-4.74 

+0400 

M OIL PRODUCTS NWEprorrpt ddhrary OF frame] 

Rerwn Gasoine 

*150-152 


Gas OB 

$139-140 

+1 

Heavy Fuel 04 

*74-78 

-2 

Martha 

*132-134 


Jel Fuel 

£159-161 

+2 

Aeitam Argus Estknetts 



■ OTHER 



Qokl (par troy oz}A 

$38626 

-OB5 

S»ver (per troy 

S41.5C 

-30 

Raflnum (par troy ocj 

*40345 

+0.65 

Patadktfn (pv tray «.) 

S1312S 

+025 

Copper (US predj 

95.00c 


Lead (IS predj 

nrv 


Tta (Kuala Lumpur) 

14J38r 


Tin (New York) 

26140c 

-1.00 

Zinc (US Prime W.) 

Unq. 


Cattle (*v® teaghqr 

12748p 

♦243" 

Sheep (B« weighijT* 

131.14p 

+9J01* 

Pigs (toe weight) 

semap 

-13T 

Lon. day Sugar (raw) 

329940 

+440 

Lon. day sugar (wtet 

S340.0Q 

-200 

Tate 6 Lyle export 

S314J30 

+4.00 

Bafey [Eng. feed) 

Unq 


Maize (US No3 Yalow) 

Unq 


Wheal (US Dark Norm) 

ciaoox 


ft*ber(Apdf 

68.00p 


Rubbr (May)^ 

S840p 


RutffMrfKLRSSNol Apt) 

24440m 

-100 

Coconut 01 (Rri)§ 

sssaox 


Palm Cs [Malay 

*377.St 


Copra (Ptriil 

S343.0 


Soyabeans (USJ 

C1S3.0H 


Cotton Outlook A Index 

6040C 

-060 

WMHope IS-te Si<wJ 

389p 



■ CRB Pub— a gear 4/9/56^103 

Mar 14 Mar 13 worth ago year ago 

22356 227.34 22728 210.19 


r m e g m w May. 

Sep. « ApriUoy- V Lone* PtiyscaL 9 OF feaarea 
Britton rarest dose. 4 Staap (Lire wwgnt pin 
Omga an o*efc p mu M e nri piicm. 


No.8,405 Set by HIGHLANDER 



ACROSS 

1 Company working far stable 
conditions underfoot (45) 

6 Second wave yields reproduc- 
tive cells (5) 

9 Publish in secret initially and 
charge the heirs (6) 

10 Vote takes university into dis- 
persing contamination (9) 

11 A last run at wfltj insects (20) 

12 Bird employed by NOT, say? 
(4) 

14 Main dish? (7) 

16 Travel seated to explosive 
missile (7) 

17 She puts actress's clothes on 
piece of furniture with draw- 
ers (7) 

19 Confuse bony substance with 
source of nautical weather 
warning CD 

20 Refrained from taking aban- 
doned port (4) 

22 Copies shuffled and spread by 
church leaders do) 

2 5 Run off and seize hold of over- 
turned vessel’s propulsion aid 

(9) 

26 Prunes in good condition on 
Saturday (5) 

27 Patron of hotel in Prague 
stays there regularly (6) 

28 They care madly about royal 
betrayal (9) 

DOWN 

1 Loud is not commonly lacking 
to volume (9 

2 Ray waves one to come up 
again (9) 

3 Imm a t ure family has an effect 
mimical to the environment 

( 10 ) 


4 Take possession of how star 
ling Identifies itself? (7) 

5 Courageous lover (7) 

6 Ethnic music only heard (4) 

7 Bronf# lifts fruit before end of 
July (5) 

8 Brown follows fellow bowler 
perhaps in New York 0) 

13 Analytical help over revised 
costing (10) 

14 Pass between peaks with 
hunting spoils in travelling 
pouch (9; 

16 Oriental case for grammari- 
ans stim ulating the memory 
©) 

18 A sympathetic relationship 
hit by drink (7) 

19 Descriptive of lens angle, 1 
said (4-3) 

21 Smith’s equipment is fake (5) 

23 Try two different directions 
for example (5) 

24 Quietly taka food and fuel (4) 


Solution 8,404 



Of broking and jobbing the Pelikan 's fond. 

See hmu sweetly he puts your ward onto band. 

Sbiikan © 


JOTTER PAD 





1 











_F1NANCIAI TIMES WEDNESDAY MARCH 16 1994 


IU:c ipiv 


iSWORD 



’M-.i! 


LONDON STOCK EXCHANGE 


MARKET REPORT 


Share prices respond to strong gains in bonds 

Ah Tom. • 


FT-SE- A AH-Share index 


1.800 — 


Equity Shares Traded 

Turnover by nhim (mWon). Exclutfing: 
Irtfra-RUtfcet Puertess and overseas lumover 

1SOO -- -- 


Sy Terry Byland, 

UK Stock, Market Ecfitor 

Strong gains in British government 
bonds and further indications that 
economic recovery is showing 
through in corporate results laid 
the foundation for a 34-point 
advance in the FT-SE 100 Index yes- 
terday. Trading volume gathered 
pace as the stock market moved 
ahead to a confident close. 

Investors were encouraged by 
good news on US inflation, by 
confidence ahead of the Bund- 
esbank’s money market repos 
tender today and by another 
round of dividend increases from 
UK companies. The final reading 
put the FT-SE 100 at 3^67.4. with 
some analysts predicting that the 
3,300 mark could be challenged 
again before the end of the week. 


A week heavy with -important 
economic statistics saw the opening 
of yesterday's section dominated by 
prospects Tor the US producer price 
index, announced at midsession in 
London. 

News that the core jndnx had 
risen by only 0.1 per cent In Febru- 
ary, reducing the likelihood of a 
tightening In Federal Reserve credit 
policy, was well taken in Europe. 

UK equities, which had made 
modest progress during the morn- 
ing, began to move up strongly 
behind gains of more than a f ull 
point in long-dated government 
securities. 

On the domestic front, the switch 
in market sentiment in favour of 
signs of economic recovery was 
encouraged first by news that UK 
construction industry orders had 
jumped by 16 per cent in the three 


Account P o oflnfl pates 

TW nnHwgK 

Feb 20 Wr M 2B 

Option Dodmattana: 

tar 10 War 24 Apr 7 

UatDMktBfc 

taw n Mara Apr 6 

Meant Day: 

M»21 fWS to IB 

"taw dm deetaga may taka niaoe tram tarn 
buaiwi— dm — tor. 


months to January, and then by 
strong profits and dividend 
announcements from the construc- 
tion and building sectors. 

An increase of around one-third 
in the dividend payment from Wol- 
seley, Britain's leading builders 
merchant, reinforced market confi- 
dence that higher payouts will pro- 
vide the drive for the stock market 

Little heed was paid to the latest 
distributive trades survey from the 


Confederation of British Industry, 
which suggested a slowdown in the 
rate of retail sales increase. 

Store and consumer issues mostly 
followed the market trend, as inves- 
tors took the view that economic 
recovery will provide the basis for 
higher levels of consumer spending. 
Heavy trading in Barclays reflected 
continuing dividend optimism. The 
strength of sterling failed to deter 
shares in the big exporting firms. 

The FT-SE Mid 230 index gai ned 
16.3 at 3,902.5 as buying spread 
through the list of building and con- 
struction shares, many of which are 
outside the FT-SE 100 stocks. By the 
end of the session, Seaq volume, at 
616.1m shares, showed a 10 per cent 
increase from Monday's total. 
Retail, or customer, business on Fri- 
day was worth £i.25bn. While a lit- 
tle below last week's average, retail 


business in equities remained 
healthily profitable for London- 
based securities firms. 

While sounding fully confident 
last night, market strategists 
pointed out that today will bring 
significant tests for shares and 
bonds in the form of the latest data 
on domestic retail sales, unemploy- 
ment, average earnings and unit 
wage costs. All will be scanned for 
evidence of progress in the domestic 
economy, as well as for inflationary 
pressures. 

With Wall Street a shade lower at 
the London close, it was clear that 
attention had switched to Germany 
and that the UK market will focus 
closely today on the progress and 
outcome of the Bundesbank repos 
tender, where some analysts hope 
to see rates trimmed more sharply 
than they were last week. 


1,750 a 


von 


1,650 "V 

1>600 U_ 

8 ou» FT CracHM 1994 

m Key Indicators 

Indices and ratios 

FT-SE 10O 3287.4 

FT-SE Mid 250 3902.5 

FT-SE- A 350 1655.5 

FT-SE-A All-Share 1616.57 
FT-SE- A AX-Shere yield 3.51 

Best performing sectors 

1 Building Materials - 

2 Water 

3 Tobacco 

4 Gaa DlstrSxjtton 

5 Banks 



1-34.0 

FT OrcBnary Index 

2569.3 

+23.1 

+ 16.8 

FT-SE-A Non Fins p/e 

21.94 

(21.88) 

+14.9 

FT-SE 1 00 Fut Mar 

3272.0 

+39 X) 

+13.79 

10 yr QIR yield 

7.02 

(7.18) 

(3^4) 

Long gilt/equity ytd ratio: 

2.15 

(2.16) 

.„. +2.3 

Worst performing sectors 

1 Other Sorvicas & Bans 


+1.9 




+1.8 



......0.5 

+1.7 




+1.5 

5 FT-SE SmallCap ex IT 


-ao 


Builders 
led by 
Wolseley 

News that UK construction 
orders rose 16 per cent In the 
quarter ending on January 31, 
plus stunningly good interim 
results from Wolseley, the 
UK's leading builders mer- 
chant, saw tiie shares spear- 
head a general upsurge in the 
building materials and mer- 
chants sector. 

Wolseley ‘s profits at £87m 
were around £l7m higher than 


the most optimistic forecasts in 
the market, while the 33 per 
cent rise in the dividend com- 
pared with most expectations 
of an increase in the region of 
10 per cent BZW hoisted Its 
current-year forecast for Wol- 
seley from £X53m to £l87m and 
its 1995 estimate to £230m. 

Mr Howard Seymour, build- 
ing analyst at BZW, said Wol- 
seley’s “phenomenally good 
figures” confirmed the strong 
recovery coming through In 
the light end of the building 
market 

Wolseley finished 66 higher 
at a record 968p. Since their 
elevation to FT-SE 100 status 
last June, Wolseley shares 
have climbed 46 per cent com- 


pared with a 12.3 per cent 
advance by the 100 index. 

Builders strong 

Wolseley’s excellent results 
were followed by news of a 
near four-fold profits increase 
from Heywood Williams, the 
building products group. Mar- 
ley is also expected to report 
bumper profits with its figures 
this morning. A big line of 
Marley stock was taken out of 
the market last week, prompt- 
ing speculation that the figures 
would be much better than the 
market expects. Most predic- 
tions for Marley point to pre- 
tax profits of £34m-plus. 

Travis Perkins, the builders 


EQUITY FUTURES AND OPTIONS TRADING 


Continuing hopes of a 
reduction In interest rates, 
and a firm performance in 
bonds, helped stock index 
futures to a premium as the 


March contract pulled the 
underlying cash market 
higher, writes Joel tQbazo. 

The opening of the Uffe 
March contract on the FT-SE 


■ FT-SE 100 MDEX FUTURES {UFFE) E2S pg full Indax port 



Open 

Seri price 

Change 

Mgh 

Low 

Est vol 

Open hit 

Mar 

3227.0 

3272.0 

+39.0 

3278.0 

3227X3 

20293 

30694 

JlXl 

323B.D 

3283.0 

+39-5 

3287.0 

3238.0 

6626 

37290 

Sap 


3301-5 

+39.6 



0 

880 

■ FT-8E ADD 250 MDEX FUTURES (UFFE) £10 per M Index poht 



Mar 

391 ao 

3907X1 

+12.0 

3915.0 

39oao 

276 

681 

Jun 

3929.0 

3923X1 

+90 

3834.0 

3919.0 

218 

615 


■ FT-SE MP 250 MDEX RJTURE3 (OMLX) CIO per M fcidaat poM 

Mar 3006.0 2.851 

Jun 3029.5 232 

Al span hcarast flguws m tor pnMom (toy- t Bad nbn shown. 

■ FT-SE 100 PIDBC OPTION (UFFE) ^^88} E1Q per ful Index pari 

3100 3150 3200 3250 3300 3390 3400 3450 

CPCPCPCPCPCPCPCP 
Mar 174 >2 125 >2 77 2ij 3ft 11 8»j 37 83*2 * 13ft fe 18ft 

Apr 184 Ift 143 22*2 106 38 75 SS 48 » 294 110 17 1474 » 1904 

■fey 2074314 171 4441354 59 107 80 794 10ft Sft 132 404 1844 27 2014 

Jun ZZ5 4541884 59 1644 75 12ft 96 *4 115 71 146457417ft 44 2134 

Oacf 301 104 2381213ft 1814 179 137 2924 

Cats 0£77 Ms 1X278 



SOTS 

am 

3178 

8238 3238 

3325 

337S MSS 

liar 

187 1* 

147 h 

98 

1*9 

62 7 174 22 

34 SB 

1 1034 4 153 

Apr 

205 11 

162 171a 

123 

■a 

89 434 61 654 

38 S3 

2341Z74 « 167 

■tor 


189*2 38 



129 674 

674 114 

34 1794 

Jin 


2M 484 



MB 63 

90 132 

54 1944 

Sept 


2984794 



W4U34 

1344 1S6 

834 217 


Cift 1.557 PBb 436 * (Malta tafcx take. PrarteM Aon are baaed an seated (does, 
t Long am apt? auxte 

■ EURO STYLE FT-SE AMP 250 MDEX OPTION P3MUQ CIO per fcri Index point 
3950 4000 4050 4100 4190 4200 4290 « 

Mar 8 47 ft 93 *4 1424 1 4 1924 4 2424 4 2924 4 4 

Apr » 894 35 75>i 224 1574 « 19ft 74 ft ft 2 

Ote 5 Ada M SaMamem prten and votes are tei d Ute 


FT - SE Actuaries Share indices 


100 at 3,227 was 6 points 
below the previous night's 
dose, which initially ted 
dealers to expect a quiet 
session. But those early 
doubts soon faded, leaving 
March to advance for most 
of the session, with “solid 
US buying” said to have 
been prominent in the first 
part of the day. 

Having touched the day’s 
high of 3,278. the contract 
finished at 3,272, up 39 from 
its previous dose and at a 
6 -polnt premium to cash. 
Volume at the official dose 
was a healthy 18,480 
contracts. 

The Uffe Mid 250 March 
contract ended at 3,907 after 
business of 285 lots, and 
June, which becomes the 
market leader next week, 
saw volume of 225 contracts. 
On the OMLX. the screens 
showed there had been no 
trade in the FT-SE Mid 250 
contract 

Turnover in Uffe traded 
options improved to 40,369 
lots, with 21,792 contracts 
dealt in the FT-SE 100 option 
and 2,043 in the Euro FT-SE 
option. Ladbroke was the 
busiest stock option with a 
total of 2,309 trades. 


The UK Senes 


FT-SE 100 3267.. 

FT-SE MW 250 

FT-SE Md 250 ax bw Trite 3818. 

FT-SE-A 350 1665J 

FT-SE SmailCafi Mil.* 

FT-SE SmoBCop ex Inv TnraW 1902.1i 

FT-SE-A ALL-SHARE 1646.5 

■ FT-SE Actuaries All-Share 


+1.1 3233.4 3191.9 3233.9 29103 

♦04 3886.7 3857.4 38004 31109 

+04 39009 3872.1 3822.8 3134.4 

♦09 16400 1821.7 16401 14404 

2011.70 200046 201953 1564.69 

1992.48 190009 200017 1673£2 

+08 1632.78 1615.12 1635.40 1424.79 


Xv. 

E*n. 

P/E 

Xd mt 

Total 

dd* 

yMd* 

fBtk> 

ytd 

Retun 

3.70 

5.74 

21 PI 

2112 

1207.27 

3.14 

4.96 

24-90 

14P0 

142122 

3-23 

529 

23.49 

14-40 

1422.17 

3-fi7 

5.55 

21.97 

1045 

1251.44 

2-75 

3.76 

3319 

311 

153305 

Z8S 

4.15 

3080 

7-55 

1520.10 

3.61 

5.43 

22P0 

1013 

126047 


biter 15 cripa* Mr 14 Mar n to 10 apo yteMW yMd% 

10 MINERAL EXTRACT10IK18) 2531.12 +07 2512-97 250016 252098 2151.70 3^9 4.91 2026 27.63 100097 

12 Extracdvn lnduatries(4) 396030 +1.1 3824.49 388071 3921.70 3125.30 3^6 4.46 2666 2003 1077.27 

IS 08. WewBterfCT 2433.11 +07 2416073410382433.78203040 3.71 5.12 2462 3160 96034 

IB OaExSraStoKaPToddl) 134364 1B4Q3S 1631.70 18SQ31 210860 363 368 3010 0q0_104000_ 

on OEM MANUFACT\KtERSI2B4) 2174.76 +0.8 216006 213800 215664 1734.70 043 088 3017 11.18 106265 

21 BuMng & Construcbonpl) 1452.93 -06 148028146265149000 911.70 2.45 008 4227 261 111056 

22 Bu^ Marts & MercfctfQ) 230266 +03 2250.58 223068 2258.73 1512.70 008 264 54.11 1.62 105566 

23 OwtaaM 247360 +0.4 246087 248068 2401.84 215010 074 4.84 2767 2000 107360 

04 OMnMBdl rt*teirtals(l6} 217045 +07 2159.03 2131.63 213025 187960 463 463 3064 24.90 10806 8 

25 Qectioric & BactEquip(34) 21 1964 +06 21 036S 206084 209062 1861 AO 047 861 2041 260 100860 

26 1971.92 +04 196468 195262 1872.79 147460 2.77 26Z 4049 073 110467 

27 &Soe«Zw V*Hetos(12) 235027 +05 233868 2354.41 239168 180660 4.43 016 42.19 2081 1118.91 

26 TwmQ7) 303260 +06 3018.09 299029 3034.46 231260 2.68 4,11 29.45 160 118561 

197743 +07196045 1929671920411807,70 032 4.97 26.18 1.58 1089.79, 

m 288047 +08 286108 283960 288268 2839.10 099 763 1077 19.08 967.11 

” 2251.04 +07 223030 2210.55 2248X15 210260 466 763 1007 11.01 987.00 

« 8 cfcteBfiOl 313262 +06 310764 307021 310001 298000 368 565 1966 1963 102669 

5K? +02 2342.88 2337.84 238066 247360 4X0 769 18.07 11^3 98061 

5 271409 -0.8 2730.51 2727.53277031 2403.10 3.18 076 17.13 167 94068 

£ EStttteCO) ^ 1784.42 -021787.91 179907 1807.49 180160 3.00 563 2165 268 101202 

„ pSScatedffl 3087.38 +10 305068 302661 3040.03 328360 4,07 7.19 1024 3565 981.14 

m 4077.10 +16 400079 394767 3963.84 409500 5.17 010 14,50 OOP 87006 

— Zioi.eo +07 2068.34 2070.07 2004.1 1 1822.70 260 560 2267 OOfl 101099 

1? |£££2sil 309509 +04 3083.893071.17308200 268100 275 468 2460 567 1047.96 

V, 2325.86 +09 2304.45 228860 229862 178660 3.09 467 2768 1306 112760 

3261.00 +0.4 324868 322026 3278.45 221010 1.92 369 2963 1460 111508 

165460 +10 183*66 1694.42 102362 21B0.70 074 965 1288 1.93 96097 

22 175048 +09174211 1729.77 174462 161060 271 507 23.79 464 02006 

“ 173080 +02 173050 172668 175052 157020 209 060 1705 166 103762 

259403 +08 257267287014 2005.11200860 304 149 3301 5.82 89805 

J JjfJqJlS- « 122860 -23 12S0 71 125006 1292.98 134290 367 3.63 4003 06^,103243 

2449.16 +1.0 2425.04 237012 243216 213760 468 7.12 17.34 560 91000 

*? 233764 +1.1231008 2237092292.701721.60 364 1069 1160 1565 94405 

g BootnoWI 7) 2085.73 +1.7206065 200002 203012 198080 5.74 t t OOO 92163 

^ 215293 +O4 214367 2114.18218O80 197960 3.67 083 21.71 0X» 895.42 

“ ^^7 ntaU, ° n8<1 1904.13 +1,9 1887.73 184261 1652.70 180300 466 .1365 861 3.48 918.15 

1772.13 +08 1757.87 174167 1761.66 156806 362_ 058 2164 867 122362. 

937968 +1.1 23S273 2309.78 234861 188020 073 5.41 2285 29.00 92400 

ZJ "“IJCWWIOq 32S +16303083 298078301960228260 048 6.TB 2069 5568 91167 

71 BwMMJ 3 40.7 134703 1329.92 134028 135000 4.70 003 1098 1362 90466 

266040 +10262509248864251097280270 468 4.76 26.44 291 94000 

« 2989.72 +08 296700 2352.74 298164 2282.40 005 769 1045 11.44 87962 

75 Merchant Banh^ 3m018 *03 2027.79 199969 201098 137060 018 048 2268 1237 106288 

77 Other Ftnmclaip5) M ^OA 1711.19 169074 1 73086120060 367 306 40.70 260 95868 

an «TK<fia MW>„ +1X3292862 291041 294763 22S0M ... 2.18 ... 1,75 . 5704 1460 . 97044. 

89 164067 +061632.78161012163049142079 061 5.43 2260 1013 128047 

■ Hourly movements 

1 Onon 000 «IUB 1160 1^ 1*AW 1560 1010 HigtVday IWday 

— . 034ns 32446 3244.5 32500 32506 32800 32508 32606 32696 32306 

FT-SE 100 K+u-b 3907.0 38900 38908 3801.4 39026 38870 

SS-AK? 0 X! XI 1845.9 18456 16402 18406 1649.9 1^,1 1655.1 18601 1BW.7 

Hum H FT-SE 10D f*gh 32A*n la" 

■ FT-SE Actuaries 350 Industry baskets 

rl 1260 13XW 1*60 15XM 101O CWM Ptwrtoua Change 

i-mq I lifll 13804 13840 13807 13826 1384.1 1384.1 13805 13008 -106 

QWgSCnstrcn 1^1 g*' ifE’. 30^6 30407 30426 30436 3045.9 30509 30508 30206 +308 

Phaiiiirieautlcfc. 3025.1 1gS3J 18gi4 ig03Lt 19(aa TWet 18a2 . 1 igoo.O 18830 +303 

Wjto ^874 ^6707 WWJ 3052J 30786 30809 30907 31101 31203 3874.1 +400 

... ^ MM] B w asvrtay bow*. Us» o* conaBRiento are avgtuii bom IT* Fhim Ttoie* 

MittMl Mhyranihin FT-SE te nMtw Shara todcra ante wNch corns a ranoe of otearornc and woer-toed oroajca 

SX , lSF?se 101 » FT-SE Wrt 2S0 FT-SE Adtetota *0 wd at. Fr-SEAa««injfc*f» 
itta cr +gn- rma Mon innMn+d FT-SE-A ^ IMtetf Nnortorn and ftofxtolo of bteadd aid Vm FT4E Acbratas A+ftw tadox ta 

ora enlnAHod Of w*h ■» bwtute * Acawta and lha frcutv of Acantoi imtor ■ ittffM «o< omaid idn. 

«* So* Manga OM 1J« Btotel An U b*»«LI»» FT^E toumte* Sara 

H«9cn n Budnod nv IB® *** Oon*” 1 ™- 1 


P/E Xd adt- Tote 
ratio yirt Rteum 

2505 27.83 100097 
2068 2093 107707 
2402 3160 96304 

33.10 000 104000 
33.17 11.18 108265 
4227 2.01 111368 

54.11 1.62 105568 

2767 2000 107360 
3064 24.90 108088 
2041 260 100009 
4049 073 110467 
42.19 2001 111091 
29.45 160 118501 
2018 1.S6 1089.79 
1077 1008 987.11 
1007 11.01 967.00 

1968 1093 102039 
1007 11.13 98021 
17.13 167 94868 

2165 268 101202 
1804 3565 961.14 
14,50 000 87006 

2207 008 101099 
2460 567 1047.96 
2766 1306 112760 
2093 1460 111508 
12.98 1.93 96067 

23.79 464 92066 

170S 166 103762 
3301 5. 82 89005 
4003 097 103248 
17.34 560 91000 

1160 1565 94405 

t OOO 92163 

21.71 0X39 885.42 

861 3.48 91015 
2164 867 122362 

22.65 29.00 92400 
2089 5568 91167 
1468 1362 90466 

26.44 261 94000 

15.45 11.44 87962 
2268 1267 1062.88 
40.70 260 95068 
5704 1460 97S.44 
2260 1013 126047 


merchant, is expected to reveal 
more than doubled pre-tax 
profits in excess of around 
£20m tomorrow. 

Marley rose 4 to 204p, Hey- 
wood Williams 7 to 437p r Gra- 
ham Group, floated at 183p 
only a week ago, 8 to 2l4p, 
Meyer International 29 to 545p 
and Travis Perkins 13 to 359p. 

At the heavy end of the 
building materials sector, 
hopes of an early reduction in 
German interest rates boosted 
Red] and, up 9 at S71p, and 
BMC, 13 ahead at 972p. 

Housebuilders, on the other 
hand, were unsettled by wbat 
was said to have been a flat 
and uninspiring post-results 
meeting with Wimpey and con- 


■ Mafor Stocks yesterd a y 


ASDAQronjf 0000 aft +1 

Atib+r rtownari 2^00 «o +g 

AMFWmt 968 as tS 

WKHnat OC 029 *3 

nlMaMrt MO 622 it 

A rv» 800 360 +t 

Afffl*GraiVf 4000 264 40 

Ar|oVWootn*T 540 291 «4 

Aasac Bnt Boodof 221 560 0 

Amo. Bnt Pons ESI 500 +7 

baM sea 1001 +u 


VaL Oontofl 
000 s prtoa daw 


BAT MB. t 
BET 

acc 

if 

BPS Mb. 
BTf 

BTffVPskl] 

BTRf 


3.700 408 +0 

4600 133 0 

1200 440 «8 

280 728 -5 

0200 Ml 4 

2.100 340 4 

0700 418 +2I2 

0900 301 +2 l J 

0000 30B +1 


1200 440 

2BB 728 

0200 981 

2.100 340 


IW* ol Scadantft 2000 107 

BafikVtf 12.000 ESS ._ 

M. „ 4200 520 * 

BuaCMat 1600 050 +4 

Bookor 300 410 *3 

Boost 1.000 560 +1 

Oo—Mrt 1.100 £05 0 

aiL ABroop»»t 1.100 519 +1 

BrtW\to S ^ B f 3000 438 +4 

BUM Bart SOTO 314 ,6 

BrSsh Land 911 «13 <0 

Bnwi3m#t 0700 1441 a *10 

Buol 400 184 «2 

BunoP fBUrri - 190 838 «0 

Bunn 1.100 S*\ »f 

CtetoAIMrat 7.100 450 -3 

Caaour a &i m p pm t 3jm +14 

CatorOixip 11 324 0 

Ondont 2600 404 .12 

Cjjten Cocnraa.t 1.100 908 <2 

CmiVVM 484 200 +0 

Comm. IMorf 688 568 +5 

Cookaon 0300 285 0 

Couts4dBt 1600 550 -1 

Um 262 400 -8 

DeUftiO 342 987 +7 

Ottona 1000 213 .1 

Easton? Bod. 438 631 0 

Eeat Mdnnd Boct 535 609 «« 

EnuCtoaOM 1000 522 -2 

Em*trao ort 254 415 +1 

Emotirtiel LAMB 221 541 +1 

FKJ 1.400 209 +4 

f*fa 0300 131 0 

FofMI a COL LT. 684 290 43 

Fon*T . 1000 295 *2 

Om ACCkJnrn+ 100c 008 -2 

BanrtEtoctf 2600 3 1 ft +4 

BMxot 1.700 878 *8 

Q^nn«l 319 387 -2 

GfBnadBf 2600 581 <6 

Orend MM-t 3000 406 +4 

OUST 1000 573 +1 

OHEt 1.100 193 <2 

OKN 435 567 42 

Qtew— «t 1000 909 47 

HS8C (7Sp rtwJt 0200 668 +8 

Hl BWl Bo n 93 M2 -7 

Hamont ’5X300 281 44 

HoxtoMiB CRmBbU 196 211 -1 

Hm 121 902 0 


an. aeroapB c+ t 
BrtWtMmmyBt 
BmWi Bart 
BrSoti Land 
Bnaaci 3m7f 
Buol 

BunaKCaMt 


12X100 E6S 422 

♦ Ton szb A 

1600 350 44 

300 419 -3 

1.000 560 41 

1.100 505 0 

1.100 519 +1 

2000 438 44 

S.0TO 314 ^ 

911 413 «8 


Foretoi 8 CoL IT. 
FortaT 

Ban, ACddanrt 

Oannf BbcLT 
GtaKot 
Otfornd 
Grenaitet . 

Brand MK-t 

OKN 

BMosat 

H5BC |7Sp rt att 

Hanmaon 

Hsiaant 

Hontoni Craa 6 aU 

hKomi 

IMI 

|C1t , 

helmpnt 

JoimtOd MaahBjr 

h3no«?art 

KMfcSora 

Ladbn**t 

Land Saortiest 

Lapana 

L 49 X < Benentt 
UoWsAOtay 
Uoyd* Bankt 
LA3MB 
London Bad. 
Unto 


MflnB o n (Mu) 

wet _ . 


NsttonsJ Po*Wf 

Nvt 


PowwG+M 

Pnxlenosrt 


Rank Oro-t 
RMttttCatoant 


SrtraSertt 

SooOM A Nar.f 
SaaL Hy4n-€toCL 
Scontsfi ftowarf 

g"*t 

Sedgwick 

SMbOOTd 

Sown TranCf 

aaBHanrcont 
SUbnt 
StoughEAa 
smiM(H)a 
S moti 8 Nvhmrt 
SmM Beacfnmt 


2S 

■9 352 

*3 

2X1 

J 779 

♦9 

0SOQ 9<7 

*6 

K 

a ass 

4 eie 

4 012 

♦7 

♦11 

♦5 

2JJ00 207 

-1 

4J 

i 708 

♦11 

■ 

9 807 

♦0 

ML 

7 483 

♦10 


3 420 

•a 

xa 

3 988 

♦15 

AV 

3 131 

0 

41 

3 620 

-5 

03 

3 161 


o; 

J 212 

0 

8- 

9 495 

♦4 

2J( 

3 170 

♦s 


3 730 

+3 

011 

j 425 


E 

7 034 

4 117 

s 

1,300 2504 

-2b 

0700 4B7 

♦12 

1^00 403 

♦ia*a 

1,600 223 

♦ab 

W 540 

♦so 

296 ess 

♦4 

84+ 210 

-a 

540 859 

♦1 

424 ESO 

0 


AW 

2.100 1 B 6 >* 

fb 

1.400 552 

♦13 

0000 323 

+4 

174 972 

+13 

1ROO 8S7 

+12 

1^00 223 

-a 

1,000 425 

*0 

381 861 

-4 

1^00 571 

*8 

i.ioo era 

♦15 

B54 258 

♦Z 

1.400 204+ 

-14 

4300 100 

•2 

BB2 496 

-2 

1.500 zra 

-1 

0200 388 

♦10 

07 1090 

*22 

1.100 546 

♦7 

1,300 383 

♦4 

22tH 408 

+1 

478 119 

♦1 


8S7 S93 ♦’ 

736 579 .15 

0200 682 *5 

1.700 600 -2 

143 203 0 

32B 522 +4 

0800 144)j . 41 

1000 388 <3 


6 mW Oaocham Uto.t 874 368 -5 

BmHBlnda, 576 494 -9 


Soutw Bcctf 
Souh Mtota Bool 
down Was* Water 
South West Boo. 
GhIhiWHk 
S tandard CHMLf 
Stonhaae 
Sun Afcnwt 
TIN 

TIOrapt 

T38T 

Tarmac 

TteaS Ly® 

TaftorwotkU* 

Toocot 

Thatwi VWtarf 
ItomBBt 
Tonwrot 
TnUgaHoura 

Kt 

Lrttsd BbcuBst 
md- lto -tew m a 
Vodutanst 
WtoTjujg 0O}t 


vuteano Wga.t 
WHaConoo? 


rotwnoBaa. 

'ftahanMVMar 

Znnmt 


182 037 t3 

27 70* « 

84 572 *5 

272 B4fi *5 

169 579 4 

1,400 1082 -17 

523 227 41 

0000 320 +1 

W » -1 

1.100 362 41 

4.100 242 4fi 

0400 IS * 

864 480 42 

83 164 0 

0400 2Z3 -1 

981 530 40 

843 1944 *15 

0100 265 0 

1000 109 J 2 

SM 340 -8 

i0oo ices -6 

081 333 +1 

1.100 TOO 412 

1,300 671 -4 

816 802 43 

1.000 643 410 

374 667 413 

202 071 416 

094 563 43 

0800 407 44 

1.000 225 *4 

4.100 210 -0 

1080 875 473 

350 840 43 

772 533 *3 

USO 746 47 


Baaed an Bacang nkana tar a atocOan (X mapr 
newtaas deeK ftcugn the SEAQ 9*sem 
ifini r d i j ’ goa 4jQpm. ItedcB o t one ntetan a 
mera an icwdad donA. t to&msB ■» FT-SE 
100 ntax cntataanc 


struction sector analysts. 

"We were expecting a bullish 
statement on housebuilding 
but got a rather dismal 
appraisal,'' said one analyst. 
Current year profits estimates 
of up to £50m were said to have 
been tr imm ed back to £45m 
and less in some cases. Wim- 
pey shares dropped to a session 
low of 206p following the ana- 
lysts meeting, before steadying 
to close a net 8 off at 2iop. 

Large MGN trade 

Mirror Group Newspapers 
experienced exceptionally 
heavy turnover of 11m shares 
as the market responded 
enthusiastically to the latest 
figures and bought the stock 
up 7 to 19?p. 

A lift in advertising revenues 
and trading margins, together 
with far better than antici- 
pated profits, saw forecasts 
raised to between £82m and 
£85m for 1994. The only con- 
cern was the slide In circula- 
tion following the price war 
started by News International. 

The two English power gen- 
erators, PowerGen and 
National Power, were among 
the best performers in a gener- 
ally strong utilities area follow- 
ing a strong buy recommenda- 
tion published by NatWest 
Securities. The broker’s strate- 
gic assessment of the two com- 
panies focused on the 
long-term attractions of both 
companies. Upgrading the 
stocks to a buy NatWest high- 
lighted strong dividend 
growth, lack of regulatory 
threats and recovering market 
share. PowerGen rose 13 to 


NEW HIGHS AND 
LOWS FOR 1993/94 

NEWHUHSM). 

BULOMB 8 CNSIM (1| BoK BfW.. BLDQ 
MAILS A I0CHTS «q Akanrac. OH. EfMta. SL 
BabakL WOtoatai. CMEMCAtA M Moo. Bsyc>. 
Hoecfm, PSn«». WSTWflUTORS (g Ewbb 
H aMiPi, SvxMtaon Braral. ELECTRNC A 
ELECT EOUP a ASEA 0 EunUMnn. foramd 
T+cMalcgy. ENOMEERDta [1) ABai Ccpco 0 
EMO. VEMK0E8 <1| Veftsuogan. EXTRACTIVE 
IND8 (7) AnolO Amer. Co0 Ml Mt«ao. 
JohuMBtug CvhAI. KkMett Gotti MSM. 
Itogtek WMhetla. insurance pt Sedgwick. 
MVE0T1KNT TRUSTS « Atatonn Soil M 
Cop.. NBOTnarkM Vantura Caa. WVESnCNT 
COMPAIKS t3)Mtanasia Eouky FOL. Koroa 
LS>ors) Whs, Lyddtawg, LBSUHEA HOTELS 
HI Bair 4 WAT A. CaaU CanwrartcMona. 
Otacktorda, Saraoy Urn, hsm (3| HoMm 
M oretnnt Stotpy KM*. Suom S Mm. OTHER 
FINANCIAL 66 EFT, Enaigy Copsd WtM, 
PRTNO, PAPER 4 PACKB 60 BuibL Srxk. 
RETA0ER0 FOOD fl) Gram RETAJLBB, 
OENSIAL (I) Soowtoyo. SUPPORT SSRVS (2) 
18710 ManpOdOr kA. TEXTILES 8 APPAREL 
ffl CMwncn BarmcniB. AMERICANS n 
BUM, LdMtofc, SOUTH AFRICANS f!| Anglo 
Amor. Into. 

NEW LOWS PH- 

(MLTS n Truao. Bpc 1694. E«h. 12«!>pc 1894. 
Enh. lIMpc IBM. Exoi lOWpc 1B90 Tram. 
17pc 1695. Ttooa. !5Mpc I860 UfSTRSUIOM 
CO Wokac, ENBOteBONQ (tj Fonm FOOO 
MANUF ft) eraiM Foods, HEALTH CARE fl| 
Uto Scdncaa ML. BWEBTMan"f1MJST8 5) 
Bart>o Emg. Eun. KMnwort Euo. Prvt. Do 
Wrta, OB. EXPLORATION 8 PROO (1) Ccpkn 
Ftooucn, PRTN0 PAPER A RACKG (1) 
Ppksds lafL. PHUPER I 1 (i) Cnfny tan, 
RCTA0B10 BBIERAL (1) Bum 4 Xndraon. 
SUPPORT 8ERVS tlV SNBwood Caiwv 
9cm, TEXTILES 4 APPARB. (Q Haggss LI). 
Martta Ml. AABBCANS (2) Amer. CysnanM, 
NYNBC 

552p and National Power 1 2Vi 
to 463p. North West Water, up 
20 to 546p, Severn Trent 15 bet- 
ter at 579p and Wessex Water 
15 higher at 6671p, were the 
pick of the water stocks. 

The placing of a block of 
5 ihn Vodafone shares at a dis- 
counted 564p by house broker 
UBS, to finance the acquisition 
of a one third stake in General 
Mobile Communications from 
Gene rale des Eaux of France. 


saw Vodafone dip i to 57ip. 

Saatchl & Saatchi slipped a 
penny to 14lp in spite of 
returning to profitability. The 
market was disappointed by 
the group’s margin growth. 
S.G. Warburg cut its 1994 prof- 
its forecast by 10 per cent to 
£30m. 

The initial advance in elec- 
tricals group Delta after the 
group revealed a higher than 
expected dividend increase 
proved short lived after bro- 
kers downgraded current year 
profit estimates. Analysts were 
particularly concerned by the 
continuing pressure on profits 
in the cable industry. The 
shares gave up 7 to 522p. 

The list of brokers down- 
grading included Strauss Turn- 
bull which trimmed its esti- 
mate by £4m to £59m. Several 
brokers advised investors to 
switch out of Delta and into 
BICC where the shares put on 
9 to 440p. 

UK airports operator BAA 
closed 13 ahead at lOOlp, alter 
a positive note on the stock 
from NatWest Securities. The 
securities house which expects 
1994 profits of £324m said: "the 
company continues to produce 
traffic growth marginally 
ahead of our expectations giv- 
ing us confidence in our full 
year profits forecasts." 

Analysts returned positive 
from preclose season meetings 
with Granada, helping the 
shares climb 6 to 561p amiri 
profit forecast upgrades. Euro 
Disney shares opened sharply 
down following the weakness 
seen after the theme park 
group announced a financial 
rescue package on Monday. 


They later rallied, ending the 
day 5 ahead at 395p. 

Reports of a further round of 
price cuts in the milk market 
hurt Unigate and Northern 
Foods, the shares sliding 3 to 
148p and 2 to 21Bp respectively. 
Tosco, off a penny at 223p, was 
said to be applying the 
renewed pressure on suppliers, 
with expectations that the 
other big operators Argyll 3 
ahead at 25-Ip, and J Salisbury, 
10 Coward at 38Sp. arc likely to 
follow suit. The news follows 
weekend reports that Asda, up 
a penny at 60%p, was pressur- 
ing suppliers to turn price pro- 
motions into permanent price 
reductions. 

Other big moves 

Elbfef bounced back 4!/i to 
21 p after its leading share- 
holder Gedma Investments was 
believed to have successfully 
sold its 7 per cent stake in the 
photo frame and clock maker. 

Research based pharmaceuti- 
cals group Scotia Holdings 
added a further 16 at 271p as 
investors focused on the new 
drugs in development. 

Talk of stakebuilding in 
Owen & Robinson, the loss- 
making jewellery and sports 
footwear retailer, saw the 
shares climb 8 to 34p. 

Concern over a boardroom 
tussle saw Takare, the nursing 
home group, fall 17 to 249p. 

MARKET REPORTERS: 

Christopher Price, 

Joel Kibazo, Peter John, 

Steve Thompson. 

■ Other statistics. Page 21 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


Cafe Puts 

OpUflQ Aw JhI Pel fat Jri 08 

AtaHjons 600 39 SO » ft 23 3ft 

r«ffl } 650 11H 25 34H 3ft 51 57W 

Argjl 240 1ft 2ft 84 4» IS 19*i 

CZS4 1 260 6 17H MH H 2ft 30H 

ASDA 00 ft 8 10 ft 6 8 

r« » 70 l«r ft 8 11 13 IS 

BrtAJraayS 420 22 31 41K ItK 25M 31M 
{*428 t 460 S 18 36 50 55 

MMI 390 2ft 35V. 48 11 24 31M 
(*398 1 420 9 2ft 3ft 29 4ft 48* 

Boots 550 1ft 32 42 16 3ft 37 
1*560 J BOO ft 13 2ft S3 05 08 

BP 360 14 24 31 H 10W 33 25 

(*3E1 ) 390 3* 11* 1ft 33 38 4ft 

Ml* Start 140 ft 15* 1ft 4*4 10 IS 
P44 j in 2 7 11 17M 22M 25 

Ba 500 37 Gl 83 5 17 2ft 

C3Z7 J 550 B 2ft 3714 2ft 44» 4ft 

Cttttto 450 21 K 3ft > 13 2711 - 

r<56 ) 475 9h 2 ft - 25 41 - 

Courts** 550 2 ft 4ft 51 m 37 42D 
{*558 ) 600 6 18 30 47 67» 72 

Caren IWOI 650 44 60H 08 4 13 2 ft 

(*580 ) 600 12 30 3ft 24H 34 45 

a 750 40 6714 77 9)4 24H 37 

(776 J 800 1ft 3ft 51 33 4ft 82 
Ktaefcfctf 600 3ft 4ft BOM 12 31 41 
(*618 ) B50 12 Z7 38 3ft 60 GBM 

Land Saar 700 18 31 38 14 34 37H 
(703 J 750 ft llri 2ft 5ft 69 7U4 
Ibris 8 8 420 16 35 33 814 3ft 2ft 
(*424 f 400 3M ft 1ft 37 40 47to 
Na3W«a 460 U sn 68 5 1ft IS 

(-406 ) 500 17H 3ft 45Vs 1ft 29 3ft 

Satesbuy 360 3ft 41 48 4» 17 21 
(*388 ) 390 12M 24 3211 10 3111 3SK 

Srt Trans. 660 40 57 Oft 4H 1ft 22 
(*681 ) 700 ft aw 38 2ft 3511 4ft 

Stanheurt 220 13 21 28 5 15 15 

C226 ) 240 4 11)1 1ft 17 24b 2BM 

TralaLj* 10S ft 18 - 6 ft - 

(700 ) 115 ft 1114 -10111ft - 

Unfertr 1050 43 63 83 16 30M 43 

(7034) 110013)13911 SE 47 57 68b 

ten 700 58 77b B ft 1ft 3ft 
(745 l 750 22 47 60 ZJW 39 53 

Opnon Mr *1 Aw Ma) tag Nw 

ted M a 480 3ft 46 58b sit 17b S3 
T484 ) MO 14b 27b 3714 Z7H 37 4ft 
Laffiroks 200 16 24b 3ft 7 12b 19 
nr? ) 220 6b 14b 21b 1ft 24 30b 

Ud Biscuts 330 11 23 29 17H 23b 29b 
(733 ) 360 4H 12M 17b 42 4ft 49K 

Opnon Mar Jan Sep Mr Am Sep 

Pear. i» 5 13b 21b 4b 12 19b 

(7») 140 2 8 18 12 18 23 

Opflcn Mf Am 8— Hay Aug Mar 

frflteo 500 SOM 88b 88b 23 40 5ft 

nil 9 ) 550 3ft Oft 8ft 57b 67 79b 

BAT hdi 480 33b 43 53 11 21 28K 

(-488 J 500 12b 23 3l34H43bS1b 

SIR 360 » Aft S3 5 9 16 

(*389 ) 390 « » 39 1SH 2f 29b 

M Tricon 3S0 3ft 44b 49 3 11b 15b 

(*419 ) 429 16 2ft 31 13 25 29b 

CaaunrScn 433 ia - - ie - - 

r«S > 542 4 - - SOW - - 

EasnBSC 600 4ft 98 Bft 9 25 32 

(*830 ) SO 17 31 Vr 36» 33 51b 58 

firing 500 24 38 51 21 33 42 

(-506 ) S» 6 1BH 30 58 65b 72b 

GEC 300 2ft 31b 35 4b 11 14b 

{*319 1 330 9b Mb 2ft 17b 27 30b 


Cak Puri 

Opten Itey Aug rior May Aog Wo» 

Hanson 280 12 17b 22 9b 14b 18 

(-281 ) 300 4b ft 14 22 2ft 30 

lasno 130 12 18 23b 10b 16 20b 

(731 ) 140 7b Mb 1ft 17W 22b 26b 

Una Mt 200 17b 25 2Bb 6b 11 17b 

(*211 ) 220 7 15 1ft 17b 23 28b 

6 5 0 650 48 85b 77b 16 31 46b 

fS8t ) 700 19b 41 » 52b 42b 56 75b 

PStatan 180 21b 2ft 31 4 Bb 11b 

(795 ) 200 ft 16b 19b 12h IS 21 

PNdttlri 300 29 31b 3ft 6 11b 17 

(T23 > 330 7b 18b 22b 33b » 33 

RIZ 550 41b 64 78b 29b 45 5Bb 

1*855 ) BOO 16 41b Sft 60 72b 87H 

fladbnd 550 34 45 59 23 30b 43 

(*570 ) 600 11 23 38b 57 62 78 

ftoyri kts» 260 2ft 36 41b ft 12b 18b 

CZ77 ) 280 IS 2S 31b 15D 22 2ft 

T«co 220 12 19a«b12»1ft21h 

(*2n ) 240 «b 11 1ft 27 2ft 33b 

UtxMara 5SQ 43 60 75b 17 2ft 41b 

{*571 ) 000 17 38 91b 44 57b 67b 

WBsms 300 26 33b 40b 1117b 25 

[MO? ) 420 11 19 27 2ft 34b 41 

Option Apr M Oct tj* Jri OB 

BAA 1000 Sft Sft 7ft 23b 47b 55b 

(7001) 1050 11 31b 51b 58 76b 84b 

Itntt 500 44b 92 57 3b 18 19b 

rS37 ) 550 10b 22 29 22H 42b «b 

Optai Iter Jmi Sip Hat ten 5m 

Abbey Km 460 S3 «H 57 1 9b 17b 

("489 ) 500 4 21M 34b 14 27 37 

Anted 35 3 ft 7b 1 3 4b 

{*37 ) 40 I ft 5b 4b 8 7b 

Bradys 550 12b 35 48b 8 25b 38b 

r$52 ) 600 2 1ft 2Bb 50 57 Oft 

Btua ante 330 3 37 46b I W 17 

(*359 ) 360 7 1ft 30b 8 24 32 

Brttt 6 m 300 1ft 22 28 lb 11N 16 

(*313) 330 1b 7 12 19 30 32b 

Dtam 200 15b 24 29 2 8 15 

(*213 ) 220 3 13b 18 10h 17b 25b 

Htedowi 100 7 1ft 1ft 2 11 13b 

(765 I 180 IK 4ft ft 17 26 27b 

Lonrtn 160 B 17b 25 14 20b 

(761 ) 160 1 9b 17 2ft 26b 33 

Nad Power 480 B 24b 36b B 23b 32 

r«2 ) 500 t 10b 18 39b Sft 56 

Scd Power 390 21b 34b 43 2 ft 19 

{*408 ) 420 ft 18b 27b 15b 24h 35 

Sears 110 Mb 13 Tft T 4 5b 

(719) 120 2b Bb 9H 3b 8b 11 

Fora 240 17 22 29b 1b 10b 15b 

(*254 ) 260 4 11b IBb SM 23 26b 

Tarmac 174 a 28 - 1 7 - 

(782 ) 133 5 13 - 5 14 - 

Itnm BX 110048b 81 103 3b 27 53b 
(7140) 1150 11 64 74b 22 49b 77b 

TS8 240 ft 17b 25b 4 12 19 

(*242 ) 260 1b 9 18 tBb 24b 31 

Tontens 240 17b 25 30b IN 7b 13 

(-255 ) 2E0 3 13b 1ft 8 1ft 23b 

KMkUW 600 48 67b Sft 3 22 35 

1*643 ) 650 10 39b 6ft I8b 45b 60 

Option Apr Jot Od Aor Jri Oct 


RISES AND FALLS YESTERDAY 


BriWh Funds 

Othar Fixed Merest 

Mnarel E x traction 

General Manutactum 

Consumer Good* 

Service* 

UWKtos 

RnancfaJs - 

investment Trusts — 

Others — — — 

Totals ( 

Data based on too co m p ute hs»d on ttw London Sham Sanaa. 


TRADITIONAL OPTIONS 

Fbst Deeteigs March 7 Last Decteraitons June 16 

Last darings March 10 For seraement June 37 

Cals; Ainteax. Amoco. Cannon St, Gaverdale, Edmond Hdga. Eurotunnel Ufa, 
Lasmo, LBM3, HogriBan , Renfaon OekL Puts: E ur ot u nnel Uts. Puts & Cab: Cannon 
St. Laamo. IBMS. Tlritew OB. 


Rms 

Falls 

Same 

81 

8 

7 

4 

10 

1 

01 

45 

89 

171 

112 

398 

42 

35 

118 

117 

79 

323 

28 

8 

10 

131 

83 

177 

129 

35 

296 

81 40 28 

635 

453 

1423 


LONDON RECENT ISSUES: EQUITIES 

Issue Ami MM. CUM 

price paid cap 1983/84 prioe 

p up t&TL) mgh Low Stock p 

- FP. 31X1 248 245 Abtroot II Dawn C 246 

140 FA 2S9J) 176 163 Alpha Airports 172 

- FJP. 1.32 8lj 1 fCaro UK Wits 8 ■ 

105 F.P. 33.1 118 101 CedmtJate 108 

150 FJ>. 8i3 147 14G Ctrioactence 146 

124 FjP. 24X) 186 142 Cltaka) Computing 148 

50 FJ>. 1308 50 47 6*1 New Tiger 4B»z 

100 FP. 1305 99 93 FUetfiy Jpn Vahjas 83 

- FP. 154 52 48 0Q Warrants 52 

130 FP. 31.B 155 130 Finetet 145 

- F.P. 248 106 96 Flaming Japan C 103*1 


Net Dw. 
(#v. cov. 


- FP. 2470.4 E 31 >4 ESQSg ftartrtn 8 BB 

170 FP. 74.1 171 1M GoWabonx^i Wh 

183 FP. 2454 215 195 Graham Croup 

• FP. 684 74 664i Guangdong Dripl 

- FP. 541 29*3 18*2 Do Warrants 

TOO FP. 86.3 103 94 HaM Inv Tat 


48*z 

83 

52 

145 

103*2 

£31^« 

168 

214 «8 

73 ♦•+ 
29*4 
102 t*2 


r«? } 900 1 1ft 19 39b Sft 96 

Seal Power 390 21 K Sft 43 2 ft 19 

f406 ) 420 ft 18b 27b 15b 24b 35 

Seers 110 fflb 13 Ift i 4 5b 

ni9) 120 2b ft 9H 3b 8b 11 

Fane 2« 17 22 29b 1b ift 15b 

r254 ) 290 4 11H tBb flb 23 26b 

tarmac 174 a 28 - 1 7 - 

(782 ) 193 5 19 - 5 14 - 

non SI 110048b 81 103 ft 27 53b 
(7140) 1150 11 54 74b 22 49b 77b 

rS8 240 ft 17b 25b 4 12 19 

(*242 ) 260 1b 9 18 t9b 24b 31 

Tontens 240 17b 25 30b 1M 7b 13 

(-255 ) 2H) 3 Ift 19b 8 1ft 23b 

WeBCMw 600 « 67b 9ft 3 22 35 
1*643 ) 650 IB 39b Sft 18b 45K 60 

OpOoa Apr Jri W Apr Jri Od 

Stao 660 « 72b 36b 13b 30K » 

1*678 } TOO 19 47 61 38 56 75 

IGBCfip* 850 47b 89H 112 38b 68K 88 

(*957 ) 900 2B SB 88H 66b »4b 113 

Reutoa 2000 95 183 203 39 92 114 

(-2044) 2050 65 137 177 62 117 138 

Opttn Hay Auj Npv May Aug Nw 

frtaterw 189 12 IBb 23 S 14H 19 

(-186 ) ZOO 4 18 IS 21b 26 30b 

* UMMvng aecutty prtca. Prenatarra snmn an 
based on daring ota prices. 

March 15 Totri cortiactr +0677 CteK 17.984 
te! 22093 


_ 

FP 

&63 

63 

45 Do Warrants 

51 


- 

- 

- 

- 

- 

F.P. 

5306 

495 

464 Mercuy Euo Pram 

46< 

-4 

- 

- 

- 

- 

SO 

FP. 

2 a« 

53 

49 MUree Inv Tit 

51 


*• 

- 

- 

- 

. 

FP. 

2X38 

28 

25 Do Warranto 

26 


- 

- 

- 

- 

- 

FP. 

5P4 

200 

198 Ptarmigan Inn C 

T9fl 


- 

- 


- 

125 

FP. 

17.7 

133 

115 Radstone Terii 

115 

-1 

RIO 

2.4 

3J 

14* 

100 

FP. 

57.0 

98 

94 Saacen Vatue 

96 


- 

- 


- 

- 

FP. 

456 

43 

38 Do Warranto 

38 


- 

- 

- 

- 

- 

FP. 

5893 

508 

481 Schroder UK Orth 

503 

♦6 

- 

- 

- 

- 

ZOO 

FP. 

32J) 

218 

206 Tribal 

208 


Ffc .6 

2 2 


17.1 

118 

FP. 

54.8 

140 

128 THng Ini 

129 


mxa 

2.1 

ir 

15J 

153 

F.P. 

5X9 

160 

153 limed Carrier* 

159 


- 

- 

- 

- 


t tabaduEUDn. 5 Ptaong prim FP. Uyffe security. For < 
to the Gride to lha larrion Shore Scntao 


RIGHTS OFFERS 


Issue 

once 

p 

Arman 

paid 

up 

LateM 

Renun. 

dare 

1993/94 
Htah Low 

Stock 

Booing 

price 

P 

♦Of- 

82 

N* 

11/4 

15pm 

10 pm 

Burtord 

10pm 

-S 

173 

M 

Stt 

27pm 

16pm 

iCap. i Retford 

16pm 

-1 

4*1 

M 

14/4 

6pm 

3pm 

Cera UK 

4>2pm 


42 

W 

14/4 

18pm 

4pm 

Conrad Rdttel 

4pm 


15 

HU 

25/3 

4pm 

2*yxn Cnaton Land 

24 pm 


12 

Ni 

1314 

i3om 

10 pm 

Fm(GM) 

11pm 

-*2 

120 

Ml 

21/3 

45pm 

33pm 

^CKHMfwbtne 

35pm 


315 

M 

3013 

84pm 

52pm 

Weffierapoon JO 

52pm 



FT GOLD MINES INDEX 


Bald Hw terife (ft 2041.70 +47 202858 282234 11J3J4 

a Bagtaori tadfeu 

Atrica (15) 280550 +2.1 274844 273050 137886 

AiBBtadafO) 2683.42 +4 7 25*3.79 244102 130162 

Nora smarts (11) 1727.72 -M 174107 17SB04 1112.45 

CRVW0 The Francis Times LTmfMd TB94. 

Rsaoe h bradmto snow number at ctirauau. Bote US Dote. Bara 
Pmnwai ia Odd Maes Mac Mw IS: 3109 ; dev*! change: +06 parts 
Lxesi prices ante mraMfe far life aedrion. 


Mar 

14 

Kebg 
on dsr 

tar tar Year 

11 10 ago 

term ten 
]M % 

52 Mt 

UW 

2041.70 

+0.7 

2Q286S 262254 117134 

133 

2337.40 1173-34 

280060 

+2.1 

274844 2735.50 137886 

488 

344880 137066 

2683.42 

♦4.7 

2543.78 2441,32 120852 

U? 

301388 1184.72 

1727.72 

-M 

174157 175804 1112.45 

855 

2039JB 1110.10 


values; looooo yinnsfL 
Yea apo. 07.7 t Fada 


pm Pnce zt a prernum. 


FINANCIAL TIMES EQUITY INDICES 

Mar 15 Mar 14 Mar 11 Mar 10 Mor 9 Yr ago High low 

Ortkiaay Share 2509.3 25482 251B.7 2&A7 2 2553.0 227X3 2713A 2124.7 

Ord.dhi.yWd 3,01 3.64 166 3.63 3.62 4X 343 

Ema yU. ft Ml 4.91 4.95 4S7 4.82 4.81 6.07 038 3J2 

P/F ratio not 22.11 21.95 22.16 22-39 22.43 20£3 33^3 19.40 

P/E ratio rii 23.09 22-92 23^3 23.47 23£1 18.97 3080 1&14 

•For 1893A4. Onfroy Ohara ntax since comr ri ati o n; Ntt 2713JB ZAK/B4: knr 4 94 36W40 
FT OrOnuy Siam Mb boss dare 1/7/35. 

Ordnary Share hourly t haig w 

Open MO 1000 11X» 12JOO 13XM 14XM 1000 16j00 High Um 
2546-2 2554.1 2555.5 2566.7 25605 2659.6 2682.8 2564.8 2669^ 2572.0 ZS462 
Mar 15 Mar 14 Mia II Mar 10 Mar 9 Yr ago 

SEAQ bargains 33.617 34,173 41,081 34.943 31,485 32.183 

Equity hmwr (Em)T 1248X5 18728 2118.1 1690.7 1301.2 

Equty barter - 38.189 45.620 38.825 35.793 37^34 

Shares traded (mlft - 467.9 71X9 7603 606.4 608:1 

T EaJufeig rtra+nailiot buUnoes ox] owtob iwnmnr. 


Mar 14 

M> 11 

Mar 10 

Mar 9 

Yr ago 

34,173 

41,081 

34,943 

31.485 

32.183 

1248X1 

187L8 

2118.1 

1630.7 

lamj 

38.109 

45X20 

38.825 

35.793 

37334 

487.9 

71X9 

7603 

606.4 

608;1 










































































I 


FIN ANCIA L TIMES WEDNESDAY MARCH 16 1994 


Rv&MerExt ID 14D 


- UgH low 

— ita S3 

— 8* 37 

— CM B76b 

IS 06 

— n fi 

— it7 m 

— an is/ 

*278 in 

— . MB 38 

+1 MB 100 

+b B#j £100b 

+3 a *r 

— W 1M 

— 535 303 

— 121 IQS 

— M 27 

C 140 ~ £ a 

49 13 

Wi KG 

— HI 81 

W — 31 18 

— 170 95 

“ — 77 » 

— U7 108 

■» — in » 

33 4 

W + V T63 

no *i m 
MB +2 Ita 


2400306 <A 
4-4 1393 -49 

- 109.7 -3 

2.1 329.1 183 
M - . 

08 217JS 1&2 
M . . 


104 
- 2Z7J 


U 

Nil 


133': 71 

1795 1300 

IS B8 

125 101 

OS 266 

106 74b 

179 188b 

T77 m 

T77 128 

181 1M 

MS 231 

287 97 

173 78 

S3 14 

63 45 

Bib 14 

10S 78S 

88 80b 

178 38 

98 89 

92 40 

418 283 

483 218 

389 100 


S - Coat 

♦ or ffitttt 

- 

N* 

nr 

-1 

ifflsb 

sn 

, 

*BV 

2 

_ 

51 

7b 


MB 

!W 

— 

MB 

120 


184 

127 

-1 

99 

33 


141 

47 



183 

SS 


43 

16 



W 

44 

, 

129 

101 

— 

99 

83 



234 

132 

*e *4«7V 

234»? 

♦i 

Ml 

11.1b 


Zb 

Ob 


bb 

28 



31 

11b 

+5 1019b 

71X1 

"... 

BBO 

300 



■82b 

Mb 

+4 

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104 

— 

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5b 



3 

1b 



420 

345V 

*16 

1154 

BOB 



2b 

1 


37 

13 

1 „ 

117 

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+1 

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129 

83 

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tv 

196304 


X 

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65B 

399b 



241 

in 

4-10 

547 



egg 

*8 

471 

389 

+3 

443 

274 

4 4 

385 

202b 

4-1 

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2G6b 

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484 

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-ib 

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85 



773 

499 


LONDON SHARE SERVICE 


Yld 


1 6rt 

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: 15 

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3.4 

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8515504 
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am* *2 mcj 

HU +17b 423 


Seal Aabn Pig — 4U 


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78 *5 

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42 — 
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565b *5% 


4-ib 
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$ 3 

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2 

23b -b 

1*b 

416 +1 

72Bb tiHb 

n — 

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25b -V 
BV +V 
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4Mb -7V 
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29 — 
189 — 
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7b — 
162 — 
313 _~ 

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164 — 
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SMV Offlb 

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44 212* 

fflb 8b 
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511 397 

712 438 

M 26 
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•18 345 

87 46 

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m sib 

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B9 

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290 

11 

21.7 

18 

1.4 

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201 

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- 

15 

279 

17 

412 

1.1 

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37 

361 

12 

208 

16 

173 

62 

153 

11 

153 

08 

110 

15 

238 

17 

— 

79 

- 

19 

423 

38 

213 

12 

168 

19 

* 

14 

304 

— 

44.1 

04 

- 

S3 

177 

S3 

- 

32 

177 

£8 

213 

88 

711 

17 

638 

17 

369 

19 

119 

49 

- 

29 

773 

32 

+ 

S3 

217 

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178 

14 

334 

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32 

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32 

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YU 


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621 

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118 

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CURRENCIES AND MONEY 


FINANC IAL TIMES WEDNESDAY MARCH 16 1994 

' MONEY MARKET FUNDS 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE POUND 


$ steady on mixed data 


Economic data released in the 
US yesterday revealed hints of 
inflation, but bad little impact 
on the dollar which has 
already factored in a further 
Fed tightening, writes Philip 
Gravith. 

The US currency failed to 
make a sustained break 
through the key technical level 
of DM1.6975 and finished in 
London at DM1.6963, up from 
DM1.6898 on Monday. 

Boosted by a fall in Japan's 
bilateral trade surplus with the 
US in February, the dollar also 
finished stronger against the 
yen. closing at Y106.I50 from 
Y105.SS0. 

In Europe the recovery from 
recent interest rate pessimism 
continued with both sterling 
and euromark futures rising 
across the the yield curve. Mar- 
ket speculation is that the 
Bundesbank will today 
announce a more generous cut 
in its repo rate than the 3 basis 
points of the last two weeks. 

■ The dollar weakened ini- 
tially after the release of fairly 
modest inflation data which 
appeared to postpone the need 
for higher US interest rates. 
Although the headline figure 
showed February producer 
prices up by 0.5 per cent, this 
figure fell to 0.1 per cent when 
the volatile food and energy 
sectors were excluded. Cold 
weather in February pushed 
fuel bills to exceptional levels. 

The Industrial production 
numbers released a little later, 
however, lent support to the 
US currency. February indus- 
trial production rose 0.4 per 
cent, against expectations of 
no change, while capacity use 
was 83.4 per cent a gains t a 83 
per cent forecast 

Mr David Cocker, currency 
analyst at Chemical Bank, said 
the capacity utilisation mea- 
sure had caused concern. “We 
are almost at the level at 
which in the past we have seen 
inflation pressure build in the 
US." 

Mr Neil MacKinnon, chief 
currency strategist at Citibank, 
endorsed this view, saying 
“Inflation pressures are bubbl- 
ing below the surface." He said 
there was nothing in the data 
to prevent the Fed from tight- 
ening if it wishes. 

Mr Cocker said the muted 
response of the dollar was 


DoUar 

Against the Yen <¥ par $) 

10 7 - 


105 



Sauro* FTGrapWt* 


■ Pound In How Vocfc 


HarlS 

— L fen — 

-PlW. Ctew- 

£spo* 

1.4015 

1X958 

1 nan 

1.4893 

1.4834 

3 fllBi 

1.4867 

1.4911 

1 ir 

14817 

1.4757 


explained by the market 
already having factored in a 
rise In US Interest rates. 

Mr MacKinnon said the fig- 
ures contained nothing new for 
dollar bulls. He predicted the 
US currency “will find it very 
difficult to make progress 
against the D-Mark from now 
on." 

Japan's February trade fig- 
ures offered some solace for 
dollar bulls, showing an unad- 
justed 0.9 per cent decline in 
the February surplus with the 
US from a year earlier. 

This positive note was 
promptly offset by comments 
from Mr Mickey Kantor. the 
US trade representative, show- 
ing that the US would continue 
to play tough over the trade 
talks. "Our trade and eranmnic 
relationship, a key priority of 
the Clinton administration, is 
in serious disrepair," he said. 

■ The D-Mark was mixed in 
European trading ahead of 
today's repo announcement It 
was unchanged in London 
against the Belgian and french 
francs, at BFr20.60 and 
FFr3.398 respectively. It was 
weaker against the Italian lira, 
at L985.4 from L9S8.1. and 
stronger against the Spanish 
peseta finishing at Pta82.02 
from Ptafll.94. 

Increased optimism about 
the pace of monetary easing 
was evident in the euromark 
futures. The June contract 
firmed by 4 points to 94J» and 
the December contract was 10 


points firmer at 95.06. 

Analysts said German call 
money, in the 5.85 - 5.90 range 
was also helping, in that it 
Indicated the market could 
accept a 6-7 basis points cot 
without difficulty. 

Call money is now below the 
repo rate, which is 5-94 per 
cent The Bundesbank yester- 
day announced that it would 
be implementing another vari- 
able rate repo. 

Some observers were more 
aggressive in their forecasts 
with Citibank’s Mr MacKinnon 
saying he "would not be sur- 
prised" if the repo fell to 5.75 
per cent “The strength of the 
D-Mark gives the Bundesbank 
a chance to put through quite 
a handsome repo cut. 

One factor likely to have a 
bearing on the size of the cut is 
the reportedly easy liquidity 
position of the banks, which 
may have encouraged lower 
bids. 

■ Sterling showed little reac- 
tion to the CBl’s distributive 
trades survey which showed a 
slow-down in retail sales 
growth. It finished slightly 
weaker against the dollar at 
$1.4915 from $1.4945, but was 
firmer against the D-Mark clos- 
ing at DM253 from DM25254. 

The CBI survey did have an 
impact in the futures market 
with the June sterling contract 
rising by six points to 9450, 
and the December contract 
eight points higher at 94.60. 

In the discount market the 
overnight rate maintained its 
firm tone of late, trading 
around 6 per cent Mr Philip 
Shaw, group economist at 
Union Discount, said the Bank 
of England was r+m l in iiinfr to 
have difficulty in Hearing the 
shortage. He said this reflected 
a shortage of bills rather than 
pressure from the Bank. 

Yesterday the Bank provided 
the market with £S50m late 
assistance after earlier patting 
BSHm liquidity into the sys- 
tem. This compared with a 
revised forecast of a £155bn 
shortage. 


HarlS 

Closing 

mid-print 

Cunpa 

Austria 

(Set! 

17.7973 

Bafekm 

(BFr) 

52.1130 

Denmark 

IDKr) 

92756 

Rriand 

(FM) 

62620 

France 

tFFf) 

83384 

Germany 

IPM) 

moo 

Greece 

too 

368.177 

Ireland 

« 

1.0399 

**/ 

w 

243527 

(jxGrtnbocBQ 

OLFft 

52.1130 

Motherlands 

(FD 

£6421 

Norway 

<NKr) 

109499 

Portugal 

(Eai 

259220 

Spate 

pta) 

207,528 

Sweden 

(3Kr) 

11.7548 

Switzerland 

ISFr) 

2,1500 

UK 

K) 

- 

Ecu 

— 

12096 

SOR 

- 

0237732 

Americas 

Argentina 

(Peeri 

1^4909 

Brad) 

(Cl) 

1126.74 

Canada 

ICS) 

anana 

Mexico (NewPeso) 

42593 

USA 

» 

1X915 

PacMc/MUdte East/Africa 

AlteHBa 

(AS) 

22727 

Hong Kong 

(HKS) 

112223 

tnria 

Ps) 

46.7846 

Japan 

m 

158223 

Malaysia 

IMS) 

42600 

New Zeeland 

(NZS 

22874 

Plfepplnea 

tPwot 

41.1282 

Saud Arable 

(SR) 

52934 

Singapore 

CSS) 

22873 

3 Africa tComJ 

p) 

5.1491 

S Africa (Fmj 

(R) 

6.7938 

South Korea 

(Won) 

120223 

Taiwan 

VS) 

392756 

Thailand 

CBO 

37.7723 


400285 878 
40.1014 G57 
40.0401 682 
+0,0488 518 
♦0.0185 347 
+0.0046 287 
+0.081 681 
400001 388 
-1.43 131 
40.1014 857 
+O.OOS5 404 
+0.0225 447 
+0.748 658 
40344 413 
+00183 452 
♦0.0081 485 


■ 070 17.8391 

-603 832151 
-830 9aase 
-722 &288Q 

- 021 8.6178 

- 312 2^361 

- 873 3684573 

■ 410 1-0428 

- 622 249098 

■ 603 52-21 Si . 

- 438 184*4 

-550 11.0105 

- 981 260441 

- 842 207.965 

- 643 11.3349 

■ 915 2.1537 


One u ranth Three months 
Rate %PA Rate «PA 

One yew 

Rate XPA 1 

Ba* of 
Eng. IndeK 

17.7S3S 

02 

17.7879 

02 



1132 

52.163 

-12 

52258 

- 1.1 


-0.7 

11A7 

9284S 

- 1.1 

92992 

-19 

9934 

-02 

1162 

- 

. 

- 



- 

812 

82079 

-19 

8.6236 

-12 

06478 

-02 

1082 

2232 

-09 

2235 

-22 

22354 

-02 

1232 

1.0407 

-19 

12424 

-19 

12482 

-02 

1022 

2500.47 

-32 

251322 

-32 

256527 

-39 

7S9 

52.163 

- 1 2 

52258 

- 1.1 

62203 

-0.7 

114.7 

22427 

-02 

22436 

-02 

O RAnR. 

ai 

1182 

109442 

02 

109568 

-02 

102479 

02 

852 

280.795 

-42 

M2J4 

-42 

- 

- 

— 

206.133 

-32 

209203 

-32 

213218 

- 2.8 

842 

11.7748 

-22 

11.8103 

-19 

112183 

-\A 

78.7 

2.1482 

19 

2.1446 

19 

2.1221 

12 

117^ 

. 

. 

. 

_ 

. 

. 

807 

12111 

-12 

12133 

- 1.1 

12188 

-0.7 

- 

2-Q311 

12 

22289 

12 

22301 

02 

882 

1.4894 

1.7 

1.4868 

12 

14819 

02 

662 

2X1712 

02 

2-0689 

a? 

2.0660 

02 

_ 

112093 

\A 

11.5039 

06 

11.4548 

06 

- 

157933 

32 

157228 

22 

153238 

22 

1832 

22903 

-12 

22946 

- 1.1 

22032 

-06 
i . 

- 

- 

- 

« 

- 

- 

- 

- 


Money Market 
Trust Funds 

fiM 

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Is Bn martlet 
boBl Mi tad 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Mer 15 

Closing 

mid-point 

Change 
on day 

Sdfofler 

«praad 

Batope 

Austria 

(Sch) 

11.9325 

+02437 

300 - 350 

Belgium 

(BFr) 

342400 

+0.138 

200 - 600 

Denmark 

W 

62213 

+0.0402 

165- 240 

Ftetend 

(FM) 

52394 

+0.0445 

344 - 444 

Franco 

(FFr) 

S.7650 

+0224 

844 - 655 

Germany 

P) 

1.6963 

402065 

960 - 965 

Greece 

W 

246.650 

+055 

600- 100 

briand 

m 

1.4343 

-0.003 

333 - 353 

Italy 

(U 

1071.65 

+2.4 

090 - 240 

Luxambourp 

(LFO 

3400 

+0.158 

200 - 600 

Nether tends 

(O) 

12056 

+02075 

050- 060 

Norway 

(NKf) 

72415 

+02298 

405 - 425 

Portugal 

(Es) 

174200 

+0.85 

ISO - 250 

Spate 

(Pta) 

139.140 

+0.71 

110 - 170 

Sweden 

(SKr) 

72812 

+0.0267 

774 - 849 

Switzerland 

(SFr) 

1,4415 

+0209 

410 - 420 

UK 

(ti 

1.4915 

-0203 

910 • 920 


1 475 UBS | 4*5 j MS. 
I ISO 3.75 i 5 . 1*1 Ob 


~ ,T v»— a • I ITS 14J7B 1 3.10 MBl 

5m JS 100 407 H> 

BSb- BSs. 1 4” 1375 459 [ MB 

mow BlSS-Z: 4.75 15075 I 495 1 •» 


071-0250879 
430 434 Warty 

438 UB tatay 

433 154 Mb 

305 533 Yw X* 

300 407 HOI 

oo 407 mi 

.15 537 wtoy 


as ioo mo> 

2X3 590 M* 

231 182 brtl 

300 407 MO 

119 483 Mb 

336 435 brtl 


laMMMta 500 460 5W 

MrtMMOeMta in 431 |W 

IrtMnDMul IS «31l 8001 

Ita m l ta cfttN R osace ftot p „ 

58B5rt«rt.HOi*.0nba«Ota «*{■»» 

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,0772 433272 

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11353 -2.1 
35025 -2 a 
6.6366 -2 S 
5-5451 -12 
6.7788 -3.1 
1.7001 -2.7 
2605 -17.7 
1.4308 2 a 
167095 -02 
35.025 -M 
15087 -2.0 
73522 -16 
175.18 - 6 a 
139.75 -5.3 
7.9082 -4.1 

. 1.4423 -07 
1.4894 1.7 


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35.146 -Z3 
6 . 6 SB 6 -U 
55504 -08 
5.7998 -2.4 
1.7049 -2H 
257.33 -17a 
1.4280 2S 
1690.7 -4a 
35.146 -2a 
1.9124 -1.4 
70647 -10 
178.64 -5a 
i4oaas -4a 


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noose *_ ) isos 

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231 U7 
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S25DOO- 530 IS 

mug. 150 4.12 

TESSA—— 525 


Nattmoibte BUp Soc - Bi^BOsataiyator 


285a6 -isa 
Mils ia 
1731.65 -3a 
36.44 -1^ 
1J169 -0.6 

7 a 77 S -oa 
18ia -4.4 
143475 -aa 


7.9455 

-32 

82482 

- 2.1 

822 

1.4423 

-22 

1.4324 

0.6 

1042 

1.4868 

12 

1.4819 

Q .6 

89.4 

1.1322 

2.4 

1.1235 

1 A 

- 


Aigantina (Peso) 09896 

BrazS (Cf) 755.435 

Canada (CS) ia638 

Mexico (New Peso) 3a2S0 

USA W 

PacMcAflMda East/ Africa 


-OaOQ 2 995 ■ 996 0.9996 09994 
+11.775 430 -■ 440 755.440 755.420 
+00038 633-638 1-3838 1.3603 ia639 

♦006 200 - 300 33300 3a 100 3.3268 


E13O0414M 

OJW-ttSW 

EHMM 0 -C 2 VSW. 

C293W+ 1 

Brawn States 

MnOwiMba 

MBA 1 

MOOOMrtAb 1 


Ph. Camay 0SW4W1W 
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ioa T- 7 b loo tinrty 

S3 IW 125 Warty 

540 4.13 UB Warty 


20 a 150 2 TB Ob 

I 125 159) 227 Of 

2J! 209 27B| OB 

I 435 251 I 3J9I Or 

SOB LM 

BMraUmgneC2 071-9059533 

I 450 1W 4071 (Mr 

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Ptomrtrt.-MBWLSWSIWI 

ISMO-C4009 430 240 

SoOO-fBOW- 350 255 

IKUI00-C245M 430 1Z3 

E34no-£M5» 450 390 

00500+ SJO IBB 


-oa 1.3645 -oa 

-oa 33 29 4 -oa 


ia7 -oa 
334 -oa 


■ onn cumoB 


Honj*l 154395 - 154273 

ban 26120) - 261&00 

KdMK 0.4436 - 0.4454 

Mwd 327155 - 3Z7375 

Rusda 2564.75 - 257225 

UAL 5.4749 • 54881 


103350 - 103400 
17480) - 17500) 
02975 - Q7HB5 
2)9420- 219420 
170700 - 171200 
30715 - 35735 


AiMtraBa 

(AS) 

12897 

-0.0025 

883 - 900 

12914 12854 

12908 

-02 

12836 

- 1.1 

1.4012 

-02 

884 

Hong Kong 

(HKS) 

7.72S3 

-2.0008 

248 - 256 

7.7264 7.7247 

7.726 

- 0.1 

7.73 

-02 

7.7488 

-02 

- 

Inria 

(Ra) 

312875 

-0202S 

650 - 700 

312700 312650 

31.4325 

-22 

31.5875 

-22 

- 

- 

- 

Japan 

W 

IOB. ISO 

+027 

100-200 

70GL680 106270 

10&045 

12 

10 5.745 

12 

10322 

21 

144-8 

Malaysia 

(MS) 

2.7355 

+02107 

330 - 380 

2.7410 27251 

27295 

22 

2713 

32 

27855 

-12 

- 

NswZaefceid 

(NZS) 

1.7348 

-0.0015 

337 - 358 

1.7382 1.7325 

1.7364 

- 1.1 

1.7409 

-1.4 

1.7651 

-12 

- 

PhCppInes 

(Peso) 

272750 

+0.025 

000-500 

27.7500 27.4000 

- 

- 

• 

- 

- 

- 

- 

Seud Arabia 

(SR) 

3.7502 

+0.0003 

489 - 504 

3.7504 3-7500 

3-7626 

-09 

3.757 

-0.7 

3.7757 

-a7 

- 

Singapore 

(SS) 

12872 

+0.0029 

867 - 877 

12877 1-5850 

12872 

02 

T2872 

ao 

1.6107 

-12 

- 

S Africa (Com.) 

' (R) 

3.4523 

+0.0015 

515-530 

3.4560 3.4425 

3.4866 

-52 

3.4958 

-52 

32928 

-4.1 

- 

S Africa (Raj 

(R> 

45550 

+02325 

500 - 600 

42600 42075 

4266 

-82 

4.65 

-82 

• 

- 

- 

South Korea 

(Won) 

806250 

-025 

000 - 500 

807.400 808200 

80925 

-4.5 

81276 

-32 

831.25 

-3.1 

- 

Tdwon 

(TS) 

26.4000 

+021 

000 • 000 

264000 262900 

ttesngfi 

-4.7 

2896 

-32 

- 

- 

- 

Thailand 

(Bt) 

252250 

+0205 

200 - 300 

252200 

25296 

-32 


-32 

25275 

-19 

- 


aa/MbrtSwrtaGtatboWBazpp uisnbbs 

MCA .1475 UOZBl -IVortk 

CMarAttaLM 

20 Bbdrti Lira. LboOM SOI 071-002070 

MCA lira 251 461 1 Ml 

Canton daw art 450 137 ia MB 

OwtMI I 13 -I 137 1 Mb 


IMmanrt M. Boaiirtaam. BIC BB > 0500053083 

£90000+ 1 AM 4 13 550 Warty 

en500-£41B99 I BOO 175 100 tartly 

ao 5OM2M08 I 450 130 4M tartly 

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}&S^SSSiS^ ,871-8221 ,05 
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EdOW-trtUes 300 170 196 or 

£10, OW - £24999 SW 225 353 Or 

OMO-taMB 250 150 252 Ob 

EWO-HQW UO 1.13 101 Ob 


10 ' 0000 a2HH 

OartMHMrt. 171 251 I 302 Doll 

IBMMIIta 353 -1 4W MB 

TESSA batata 455 - I 475 IM 


[ Ran. EC4M 70H. 

ITS 251 
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425 110 

410 138 

150 1.13 

2-00 150 

225 159 

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ar^rti bbBoM dmwn tor AM 14 Bon mrnmge 1990-100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


Mar.lS 


BFr 

DKr 

FFr 

DM 

IE 

L 

H 

NKr 

Es 

Pta 

SKr 

SFT 

t 

CS 

S 

V 

ecu 

Brrighsn 

(BFr) 

100 

1825 

16.50 

4.855 

1.996 

4784 

5^54 

21.01 

498.6 

3982 

2255 

4.126 

1.919 

3203 

2281 

3032 

2314 

Denmark 

(PKi) 

5276 

10 

6.706 

2.582 

1.053 

2524 

2678 

11.09 

263.1 

210.1 

1120 

2177 

1213 

2060 

1310 

1603 

1228 

France 

IFFt) 

6021 

1149 

10 

2243 

1210 

2900 

3205 

1274 

3022 

2413 

1327 

2301 

1.163 

2266 

1.734 

184.1 

1324 

Germany 

(DM) 

CO.0O 

3.904 

3298 

1 

0.411 

965.4 

1.123 

4228 

1027 

8202 

4244 

0260 

0295 

0204 

0369 

6257 

0316 

Ireland 

(IE) 

sail 

9.486 

8287 

2.433 

1 

2397 

2733 

1023 

2492 

1993 

1120 

2067 

0.962 

1256 

1.434 

1522 

1260 

Italy 

tu 

Z090 

0296 

0345 

OHM 

0042 

IOO 

0114 

0439 

1042 

8323 

0.471 

0066 

0.040 

0082 

0080 

6250 

otwa 

Netherlands 

(FD 

1634 

3.475 

3.025 

0690 

0266 

8772 

1 

3.853 

91.41 

73.01 

4.134 

0757 

0352 

0716 

0525 

55.70 

0461 

Norway 

(NKr) 

4729 

9.019 

7252 

2311 

0250 

2277 

2295 

10 

2373 

1893 

1073 

1263 

0.913 

1.858 

1282 

1443 

1.196 

Portugal 

(Es) 

2 a 06 

3201 

3209 

0274 

0400 

9582 

1294 

4-215 

IOO 

7927 

4323 

0228 

0285 

0783 

0374 

6023 

0304 

Spate 

(Pta) 

2511 

4.7B0 

4.144 

1218 

0501 

1201 

1370 

5277 

1252 

100. 

5.663 

1236 

0482 

0880 

0719 

7829 

0631 

Sweden 

(SKr) 

44.35 

2405 

7217 

2153 

0885 

2122 

2419 

9219 

221.1 

1708 

10 

1230 

0251 

1.731 

1-289 

134.7 

1.115 

Switzerland 

(SFr) 

2424 

4.593 

3.999 

1.177 

0484 

1160 

1222 

5.093 

1202 

9631 

3485 

1 

0.465 

0248 

0293 

73.83 

0609 

UK 

(0 

52.11 

9 876 

8598 

2530 

1240 

2493 

2642 

1095 

2592 

2073 

11.75 

2150 

1 

2034 

1.491 

1582 

1210 

Canada 

(CS) 

25.62 

4255 

4.227 

1244 

0511 

1226 

1297 

5283 

127.7 

1022 

5.777 

1.057 

0.492 

1 

0733 

77.83 

0.6*4 

US 

(S) 

34.95 

8224 

5.767 

1287 

0688 

1672 

1206 

7244 

1742 

138.2 

7881 

1.442 

0271 

1.384 

1 

1062 

0.979 

Japan 

(Y) 

3292 

6229 

542J 

15.98 

8.570 

15749 

17.S5 

68.17 

J64 1 

1311 

7423 

1338 

6217 

1285 

a419 

1000. 

8275 

Ecu 


3978 

7239 

6.563 

1231 

0.794 

1903 

2.169 

8256 

1983 

158.4 

8266 

1241 

0763 

13S3 

1.138 

120.8 

1 


, DgnMi Knm, Frenctl Franc. Nonmglafi Kn 
nnURSB flMM) DM 126a00 pa CM 


I Swadsh Kronor par 


i Franc. E amrl a Los and Pan 

■ JAPANESE YEN I 


) ()MM) Yon 12a par Yin IDO 



Open 

Lotos 

Change 

Hlpi 

Low 

Est vrt 

Open tot 


Open 

Latest 

Change 

Hgh 

Lon 

Eat vd 

Open rL 

JVFI 

0 5886 

05857 

-0.0033 

0.5889 

0.5854 

44287 

80231 

Jun 

09457 

08414 

-0.0036 

02483 

02406 

25200 

46219 

Sop 

05848 

03840 

-00033 

03652 

0.5840 

127 

2.708 

Sep 

02495 

09468 

-0.0025 

02500 

0.9461 

85 

1273 

Doc 

0.5836 

05837 

-0.0027 

05840 

03837 

5 

132 

Doc 

- 

09525 

- 

- 

02525 

7 

390 


EUS EUROPEAN CURRENCY UNIT RATES 


2.19672 


Franca 6a3883 657206 +0.00248 051 2M -4 

Danmark 7.43679 754560 +0.00642 1.46 1.47 -10 

Spain 154250 158534 +0.179 2.78 ai8 -19 

Portugal 192054 196558 +0-467 298 000-20 

NON ERM MEMTOS 

Orartca 284513 261094 +ai38 654 -3.18 

Italy 1733.19 1907.90 -Z75 6.40 -303 

UK 0.788749 0.764017 -0500516 -209 652 

Ecu cenpol mm art by dia Bbapaon C u i n i BMlu n. Qiranbi am bl deowndbiH mMBm oaongBi 
P rtconrtpa drtrtO— am ibr Ecu a pnaBNa ctawpa danetaa a wB uai an c y . a m pence rt mwlho 
rade batwean ta« opoadK dm prtcarapa MTonnce bMaorti 8 m rtErtta mortta aid Ecu cvrtnl nan 
Ibra uri rt t- y, n) Bw i i mtin n pernrtnad prt u a mu « drtrt MM i «rt Bm a»r»ncy*» aaM rtaa trom to 

EcucaiMMrtaa 

(1 DM8 StarBng and ttaean Lira awpandad from SIM. Atuabnora cMctartad by 0» FtaancW tanna. 
■ PWBJbPajW 90 C^OPTIOIM £31550 (cants per powd) 


Change 
on day 

96 +V- tram 
can. rats 

96 spread 
v week net 

Ota. 

ted. 

-000105 

-1.70 

4.74 

11 

-000088 

-1.13 

4.14 

- 

-00307 

-0.96 

328 

7 

+000072 

-0.85 

334 

- 

+000248 

031 

244 

-4 

♦000642 

1.46 

1.47 

-10 

+0.179 

2.78 

018 

-19 

+0.467 

226 

OOO 

-20 

+0-138 

624 

-3.18 

— 

-2.75 

6.40 

_3_23 

- 

-0200516 

-239 

622 

- 


30SW1OCM4 pace, saw"* Bl 2H. ,041-0457070 

ElOOdO-CaLtM [170 171 | 175 Ob 

£30X00-00990 |17S 251 | 350 OB 

nDOWO-CIOMW— I 350 259 I l»l 00 

Ike Co-sparaOw Bnk 

. OMBfSsm 


raaa>3W.Mwmrt«xUwcB . (046252000 
TTSSA 1 525 -I -I tartly 

7Mlprt-eMlbl4 trti rtrt1 

raa i ri i.. Tuo 3 55 I bxI m 

00X00+ ^ , .*1i2b"*” I 1«4 1 432|5-MB 

£25X004*8X88 *-50 135 J 495 6-MO 

tnqflOO-CMMB 4X0 TOO 404 10 -AWI 

cSo-tun lira iral ubIb-mb 


IMMBinMMrttarbrt 1X3 2710 1071 0b 

UMIHUMBaa. 1791 2013 3X03 Ob 

MM £50000+ 3571 HOB 1802 Ob 

«MA £100000+. 4000 3XW 4X50 Ob 

TyndMTCSSA 4375 - 4447 Oa 

IV That Unfed 

I Grad CwmortOod PI, Imflon W1H 7AL 071-3050004 
£10X00-80 lrtrnobca | 8.75 1X0 I 5a2|3-MB 

£10X00-100 drtWBrt- 750 IBS ] 754 MMI 
£23X00- liter I 72 144 I -I tart* 

Doted UoaUafBBo TVart LH 

POBMfe 1 10 CbddMbn RlfeOK Hrtta 9M 007 

IteBrt (Bn E^rt MM 

£1X00+ l4J5 1SB I 4J4[ 00 

J. Haaqi Sdaoder Mni Co 111 
mafete Umtai EoVta orr-ownooo 

SpoctaAcc.— 0X0 175 | MBl MM 

£10X00 and aSow I 526 194 1 1931 Ml 

Mn Hurt M0 lateraBChoqpeta 
Ite lrtrt«|CaMl Kyninart B.1 1SE , 07S 224M1 

£10X00+ [ATS ISO 40*1 W 

0X00414005 *50 339 J 469 Ob 

£1X00-040® 1423 119 1 4&| Ob 


2^ 169 1 OX.lMNM SHSSSSSSJ 


ezsax»+ 4X0 138 I 49510-MM 

00X00-049X89 109 230 I U MO 

ei OXOO-e*BX99 1 275 2X6 277 0-MBi 

OOB-COLBbB 1 223 1X9) 220lB-rt» 

35B0M teBantaMMiaOBI-BB SGS 


l OMM) SFr 125.000 per SFr 


i RJTURn (MM) £62.500 par C 


Jun 

0.6955 

0.6924 

-0.0038 

08(160 

06915 

22206 

32.683 

Jun 

1.4904 

1.4856 -0.0068 

1.4910 1.4850 

7.701 

24.107 

Srp 

06950 

06935 

■00037 

06960 

0 6928 

96 

269 

Sep 

- 

1.4820 

1.4820 

68 

586 

Dec 

OtfSiS 

06950 

-0.0035 

0.6965 

0.6950 

39 

33 

Dec 

• 

1.4800 

1.4800 

3 

30 


SW« 

Price 


- CALLS - 
May 

Jun 

Apr 

— PUTS — 

May 

Jun 

1-400 

832 

8.79 

838 

- 

0.10 

030 

1-425 

6.46 

068 

8.79 

008 

023 

066 

1-450 

423 

438 

4.90 

032 

079 

125 

1-475 

2.4 2 

238 

323 

095 

1.80 

2.15 

1300 

1.12 

1.69 

2.16 

2.14 

2.79 

328 

1325 

0.43 

039 

120 

339 

4.47 

438 


Lmxaca: 


Are you dealing in over $lm? I 
Fast, Competitive Quotes 24 Hours ! 
on 071 815 0400 or fax 071+329 3919 1 


PrmDiB On/s +oL, CoM 1 11252 Puts 67300 . Prav. daft open irrt. Cal) 475X44 Pirt» 37174S 


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MONEY RATES 


) (L/FFEr DMIm paints ot 100H 


March 15 

CVpt 

rugnt 

One 

month 

TTwoo 

iiiUkj 

Set 

mtha 

One 

year 

Lomtx 

tetcr. 

Db. 

rate 

Repo 

rate 

Detgtum 


O'. 

84 

6ft 

Oft 

7.40 

500 

_ 

i+tv+i jgs> 

- 

lift 

04 

Si 

6ft 

7.40 

5.00 

- 

France 

e; 

6 5 » 

fl'a 

«A 

S3 

6.10 

- 

7.75 

wnek JTO 

Oft 

6ft 

Oft 

64 

53 

6.10 

_ 

7.75 

Oonnany 

590 

535 

5.80 

5.65 

5.43 

6.75 

525 

594 

«+<ck j ao 

6.05 

5.95 

585 

572 

5.48 

075 

525 

537 

Ireland 


84 

6ft 

6ft 

6ft 

- 

- 

6.75 

et+ta aoo 

Ai 

6& 

64 

04 

6ft 

- 

- 

075 

Ksfy 

84 

8ft 

8ft 

04 

84 

- 

8.00 

892 

*«+l fl'JO 

a-b 

8ft 

8!* 

84 

64 

- 

8.00 

83= 

Nenwriandi 

553 

5.47 

529 

5.20 

5.16 

- 

525 

- 

wnik ago 

553 

5.4,- 

524 

5.16 

5.11 

- 

525 

- 

Surtuortand 

4 

44 

44 

4 

33 

0625 

400 

- 

week ego 

4'. a 

44 

44 

4 

3Q 

0625 

4.00 

- 

US 

34 

3-7 

33 

*4 

-a 

- 

3.00 

- 

wi* ago 

3'a 

3ft 

39 

44 

4ft 

- 

3-00 

- 



Open 

Sett price 

Change 

Hflh 

Low 

Est vtJl 

Open tm. 

Jun 

9456 

94 60 

+0.04 

9430 

9454 

37927 

253231 

Sep 

9432 

9427 

+005 

94.00 

9432 

34103 

160032 

Doc 

94.96 

95.04 

+006 

3508 

9436 

39141 

148343 

Mar 

95.02 

9513 

♦Oil 

95.15 

9502 

9153 

116426 



i wnm pJFFE] LIOOQm paints at 10096 


Warta* Startng 
Stertna CDs 

Treasry BRa 
Bank 8fe 


*h- 5^ 5^-Sl, 5A -5 f, 6A-5i 54-54 

Sd-S* *-SA 54-54 5V-5J* 

<!i-A 4^,-4% 




Open 

Sett price 

Change 

High 

Law 

Est wl 

Open Int 

Jun 

91.83 

91.94 

+0.13 

91.97 

91.62 

10273 

58538 

Sap 

92.08 

82.19 

*0.12 

92.19 

92.06 

5101 

2S711 

Ctec 

9221 

92.30 

+ai2 

9222 

82.17 

3069 

41455 

Mar 

92.16 

9221 

+0.15 

oa •y? 

92.12 


0 


HUFPE) SFrlm points o( 100% 


wn.4 ago ?'> 


■ 9 UBOR FT Lontkm 
Intatbank FUng 
»nrt ago 
US DoMor CDs 
•£«4. ago 
SDR Linked Da 
neck ago 



Open 

Sett price 

Change 

High 

Low 

Esl vri 

Open InL 

Jun 

96.18 

96.19 

+0.01 

96^0 

96.16 

2519 

29567 

Sep 

9624 

9627 

+003 

9027 

9624 

ear 

5555 

Osc 

9630 

9630 

+004 

9633 

9019 

IBS 

4540 

Mar 

96.10 

96.10 

- 

96.10 

9010 

50 

0 


Local muttony dope. 5}i - 5JJ 

5.’. - 5£ 5A-5i 

5l»-5 

5*0-5 

5A-5.V 

Discount rrasket deps. 6-5 

Sh - 5i* 

- 

- 

- 

UK dearteQ tank base lenring rate b 1 * par cent bom Februwy 5 1994 
Up » 1 1-3 53 

6-9 

9-12 


•north month 

fflorthi 

months 

uwAn 

Certs of Ta* dep. (flOOflOOl 

1*2 * 

a 

34 

3*2 


Corn cf T« dap. undar C100X00 la ifepc. Dapatas elBidrawn Air cash W 
tan. fonder aaa cf docoibit 47«0ipo. ECGQ flnad rata S#g. Emwi tanonca. M 


» cf dtaaunt 47S3ipo. ECGD fbcad iota SBp. BqM+ tananert Mato up day Fataurty 28, 
1 004 Aaaod Irtc lar partod Urt 06. 1804 n Apr 2S. 1904. Sckattaf B 0 ■ aape. RMrtwEB <an lor 
Period Art 1 . IBS* to Fab 20. 1004 Manta N 4 V UOBpe. FVtanra Hqum BON Rta 5>apa Awn 


3S 3'b 4W, *H 

31 3Tb 4ft 44 

344 3JSS 19 B 4-39 

3^4 168 3.94 4J2 

J'l 3 r a 3ft 4 

3*h 3ft 3-ft 4 


! MONTH CCU WTO® 


Open See price 
9415 94 JO 

94.35 94.42 

94.46 9453 

94.46 94.55 

m aadoa an APT 


8S (UPFE) Eculm pakits of 10094 


CTunge high Low &t- wol Open bx. 
+03B 94^0 94.16 1166 11530 

♦007 94.42 94.35 987 10016 

+008 945Z 9446 4ST 0730 

+0.07 9452 9448 140 0 


I PUTURXS (LffFE) £500,000 points of 1DC?fc 


Open 

Son price 

Change 

«8h 

Low 

ESL vat 

Open InL 

94.81 

34-82 

+0.01 

94.82 

94J1 

6638 

55784 

94.65 

94J30 

+006 

94*1 

94^4 

18068 

110135 

94.72 

84.79 

+007 

94.79 

94.72 

909 

74619 

94^1 

84.00 

+008 

94.60 

94 £1 

7390 

87848 


ECU LMmd tta mid rai n : I mti OV 3 mil* 0ft; 8 mtta: B : 1 yaar: 53. S U80R b l lwttank Wig 
own am Crtfirad nura lor Siftn pucasd lo Be mark** by tour ntm once Banka at Horn nmCf menu tq 
on Hm oopSs »» Banker* Tius. Bor* of Tokyo. Borctaya aid Naborta Waib ni ta cr. 
kW «a Bd mm ia oio oarasoc Money Ratal US S Ota and SDR UrBoa Ocpotaa (Do). 

EURO CURRENCY INTEREST RATES 

Mer 15 Short 7 days One Three Six One 

tarn notice month months rn m dt m veer 


Traded on ATT. Al Open Heart aoa. rta A» pnmaw day. 

■ SHORT SmuM OfrnOtaS (LIPFE) C50000D poteta of 1009*1 


! MONTH BUMDOLLM 0MA4) $1m paints of 100% 


Bc*3*»i Franc 
Sonsh Krone 
D-Maft 
OU^ft GuMv 


6,1 - 6,‘e 6>« 

64-5% 8l| - 

iU - 5!J 5*. - 




Open 

Latest 

Change 

High 

Low 

EsL wol 

Open InL 


Jun 

9565 

9566 

+0.01 

9569 

9554 

123.130 

477.581 

One 

Sep 

9525 

95.25 

-O.Q1 

9529 

9623 

80-482 

378,795 

year 

6,'. - Si} 

Dec 

94.83 

94.84 

-0.01 

9427 

94.62 

51^68 

282-407 


■ IW TRSASURT BU. PUTUBS ?MM) Sim par 100% 


French Franc 

D*o - 6'* 

»H ■ 8 ft 

eft - eft 

eft - eft 

6A-5U 

Sft -Sft 

Pcriuguosa Esc, 

lOU - 10 

10 ft - to 

10 -9ft 

9fl-9i 

9,'. -9ft 

9A-9 

Search Peseta 

8i\ - 8>| 

8,’. - 8ft 

8ft - B, 1 . 

BA -8 

8ft -7U 

«A-7ft 

Staling 

S'* - 

5ft -5ft 

5ft - 5ft 

5A - W 

5A - 5A 

5\-5ft 

Sew Franc 

Jl+ - 4 

Jft - 4 

4ft 4 

4A - 313 

3i: - on 

3iJ -3ii 

Can. D0Ur 

3.’* - Ji* 

3fi - 3,'. 

3ft -3ft 

4,’* - 31} 

4ft - 4ft 

5 It - 4H 

US Defer 

3% - 31* 

3ft -3ft 

3.*. - V. 

3ft -3ft 

4ft - 4 

4ft - 4ft 

Itfun Ura 

9 - r»+ 

8ft-?ft 

8ft -7ft 

8ft -7ft 

8ft - 7ft 

7ft - 7ft 

'ton 

2i* - E l a 

2»i " >u 

2ft - 2.'. 

211-2A 

211 - 2i 

2ft - 2A 

Assn S5<ng 

3‘; - 2‘2 

3ft ■ 2ft 

3ft - 2ft 

4 - 3 

4-3 

4ft -3ft 


Jun 

9506 

96.07 

- 

96.09 

9006 

4219 

13267 

Sep 

9571 

0572 

+021 

9574 

9571 

35a 

8-111 

Dec 

9537 

9536 

-0.01 

8538 

9527 

34 

2234 


MOpan Heart fid are tor cnwteu* day 
■ EH ROMftHK OPTIONS (UFFE) DMIm PQtnO of 100% 




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brtE Indoi He. 91 1 (ensaenar Cardan. I*aknSWl WOOD 


Duff Forecasts and Market Myths for 1994 

Th.:- US d'M.c: wi.. :eor. dercMon w!:! continue: gold 4 most coirmcdiV.« 


•ron’t rise: Jcnon s economy J stock merkot will be week. You did 
MOT readtha? ; n ruHcrf/lor.ety - I no iconoclastic Inveslnont iftlor. 

? £»=••&« s':co‘. i-i-rioi v;:+ Tuo. tjk ro 1 . Lor ca;: T''ii7 ±lt\ 

:CT-, n JK> e: fox 71 .«« .... ^ 


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BASE LENDING RATES 


Snan arm rmo ora 



AOam&Compeny — 555 

AEed Trust Bank -5^S 

AS Bank - &2S 

•Harry Aistauisr 523 

Bankaf Baroaa 525 

Banco BUo Vizcaya- 525 

BankOfCiwus _.. 525 

BatfcoIMand — 525 

Bank cX Mb 525 

Berk a( SoaSarid 525 

BedayaBank. — —625 
Brit Bk at Mi East.. ^ 525 

•Brawn SHptey 525 

CL Boric NBdBrtand... 525 

CateartiNA 325 

Oyd a o do t o Bank 5-25 

Ths CocparaM Bank. 525 

COiltS 5C° 525 

CracftLyPtatels 525 

Cypno PofHdfr Brt* -525 


Oman Laorie 323 

Enter fink Urrited_ 625 
Rnandal 5 Oan Bank _ 6 
•Hobart Homing & Co 525 

Orabrt* 325 

•Grimaao Matan 525 

HpMBaAAG2UkBi.52S 

•HamtnaBo* 526 

Harfebte ft Gen Mv 9b S2S 

■MamuL 625 

C. Hoan&Co — 52S 

HcnsfengSStatfiBL 33 
JufenHadgaBank — 525 
•UxpoU joeerii S Som 525 

Lloyds Bank 525 

Mepq|Ba*Ud 525 

MfeMBar* 525 

* Motif BaBWg 6 

W WMH B ife 525 

•HMBK0WR 525 


* Rodvtfa Guaratfee 

OrpcxaSon Limited Is no 
longer atfolsed as 
a Hama >— Ana 8 

Royri BkoOcoBand- 525 
•Snfei & WBrran Secs . 525 
Stands* Cantered _ 523 

TBB 525 

•Unfed Bfe of Nimb_ 525 
Undy Trust Bark Pic _ 52S 

Wastem Trust —825 

WriOBway lakflaw 525 
Yukrt B aBrt * . 625 

• Uembars of British 
Maretwnt Banking & 
Securities Houses 


-3 C'4 

f rssi CrJ-' A-.olysis Lid 

xci.t ' 7 Swallow Sirwr. tendon V.'IR 7HD. OK- 

•;> exchange rote speciaiisls (or over 20 years 


g:' : (: Anne Whi!by 

Tci: 071-731* 7174 
Fax: D71-43? 4?i6 

C fiVJdA ’.‘cr-t,-.- 



24 HOUR 

CURRENCY MANAGEMENT 

CORPORATION PLC 

FOREIGN EXCHANGE 

WtndieaerHanc 

77UmtooWflH 

London ) 

London EOMWD 

De.iling D^sk j 

T*t 071-382 VMS 

Ac (0 1-382 W 


•FOREX ‘METALS -BONDS -SOFTS 

Objective analysis (or professional investors 

0962 879764 















EUROPE 

AUSTRIA (Mar15/ Scfll 


AdMr 

BUud 

craapi 

UCM 

EWt 

Lining 

Mh 

PwtZm 

feduH 

SBKrt* 

imup 

AAA 

UMAlr 


1075 
1.305 
734 
4.030 
1.567 
1JB0 
®I7 
1.000 
505 
Ml 
375 
724 
5E2 
3 .BOO 


-S20OO 
*5 1.270 
•3 B34 
*15 4290 
*10 1.713 
+20 1.131 
.... 1.071 

— 1.105 
+20 513 

— 251 
+1 acta 
-2 701 
+4 600 

♦ 15 4,340 


la» 2.4 
053 OJ 
409 as 
IMtl _ 
000 12 
404 1 * 
56Z 1J 
TOO 20 
200 10 
146 ?J 
211 io 
380 12 
440 1.4 
Men as 




ss ss 

£55" Saw 

SL AS 

BCrtPl 20000 

BAM 40.475a 
oaai zuoa 
BBRQm 12,350 

an 2.475 

OBW 
IBB 
0,131 
1.436 
8080 
Bjao 
3,580 
4J06 
4020 
UK 

tom <J.£»o 
OvM 4.7B0 
tomou 3.440 
Rntx*'. 7,«n 


EbWFy 


1J90 

PunLm 17.050 
Pinna IOjoo 
P wfln 3J20 
Hod 530 
RvfMg 5.000 
FtMUU-V 5.540 
SocOtl 7.755 
SBnWV 7.670 
tons 15000 
Sdvac 1 JOO 
Sotav 14.650 
TreM 11,150 
UCB 23jBOO 
UnMn 2005 


-ta 3,086 2.111 15 

*“4^0 2,360 VJ 

*iS f-SS SiW0 mi 

*“4.790 1.750 __ 
rSJ^jonoo 45 
-100 10380 11 .238 20 

■•-aTOWLS 01 21 
—073313)00 5J 
-200 25500 13.S3Q 1.4 

_i 2 £rtMm> as 

♦5 2.600 1.M7 jj 
♦70 SJW 4 jsse 
*1 .I® 81 7.0 

♦M8.1B0 6 .EO 12 
-61.H0 1.090 1 JB 

;«25225" B, ° “ 

♦30 3JSOo|«0 3J 

335358 

-101SWl.no 26 
— 9210 7.070 _ 
♦10 1 U.a® 0210 1 7 
♦ID 0050 2JOO 23 
+40 3J5O2.4B0 *_3 
♦10BJMO 5.750 IS 
♦*0 7050 5.630 IS 
+ 10 O3B0 5JO0 _ 
♦M ISA 1012 OS 
-■ 17S501ZEOO ai 
+75 10975 7000 17 
♦31 3.660 2J45 4.0 

-4 568 273 

—40 6 JOO 4.025 33 
♦10 5.680 3S10 3S 

-16 VBO ]■*“ 4-1 
♦175 ISuGOO 9000 is 

*3!SS$BB 

^SSKBB 


KB* |S 
ESS ,57 SS 

NMU 

■T™ 1282 

__ £3? ’»■» 

man 250 
... ***% 49650 

PunuR 530 

= Sf "W 

- af a 

".. P" 1 ™ iflsa 

500101 

~ (vm» Bco 

••• rum S£ 

"■SMC 875 

3 S Hi! 
SS, \1 

§^3A 580 

So?** 537 

SJmco 637 

— SW» R 

- SocGon 678 

— SammA ? 

“ g«* 4 91 so 

•• Tallin 2741 

- E 2 S* *» 

TMffi !man 
“ UAP SSio 

— UFBLoc 446 
■" Mitral 587 

- Mrft 700 

— WfO 1.469 
VlAc 28090 

-•• WrmrO 32Z90 


+1 298 l» 

*3 01839010 2.5 
*1-23 177 9050 21 
*1 20 287 lOia no 
+)■» 167 705 it 
732 4.7 
-JD1»« 12050 4S 
— 200 96 — 

*4 70 589 333 3S 

♦8 589BO50 4 A 
-.6023050 181 2S 
+4.9044520 348 5.4 
*10 903 — 

♦21 1.Q50 
+6 1 J®S __ 

♦34 57321950 _ 
*4 1.125 630 128 
"1 1B0 125 3 .1 

+14 752 410 12 
-25 046 661 02 
-6 31290 1.100 1.7 
♦13 713 460 11 
-1 1.732 1,050 26 
♦347650 210 


500 1.7 
551 — 
535 16 


310 IS 
405 50 
430 4S 
787 — 
570 13 


-14 

-3 61& 

+3 700 
-36 2470 

♦ IB 7B2 __ 

♦10 2524 1.150 1 0 
♦17S0 529 273 _ 
+2W 377 244 16 
+20 3.100 1S0O IS 
*4*5 214 137 4S 
♦230 354 216.10 3.1 
*6-80 227 153 SS 
♦S 404 185 13 

-2 050 317 4.4 
*29 800 451 4.7 
+73 1J33 632 OS 
-.10 30013710 13 
♦-£0 355 220 30 


— NETHERLANDS (Mar 15 /Rs.) 


_ AfiHAm 6B20 +S071»90S0 4J 
_ AEGON 97 +1-20 111 74. TO 3.9 

AMO 50 +S0 5140 42J0 — 

_ AK 20 N mao ♦uosunmsi ze 

_ AnwOpR 78 SO *1.30 8030 5980 4.1 
SbWNB 4140 -JO 47 20 37.75 — 

— BokOfl £020 +.10 E 25-30 IS 
_ CSM 71.40 +S0 77S0 50 50 — 
_ DSU IW^O +250124.40 66.40 12 
_ Dscfirt 186.70 +JD2D1J9 13230 2£ 
_ &WT 181 JO +27018570 120 1.4 

— FUftfl 16.40 +J0 85 B.10 4J 

_ Ganna B9 — 1DK50 71.70 43 

— SkOgH 6180 -.105130 33 23 

_ Knot* 14150 -*S0lE7J»e(L2S _ 
_ Hanoi 23270 -SO 237 JB 1EL80 IS 

._ HaBa 301 SO -SO 304 178 1Z 

— HpOOII 68L7D *1JOB8S0 30J» 6.4 

— HinDQl HS _ 03J0 3SS0 IS 

_ HCCal 43-20 45 7175 18 

™ HGBpn BS -20 04.70 54S0 3S 

— MUue 84.70 +180 8980 4980 12 

_ KLM 48.70 -20 54 2110 21 

— KNPBT 50.10 — EZ725 OS 

— KFfcDpH 51 SO +S0 5720 3420 14 
-. HAW 7230 +80 8150 2250 4S 

NjToiC BliO -1 10020 CEJO 22 
__ NVBDoR 14030 — 15B8B 109 2S 

_ OceVBr BO JO +J0 SOSO 38 28 
54.B0 +1.1D55J0 19S0 09 
BOSS +20 B4J0 43 OS 


BBWfr 12JS0 -50 128505880 0-3 

IWASi 7.160 +1TO7S70 3S30 05 
SGS Sr 2110 *70 23001 .387. 2S 
-20 135 660 
-7 2B8 146 .... 
-a0 4S40 2BSO IS 
— 430 2780 12 
+30 4S5027BO IS 
♦15 1.725 620 IS 
-1 1.100 581 1 5 
*0 531 30* 30 

♦2 25914656 „ 
♦36 815 496 — 
+25 776 464 _. 
-10 B8& 4S0 „„ 

♦4 1J17 045 23 

♦12 636 372 „ 
♦ 10 1J1S 1.000 — 


— SW Be 

— &MHR0 187 

— axtzBr 1990 

— SAdzPC 3.920 
3SS5 
1J40 
1j075 

440 
_ 215S0 

— SmflcflT QUO 

— EwMtg 635 

— S'affl 785 

— UiSkSr 1S40 

— WNflg 712 

— TnrtnB 1J85 



= PAC1RC 

~ JAPAN {Mar 15 /Yen) 


Z EB *AHT (Mar 15/ Dm.) 


131 98.70 27 
Bfl 4&S0 51 
♦SO 13540 9130 25 
♦SO 11X130 80 4S 

♦20 2154014250 4S 
+.70 45ZBS0 IS 

+S0 2381848) 28 

VNU 185 JO *08020010 87.70 IS 
MCOpA 49 SO -.50 5130 31 JO 18 
WHDpfl 119J0 ♦ ISO 73150 81 1.1 


12&30 +J0 
63 +JZ0 
128 SO 
Hnrent 9530 
ROutch 19830 

St.kfJ 44.80 

imop 21110 


_ AMU 

— Akier 
iwu 

— AlpsEJ 
_ AircHfl 
Anrano 

_ Anaocn 
._ Amu 

— Add 

— Auwro 
_ Aflaa 
_ AnNBk 


- UWE 

- Ifedan 

- IWmQC 


— MDCmp 


5k 


CRAar 15/Ki) 


AOPA 880 

BSonn 231 

CwM 31B 

Com 0.000 

O/fflZ 135/10# 

987 
373 
105 
535 
645 
241 
390 
1.600 
303 
705 
880 
590 
585 
480 
915 
2S6 


Panto 

EAabd 

ase 

ONonl 

GS B 

JpdiBR 

LitsnB 

NKTA/S 


SaphsA 

SophsO 

5uprte 

TopOan 

Ur&M 


+10 730 389 22 
+1 281 191 26 

+.60 333 238 09 

— 7S00 IBOO 0.7 

_ on 73.000 os 

-3 1.140 610 is 
-1 4Z7 235 3S 
♦8 200 60 4£ 

*4.34 815 375 22 
.... 6562580) IS 
-0 276 IE — 

— 415 217 28 
-20 1S50 1.050 03 

+2J5 385 185 3J 
♦ 318331 E4 OS 
♦0.18 737 334JO0.7 
♦3 615 400 OS 
+3 Oil 
585 

♦1725 1.372 
♦B 207 


385 US 
320 IS 
645 1.1 
110 3.9 


- 158J2 *1.70 18714110 1.7 
rS&j +4 630 390 IS 

Ju£i WB !■§? -10 1,465 727-30 1.1 

HP 2 25M +31 3J801.B45 OS 

22!!" .552 ~ bzs 471 20 

1S60 -40 1S75 570 _ 

228: -20 1.120 380 ... 

jy ■ 225-30 +^ 318 207 28 
H5“* 467-50 -250 472 273 1.7 
.. ..396 +S0 4B52D1A0 IS 
37SS0 +5L50 37750 3010 29 
456 +105053550 384 ? Q 
070 +13 886 446.00 1.4 

485 +150 saa *1550 26 
855 -11 BOO 835 IS 

“*»_ aOISO -2SO 34&SD 11450 1.7 
[SSL®* «7 +6.50 535 383 323 

SSL -.33 1JJ26 707 1 3 

Wto 1.180 +40 1J60 802 OS 

G»™P BCO 1.100 425 15 

O»M*3MJ0*flS0 '398 M3J 
S’™* fga.SO -3 200 189 1.4 

DLW 52050 +50 525 392 19 

849 +1 JO 001 $3050 IS 
SST -3 KMfi# 31420 1 A 

— Bab 265-30 +4S0 2E7SQ 140?n 
DWfill 877.4® ♦1SJ»M^®(S0 20 
DUWk 163.20 +JM 170 94370 25 

»2 -5 035 40350 2.2 

“WJt 378 -1 29S 211 IS 

407 +7 JO 472 339 2S 
grc -4 56126550 13 

OMm a» +7 304 165 1.7 

EMdl 025 +10 875 520 22 

JJmna 230 *0 245 166 26 

Haffim 1315 -10 1J80 785 OS 

SS** Ml +0 888 502 IS 

Hrilt2 407 -| 452 354 2_2 

u<« 1SG7 -081382 86B1i 

IfehBf 32420 +420 325-50 729-10 22 
WO -2 1.099 780 12 
230 250 1TO 22 

202 -2 37450 227 3.4 

308 -2*50 250 20 

152 +8 189 96.70 __ 


Naraur(Mai5/KioneO 


AWrM 

BrqHiA 

amxf 


108 +2 10850 35 24 

ISO *0 162 7850 OS 

15S5 --101BS0T3J36 _ 


_ AseUG 

- Asamo 
_ Ast* 

AlsNK 

BnyuRi 

Organ 

SnM* 

CSK 

- Ctt* 


Drain 

OwnFr 

149 

100 

*2 

-1 

153 

114 

80 10 
22 

- 

Canons 

to«C 

2010 

1J40 









Kwirl 


+2 




CenO, 

*02 


104 

+4 121 JB 

GO I B 


OHMS 

880 

NttHyd 

NSkom 

250 

-1 

335 15250 10 

— 

Omb 

QifytM 

1.400 

B4B 



♦3 




cnrouE 

2J70 

NTbaA 

Tea 





CEuPtlll 

1030 

SOflOM 

79JO +1J0 

93 




2J7D 

s3*S 






415 


430 

183 _ 


C&weh 

907 


SUM 207 +450 217 78 OS 

IMtor 143 +BM650 BO IS 

VNnl 46JD+1J0 6£50 16 _ 

WMA 77 _ » 85 83 


SPAA (Mar 15 /PtB-) 


BFBglr 

BSHnta 

Baud 

CEPSA 

CWAB 

Cum 

DrgODB 

EbrnAg 

HWI« 


KB 

MWk 

A4ULB 


{Mar 15/Mta) 


AmrA 

ClAtor 

EnaoR 

Will 

KOP 

MSU 

ms 


MulfnA 

wans 

MabSA 


NoMaP 

OtkmpA 

PWlM 

Poh(fi 


SUmB 

TuiOf* 

Unhcs 


140 

ISO 

4050 

208 

1270 

6220 

6S0 

119 

218 

215 

220 

220 

385 

6330 

67 

8350 

101 

200 

tsso 

17.10 


-3 IE 
-1 170 

-30 46.60 
-3 226 
-AO 18 
-JO 50 
-5 705 
-5 IE 
-2 247 
-5 250 
-2 268 
*1 250 

-0 410 
-1.50 8850 
-JO 1 1D 
-I IE 
-2 120 
-5 299 
-VM35J0 
-SO 21 


BS 13 
81 1.7 
16-BO 1.0 
166 13 
8 ._ 
3250 23 
432 1J 
53.10 .... 
115 13 

*08 

92-50 0.9 
8210 07 
4230 _ 
48 1.1 
S3 13 
45 08 
730 21 
15 

430 ... 


— ■ 

Kntffl 




— 

ireiof 

49000 +400 





14300 





134 JO 




Laftmyr 

716 






7E8 

+8 





885 





385 





LuIBbi 

196 JO +1 JO 


97 ... 

— * 


192 

+2J0 




ItivM 

457 

+4 

458 

261 1J 


Mfiuf 

HdCan 


— Woo 


FRANCE (Mar 15/Frs.) 


ACF 

Accor 

Aifljq 

A1CW 

Axa 

BC 

BEN 

BNP 

Bncar 

Songti 


Carat* 

CodGoih 


Qrgi 


CCF 

CrFonF 

CrcyO 

OlocF 

Crttal 


DoctaF 

DHlB. 

EBF 

EauGn 

bwi 

BMgu 

HlACl 

BtSao 

EiBSw 

ErBOs 

Ex* 

EM 

Euratfr 

EuRSCG 

EirOB 

Hum 

FoncLv 

FnnBd 

GTlffiid 

GolLol 

Gaund 

(Tpnyt 

KBV33 

kneld 

kranFr 

■mm 

anitinx 


LVMH 

LSOop 

LOrad 

Unxnd 


997 

728 
872 

729 
1.425 

’« 
287 JO 
837 
3.470 
720 
1JS0 
1.050 
2095)0 
195.90 
4.193 
190.70 
1.487 
40550 
261 
1305 

711 

454 

630 
5.600 

730 
411 
040 

2770 

676 

41330 

35260 

1.101 

948 

845 

787 

3-250 

2300 

637 

34.70 

172 

939 

5.530 

•80 

2688 

1S20 

690 

487.40 

629 

715 

980 

110 

510 

631 
4.160 

47b 

1,313 

0,000 


480 _ 
580 3J 
692 2-4 

SI 2£ 

987 24 
926 1.1 
823 24 
240 ._ 
38 2 24 


+6 735 
♦18 766 
♦22 896 
+10 013 
+63 1S49 
+101,387 
+0 1.010 
♦ASO 299 

*8 683 

♦TO 3.750 2380 26 
♦2 767 638 23 
*29 1.480 851 27 

♦ 54 1,399 B42 26 
-10 237 138 SS 

♦ ISO 239 401 7430 ._ 
+98 4JS0 2J50 1J 
♦120 205 131 29 
*08 1 JSC 980 28 
.. 4B1 306 22 

+8.40 30SZOUO 23 
*3S UfiS 930 4 J 
+21 056 458 21 

♦1430 501 320 _. 

*16 737 526 BS 
-IE BJH) 3 J12 07 
+17 830 380 _. 
*Z 438 2*0 IS 
_. 980 500 2.7 
+133 2004 2014 23 
*0 703 3E 22 
*.90 468 320 4.7 
♦240 41071818 -- 
+18 1,144 883 23 
♦20 1JJB8 E71 — 
... 886 455 _ 

♦ 12 830 381 1.6 
♦10 2318 1.725 28 
-25 2589 1.280 23 

-1 688 40620 25 

+S6 99 2270 20 

_ IE 112881 54 
+11 93B 550 IS 

+10 6.020 232S 0.9 
-2ft 576387. IQ 22 
... 2754 1.470 OS 
♦34 1J20 306 OS 
-B 690 493 20 
+7 458S0 -402 25 
*4 680 334.1D 22 

._ 738 300 6.3 

—7 1,078 617 21 
-230 155 
-4 598 
-22 600 
*65 4J4B 2120 0.6 
♦ 149190 774 28 

*40 1 JB5 960 0.0 
♦70 6,120 3,940 0.7 


MAN PI 300 +S 360 218 24 
M«Min427 f 20 -00O438JO 325 1^4 

MrrtU 840 +1 357 39050 IS 

aiS +50 4,100 2685 OS 
FWA 230-50 +1 JO 257 145 _ 

51B 571,20 49& 0S 

Wnai 012 +22 015 425 OJ 

P™«0 488 -7 498330 TO 20 

HWE 461 +4J0 536 384 2S 
ROE PI 3E +2 424 303 3J 

na*£ 1 J7D -5 1,470 756 OS 

Rhnmtfl 320 +1 355 233 28 

RUnmPl 240.50 +350 2E 170 4S 
tow 260 _ 2»7 201 28 

sovna 1.073 +37 i,«a B7&30 i J 

ScftjJ 370 +5 417 237 22 

sum 7054 ♦13J0B0SJB 588 IS 
SpASm flei *1 700 485 1.7 

SodOn 405 -6 638 396 1 J 

ST WEB 

IM» 407 JO *3S0 532 330 2S 

VBN 3S3 _ 37021160 21 

V41M0 382 +241960 300 23 

«TO 407 -250 513 314 1.9 

VW 480 *4 JO 496 241 0 A 

VWPI 39050 +1J04DUD 210 OJ 

810 +2EJ0 808 ®M IS 

231 -4 270 181 1.7 


PdW 

Hapsol 

SNMCE 

Srailo 

Sow G 

TatiacA 

ToteCn 

Tudor 

UnFm 

UnFM 

inm 


B,tn 

6 . 0 * 

2280 

2J80 

4-076 

18J20 

0SOO 

775 

3,045 

4J70 

12120 

2510 

1.655 

2830 

7J90 

1585 
568 

4340 

1.106 

6SS0 

M50 

5S10 

11,420 

4J00 

iaa 

527 

742 

4.056 

1586 
1.090 

681 

1.650 

1J90 

2049 

2110 


— 6JS0 3JG0 20 
-40 B.7DO 4.190 _ 
♦10 3ja$2J00 52 

-5 4.190 2650 7 A 
+20 4 .205 3.600 JO 
♦180 17,700 4670 23 
♦40 7.480 4J60 27 
+7 3SOO 700 286 
♦30 3276 2000 3.3 

— 4370 3.290 20 
+130 12«0 3J60 IS 

*30 271 S 1.200 OS 
+51.776 940 21 
♦10 2260 1 JBb 23 
♦200 8.100 C675 28 
♦30 1305 030 _ 
+1 895 385 159 

+45 6,140 1.Q0Q 28 
♦25 1J10 840 _ 

— 6J00 3S00 27 
+130 7390 2410 2-6 

♦106.490 2740 1.7 
♦2BO11J60 0400 IS 
♦170 4300 2603 2.1 
+1 204 34 _ 

*1 583 29B 8.5 
♦22 815 381 GS 
-05 4.480 2380 6.1 
♦15 21861.135 IS 
♦401,415 385 IS 
♦II 739 308 BS 
+96 3-830 1.415 108 
♦15 1.423 S83 50 
♦10 3,130 1053 IS 
♦102160 901 TS 


1020 -ID 1,400 1.100 — 

588 -1 E7S 422 _ 

1 .110 -20 12BD 050 OJ 

1050 4001000 786 ... 

1.150 -101050 830 „ 

7S50 +20 1.770 1,000 — 

090 +11 764 501 IS 
1.240 .30 1.290 710 - 

493 -10 £33 334 1.6 

5.730 +70 8000 2243 — 

4050 +408020 3080 00 

1.100 -TO 1 330 788 — 

1.220 — 1000 BBS 

700 *3 738 

1.100 -10 1040 

SOB +17 535 
450 *8 580 

BBS +2 720 
850 -5 1.170 

1090 +10 1010 1.120 OS 

576 +3 826 360 

2030 -50 3070 2M> _ 

»SO *10 1040 HSU) - 
000 +15 B3S 414 — _ 

1.720 +10 1,7301070 _ — 

+40 2972 1,763 — 35.9 
+10 T 050 865 0.0 ... 

♦27 830 280 — — 

*7 510 315 10 — 

-ID 1010 832 — — 

-201 STD 981 ad _ 

-1 740 480 1.1 — 

-2400 2260 — — 

— 1080 1.140 _ ... 

-10 3.140 2190 — _ 

.30 2010 1.180 — — 

♦21.170 780 OS — 

+5 946 586 — — 

♦ID 640 387 _ — 

♦2 827 339 

-201070 790 — — MSB! 
♦10 1.790 1J30 OS — Uoc&t, 
+10 2440 1030 „ MmogM 

.3 1,000 625 _ — 
♦101080 — 

+11 910 
+14 575 
-20 1.400 915 
—20 1040 1040 — 

-5 847 


-40 2730 1000 _ 
-W703B 3.770 - 
-4 614 338 1.1 
-ID 1020 788 
-71.190 096 _ 
*40 3010 2080 — 
-1 760 549 _ 

-5 1.130 740 — 
-10 1040 790 OS 
+0 840 475 .. 
-10 2080 1000 _ 
*3 5*5 337 _ 
+10 930 742 IS 
♦10 526 203 
-20 1090 1030 13 
♦30 2160 1540 .... 
-201060 99G - 
-10 1040 888 10 
-20 35801000 „ 
♦15 909 486 ... 
♦2 625 310 .. 
-3 1,150 640 — 
♦3 796 901 - 
-1 930 660 OJ 

+20 2080 10®) 0.7 
♦33 748 371 

♦23 533 311 — 
—20 1.470 7H0 OS 

.20 3,190 2200 _ 
-301010 813 — 





375 

542 

-S 
♦ 5 

*TO 

821 

£96 

380 

“ 


1J7D 

♦ 10 1J1D 

838 




-30 1080 1.190 



5*0 


71* 

366 



773 





MtlEnS 

343 

-2 


ESI 



1040 

+10 1.480 

M2 0.7 


~ DTdtfW 


- SE 


52 •- — kc 

48B — — KGKln 

347 — — NEKSp 

- NIX So 

- HOC 

— 2.150 885 — |« 

-20 870 800 OS HTN 

♦20 1010 045 — HONFu 

—10 1010 1080 — 75S 
♦30 1020 812 OJ 
-2D 4.700 2050 DL5 

— 730 457 IS 

-12 870 308 _. 

— 1080 1.1 DO _ 

-30 2080 1060 ._ 

-20 1080 863 — 

♦20 4040 2950 — 

-8 759 448 OS 

-20 2590 1050 ... 

+2 588 390 ... 

-30 2900 2170 — 

-2 7B9 555 1.1 

+2 «22 238 

♦11 635 325 — 

-6 1080 475 — 

-20 1070 


Hicnfl 


— MhnOn 

— MhnNo 

— WHPk 


SS* 



655 
418 
332 
820 
880 
400 
1040 
880 
21 BO 
738 
965 
272D 
577 
2050 
4.700 
1070 
1090 
1.330 
5Tfl 
261 
760 
749 
690 
443 
737 
019 
800 
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♦37 620 
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367 
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1,460 
2780 
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6.330 
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— Suitt* 2180 
... SuraCem 513 

SurChnv 468 

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_ SmnBs 1.800 

— SinHuy 407 
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... SanMv 885 

— SunMB 280 

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— SwAr 070 

— SunTrB 1,540 

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Suzdd 1070 

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— Hum ljBO 

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1010 
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Tkfkm 677 
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♦9 519 
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258 -02 297 226 30 

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12000 +100 1SJ75 8030 4S 
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38.170 +BS 42495 29040 — 
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2780 +30 3040 2140 — — NlnUi 

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715 _. 729 396 ... - NMMi 

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1000 +201,990 1.480 — — NWS 

457 +3 570 352 — — NsblRJ 

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885 -B 1.1 BO 677 — NtonB 

1.130 +10 1080 786 — — NBDi* 

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701 -0 714 370 - _ 0MB 

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700 +20 741 310 .. ... Otymg 

1070 *10 2000 1070 _ _ Oraran 

750 +17 792 *53 _ — Onodal 

1000 -1020801020 06 — OnoU 

389 *19 535 210 — — 

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2790 -ID 3.+90 2200 _ — SnyoQ 

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402 +2 481 302 — — Samftl 

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—1, Stall Ob'; 
V Sib - , IOV 


6V 

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Mga Low VH Pit 


-iSt^SmsS “ z NORTH AMERICA 

+11 583 335 10 _ 

658 OS 540 CANADA 

: TORONTO (Mar 15/ Can S) 

- Apffldoso 


598 

488 

1040 

452 

911 

1090 

1090 

an 

438 

1.080 

480 

83* 

2000 


-20 1020 
~4 1.150 
♦2D 5E 
-20 1.110 
-A 523 
+4 1020 

—20 3.210 2 

1JB10 -201.T10 

314 -2 4G9 

1J10 -301040 


S::r 

760 Z Z Cato 
351 _ _ CartHH 
772 — — ccAnut 
B20 OB 


= §gj. 


475 _ 

aoo _ _ 

318 _ _ 

518 _ _ 

691 1.1 


459 


Fawn 

GnPiTr 


_ Rkoti 


— Satan 
„ Sandai 
_ Saifiyo 
_ Sumo 


238 n Commute 

Ma — cnamr 

+20 £410 1 S10 OS — DomMng 

41 

-11 773 

-7 1.100 
+11 680 
+1 1.110 
-2 1.610 
+101010 
+10 1010 

-7 m 

UOO -1006.150 *050 as _ 

1.190 -10 1020 1S20 IS 

720 +2 030 an Hnamfi 

3.450 -JO *003 2.180 04 5*0 CUWffi 

521 +12 SB* 410 — Kkbtn 

707 -10 823 540 1.1 

2.730 +30 3040 1010 _ 

513 -2 583 350 IS 

500 +2D G99 403 1J 

788 *10 837 527 — 

4S7D -30 *030 1.790 _ 

1090 +10 1090 880 — 

599 -1 600 *22 _. 

1090 +C0 1.750 1,110 _ 

821 +8 732 *21 

2J30 -so asn 2010 o< 

1030 +20 2J70 *12 — 

2020 *20 2.480 1S50 — 

928 -2 1.120 785 __ 

512 +5 514 342 _ 

8Z1 -3 1.120 830 _ 

♦40 7030 6060 OS 


LtanN 
— MM 
_. MaymN 
... UsaMi 
NAB 


- 9NM( 


_ PacDui 
_ Paneon 


AGO 

4.80 
1700 

305 

290 

11.18 

404 

4.96 

ais 

1S1 

048 

5.16 

1.80 
1.12 
X12 
2-65 

I04ad 

262 

304 
1.48 
1S1 
205 
1-48 
isa 

10.40 

3.72 

1708 

&s 

BSD 

1104 

0.30*1 

900 

505 

2.35 

305 
540 
ISO 
210 



7.770 +480 11J50O 7010 _ 
4020 _4J50 2,1M _ 

1.730 +40 1.960 1040 0.8 

1000 -40 1010 800 _ 

1090 +10 1010 1060 __ 

1.120 _ 1.130 875 — 

1.400 _ 1000 928 10 

430 +14 5G9 300 1 0 

0050 -80 9000 8 054 

T.700 —10 1.780 928 _ 

2.730 +30 3020 2.150 _ 

890 -51030 715 _ 

2.190 ..2010 1.480 _ 


— mane 
_ FmOd 
_ OBEkl 

.. aern, 

— RranGd 

— Rod*™ 


_ TOT 

— TetQvr 


8-35 

3.45 

509 

1.31 

5 

7.10 

4.08 

Gu75 

900 

303 

304 
203 
445 
90S 


INDICES 


ttr 

15 


Mar 

14 


Itai 


-19B3M- 




Um 


Mar 

li 


HWi 


-1983/4- 


US INDICES 


Dow Joom Mar 

14 


11 


10 


1983/4 


Mod 


— 6 808 0.7 _ 

+.06 11.12 748 3.1 365 
-03 800 378 1.1 __ 

-05 12.82 550 11 365 
+04 206 104 IS — 
-S3 5.72 205 30 _ 
-SB 4J0 200 3J __ 
-.18 208 1.45 30 70 
-04 19.80 12J6 24 270 
-.02 X58 242 30 BS 
-04 402 2.80 40 — 

_ 108 008 „ _ 
♦06 1704 11 JO 4.1 38.1 
_ 080 044 30 

— 1.18 007 80 _ 
+.10 503 155 3.7 210 
-.10 5.46 302 40 200 
-04 1802 1208 40 _ 
+.10 300 202 _. _. 

_ 135 108 20 „ 
-08 1200 170 16 _ 
-04 5.70 442 3-0 _ 
+02 5.75 3 10 „ 

-0*1000 60S 46 _ 
-02 1.45 0-75 25 _ 
.. 0.72 003 40 _ 

-.15 6-02 102 IS 250 
._ 102 1 10 ... 

♦-0* I. TO 008 __ 10 
+.03 345 1 J9 1.4 _. 
+ 02 206 2J5 . 

._ ISO 1.11 40 
_. Z05 208 7.7 111 
+ 00 in 203 40 _ 
-01 1.75 003 21 27 
_ 1 78 1.40 GS _. 
-01 20S 205 4.7 80 
__ 202 008 10 ... 
-08 282 0 75 __ ... 
+281140 5.70 20400 
+07 172 142 6J _ 
+0210201388 40 319 
... 140 245 44 _ 
-02 303 101 10 79.0 
-.10 10.04 6.15 14 280 
+05 401 106 24 _ 
-02 1114 70S 40 130 
-02 7 SO 5.65 20 
-.11 12 675 00 90 

-.19 009 283 Z7 
♦05 2.79 1.16 20 
_ 4.15 206 17 238 
♦05 502 405 40 _ 

+.10 115 005 . 

-03 243 005 . __ 

+.02 3 42 219 4.7134 
*.04 100 105 1.1 
+01 805 205 __ 

-.07 5.10 1.47 29 
- 01 808 175 17 
+02 181 105 70 
+05 B-25 205 OJ 
._ 7.70 5.15 54 
+08 4J2 260 5.4 

— 7.10 508 4.1 
♦.IB 980 4.15 5.1 
+ 06 300 204 __ 

— 170 203 70 219 
+03 2J2 089 _ 

+04 4.45 1.63 3J _ 

+ 02 9.75 500 10 _ 


State oompBnioo 

»*> Lw 


120057 AbtaD 
«5MW AoiEag 
802*78 AkCda 
141164 AiMaE 
2 iso Atoms < 

320917 AtcnAJ 
170BTO AmBarr 
3850 AttoOx 
sin BCSUOA 
15054 BCTOIX 
*06880 BCE* 
4718 BCE Ml 
13085 BSt A 
27*2 Bnadta 
372808 BkMunt 
241491 BkNnvS 
37684 BwuE* 
1253120 BMKB8 
32157 BoMVid 
aXXJI70 Etnnloa 
72S03 BracnA 
8585 Bmcor 
125133 CAE* 
29096 CmpBRa 


♦ /- M. Lew 

iov as iov 

16V +VSWV1BV 
7V +VTOV 7V 
IBV ShPl IB 1 * 
16V -V SiB% 15V 
32V -V aevazv 
33V -vmv 33 
T5V +v Sibil 15V 
iov -VS 1 M. iov 

26V +VSS% 28 
S2V + 1 ! NSV 51V 
40V S*OV *0V 
18V +VSI5V IGV 

30V +VSSIV30V 
205 210 201 

23 +1 1*23 71 T) 
11V +VSli? 11V 
40 -V 4039V 
IBV +VS18V IBV 
25V -V1E0 25V 
64, +V W? 6V 
80 81 80 


48974 

27*70 NBM 
850275 UM 
18500 HoknA 
321144 Moora 

2 Mngto 
275926 NTOBkC 
21996 Nrwtwkj 

45270 Ncma A 

42841 HmdaF 
206205 NnMBM 
135951 NarcnE 
1 83477 NBlTeli 
IBM Non 
4150 Mown 
500 NumacE 
419100 One* 
28101 OMraart 
301258 UNA CD 
597185 Ptadill 
38257 PocoP 
97200 PogmA 

MM 

'asag' 

623631 PDonra 
35515 Powiqp 
14450 PoraiFn 
133KOT RflMkY 
50 Mi mis 
1200 RoOunn 
21500 Rngoe 
25 Rnwet 
95088 RroEn 
000344 Rroro 


22V 
18V 

28V -V K32&V 

ai v +iaiv 6SV 
nv J+nij; hv 

TV +VS7V 7V 
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iov -V S1DV 10V 

360 -5 365 360 
24 +V $24 23V 
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17 817 17 

56 -V 57 58 
20 STO 19V 
440 + 5 440 *30 
11V mv nv 
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15V -V SISj 15V 

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29V -VSWiM-n 
38V -V»V3»V 
Si! . ABSA 8 15 -05 10.50 7 60 5 3 

-HWWb AGP a ... -U 5UO05 

i? . C ? Altod 94 148 85 3 2 

8 r» +V»V OV wnteal 133 133 76 3 G 

S Annum 22950 +4.50 239 88 75 15 

Ki* *5' * m ' WI0 *10 .1250 42H 139 7 5 

IS! 4 "J 4 1il * AngwIN 
23V +>,S3>; 23 BmVn* 

BV iffli, at, aSmT 
21V »v 20V Burw 
23V +VS3V 22 V CNAGd 
33 +V S33 33 DeflCen 
IBV SltV IBV Da to 
21> -VpVtClV Drum 
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BV +>,»V 8V toSr 
24V NNb 2*V FfuffiK 

12 *v usir nv FfBooi 
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14 *1* J* CFSA 

SI TV .7=5 issr 

23 -V D V ?J HRittd 
71 -V uS72 7W; KCon 

13 +V ST 3 12< mdal 
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13V +VSLP; 13 ttns 
rfV +V MJV I4i, nmo 

iWH 7 V LDUo 
j S27 28V 
_ . ,IZ7V 27V 
137 +2 137 137 
BV -V S9V 9V 
82 


114 

3CL25 

20 


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sav » 
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BV +V $7 
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25 s ! * CSV 251, HusS? 1 

14V +VB14V14V SKRen 
41fe ri* SS SmBiCE 
BV +*, $10 BV SMh 
20V 20 SAMton 

Sam 
Doom 

__ TnoHU 

110 +5 112 107 VRaata 
56 +12 53 43 wAraa 


-2 118 74.75 0(1 
♦ XO 57 25 26 JO 
+ 05 3* DO 675 3 0 
49 1,0 18 0 4 

300 + 05 32.75 105 _ 
115 <3 11b 57 bfl OB 

7 +.IU1I0S 2141 14 

52 -.75 84 50 29 05 29 

8 50 +05 13.5U 350 5 9 

20 *1.50 38 10 8 Sll 38 
34 +1 S3 30 4 5 

85 *2 95 C-4 50 OA 

03 . 75 KO 27 17 

10.10 +O5 10J6 505 4 5 
100 *3 115 U 20 

25 50 *50 27.50 5 75 . 
23 ... 2950 6 80 4.1 

22 -2 22 805 0 3 

3 14 * 1) 3 14 0.62 1 9 
GO *1 JO 72 33 75 7 0 
92.50 *4 JO 92 50 48 1.4 

86 50 tIJO 812*05 17 
46 - 75 85 24 2.4 

91 *3 92 5650 1.5 

19.75 + ID 2050 12.25 

SB +.75 29 50 1085 2.0 
58 JO -050 82 51 8 9 

73 ... 74 *7 .... 

4305 +1.ID 5350 11 3.4 

34.25 +100 35.75 2300 1.1 

53 +.75 25 JO 16.50 10 

88 _ EL 75 57 75 1.8 

ID* +2 106 87 2.3 

IB —1150 11 JO 7.7 

92 +2 97 JO 54 SS 


+3 



38 17 10 

180 3*50 2.1 
58 37 1J 

40 1705 10 
490 13650 11 
42 ISO — 
2154350 10 
80 24 17 


fttwawBtatffr nrog 


17^^m§?7V MMmUITOiL# 
2D $20 20 ddttBO. »t t« SOU 
-*>1831,831 




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Maw nTOaegd and «a may w nau 
pnen iV/atUiwa a* 1993-9*. mu 7bMd 5 
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FT FREE ANNUAL REPORTS SERVICE 


eeoUHMhf .Hn, 0*1 770 0710 eln W1 770 

aaa. auto FT [» Bto to HU IN. ite 

♦4*81 770 0770 H TO +u 81 77D 3822. unto FI 
Amt Tie Mm* •* he M ob n, mo mrtdn, dw 
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pm <Ue. 


■ TOKYO -WONT ACTIVE STOCK& Tuesday. March 15. 1894 


Argento 

Gento £3712/77) 


M Onfcariosfi/i/BO) 
AI Utatagfl/l/Sn 


Craft AMtti&inZiBq 
Traded htaC/1.’91) 


Bazon/iflii 

Km* 

Bnosra (33/13831 


Mdafc Mrfcfn975J 
CorgOt* 119751 
PorOtfc§§ [4/1/831 

CbBa 

PGA Gen QinS.'OT 

Hamit 

CapedBgw6B3/UB3| 

FHaad 

t€X &nm*pS12/901 


SBF 30 (31/13W 

CAC 4001/12.571 

Gengagr 

BC /Satenpli’l 2/581 
CammeraanMi 12AS3I 
W«Oai2«TVt 

Gnaece 

Anns SB31/1M0I 

Hto Keag 

Hum Sanefll/’W 

tab 

B3ESWM1S79 


1007.46 


37SLT 


J*ata OompdWES 


2072X62 205*129 2547X40 lfi/Z/94 

1ZK70B 8093 

FC 9*1/1979 

84 

242988 

X1O03 

2081.17 BOM 

21790 

10370 

21511 

101&1 

234900 3QY4 
H38.T0 wm 

149500 13/1/93 
59470 13/1«3 

C8S IWMKtBid S3 
CBS AS Star (End B3> 

439.1 

2845 

4397 

2830 

4310 

2799 

45400 31/W4 
2MJ0 31/1 /M 





Nan am— | 





445.65 

4440S 

46068 2/204 

30009 14/lffl3 

&p. 40 (1/7/88) 

224941 

2221.43 

22)924 

S439M 3094 

1157.74 

11SZ.43 

122203 1/2734 

71205 15/1/BO 

Nmny 

0* SgncK2n/83) 

1171 08 

117036 

115945 

12)1.19 2800* 

151403 

1510.41 

154205 BI2/94 

tisAB mm 

to top pn/B9 

283306 

2B31J3 

255X73 

330BS7 4/1/94 

13297.0 

136870 

1329700 14094 

7M7 4/U93 

PUrtogM 

BIA (1977) 

3107J 

310480 

310200 

322980 IB/2/94 


3656.00 

383403 1004 

274801 21/1/BI 

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447040 

444600 

«91J8 1/094 

327500 21/1/93 

SB /M-SpcraCM/TS 

58982 

B 

STUB 

64101 4/1/W 

210X34 

210158 

218209 1/2/94 

172007 21/W3 

Santa tttti 

JSE BllU (28/979 

196709 

19640 

19330 

2J31J0 mo* 

44450f 

4444.7 

488700 41204 

7B1ZH1 10SB3 

JSE Id. Q8/8/7Q 

Sauth Kama 

60990V 

59040 

■won 

609909 15/3/B4 

397.17 

397 Jl 

41509 2/2/94 

20100 mm 

KareaCni|fi4l/lA0r 

Sp*. 

911 A3 

91203 

301.87 

97426 200* 

18790 

10794 

197200 4/2/94 

8 IX 10 22nm 

— iMfSEpan2/B3 

Sandro 

3023 

naaa 

33306 

35601 31/1/94 

1487 G3 

1472AS 

15B5J2D 2/2/94 

1114.19 2871/33 

/tts&nrttaGen (1/2X7) 

1525.00 

152500 

150100 

160000 31/1/54 

2J1MB 

217401 

2X503 2004 

177221 28^93 

hta M 

toss 0k W (31/1258) 

13599B 

1347.10 

133356 

142X34 31/1 AM 

81984 

80603 

85507 4/1/94 

SKIP 14/1/93 

SBC Gennl (1/4/87) 

101400 

KX&0G 

99427 

100329 31/1/94 

234070 

2301 JO 

3CB0O 4n» 

160430 14/1/93 

Taliwai 





214517 

210X49 

Z267J8 3/1/94 

1SW0D 13/1/93 

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5Z7424 

533187 

53Z7J7 

646452 6/1/94 

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1074 53 

119458 ian/B4 

Bonght* SEt pW*/75) 

1302.13 

129655 

131941 

T75XJ3 4/U94 

900007 

990568 1220109 4W 

6(3700 4/1/93 

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1450932888860 13UA4 

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37472 

428700 2809* 

210007 23/4/93 

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BM8 

CT11 

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27301 5/1/93 

nnwMLuwmcn 





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«2» m 94 

Bnftaft IflOCWlM) 

146935 

145650 

1431.65 

164919 31TU94 




Eure Top - 100 pW«7 

126106 

12(7.16 

122949 

131101 2/204 

1SK26 

1910B9 

7052.10 20/1S4 

1191.19 11/W3 

jawdg^ (7U13B8) 

M 

30.10 

•mac 

395.19 snm 


Barinos £m«x(7/l®3 

U 

164.12 

1S424 

18X32 14/2A4 


1504.16 25®93 

23SJ0 mm 
lBBfiO 13/1/93 

2200 2212/BA 

68083 27/1 (S3 

1276GB mm 

180930 14A/S3 

394.10 13/1/83 

77500 5NC3 
433100 19/463 

B05JQ 6083 

2U£o mm 
fiST&IO 28/V83 


38GXS6 389200 383002 387808 324105 

01/1/M (201/93) (31/1/M 

Hon Bonds 10Z04 10201 10262 199.77 10201 W3.77 

fi8/io/93) (i i/3/M nanora 

import 1725.12 172104 1724.79 188209 145304 106209 

mm ivi /aa mm 

UdKes 20GJT 209.79 308.15 25X49 20709 25X48 

pirasj) c« 2 jm (n/ans 

DJ but CW/s iwgh 389*01 (397183 ) Low 383596 (3&0GJ9 ) (TTwarebcafA) 
Day's hVi 3871.14 (388T.7D ) Law 385802 0815.70 ) (Actut+H 


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(2/7/33 

54 ag 

(1A0/811 

1202 

(8/7/32) 

1060 

PW32) 


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Aon Utt UN 
NASDAQ Crag 

■ RATIOS 


46709 

46944 

46X90 

48208 

(2905 

oann 

4.40 




coot) 

(S1/B9 

(2094) 

OJW32J 

54804 

547.(3 

54505 

mm 

(9846 

5BAS9 

162 




POM) (26/4/931 

PM94) 

pl/G/X* 

4X50 

4X23 

4202 

48AB 

39 BB 

48A0 

B04 




(78893) 

(Bn/931 

(28093) 

(1/10/74) 

25901 

25953 

25702 

267 Jl 

23601 

267 Jl 

4.46 




£2/7/84) 

mm 

(2094) 

fS/4/42) 

46886 

46508 

464.78 

48709 

39504 

48700 

2931 




POM) 

(sn/sa 

pom 

(9/12/72) 

79200 

78920 

7B9D8 

809(7 

6450/ 

890 xi 

5407 




(31/1/94 CBM/BI) 

pin/ 94 ) 

(31/10/73 


f 1/1/93 

678.70 m/33 

308843 9/1/93 

Stax* vsm 

395553 mm 

438J0 13/1/93 

106302 13/1/93 

86073 1 371/33 

18XB2 vim 

9901 4093 



Mar 11 

Mar 4 

Feb 25 

Year ago 

Dow Jones bid. Div. YteU 

2.61 

2.62 

2.62 

200 


Mar g 

Mar 2 

Feb 23 

Year ego 

5 8 P bid. Diu. yield 

237 

2.30 

2.38 

2A8 

S A P bid. P/E ratio 

24 J3 

2404 

28.00 

26.10 


■ STAWMIO AW POORS 500 DHDOdVTIJnES £500 ihnes Index 



Open 

Latest 

Change 

tfigh 

Low 

EstvoL Opentnt 

Mar 

46700 

407.10 

+030 

467 00 

407.10 

24.119 

70.063 

Jun 

488.00 

468.46 

+023S 

468.35 

48700 

07015 

145,884 

Sep 

47030 

47000 

♦000 

470.60 

470.30 

68 

3.781 


Open mhmi bound are lor ptoaus dey. 


■ NEW YORK ACTIVE STOCKS ■ TRADOIG ACTIVITY 


197a 67806 
Jl 10880 


67178 

10780 


66506 EMUS 1B/2/B4 
10640 110200 IBfflM 


I an« 
MUD 10/1/94 


■ CA0-40 STOCK HBEX FUTURES JtlATF) 


2O5O&05 20S2G.15 3)11531 2fl4X.H 13«® «»« 

TEL31 30108 Z9X® 30X94 10/J1O3 24994 29/tlffl 

,S i£S 161390 1BSXB7 3«93 MMS 

2J1104 • y YT am 2191X3 338497 W® KSL72 S/IC3 



Open 

Sen Price Change 

High 

Low 

ESL voL Open Ira. 

Mar 

22360 

22650 

+38.0 

22690 

22330 

29108 

44.780 

Apr 

2247.5 

22790 

♦680 

22790 

22470 

786 

3066 

May 

22660 

22795 

+380 

22695 

2268.0 

394 

2.733 


Open Mara Dguns Kir pnaHoue oay- 




Q ] 046 48 131446 5/1/9* 13/1/BO 


Monday 

Stocks 

Boas 

Cfcngn 

• Vebiu (moan) 




traded 

pries 

in itoy 


Mar 14 

ttai 11 

Mar ID 



fir.* 

-3M 

llm York SE 

269130 303011 

33X480 


4J280OO 

apt 

♦to 

Amu 

16022 

19S3 

19249 

Unisys 

4004,100 

IB 1 * 

+ft 

NASDAQ 

gw 

m 

2092000 

57H 

+1H 

WSE 




Am TS T 

2.777.600 

5U4 

♦M 

bates Traded 

2.788 

2.762 

2.779 

Ph— Morris 

2.717000 

afivu 

+ft 

Rau 

1.152 

1.126 

705 

ATOiacn 

2,422000 

27*4 

-» 

Rtfs 

945 

852 

M74 

Psp—e 

2,180200 

35V 

-K 

Unchanged 

70) 

684 

GOO 

Am Express 

2,131000 

29V 

+M 

Ntartigte 

67 

44 

47 

Walt Disney 

1033000 

45ft 

-1» 

New Low 

82 

118 

113 


. ,rt koto Cwnp E* “a- 11 BtoiralraUUInilMtoinaannAuMtaMadtaaiy 

I 1 ? Tuimn u— Q_ S5P 1S0. CAO40. Eu* Top-TO. EEO OvaaK Tonano GompJIMUMa S 

, . 500. ‘4^ rtn0 "Sr 0, JSE SG Hutu - 2643; NYSE A4 Common - SO and finnan rod Poor, - 1ft 5S 


t Oomcuon. ' CUc d u a d a 1500 GMT. 
A Uw OJ ta*. adage ttraaredcsl day‘> hlg 
atocta wtramro Bra ksuI dayV hins rod 
during iha day. (Tha 6gra in 


• Exdudno bom*, i taduanri. pluc UOUhl Finaneui end Trangpcrtnm. 
a and lowim ffra menou U the 1«gneu rod bwan pncaa nroned dumg a» day by each 
km tanked d» TdMuu norart m NgOesi and krtnet vnhMB mu me non has maenad 
u grevtoua day^si. Y Subjwa lu aSdal mcUodtalaa 


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Nippon Steel 

11 . 1 m 

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9.1m 

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Kubota .. . _ 

6An 

685 

+10 


7.4m 







Toshiba . 

7.3m 

795 

♦2 

Nteshbi Steel 

5.8m 

436 

+20 


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36 


FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


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53 31% Bra Corp 058 10 18 488 43% 42% 42% 

29% 19% Vk*B6 £97*1.10 50 13 27 23% 23% £3% 


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000 14 23 283 6 8% 

100 31 10 80 32% 32% 


3% 5% TCBYEiW 

40 27% TCF Fhanc . 

10% B% 1CW Cow S 084 88 298 9% 9% 9*2 


44 25% TDIi Carp A 047 1.1 43 
7% 1 % T I S M|00 x O0O1Z3 0 


12 42% 42 h. 

13 1% 1% 


1% •% 


16% 8%lkdafi 

4% 1% IMCnp 
47% 28% UWAaaa 
18% IZUUkmRly 
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0 74 2 1% _ . 

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25 SB 3% 3% 3% +% 

088 20 21 784 40 39% 39% +1 

070 50 70 458 14 13% 14 +% 

020 OS 2D IB 22% 22% 22% -% 

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098 12 88 217 28% 27% 27% 


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AMEX COMPOSITE PRICES 


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Astnnech 30 20 

Ural b 322 

AttcCMB 0 108 

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BAH Ocean 005 1 20 4 4 4 

BadnoMIr 088 17 10 22 21% 21% -% 

B&kMnT A 004 30 45 5% 5% 5% 

Bony FIG 17 170 18 17% 17% -% 

BAT hd 029 12 31« 7% 7% 7% 

Bean] 9 4 IjJ f!| ijS 



BtoPiHan 0 <10186 
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BUM A> 008 33 
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Bmnet 
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Compubac 6 15 1% 1% 1% 

Coned PM B 13 9% 9% ' 

OweMA 054495 431 15% 14% 


Omni C A 040 40 
CnxmCB 040 16 
ClMOX 053 95 
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10 


$ A 

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Ducaflinui 8 78 _4 3% 4 +% 

Duplex 048 57 212 10% 10% 10% +% 

048 IB 9 18% 18% 16% 

1.72 1575 88 19% 19% 19% 

007412 3473 12% 12% II* 

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FhaA 120 15 13 70 

FtoOiyBi* 020 14 ZtOO 11% 11 

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Fans! La 30 363 51% 50 

Frequency 3 8 4% 4 


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3 313 3i 3% 3% 
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3 1865 
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32 32% 


24 318 B% 8% 8% 

18 20 12% 121 '■ 
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25 374 21% 21% 21% 

SB 71 7% 7% 7% 


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020 8 35 8*4 4. 

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12 177 8% U8% B% 

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Pwtrt 000 53 75 13% 12% 12% 

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PWLDx 023 IB 688 60% 66% 66% 

PttonayA*. 05D 18 10 34 33% 34 +% 

Ply tom 012 321203 25 23% 24% +1 

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1 384 li 1J4 l,i -A 


29 Z1D0 
3 132 
3 45 


27 27 27 

5% 6 6 

2% 2 2% 


A 


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21 74 23% 23*4 23% 

004 15 482 14 13% 13% 

0 50 8% 8 8% 


B anacBud 
RB&WCp 
MedaEm 

SJWCnp 
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Stall B 

sum o 

TBhd it 277 4,1 4% 

Tab Plata 020 57 67 10% 10 

THSDatax OK 63 759 43% 41% 

TtHflmdcs 59 879 13% 12% 

ThomxtaB 35 188 " 

TotPNA 021 23 415 1 
Towocrary 1 529 
Titton 11 100 

TubaaMex 21 159 
TnrxBrt 007 80 119 21? 

TimxaS 0J77175 373 22 

Sf 1? X ^ 

ft e% 6 % -% 

27 26% 2B% -% 

21 B36 9% 8% 9 +% 

000 23 29 27% 27% 27% +% 

1.12 IB 140 14% 13% 13% -% 

S 74 21% 20% 21 -*2 

-% 








6 43 


6 


GET YOUR FT DELIVERED TO YOUR HOME OR 
OFFICE IN THE GRAND DUCHY OF LUXEMBOURG. 

A subscription hand deliveiy is available in the whole of the Grand Duchy of Luxembourg. 

We will deliver your daily copy of the FT to your home or lo your office at no extra charge to you. 

If vou would like more information about subscribing please call Philippe de Norman 
on tel: 4.322) 51 3.28. 1 6 or fax your requirement to (322) 5 1 1 .04.72. 


'* — t HM » lAteu uiff f -L , * 

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AfCtamE 3315916 26% 25 25% 

Acrar uos 21 494 ZS 24% 24% 

71 1050 22% 21% ZZ 
A®**** 3) 6388 21^ 21% 21% 

ADC Trio 32 1422 39% 38% 38% 

AMng&n 98 U 1ft 16% ift 

Ada Sen 0.1b 15 4 26 25% 35% 

Adobe Sn 020 2610837 34% 32% 33% -?% 
AdvanwC 8 309 13% 13% 13»2 -% 
Attalrgn 93869 u?% 6% 6% +% 

MkWym 9 389 7 6% ft -% 

AdvTthL* 34 170 16 15% 15% +% 

Adradax 020 17 49M 36 34% 34% ft 

«iymH 12 183 1T% 17 17 +% 

AOBicyHe 22 733 13% 13% 13% -% 
ApdcoEa 0.10131 1712 12% 11% 11% ft 
Atm AJJR 200 21 497u50% 59*2 50% ft 
Akita Cp 37 3862 26% 25% 36% ft 
Ahflu 088 IB 359 28% 26% 2E% 
MeBhBW 16 4 B% 8% 8% ft 

AlenOro OS2 12 5 30% 30*4 30% -1% 

AfcnPtl 5 470 9% 8% 9% 

ABdtotfix 100 12 82 14% 14 14% ft 

AUCapx 00012 168 13% 13% 13% ft 
Atotote C 032 57 rlOO 4% 4% 4% 
ARaGOd 006 2 137 if, 1% 1% ft 
ABera Co to 727 34% 33% 33% -% 
Am Barter 050 9 93 25% 24% 25 ft 

AmQyBu 27 2100 28% 2B% 28% -% 
Am Wang 18 732 19% 19% 19% 

Am Med 0 23142S 16% 15% 16% ft 

Am Software JCT 95 435 6% 3% 5% ft 
Am Frtwys 31 63 18% 18% 18% 

AmfiKA 050 17 1881 30*4 29% 30 ft 

AmHP 2 3080 1,1 1i| 1% ft 

Amkfln 220 8 g 53 S3 53 
AmPmConv 52 3797 27 % 27 77% +% 

AmTrm 10 298 13 12% 12% -% 

Amgen he 1417521 40 38% 39 -1 

Anted! Cp 008 41 460 29% 28% 28% -% 

AflNFh 4 1773 10% 09% 10% ft 

Anatogt ifi 20 17% 17% 17% +% 
Antoysb 048 13 143 16% 15% 16 ft 

AnaiptiAmxlXO 14 50 17% 17% 17% +% 

Andrew Cp 18 553 r% 31% 31% ft 
Andros An 10 B84 19% 19 19 

Apogae En OJO 30 200 15% 15 15% ft 

APPBJo B 578 6% 5% 6 

AwkJMal 33 8708 50% 49% 50 +1 

AHIteC 04810717898 38% 37% 37% ft 
Appia&ea OM 53 1B2S 23% 23 23% ft 

Arbor Dr 024 42 8 18% 18% 18% 

Arctco 028 18 133 25 23% 23% ft 

Aigonaut 100 B 34 31 30% 30% -% 

Armor AJ 064 20 ID 20% 20% 20% ft 

tonUUt 040 19 IDS 22% 21% 22 

A&l&p 10 641 7% d7% 7% ft 

AapeaTri 32 250 38 35% 35% +% 

AsscComm 587 10 23% 23% 23% 


ft 

ft 

ft 


ASTHscb 1415005 24 % 23 23% 

AUdraon 20 8 8% 8% B% 

AISEAir 002 25 2781 35% 33% 34% +1% 
Aukttk 048 23 6157 u61% 58% 59% -2% 

AUUUo 13 94 4 3% 3|2 -f, 

Avondale 082 II 205 7% 7 7 


- B - 

BEIBx 008 21 57 6% 8% 6% +% 

II 348 13% 13 13% ft 

14 % d% % 

006 13 477 21% ZT% 21% +% 
020 3 588 14% 14% 14% 

17 137 23% 23% 23% ft 
BnkSoutnx 044 101282 17% 16% 17 ft 

BartmnQ) 040 9 105 17% 17% 17% 
Bantam 060 11 38 18% 18% 18% 

BoMffcns 020 28 55 33% 33% 33% 

Baota Gw 002 18 19 37% 38% 37% +% 

HassoF 1100 15 87 20% 28% 28% ft 

060 11 672 30% 19% 20% +% 
1.40 12 261 54 % 54% 54% ft 
108 9 723 30% 29% 30 

28 478 11% 10% 10’a 
BeauOCm 020 26 31 11% 11% 11% ft 

BOngJanjr 16 311 17 16% 16% +% 

BorktayfW 044 14 30 38 37% 38 ft 

BHABp 012 15 90 11 10% 10% •% 

B he 102 04 5% 5 5% ft 

Big 8 012 15 2151 11 10% 10% ft 

BkidoyWx 008 15 384 13% 13% 13% +% 

Bloom 41I81B7 42 37% 38% -2% 

Btomot 194349 11% II 11% ft 

BhckDn) 104 12 210 34% 34 34 ft 

BbSCSonw 211230 68% 67% 68 ft 

BwmienS 104 9 2358 28% 27% 28 

Bd) Evans 02719 405 22 21% 21% ft 

Bode&B 12 11 24% 24% 24% +1 

Borland 23 8851 13 12% 12% ft 

Boston Bk 076 6 60 36 34% £ ft 

Bosun Tc 64 4B32u14% 13% 14% ft 
BraoyWA 068 17 36 44% 43% 44% +1 

Bronco, 020 20 111 8% 0% a% ft 
BrunoS 024 173319 8% 8 8%+% 

BS88ncp 078 7 27 23% 22% 22% -% 


H at 

Stock Dh. E lllto Kph U» tat Cteg 
Deb Sbops 020 20 10 6% 8% 6% 

DekafcEn 032 2D 27 14 13% 13% ft 

Deta6 to 060 50 127 34% 33% 34% ft 

Ddctanpa 044 11 315 22% 22 22% -% 

wrewrp 24 9118 »% 25% 2£% ft 

DritaOSmi 016 18 498 15% is 15 

DMPy 38 481 44% 43% 43% -1+ 

top®)* LW 7 91 27% 27% 27% ♦% 
Dbkoi CUD 4 2 7% 7% 7% ft 

OHTwh 14 195 17% 1: 17% 
DkxeaB 072 ions? 23% 21% 21% -1% 
DlglM 18 504 19% 18% 10% +% 

Dig Man 94457 17 14 17 *3 

Dig Sand 6 2000 1% 1% iJJ 

Dig 5ys 3 610 2% 2% 2% 

Dtancr Cp 1? M it 35 35I1 -% 

Dbdeirm 02023 94 10 9% 8% -% 
DNAPtant 51839 5% 5% ft ft 
Doteto 02D3Q 68S 31 30 30% «% 

Dordi Htn 068 17 230 16% 16 16 

OracD&gy 6 364 9% d8% 8% -% 

towsflun 14 810 13% 12% 13% ft 

Dray GD 024 20 830 25 23% 24 -1 

Drug Empo 006 50 320 6% 5% 5% +% 
DGBmar 109 14 306 25 24% 24% ft 

Durban 063 21 44 26% 27% 28% 

Durr FRI 000 24 8u33% 32% 32% 

DynAdi 13 255 20% 20*4 20*4 ft 


- E - 

Emlc Fn 10 516 6% 6% 6% 

Easel Cp 4 17M 6% 6% 6% ft 
EastEnmk 5 69 ifj i7 a |J* Jj 
Ed Tel ttIB 31 16<6 29% 24% 24% *% 
Eashead 77 182 9,4 9 9% 

BPmoB 2 387 2% 111 2,‘i 

Ekc&Sd 14 4311 16 14% 14% .% 

Been* 082 52 MOO 52 52 52 -% 

EbctAfta 3216033 27% 26 27% +1% 

Encon Ass 22 183 7% 7% 7% ft 
EnntaxCp 27 1442 6% 6 6% 

EngyVWre 50 146 14% 14 14% +% 

EmrtrSw 62 10 1% 1% 1% 

Enron he 4 168 4% 4% 4,'c ft 

EqukyOi 010 21 73 4% 4% 4% -% 

Ertssor 0481Z7 531S 45% 44% 45-% +1% 
Elbd 82 10% 10% 10% 

tarns 58) 81 JOB 18 17% 18 

284321 22% 21% 22 ft 
14 65 11% 11% 11% 
BddaE fec 14 173 19% 18% 19% +% 
Expecta I OLID 20 165 17% 17% 17% 
EanpAm 26 437 16 15% 16 +% 


SUM DXr. E llXk HUB 1 m LtU Chg 

- K - 

KSms 006 12 10 23% 22% 23% ft 

kamanCo 044 6 93 10% 97, iO*g 

Karewc 009 38 295 13% 13% 13% ft 

NaydonCpiDWi 15 153 25 24% 24% 

WtaytW 712 2330 7% 6^ 7% ft 

iwttysv 004 22 1042 27 X 26 -% 

Kentucky 011 12 15 ?-% 7% 7% ft 

NtoOaD 084 15 1033 23 % 277 4 28 -% 

Krcfnw 14 10] 7% $% £% .% 

KIAhstr 57 31 95 u43% 42*4 42% +% 

Knowledge 7 1034 14 13% 13% 

KODA I M % h % -Jh 

Maroon. *6tS5 26% Zb% 15% -% 
huhAeS 9 2305 14% 13% ’4 -% 


- L - 

Ladd Rm 012 M 127 9% 8% 9% ft 

Lam Ha* 41 3050 36% 36% 36% ft 

Lancaster , 060 19 23b 4b 43% 43% .% 

UnCe he 096 20 369 20*4 19% 70% ♦% 

LamunkCpn X 114 18% 17% 2fl% •% 

Lanopucs 14 60 10% dIO 10% -*a 

Lastistpe 77 3167 7% 67j T ♦% 

LMnceS m 1796 i? 16% 17 +% 

Lwcrn Pr 048 19 KM 26% 2b X*-> 

LOOS 401 2*180 78% 28 28% ft 

UUCP 016 8 751 6% 05% 5% 
Lesnten 16 374 ift i*% ib% ft 

Legem CP 20 7712 34% 33% 33% -% 

LimyNIBct 078 14 18 29% 79% 29% *% 

Ue Teen 1 020 14 149 17 16 16% 

LHrime 23 772 4% 4% 4% -% 

IXyMA 1 0.40 34 34 75% 24% 75% 

Lin Sr 93 ££31!0%ir9 , a 11D 

UncokiT 057 16 133 17 10 16% 

LnddayMt 14 133 32% 31% 32% *% 

Linear T« OH 38 4333 i)48 45% 46% -% 

UrnOn 040 19 MOD 38 38 38 +2% 

Loewi Go 006 31 195, 79% 26% 2b% % 

LoneStar II 791 8% 7% g ,% 

LiMisD 64 5279 80*4 79 80 ft 

LTHCp 2 657 3% 3% 3% 

LVm 153 19 4 1 44% 144% 144% +4 


Stock Dto E uos Wgx Lew Laif Gtef 
Pyramid 201941 14% 133, i4 

(kndraLog 9 11 6% * 6 .% 

OuaWiCbm D671U) ;1D0 19% 19% 19% -% 

dual Food 020 it 79! 24% 23 tjU .% 

uuamran 8510946 19* s 18% ig% -% 

Quctafr 21 76i 15 14% Id7g ft 

OVCNflrt 266715 40% 39 39% -% 


19 19 
ft 10% 
6 % 6 % 


ft 


.1, 


fid Grp 
FarrCp 


11 

024 14 


- F- 

6 4% 4% 4% 
4 6% 5% 5% 


BatartllM 
Baker J 
Bkfi«a.B 
BanctK 


Bay View 
bytandn 
BUST Fin 

BE Aero 


BTSdpng 048 0- 20 3% 3% 3% 


Britets 

BtodemT 

Bunup&B 

BuTBnui 

Bushosdl 

BUkxMlg 


351235 24% 23% 23% 
30 430 1ft 17% 17% 

B 2298 UB% 8% ft 

23 31 7 6% B% 

83 1 2 33% 33% 33% 

6 60S 26% 26 26% 


- c - 


CTtc 07 50 29% 29 29 +% 

Criwr Mod 0 540 8% 8 8% +% 

CtoBdwps 101 17 2695 30% 30% 30% +% 
CadmusComOZO 18 2ui5% ift 1ft +% 


Caere Cp 
cagene 
CaUaD 
Cambr8ta 
CmdetaL 
Cndfcs 
Canon be 
Canons 
Cantata! 

CatonCm xO04 24 
Cascade 
Casey S 
Criflene 
CCtate 
CEMCp 
CodexTa 
Certoeor 


08 720 8% ft 8% 
22 8 3111 13% 13% 12% 
20 187D 23 21% 22% 


3% 3ic 3 A 
ft 3% 3% 
2% 2% 2% 
B1 80*2 81 

4% 3% 4 


41513 
1 21b 
0 12 
008112 23 
1 68 

0.12 25 144 46% 46*4 4ft 

17 28% 28% 28% 

000 17 65 IS ift Ift 

O0B IB 1273 12% 12% 1ft 

71167 9 8% 6% 

8 334 10% 18% 19% 

19 28 12% 12% 12% 

162 746 ft 4% 4% 

B 7347 12% 11% 12 

CnWRdx i.T2 10 865 29% 28% 29 +% 

QnMSpr 76 3 13 13 13 +% 

Uam9er 12 50 6% ft 8% 

Otatn-1 048 7 366 19% 19% 1ft +% 

OrmSd 009 17 4377 12% 12% 12% 

Ctermhfpi 41 1393 ft ft ft ft 

ChHidai 18 270 12 11 11% ft 

Chenfix 1 290 % d% % 

Uwmpowur 17 217 4% 4% 4% 

CKpsSTe 71970 ft 0% 8% 

Chiron Cp 6910948 75 7ft 71% 

Omfin 12B 13 288 57% 5B% 56% 
CMa&Cpx ai7 29 235 30 % 30% 30% 


ft 

ft 

ft 

+% 

+% 

ft 

ft 

ft 

ft 


ft 

ft 


CtzBancp 
Chan far 
OHIO Dr 
UoBwbn 
CacaCdaS 100 19 1304 
CwtaEngy 
CodpAtarra 
Cognacp 
cognos 
Coneren 
Qdtagan 
CflWGas 
COW Grp 
Comal 
CmcstA 


ft 
-I 
ft 
ft 

CXTUSUC 3810795 37% 36% 37% +% 
US Ter* 200 1534 «% 3% 4 

4320373 79% 77% 79 -1 

108 16 65 29 28*4 3% 

29 SOI 8*2 8% 8% 

40 32B 12 11% 11% 

14 1405 8 7% 8 +% 

32 31% 31% +% 

952341 4% 4|$ 4% 

26 177 10% 10% 10% ft 

32 42S 20% 19% 2D% +1% 

113 161 12% 12% 12% +% 

15 100 13% 11% 12% ft 

92 344 23% 22% 23 +% 

154 14 45 22% 21% ft 

aano 453 28% 24% 26% +2% 

0+4 15 1653 23 22 22% ft 

1S32 24 4520 19% 19*4 19% ft 

CmSASp 009 235408 19% <9 ™ ft 
cofiKadviaeo 11 ass 32% 32% ft 

Comma 070 96 174 18% 17% 18% ft 
OomptltE 42 1059 13% 12% 12% ft 
Coras** 5b 108 12% 11% 12% ft 
Coratockft 56 1612 5£ 5% 5% ft 
Cental 108 3D 185 44% 44 44% -% 

CansAan 12 218 9 8% 8*2 ft 

CanstaB \M 181142 10% 10% 10% +% 
CuraCeJ 20 142 15% 15% 15*2 +% 
Cnbftao 14 67 9*2 9% 9% -% 
CDORA 050 24 3450 19 18% 19 ft 

Oopytde 102 312 11% 11% 11% ft 
Cords Cp 20 3050 47% 4$]^ 46% ft 
cap (HA 44 775 16% 15% 15% -% 
Orocta 6x062 34 4046 28% 28*4 26% ft 
day Comp 17188 2% 2% 2% ft 

Crown Res 6 711 6% 6% B% ft 

Cynom 3 1349 4% d4% 4% -% 


- D - 

DSC Cm 371 6501 67% 56% 56% ft 

DatDrau 0.13106 151 86 1 i 84 84 -3% 
DaaSwtEh 14 65 2% 2% 2% ft 

betel S 31 7% T% 7% ft 

DataBase is 252 16 15% i&% 

QauiWnDp 062 11 131 23% 23% 23% 


Ftostana t 004 58 2333 37% 36% 38% -% 

FWH1 173S31 27 26 27 +% 

Fhrarebs 3 841 3% 62% 2% -% 

HUlThrd 108 14 747 47% 47% 47% -% 

Fifty Ml 10 307 6 5% 5% -% 

Hggta A 034 27 908 9% 9% 9% 

FBMt 37 712 27 26% 26% +% 

EriABramailza 10 781 31% 30% 31% +% 

FW Am 004 71671 29% 26% 2S% 

094 11 392 28 25% 25% +1% 

OEO 17 89 19% 19% 19% 

104 11 481 28% 2B% 28% ft 

108 9 607 39 38% 38% ft 

036 5 0 7% 7% 7% ft 

052 10 504 24% 24% 24% 

136 II 13 47 46% 47 

38 2 8% ft 6% -% 

271655 22 21 22 ♦% 
20 377 7 6% 7 +% 

009 IB +039 6% 8% 8% ft 
009650 721 6% 6% 6% ft 


FstBcOWo 

FaCoBk 

F9 Sedy 

FstTean 

FaVfean 

FadedUc 

FbsUari 

Fkstmlss 

FteetK 

FtarIH 

FnU 

FaaU 

Foremost 

Fon ul— 


FTuneBm: 000 52 


108 11 Z100 33% 33*2 33% 
14 416 15% 15 15% 


38 31 30% 31 

68 3% 3% 3% 
32 27% 27% 27% 


Faster A 40 

FrtiFki 104 11 
Ffl Earn 1.12522 22 26% 25% 26% +% 
fidFWx 040 8 153 15% 15 15% +% 

WHawa 1.18 10 50 27% 2B*2 27 ♦% 

Piter® 056 26 528 41% 38% 40% ft 

Fitenfin 0« 13 47 24% 23% 24% ft 

Fum 024 21 7 17% 16% 16% -1 


GBApp 
GBJvSonx 007 22 


- G - 

9 132 5% 5** 5% 
31 15% 15 15 


tortus 01833 5 4% 4% ft 

tomm Hs 18 132 4$$ 4% 4% ft 

GaM Co 016182 40 6% 6% 6% +% 

Soil Bind 040 18 12 15% 14% 15% 

Gertyw 16 878 4% 4% A% 

torotaPh 8 517 20% 19% 1974 -% 

tefltaCp 400 420830 28 23% 25% +1% 

tonm he 0 840 4% 4% 4ft ft 

Genzyme 112 3473 28% 27 28 ft 

Susan O 040 14 8b 23 22% 22% ft 

EUdagsL 012 20 641 Z7 25% 26% +% 

GttertA 000 30 238 16% 17% 18 +% 

to/i Worn 11 3 5% 5% 5% 

Goad Guys 23 S59u18% 18 18% +% 

SajMsPn*) 000 21 243 24% 24% 24ft ft 


MU Cm DOS 2124447 24% 24% 24% ft 
MS Cart 22 309 25*2 24% 15% +% 

Mac Mfl 060 E 10 16% 16 % i 6 7 £ 

UadsmCE 105 14 174 33*2 32% 32% +% 

UagmaPW! 14 3356 32% 32 32% +% 

Magna Grp 0 76 12 103 18% 18% 18% 


ft 

-% 

ft 

+ >4 


Hair Box 13 4457 8% 8% 8% 

Marram Cp 38 711 13% 12% 13% 

Marine Dr 15 1484 5% ft 5% 

Marta to 10 23 43% 43 43 

Mamies 0 38 2% ft 1}J 

Uamatta 17 130 0% 7% 8% 

MareftSndiA 044 ii ii 11% n n% 

MarstaB 056 11 300 21% 20% 20% 

Maxknht 42 4SSifi5% 54% 54% 
Moxkx Cp 0 4064 7 % 7% 7% 

McGrath R 040 13 21 17% 16% 17% 
Mctomic 048 182106 22% 22 22% 

IfcCawC 4410229 50% 49% 50% 
Madbnag 0 50 ft ft 

MedM he x 016 21 62 17% 17% 17% 

MOdOMS 040 13 391 23% 22% 23% +ft 

Metomne 024 5 55 5% ft 5% 

Mart* Cp 016 52 717 16 15% 15% ft 

MenbG 024 202632 14% 13% 13% -% 
MereanLB 068 10 311 19% 18% 19% +% 
IferniyGxOTD 8 77 30% 28% 30% 
Meridian IJB 101572 26% 28 20 

Merita 219532 22 23% 21% ft 

MrihodeA 005 101033 18% 15% 1S* 4 +J4 
Mdtad F 020 12 290 10% 9% 10% +% 

IfictiNatB 200290 16 64 83*2 64 +% 

MKroWi 14 35 6% 5% 6 ft 

Mange 233726 31 29% 30% ft 

Mtancom 4 327 5% 5% 5% +% 

McrO>rar 121963 7% 7% 7% -% 
Mtopote 51946 7% 7% 7% 

MJcsfl 2419032 85*4 53% 84% +7* 

NdAflM 341845 39% 36% 39 

•tehrtlc 100 11 3503 28% Z7% 28% +% 


MUwGnh 050 25 58 30% 30% 30*2 
MUerH 052 24 661 33% 33*2 33% 

812 24% 24% 24% 
Mhntach 16 285 1Z% 12 12 

MotteTel 42 3289 17% 16% 16% 

Modem CP 020 20 382 8% 8 8% 

ModtanM 046 20 79 28*2 28*2 28% 

003 378 35 34% 35 +*4 

Mrtexhc 004 26 655 36*4 35 35% -% 

Itecom 004 17 685 11% 1ft 10% ft 

MoWimP 030 24 60 32% 31% 32% +t% 

I* Codec 18 2493 ul5% 15 1b 

MISSyxx 056 73 2 32% 32% 32% +% 

Mimed 13 578 30% 28% 30*4 

Ufl»g« 4 476 11 10 70% 


ft 

ft 

% 

ft 

-1 


*% 

+h 


- R- 

fO«ww 17 625 19% 

R*rs 151275 ift 

teterogs 3 360 6% 

fcr.TOowJ 23 19 19 17% 17% 

toman 28 118 30% 29-\ 30% 

ftri.Be A 18 41 20 Ift 19% 

Hepfigui i 770 5% 6 6 

f-T Wear 4 79 3% 2% 7JI -ft 

RtacNnd 17 III 10% 9% 10% -ft 

Rwim 217 31130 92% 91% 91% •% 
fleionhc 1 1354 6*4 6% 6% -% 

Biter Fra 1 D0G ID 17 16% 35% 35% +JJ 

FhMwS 1.« 13 945 71% 703 4 71% +% 

RMftmi 012 15 10 7% 7% 7% 

RrcbSvBh O0C- 51255 16*4 15% Ib7 a ft 

Rawryifl 13 8 100 45% 44% 45% ♦% 

Boon Ur DID II 1373 16% 15% »S% 

tooediUcd H 1105 18% 17 17% +% 

Rhct, 068 68 91 18% ia 18% *% 

RPMUir Oil 71 S73 19 18% 18% ■% 

BS Fin 040 11 as 19% is% 19% +% 

ftvan Fmv M 92s B% 7~ s 7% -% 


aadroSys 41 40 

Grante QZD 75 60S 
Green AP 004 12 MOO 


QnwctiPb 


BrndWtr 
GTI Corp 
QrMVSeg 


1 1005 
1 1676 
737 
14 


2% 2% 2% +% 
23 22*2 22% 

20 20 20 
1ft 1% 1% 

4% 4 4% 

69 1ft 1<% 14% 

54 20% 19*4 18% 


4 580 0 7% 7% 


Heathdm 


HadXngN 

Hridnk 

Hehnlrey 

Unfit 


♦% 

ft 

■% 

♦% 

ft 

ft 

ft 


- H - 

81 34 B 8% 9 

Hartevyrix 004 9 180 25 24 24 

Harper 6p 000 14 55 16% 15% 15% 
WOftCD 002 43 315 51% 50% 50% 

22 1824 24% 23% 24 

006 IB 883 10% 6% 9% 

11 374 8 7% 7% 

11 176 7% 6% 6% 

018 21 919 13 12% 12% +% 

232 12% 12 12 -% 

8 55 14 13% 13% 

0.72 18 6045 U28 25% 27% +2% 

Hogan Sys 015 31 2SG 1ft 10% 1ft ft 

Hotoflfc 30 204 6% 6% 6% 

Home Bert UJB B 44 70% 20% 2ft -1 
HotnelUr 2S6 141 7}J 7J4 7li 

Home Oto 072 25 251 uZI 20 20% 

Hon bids 044 23 12 33 33 33 -% 

17 8013 15% 14% 15% +1% 
Horeanfles 044 23 5 5% 5% 5% 

HUD JB 020 24 673 24 % 24% 24% -% 
Hutegtn x 000 9 805 22% 22% 21% ft 
HureoCa 008 0 3 2% 2% 2% ft 


HDttfflKtl 

HycarBlo 


468 106 38% 37% 37% 
18 99 4% 4% 4U 


- I - 


8% B% 
18 18% 


IFRSys 51 II 9 

lOB Crams 54 2187 18% 

KhH 8 1333 ft 8% 9% +% 

trenucar 38 30 8% 6 0% ft 

Iflxt mn og a i 5 341 ft G 6 

toped 6C 040 27 206 14% 14*4 14% ft 

hdBsxp 1.16 IS 713 36% 36% 36% ft 

mins 034223 869 15% 15% 15% 

25 5517 21 d20 II +1 

17 5319 23 21% 22% 

006 17 70 12% 11% 12% -% 

363517 31% 29$ 30 ft 

IS 101 12 11% 11% ft 

31 1399 ft 5 5 -% 

03) 1328459 72 TO 71% +1% 

10 255 4% 4% 4% -it 

032 45 2625 20^ Ift 26*4 ■% 

IrtaTri 23 106 1D% 10% 10% 

hlwtaAx oa t9 486 14% 14% 14% ft 

hlspb 31495 10 9% 9% 

Mortal II 728 7% 7% 7% -% 

275 4746 13% 12% 13% +1% 
23 1140 13 11% 11% ft 

14 120 17% 17% 17% +% 

008 20 9 3% 3 3% ft 

637 717 1Z% 12% 12% 

001 18 925 28% 27% 28 +% 
2 32 2% 2% 2% 

17 70 19% 18% 10 +% 
100 39 21 214 214 214 -S 


H Bee 

Ittxmh 

■ngtaMkt 

Heorffev 

htgafiys 

htgbHfel 

tta 

kite* 


htonolc 
MDriryQA 
Mfas 
hi Tata 

hMCWE 

hroegaCp 

kwnerty 

loYstato 


■ J ■ 

JSJSnadi 21 40 18% 10 18% 

Jasmine 008 21 44 14% 14 14 -% 

JLGhdX aioza 53 32% 31 32% +1% 

JdllOGUd W 61 IS 24% 24% 24% +<4 

Jones kd II 90 15% 14% 14% ft 

Jam Med ,010 22 47 14% 14% 14% ft 

Jodmto 100 11 05 24% 23% 23% +*4 

JSBRb on M 62 23% 13% 22% ft 

JunoUgx 004 18 585 10% 18% 18% ft 

JuSUn 016 II 2785 1ft 14% 14% 


- N - 

MAC Re 016 113515 26%<C£% 26% -2 

Midi Fnch 072 11 35 17 16% 17 ♦% 

MS Rea 14 10 6% 6 6% ft 

Nat Conw XO06 14 42 13 13 13 -% 

NUsSui x 000 25 1801 17% 16% 17 ft 

KMgaor 11 302 20% 20% 20% +% 
NEC 048 83 13 50 49% 49% ft 

NeBW 17 693 26*4 17 27 

NaMiBen 30 2175 21% 20% 21% 
NelwkS 1104129 a 7% 7% 
Newogan 25 3 7% 7% 7% 

Itepia 007 IB 401 18 17% 18 

NbwE Bus 080 23 3054 21 2(1% ;o% 

Hew mage 9 9G5 12% 11% 11% 

MudpeNel 45 9126 61% 58% 60 

Newt to OW 9 148 ft 5% 5% 

(Ufe Dll 23 5591 7% 7% 7% 
Nanfcan 056 77 26 60% 59% 60*4 
034 23 3057 40% 39*4 40 

12 15 17% 17 17 

4 83 5% 5% 5% 


- s - 

Sana 100 B 4193 50% 54 % 55% +% 
Sandmen OJO 1? 188 16% 15% 16% »1% 
SdtfmbpA D 36 K 91 J4 33% 34 
SriMedL 93513 36% 33% JJ% -1% 

50 Si’sun 10 1331 10% 10 20% ft 

SOUP 8 769 8% 6% 8% -% 

Goto Co 052 111814 3b 24% 14% ft 

Saxe Bid 13 1337 13 11% 12% +1% 

Sr-afirid I0D 45 24 37% 37% 37% ♦% 

SW 12 8135 28 27% 17% ft 

SETCp QI2 29 191 14% 2J% U% ft 

stiwsB ojo 1 n u; ■{; ir 0 +,*. 

Vmtmn UI 17 IT 39*4 :&% 23% »% 
Seuuent S3 1250 i4% 14 14 ft 

Seqjoo 40 G7D 6* c r, eft -i 1 , 

Sarv Tecfi 1G 193 11% 11 11 

Screfraa 17 21 3“a J% 3% 
Swenson 15 3 16% 16% 16% -1% 

swfcfl oat :q xm w% 27% •% 
SHLSyam 100 904 8% 7% 8 

Shamrood 25 1583 ift 15 i&% -% 
ShowntP 13 1349 14% 13% 14 ft 

Sierra On 21 321 27% 26% 26% 
SrerraTuc 3 72 4% 3% 37 b 
S lgmAJ 033 13 1623 53 50% 5D% -2% 

SrpnaOce 2 885 13% 12% 13 ft 

SDcnVEc 006 51 29 10*+ 8% ift ft 

StocHVGp 37 3920 1 3% 12% 127, ft 
SmxKor 056 28 31 22% 22% 22% 

Sm km 29 306 11% 21% 21% 

SnappteBv 5921842 24 22*2 22% -1 

SoltwareP 22441 6% 6% 6% ft 

SoBurareT 52 3359 9% 9% 9% 
Scnoco 054 17 639 24% 23% 23% ft 
Souliltt 008 9 827 19 18% 18% -% 

Sptefld A 020 422164 20*4 18% 20% ft 
StJudeMd 040 12 631 28% 27% 27% -% 

51 Paaac 000 8 222 18% 18% 18*4 ft 

SSy81 2 190 3j£ 3% 3% 

Smptes 46 868 31 30*4 3ft 

Star Banc 1.40 10 319 36*4 35% 36 ft 

State Sir 056 163219 38% 37% 38% ft 

Sid SfiCTC 13 1869 18% 17% 18% ft 
SU Re|ps 008 15 114 22% 22 22% ft 

Steel Tet 006 23 488 21% 20% 21% ft 
SbMrUSA OIO 2 162 8% 8% ft 
StnfiM 153 264 21% 21% 21% 

Stotebria 1.10 14 33 22% 23 32% 

SBUrilDy 30 2147 15 14% 14% 

Stryker 02B 25 781 31% 31% 31% ft 
StteranD 28 76 18% 18 18% ft 

SumrtomoB 000 75 175 21% 20 21% ft 
Sumtnb Be 004 121087 20 19% 20 ft 

SarmrtTa 64 3663 37% 38 38% ft 

SuiSport 15 46 6% ft ft 

SunMfc 1E2B7B5 31% 30*4 30% ft 
SwbtTre 27 7 26% 26% 2B% ft 

Sybaselnc 57 3566u51% 49% 49% ft 

Symantec 29S2B2 16% 15% 16% ft 

Synatoy 036 18 12 18% 18 18 ft 

Synenaai 75 28 3% 3% 3% 

Synegen 31873 12% 12 12% ft 

Spurt* 42 182 10% 1ft Ift 

SynapHs 2311328 26 25% 25% +% 

SyMmSdt 012 19 1645 17% 18% 17 ft 


SycterrvSco 

Syaamed 


371490u23% 22% 22% ft 
191058 5% 5 5% ft 


Mdstrm 
Nratm J 
NSteiUn 


-% 

ft 


Mor1tinT9 » 008 14 1019 42 41% 41% 

Hwri! 26531134 24% 23% 137* .% 

MteSus 3411008 38% 37% 37% -1% 

NSC Cup 11 IDO *,l 4r», 4,i +,V 


- o - 

OOwteya 25 47BuiG% 15% 18 

Octal Cam 2D 1519 27 26% 26*2 

ORstneLg 14 499 14 13% 14 

Outlay N Ora 8 17 25 24*: 24% 

ODBCs 292 13 305 64% 83*2 63% 

Ok! Kerr 1.16 B 461 307* 30JJ 30% 

OkJNae 092 16 183 36% 36% 36% 

Ortaniwp 1100 8 128 31% 31 31% 

One Pita 20 545 u26 25 % 26 

OpbcriR 20 240 22% 21% 21% ft 

Oracles 4310983 35% 33% 337 3 -1% 

OrbScnce 5G1220) 22% 21% 22+1% 

Ortnterti 059 26 422 9% 9 9% ft 

OnJxEuTP 10 88 15 14% 14% 

DregonMoi 031 lb 49 ft 6% 6% 

Osh*) 5 166 45c d*% 4% 

0S*BA 041 47 336 15*4 14% 14% -% 

OshkMhT 050 11 94 lt% 11 11% +% 

OnerTM 1.72 1< 07 34 33% 33% ft 


ft 

ft 

+% 

+% 

-J-i 

+% 

ft 

+% 

+% 


-P-Q- 

Paecar 100 15 423 58% 57% 58 ft 

PacDiBIkp 052 15 254 15% 16% 16% ft 

proton 102 16 56 25% 24% 25 

PactCre n 219 51% 51% 51% ft 

Parmretrc 37 8405 32% 30% 32% +1% 

Pawtex 124 47 609 39 38 38 ft 

PayarAm 241701 9% 9*4 9% ft 

less OH) 46 4 10% 10% 10% +% 

PwnTfly 8 4 13 13 13 -1% 

PHI) Vkg 100 23 12 33 33 33 

Pemsytv. 220 1 7 80 31% 31 31 

Pencw 0.72 18 458 37% 36% 37 

Parted) I 18 122 6% 6 8{, 

tamed L 000 25 45 23% 22% 22% 

PeapBarc 106 IS 62 48% 47% 48*4 +% 

*« H 10 695 10% 10% 10% ft 

PetraCte 1.12 20 ISO 37 35% 37 +3% 

ptiaraacy 27 710 u9 8% 0ft 
Pfmmreh 27 112 5% 5% 5% +% 

Beta* 0.48 5 17 14% 14 14% 

nmma 30 360 15 14% 14% 

Pkftemn 53 173 21% 20 21 

PWneerfia 008 23 1513 U35 337* 34% 

PiawwtB 056 254695 37% 37% 37% 

PtmeaSt 014 15 282 27 % 26% 27% 

Parts Fed 5 21 fl% 6% 8% 

POlWl 18 250 6% 6*4 6% 

Pros Lfip 009 4 1965 7% 6% 7% +% 

Pitta* 118 807 35% 31 32 ft 

Pi/Cosl 30 6410 20 7* 20*4 20** 

Pride PM 38 786 5*4 & 5 

PrtniroM 14 is a% 8 8% 

Prod Ora 004 IS 175 28*2 28 26 

Pitman B 012 7 52 19% 19% 19% 


ft 


■A 

-*i 


ft 

+*2 

ft 


♦% 


ft 

ft 


T-Ce* Sc 
TjowePr 
TBCCp 


TdeM 

T*U» 


- T- 

81473 5% 4% 4% 

052 23 2175 u30 36 37 
18 1091 13% 13% 13% 

TCA Cable 044 28 731 24 23 23% 

TwbDab 26 408 41% 40*2 40% 
Twumsrtlxara 15 332 62% 58 56 

Tetaac 1 27 6% 6 6 

TetoSys 6 721Dui3% 12% 12% 

TEteGmrenA 27523ffi8 22% 21% 22 

15 1996 13 12% 11% 

42 2659 58% 56% 58 

Tetaxi Cp 001 151364 15% 16 15% 

TriraTac 601153 7% 6% 7% 
TswfWIM«a27 32 1421 32% 30% 31% +1% 
Three Cam 27 166* 60 56% 59% +3% 

TJ hi 002 37 7756 »% 23% 34% +% 
Tokos Med 2 753 4% 4 4% +% 

Tokyo Mar 007 36 4 61 81 61 

Turn Brown 62 2023 11% 11% 11% 

Tapps Co 006331 1736 6% 6% 6% ft 
TP1 Enter 4 541 8 7 % 7% 

Tianaxld 12 30 13 12% 12% 

Trcnmfcx 100 9 7B9 34 % 33% 34% +% 
Trieste 23 329 2iJ 2% 2% 

Trimbto 51 109 10% 9% 9% 

TnctroBkC 1X0 10 104 21% 20% 21 

Tseng Lab 020 161535 9% ft 5% 
TysFdA 008 16 1324 20% 20 20% 


ft 

*% 

ft 


ISHUlcrx 

- U - 

Ora 24 6998 67% 66 £6*2 

ft 

Urriob 

21365 6 5% 5% 


uemosto 

100 14 51 17% l7*g 17% 

-% 

uSTd 

ZiU 11 58 51 50 50% 

ft 

United 51 

OJO 12 119 1ft 14% 14% 

+% 

Unltog 

020 19 52 25*4 2<% 25 


Unitrtn 

1.40 22 431 40*4 40*4 40% 

ft 

USBancpi 

088 ID 5031 26 25% 25% 

+% 

US Energy 

32 197 4% 4% 47* 


LEI Cop 

1.12 6 315 12% 12% 12% 

ft 

lltdiMed 

12 239 7% ft 7*’ 

ft 

UTOTdn 

3 27 42*8 «% «2% 


US* 

20 607 6% 6% 6*2 

ft 

Vttnmt 

- V - 

038 36 :100 Ift 1ft 16% 


Vngrd ton 

48 1011 30 »% 29% 

ft 

Vantone 

201195 19 18*2 18% 

h 

Vicar 

43 1993 28% 27*4 28% 

ft 

Vkantei 

10 1052 17l 2 ift 17% 

ft 

ViCwBSc 

351086 29*4 27% 28 

-1 

VLSI Tech 

35 4138 ift 15% 15% 

ft 

VriwB 

104 16 18 86 85*2 BE 

ft 


- w- 

WfriKf En 0.12 23 141 31 30*4 30% ft 

Wmrtedi 01 4S0 5* 4 4% 4% ft 
WasWJUSBQfi* 72850 2% 21% 21% ft 
WaahFeifi. 088 9 795 22 21% 22 
WatEWA 0« 22 4B 57 56 56 

MhusmPIKUM 20 595 31% 30% 31% ft 
WHD ZOO 16 43 43% tW 43 ■% 
Write* 471060 6% 8% 8% 

WastOne 072 11 BID 26% 27% 27% ft 
WstPub 02776 14% 13% 14% ft 

WteSlA 1 348 19 16*4 18% ft 

WrtSttUA 50 188 4 % 4% 4% +% 
tt&mtlB 006 26 1614 54 52% 54 +% 

VftflsSmne n 1953 31% 31% 31% ft 
WridunL 020 14 46 1ft 16 16% ft 
WUngli 0J6 25 II34 19% 19*2 19% +% 
WPP Group 003 221625 3% 3% +A 
Wynan-cwa40 6 2D7 6*2 ft ft 


- X - Y - Z - 

am 35 782 54% 53% 54% 

XomaCarp 3 744 -4ft 4% 4% 

Veto" 034 44 1020 29% 29*2 28% ft 
mV Raft GO 221 5/1 5% bit *A 

Zhnsitoh 1.12 9 113 39% 39% 39% ft 











3S 


■ 1 r 


WORLD STOCK MARKETS 


FINANCIAL 


Wednesday March 16 1994 


AMERICA 


Economic news fails 
to give Dow impetus 


Wall Street 

US share prices slipped yester- 
day morning in spite of a rally 
in the bond market and more 
favourable news on the econ- 
omy, rentes Frank McGurty in 
h T cw York. 

By I pm, the Dow Jones 
Industrial Average was 2.74 
lower at 3,860.24, while the 
more broadly based Standard 
& Poor's 500 was up 0.53 at 
467.97. In the secondary mar- 
kets, the American SE compos- 
ite was off 0.21 at 467.85, but 
the Nasdaq composite man- 
aged to add 1L27 at 795.07. 

After ignoring further weak- 
ness in the US Treasury mar- 
ket the previous session. 
stocks were unmoved by yes- 
terday's rebound in bond 
prices. At best, share prices 
struggled into positive terri- 
tory during the course of 
the morning, aided by some 
solid numbers on industrial 
production, coupled with a 
tame report on producer price 
inflation. 

The Labor Department 
reported a 08 per cent increase 
in the February producer price 
index, but the stronger-than- 
expected reading was largely 
attributed to a big jump in 
energy prices, due to harsh 
winter weather last month. 


Excluding energy and food, 
producer prices inched 0.1 per 
cent ahead, against a consen- 
sus forecast of 0.3 per cent. 

The encouraging figure trig- 
gered heavy buying of the 
benchmark 30-year govern- 
ment bond, which is especially 
sensitive to inflationary expec- 
tations. Yields fell well below 
the worrisome 7.0 per cent 
level, giving some breathing 
space to equity investors trou- 
bled by a swift rise in 
long-term interest rates in 
recent weeks. 

Still, enthusiasm was 
restrained, with most of the 
blue chips showing little move- 
ment during the first half of 
the session. By the afternoon, 
most indices were drifting into 
negative territory. Hie Nasdaq, 
buoyed by financial and trans- 
port issues, was the exception. 

Kemper surged $20%, or 
nearly 50 per cent, to $61% 
since the close of NYSE trad- 
ing the previous session. The 
stock took off in overnight 
trading on news of a $2Hbn 
takeover bid for the financial 
services concern launched by 
GE Capital. The announcement 
came just as Monday's session 
was drawing to an end. 

Overall, the financial sector 
showed the most strength. 
Among the Dow industrials, JP 
Morgan, up $1 at $65%. deliv- 
ered one of the best perfor- 


Venezuelan equities are 
upset by tax proposal 


Transaction costs could rise, writes Joseph Mann 

A new tax proposed last have an even greater effect on office on February 2. It is I 
week by the Venezue- foreigners. ing to cope with an economy 

lan government cover- Ms Norys Aguirre, president recession, a large fiscal defi 


A new tax proposed last 
week by the Venezue- 
lan government cover- 
ing most debit transactions at 
domestic banks has sent trem- 
ors through the Caracas stock 
exchange. 

On March 9. Mr Julio Sosa 
Rodriguez. Venezuela’s minis- 
ter of finance, presented a 
series of tax bills to congress. 
Including a proposed tax of 0.75 
per cent on debit transactions 
at banks that will primarily 
affect the country's private 
sector. 

On the same day, the Car- 
acas index reacted with a 48 
per cent decline, and over the 
week retreated more than 10 
per cent in local currency 
terms. 

The index recovered more 
than 3 per cent on Monday, but 
at midday yesterday, prices 
were beginning to weaken once 
more. The market underper- 
formed the region last year, 
showing a 14 per cent gain in 
dollar terms, while turnover 
slipped by 28 per cent com- 
pared with 1992. 

Although equity investors in 
Venezuela were - and are - 
worried about a number of 
problems, the proposed debit 
tax. as it is now being coiled, 
has given them a new head- 
ache. 

The tax. still to be approved 
by congress, has also raised 
fears that trading will move 
offshore and that foreign inves- 
tors will find the country's 
equity market less attractive. 

With some exceptions, banks 
will deduct the tax from the 
accounts of individuals or com- 
panies whenever they order a 
debit to their accounts, includ- 
ing issuing cheques or making 
an electronic payment. 

A stock transaction requires 
at least four cheques or debit 
orders, each of which would be 
taxed under the proposal. The 
new levy would increase trans- 
action costs significantly for 
domestic investors, and would 


have an even greater effect on 
foreigners. 

Ms Norys Aguirre, president 
of the stock exchange - the 
Bolsa de Valores de Caracas - 
has asked the government to 
prelude e xchang e transactions 
from the proposed levy. She 
warned that investors, espe- 
cially from overseas, would be 
driven away, noting that the 
tax would have theoretically 

Venezuela 

Co mp o site Index (*000) 

30 -- - 



22 - - 


1983 

Sana Datactroan 


added more than S54m to last 
year's transaction costs. 

Brokers and investors are 
also worried that stock deals 
will simply move offshore in 
an effort to avoid the tax. Ms 
Aguirre pointed out that a 
similar tax in Argentina was 
eliminated soon after it was 
applied when the authorities 
realised that much of that 
stock exchange's activities had 
moved to Uruguay: many 
Argentinians also decided to 
carry out their daily business 
activities in cash rather than 
cheques. 

The government has tried to 
soften the impact of the debit 
tax by noting that it will only 
be in effect until December 31 
and that, originally, a tax of 2 
per cent had been discussed. 

The new tax is a sign of the 
desperate fiscal situation of 
President Rafael Caldera's 
administration, which took 


office on February 2. It is try- 
ing to cope with an economy in 
recession, a large fiscal deficit 
high inflation, declining 
income from oil exports (one of 
its main sources of Treasury 
revenue), a hanking crisis and 
other problems. It also hopes to 
raise additional revenues 
through a proposed luxury tax 
and aims to reduce Income tax 
evasion. 

Another tax initiative 
involves lifting the celling on 
corporate and individual 
income tax from 30 per cent to 
34 per cent While this is not a 
crippling increase, business- 
men generally are unhappy as 
they work their way through 
the second year of a recession- 
ary economy. 

The failure last January of 
Banco Latino, the country’s 
second largest bank, created an 
unexpected problem for the 
new government and provoked 
crises at several other banks. 
The cash-strapped government 
has so far been forced to sup- 
ply Latino and other troubled 
banks with some $3bn in finan- 
cial assistance. 


N o-one can say for sure 
how the debt tax will 
fere in the new con- 
gress. where the two political 
parties supporting Mr Caldera 
together hold under 25 per cent 
of seats in both the chamber of 
deputies and the senate. 

The proposal got off to a bad 
start when Mr Henry Ramos, a 
spokesman for the Democratic 
Action Party (AD), said the 
tax had never worked any- 
where else. 

Air Caldera's parties need the 
support of one of the other 
three, larger political blocs in 
congress in order to gain 
approval of the debit tax and 
other tax proposals. So far, 
none of the three groups - AD, 
the Christian Democrats or the 
left wing Radical Cause party 
- has indicated that it will 
back the president. 


EUROPE 


Domestic component in bourse revival 


mances. The Investment bank 
revealed that it would back a 
proposed restructuring plan for 
Banco Espanol de Credito, the 
ailing Spanish bank in which it 
holds a 78 per cent stake. 

Dreyfus, the mutual funds 
group to be acquired by Mellon 
Bank, picked up $1% to $49. 

Among insurance stocks, 
several groups benefited from 
a "strong buy" recommenda- 
tions by Mr Steven Gavios, an 
analyst with Kidder Peabody 
in New York. Chubb climbed 
$1% to $74%. General Re was 
up $1% at $106%, American 
International jumped $2% to 
$85% and Marsh & Mclennan 
added to $82%. 

Elsewhere, Pepsico was 
given a lift from an upgrading 
by AG Edwards & Sons. The 
stock gained $1% to $37. 

Time Warner continued its 
impressive run, climbing $1% 
to $40. 

Canada 

Toronto continued higher at 
midday, fuelled by industrial, 
transport and banking stocks, 
as well as by an air of renewed 
economic confidence. 

The TSE 300 composite index 
rose 16.48 to 4,48684 at noon. 
Transportation issues led the 
market forward with a jump of 
47.66, or 1.2 per cent, to 
4^0034. 


Bourses found both domestic 
and international grounds for 
yesterday's gains, writes Our 
Markets Staff 

PARIS, up nearly 2 per cent, 
was little affected by the US 
PPI figures, finding other Rnri 
various reasons for the rise. 
Including lingering hopes of a 
Buba rate cut tomorrow, as 
well as support from the 
futures market 

The CAC-40 Index closed 
4380 higher at 2.25882. 

There was strong activity 
among media stocks. Canal 
Plus, in particular, was one of 
the session's most active per- 
formers, adding FFr54 or 6 per 
cent to FFrl,050. It was 
suggested that the group was 
helped by reports that the gov- 
ernment was reviewing its 
request for a finanrfai commit- 
ment towards the development 
of a cable network. 

Lyonnaise des Eaux-Dumez, 
the construction group, up 
FFr8 at FFr692. announced 
that its Dumez and GTM-Entre- 
pose units would form a joint 
venture. GTM dipped FFr28 or 
5 per cent to FFr480. on the 
news. 

Euro Disney, suspended limit 
down at one stage during the 
morning, recovered to close the 
day up 85 centi mes at FFr34.70. 

FRANKFURT consolidated 
most of Monday afternoon's 
gains, the Dax Index showing a 
session rise of 20.42, and moved 

ASIA PACIFIC 


on again after hours with the 
Ibis-indicated Dax closing at 

2,17881. 

Brokers said that Monday 
afternoon's gains reflected 
Morgan Stanley's raising of its 
recommended weighting in 
German equities. Turnover 
rose again, from DM88bn to 

DM9 8bn. 

Sentiment was lifted by 
Bayer which, unexpectedly, 
said that it would hold the div- 
idend at DM1 L After a DM280 
rise on the session the chemi- 
cal group rose another DM480 
to DM380 after hours. 

Relative strength continued 
in financials, in Siemens as it 
caught up with other blue 
chips unri in Volkswagen. But 
the most striking Dax stock 
gain was in Schenng: after an 
average response to Monday's 
progress report, the pharma- 
ceutical group put on DM37, or 
38 per cent to DM1,073. 

Mr Mark Tracey of Goldman 
Sachs said that there were six 
reasons for being bullish about 
Sobering: significant margin 
expansion in core pharmaceuti- 
cals: Betaseron, the new multi- 
ple sclerosis drug: cost savings 
potential: improvements in 
production techniques; strong 
ragh flow: and benefits from 
AgrEvo, the joint venture with 
Hoechst in agm r.'hgmlralft- 

AMSTERDAM firmed with 
strong interest seen In the 
heavily weighted issues, DSM 


FT-SE Actuaries Share indices ■ 


Mar 15 THE EUROPEAN SERIES 

Hut, rt-y. QptE V)JO 11-00 12.00 13J0 14.00 1SJ0 OaM 

FT-SEBmtndctQO 1<S5.e5 146137 1485.16 M64J0 14S4JB 1487X3 148X29 148933 

FT-SE Bictracfc 200 15D4.B7 150335 150433 1904.61 150SL09 1506X6 190652 151124 

Mar 14 Mar 11 Mg 10 Mar 0 6 

FT-SE Bmnek 100 145858 1431.65 144&2B 1445J7 1*39-23 

FT-SE Etrafrack 200 14Q5JB 1471.58 1404.36 149883 1511.16 

iMMlin OBmiMk 106 - 141tta 300 - tSW* LOOTS* 100 - 144183 200 • 130241. 


and Akzo Nobel, for example, 
adding a respective FI 280 and 
FI 2.80 to FI 124.40 and 
FI 22880. 

The AEX index strengthened 
387 to 42787. 

Hoogovens, which is expec- 
ted to release 1993 results 
tomorrow that are broadly 
expected to reveal another sub- 
stantial loss, gained FI 1.50 to 
FI 68.70. Analysts expect the 
steel group to begin its return 
to profitable operation in 1994, 
with the likelihood also that 
dividend payments will be 
resumed. 

Wolters Kluwer, the pub- 
lisher, which satisfied inves- 
tors with its 23 per cent gain in 
1393 profits, added FI 1.50 to 
FI 11980. 

ZURICH finished hi gher on 
the back of firmer US bonds, 
which rose after the release of 
the US PPI figures. The SMI 
index rose 36.4 or 18 per cent 
to 2806.9 but trading volume 
remained tow. 

Roche certificiates. the most 


active issue, put an SFrl40 to 
SFi7,l90. 

SMH bearers slipped SFt 20 to 
SFT880 amid doubts about ftir- 
ther growth in the watchmak- 
er's market penetration, and 
the view that the Swatchmo- 
blle small car project still had 
a long way to go. 

Surveillance rose SFr70 to 
SFr2.1l0 after the inspection 
and verification services group 
said that it expected its 1994 
results to be in line with the 
1993 outcome. 

MILAN maintained its posi- 
tive tone in spite of some sell- 
ing ahead of today's end of the 
monthly account. The Count 
index added 488 to 678.06. 

Demand from domestic funds 
and foreign investors helped 
some industrials and blue 
chips higher. Fiat rose L33 to 
L4.998, Olivetti L55 to 18810 
and Montedison 181 to 18.811. 

Banco di Napoli fell L27 to 
L2.141 as Moody's, the US 
credit ratings agency, said it 
had placed the bank's 


long-term credit ratings under 
review for possible downgrade. 
The recently privatised banks 
remained firm: QQ rose 187 to 
L12.640 and Credito Italiano 
put on U5 to 18,659. BCl added 
L125 to L6837. ahead of the 
first quotation tomorrow of its 
privatisation shares- The new 
shares, sold by public offer at 
18,400 without the L200 divi- 
dend, were quoted on the Lon- 
don grey market yesterday at 
around L6.100. 

MADRID gave credit to 
futures, foreign bourses and 
domestic bonds as the general 
index rose 485 to 34583 after a 
las t minut e sport of buying. 

Turnover rose to Pta32J4bn. 
There were specific interest 
rate hopes ahead of tomorrow's 
Bundesbank meeting, and the 
interest-rate sensitive utilities 
responded, showing the best 
gains of the day with Iberdrola, 
the most active stock, Pta25 
higher at Ptal.105. 

TEL AVIV -broke a four-ses- 
sion losing streak on buying by 
domestic pension funds, the 
Mtehtanim index shooting up 
by 138, or 6.75 per cent to 
208.82. This followed share 
price manipulation scandals 
which had dropped the blue 
chip index by nearly 25 per 
cent from its 1994 high. 

Written and edited by William 
Cochrane, John Pitt and Michael 
Morgan 


Region depressed by lack of foreign interest 


Tokyo 

Profit-taking following Mon- 
day's rally depressed share 
prices, and the Nikkei 225 aver- 
age finlahpd marginally easier 
after moving within a narrow 
range on technical trading. 
writes Emiko Terazono in 
Tokyo. 

The index lost 17.30 at 
2080885 after a day's high of 
20,654.17 in the morning and a 
low of 20,45885 in the after- 
noon. Early buying by foreign 
investors supported equities, 
but the Nikkei 225 was caught 
later between profit-taking and 
arbitrage buying. 

Traders were not discour- 
aged by the fells because vol- 
ume was heavy, with some 
550m shares chang in g hands, 
against Monday's 514m. A Jap- 
anese fund manager said that 
while share prices still looked 
expensive on a price/eamings 
ratio basis, the risk of a fall in 
values had declined, helped by 
the fact that the economy 
seemed to have bottomed out. 
Rises outpaced fells by 550 to 
449. with 147 issues unchanged. 

The Topix index of all first 
section stocks added 3.07 at 
1.642.94 and the Nikkei 300 
gained 0.43 at 30281. In London 
the ISE/Nikkei 50 index firmed 
3.75 to 1863.71. 

Machinery issues drew buy- 
ing after the release of favoura- 
ble data showing an increase 
in industry orders. Minebea 
rose Y33 to Y748 and Nachi 
Fujlkoshi Y9 to Y443. 

The yen’s retreat against the 
dollar supported high-technol- 
ogy Issues. Sony put on Y30 at 
Y6830 and TDK Y50 at Y4.450. 
However, some issues which 
had improved on the multime- 
dia theme declined. Nippon 
Telegraph and Telephone 
dipped Y2.000 to Y952.000 and 
Fujitsu eased Y10 to Y1.04Q. 


SOUTH AFRICA 

A flurry of activity before the 
expiry’ of Aztores and options 
lifted equities in late trading. 
The overall Index advanced 98 
to 6,254, industrials 105 to 
6.099 and golds 3 to 18 67. 

Anglos climbed R4.50 to 
R22980 and SAB R2 to R92. 


Mining issues, which had 
risen in tandem with the gold 
price, were lower. Mitsui Min- 
ing and Smelting declined Y9 
to Y416 and Sumitomo Metal 
Mining Y4 to Y92& 

Banka rose on arbitrage buy- 
ing, Industrial Runic of Japan 
finning Y10 to Y3890 and Sak- 
ura Bank Y60 to Y1890. 

In Osaka, the OSE average 
moved up 6585 to 22,438.38 in 
volume of 172.7m shares. 

Roundup 

Weak turnover and declining 
share prices typified the 
region. Kuala Lumpur, Jakarta 
and Karachi remained closed 
for holidays. 

HONG KONG's turnover was 


down from HK$88bn to a pro- 
visional HK$3-47hn, against fig- 
ures of more than HKyiOhn in 
late-1993 when the market was 
booming. The Hang Seng index 
ended a net 11681, or 18 per 
cent, down at 986386 after an 
early 120-point gain. 

US funds took profits and 
spiling mainly hit blue Chips, 

with Henderson Land falling 
HKS2.75 to HK$47.75, Sun Hung 
Kai Properties HK$1.50 to 
HK$58.50 and Hutchison 
Whampoa HK$L25 to HK$3285. 

TAIWAN saw turnover 
shrink to its lowest this year, 
down from T$40.39bn to 
T$34.29bn, as the weighted 
Index finished 5983, or 1.1 per 
cent, weaker at 587484, just 
one point above Its 1994 low. 


The heavily weighted finan- 
cial sector was among the big- 
gest losers, with China Trust 
and China Development down 
T$2 apiece to T$6380 and T$119 
respectively. It was said that 
reduced buying by foreign 
institutions was hurting the 
market 

COLOMBO blamed foreign 
inactivity or selling, local insti- 
tutional profit-taking and a 
drive for liquidity in the retail 
market as the all-share index 
dropped a further 31.92, or 
28 per cent, to 1,268.38. 
Turnover expanded from 
Rsilfim to Rsl428m. 

BOMBAY edged up. but bro- 
kers said that trade was virtu- 
ally paralysed by the imple- 
mentation of a ban by the 


Securities and Exchange Board 
of India on forward trading. 
The BSE 30-share index rose 
1L06 to 3,75888. 

The SEBI, India's main regu- 
lator for capital markets, had 
said that the carry forward, 
or badla system of trading, 
was leading to excessive 
speculation, and that it 
would allow resumption of 
the system only if stock 
exchanges implemented sev- 
eral measures to make trading 
more transparent 

NEW ZEALAND defied the 
regional trend, the NZSE-40 
index moving ahead 2788 to 
2849A1 as tile market found 
support from stranger Euro- 
pean bourses and a more stable 
focal bond mark et 





Touche Ross Corporate Finance 
are pleased to have acted as lead advisers to: 

Calder Group Limited. 

responsible for initiating, negotiating and arranging 

the £84*5 million MBI 
of part of the Engineered Products Division out of: 


... . 




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Cookson 


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FT-ACTU ARIES WORLD INDICES 






.*** V-- ; . 


.iftrJty conpitod by Tho Financial Times LKL. Goldman. Suchs & Co ana NatWea: Securities Lid. tn conjunction woh the Institute as Actuates end the Faaflty at Actuaries 
NATIONAL AND 

REGIONAL MARKETS MONOAY MARCH 14 1994 FRIDAY MARCH 11 1BB4 DOLLAR INDEX - 


■ DOLLAR INDEX- 



EUROPE (TiS) 

Nbrfl-C |113| . .. 

P»<*c S<u«i tTWj 

Euro-Padfle 114671 ..... .. 

North Amcnco (62S» 

SuraWfEt IMOJO} . . 

PaaHc 6* Japan CM1 -. . 

W0*»(»fc«.USf16M) 

WortiE^ UK 0*51 .._ 
World E*. So. M. <21101 ... 
Worfj fi Japan (17011 .... 


... 170.50 
— .214 68 
181 74 
18&d9 
— 19&6I 
... ISIS’ 
.....258.18 

16845 

. -t7?.34 
-....174.00 
— 106.04 


0.7 169.14 

0.6 212.98 

06 163.43 

0.6 165 85 

02 185.32 

0.7 150.50 

1.1 258.12 

0.7 167 10 

0.5 170.96 

0.5 172.70 

0.5 185.45 


18 ZB2 
09 1.26 

1.2 1 08 
1 2 1.81 
02 2.77 

1.4 L2B 


0.8 2.00 
OS 218 


The Wo« 12170} 174 65 OJ 173-25 11089 153.42 15440 0.8 2.16 173.78 171.47 115.48 151.58 152.13 17857 146.31 148-46 


twmtfftt. Thn rwaj TV*** uw*t Cddnm Sachs ana Gj and NaiWeu Sacunnas UeK 190T 
LAM inn mw ittendsda la Su attai 


Touche 

Boss 

& 


Dsiofttelb&cta 

Totatsu 

liitemationai 


Solicitors to Colder Group Limited: 

MACLAY MURRAY & SPENS 


Equity provided by: 

MORGAN GRENFELL DEVELOPMENT CAPITAL LIMITED 


Debt provided by: 

MORGAN GRENFELL & CO. LIMITED 


For further information please contact David Shearer, 
Partner in Charge of Corporate Finance in Scotland 

on 041 2O4 2S00 


Ro. R .i. ^ ,/CW,d 

hw<*T of OviCTnl 4»>wi«,jn Fi^md jnl min nunt a IhmnlBwn. 



FINANCIAL TIMES SURVEY 







c 

INFORMATION AND COMMUNICATIONS TECHNOLOGY 


Wednesday March 16 1994 


IN THIS 20 PAGE SURVEY 


AivliIvtafiiidbflRiwvattm - • 

Tta toy tectaotogmemerging as tfw cs&y* of tterwd waved 
business and social change hare computing power and cammunlttitions 
■ to common. Business assumptions wffi be repeated chafergad to tte 

naxt few yeare ao lecfinotogfcai tvlvances sweep me world of 
communteahons, MtftJroecka, mobte computing andgroupwars are 
among the hot' topic* says ftaa Cane-RagaE 

fhooi-out loonwinthaPC TMortfd: Apple Compulai*a ■ 
intiTxiudion of the first PowaWMarintoeh pfflsc^ Wowg - 


technology comfwfittor» Jnjte history of the pasonat compiler industry. 



Tlw iMdtbae«tta races 

Microsoft, tt» veld's tegast • 
personal computer software 
company, to' h amasring'te 
resources to a new goal: leadership 
fn the design of .muttfe»dia systems, 

Ura already over $iOQma: 

yew-oUjofarasarejciiand ■ 

dsvefopfneet budget of $473m - on. 
the criticaf opemttog software. 88 , 

Gates, (pk^med ham), the founder . 

' end c4irfm«anrf Micros^ pou» .. 

scorn on most ofthe mtifemedfa . 

Ojabln the USand Europe. Pago 3 

focus for sR banfcin gactivity: Faced with .mounting coropeStJon. 
the bartkOcan no longer survive without persistent investment In . . 

. internal technology, despttelts high cost, Pag»4 

Stropping In tfae liiUuK Home shopping: in the long term, 

. customers may rotmetefy stare at video screens at home, butlnstead- 
a prpapecttftat am. Bounds iStesc^nce ftcfiort - they may don headsets .. 
that allow them to wander.around virtual resfity stores, or even virtual 
stropping meSs. writes Ne3 BupHey-yafle 6 : 

Adv anc es to ttotho e to clrc N i i p office: The paperless office fa 
as far oft as ever ftxwhEi n^ght be t6frfled\^dB-ranglng Jobs. But for - • 
highly stroctufedtaste.siK* as («»d^ ■ 

cutting down on paper ran toad to substantial gatosjp productivity,..- - 
writes dotoShWogfairtPfow 5 . 

WrtM«wfcojy o ci^.DemBodforgpy»wc«iytJ^nitowddtsltB^K 
exoeec8npaupp^witos^3eorgaStock.LteBrsaiu jxjfongttiflfehopesan 
ATM- Asynchronous Transfer Mdda Page S .j . 

C om jp Bt ar WM b y lo'twwrtBops Ihe sefenwtigufoa teas has •: 
rooted the computer fedusey intheaaty.tfi90B is not just'tha result cA a 
recasskxi - ft isrtfte result of a tundamantal shJft toteebnotogy.. PWip . 

Itench«terlooteate«wori5 dewafapnfonlsand the busirisss beneftfs of 
efient-server system- FageS .• ; •• . v 

Kg telecom Opentnv saok slBancess Theemergenceof - 
global servk^ ptovtete^ able to meal the nBMto,ttf rraifinationai ■'■ 
corporations ts being turned Cy cutturaJand techrteM problems, 
writes WtakMswjm. ftoaa 7 -y . 

Tricky WtaBriBB act ffor eguSpnrooi vendors: Leading 
taiecommuiihfotictosecMbntorrt suftderearewalljtamdtB benefit ram 
emerging Aston markets growth; but they wffi have to gat the batorioe, 
right between selling Okt products iratww. markets, and bringtogtest 
new products for thefr older customers in tire westtep worid. Ragoti 

Gfcduri noWfo 
coDNm^tetiOOs: paulOuigtey 
charts JherapW progress towards a 
mobile mHenlum in 
OBPttnanicattoro. Pagna 

Out so ttr dnfl: | nwke-OT- .«• 
tmk factor; With the tenn • 
•‘dpmpUtesenHctei'.eniphBafe is 
'^ffla^awytromooTTfAterewid 
.towards services. That fe one ' - 
asfcgcm why compeotes ones 
dedicated to hardware of software 
are moiling Into fadBtfoa 

nwtagement. expb 
Goocflng-Paa*1Z 

Business Software' ChaQonoe: Once again, the UK's young 
aoftware dosignaretwvelhe cw«ta«y to wta cash. haRteareand 
software prizes to the value of C20JTOQ in-toe BosIneaB 8c«ww» 
ChaBenga '90s design competiijon - psMaLswhed. far its fourth year; 

p ®8* 12 

Mstory often repeats Itself; ’fleSrospecttveim 
Britain's cornputer manufacturing fridushy rar into probfemsfran the ■ . 
start Genius was to down by poormarkeCng and lack of gwanment 
iunding, writes' John Kavanagiv. (toge.13- ; 

Moves towards systems IntegraaioK Ttwpare^dwwid. 
fa- systems mtegrahort tes attrarited a growing number ot si^pSer WKl . 



xa cuilijAeanm. « — -t - - 

I, Writes PhRp Manchester- Pap* tS 

ing clown. the paperwofta Case stuefios-on how compartes 

jccessfa#y^jpWn9docasoen^irriB8ei«^^ . 

r dericeK «r«»t aapeetoWons: Ften^ 

. J I raaruwuanT Ihn rvod bio 


it These smal coroptter <&v»es represem 

nputer techMtedes asthay mow fir«n the deskttto. to pwteore 

liters, to f WM » CnilldlnOinHtCated Orinoco. Pm# w 


rata or . 

Tstratethat 
rifty than their US txw^eJtors. Pag* 1# 


tft3U ® c 

SflOES KLUOo^P Wgff iM . 

\n<Z ru ftLW CJrR. - 

y ! 



The key to fester softw»w in i 

WOrid rfJ» 1990s, a 

systomsrapWfotoaPriKt^^ 

WMlf H-fa. -oan hfg risks: fts increasing amounts^ , 

become paramount ftoge 19 
Editorial production: Jfiebaei Wiltshire 



ATftTs desktop video system at the Network Operations Centre in 
Bedirinster, New Jersey. It brings together telephony and computing In a 
digitai telephone and vtenl system that Blows caftors to see one 
another m a window on their screens whOe they work on documents. 


The shape of 
things to come 

Floating down a Venetian 
canal or walking under the 
arched ceilings of a medieval 
cathedral could ail happen 
in the not-toO’distant future 
without the traveller leaving 
tlw armchair - see picture, 
right 

By hokflng a space ball - 

that replaces the remote 
control pad - the armchair 
traveler can explore the 
world through a virtual reality 
Interface and enhanced 
three-dimensional-type 
pictures on the home TV. 

This futuristic tourism is just 
one of the TV-based home 
services being developed 
by BT Laboratories at 
MarHesham Heath, near 
Ipswich in Suffolk. 

Known as VRHS (for virtual 
reality home services), 
engineers are working on 
a range of Irritative interfaces 
that could transform the way 
that TV is viewed. 

□ Pictured left is AT&T’s 
video-conference system - 
the result of the 
collaboration between the 
i nfo rmat i on systems and 
business equipment units. 



Sightseeing by spacebar designer Andrew McGrath uses a virtual reaflty system to explore The antiquities of a 
sixth ceeAury basBca, created on screen. These systems could provide services of such raafism that a viewer 
feels as if he b wrtdng through the screen. The technology could also create a virtual shopping maB where 
Asms such as clothes could be viewed. There are also financial, educational and entertainment scenarios. 


The Interaction 

reality systems the . _ , 7 

spe«Srig devekjpmenb m this am. PBS® i < 

S£bsM^^S?3^: 

pace of change, writes Andrew Baxter. Page 18 


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FINANCIAL TIMES WEDNESDAY MARCH 1 6 1994 


II 

Information and communications technology 2 


A whirlwind of innovation 


Business assumptions will be repeatedly challenged in the next few years as technological 
advances sweep the world of communications. Multimedia, mobile computing and groupware 

are among the hot topics, as Alan Cane explains here 



Many of lhe new advances in information technology are drivon by the demands of the financial world. Observers boBovo that muttimedia, for example, tvftl unttaSy be drrvflfi by business applications. 
Larger corporations are already investigating the potential of rmdtanedta, although most have only developed a serious interest in the topic In the past yea-. 


The key technologies 
emerging as the cata- 
lyst of the next wave of 
business and social 
change have computing 
power and communica- 
tions in common. Mul- 
timedia, mobile com- 
puting and groupware 
are the most promising 
business opportunities 
over the next three 
years. According to a group of computer 
companies canvassed last month by Input, 
a US- based marketing consultancy, client- 
server computing, networking in its vari- 
ous forms and document image processing 
were all seen as providing continuing busi- 
ness, but there was less enthusiasm for 
last year's fashionable topics including 
artificial intelligence and graphic informa- 
tion systems. 

The computer company's choices are 
supported by a diversity of evidence. 

□ Deals like Viacom's SlObn acquisition 
last month of Paramount Communica- 
tions. the US information and entertain- 
ment group, exemplify the excitement 
multimedia is generating. In January 1993, 
150 US newspapers published a total of 25 
articles about multimedia: in December, 
the same newspapers published 425 pieces 
on the topic. 

□ The market for notebook and subno- 
tebook (hand-held) computers is expected 
to grow at 20 per cent or more this year 
compared with only six per cent or so for 
the industry as a whole. Prices of subnote- 
books seem set to follow their desktop 
equivalents downwards especially with the 
launch of the Compaq Contura Aero at 
under £1000 and the relaunch later this 
year of IBM's ThinkPad 500. There is con- 
tinuing interest in personal digital assis- 
tants (PDAs) combining computing power 
with communications despite a muted 
market response to the launch of Apple's 
Newton PDA 

□ The market for groupware - software 
designed to run on personal computer net- 
works to support the co-ordination of 
office activities and exemplified by Lotus 
“Notes" - looks likely to double in the US 
and Europe over the next five years. 
According to Ovum, a London-based infor- 
mation technology consultancy, the 
installed base of PC networks has now 
reached the critical mass necessary to pro- 
vide the incentive for the adoption of 
groupware. 

Elimination of barriers 

What has changed over the past few 
months is the speed at which these eso- 
teric technologies are becoming realities. 
Last month, for example, 400 senior tele- 
communications executives from compa- 
nies including AT&T, BT, MCI and Mer- 
cury, packed a seminar in the US to hear 
claims that business and society would be 
transformed by multimedia through the 
elimination of barriers of time, space and 
form. 

Opening the conference, Mr Rudy Pur- 
year. managing partner, strategic change, 
at Andersen Consulting, warned that 


every business assumption would be 
repeatedly challenged in the next few 
years: “The mean time between surprises 
is shortening,'’ he said. 

Most of the corporations present were 
already investigating the potential of mul- 
timedia: most had only developed a seri- 
ous interest in the topic in the past year. 

To a large extent, their enthusiasm is 
being driven by commercial demands, 
rather than customer-need. Telecommuni- 
cations companies like AT&T. MCI, BT 
and Mercury need to generate better mar- 
gins from their networks by moving from 
“pots" to “pans” (“plain old telephone ser- 
vices” to “pretty awesome new stuff"). 
Computer companies need to find new 
ways to encourage customers to buy more 
computer power as prices fall to commod- 
ity levels. Among those which have 
already declared an interest in multimedia 
are Apple Computer, Intel, Silicon Graph- 
ics and Microsoft as well as the games 


market leaders Sega and Nintendo. 

Mobile computers and groupware are 
firmly established in the market place. 
There are, however, question marks 
remaining over the potential of multime- 
dia. It has not been helped by confusion 
over what the term implies. 

The egsmtfal definition is the transfor- 
mation of information of all kinds - tex- 
tual, graphical, still and moving video pic- 
tures - into computer language (“bits”) in 
which form it can be transmitted down a 
single mnuniinirafi g ns channel - which 
could be a telephone line or a compact 
disk - to a modified television set or per- 
sonal computer in the office or home. 

The service is interactive; customers can 
send back instructions and requests 
through the network. What is important is 
that different bits of information are co- 
mingled in the transmission stream; the 
system is responsible for sorting out 
which are text, which are video and so on. 


Dr Nicholas Negroponti, director of the 
Massachusetts Institute of Technology 
media laboratory, believes that the impact 
of multimedia on the business and social 
world is inevitable. He points to four 
trends: 

□ First, the “disappearing desk top” as 
executives become peripatetic, using 
mobile computers on the move or while 
working from home. 

□ Second, continuing miniaturisation 
which will make complex and bulky tech- 
nologies such as speech recognition for pcs 
simple and easily transported. 

□ Third, increased use of the so-called 
“Negroponti switch" - the use of fibre to 
bring multimedia to the office and home 
leaving precious broadcast bandwidth far 
mobile telephony and computing. 

□ Fourth, the use of intelligent software 
“agents” to roam through electronic 
libraries gathering information of interest 
to their owners. 


AT&T already has systems which make 
use of this advanced concept. 

Four elements are required for the prof- 
itable development of multimedia systems: 

□ Powerful computers are needed to 
store, process and keep track erf the bits. 

□ High capacity telecommunications 
rhannals are needed to transmit them to 
office or home. 

□ There has to be a ready supply of 
information to feed the system. 

□ The customer must be willing to pay 
for the new services. 

All the technological elements for foil 
scale multimedia are pretty well In place: 
the computer power, software and net- 
works capable of transporting millions of 
bits a second at reasonable cost fibre 
optic technology is now staggeringly pow- 
erful, capable of carrying 150,000 times the 
volume of conventional telephone wires. 
Fibres can be spun from glass so pure that 
it is possible to see through a block 70 


miles wide. 

Chip technology is making possible the 
computing power to sort through all those 
bits. Dr Wei Yen, a senior vice-president at 
Silicon Graphics, a US company which 
specialises in the manipulation of elec- 
tronic images, said that the necessary 
computing power would be available 
through the development of microproces- 
sor chips railed “media engines" with the 
power of a supercomputer but cost only 
$200 (£130). His media engine would be 
available next year. 

Given the ability to make one billion 
' calculatio ns a second, he said, presenting 
life-like im a ges an the screen did not pres- 
ent technical difficulties - “reality is all 
mathematics,” he smiled. 

The chips, which will process bits 64 at a 
time like a supercomputer, will be Incorpo- 
rated first in Nintendo’s Reality tamer- 
stan Technology, claimed to allow players 
to step inside real-time, three dimensional 
worlds. 

Nintendo’s involvement gives the clue to 
the principal remaining problem: the 
search for attractive and marketable ser- 
vices to feed the multimedia machine. 
Entertalnxueat is an obvious option. 

New electronic services 

Time Warner Cable, the second largest 
>-ahiP! operator in the US, intends to launch 
this autumn one of the largest tests yet of 
multimedia services. It w31, tn the first 
in stanc e, allow customers to watch videos 
delivered via their telephone lines. The 
intention, however, is eventually to offer a 
“foil service network." 

About 4,000 homes around Orlando in 
Florida are being wired up for the trial, 
which could pave the way far a fuller 
range of electronic services, such as home 
hanking and shopping. 

The Orlando trial uses a combination of 
fibre optics and coaxial cable for transmis- 
sion; tn the UK, BT Intends to offer a 
video-on-demand service offering accept- 
able picture quality over ordinary tele- 
phone tines. 

The intention had been to open the ser- 
vice next month; Time Warner announced 
it would be delayed earher this month to 
allow - “additional refinements of the 
underlying system software and the set- 
top terminal." 

Coupled with the collapse at about the 
same time of the proposed merger between 
Bell Atlantic and the cable operator Tele- 
communications Int, observers were not- 
ing that the path to the establishment of 
successful multimedia systems will not be 
that easy. 

Many observers, indeed, believe that 
multimedia, will initially be driven by busi- 
ness applications. An option is telecom- 
muting. France Telecom is experimenting 
with a range of technologies including 
electronic mall and groupware which 
could be combined so employees can work 
from home or electronic telecommuting 
centres. 


□ The multimedia race: pages 3 and 4. 

□ Developments and applications for vir- 
tual reality technology, page 17 



NB-400 notebook PCs from Elonex. 


Personal computers: the technology battle intensifies 

Shoot-out between PowerPC 


Built-in power 
supply (no 'brick'). 



Choose from two monochrome 
and one colour LCD screen 
options. 


Upgradeable VGA video adapter 
supports Simulscan (displays 
on notebook screen and 
externa/ monitor at the 
same time). 


Built-in PCMCIA 2.0 slot 
accommodates the latest 
credit-card-stzed 
connectivity 
options. 


CPU options ranging from entryJevel 
486SX-25 to the tofyend 486DX2-66. 


‘Intelligent’ E2P2 parallel 
connector. 


4MB RAM module supplied as 
standard. Options include 8MB, 
16MB and 32MB. 


Simple ‘cfick-andslhte’ 
mechanism 
makes 
swapping 
screens 
easy. 


Integral trackball ‘ mouse 
with drag lock button. 


Use one battery pack, or 
two for twice as long. 


Removable, interchangeable 
hard disk module. 


Now you don’t have to compromise 


Until now, choosing a portable PC meant compromising on 
power and flexibility. El onex's NB-400 notebook PC range changes 
all that. Designed from scratch by Elonex to beat the best in the 
world, the NB-400 range matches the versatility and processing 
speeds of many bigger and heavier machines. 

The NB-400 's unique modular design means that just like 
desktop PCs. they can evolve as technology advances and your 
needs change. You can simply upgrade the CPU. RAM, screen, 
video card, batteries or hard disk as and when you need to. 

There are live NB-400 hand disk modules, for example, ranging 
from SOME to a massive 450MB. These can also be used with 
conventional desktop PCs. A communications cable comes as 
standard for loading applications or trading data with other PCs. 
An external 3 ':’ dish drive is also available as an option. 

Elonex’s NB-400 notebooks offer a choice of three different 
interchangeable LCDs. Options include a mono backlit LCD. a low 
power mono LCD with adjustable backlighting and a brilliant 
passive matrix colour LCD. More will be added to the range later. 


NB-400 battery packs offer longer than average battery life. 
You can also connect directly to a car or boat battery if you wish. 

You might be surprised to learn that all this power and flexibility 
is also very affordable, in fact, at around £1.400 + VAT for a folly 
configured system, you'll find Elonex NB-400 models cost no more 
than ordinary notebooks from other manufacturers. 

Find oat morn about the NB-400 notebook PC Can 

your nearest Elonex office and ask for notebook sales. 

London: Bradford: Cumbernauld: 

081-452 4444 0274-307226 0230452052 



Computers that change everything. 



SI) NtWOfl middle jra suopked **#: j urtnwmt (UXKU nw wnrnfi c.n*. *4 one ream W lun nW Lotus Oganw. kSOOS* 0.2 *>d widows™ h* 3 n . 

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Northern Offcp.- EMnet pic. 75 Campus Road. Lr.lcrtnlb Sah* Pa*. 3D7 lnR. Tel; 0274-307226. Fa*- 0274-307294. Scatter) Office: Banal pfc. 10 

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miei »wt Lfltp ae rrera^d h.xi>mi«fcr., and InlcHg?. in .1 iisomi*!. rt irwi Carport* cn. Civ** ipsonies the "gfw re dwngo pnoas ana Npeaflcattons without notice. 


and Intel’s Pentium 


A pple Computer’s introduction of the 
first PowerPC Macintosh personal 
computers blows the starting whistle 
on what promises to be one of the tough- 
est technology competitions in the history 
of the personal computer industry. 

On the PowerPC team, together with 
Apple, will be Motorola and International 
Business Machines. Together, the three 
companies have co-developed a 
microprocessor architecture which they 
aim to establish as a new industry 
standard for PCs. They face the reigning 
champions of the PC microprocessor 
market, Intel and its league or 
PC-manufacturing technology partners, 
led by IBM. 

One of the most curious aspects of this 
contest is that IBM is playing on both 
sides. Long a close ally of Intel, IBM is the 
largest manufacturer of Intel 
microprocessor-based PCs and says it 
intends to remain so. However, the 
computer company is also a co-developer 
and manufacturer of PowerPC and has 
stated that the new technology is central 
to its future strategy. 

This ambiguity aside, the contest is a 
straight-forward shoot out between 
PowerPC and Intel’s Pentium., the latest 
version of its long-established “x86" 
microprocessor lineage. 

PowerPC has a Reduced Instruction Set 
Computing (RISC) architecture. 
Theoretically, this suggests that it may be 
faster than Intel's Pentium. However, 
PowerPC lacks the critical software base 
of Intel’s microprocessors and its 
performance in commercial systems is 
relatively unproven. 

In contrast. Intel’s Pentium has a huge 
head start in the marketplace as the 
successor of the widely used Intel 386 and 
486 microprocessors, the “brains" of most 
PCs in use today. 

The Intel chips ran Microsoft's popular 
MS-DOS and Windows operating system 
software and the thousands of application 
programs designed to work with them. 

Apple's debut of PowerPC-based 
Macintosh computers will be a critical test 
of the new technology. Apple is expected 
to launch three “PowerMac” computers 
ranging in price from about $2,400 to about 
$4,000 to replace its current “Quadra" 
models aimed at business users. Apple 
says that it intends to convert 40 per cent 
erf its Macintosh shipments to PowerPC by 
year’s end, with the complete changeover 
occurring within three to four years. 

For Apple, the PowerPC represents an 
important transition from Motorola's 68000 
line of microprocassors, which it has used 
since the introduction of the Macintosh 
computer 12 years ago. Apple needed a 
new microprocessor to keep pace with 
competitors using Intel's chips, but its 
decision to join with IBM and Motorola in 
developing a brand new architecture 
makes the transition more risky. 



IBM and Apple aim to establish a 30 percent 
share of the PC marint for the PowerPC by the 
end of the decade. Microsoft has announced 
plans to port Windows NT to the machine 

PowerPC's may have a speed advantage 
over Pentium. However, among existing 
Apple customers the PowerMac may be 
judged as much for its compatibility with 
existing Macintosh software as for its raw 
performance. 

This could give the PowerPC a rough 
start in the personal computer market 
According to industry reports, about 90 
per cent of existing Macintosh software 
will run on the new Apple computers, but 
only via emulation software which will 
significantly slow down performance. 

Thus, although PowerPC may be 
theoretically capable of outpacing the Intel 
Pentium, that may not be the practical 
experience of the first users of personal 
computers based on the new 
microprocessor. 

A pple says that about 75 application 
programs designed specifically for 
the PowerMac will be available when 
the computers are introduced, and that 
hundreds more are in development 
However, software companies are 
unlikely to make development of 
applications programs for the PowerMac a 
high priority. Apple says that it expects to 
sell up to one million PowerMac 
computers in the first 12 months. While 
this would be a significant achievement 
for Apple, it presents a relatively limited 
market for software designed solely for the 
PowerMac. 

In contrast. Intel expects about 25 per 
cent of all PCs sold this year, or 
approximately seven million units, to be 
based on its Pentium chips. Most of the 
remaining 40m PCs will contain Intel 486 
microprocessors. Thus, Intel-based PCs 
represent a far larger potential market for 
software applications than the PowerMac. 


Therefore even if the PowerMac exceeds 
Apple’s expectations, It will hardly make a 
dent in Intel's dominance of the personal 
computer microprocessor market 

Intel and its backers, meanwhile, are 
targeting Apple's existing market share, 
aiming to take advantage of the 
uncertainties created by the transition to 
PowerPC. 

Apple, however, is not alone in its plans 
to offer PowerPC based personal 
computersJBM already offers a computer 
workstation based on the PowerPC 
microprocessor. The company is expected 
to introduce a broad range of “Power” 
machines for more general use, including 
portable PCs . But it is not yet dear how 
IBM will position these products relative 
to its strong Intel-based PC product fine. 

IBM is also actively seeking PowerPC 
endorsements from other computer 
makers. The first Canon of Japan, said 
recently that it will use PowerPC in a new 
range of office computers and work with 
IBM and Motorola to develop versions of 
PowerPC for use in hand-held and 
notebook-sized computers. 

I n Taiwan, PowerPC has attracted great 
interest among PC circuit-board 
m anu facturers. However, these 
sub-system manufacturers are unlikely to 
take a leadership role in developing the 
PowerPC market. Instead, they tend to 
wait for demand to develop in the US 
market. 

IBM says it has sold over 800 PowerPC 
“reference specifications” to PC manufac- 
turers and software developers interested 
in developing products around the new 
technology. Computers that adhere to 
these specifications will eventually be able 
to run a smorgasbord of operating systems 
and applications software, IBM says. 

Microsoft has announced plans to port 
Windows NT to the PowerPC, and IBM’s 
new Workplace OS will run DOS, Win- 
dows, and OS/2 applications on the Pow- 
erPC. PowerOpen, another “multipersonal- 
ity” operating environment, is being 
developed specifically for PowerPC 
systems by Apple and IBM. 

Together, IBM and Apple ai» to estab- 
lish a 30 percent share of the PC market 
for PowerPC by the end of the decade, 
leaving Intel with perhaps 60 per cent (the 
rest being clones of Intel microprocessors), 
down from about BO percent today. 

Thus while PowerPC may somewhat 
dimi nish Intel's market share, not even its 
most 'Optimistic backers expect to overtake 
Intel’s leadership in the microprocessor 
market in the short term. 

In the longer term, the outcome of the 
PowerPC versus Intel hattip. is likely to 
depend as much on software developers as 
on the relative merits of each type of 
microprocessor. 


Louise Kehoe 








FINANCIAL TIMES WF.DNRSnAv MAaru ia tdQA 



MULTIMEDIA IN THE OFFICE 


M 


‘Evolutionary rather than revolutionary’ 


ierosoft, the world's 
largest personal 
computer software 
company, is harnessing its 
resources to a new goal: 
leadership in the design of 
multi media systems. 

It 16 already investing over 
SlOOm a year - out of an 
research and development 
budget of $473m - on the 
critical operating software. 

Mr Bill Gates, the company's 
founder and chairman, said 
earlier this month that the 
company had more people 
working on multimedia than 
any other software group. 

The implication Is that the 
company wants to establish 
its software as the global 
standard in multimedia just 
as its MS/DOS and Windows 
operating systems are the 
world standard for IBM’s 
design of personal computers. 

There have been some early 
clues: Microsoft is already 
working with Sega, the 
Japanese games console 
manufacturer, on an operating 
system for a new machine, 
although Mr Gates says the 
project is small and divorced 
from Microsoft's mainline 
operating systems 
development 

Some weeks ago, it bought 
Soft Image, a Canadian 
company which is market 


Bill Gates, founder and chairman of Microsoft, has poured scorn on most of the 
multimedia trials in the US and Europe, reports Alan Cane. Microsoft is meanwhile 
investing $100m a year in multimedia and aims to set the agenda in the technology 

leader in the esoteric I in operating systems at the 

discipline of software for | beginning of the personal 

computer business. Everybody 
who is doing multimedia 


moving picture animation. 
The special effects in the Him 
Jurassic Park are its work. 

Furthermore, it has 
announced it intends to test 
its multimedia software in 
collaboration with 
Telecommunications 
Inc^(TCI), the largest US cable 
operator. A first fruit from 
the venture will be a new 
channel of programming 
aimed at the consumer market 
for computer hardware, 
software and accessories. 

What Microsoft intends to 
provide is the operating 
software which will manage 
the flow of information of aH 
kinds on to high speed 
networks and the software 
which win connect it to 
personal computer operating 
systems in the home or office. 
It may also provide some of 
the applications - a personal 
money management program, 
for example. 

Mr Gates says “there are 
a lot of companies developing 
software for the information 
highway,’ just as there were 
a lot of companies involved 


software will have lots or 
pilots. Based on the quality 
of those pilots, some will 
emerge stronger than others". 

Mr Gates said Microsoft 
would begin testing home 
multimedia services in the 
US and Europe in 1995. He 
did not expect substantial 
returns on his investment for 
five years, although he 
thought that there would be 
substantive developments in 
multimedia in 1996-97 with 
entire cities converted to 
interactive networks. 

Multimedia and the 
“information superhighway," 
the high-capacity network 
which will link vast 
repositories of information 
with modified television sets 
or personal computers, are 
creating intense interest 
among computer companies, 
telecommunications 
organisations and 
entertainment firms. They are 
jockeying to take advantage 
of what are expected to be 
lucrative new business 



opportunities. 

Bill Gates, however, argues 
that most are taking the 
wrong approach - “dead ends" 
were how he described them 
- “because the user-interface 
is so simple, and because they 
do not tie In to personal 
computers in the right way, 
the results will be 
disappointing. The revenue 
and the usage that comes out 
of them wiB not justify the 
huge infrastructure costs.” 


W! 


hile most of the trials 
to date have been 
designed to exploit 
domestic multimedia, offering, 
typically, menus of video films 
for home viewing, Mr Gates 
says that business will make 
use or the multimedia first. 

“The first widespread use 
of these capabilities will be 
In business,” he predicted. “It 
will involve things like 
video-conferencing and 
collaboration which would 
enable you to do your job 
without going into the office. 
Or U could help companies 
find expertise to help them 
out without the expert having 
to travel. 

“The network itself could 
create electronic markets able 
to find a resource of any type.” 

“So, what in the past we 


have seen as electronic 
markets for currencies or 
stocks will move into items 
of ail types where cbequeing 
references and other kinds 
of working together can be 
done very effectively in 
electronic form." 

“This will be done by 
extending the range of the 
personal computer. One of the 
early symptoms will be very 
low cost video conferencing 
where a PC is connected up 
to an ISDN (integrated 
services digital network). 
Within two or three years this 
will be extremely widespread. 

(Intel, which makes the 
microprocessors used in the 
majority of the world's 
personal computers, earlier 
this year announced a low-cost 
set of components capable of 
turning a personal computer 
into a video-conferencing 
terminal). 

Mr Gates thought tbat 
multimedia in the office would 
be evolutionary rather than 
revolutionary, driven by 
proven technologies like 
electronic mail - “the benefits 
of electronic mail are 
unbelievable. We could not 
run Microsoft without that 
capability. 

“Today, some think or 
electronic mail and work 


group software and the 
Internet (an open, publicly 
available computer network 
spanning several continents) 
as separate things, but with 
some enhancements to 
Windows due in less than a 
year, we will bring all these 
things together.” 

Once the technology and 
benefits have been established 
in a business environment, 
that would be the time to 
move into the home. 

Mr Gates was critical of the 
narrow range of many of the 
current multimedia trials: 
“Some of the early pilots will 
be particularly embarrassing 
because they will not have 
the breadth of applications,” 
be said. 

“The network operators 
running these pilots are acting 
against their own interests 
because they are going to 
prove exactly what they do 
not want to prove - that there 
will not be enough revenue 
generated to justify building 
the infrastructure.” 

“Until you have a broad 
range of applications, you will 
never be able to demonstrate 
the true potential of these 
systems. That is why instead 
of doing crummy pilots in 
1994, we will start onr trials 
in 1995.” 

He extended bis criticism 
to Oracle, the US database 
specialist with which British 
Telecommunications has 
formed an alliance to test 



BBl Gales, founder aid chairman of Microsoft, befleved to bo Ifto riches! 
man in America, says the first widespread use of multimedia technology 
wfll be in the business world before it spreads to homo entertainment 


interactive entertainment 
services in the home. Oracle 
will provide the sort ware and 
systems integration: “I'm sure 
Oracle will change its 
approach because it Ls a 
terrible approach.” he said. 

Bill Gates' comments have 


to be seen against a 
background of intense 
competition in the nascent 
multimedia business. 
Furthermore, he has never 
been slow to promote 
Microsoft's efforts and pick 
holes in the competition. 


The multimedia market is still in its infancy, writes Joia ShiHingford 

Computers which appeal to the senses 




A tetecommuntcatfon s engineer working on equipment for mufthnetfla services which aim one day to bring 
entertainment and information services Into the home, using the faeffittes of an ordinary television set and the 
telephone. M i crosoft has had tala writh BT among others about muWmetBa colaboratfon. 


ultimedia brings 
sound and video to the 
personal computer. 
Like sex. it promises to appeal 
to the senses- Unlike sex. mul- 
timedia 1ms yet to appeal to a 
wide audience. 

However, one application 
which seems likely to increase 
the take-up rate of multimedia 
is desktop video-conferencing. 
Tbe technology is also suitable 
for point-of-sale promotions, 
interactive educational/train- 
ing software and - in very 
skilled hands - designing mul- 


timedia presentations. 

Here and on the following 
page we look at two areas with 
most potential: desktop video- 
conferencing and multimedia 
at the point of sale. 

■ Desktop video-conferenc- 
ing: Some computers now 
come fully equipped for video- 
conferencing, allowing users to 
transmit live video images of 
themselves to other, similarly- 
equipped users, and to see on 
their PC the person they are 
talking to. 

For example, Sun Microsys- 


tems. the US workstation com- 
pany, says its new SPARCcIas- 
sic Unix workstation, which 
costs £4,340 ($6,510), ls the 
industry's lowest cost, fully- 
configured multimedia work- 
station. This includes camera, 
real-time video-capture and 
compression and a storage 
disk. 

But most users will have to 
buy a multimedia kit if they 
want to carry out a video-con- 
ference in a window on their 
personal computer. 

In April BT and Olivetti will 


begin selling multimedia kits 
which allow pc users to do 
this. The BT-OUvetti kits will 
cost £3.595; they include a 
s mall video camera which sits 
on top of the PC. a card which 
slots into the PC. and software. 

In addition, the kit makes it 
possible for users to transmit 
still video images, photographs 
or sound. BT says the kit will 
send video at 15-frames a sec- 
ond when it goes on sale. 

At this speed, video images 
will be rather jerky (it may 
look as If the person you are 


talking to has just come back 
from a boozy lunch). So “meet- 
ing” someone for the first time 
via a desktop video-conference 
is not Ideal If you want to 
make a good impression. It is 
more suitable for follow-up 
“meetings.” where being able 
to see the person you are 
talking to may give a better 
idea of their reactions. 

Will this form of communica- 
tion catch on? 

Yes - according to Judith 
Jeficoate, of the research con 
Continued on next page 


Tlf • 










just talk 


CITY OF LONDON TELECOMMUNICATIONS 





The Revolutionary Fibre Optic Telecommunication System 

071 390 3900 




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Michael Dempsey highlights IT applications in finance 


Focus for all banking activity 

Despite the high cost of applying the latest information technology, 
tion about «»sh - that is our ths banks — facsd with mounting cornpsfition — can no longor the mixing of sound and video 
product/’ TiiQs, Peter uzard. survive without persistent investment in this area images with data on one 

head of technology strategy r screen, is seen as having large 

and research at Abbey faced new competitors. Abbey pleted a four-year programme data database engine, an potential for banks. 

National sums up the relation- National is a building society to install rings of workstations extremely powerful box dedi- Multimedia computer terml- 

shlp between banking and turned bank. Lazard notes that linked into local networks in cated to analysing customer na ls represent the logical next 

information technology, (ID- Abbey National has used com- each of its 685 brandies. data. The price tag on the step in the march of the auto- 

Oa the surface, computer paters tor thirty years. Histori- These Olivetti machines are entire Teradata installation is matin teller machine. Candens- 
technology has become the cally this meant large expen- tied to a dedicated communica- around £10m, but this expen- ing all the human functions of 

focus of all banking activity, sive mainframe machines, tions workstation at each site, sive specialist tool is the only retail branch hanWng on to a 

The real assets of any financial Falling hardware prices and which is networked on a option if Abbey National is to has obvious attrac- 

insti tu tion are now locked the event of the miero-proces- national basis through lines exploit customer profiles and tions for institutions deter- 

away in digital form. The rise sor saw computing break out leased from British Telecom, mount direct sales wrmpaignq mined to dash payrolls, 

of the technology-driven bank of the mainframe world. IT was The object of the exercise is Expert systems are computer Some franhg are seizing an 

has coincided with fierce com- suddenly available across the data-shartng through the com- programmes designed to repli- multimedia to squeeze extra 

mercial pressures and a relent- board. munica tions host machine , in cate and multiply human revenue out of gristing floor- 
less struggle to keep overheads “Technology was a barrier, theory, any member of staff knowledge. Barclays Bank is space. Turin-based San Paolo 

down. due to cost Now it is a gate- can work with any application employing Lending Advisor to Bank is installing Olivetti nral- 

IT briefly served to offer a way, an enabler rather than an on any workstation. The entire back up decisions on commer- timedia terminals in its 

'holy grail' during the 19809. Inhibitor. That is very signlfi- branch programme, including dal lending. Software licences branches. San Paolo rents out 

Banks signed up for huge pro- cant to us." Lazard says. banking software, cost £S5m. from supplier Syntelligence space on these machines to 

jects on the grounds that more Abbey National operates Over the last seven years cost upwards of £600,000. If the third parties who use the inter- 

information meant better busi- systems ranging In size and Abbey National has invested a expert system can succeed in active video display to sell ser- 

ness. By and large, they ended supplier. Large mainframes total of nearly £20Qm in IT. producing a coherent and vices. The Trustee Savings 

the decade disillusioned. Com- from IBM and Unisys still pro- Large though it seems, banks secure lending policy it is Bank (TSB) has 1350 branches, 

puters had proved their worth, vide the backbone for essential can no longer survive without money well spent and is experimenting with mill- 

handling vast quantities of services such as savings, cur- persistent investment in IT, a The world of the expert sys- timedia equipment from 

data but they had not come rent accounts and insurance condition Lazard defines as a tern is a clear example of FT AT&T's NCR arm in two 

cheap, and on the way banks packages, but the advent of growing dependency on infor- coming to be used as a preci- branches, in Newcastle and 

found themselves employing a powerful workstations that do nation as a product In theory, sion tool, in the past, vast Watford, 

growing army of programmers not require IT specialists to IT should allow banks to make hanking rr projects stumbled Paul Swainb rook's job as 

and systems analysts. drive them has revolutionised better use erf that information, because computers were director of Teleservice at the 

With financial deregulation the branch network. Abbey One of Abbey National's employed in an indiscriminate TSB is to set up a telephone 

in the UK, retail banks have National has recently com- computers is an AT&T Tera- fashion. Banks have learnt to banking system. He has 



worked on the multimedia 
experiments and Is blunt about 
the impact at such technology 
- “customer shock proved 
much more powerful than you 
might think." The TSB discov- 
ered *hat Without human inter , 
vention, in the form at a Cus- 
tomer Care Officer, its account 
holders would not do business 
with a box. 

This experiment justified a 
policy of applying IT in a 
restrained fashi on 

“It’s about not being supply- 
driven,” says Swainbrook. 


“You start out by asking what 
the customer wants, and than 
give him the choice whether or 
not to use the technology. Why 
persist with a solution If the 
customer doesn't want it?” 

The TSB Is embarking on 
remote telephone banking 
courtesy of IT. Cheaper and 
more powerful computers have 
enabled banks to set up paral- 
lel inrtttnttana such as Teleser- 
vice within a practical time- 
frame. Teleservice pools the 
skills of computer and tele- 
phony integration specialist 


Datapoint, telecoms provider 
Mercury and TT supplier Uni- 
sys. 

The project will cost tens of 
minio ns of pounds, but by a 
judicious marriage of telecoms 
and IT, TSB will acquire a new 
banking structure without the 
overheads of a physical branch 
network. Teleservice will fol- 
low in the steps of Midland 
Book's First Direct operation. 
Technology is the enabler, but 
public interest is the motiva- 
tor. Banks are finally taking a 
firm grip on the IT toolbox. 



Contained from previous page 

sultancy Ovum. She believes 
that between 1996 and the end 
of 1998, revenues from pcs 
equipped for video will exceed 
those foam conventional video- 
conferencing equipment 

Suppliers are also upbeat 
about the potential market An 
increasing number have devel- 
oped desktop video-conferenc- 
ing products. They include 
Canada-based Northern Tele- 
com (with the Visit system dis- 
tributed by UK computer deal- 
ers P&P); Intel, the US 
semiconductor company; 
AT&T; BT and IBM (with 
Cooo); Apple (in the US): and 
Olivetti. 

Many of these products allow 
people engaged in a video-con- 
ference to point to or edit infor- 
mation they can both see on 
their screens. Intel says that 
with its system, users at 
far-flung sites can edit a report 
together, both looking at the 
same version on their screens. 

The system is modular and it 
is possible for US users to buy 


Big potential for multimedia 


the Pro Share shared editing 
software for $99 without the 
full videoconferencing kit 
(which costs SL200 to $2,500). 
Intel is spending $10Qm (£67m) 
a year on what it calk personal 
conferencing technology. Its 

m ultimedia kits will go on sale 

in Europe this year. 

To use one of its kits, the 
user must have a pc based on a 
powerful microprocessor 
(486DX or Pentium) and must 
install an ISDN (Integrated 
Services Digital Network) tele- 
phone line. Most other desktop 
videoconferencing systems are 
also designed to work with 
ISDN, a high-speed digital 
dial-up service. 

Simon Goodwin, of AT&T 
Global Information Solutions, 
expects the multimedia market 
to be worth $900m by the end 
of 1995. He believes that 
growth wifi be fuelled by three 
factors: falling prices for multi- 
media components; the accep- 


tance and roll-out of Euro- 
ISDN. replacing proprietary 
national ISDN communication; 
and the combined efforts of 
important European industrial 
participators in exploring new 
opportunities and require- 
ments for videoconferencing 
products. 

■ Point-of-sale promotions: 
Another potential growth area 
for multimedia is in pointof- 
sale (POS) devices. These can 
be used not only to promote 
products but also to collect 
information about customer 
preferences. 

Many POS devices developed 
so far are linked into ISDN, so 
that they can relay customer 
orders back to head office or be 
updated with the latest prod- 
uct and price information. 

Examples Indude: 

• An interactive point-of-sales 
terminal which Ford plans to 
use in its car showrooms to 
enable customers to see the car 


of their choice in the colour 
and configuration they want - 
for example, four dons, spoil- 
ers. 

• A system which helps a cus- 
tomer to choose a hairstyle 
bom a database of 4,000 styles. 
Hairstyles can be superim- 
posed on to a video image of 
the customer's face to see bow 
he/ she would look. (Although 
the system is used by only 18 
Belgian hair dressers, Comsys 
of Belgium, its developers, is 
undeterred, and has crossed 
the channel in search of UK 
business.) 

• A point-of sale terminal for 
a big music retailer. This sys- 
tem, developed by Applied 
Interactive Marketing (AIM) of 
Piccadilly Circus, London, 
allows customers to sample 
albums which are to be 
released in the next few 
months (by selecting a track 
and a seeing a video dip of the 
singer). Customers can operate 


the terminal using touch- 
screen wwmianil*, flwri mdlr-nte 
which releases they are inter- 
ested in buying. 

AIM says that developing a 
multimedia POS system can 
take as little as three to four 
months or up to a year and a 
halt Costs of developing a sys- 
tem range from £15,000 to 
£2MWM0. 

Multimedia at the point of 
sale has a lot to offer. How- 
ever, 24 multimedia POS 
kiosks based in London’s 
Heathrow airport fflustrate the 
main problem with the tech- 
nology: most people are unfa- 
miliar with multimedia termi- 
nals /kioeks and are hesitant to 
try them out 

The colourful Galleria 21 
Heathrow kiosks, designed by 
the John Herbert Partnership 
(which was involved in the 
interior design of Ter minal 4), 
use AT&T’s multimedia tech- 
nology. At first, people spotted 


the kiosks and wondered what 
they were for. Most people did 
not know - so they did not use 
them. Now the kiosks have 
been dearly labelled "Tax free 
shopping” and AT&T says 
usage has increased. They 
allow travellers to use a touch- 
sensitive screen to order goods 
via credit card. 

The terminal works out how 
much the goods will cost, 
based on factors such as which 
currency is befog used in pay- 
ment, delivery charge, and 
whether any duty is payable. 
The goods thus ordered can be 
delivered to any destination in 
the world within seven work- 
ing days. 

The tale of the 24 kiosks 
shows that a multimedia 
screen lias only limited powers 
of attraction. In order to reach 
a wider audience, multimedia 
products must demonstrate 
clear benefits. 

O Join ShSHngford is associate 
editor of the Financial Times 
newsletter. Business Computing 
Brief 







number of new technolo- 
gies make it possible for 
l modern offices to cut 
back on paperwork - they 
include image processing 
(which converts paper docu- 
ments into electronic images), 
workflow (which controls the 
flow of work between a group 
of workers), electronic mail 
and electronic data inter- 
change. 

□ Image processing a nd work- 

flow; 

At General Accident's l-2-l 
division, which sells insurance 
directly to the public, a EL5 
million AT&T G1S image pro- 
cessing system has speeded up 
claims processing and 
increased productivity by 20 to 
30 per cent 

Bob Thomson, personal lines 
operations manager for Gen- 
eral Accident, says: "We're 
working in a very competitive 
environment and wanted to 
make significant savings. A lot 
of resources were going into 
filing and looking for paper, 
and we wanted all documents 
to be accessible from a single 
source." 

Now the 1.000 to 1,500 items 
that arrive in the post every 
day are scanned into the image 
processing system and assem- 
bled into electronic files, which 
can be viewed on a computer. 
1-2-1’s 54. staff (who spend most 
of the time on the phone) thus 
have everything they need to 
work on a claim on screen, 
without having to get up and 
look for files. 

Image processing and work- 
flow software are also being 
used at the OK offices of US oil 
company, Amerada Hess. They 
have enabled the company to 
process higher volumes of 
invoices without increasing the 
□umber of accounts staff. 
Amerada Hess* system, devel- 
oped in conjunction with US 
image processing company 
Filenet, scans every paper 
invoice into a computer sys- 
tem. 

If the invoice is straightfor- 
ward and the goods have been 
received and match the origi- 
nal purchase order, the bill is 
paid. If it needs to be verified 
by an engineer or a senior 
accountant, it is sent to their 
computer screens electroni- 
cally via Digital Equipment’s 
Teamlinks package. 

Once approved the invoice is 
automatically sent to the gen- 
eral ledger department for a 
cheque to be issued. The sys- 
tem is faster and more efficient 
than the oM system in which 
all accounting information was 
typed in to the computer from 
a paper invoice, and sometimes 


The paperless office pays off 
for structured tasks 

The paperless office is as far off as ever for what might be termed wide-ranging jobs. But 
for highly structured tasks, such as handling insurance claims or invoices, cutting down on 
paper can lead to substantial gains in productivity, writes Joia Shillingford 

added to by an engineer or 
accountant, and it now takes 
only minutes to locate one of 
the 50.000 invoices Amerada 


receives each year, rather than 
a day or longer. 

□ Electronic 

However, image processing 
and workflow are not the only 
route to reducing paper. David 
Ferris, a British-born but US- 
based electronic mail (e-mail) 
consultant says that use of 
e-mail can cut back on paper 
and give huge gains in produc- 
tivity. 

He says that these gains will 
not necessarily come from 
interpersonal messaging of the 
“Are you free for lunch on Fri- 
day' variety, bot rather from 
the use of *mafl-enabled' appli- 
cations, where an application 
such as word processing or 
electronic forms has an e-mail 
option built in. Mr Ferris says: 
“Automating simple business 
forms, such as expenses, ran 
cut a company's costs by 
between one and two per cent 
of revenues." 

For example, time sheets cre- 
ated using JetForm software 
and sent via Lotus Develop- 
ment’s cc:Mail or Microsoft 
Mail, save California-based dis- 
kette-maker and CD-ROM 
duplicator. Trace $270 a year 
per employee. The system 
costs $44 a year per employee, 
giving a financial return of 
more than 400 per cent a year. 

E-mail can also provide 
other, less measurable benefits, 
such as unproved decision 
making, better communication 
across time zones, more 
up-to-date market information, 
faster reactions to unexpected 
events, and shorter product-de- 
velopment times from geo- 
graphically dispersed teams. 
E-mail can be used on all sorts 
of computer, but the fastest 
grow in g area of the market is 
e-mail for local-area networks 
of PCs. 

Another growth area is 
e-mail for executives who 
spend a lot of time out of the 
office. One of the latest prod- 



City of London dealers; high-speed financial transactions are almost 
entirely completed on-screen and by phone 


ucts designed for mobile e-mail 
users is Lotus' cc:Mail Remote 
for Windows. This allows exec- 
utives to exchange messages 
with their in-house Lan e-mail 
system and keep in touch with 
what is going on back at base. 
Larry Grume, vice president of 
messaging at Lotus, predicts 
that it will be the company's 
biggest selling product this 
year and could hit sales of a 
millio n copies. 

□ Electronic data interchange: 

At present, many large com- 
panies Use e-mail p rimar ily for 
internal communications. By 
contrast electronic data inter- 
change (EDI) is used mainly 
for inter-company communica- 
tions. where cutting out paper 
can significantly speed up the 
processing and transmission of 
information. (EDI or paperless 
trading is the name given to 
the exchange of structured 
business documents, such as 
orders and invoices, directly 
between computers.) 

For example, a sales manage- 


ment system underpinned by 
GE Information Service's pub- 
lic EDI network, helped to cut 
the time it took for US orders 
to arrive at Benetton’s Italian 
clothing factories from three- 
to-ten days to just hours. 

Use of EDI is expanding. In 
Britain, 8.400 companies have 
adopted it and new types of 
paperless EDI message are 
being developed all the time. 
For example, a UK EDI stan- 
dard for utility bills has been 
developed and is waiting for 
European endorsement, and 
despatch and binding messages 
are being developed for users 
in printing and pu blishing . 

But large scale users of EDI 
have one big problem - how to 
communicate with even very 
small suppliers or customers 
via EDL 

One solution is to use what 
is known as hybrid EDI where 
those who aren't equipped to 
receive EDI documents elec- 
tronically receive them on 
paper. A number of options are 


available including BTs ED1- 
to-fex service for its EDI*Net 
customers and the Royal Mail's 
Edipost (EDI-to-post). Here, 
EDI messages are sent to tbe 
Royal Mail’s electronic data 
centre and then converted to 
paper for delivery by post. 
Recipients can phone back 
their responses, which in turn 
will be converted into EDI mes- 
sages. 

□ Barriers to the paperless 
office 

Hybrid EDI is a sensible 
compromise but it underlines 
just how difficult it is to get rid 
of paper when paper is accessi- 
ble to every business from tbe 
comer shop to the multina- 
tional 

Another problem is that elec- 
tronic images of paper docu- 
ments are not legally admissi- 
ble in court, even though they 
can include signatures, and are 
difficult to alter. 

For example, Amerada Hess 
files copies of its paper 
invoices, in case its auditors, 
consortia partners or the VAT 
office want to see them, and 
General Accident is keeping 
paper records of documents 
scanned into its imaging sys- 
tem on site for six months 
before deciding what to do 
with them. Jeff Goldberg, an 
analyst at researchers Data- 
quest, says: “The promised 
paperless office has became the 
’paperfull' office, partly 
becaose computers have not 
yet achieved the readability, or 
portability, of paper." 

This is good news for printer 
companies - “more and more 
data is being stored on comput- 
ers and people want to output 
it in a variety of ways," says 
Kevin Spinks, printer business 
manager at printer company, 
Lexmark. “This creates more 
and more paper and the 
demand for printers is growing 
at 15 to 20 per cent a year. I 
can’t see the paperless office 
taking off this century." 

Joia Shillingford is editor of 
the Financial Times newsletter. 
Business Computing Brief 



NEC’s Super Tower sets the pace 

The Tokyo headquarters of NEC. the electronics company, has one of foe world's most advanced 
commercial communications systems, writes Michael WRtshbe. 

Built on foe site where NEC first began operations in 1899, foe 43-storey Super Tower, pictured above, 
features foe NEC's Super Aladdin system for total office automation. This includes electronic mail, 
electronic statement and receipt systems for the collection and distribution of documents, an electronic 
bulletin board, dosed circuit and satellite television services which links NEC's three north American 
subsidiaries - NEC America. NEC Electronics and NEC Technologies. 

Other features used by foe 6,000 staff of foe Super Tower include electronic telephone notebooks 
which contain foe 35,000 telephone numbers within foe company. There are also automatic message 
services on telephone terminals. 

Office facilities of foe Super Tower also include electronic secretarial services for setting up schedules 
and monitoring business process. Staff work to a flexitime system - “this seeks to encourage the 
self-esteem of company employees by giving them more control and responsibility over their working 
time," says NEC. 


Customers may one day don headsets for a ‘virtual reality’ armchair walk 
around their favourite stores, writes Neil Buckley 

A whole new shopping 
experience 



Armchair shoppings technical trials are under way in the western world for new services which promise to 
create a revolution in ‘home shopping.' These faculties bring together foe telephone and television set to 
gnapifl gwtomera to choose and order entertaiiB u ent and hi fbn na tfon sendees vte an onfinaiy TV set 


I magine, 20 years from now, 
a couple want to hold a din- 
ner party but cannot decide 
what to cook. 

They reach for a handset and 
call up some ideas from an 
electronic recipe book on tbe 
high definition video screen in 
their living room. Unsure 
whether one particular dish 
might be too difficult, they 
press a button for a video 
recording of a chef showing 
how to prepare the meal step- 
by-step 

Satisfied they can manage, 
they move on to the wine. Fur- 
ther clicks on the remote con- 
3 trol call up video recordings of 
winemakers wandering around 
their vineyards, talking about 
their wines. 

The choices made, tbe couple 
transmit an order via the hand- 
set to their favourite food 
retailer. A few hours later, the 
ingredients and wine will be 
delivered to a special hatch at 
their borne. They may even be 
delivered at the same time as 
the couple's regular, weekly 
shopping order. 

Such a vision remains a fan- 
tasy - But retailers believe it 
could be a reality, even a com- 
monplace. by early in the next 
century. What will make it pos- 
sible is the conjunction of 
multi-media technology, allow- 
ing sound, pictures, graphics 
and text to come together on 
one screen, with fibre-optic 
technology, enabling huge 
amounts of information to be 
sent at high speed to and from 
consumers' homes. 

Technological advances in 
the past 20 years have revolu- 
tionised the way retailers run 
their businesses, producing 
huge gains in operating effi- 
ciency. but they have not fun- 
damentally changed the shop- 


Trove/ with o PC/fox/modem? 



ping experience. In the next 20 
years, however, technology 
could revolutionise shopping 
Itself. 

It will change the view of 
shops as simply repositories 
for goods to be sold to tbe pub- 
lic. It is also likely to break 
down the barriers between 
shopping, recreation, and even 
education. 

The biggest growth area is 
expected to be TV shopping - 
already booming in the US. 
The cable home shopping 
industry there - dominated by 
Home Shopping Network and 
QVC (Quality, Value, Conve- 
nience) - where customers 
watch a succession of products 
on screen and order by tele- 
phone, generated turnover erf 
$2.3bn last year. So-cailed 
“infomercials'', advertisements 
used to sell products directly to 
the public, pulled in a further 
$700m- On-line computer shop- 
ping services, in their infancy 
bat expected to mushroom, 
generated $200m. 

Coopers & Lybrand, which 
has just completed a year-long, 
$l_2m survey with sponsors 
NCR. Teixon and Citicorp into 
Retailing in the 2lst century, 
says that as the number of 
available cable channels 


increases, conventional shop- 
ping channels are expected to 
proliferate, probably targeted 
at increasingly narrow age and 
interest groups. 

Established retailers are 
already w iring upon TV shop- 
ping as a potent selling force. 
Macy's, tbe US department 
store group, is launching a 
shopping channel later this 
year. 

T he next stage, as more 
sophisticated communi- 
cation networks are 
developed, could be the group- 
ing together of information 
providers, network operators 
and transaction companies. 
That would enable customers 
to select purchases and trans- 
mit orders to retailers via a 
remote control, as described 
above. 

An essential part of the 
growth of such channels is 
likely to be fast, secure deliv- 
ery of products to consumers* 
homes, posing new challenges 
for retailers. 

However, shops as physical 
entities will not die ouL Many 
Consumers will always want 
the opportunity to examine or 
try on products before they 
purchase. Convenience stores 


for top-up and impulse pur- 
chases are likely to remain 
indispensable - although they 
may become more specialised. 

But stores will have to 
ensure they provide a “val- 
ue-added" shopping experience 
and come up with new attrac- 
tions to lure shoppers away 
from their TV screens. 

Technological advances are 
expected soon to make shop- 
ping, especially grocery shop- 
ping, less onerous. One way 
will be to end queues at check- 
outs by developing shopping 
trolleys that scan purchases as 
customers make them and 
automatically deduct the cost 
from their credit or charge 
card. 

Symbol Technologies and 
Videocard have already devel- 
oped a trolley with a blanket of 
laser beams across the top 
which can read barcodes of 
goods being put into the trol- 
ley, from any angle. The trol- 
leys are being trialled in the 
Netherlands. 

The next step may be using 
silicon chips or tags which can 
be read by a radio beam on the 
trolley. A prototype system has 
been developed by the South 
African Council for Scientific 
Continued on next page 



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Information and communications technology 6 


Philip Manchester looks at network developments and the business benefits of client-server systems 

Computer industry in transition 


T he computer industry 
fared well in previous 
recessions because com- 
panies turned to automation to 
save costs and cut staff- But in 
the early 1990s It was different. 
Former giants of the industry 
- such as IBM and DEC - tot- 
tered alarmingly and have yet 
to prove they will survive the 
upheaval. 

The main cause is the transi- 
tion from centralized, main- 
frame-based computing to dis- 
tributed client-server-based 
computing. 

In many ways the transition 
reflects a wider change which 
is taking place in industry gen- 
erally; local autonomy from 
the distribution or computer 
power and management 
responsibility. 

Technologically, this change 
manifests itself in client-server 
systems - an approach to dis- 
tributed computing which sep- 
arates users (clients) and the 
services they use (servers). 

Client-server computing has 
its origins in database manage- 
ment systems (DBMS) and the 
trend to separate the software 
used to access data from the 
software used to manage it 
During the 1980s, developers 
created a new model for DBMS 
which allowed these two com- 
ponents to be distributed 
across computers on a net- 


work. The front-end tools - 
data query languages and local 
applications - became known 
as 'clients' and the back-end 
DBMS ’engines’ became known 
as servers. 

Database vendors such as 
Oracle, Ingres, Sybase and 
Gupta use this approach in 
their products with the result 
that they can all communicate 
with each other. 

A front-end tool from Gupta, 
for example, can use a back- 
end DBMS engine from Oracle 
without the user ever being 
aware of the location of the 
data. 

Client-server computing 
extends this Idea across the 
whole system and breaks down 
functions according to their 
role either as a client or a 
server. 

I n addition to DBMS servers, 
a modem network will have 
servers to handle printing, 
communications, mass storage 
back up and so on. 

This approach can bring 
many benefits. It allows users 
greater freedom in their choice 
of hardware and software - 
with consequent cost-savings. 
It makes systems more flexible 
and provides for better integra- 
tion of different types of 
systems. 

“We have to tie the benefits 


The seismic trauma that has rocked the 
computer industry in the early 1990s is not just 
the result of a recession - It is the result of a 
fundamental shift in technology 


to the business and I think cli- 
ent-server does this in four 
ways,” says Mr Lawrence 
Hunt, director of distributed 
processing at the UK software 
company ACT. 

“Firstly, client-server is 
much more flexible than tradi- 
tional mainframe systems. If 
you want to get data for man- 
agement Information systems, 
this is difficult with closed 
mainframes. 

“Secondly, it lets you Inte- 
grate application more easily. 
You can integrate a PC-based 
spreadsheet into a mainframe 
database much more easily 
with a client-server approach. 

“Thirdly, client-server 
systems give much more inde- 
pendence from vendors. All 
business want to future-proof 
their Investment In applica- 
tions software, which probably 
represents 80 per cent of the 
cost of a system. Client-server 
enables you to do this effec- 
tively. 

“Finally, client-server 
systems can cut costs. We were 
recently installed a client- 
server system at a large invest- 
ment bank.The costs came to 


about £1.5mu It would have cost 
£3m if we'd bad to use a tradi- 
tional approach with mam- 
frames,’' says Mr Hunt 

Other financial institutions 
have also opted for the client- 
server approach in a big way. 
The Nationwide Building Soci- 
ety, for example, has standar- 
dised on Microsoft’s Windows 
NT operating system as the 
lynchpin for a client-server 
system which will support 
10,000 personal computer users 
over the next three years. It is 
also looking into the possibility 
of plugging Its Automatic 
Teller Machine network Into 
the new system with Windows 
NT as the controlling software. 

National Westminster Bank 
has also adopted Windows NT 
as the basis for Its client-server 
developments. 

Most organisations are 
adopting a cautions approach 
to the transition from tradi- 
tional centralized computer to 
client-server systems, however. 

Paymaster, formerly the Pay- 
master General's Office, is typi- 
cal - “we are introducing cli- 
ent-server slowly - function by 
Function. We have started with 


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electronic mail and access to 
shared spreadsheet and are 
moving on to introducing more 
[unction on desktop PCS," says 
Mr Derick Harbottle, director 
of information technology at 
Paymaster. 

After .many years of relying 
Otl an ZCL mainfram e computer 
to do everything, Paymaster 
has embarked on an ambitious 
plan to integrate up to 800 
users Into a three-layer cheat 
server system using hardware 
from Olivetti and software 
from Novell and Oracle. 

The ICL mainframe will 
eventually become no more 
than a database server. 

“We have a heritage of leg- 
acy' systems on mainframes 
and we had to see if it was 
practical to move away from 
the mainframe. After a rigor- 
ous right-sizing study to see if 
It was feasible, we opted for a 
staged approach with a pilot 
project to start," says Mr Har- 
bottle. Paymaster's move to ch- 


eat-server is the result of the 
same commercial pressure 
faced by business. Following 
changes in the UK govern- 
ment's approach to public ser- 
vices and tiie introduction of 
market testing, Paymaster has 
had to become aware of the 
service it offers it customers. 

“We have p w»ri»» the rb gn c p 
for sound business reasons. We 
are forward-looking company 
and need do more than sit back 
and let things just happen," 
says Mr Harbottle. 

He goes on to emphasise that 
client-server should not be 
seen as a technology solution - 
but a business solution which 
brings greater flexibility to 
building information systems. 
He Is also wary of expecting 
too much in the way of cost 
savings - "some people are 
talking about the technical 
Issues or the cost-saving 
issues. We prefer to concen- 
trate on the business benefits 
which will come from client- 



Clent-server systems alow users to integrate appBcattons moreeaaBy 
and have proved to be far more fhudbte than mainframe systems 


server," he explains. 

Any move to a new technol- 
ogy is bound to cause new 
problems and the transition to 
client-server systems is no 
exception. Paymaster's cau- 
tious approach - with carefully 
phawt introduction of the new 
system alongside the old. Is an 


object lesson in how to move to 
client-server with the mini- 
mum amount of pain. 

“We try to avoid being at the 
bleeding edge of technology. 
Rather than inventing our 
own, we would rather steel 
other people's wheels," # 
observes Mr Harbottle. 


NETWORK CAPACITY 


Users pin hopes on ATM 


Demand for space on 
computer networks 
keeps exceeding 
supply, writes 

George Black 

T he present structures of 
local area networks of 
personal computers, Eth- 
ernet and Token Ring, running 
at 10 megabits and 16 megabits 
per second respectively, will 
soon be unable to cope with 
the growing volume of traffic. 

As users compete for com- 
munications channels, the 
actual speed of delivery to each 
of them is often only a tenth of 
the network’s theoretical 
capacity. When more users 
come on to the network, its 
performance degrades. 

Network managers have 
responded to the rising 
.demand by exploiting existing 
systems more efficiently. This 
is one of the main reasons for 
the enormous growth in sales 
of devices such as intelligent 
hubs, bridges and routers in 
the past couple of years. They 
have helped a lot, but it will 
not be enough. 

Fibre Distributed Data Inter- 
face, running at lOOMBps, has 
been regarded by many as the 
probable solution, but it has so 
Ear proved too expensive. FDD! 
and Fast Ethernet, also run- 
ning at lOOMBps, may be over- 
taken by ATM (Asynchronous 
Transfer Mode). 

Experts now agree that ATM 
is the only technology that can 
give the necessary transmis- 
sion speed for communicating 
image, voice and data together 
in real time at an acceptable 
price. It can use existing wir- 
ing, which will help keep down 
the cost It may therefore be 
what Is needed to start the 
long- expected spread of multi- 
media applications. 

Ethernet and Token Ring 
have suffered from a lade of 
standards, which has meant a 
large amount of conversion of 
data from one format to 
another. The move to ATM, 
which is rapidly becoming 
standardised, may be equiva- 
lent to removing official fron- 
tier controls. 




* ./*&,"* *-; ■ -A- 


'.\fn 




wr-.i roSp 



Dio largest corporation wffl probably be the Orst to take up 'ATM-ready* 
local 8roa networks to oonwraarfeate Image, voice and (fata 


Unlike its predecessors, ATM 
uses a technology known as 
cell relay, which takes advan- 
tage of the high speed trans- 
mission capacity of fibre optic 
cables. It handles data in fixed 
length cells rather than vari- 
able length packets, which is 
thought to be more efficient 
This should push the speed of 
tr ansmis sion up to a maximum 
of around 2.4 gigabits per sec- 
ond. 

For backbone systems in 
office and factory buildings, 
155MBps is expected to be the 
usual speed; 45MBps may be 
typical for combined data, 
voice and video. ATM will not 
put upper or lower limits on 
the transmission speed but use 
that which is appropriate to 
the application. 

Other important advantages 
of ATM are that It is a much 
simpler system than the older 
ones and can be used for both 
local area and wide area art- 
works, which should further 
reduce migration costs and 
ease the task of network man- 
agement 


ATM was Invented to serve 
the needs of the public tele- 
phone companies, but was 
soon taken over by the pioneer- 
ing computer companies of 
California’s Silicon Valley. 

T he ATM Forum, which 
was set up by the com- 
puter companies in 1991 
and now has over 200 mem- 
bers, comes out with a new 
standard every couple of 
months and is rapidly complet- 
ing the set which is needed. 

It is setting a pace which the 
telephone companies cannot 
match. Mr Tim Ward, strategic 
marketing director for Net- 
work. Equipment Technologies 
(NED, a leading company in 
the forum, admits that there 
has been a lot of “hype" for 
ATM but argues that it was 
necessary. 

"It has turned people’s atten- 
tion to ATM as a local area 
network technology." he says. 

“ATM-ready" LAN products 
began to come on to the mar- 
ket in 1992. ATM on LANs is 
forecast to prove a more 


European contracts for Asyncbnmovs Transfer Mode-based public switches 




Alcatel 

Semens 

Netcomm 

Alcatel 



Alcatel 






Afcatef 







Alcatel 



Alcatel, Ericsson 


trite!* 

Alcatel 


Motherlands 

AT&T 

AT&T 

Alcatel 



Alcatel 


. 

AT&T 

Alcatel 


T#i 

Ericsson 

AT&T 



Ericsson 

AT&T 

UK 

Telecom 

BT 

Siemens 

AT&T 

Siemens 

Alcatel 


Footnote: + iratemw purely domestic operator, -purely knemationai operator; ++ contracts hau yet to be swatted; feted huamattaGl 
co n tr acts as Involve switches tar the pan-European ATM Met; sow ca: financial Timas Telecom Marinos newataOer 


cost-effective solution than on 
WANs or on the public carri- 
ers' services. So It is likely to 
be adopted for LANs long 
before the telephone compa- 
nies have worked out the 
details or their offerings. 

The largest corporations will 
probably be the first to take up 
the technology. Banks want it 
in their dealing rooms, where 
video and news agency reports 
may be joined on a single fibre 
optic feed. 

Users are only experiment- 
ing with it at the moment; live 
applications will follow in a 
year or two. Many of the tele- 
phone companies worldwide 
will introduce their first ATM 
services this year. 

According to Mr Sean Phe- 
lan, principal analyst for mar 
ket research firm Yankee 
Group Europe, pricing presents 
them with a dilemma. “If they ** 
price it too low they risk canni- w 
balising their current reve- 
nues, but if they price it too 
high the uptake will be very 
small," be says. 

“The arrival of ATM there- 
fore represents a big opportu- 
nity for new entrants into the 
telecommunications business.” 

For most users the big ques- 
tion is when they should try to 
move to ATM. 

A report last year by the 
Ovum consultancy said that 
potential users of ATM, espe- 
cially in Europe, were cynical 
about it, partly because cur- 
rent ATM products did not 
match their expectations. 
Ovum said that ATM provided 
far more than enough band- 
width but added that this did 
not translate into the function- 
ality required. 

One of the authors of the 
report, Mr lain Stevenson, says 
that their cynicism may be dis- 
pelled by a number of new 
products from hub and router 
vendors which will be deliv- 
ered this year. He notes the 
telephone companies are wor- 
ried that ATM may leave them 
“holding the string" for users 
who have equipment an their 
premises which is intelligent 
enough for them to manage 
their awn networks. 

“The telephone companies 
have to get closer to their cus- * 
to mere to find out what ser- 
vices they really want," he 
says. 

One of the technical con- 
cerns about ATM has been that 
receiving devices may not be 
able to cope with the through- 
put. Date cells could get lost in 
the pipeline and need to be re- 
sent 

“With only a small disrup- 
tion an encyclopedia could 
have gone by," notes Mr Jim 
Boyle, vice-president of wide 
area networking for IBM. IBM 
has stated that ATM is one of 
its key technology strategies 
and it is investing heavily in 
research into network conges- 
tion. The design of ATM net- 
works will be difficult at least 
until flow control software 
matures. 

Users may therefore be wise 
to hire systems integrators to 
build these networks for them. 


Electronic shoppers will be spoiled for choice 


Continued from previous page 

and Industrial Research in con- 
junction with the British Tech- 
nology Group. 

Eventually, however, cus- 
tomers may not need to pot 
gpods into trolleys themselves. 
Supermarkets - and other 
stores - may display just one 
example of each product Cus- 
tomers will walk around the 
shop and wave a wand across a 
bar code on the shelf to order 
and pay for a product Their 
order will be assembled behind 
the scenes by staff. 

Surplus selling space might 
be used instead for cooking 
classes and demonstrations, or 
multi-media kiosks offering 


information. 

For those who do not insist 
on seeing or handling every 
item, the process could be 
taken further. Why walk 
around a supermarket when 
you could be, say, enjoying a 
meal in a restaurant, making 
selections from an electronic 
shopping catalogue and pick- 
ing up your order when you 
have finished your cofee? 

As well as malting shopping 
more enjoyable, advances in 
information and communica- 
tions technology will give cus- 
tomers more choice and con- 
trol. Stores may no longer 
stock products, but instead 
offer customers the opportu- 
nity, assisted by knowledge- 


able staff or consultants, to 
customise or even design their 
own merchandise - for exam- 
ple to choose the colour, fabric 
and precise size they want 
items of clothing to be made 
in, with the order transmitted 
instantaneously to a factory 
and the finished product des- 
patched the same day. 

In the US, the Blockbuster 
retail chain in a venture with 
IBM is allowing customers to 
select tracks for and record 
their own compact discs on the 
spot 

Japan is experimenting with 
mobile production units in 
trucks or vans for goods such 
as spectacles and contact 
lenses, which take orders by 


telephone and deliver products 
rapidly to a customer's home 

or workplace. 

Themed and ‘experiential' 
stores, such as those operated 
by Disney and Warner 
Brothers, are also expected to 
increase, using technology 
such as virtual reality to sell 
goods. 

In the long run, customers 
may not stare at video screens 
at home, but instead - a pros* 
pect that still sounds like sci- 
ence fiction - don headsets 
that allow them to wander 
around virtual reality stores, 
or even virtual shopping malls. 

Developments In virtual real- 
ity systems: page 17 




Information and communications technology 7 

THE BIG TELECOM OPERATORS 




A global scramble for partners 

The emergence of global service providers able to meet the needs of multinational corporations is being 
slowed by a range of cultural and technical problems, writes Mark Newman 




n ATfvfl 


T elecommunications 
giants are stumbling 
towards global alliances 
which will bring down national 
barriers and sideline second-di- 
vision telephone companies- 
The telecommunications big 
boys say alliances are a 
response to the communica- 
tions needs of multinational 
corporations, but, at times, tt 
seems as though the customers 
are the sideshow, and the main 
event is a showdown between 
telephone operators deter- 
mined to outmanoeuvre each 
other. 

BT carries much of the 
responsibility for the hi gh lev- 
els of activity among the 
world's largest telephone oper- 
ators over the last three years. 
it tried to set up an exclusive 
partnership with Deutsche 
Telekom and Nippon Tele- 
phone and Telegraph in 1991. 
This fell apart after Deutsche 
Telekom insisted on including 
its French allies, NTT got cold 
feet, and both the Japanese 
and the Europeans realised 
that their competition authori- 
ties might not think a joint 
venture company intent on 
exercising global competitive 



In Incfia, a bored attendant Is pictured amid rows of phones during a strike on the Bombay Stock Exchange. Western telecom giants have sets their 
eyes on vast Asian markets, incfia has about 7m telephones, but just to provide one line for every ten of its 200m mkldle-ciass people would mean 
instaffing an extra 13m fines, tai China, there are plans to Increase the number erf fines five-fold to 100m fines by the year 2,000 pcm* rm 


taH» 

strength was a good idea. 

ft - 

In fairness to BT, it saw a 

tt 

market emerging for the provi- 

?!£ 
f & 

sion of global communications 


services, and this has been the 
motivation behind its attempts 
to put together worldwide alli- 
ances. Many other companies, 
despite their claims, would be 
happy to keep the status quo 
and to exclude BT from their 
markets. 


Events have moved on since 
1981: BT has taken a 20-per- 
cent stake in MCI, the second 
largest DS long-distance tele- 
phone company, and the two 
companies are setting up a 
new company dedicated exclu- 
sively to selling services to 


The world's ten largest telecommunications operators* 


Linas (m) 
1992 


% change 
1991-92 


Operator Country Revenue % change Linas (m) % change 

1992 ($m) 1991-92 1992 1991-92 

NTT f Japan 51,353 L7 57 Z7 

AT&T** US 39,580. 2J> n/a n/a 

PBP Telekom Germany 34,550 1^3 35 5JJ 

BTf UK 23^79 (07) 26 ;L9 

France Telecom France 23,164 09 30 04 

SIP Italy 17,492 108 24 2Jt 

BellSouth US 1Q202 02 19 04 

Nynex US 13,155 (09) 16 Id) 

GTE US 12 ,644 06 17 06 

Bell Atlantic US 12,093 05 18 2.4 

TOTAL 242,613 7j\ 242 02 

‘Ranked by 1992 revenue; "AT&T does not offer local exchange line services: t indicates year ending March 
31, 1993. Source: Financial limes Telecom Markets Newsletter 


multinational corporations; 
France Telecom and Deutsche 
Telekom have set up a joint 
venture company of their own; 
three second -tier European 
telephone operators, PTT Tele- 
com Netherlands, Telia of Swe- 
den, and Switzerland's PTT 
Telecom have set up a venture 
called Unisource; and Ameri- 
can Telephone and Telegraph 
has also announced a world 
strategy of its own. 

Brokers in the global power 
game will emerge from these 
four groupings, but the next 
few years will see a jockeying 
for position among the global 
communications protagonists 
and the expansion of existing 
partnerships. 

Other telecommunications 
companies waiting on the side- 
lines are US long-distance oper- 
ator, Sprint. Japanese opera- 
tors, KDI and NTT. Cable & 
Wireless, Spain's Telefonica 
and Telecom Italia, the group 
that will emerge from the 
restructuring of Italy's tele- 
communications services sec- 
tor, but they will face a num- 
ber of obstacles along the way 
which will slow the progress of 


global partnerships. The main 
ones are: 

□ US partners: most multina- 
tional corporations are head- 
quartered in the US. The idea 
of a global communications 
company is that it can deliver 
services in all of those coun- 
tries where multinational com- 
panies have offices. 

A presence in the US, there- 
fore, is vital. Two of the group- 
ings, Unisource and France 
Telecom/Deutsche Telekom 
need US partners. AT&T, MCI 
and Sprint are the three obvi- 
ous candidates for anyone in 
search of a US partner. 

MCI has already thrown in 
its lot with BT, so this only 
leaves AT&T and Sprint. 
France Telecom and Deutsche 
Telekom were in serious dis- 
cussions with AT&T last year 
with a view to an alliance that 
would have involved a pooling 
of international telecommuni- 
cations activities in a new com- 
pany but Project Atlantic has 
broken down following sugges- 
tions from the competition 
authorities in Brussels that it 
would fall foul of rules on 
mergers. A less-ambitious alii- 


■M 




ance is now under discussion, 
but this may not satisfy die 
ambitious of AT&T. 

Unisource appeared to be lin- 
ing up Sprint two years ago 
when the two sides agreed to 
interconnect their data com- 
munications networks, but the 
agreement was terminated at 
the end of last year after Uni- 
source lost one of its first cus- 
tomers, Swedish conglomerate, 
SKF Group, because of prob- 
lems with the interconnection 
of the two networks. 

P Systems integration: tele- 
communications networks are 
constructed in different ways 
and by different manufactur- 
ers. When SKF Group can- 
celled its contract with Uni- 
source. it cited the failure of 
Unisource and Sprint to pro- 
vide seamless network integra- 
tion. 

Systems integration will be 
one of the main tasks facing 
BT and MCI when they con- 
struct a global network plat- 
form. Customers in the US will 
connect on to MCI’s network, 
while BT is installing network 
facilities in Europe. 

□ Old friends: partnerships 
already exist between interna- 
tional telephone operators. 
When a UK company orders an 
international private circuit 
from BT. for example, from 
London to Paris. BT has to 
liaise with France Telecom for 
the half-circuit on the French 
side. Similarly, international 
telephone operators have to 
pay each other for delivering 
calls to their customers. 

Accounts are settled accord- 
ing to the international settle- 
ments procedure. Complica- 
tions arise when a country has 
more than one international 
operator. For example, the UK 
has BT and Mercury, while the 
US has three large interna- 
tional carriers. AT&T. MCI and 
Sprint 

In this case, BT would divide 
its international outgoing traf- 
fic between the US operators 
according to the market share 
of the three operators for inter- 
national calls from the US. 

AT&T has roughly 60 per 
cent of the US long-distance 
market, so it receives 60 per 




Cable and Wireless earth satellite station In hong Kong. More than 65 
per cent of the population now have telephones *ViJ" HwjIi FV>uno&)v 


cent of all incoming calls. This 
business is highly lucrative as 
the settlements procedure sets 
prices at above cost. If AT&T 
was to side against large inter- 
national operators, it could 
threaten existing relationships. 

This explains why AT&T 
says it would prefer to offer 
global services in partnership 
with state-owned telephone 
companies rather than in com- 
petition with them. 

O Regulation: few countries 
allow competition with state- 
owned telephone operators in 
basic voice telephone services. 
In Europe, restrictions will not 
be removed until 1998. 
although many companies are 
already exploiting uncertain- 
ties about the rules for compe- 
tition in services to closed user 
groups. Global alliances will 
also attract scrutiny from both 
national and regional govern- 
mental bodies. 

BT’s acquisition of a 20 per 
cent stake in MCI had to go 
before the the US State Depart- 
ment and Department of Jus- 
tice. as well as the Federal 
Communications Commission, 
the telecommunications regu- 
latory authority. It also needed 
clearance from the European 
Commission. 

An alliance between AT&T, 
France Telecom and Deutshce 
Telekom would face even 
closer scrutiny, and is the 
main reason for the decision of 
the three operators to seek a 
less-ambitious alliance than 
was originally envisaged. 


O utsourcing: global alli- 
ances are founded on 
the assumption that 
multinational corporations 
will, over the next few years, 
decide to outsource their tele- 
communications networks to 
third parties. But Mr Lenny 
Elefenbein, the managing 
director of US telecommunica- 
tions consultancy, Lynx Tech- 
nologies, notes that “while an 
impressive number of users 


have put out requests for infor- 
mation. very Feu have actually 
awarded their businesses to 
one of the carriers." 

He says that even the large 
carriers have been confused by 
the high ratio uf activity to 
closed deals and that several of 
them have commissioned inter- 
nal studies to determine "why 
they they are nut getting their 
share of the perceived big out- 
sourcing bonanza." 

D Cultures: while MCI is an 
aggressive, marketing-driven 
company. BT is still making 
the transition from a govern- 
ment department nine years 
after its privatisation anil ten 
years after the ending of its 
monopoly. Many observers 
question the ability of the two 
companies to work together 
effectively. 

The problems will Ik- even 
greater for other transatlantic 
partnerships. Other telephone 
companies in Europe are still 
under state-control and have 
not even begun to make the 
transition to commercially-run 
companies that BT started in 
tiie late 1980s. 

There will be other problems 
along the way. many of them 
arising as global consortia 
threaten to take lucrative busi- 
ness contracts from state- 
owned telephone operators in 
smaller countries, leaving 
them only with the unprofita- 
ble residential customers. 

A momentum has built up 
behind the formation of global 
alliances which will assure 
their emergence, but there will 
be problems along the way. 
and big businesses - in whose 
interests the alliances are 
being formed - will have to 
wait a little longer before oper- 
ators deliver the services that 
match their global service 
claims. 

The writer, Mark Newman, is 
editor of the FT newsletter, 
Telecom Markets 




Information and communications technology S 


TELECOM EQUIPMENT SUPPLIERS 


A tricky balancing act for leading vendors 


T here is substantial uncer- 
tainty in the interna* 
tional market for public 
telecommunications “which is 
characterised by lower invest- 
ment and intensifying price 
competition particularly in the 
major industrialised countries’* 
- this was the gloomy progno- 
sis for telecom equipment sup- 
pliers, given by the Swedish 
manufacturer Ericsson, during 
its 1993 results meeting. 

Five years ago this kind of 
outlook would have been 
deeply damaging for a com- 
pany like Ericsson, In common 
with its rivals in Europe - 
Alcatel and Siemens - Erics- 
son placed a heavy reliance on 
the sale of switching equip- 
ment to state-owned telephone 
companies in western Europe. 

But Ericsson's focus has 
changed over the last two to 
three years. Mobile communi- 
cations is now its core busi- 
ness. And while Europe 
remains an important market 
for sales of switching equip- 
ment, Ericsson is increasingly 
tapping emerging markets 
such as India and China for 
new sales. 

The telecom equipment mar- 
ket today is undergoing rapid 
change both in terms of the 
products that are manufac- 
tured and the markets where 
they are sold. 

Big business users are 
demanding high-speed broad- 
band services to send massive 
volumes of data backwards 
and forwards between their 
offices scattered across the 
world. Radio is becoming the 
cheaper than copper for access 
to long-distance networks. And 
the term ‘multimedia* is caus- 
ing panic among equipment 
vendors. They will undoubt- 
edly play a role in building 
multimedia networks. 

But software is the key to 
multimedia and if equipment 
vendors fail to reach alliances 
with software companies, they 
may be left behind. The lead- 
ing equipment suppliers such 
as Alcatel Siemens. American 
Telephone and Telegraph and 
Northern Telecom are still 
making public switches. 

But most state-owned tele- 
phone companies in western 
Europe and North America are 
now reducing their investment 


levels. They have digitalised 
their long-distance networks 
and modernisation of local net- 
works for low-spending resi- 
dential customers Is proceed- 
ing at a slower rate. Recession 
- first in North America and 
now in Europe - has also 
taken its tolL 

Increasingly, switch suppli- 
ers are targetting the emerging 
Asian markets. 

China is the biggest prize 
and its requirements are so 
immense that there is room for 
all suppliers. Ian Macleod, a 
telecommunications analyst at 
Natwest Seliier in Paris, calcu- 
lates that in 1992, total line 
deliveries (switch orders are 
expressed in terms of the num- 
ber of lines that can be con- 
nected) to China came to 
around four milli on. 

He estimates that the figure 
doubled to eight million in 
1993, and that by 1996, orders 
could be running at 12m lines a 
year. To raise telephone pene- 
tration to its planned level of 
10 per cent by the end of the 
decade, China will have to buy 
100m lines between 1992 and 
2000 . 

India’s expansion pro- 
gramme will require the instal- 

Leading equipment 
suppliers are well-placed 
to benefit from emerging 
Asian markets growth, 
but they will have to get 
the balance right 
between selling old 
products into new 
markets, and bringing 
out new products for 
their older customers in 
the western worid 

lation of 18m lines over the 
same period. Major suppliers to 
Asia such as Alcatel and Erics- 
son are gradually moving man- 
ufacturing facilities into local 
markets. There are clear bene- 
fits to be had. 

Production costs are lower 
than in Europe or North Amer- 
ica. But this is not the prime 
motivating factor. In many 
cases, governments insist on 



Stock market dealers In Hungary. Eastern Europe afters great scope tar telecom equipment suppliers 


local manufacture to provide 
jobs and prepare the way for 
indigenous production. Some 
governments in eastern Europe 
make the acquisition of local 
production facilities a pre-con- 
dition of contract awards. Oth- 
erwise, the local manufactur- 
ers which supplied the 
national telephone companies 
during the Cold War would 
inevitably face closure. 

But it would be a mistake to 
imagine that western tnaniifac . 

hirers are padring their bags 
and heading east. Sales into 
developing markets are more 
of an expansion than a re-ori- 
entation. 

The riches are still in West- 
ern Europe and North Amer- 
ica, althoug h the importance of 
public switching equipment is 
inevitably in decline. Alcatel 
the world's largest telecom 
equipment manufacturer, still 
relies on Europe for 75 per cent 
of its sales. 

Driven by a wave of liberalis- 
ation, the European telecom- 
munications equipment market 
will undergo radical change 
over coming years. The cosy 
relationship between state- 
owned telephone companies 
and local manufacturers will 
be forced apart as new opera- 
tors attack the lucrative inter- 
national and business commu- 
nications markets. 

Closed markets will open as 
state-owned telephone compa- 
nies begin to behave like 


proper commercially-run com- 
panies. And national champi- 
ons such as Siemens and 
Alcatel will respond by selling 
their products to competitors 
to Deutsche Telekom and 
France Telekom. 

The OK telecommunications 
market is already the most lib- 
eralised in the world. 

Equipment manufacturers 
are widening their vision 
beyond BT and Mercury Com- 
munications, and are facing 
immense pressure from both 
the new operators and the 
incumbents to develop new 
technology that gives them a 
competitive edge. 

New international and 
long-distance telephone net- 
works are being built, wireless 
technology is being trialled for 
local telephone networks, and 
cable televirion operators are 
being allowed to offer tele- 
phone services. 

The requirements of big 
business users are setting the 
agenda for equipment vendors. 
Coping with massive flows of 
data between sites has become 
a he adach e far today’s telecom- 
munications manager. 

A surge in demand far the 
interconnection of local com- 
puter-based networks has led 
to the development of a fast 
packet-switching service for 
data communications called 
frame relay. 

Equipment vendors are fac- 
ing stiff competition in frame 


relay from smaller companies 
in the computer and network- 
ing sectors such as Cisco 
Systems, Raycom Systems and 
StrataCom. 

A bigger battle is being 
fought for dominance in Asyn- 
chronous Transfer Mode 
(ATM), a technique for sharing 
the capacity of a telecoms 


Pteturae (W OUrtKxJ 

channel between those wishing 
to use it ATM enables tele- 
phone operators to offer high 
bandwidth services, such as 
high-speed data or videocon- 
ferencing, with improved effi- 
ciency and greater flexibility. 

ATM is already being touted 
as the backbone for multime- 
dia and other broadband ser- 


vices. and can be applied to 
both private and public net- 
works. All leading equipment 
vendors are positioning them- 
selves far a share of the ATM 
market A group of 16 Euro- 
pean operators in 16 countries 
is to conduct an AIM trial this 
year, *»"d all have awarded 
ATM contracts. 

Familiar names such as 
Alcatel, Siemens, American 
Telephone and Telegraph and 
Ericsson have won contracts 
along with Netcomm, a UK- 
based data switch manufac- 
turer. 

Ericsson has prospered as a 
leading telecommunications 
equipment manufacturer in a 
market which is undergoing 
rapid technological and where 
a number of its rivals are 
stumbling. Alcatel, Siemens 
and Northern Telecom all suf- 
fered profit setbacks in 1993. 

They were hit by a fall in 
orders for public telecommuni- 
cations equipment as a result 
of the recession in North 
America and Europe. Mean- 
while, products based on ATM, 
and Synchronous Digital Hier- 
archy, its sister transmission 
technology, are only now 


e meq giii g from the laboratory 
and operators are reluctant to 
commit themselves to major 
orders. 

bars Ram q vis t. Ericsson’s 
managing director, puts bis 
company's strong financial per- 
formance in 1993 down to a 
strategy which meant spending 
15 times more on R&D than on 
dividends. 

In a speech at the 1994 Inno- 
vation Lecture in London last 
month. Ramqvist said manu- 
facturers needed to forego 
short-term profit In favour of 
higher R&D spending. 

Ian Macleod at Natwest Sel- 
iier is confident that the combi- 
nation of liberalisation and 
new technologies “promises a 
new phase of growth in the 
world telecommunications 
equipment market" 

Leading equipment vendors 
are best-placed to benefit from 
the growth. But they will have 
to get the balance right 
between sailing old products 
into new markets, and bring- 
ing out new products for their 
older customers in Europe and 
North America. 

Mark Newman 



Telecom Markets is the essential source of regular 
information about the global telecommunications 
industry. It provides both ha rd-to -obtain news 
and specialist analysis for the professional 23 
times each year, and is available only on 
subscription from the Financial Times. 



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□ 


ence wuen personal computers 


Mobile Communications, the 
twice-monthly FT newsletter on the 

would come to have in busi- 
ness and personal life over the 
last decade. Yet we are seeing 

ES 

m 


□ 

□ 


□ 


□ 


business of international mobile 
telecommunications 

Developments in Europe's local 
telephony markets 

FT Asia-Pacific Telecoms Analyst, 
the forthcoming twice-monthly 
newsletter on the rapidly 
developing telecommunications 
markets of Asia and the Pacific. 

Forthcoming FT Conferences on 

telecommunications-reiated 

subjects. 

Forthcoming FT Management 
Reports on telecommunications- 
reiated subjects 


Fast track mobSa communications: whan a Mctaran Formula 1 (hirer needs to cal « for a fresh sat of lyres, he simple presses a button on las 
steering wheel This agow Mm to talc to ground crews and pit mechanics over a sophisticated radio system. Installed by the Kerumod Corporation 
tor the Matbora Mdaren team. 'Hands-free' operation is ensured by a mWeture microphone and speaker In the driver's helmet 

■ GLOBAL MOBILE COMMUNICATIONS 

Watchword for the future 


Paul Quigley charts 
the rapid progress 
towards a mobile 
millenium in 
communications 


“Mind the gap!" warns a famil- 
iar, faceless voice to travellers 
on the London Underground. 
This could well be the watch- 
word for the future of global 
mobile communications as a 
radical revolution takes place. 

The “gap" in this case is 
“globalisation and personalisa- 
tion" - the main themes of the 
wireless age. 

Pew of us could have pre- 
dicted the all -pervasive influ- 


torers eight hours to make a 
cellular phone in 1988; 30 min- 
utes in 1992. Ttxfay it takes a 
mere 12 minutes - and this is a 
telephone containing computer 
capacity of between 30m and 
40m instructions per second, 
equivalent to the power of 
mainframes of only a few years 
ago. 

GSM (Global System for 
Mobile Communications) is in 
the limelight around the worid. 
Developed by the European 
Telecommunications Standards 
Institute (TSTSI), the technical 
standards body, GSM is the 
first harmonised European 
standard to catch the imagina- 
tion and the investment of 
users, operators, and manufac- 
turers alike. 


enhancements such as data 
communications and far, is 
making GSM a serious con- 
tender as the benchmark for 
future global mobile systems. 

DCS 1800, a digital cellular 
standard based on the GSM 
specification for lower power 
handsets, points to the future 
in the wireless market- Operat- 
ing in the 1£ GHz band width, 
DCS 1800 is intended for use as 
a mass market personal com- 
munications network, or PCN. 

With a design philosophy 
quite distinct from its forbears, 
the key to the PCN market will 
be simplicity and ease of use. 
Tbe target market for the “per- 
sonal communicator" is you 
and me. 

In the UK there are two 


image, and communications in 
a natural evolution towards 
the multimedia workstation. 

Similar ly, emerging technol- 
ogies in mobile communica- 
tions have catapulted wireless, 
mobile and personal communi- 
cations Into one of the fastest 
growing markets in the world. 
The range of technologies 
becoming available is 
immense. Many people know 
about and use cellular tele- 
phones and radiopagers. Oth- 
ers are aware of mobile data 
and digital cordless technolo- 
gies. Plans are well under way 
for future wireless and mobile 
communications systems 
which will obfuscate the 
demarcation lines between 
wireless and fixed telecommu- 
nications. 

First generation cellular 
technologies - those in use 
today - are predominantly 
analogue systems such as 
AMPS (American Mobile 
Phone System), TACS (Total 
Access Communication Sys- 
tem) and NMT (Nordic Mobile 
Telephone) systems. 

Radiopaging has been domi- 
nated by the POCSAG (Post 
Office Code Standards Advi- 
sory Group) system. Second 
generation mobile technologies 
are now becoming commer- 
cially available, introducing 
digital architectures to mobile 
communications. These 
include GSM, CT2, DECT. 
CDMA and the lesser-known 
I $-54 and PDC. 

The speed of developments 
in the nubile industry acceler- 
ates apace. For example, it 
took cellular phone znanufac- 



*<■ . *■ 

Ceflnet Litetime, U» mobSs phone service package from Ceflnet, : 
make rnctbfle phones affordable lor domestic usere. 


GSM was developed as a pan- 
European digital cellular radio 
network architecture; it has 
evolved over more than 10 
years into the standard we see 
today. Set to grow at an 
unprecedented rate over the 
nest five years, GSM is already 
far more than merely a Euro- 
pean standard. Already it has 
been adopted as the preferred 
choice of international mobile 
network operators in countries 
as diverse as Australia, New 
Zealand, Russia. South Africa, 
Hong Kong, China. India. 
Pakistan, and the Gulf states. 

A report entitled “GSM - 
Going Global", by consultancy 
Nexus Market Analysis, fore- 
casts that there wQl be 40m 
GSM users by the year 2002 in 
Europe alone. Driven by falling 
handset prices, competitive tar- 
iffs and wider network cover- 
age, the market is growing at a 
phenomena! rate. The interna- 
tional roaming capability of 
GSM, Coupled with the phase 
two supplementary service 


licensed PCN operators. Ger- 
many has licensed one 
DCS 1800 operator; so has Thai- 
land. France is in the process 
of licensing a DCS 1800 operator 
and others are sure to follow. 
There is growing speculation 
that US telecom regulators will 
grant Personal Communica- 
tions Services (PCS) licences to 
operators touting DCS at laoo 
MHz. 

Cordless technologies such 
as CT2 (Second generation digi- 
tal cordless telephony) and 
DECT (Digital European Cord- 
less Telecoms) are also reviv- 
ing the industry. CT2 has 
recently experienced mixed for- 
tunes around the world. The 
failure of CT2 as a public tele- 
point technology in the UK 
made many people think it was 
a deadduck digital technology. 
However, mass uptake of CT2 
in Hong Kong, France and else- 
where has forced a re-evalua- 
tion of its future. (The advent 
of the DECT standard may 
have somewhat dampened this. 


as DECT has found converts in 
the cordless PABX arena, the 
wireless local area network 
(WLAN) market and even in 
the wireless local loop market) 

In radiopaging, develop- 
ments in memory capacity, 
functionality and coverage are 
vying to reestablish this elder 
statesman of mobile communi- 
cations as a flexible and fea- 
ture-rich medium. 

“Wireless Messaging" is the 
term used by many people in 
the industry for radiopaging. 
ERMES (European Radio Mess- 
aging), the ETSI standard for 
digital paging, is taking longer 
than expected to launch. Third 
generation systems are already 
on the drawing board, with 
concepts such as “Future Pub- 
lic Land Mobile Telecommuni- 
cations System” (FPLMT5), 
“Universal Mobile Telecommu- 
nications System" (UMTS) and 
“Universal Personal Telecom- 
munications" (DPT) already 
well under development. 

The backbone of these third 
generation systems will be 
Intelligent Networks (Ins) 
which will enable users to rely 
on the intelligence In the digi- 
tal network to handle the 
mechanics and logistics of rou- 
te ing, storing and forwarding 
of data. 

Competition in Europe and 
across the world has driven the 
market - competition not only 
in handsets and equipment 
manufacture, but especially 
between network operators. At 
a recent IBC conference on 
Pan-European Digital Cellular 
Radio in Athens, GSM was 
seen as the de facto global 
standard. 

Yet, despite GSM's runaway 
international success, there is 
a continuing debate within the 
industry over the future air 
interface of digital cellular 
systems. GSM, DCS180Q. DECT, 
and others use TDMA (Time 
Division Multiple Access), 
which breaks up speech chan- 
nels Into multiple time slots. 
Over the last few years the 
industry has been rocked by an 
alternative digital air interface: 
CDMA (Code Division Multiple 
Access), a spread-spectrum 
technology making better use 
of available frequencies. 

As we hurtle headlong 
towards a new mobile millen- 
nium, a blurring of the edges 
in place-to-place and person-to- 
person communications will 
give rise to wholesale change. 
We’re going global in a wife- 
less world. Mind the gap! Stand 
dear of the doors, please! 




















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Information and communications technology 12 


■ FACILITIES MANAGEMENT 

A make-or-break factor 


In the term “computer services,” emphasis 
is shifting away from computers and 
towards services. That is one reason why 
companies once dedicated to hardware or 
software are moving into facilities 
management, explains Claire Gooding 



bt-houm IT staff are faced with increasing complexity of PC networks 



Ready for action in an emergency: pictured here at London Docklands are the advanced financial trading positions in the Telehouse 

data centre, ready tor companies needing deafing room disaster recovery sendees. The £80m centre - an Angto-Japw*»e H*it venture - is located 

three mles tram the City of London’s financial district, b a 24-how operation with sateffit® communication services. 


kyns’ Scandinavian sister com- 


T tae ability of a company 
to operate - or not - 
may depend on the man- 
agement of its computer sys- 
tem. This can be the ‘make-or- 
break' factor, especially as 
computers move close to the 
centre of business in areas 
such as manufacturing, cus- 
tomer service and sales, as 
wed as the traditional account- 
ing functions. 

On this premise both fac- 
tions on facilities management 
|FM.» base their arguments. 
The Caction “against" believes 
the computer system is so vital 
to the competitive strength of 
core activities that it would be 
madness to contract it out. 
inside knowledge - expertise 
about computing, and the busi- 
ness - should stay that way. 

The argument about being in 
the centre of things hands 
equal ammunition to those 
who promote FM. In a culture 
where compulsory competitive 
tendering fCCT) is the norm, 
there ore economies of scale in 
an outside tor "outsourced") 
supplier providing the hard- 
ware, the software, and the 
expertise to support it 
COT demands that every 
contract decision must involve 
those classic elements, "mea- 
sure and deliver" - dear to the 
heart of IT professionals. You 
can't deliver what you can't 
measure. Furthermore, FM 
proponents argue that they are 
much better at knowing bow 
much things should cost, 
where economies can be made, 
and delivering them, undis- 
tracted by the fluctuating con- 
cerns of core operations. 

Coding, progr amming and 
the support of end users are 
the central activities of an IT 
department. The argument 
runs thus: bow much better for 


individuals to be at the profit 
making centre of a company 
whose business is supplying IT 
services, than to be at the 
periphery of a company whose 
real raison d'etre is baking bis- 
cuits, making cars, or explor- 
ing for oil. 

It has to be said, on both 
sides, that the margins in sup- 
plying computer hardware and 
even packaged software have 
dwindled. However, the long- 
accepted figure of "80 per cent 
of IT spending is on support 
and maintenance" stays con- 
stant. The tedium of arguing 
about who owns a problem 
(software, hardware, network?) 
has driven many a user-com- 
pany into single-source-sup- 
plier agreements, and the idea 
of contracting out an entire IT 
department is simply a logical 
step further in cost control. 

The result is a burgeoning 
market in “systems integra- 


tion" and "facilities manage- 
ment" - new names for bun- 
dling activities, familial - since 
the earliest days of computer 
services. 

Systems integration is a 
broad church. It covers any- 
thing to do with development - 
including every sort of alliance 
of software and hardware 
involved in setting up new 
systems. FM is the contracting 
out of an entire task and its 
maintenance - the contractors 
take over the assets and the 
manpower necessary to the 
service. 

The research company Data- 
quest estimates the value of 
the FM marketplace at more 
than $2, 500m in Europe, grow- 
ing by 20 per cent a year. This 
explains why some of the best- 
known names In the computer 
industry are now turning to 
FM as a core activity. 

They include the big, tradi- 


tional firms of accountants 
such as Andersen Consulting 
and Ernst and Young, and 
names once identified with 
manufacturing, rather than 
merely supporting computers. 
Unisys and Olivetti, for exam- 
ple, are among the companies 
which, once known for their 
proprietary hardware, have 
turned to supplying services 
and support for almost any 
sort of hardware and software, 
particularly the workstations 
and PCs termed "desktop ser- 
vices". 

Nearly 1,000 of Olivetti UK's 
1.400 employees are in the Cus- 
tomer Support Group, working 
for a customer base largely in 
the financial and retail sector. 
Unisys has recently signed up 
Bass Taverns, the UK's largest 
public house retailer, for an 
FM contract worth over £3.9m 
over three years. Its job is to 
support 2,500 pubs, developing 
and supporting Bass’s Central 
Retail System. 

In the UK, other users of 
Unisys' outsourcing services 
include McDonald's Restau- 
rants. US users include the fed- 
eral government, the Ford 
Motor Company, and Nasa. 

H os kyns is an active FM 
company, one of the UK's larg- 
est computer services compa- 
nies, worth £200m, part of the 
French-owned Cap Gemeni 
Sogeti Group. UK customers 
include Woolworths, Bristol 
Water, and Hoover - “outsour- 
cing is still the fastest-growing 
sector of the IT services mar- 
ket Analysts estimate that the 
European market will double 
by 1988 to a value of £4bn," 
says Peter Falconer, Hoskyns' 
associate director. 

Falconer is looking to the 
European market to expand. 
Five recent contracts for Hos- 


pany. adding up to £i7m worth 
in all, under line the ambition. 
“The pace at which FM is 
adopted will differ country by 
country,” he says. "CGS is well 
placed to benefit from this 
expansion, because it is com- 
mitted to regional as well as 
global service delivery." 

He argues that in-house IT 
departments bid it difficult to 
keep pace with the growing 
demands of the organisations 
they serve, and the increasing 
complexity of PCs and LANs is 
putting more strain on them. 

A ccording to a 1993 sur- 
vey by Romtec, desktop 
services (PCs, their pro- 
curement, installation, configu- 
ration and support) is the fast- 
est-growing part of FM - worth 
over £lbn by 1995. Asset man- 
agement, network design, 
installation and administra- 
tion, and the end-user help- 
desk, all come under the “desk- 


top" label The desktop is one 
of the prime areas targeted by 
Bull Information Systems, the 
newest arrival in the FM mar- 
ket, which launched its A these 
FM division this February (see 
below). 

Sharing the benefits of cost- 
saving is a convincing argu- 
ment for FM, but there is 
always concern about staff 
who have to change allegiance 
to the “outsourced" supplier. 
(See panel an Andersen's BP 
contract for an example). 
There are regulations to pro- 
tect them: the Transfer of 
Undertakings Protection of 
Employment Regulations 1981 
retains current terms and con- 
ditions for staff being trans- 
ferred. 

The government is anxious 
to remove obstacles to free 
market testing. According to 
the William Waldegrave, the 
minister for public service and 
science, speaking at a recent 
Financial Times conference on 


resource management, “The 
relevant provisions of the Dere- 
gulation and Contracting-Out 
Bill, now before Parliament, 
are designed to extend the 
scope for market testing activi- 
ties in central and local gov- 
ernment by removing obstacles 
to the contracting-out of statu- 
tory functions.” This is good 
news for Athesa and others - 
but staff affected might not be 
so pleased. 

Unison, the UK's biggest 
trade union, and CMS, a divi- 
sion of British Steel claimed to 
have broken new ground when 
they recently signed a trade 
union agreement which out- 
lined practices and procedures 
to be followed when staff trans- 
ferred from Cambridge City 
Council to CMS, a division of 
British Steel which won the 
multi-million pound contract 
in late 1993. According to Mark 
Pope, CMS sales and marketing 
manager, this was an impor- 
tant "industry first". 


"We believe it is important 
that our new staff have confi- 
dence in us, and we in them." 
The Unison office at Cam- 
bridge City Council stressed 
the importance of contractors 
recognising unions. “If we are 
to be subject to the contracting 
out of services from local 
authorities, then it (s impor- 
tant that any successful con- 
tractor recognises unions: CMS 
was the only candidate that 
had any track record of suc- 
cessful relationships with 
Unions." 

This is a hint that the 
change of culture associated 
with working for one organisa- 
tion rather than another might 
bring new patterns to the com- 
puter industry. “Partnership" 
- the key won! emphasised by 
all FM suppliers - means both 
partners making allowances if 
tbe marriage is to last 
ta ke in Bull and Andersen sto- 
ries 


Case study: two companies break new ground 


Facilities management: the supplier’s viewpoint 


A radical change 


F acilities management 
agreement between BP 
Exploration Europe 
t BPXEU) in Aberdeen, and 
Andersen Consulting, broke 
new ground for both compa- 
nies. In effect, BFXEU out- 
sourced not only the IT depart- 
ment and the accounting 
software it had used, but the 
actual accounting function and 
staff as well 

The decision, taken in the 
early 1990s, affected the entire 
accounting services of tbe UK 
and tbe Continental Shelf 
operations - a ELUbn business 
worldwide, employing some 
7,000 people. Another unusual 
aspect was tbe extreme secrecy 
of the arrangements: the 300 
accounting staff affected were 
not told until after months of 
negotiations and hammering 
out details of the facilities 
management (FM) contract. 

The driving lorce for BP 
Exploration towards facilities 
management was the need to 
cut down all expenses by 30 
per cent. Tom Wright, control 
and planning manager at 
BPXEU . explains the pres- 
sures brought about by tbe col- 
lapse of oil prices since the 
early issOs - “we realised we 
would have to radically alter 



BO Lattimor "We have taken a 
process and completely redefined 
(tie way the sendee operates. 1 * 


the way we did business to 
remain competitive. We had to 
reduce costs 30 per cent across 
the board,” he says. “It was a 
requirement for every manager 
to achieve that within three 
years without compromising 
health and safety.” 

The core skill for BPXEU 
was its business of oil explora- 
tion, and a hard look at the 
accounting services revealed 
that a line could be drawn 


between what accounting 
information was truly neces- 
sary in-bouse. and what was 
not 

“It is vital that we have that 
information, for making policy 
and interpreting business 
information, but not that we 
provide it ourselves,” says Mr 
Wright 

“Similar styles” is the reason 
he gives for the choice of 
Andersen Consulting, which 
already bad a track record at 
BPXEU. When news of the 
announcement broke in June, 
it was a brand new idea for 
both companies. Andersen was 
to take over accounting staff as 
well as IT staff and computer 
assets. 

“Initially there was shock, 
even anger. However we had 
prepared pre-planned, individ- 
ual. intensive counselling ses- 
sions. and by the end of the 
day. people understood the 
effect it was going to have. We 
though that was better than 
months of uncertainty." says 
Wright. 

The business was transferred 
under transfer of undertaking 
legislation, which protects the 
employees and their rights. 
Effectively they bad no choice, 
although for some, the central- 
isation of operations in Aber- 
deen, from the six sites previ- 
ously involved, predetermined 
the decision. 

“Everyone outside Aberdeen 
had a choice of relocation to 
new location or accepting sev- 
erance terms." says Tom 
Wright. “They were trans- 
ferred - full stop. There was no 
choice." 

Andersen took over the staff, 
the Vax computer and McCor- 
mack and Dodge (now 
Dun & Bradstreet) Millennium 
software used for the accounts. 
Wright himself has no doubts 
that the deal arranged for 
BPXEU accounting staff actu- 
ally secured better career pros- 
pects and long-term employ- 
ment. 

“Andersen Consulting pro- 
vides greater focus and incen- 
tive Tor the staff who feel far 
closer to the business. If an 
accountant works for an 
accountancy company, it is the 
focus of using the core skills in 
the core business that drives 
the difference. No one believes 
that on ‘day one.' of course, 
but after six or seven months 
that is exactly what has hap- 
pened." 

The pension rights were the 
only thing that had to be 
addressed - in some cases 
“topped up" to match the BP 
scheme for those transferring 
to the Andersen pension 
scheme. 

“The key benefits are the 
enthusiasm and tbe focus of 
the staff. It has reduced costs 
by creating a single interface, 
instead of a myriad of inter- 
faces." says Mr Wright. “The 
real effect is that we have 
turned a fixed cost to a vari- 
able, or at least semi-variable 
cost As the service expands - 
say, drilling increases or new 
fields come online, or we dis- 
pose of other assets - so the 
cost varies. Now we can con- 


BUSINESS SOFTWARE CHALLENGE '90s 

Prizes to the value of £20,000 
for software designers 

Once again, the UK's young software designers have the 
opportunity to win cash, hardware and software prizes to 
tho value of £20,000 in the Business Software Challenge '90s 
design competition, is Just launched - for its fourth year. 

Hie competition is a way of recognising and rewarding 
student designers as well as demonstrating to the business 
community the high quality of software design talent in the 
UK. 

The competition is sponsored by Computer Associates, 
one of tho world's leading software companies. Others 
giving support are FTs regular review of business software, 
Software At Work: the British Computer Society; the Institute 
of Management; Coopers & Lyfarandt the Worshipful Com- 
pany of information Technologists and the Conference of 
Professors and Heads of Computing. 

Success for previous winners 

Last year’s competition attracted record entry levels. Both 
the winner of the ‘Overall Winner’ category (Andrew Welker, 
University of Nottingham) and the winner of the ‘Best Busi- 
ness Solution* category (Richard Maher, Brunei University) 
are now turning their designs into commercial products with 
the hefp of competition prizes. 

During its first three years, the competition has awarded 
prizes to designs ranging from a small hotel management 
system and a sea-bed profiler to a system for assisting 
medical departments In the care of patients with heart 
problems. 

The competition is aimed at students in higher education 
and recent graduates, working individually or in teams. It 
challenges them to submit original software designs - usu- 
ally developed as course work - which address specific 
business problems. Designs should run on commonly avail- 
able computers and integrate with other relevant software. 

The closing date for receipt of entries Is September 2, 
1994. Prize-winners are offered help in talcing their products 
to the marketplace. 

For more information and an explanatory booklet, apply to: 

The Competition Secretary 
Business Software Challenge ’90s 
PO Box 2 E R 
London W1A 2ER 

Tel. 071-289 0903: fe* 071-289 4633 


in culture 



BP Ex ploration's incentive for FM was tho need to cut all costs by 30 per 
cent Pictured below is the central control room on an offshore platform 



Customer-driven approach 



The key to success In facSties management is flsxibiHy in the use of 
staff, says Brian Gum, director of Athesa UK - "we can bring our skate 
to the fore fci forging new partnerships,* he odds 


centra te on the core business, 
and it allows us to focus on tbe 
business of exploration and 
production. It has simplified 
things. We don't have to worry 
about training, developing and 
motivating 300 accounting and 
support staff." 

However, there has bran no 
abdication of decision-making. 
"We take all the business deci- 
sions. They provide the finan- 
cial analysis anrl variants anal- 
ysis, but they don't decide 
what should be done: the deci- 
sion-making is the core skill.” 
says Mr Wright. He believes 
the physical distance of the 
Andersen operation, five miles 
away, was essential to taring 
about a change of culture. 

The initial contract is for 
four years: both parties reckon 
on three years to get the costs 
down, although a longer part- 
nership is envisaged. 

“It's an opportunity to share 
benefits: if Andersen can grow 
the business, they can bring 
the cost down. They have the 
focus to do it faster and more 
efficiently. The other thing rd 
emphasise is that we really did 
want the best for our staff. We 
honestly believed they would 
have a better future than in a 
business where the cost pres- 
sures of the North Sea were a 
constant threat," he adds. 

The FM contract has had one 
more important psychological 
effect, he says. "More tta*n 
anything else, the move con- 
vinced everybody else Inside 


BP that we are serious about 
changing the way we do busi- 
ness." 

For Andersen, the business 
has grown as expected. It took 
317 staff from BPXEU, only 30 
of them computer-based. 
"That’s what makes this deal 
so unusual: it’s a business 
function management, not just 
systems management," says 
Norman Cook, Andersen's 
associate partner, the bead of 
the unit at Aberdeen. 

It now has ex tra customers, 
including Sun Oil in Aberdeen. 
Cook's view is that Andersen’s 
expertise has already brought 
savings. He is confident that 
the current costs of £i5m per 
year can be brought down by 
£5m by 1995 - “we've saved a 
lot because we manage the 
bank balance tightly: £500,000 a 
year in funding charges alone." 

Bill Lattimer, partner in 
charge of market development 
for the outsourcing practice at 
Andersen Consulting, believes 
this is the way FM is going - 
“the IT component is of less 
interest to the customer it’s 
not the important element in 
Aberdeen. The way we have 
developed the people Is impor- 
tant We have taken an organi- 
sation, a process, and com- 
pletely redefined the way the 
service operates and the way it 
interacts with its customers. 
The value-added service we’re 
providing is our skills in ser- 
vice definition and manage- 
ment" 


S tarting a facilities man- 
agement company might 
seem a radical departure 
for Bull Information Systems, 
but when Athesa, its new facil- 
ities management (FM) divi- 
sion, was launched In Febru- 
ary, Philip Crawford, the chief 
executive, insisted that the 
new company was no depar- 
ture but a logical evolution 
from the role that Bull has 
long held with its customers, 
writes Claire Gooding. 

Mr Crawford sees FM as an 
international opportunity - 
"the use of partners to offer a 
full range of services In the 
outsourcing arena will be a 
growing trend. We can draw on 
facilities in 28 countries,” he 
says. 

The company is experienced 
in changing its role as the com- 
puter industry has evolved. Its 
primary markets - healthcare, 
police and local government - 
are among those most drasti- 
cally affected by the demands 
of cost- cutting and compul- 
sory competitive tendering. 

According to Athesa direc- 
tor, Brian Gunn, the move is 
customer-driven - “we are 
focusing to deliver a range of 
services, from under one roof. 
In the last 12 months custom- 
ers, especially in local govern- 
ment, have been asking us 
what we are doing tn FM." 

Bull has used partnerships of 
various sorts as the platform 
for its own sundry changes oT 
direction. As part of its adjust- 
ment to Open Systems, it has 
developed strong links with 
software vendors and val- 
ue-added resellers. In the past 
Bull has done well as the 
prime bidder in single-source 
contracts, with clients who are 
comfortable with the ‘one bot- 
tom to kick’ principle. 

Tbe key to success, he 
believes, is flexibility in tbe 
use of staff. There is a core of 
60 Athesa staff in the division, 
but he intends to treat tbe rest 
of BoD as on can. At one client, 
Glaxo, Athesa is providing a 
desktop service where it is 
installing, maintaining and 
supporting PCs, LANs, and 
Unix servers, not only in the 
UK, but in 26 countries world- 
wide. The contract has been 
worth £2.4m since it began in 
1992, and is expected to be 
renewed at tbe end of its cur- 
rent period in 1994. 

“We can bring our skills to 
the fore in forging new part- 
nerships. There is a range of 
skills and complementary 


Leading facilities 
management suppliers* 




Europe^ 

EDS-Sdcon 

12 

12 

Serna Group 

11 

4 

AT&T Uriel 

9 

3 

Data Sciences 

6 

3 

CFM 

Andersen 

5 

2 

Consulting 

4 

- 

DEC 

3 

2 

TTnel 

2 

- 

P&P 

2 

•* 


ritnt 

Saurea; Mput NkmUi Oour 


expertise we can draw on. Per- 
haps those skills are not 
unique In themselves, but 
what is unusual is that we can 
pull it all together," says 
Gunn. 

Development and systems 
integration are complementary 
to Athesa's plans. Bull's 
Systems Integration section 
will provide the experts who 
are needed on projects needed, 
for any period from a week to 
two or three years. Athesa will 
provide the long-term support 
for operations and applications 
support, and management of 
IT. Bull's plans are standard in 
this area, involving the take- 
over of staff and assets. “We 
have the resources on tap, they 
get the career opportunities." 
says Mr Gunn. 

Athesa’s sister company, the 
People Plus head-hunters, are 
part of the partnership. In one 
sense, Gunn argues, the source 
of supply is the cornerstone of 


tbe business. There has always 
been a division in program- 
ming between those who 
develop and those who main- 
tain software. 

While this distinction has 
bran largely broken down by 
the increased use of software 
packages, and the availability 
of fourth generation languages, 
there will be times when tbe 
aristocrats of development wiD 
be needed on a short-term 
basis. 

In concentrating on the desk- 
top delivery. Bull is not alone. 
Desktop and the network have 
become more important, Sup- 
porting: legacy systems is bread 
and butter, but the market is 
beading towards improving, 
not merely maint aining 
operations. 

“It is in tbe area of business 
operations that the opportuni- 
ties of cost-benefits are to be 
achieved", comments Mr 
Gunn. 


FT SURVEYS INFORMATION 

FORTHCOMING SURVEYS LIST Tel 071 873 376 

Fax 071 873 306 

Surveys related to communications, computers and offtc 
equipment in 1994 include: 

□ A-Z of Computing: to be published on April 23. 

□ Desktop Computing: May. 

□ Telecommunications in Business: June. 

□ Computer Networking: June. 

□ Resource Management: July. 

□ Software At Work: September. 

□ Mobile Communications: September 


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and Back Numbers should be made payable t< 
Financial Times Ltd. 





t 





History often repeats itself 


F ujitsu's takeover of ICL 
in 1990 brought an end to 
a UK-owned computer 
manufacturing industry which 
dated back almost 40 years. 

Yet according to some of its 
early leaders, who met at Lon- 
don’s Science Museum at the 
rad of last month to discuss 
why the early UK promise was 
not fulfilled, the Tact that the 
industry had survived even 
beyond the 1960s was quite 
remarkable. 

The packed meeting, organ- 
ised by the Computer Conser- 
vation Society, highlighted the 
UK’s disadvantages from the 
very early days. 

"The UK’s contribution was 
out of all proportion to its pop- 
ulation and industrial capac- 
ity," said Mr George Davis, 
who worked at the National 
Physical Laboratory on the 
ACE (Automatic Computing 
En g in e ). 

“This was true at all stages: 
the creation of basic concepts, 
the research and development 
leading to the first computers 
and the emergence of a com- 
puter industry with competing 
suppliers.” 

But Mr Davis argued that 
the breadth of this contribu- 
tion meant that the UK indus- 
try was too diverse from the 
start. 

By the mid-1950s there were 
eight computer manufacturers. 
They Included Ferranti, 
English Electric, 1CT (Interna- 
tional Computers and Tabula- 
tors), Elliott Brothers and Leo 
Computers - this last was the 
product of J. Lyons' extraordi- 
nary expansion from tea shops 
into building computers. 


The development of the UK’s computer manufacturing industry ran 
into problems from the start. Genius was let down by poor 
marketing and lack of government funding, writes John Kavanagh 


L yons is credited with 
being the first organisa- 
tion to run commercial 
applications. Notable among 
these were bakery production 
monitoring in 1951 and payroll 
in 1954. These landmarks 
inspired The Economist to pub- 
lish a feature article in 1954 
which asked: "Is this the first 
step in an accounting revolu- 
tion or merely an interesting 
and expensive experiment?” 

The trouble was that the US, 
with a s imilar number of man- 
ufacturers, bad a far bigger 
home market on which to build 
the foundations for its industry 
- and more government sup- 
port 

“While the US government 
was supporting research and 
development in the late 1940s 
and early 1950s, with guaran- 
teed orders at the end, the 


computer industry was not 
seen as significant in the UK 
and was not supported," 
George Davis told the Com- 
puter Conservation Society. 

This was underlined by the 
practical experiences of Mr 
Cecil Marks, who recalled 
being seconded by Royal Ord- 
nance, where he worked on 
a dmi ni s tration and acco unting , 
using punched card equipment, 
to a study carried out by gov- 
ernment departments into the 
potential uses of computers. 
Scientists and users from sev- 
eral departments, including 
the Treasury, worked for 18 
months, culminating in the 
production of a hefty report 
and a meeting with “a very 
senior civil servant." 

“At the end of the meeting 
he suggested that this was not 
the time to be getting into com- 
puters," Mr Marks said. “That 
led to the ordnance factories, 
at least, losing ground for more 
than 10 years." 

Other factors were brought 
to light by Mr Hugh Ross, who 
set up Ferranti’s London com- 
puter centre in the mid-1950s. 
He pointed to a dispute 
between Ferranti and the 
National Research Develop- 
ment Corporation, over manu- 
facturing costs underwritten 
by the publicly-funded corpora- 
tion, which led to a nine-month 
ban on sales. As Mr Ross said, 
this had a “crippling" impact 
on UK success in the emerging 
market, as well as hitting Fer- 
ranti’s cash flow. 

But Mr Ross also blamed an 
absence of financial manage- 


ment for Ferranti's failure to 
fulfil its early promise. Even 
when he set up the London 
computer centre, he said, he 
never bad to account for any 
money he spent - indeed, he 
had never had a budget in the 
first place. 

Later, when he was responsi- 
ble for Ferranti’s pioneering 
documentation service, one of 
the biggest spending units, Mr 
Ross again had no budget. 
Moreover, he had never had to 
produce a business plan and 
was never called to account 
"There was no financial man- 
agement at all,” he said. 

"I later joined STC and came 
in contact with management 
training provided by its owner, 
the US TTT group," Mr Ross 
added. "Tins was terrific - and 



In 1968, ICL was formed as the great white hope of British computer 
manufacturing: the culmination of merging the computing activities of 
earlier manufacturers. Yet ICL was stffl dwarfed by IBM: George Davis 
showed that In 196 9 ICL had a C115m turnover and spent £13m on 
research and development, while IBM hud a turnover of E3,000m and a 
ISSS ^rSr^TeiTOm. Pictured above is iCL's mahtheme 
systems development centre tn 1984, where a 

loading an EDS 200 dtec drive. IHustrated below a the mainline computer 
at the University of London In 1985. 



a profound shock, after Fer- 
ranti. We had to produce busi- 
ness plans, prepare budgets 
and report our monthly results 
against those budgets." 

Such personal reminiscences 
add flesh to historians’ reports 
on UK genius being let down 
by everything from poor mar- 
keting to lack of government 
funding, compared with the 
US, France and Germany. 


Wi 


' hatever the combina- 
tion of factors, George 
Davis showed how US 
manufacturers took firm con- 
trol within a dozen years of J. 
Lyons running that first pay- 
roll system. 

By 1967. IBM had installed 
over 21,500 computers of vari- 
ous sizes; UK market leader 
ICT (soon to become ICL) had 
sold 844. These included 399 of 
the new 1900 range (which was 
to be the company's mainstay 
until the middle of the 1970s); 
meanwhile, IBM’s System 360, 
launched the same year, was 
already up to 5,730 installa- 
tions. 

In 1968, ICL was formed as 
the great white hope: the cul- 
mination of merging the com- 


puting activities of all the 
early manufacturers. Yet it 
was still dwarfed by IBM: 
George Davis showed that in 
1989 ICL bad a £115m turnover 
and spent £13m on research 
and development, while IBM 
had a turnover of £3, 000m and 
a research budget of almost 
£170m. 

However, a retired ICL exec- 
utive director, Mr Peter Hall, 
stoutly defended ICL’s record. 
ICL and its ICT forerunner had 
been profitable for 35 years - 
apart from in 1965, just after 
taking over Ferranti's ailing 
computing operation; and Ln 
1981, when the visionary Dr 
Robb Wilmot was transforming 
the company for the emerging 
office computing revolution. 

Mr Hall said Fujitsu allowed 
ICL to run itself; and that the 
company generated all its own 
cash for takeovers and other 
investment, and did all its own 
design work. 

Whether that makes ICL any 
more British than IBM UK (or 
Rover Group in the car indus- 
try, for that matter) is debat- 
able. But Mr Hall argued that 
these points suggest that the 
early promise of the UK com- 


puter manufacturing industry, 
which had mostly merged into 
ICL by 1969, was fulfilled after 
alL It is simply that a genera- 
tion later the industry is all in 
foreign hands. 

As today’s tight margins on 
hardware increasingly cause 
computer manufacturers to 
look to software and services 
for their profits, it is equally 
debatable whether the virtual 
disappearance of a UK com- 
puter manufacturing industry 
need be a cause for concern. 

That concern is now focused 
more on the software industry, 
where some big names have 
fallen into foreign ownership. 
Takeovers of Cap. Hoskyns, 
Istel, Sticon and others have 
given substantial footholds in 
the UK market to, for example, 
the telecoms giant AT&T, Gen- 
eral Motors’ EDS subsidiary 
and the French company CGS. 
Europe's biggest computing 
services group. 

History, as they say, has a 
habit of repeating itself. 


□ The Computer Conservation 
Society has regular meetings 
and works on restoring ancient 
computers. It is also opening 
Bletchley Park f which cracked 
German codes in the Second 
World War ) for public visits. 
The secretary is Tony Sale. 
(0234)822788. 



Computing 40 years ago: IBM's tamaus 705 valve computer. By 1087, IBM hod installed over 21,500 computers 
of various sizes; UK market leader ICT (soon to become ICL) had sold 844. These Included 399 of tho new 1900 
range (which was to be the company's mainstay until the middle of the 1070s); meonwhOe, IBM's System 360, 
launched the same year, was already up to 5,730 instsOatians. 



f you can’t make it to the end of 


the test, your company may not 


make it to the end of the decade 


This test poses tough questions about 
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line results. As customer service rises to a 


OW-tan vr -tm v.i 1. To nuke a company more responsive 'lo m 
.ntsiomeh and bciicp able lo iiiran -new ones. 2. To amomcruc an 
. Mea^salian’S information ^ntegy. cj, 10 extend systems g ja M H ie * lo 
branches, booking offices and oilier perms or cum timer contact and 
1 support. 3. What Unisys does far a growing number of companies and 
jovcrnroenl agencies worldwide. See cusrouu suvira. nniKimvi 

EDO E aiJSINESI-CamQLJ. SOUTH OKI. BETLVVE CCNIKJTIOM. 


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customers and markets are Idling you? 

□Ves □ No 

When the flow lines ol your infant urion system 
arc not within your customers' reach, you won't 
always sense when opportunity knocks. But even it 
you do. getting the message v, not enough. If you 
can't reply rapidly to market signals with information, 
products and services, revenue nppor rum lies arc lost. 


3. Do you generate as much business from each 
customer as yon want? 

□ Yes DNo 

A critical component of business growth is 
increased sales content. To marimiae each business 
opportunity, you need a way to leverage your cm ire 
organisation - to bring it toially to hear at the point of 
customer contact. 


8. Does your information strategy enable the 
proactive delivery of information to your 
customers? 

□ Yes □ No 

Many business plans underestimate the power 
of informal ion to bund ctw* inter relai ionships 
But imagine the advantage of an information tech- 
nology strategy that imnsTnimv information into 
customer-genera ling, tevenue -general me fuel 


4. Do vou real ly know what tout customers want? 

□ Yes DNo 

Arc you alert towry product your customers 
could use? Every service that mighi interest them? 
Every transaction they're prepared lo make? Every 
sale they'd allow you to follow through? Arc you 
thoroughly plugged into your market 9 


9. Are the fpjl capabilities of your organisation 
accessible lo your customers at all your field 
locations? 

□ Yes □ No 

An office. A branch . A tetail site, lb a cusiomur. 
that's your company. One mtijII pun «»r the whole. 
Which is why you need lo leverage your enliie organi- 
sai ion hy extending its capabilities (u each point ul 
customer contact. 


S. Does your enti re organisation know what your 
customers want? 

□ Yes □ No 

A customer urienuiion has limited value unless 
it's embedded in the very heart of an cnlerpriv- at 
all levels, and at every place that directly or imbrecrly 
involves the customer. 


6. Is your information strategy focused on 
hcJping you hear wind customers and markets are 
frying to tell you? 

□ Yes □ No 

The ncxl best thing tn reading ^^nu^^l3nn^ltTy , 
minds is listening to What l hey 're-saving. But unless 
you're constantly tuned in ip customers' signals, 
you're in axing messages ihui could guide you lo 
greater results for ynur business. 


10. Does your Information strategy reflect the 
beSom-iiae Importance of customer service? 

□ Yes DNo 

Business is huilt on customers. Without them, 
there is no hen tom line. Government is also built 
on customers, ihc public. And whether you're in the 
business of commerce or the business i*l p nvmmi.nL . 
no objective of an information strategy is more 
fundamental than enhanced customer sets kc. 


The Bottom Low. If you mini -ered No to ,my 
of these questions, ynu'nrnoiycicustomerizcd. 
But you might Kttfl agree that this sitH/de tat 
suggests the enormoux adivniages uf becoming 
custotnerized. And or (he kadei at nutomenzing 

business atkl government. Unisys wilt work with 
you to provide the arts wen you need. 


to adopting a vendor-independent approach to 
the assignment. And we’ll apply our industry- 


UNISYS 

We make it happen. 


leading expertise at ensuring that an informa- 
tion strategy pays off, not merely shows off. 

For more information, fax Graham Roberts 
on (44) 895 862807. Ask for our CUSTOM ER1ZE SM 
assessment and discover how we can help your 
organisation earn high marks in an increasingly 
customer-driven era. 


iW4LMm Com Mon 


IVKTTIW>HIZT MVIH>in:a.i|l 


I 




XIV 


FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


Compaq and Microsoft. 

THE CONNECTION THAT'S MAKING 
"PLUG AND PLAY" A REALITY. 


J ust about everyone who's ever used a computer has 
experienced the same thought : Wouldn't it be great if 
setting up or upgrading your machine was as easy as 
turning it on ? The idea is called "Plug and Play". People 
have been talking about it for years. But now, an ongoing 
partnership between Compaq and Microsoft , working with 
other industry leaders, is actually making it happen. Plug 
and Play is the result of some very fresh thinking in both 
hardware and software - an accomplishment that tapped the 
combined engineering expertise of both companies. 
Together, Compaq computers and the next version of the 
Microsoft® Windows" operating system (code-named 
Chicago) will deliver the long-promised benefits of true Plug 


and Play : easy setup, easy expansion and easy connection to 
peripherals. Which means no more configuration headaches. 
No more hidden switches, cryptic codes or mystery. Even 
today, Compaq is shipping computers that will take full 
advantage of Plug and Play technology as soon as the 
forthcoming version of Windows is available. So the 
Compaq & Windows combination will quickly become the 
standard for Plug and Play computing. A welcome 
reassurance for people who buy computers. 

COMPAQ. Microsoft 

SHOWS THE WAY 


Cumpjtj Computer Corporation. AH Rights Kcavrtcd. Compaq Registered U.S. Rrtrnc and Trademark Office. Microsoft is a registered trademark of the Microsoft Corporation. Windows is a trademark of the Microsoft Corporation. 


FINANC^L TIMES WEDNESDAY MARCH 16 1994 


XV 


Information and communications technology 15 


■ SYSTEMS INTEGRATION 

An expensive option for the 
foreseeable future 


The perceived demand for systems 
integration has attracted a growing number 
of supplier and services companies 

Systems integrators must have 



The investment bank, Barclays da Zoote Wedd (BZW), one of the City ot London's leading equity dealers, has switched over to a new muW-mUUon 
pound share settlement system, called Aries. Developed and installed by Syntegra, the systems integration business of BT, the new system will hand 
all BZWs UK and Internationa! equity settlements with greater speed and accuracy. Aries handtes up to 22JD0Q trades each day. 


L ike many computer 
terms, systems integra- 
tion is hard to define. At 
one level, any computer-based 
information system must be 
integrated or it will not work. 
But the term has come to refer 
to a particular class of com- 
puter system -that is, one 
which is assembled from a set 
of components in a way which 
hides the technology from the 
customer. 

The importance of systems 
integration as a discip line hac 
grown steadily since compa- 
nies began the move towards 
open systems. A system does 
not. of course, need to be 
"open" to require integration 
- but this is where the largest 
demand is. 

Proprietary systems are al s o 
“integrated” - but most of the 
integration is performed by the 
ma nu fa c turer and the system 


is sold as a complete solution. 

Open systems bring the 
advantages of user choice 
flexibility - but there is a price 
to pay. They are constructed 
from hardware and software 
“components” which are usu- 
ally sourced from several dif- 
ferent manufacturers. They 
will almost certainly involve 
the use of a technological 
design framework which sepa- 
rates systems functions into 
users and services. Thin 
approach is usually referred to 
nowadays as client-server com- 
puting. 

Advanced skills are a pre- 
requisite to bring these compo- 
nents together to create coher- 
ent and useful applications. 


a wide knowledge of “compo- 
nentry” and how it may be 
brought together successfully. 

They must also have strong 
software development skills 
because integrated systems 
invariably require some “cus- 
tom-bunt** components to meet 
the application need. 

The perceived demand for 
systems integration has 
attracted a growing n umb er of 
supplier and services compa- 
nies in the past two or three 
years. 

Established hardware manu- 
facturers in particular have 
seen systems integration as a 
growth area as margins on 
hardware have fallen. IBM, 


DEC, Groupe Bull. ICL and 
Unisys have emphasised their 
systems integration talents in 
recent years and their service 
revenues have grown accord- 
ingly. 

They are not the only con- 
tenders. Large consultancy 
companies such as EDS, 
Andersen Consulting and 
KPMG have also made a large 
dent in the market as indeed 
have traditional custom soft- 
ware developers such as Log- 
tea, SEMA and CGS. 

Successful systems integra- 
tion depends on a broad foun- 
dation of standards for both 
hardware connections and soft- 
ware compatibility. 

Some standards are drawn 
from formal efforts by interna- 
tional standards bodies such as 
the International Standards 
Organisation (ISOj and the 
American National Standards 
Institute (ANSI). 

But many of the standards 
which make integrated 
systems possible have evolved 
from proprietary industry stan- 
dards such as IBM’s SQL data- 
base standard, which is used to 
link desktop data tools to data- 
base servers. 

Given the importance of 
open systems standards, It is 
no surprise that the lead in 
systems integration has come 
from the public sector. 

The procurement policies of 
government departments have 
pushed the cause of open 
systems and put many of teem 
in tee front line. 

“The UK government’s deci- 
sion to force open systems by 
Legislation has been good for 
the systems integration mar- 
ket.” says Mr Philip Crawford, 


UK managing director of 
Groupe Bull. 

He goes on to say that there 
are other reasons why the 
demand for systems integra- 
tion has grown foster in the 
government sector than in tee 
commercial sector 

“For the last two years com- 
panies have been holding off 
making large investment deci- 
sions because of the recession 
-and obviously the recession 
hits commercial world much 
more than it hits tee govern- 
ment sector.” 

Mr Crawford adds that this 
has depressed tee market - but 
that there are signs that this is 
starting to change: 

“The market has probably 
grown at around 15 per cent 
-when two years ago we 
expected it to be more like 40 
per cent. But it is now being 
driven by the user. The 
demand for systems integra- 
tion is coming from the user 


because they are crying out for 
usable power." 

This demand is manifested 
in the demand to integrate 
desktop PCs into existing 
systems. The PC is obviously 
the best way to deliver usable 
power to the desktop. 

Mr Crawford warns, how- 
ever, that there are dangers: 

“The PC is two different 
tools. If you think of it like a 
car - it is excellent for driving 
around town but it is also 
pretty good on tee motorway. 
Good systems integration 
makes sure that the corporate 
strategy - the motorway - does 
not overwhelm the desktop.” 
he explains. 

Groupe Bull’s systems inte- 
gration strategy, like many 
others, is based on developing 
the right combination of tech- 
nical skills and relating these 
to business problems. 

It also sees the wisdom of 
securing alliances with other 


important players in the mar- 
ket and recently signed an 
agreement with software devel- 
oper Microsoft to integrate PC 
software with its own larger 
systems. 

“This is more than a market- 
ing agreement. We have had to 
work hard to prove to Micro- 
soft that we have the integra- 
tion skills and the support ser- 
vices to do the job,” says Mr 
Crawford. 

T he deal will give Groupe 
Bull advanced access to 
important Microsoft 
developments such as the Win- 
dows NT operating system, 
which looks set to be a leading 
component in future client- 
server systems. 

This level of software is 
increasingly important to the 
success of systems integration 
as indeed is the move to object- 
oriented computing, which will 
help to enforce standards for 


software components. 

Despite this, systems integra- 
tion will never be easy - espe- 
cially as the number of choices 
open to users increases. 

“Users have developed an 
attitude which means that they 
expect information technology 
to support them - whereas a 
Tew years ago they had to put 
up with what they were given. 
But because of openness, there 
are far more decisions to make 
now and it is certainly is not 
getting any the less complex," 
observes Mr Crawford. 

Systems integrators are, 
therefore, in the unenviable 
position or haring to keep up 
with everj* new technology 
development at the same time 
as meeting the growing 
demands of increasingly edu- 
cated users. 

For this reason, systems inte- 
gration is likely to remain an 
expensive option for the fore- 
seeable future. 



The importance ot systems Intonation has grown steacBy since companies began the move towards open 
systems. Integration wffl never be easy - especially as the number of choices for users increases. 


Document image processing: two case studies 

How automation cuts the invoice paper chase 


M atching invoices to 
orders and goods-re- 
ceived documents 
tends not to be a fovourite job 
or a high priority for business 
people, writes John Kaoanagk. 

British Gas North Eastern, 
which has six districts and a 
Leeds headquarters receiving 
200.000 invoices a year from 
8.000 suppliers, has automated 
the paper chase with document 
image processing and has 
reaped considerable benefit 
Paper movement has been 
drastically reduced, people 
holding up the process have 
been pinpointed and cash flow 
has improved. 

The paper chase used to 
involve an order document 
going to a supplier and a copy 
being signed off as the goods- 
received note when tee items 
arrived. Invoices were sent to 
the finance department in 
Leeds, which passed teem to 
the relevant districts to be 
matched against the goods-re- 


ceived notes. These notes and 
the invoices were then 
returned to Leeds for the 
details to be keyed into the 
payments system. The docu- 
ments were finally recorded on 
microfilm. 

Mrs Christine Kelly, invoice 
supervisor, recalls: “There was 
paper flying about every- 
where." 

The invoice unit installed 
software from Image Systems 
Europe on its existing office 
network of ICL personal com- 
puters and Novell network 
software, which was already 
used for basic office automa- 
tion such as word processing 
and spreadsheet processing. 

The PCs were fitted with 
large screens to display full 


images of documents and two 
Fujitsu scanners and three 
Sony optical disc systems were 
added, all supplied by Image 
Systems Europe. One of the 
optical disc drives is reserved 
for copying each day’s work, 
for back-up. 

Goods-received notes and 
invoices are all scanned in as 
they are received from districts 
and suppliers. The order num- 
ber is keyed in and stored with 
each document as the main ref- 
erence point an order number 
includes a code representing 
the district which made the 
order. 

The amounts on the invoice 
are also keyed in and put 
through a validation program 
to ensure, for example, teat the 


figures add up and that the 
VAT has been calculated cor- 
rectly. 

This information has to be 
keyed in because document 
scanning systems handle com- 
plete images and cannot recog- 
nise individual parts of differ- 
ent documents to capture an 
address or total figure. 

When the system receives an 
invoice it uses the order num- 
ber to search for a matching 
goods-received note. If it does 
not find one it automatically 
directs a query to the relevant 
district office where staff can 
access the central optical disc 
system through their own PCs. 

Matched invoices are passed 
automatically to the payments 
system on the region’s ICL 


mainf rame computer. The 
mainframe link is also used to 
retrieve information such as 
supplier details from central 
files. 

The system has brought sig- 
nificant staff savings and 
enabled fewer people to deal 
with tee same amount of work 
while providing better service. 
The paper chase has been 
largely eliminated and key- 
board data entry and verifica- 
tion have been vastly reduced. 

Cash flow has improved 
because more suppliers are 


paid on time. “We no longer 
pay them late - or early.” says 
Christine Kelly. “Suppliers 
would phone to ask for pay- 
ment and it was difficult to 
find tee right hits of paper. We 
now have easy access to all the 
documents and can see if pay- 
ment is due.” 

People's reluctance to check 
goods and sign goods-received 
notes was the biggest problem 
before but the system has got 
to grips with this. "It’s fantas- 
tic in this area,” Mrs Kelly 
says. "Before, we knew we had 


queries but couldn't keep track 
or them. We now know exactly 
where queries are and can gee 
people up to act on them. We 
can now be proactive rather 
than reactive.” 

□ Software details: 

□ Product: Image Systems 
Europe tailors each document 
image and work flow manage- 
ment system to the customer's 
needs. British Gas uses a ver- 
sion called ISE Accounts Pay- 
able, which can match order 
documents to invoices and link 
to accounts payable systems. A 


fax facility is available. The 
system was launched in 1991. 
Number of users: six for ISE 
Accounts Payable: three Brit- 
ish Gas regions, Tesco, Top 
Rank and Woking Borough 
CoundL The company has 55 
document and work flow man- 
agement systems installed in 
the UK and Europe. 

□ Supplier: Image Systems 
Europe, formed as a UK com- 
pany in Sheffield in 1990. Turn- 
over in 1993-94 was up by 48 
per cent at £2.14m. 

□ Price: £100.000-£150,000, 
including software, scanner 
and optical disc system but 
excluding PCs and networks. 

□ Hardware and operating 
systems: Novell networks, 
Unix computers and IBM-type 
PCs running OS/2. 


A better way to manage contracts 


INCREDIBLE, BUT 


A simple document image processing system installed by the pharmaceuticals company 
Medeva looks set for wider use following quick installation and enthusiastic reports from 

staff, writes John Kavanagh 


M edeva, the UK pharma- 
ceutical manufacturer, 
has installed Archis 
software from Bel gian com- 
pany Softcore to manage 
images of contracts, typically 
with other manufacturers, 
licensees and distributors. 

Medeva has installed a net- 
work of five Apple Macintosh 
computers at its offices in 
Leatherhead, Surrey, partly to 
run Archis and partly to sup- 
port office automation such as 
word processing, spreadsheet 
processing and links to the 
company's electronic mail sys- 
tem. 

The entire stock of 930 agree- 
ments. running to 18,000 pages, 
has been entered and all new 
agreements are scanned in 
immediately. 

The paper contracts have 
always been kept in fireproof 
cabinets and a list was main- 
tained through a simple data- 
base system based on the 
Dbase IQ product 


People working on particular 
agreements would consult the 
holder of the list intellectual 
property co-ordinator Gail 
Beale, to see if there were any 
other relevant documents, and 
then hunt them out in the fil- 
ing cabinets. All the docu- 
ments are now on-line to all 
staff in the department 

“It could take hours to get 
through these steps and find 
files, especially if you wanted, 
say, all the agreements relat- 
ing to a particular company," 
says Mr Peter Cozens, head of 
licensing and product acquisi- 
tion. 

“The files were just stored in 
chronological order. We ca n 
now search on many criteria, 
such as company name and 
therapeutic area, so we can 
easily find the history of agree- 
ments in a particular field. 

“The system has improved 
the information we have avail- 
able and our ability to respond 
to different situations." 


It took Gail Beale three 
months to scan-in all the docu- 
ments and assign keywords to 
each one. She and Peter Cozens 
agree that the system is very 
easy to use. A ‘find’ screen is 
presented when a user logs-in 
and a search is generated by 
entering the keywords. 

A ccess is being extended 
to the company secre- 
tary's office in London 
and tee system has attracted 
the interest of other depart- 
ments. 

“We could turn out to be a 
pilot for the whole company in 
document image processing," 
says Gail Beale. “It's a very 
impressive system and I could 
see other parts of the company 
getting considerable benefits.” 
□ Software details: 

□ Archis, a document file 
management package combin- 
ing document images, video 
and data and text files from 
other systems. The latest ver- 


sion, 2.0, was launched in Sep- 
tember 1993. Price; £995. 

□ Supplier. Softcore, the Bel- 
gian developer, framed in 1988. 
The UK subsidiary was formed 
in Uxbridge, Middlesex, in 1992. 
It has 47 staff, including five in 
the UK Turnover in 1993 was 
£L5m_ Number of users: more 
than 200. including more than 
50 in the UK 

Hardware and operating 
systems: Apple Macintosh cen- 
tral processor; Macintosh 
workstations or IBM-type PCs 
running Windows. 


□ Advances in the electronic 
office: see page 5 

□ For details of forthcoming 
FT surveys relating to infor- 
mation technology, see details 
on page 12. 

□ An in-depth review of office 
automation appeared in the 
latest issue of 'Software At 
Work,' the FT’S review of busi- 
ness software, pnblished on 
Thursday, March 10. 



Advent UK, tte commerce (fiuMon oft 
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XVI FINANCIAL TIMES WEDNESDAY MA RCH 16 1994 

Information and communications technology 16 — 


P ersonal Digital Assis- 
tants (PDAs) and per- 
sonal communicators 
represent the nest big com- 
puter market, and for some 
industry observers, possibly 
the last of the potentially large 
market categories for comput- 
ers. 

These small computer 
devices represent the logical 
progression of computer tech- 
nologies as they move from the 
desktop, to portable computers, 
to the lap-top and Dually to the 
so called palm-top. But like 
much pioneering technology, 
the first generation of these 
devices have so far failed to 
meet user expectations. 

However, there are encourag- 
ing signs that the second gen- 
eration of products will over- 
come some of the problems. 

Apple Computer was the 
first to coin the term 'PDA' 
which is rapidly turning into a 
generic name for small com- 
puters with communications 
capabilities. Tandy, which sells 
the Zoomer, sometimes uses 
the term “personal information 
assistant, 1 ' while IBM and 
AT&T prefer the term “per- 
sonal communicator.” 

They all describe a small 


Tom Foremski highlights advances in personal digital assistants 

Potentially large market 
in the longer term 

Like so much pioneering technology, the first generation of these small devices has largely 
failed to meet user-expectations - but a wave of improved products is on the horizon 


computer that can be comfort- 
ably held in the hand or 
slipped into a Jacket pocket, 
with a touch-sensitive screen 
with a pen or stylus input 
device and wireless communi- 
cations capabilities Cor sending 
and receiving electronic mail 
or Eases and transferring files 
to a desktop computer. 

A typical PDA wQl include 
software that consists of a 
word processor, a diary for 
scheduling appointments, and 
a database to store information 
such as phone numbers and 
addresses. 

The first PDAs to hit the 
market were the Apple Newton 



Tulip Computers' now pocketbook: weighing Just 48» and the size of an 
A5 notepad, the pocketbook (model 386sQ combines the advantages of 
an etectnmc organiser with the power and sc re e n benefits of a standard 
PCX tt finks easily Mo a larger desktop computer at the office. 


MessagePad, Tandy’s Zoomer 
and AT&T’s Eo Communicator. 
Each has taken a slightly dif- 
ferent approach but all are 
united by the fact that their 
sales have been far short of 
stellar. 

The Newton MessagePad rep- 
resents the most ambitious 
technology, ft includes sophis- 
ticated handwriting recogni- 
tion software that turns the 
"digital ink” that is written by 
the user with a special stylos, 
into computer text While the 
handwriting recognition tech- 
nology is state-of-the-art and 
works better than most previ- 
ous handwriting recognition 
technologies, its performance 
has not impressed most users. 

The handwriting recognition 
of the Newton tails to recog- 
nise many words, resulting in 
a sometimes comical re-inter- 
pretation of the users words, as 
satirised recently in the Doo- 
nesbury comic strip. 

The Newton also has prob- 
lems with foreign languages, 
especially German where aver- 
age word lengths are IP charac- 
ters instead of the six charac- 
ters average for English words. 
Newton has also been faulted 
for its communications links 
which do not perform as well 
as expected. 

The Tandy Zoomer, also mar- 
keted as the Z-7000 by Casio, 
has avoided, to a large degree, 
the quagmire of handwriting 
recognition. It cannot recog- 
nise cursive writing but it does 
have a very limited ability to 
recognise printed characters. It 
prefers to store images of the 
user’s notes instead of perform- 
ing the difficult handwriting 
interpretation. 

The AT&T Eo Personal Com- 
municator packs more technol- 
ogy into its sleek box than 
Newton or Zoomer, but it is 
twice the price. Unlike the oth- 
ers, it includes a 20-megabyte 
hard drive that allows it to 
store much more information. 
But it suffers horn a short bat- 
tery life -about two hours 
-and you really need to 


upgrade the machine's mem- 
ory to use its fax and e-mail 
communications features. 

All the leading PDAs have 
been criticised for being too 
slow and they all use different 
operating ■ systems which 
makes it difficult to produce a 
decent number of software 
applications. 

The Newton has its own pro- 
prietary operating systems, the 
Zoomer uses the Geos software 
Dorn GeoWorks, and the Eo 
device uses the PenPoint oper- 
ating system. 


T: 


his multiplicity of operat- 
ing systems makes life 
difficult for software 
developers. They have to try to 
guess which device will sell 
enough units to create a large 
enough potential market to 
justify the expense of applica- 
tions development And with- 
out sufficient quantities of 
third-party software, the PDAs 
face a limited appeal. 

Despite the Initial problems 
that have beset the firstgener- 
ation PDAs, the second genera- 
tion devices promise improve- 
ments and new features that 
will make them more useable 
and hopefully will fulfil the 
large unit sales expectations of 
market researchers. 

Apple, for example, is rede- 
signing the Newton to add bet- 
ter communications capabili- 
ties, and an improved 
operating system. Handwriting 
recognition is also improved 
but, in what Is an admission of 
a less than perfect system, the 
next Newton will have the 
option to store images of a 
user's notes without convert- 
ing the handwriting to com- 
puter text 

AT&T, stung by the disap- 
pointing sales of the Eo Com- 
municator. is redesigning the 
system, lowering the price and 
making it more of a mobile 
telephone with computer fea- 
tures. 

Other leading computer com- 
panies are also p lanning pda 
introductions. Compaq Com- 


puter, Motorola, IBM, and Sony 
are Just a few of the big compa- 
nies that will introduce PDA- 
type devices later this year. 

IBM's plans include a variety 
of PDAs designed for specific 
tasks, such as one model 
equipped with voice recogni- 
tion for dictating documents 
and using a pen-input device 
for editing. Another IBM PDA 
is designed for e-mail commu- 
nications, allowing users to 
hear messages spoken in a 
computer-generated voice and 
to dictate a response. 

PDAs could benefit greatly 
from a standard user interface. 
General Magic, a Silicon Val- 
ley-based company, earlier this 
year unveiled its Magic Gap 
user interface which is specifi- 
cally designed for PDA devices 
with communications capabili- 
ties. The Magic Cap interface 
features a tiny graphical user 
interface using a buildings 
metaphor. Users navigate 
through the systems to reach 
different applications by 
choosing different types of 
buildings such as a post office, 
for example, to send messages. 

Magic Cap is designed to 
work with on-line services 
such as CompuServe or Ameri- 
ca Online and specialised 
on-line services that use the 
companion Telescript technol- 
ogy. Because of the small stor- 
age capabilities of PDAs, 
on-line services are becoming a 
key factor in the success of 
PDAs. They will offer data 
storage services to PDA cus- 
tomers and also carry e-mail 
and faxes. 

AT&T recently announced 
its Pers onal .ink on-line service 
that wlU support PDAs, and 
Apple's eWorld on-line service 
will support Newton users. 

It is said that you can always 
recognise the pioneers by the 
arrows in their hacks and 
although the first generation erf 
PDAs collected a fair number 
of arrows, it is only a matter of 
time before the next genera- 
tions become ubiquitous and 
useful devices. 



Apple's Newton M essagePad represents the most ambitious technology in the PDA fiekL tt indudes 
sophisticated handwriting recognition software that turns the “tflgital ink" that la wrttton by the user with a 
special stylus, mo computer test Whke the handwriting recognition technology is state-of-the-art and works 
better than most previous teaxlwr iHn g recognition tachnotogtea, the perfor ma nce of early models was 
crificteed - but enhanced products am on the way. 


Technology developments in Canada 


The clear message: 
innovate or perish 


Canada’s successful IT 
companies demonstrate 
that to survive they must 
be show greater speed 
and originality than their 
US competitors, writes 
Geof Wheeiright 

W hen you live next to a 
country as large as 
the US and want to 
succeed in the information 
technology sector, you have to 
innovate to survive. 

That is the story behind Can- 
ada's best personal computer 
and telecommunications com- 
panies - which seem to win 
new business by creating speci- 
alised solutions for surpris- 
ingly common challenges. 

Take the success of Cana- 
dian personal computer fax 
software maker Delrtoa, which 
hit the world markets in a big 
way with its WinFax software 
for Microsoft Windows, a few 


years ago. Many companies 
had tried to produce software 
which, allowed users to fax doc- 
uments direct from their PC 
screens, but none had ever 
really achieved much success 
with it until *hi* Canadian 
company came along. 

By closely identifying a need 
for simple design, low cost and 
an ability to work with dozens 
of popular personal computer 
fax modems, Delrina almost 
created the market for Win- 
dows-based fax software. 
Today it dominates that mar- 
ket It has been successful in 
building on the reputation of 
WinFax with a range of form- 
design products and fax addon 
systems, and operates in a 
number of countries including 
a subsidiary operation in the 
UK. 

Likewise, the Toronto-based 
Vivid Group identified at an 
early stage the potential of 
"virtual reality" technology. Us- 
ing its implementation of this 


Idea, it started building enter- 
tainment and education 
systems. 

Today, the company's Man- 
date System, an interactive vir- 
tual reality product, allows 
users to indulge in a variety of 
"virtual” experiences including 
virtual ice hockey (something 
guaranteed to make it a big hit 
in Canada), virtual volley ball 
or soccer, and even a virtual 
swim in the shark-infested 
waters of Australia’s Great 
Barrier Beet The Vivid Group 
recently won the ultimate 
accolade for its virtual reality 
technology when it was 
selected to provide a key ele- 
ment of Paramount Pictures' 
Virtual Star Trek Transporter 
Experience. 

According to The Computer 
Paper, the founder and pub- 
lisher of Canada’s largest com- 
puter publication, many suc- 
cesses of this kind do not stay 
Canadian for very long. Doug 
Continued on next page 


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* 


FINANCIAL T. M rew EPNlaDAY MARCH 16 1994 


Information and communications technoloi 




VIRTUAL REALITY 



1 

perish 


Interaction of created worlds 


Hi 


Vttfrja 


M any advances in com- 
puter software have 
their origins in play. 
From the early chess pro- 
grams, which were used to 
demonstrate the power of elec- 
tronic brains in the 1950s, to 
the multimedia shoot- 'em- up 
video games of today, program- 
mers have used games to push 
the envelope of software techr 
oology. 

Advances in high-resolution 
graphics, data compression, 
animation and user interface 
design have often been pio- 
neered in games software 
before making the transition to 
business. Games and other lei- 
sure-based uses of computers 
have also laid the ground rules 
for computer-generated, alter- 
native worlds or what has 
come to be called virtual real- 
ity (VR). This new strain of 
software now promises to open 
exciting applications in busi- 
ness. 

“One way to see VR is as a 


Optimists see virtual reality as offering a richer form of 
communication, but pessimists see it as a disturbing retreat from 
the grimness of real life. Here, Philip Manchester looks at one of 
the likely growth markets of the next decade 


magical window on to other 
worlds from molecules to 
minds. Another way to see VR 
is to recognise that in the clos- 
ing decades of the twentieth 
century, reality is disappearing 
behind a screen,” writes 
Howard Rhetngold in his book. 
Virtual Reality. 

It could be argued that any- 
one who sits in front of a com- 
puter all day to do their job, 
already spends much of their 
life in VR. Even a simple pro- 
gram like a spreadsheet can be 
engrossing enough to its user 
to suspend physical reality. 

The convergence of comput- 
ers and communications 
pushes this even further. Bulle- 
tin board systems and net- 
worked chatlines are now well 


, - — v 

-- 





Ryfng the network: this i 


i that «rii enable tele p h one 


angbieora to have an overview of complex telecommunication struct ur ed. 
This virtual reality desktop system, now being developed by BT, slows 
users to Interact with a thrve-dknensiona] model of the network 


established in the US and 
growing fast in Europe. Net- 
work services like the Internet, 
CEX and CompuServe have cre- 
ated a multitude of widely-dis- 
persed, electronic communi- 
ties, each with thetr own 
culture. The phenomenon has 
spawned a new language, a lit- 
erary sub-genre (cyberpunk) 
and the idea of an ultimate vir- 
tual nirvana called cyberspace. 

There is, of course, not just 
one virtual reality, but many. 
At one extreme, it is possible 
to become immersed in VR by 
using an enclosed helmet with 
a built-in display and sensor 
devices which can pick up 
body movements. 

At the other end of the spec- 
trum, a serious desktop flight 
simulator such as Microsoft's 
package for the PC, can be just 
as convincing. 

VR purists argue that 
immersion is the only genuine 
VR experience and there is 
research into all-over body 
suits which can talc** thig to its 

logical conclusion. The aim is 
that such a suit should act 
both as sensing device to trans- 
fer body movements to the 
computer and also to convey a 
sense of touch. 

Sensor suits to transmit 
body movement are already 
available. At the Virtual Real- 
ity Expo show in London in 
February, for example, the UK 
company Virtual Presence 
Launched a 750 gram. Lycra 
suit equipped with 96 sensors, 
And there are others available 
in the US. 

Work is also under way to 
build systems which can 
respond to objects in VR and 
tr ansmi t this sensation back to 
the user. Researchers at the 
University of North Carolina, 
for example, have built a 
device which can be used to 
manipulate images of mole- 
cules with a fUIl feedback sys- 
tem. The Argonne remote 
manipulator (ARM) is used to 
explore possible combinations 
of molecules for new anti-can- 
cer drugs. If the properties of 


Search for venture capital 


Continued From previous page 

las Alder, who rounded The 
Computer Paper seven years 
ago. says that moderate suc- 
cess is quite commonJy fol- 
lowed by US corporate acquisi- 
tion. 

He says tliat even raising ini- 
tial venture capital is a tough 
slog Tor most Canadian devel- 
opers and entrepreneurs. 
“There just aren't enough mil- 
lionaires in Canada," he says. 
And even when Canadian com- 
panies do achieve moderate 
success, there is no “peer 
group of aspiring billionaires” 
willing to spend the money, 
time and energy to help grow 
the Canadian companies 
-"most companies don't make 
it" Alder says. 

And when they do make it, 
they ofteu become American 
companies in due course. Take 
the case of Softimage, the Que- 
bec-based computer animation 
specialists, recently acquired 
by US software house Micro- 
soft for $l30m. 

In this case, Softimage will 
be allowed to stay in Quebec 
and pursue its existing busi- 
ness - while its technology 
will also be incorporated in 
future Microsoft products. 

Microsoft has been quite 
active in the Canadian technol- 
ogy sector. In 1991 it purchased 
Consumers Software, another 
Canadian company, and turned 
it into its first big North Amer- 
ican research and development 
facility outside the United 
States. 

Based in Vancouver, it now 

employs more than 100 people 
and has been renamed Micro- 
soft Workgroup Canada, 


“We see a bright future for 
Canadian business and the 
local personal computer indus- 
try,” says Mike Maples, execu- 
tive vice-president at Micro- 
soft. 

“The Canadian personal 
computer hardware and soft- 
ware market is one of the most 
advanced in the world." 

But being a Canadian per- 
sonal computer hardware man- 
ufacturer is a tougher busi- 
ness. Ask, for example, 
Benjamin K. Tam, president 
and chief executive of Bur- 
naby, British Columbia-based 
Darius Technology. 

Tam has been making and 
selling personal computers in 
Canada for more than six 
years, but admits that it is a 
tough market - particularly 
when many Canadians can 
shop quite easily for US com- 
puters over the border. 

T am says that the recent 
Canada/US/Mexico North 
American Free Trade 
Agreement (Nafta) does not 
make this job any easier. 

“In the Canadian market, we 
are affected by the economic 
situation of our giant neigh- 
bour, the US, as well as by the 
agreements and government 
policy of the Canadian govern- 
ment," he says. 

“Nafta could affect os 
severely in the high technology 
sector. Although we are known 
to be strong in the telecommu- 
nications side, we are not at all 
competitive (in the computer 
market) because the sheer vol- 
ume is not there in Canada.” 
One solution has been to sell 

recently-developed products, 
in cl udin g a network file server 


system based on Digital Equip- 
ment's powerful Alpha AXP 
computer processor, in both 
the US and Canada. 

As a result, Tam now boasts 
that 22 per cent of his compa- 
ny's annual sales are in the 
US, with the rest in Canada. 
And in the near future, he is 
expanding to the Far East - a 
move becoming increasingly 
popular among Western Cana- 
dian nompanles . 

Tam recently signed a $l-5m 
joint venture agreement with a 
state-owned enterprise in 
China. It will begin manufac- 
turing computer displays in 
Shanghai this summer. Tam 
says that these products are 
being made for both the Far 
East and North American mar- 
kets. 

In short, while Canada has 
the resources and the talent to 
create world-class high tech- 
nology companies, H may have 
to move quite quickly to sell 
products outride its borders if 
these talents are to survive. 

With a domestic market of 
only slightly more than 25m 
people, spread over thousands 
of miles, this is perhaps not 
surprising. 

In berms of land mass, Can- 
ada is the second-largest coun- 
try in the world - and distribu- 
tion costs can be high. But 
judging by the successes of 
Delrina and the Ottawa-based 
Corel Corporation (developer of 
the popular Corel Draw soft- 
ware and now owners of the 
Ventura Publisher desktop 
publishing suite)Canadian 
companies can succeed on the 
world market 

The secret is to be there from 
day one. 


the molecules do not allow 
them to fit together, the resis- 
tance is conveyed track to the 
user as a physical force. 

There is also some specula- 
tion in fringe literature about 
the possibility of direct connec- 
tions from the human brain to 
VR systems - thus eliminating 
the need for a suit 
At a more mundane and 
practical level, less intrusive 
VR software is now within the 
reach of the PC user - mainly 
for games - but increasingly 
for other activities such as 
mall order shopping or travel 
planning. Desktop computers 
are now powerful enough to 
handle high-quality, 
three-dimensional graphics and 
convey an impression of space. 
It is now possible to walk 
around buildings which do not 
exist, fly a jumbo jet through a 
thunderstorm and visit places 
on the other side of the world 
without leaving your desk. 

T he concept of VR has, of 
course, been around for 
some time. The well-es- 
tablished flight simulator, for 
example, has been used for 
training pilots since the early 
days of flying. More recently, 
simulated environments have 
been devised for other training 
activities - such as working in 
hazardous environments. 

What marks out the new 
generation of VR software is 
that it goes beyond merely rep- 
resenting the physical world - 
like a flight simulator - or 
creating a possible future with 
a spreadsheet VR enables the 
creation of worlds which do 
not exist and allows interac- 
tion with them. 

This has spawned a genera- 
tion of software tools which 
can help to visualise data in 
new ways. 

Superscape, a VR tool from 
the UK company Dimension, 
has been used, for example, to 
show the effects of drugs on 
the human body. The software 
allows a user to navigate 
around a representation of the 


body and see the effect of a 
drug down at the molecular 
leveL 

“The market is only now 
becoming aware that VR prod- 
ucts are available for low-cost 
computing Once their eyes are 
opened to it, the ideas come 
rushing in. We have about 30 
applications built with Super- 
scape and most of them have 
come from customers," says 
Mr tan Andrew, managing 
director of Dimension. 

In addition to the drug simu- 
lation VR, which is being used 
by SmithKIine Beecham, 
Superscape has been used to 
build VR environments as 
diverse as a telecommunica- 
tions network simulation for 
British Telecom and an exhibi- 
tion modelling system for 
Dragon Exhibitions. 

Although Superscape can 
support the more exotic VR 
peripherals, such as headsets 
and sensors, Mr Andrew says 
that the demand is for applica- 
tions which are non-immersive 
and based on the desktop: 
“Immersive VR was what 
caught people's imagination in 
the first place - but most peo- 
ple are uncomfortable with it. 
Fd say 90 per cent of what we 
do is for the desktop. But we 
have left room to support the 
other devices and can offer 
users an upgrade path when 
they need it," he explains. 

Faberushl, another UK VR 
specialist has built a multime- 
dia virtual exhibition system 
(VES) which re-creates the 
sound, look and feel of an exhi- 
bition floor. Virtual visitors to 
the show can walk up to a vir- 
tual computer screen and see a 
demonstration of a product 
“The interaction between 
people and machines is what is 
important about VR. It lets you 
create spatial relationships 
which is very appealing - peo- 
ple understand the rules of 
space,” says Mr Perry Huber, a 
consultant with FaberushL 
“Proper VR allows you to 
move around In free form - 
like surrogate travel.” 

Mr Huber also sees VR 
changing the way we use com- 
puters and improving the user 
interface: “One of the obvious 
things in the business environ- 
ment is that you can get way 
from simple graphical user 





The virtual reality office; the £25m Virtuosi project Is developing a computer- generated environment where 
users can collaborate, regardless of location. The computer screen on their desk wiB not only give the latest 
financial Agues, but it will provide a window on to a virtual office, spanning the whole organisation. A user will 
be able to move about this virtual office to interact and taft to virtual colleagues. The project involving a 
consortium of universities and companies, led by BT, is supported by the UK government. 


interfaces. The three dimen- 
sionality lets you bring a con- 
text to data and visualise it 
better." 

Data visualisation in three 
dimensions might seem far 
fetched. But imagine explain- 
ing what a spreadsheet pro- 
gram could be used for ten 
years' ago. 

VR offers the same potential 
to change the way data is 
viewed and presented. 

Software developers are 
already experimenting with 
the possibilities. Maxis, a US 
software company, has built a 
VR package which simulates 
the Wall Street Stock 
Exchange in the form of a 
casino. Prospective investors 
can risk their funds and enjoy 
themselves at the same time. 

The market for VR products 
like these is expected to grow 
quickly over the next few years 
and an increasing percentage 
of revenues will come from 
commercial applications. Mar- 
ket researcher Frost & Sullivan 
(F&S) forecasts a growth rate 
of 65 per cent a year in the US 
market, with revenues exceed- 
ing a billion dollars by 1997. 

Leisure-based applications 
are expected to dominate 
throughout this period and 
show the largest growth. 
Another US market researcher 
- 4th Wave - estimates that 70 
per cent of 1993 revenues for 
VR products came from the 
entertainment sector and this 


will increase to 76 per cent by 
1997. 

But commercial applications 
of VR technology on the desk- 
top are likely to be the most 
profitable - with training, data 
visualisation and computer- 
aided design leading the way. 
Specialised commercial appli- 
cations which can harness the 
power of VR software will sell 
at a premium. 

The parallel growth of high 
bandwidth telecommunications 
and multimedia technology - 
both of which provide the 
infrastructure for VR applica- 
tions - promises to make the 
market for VR software one of 
the most exciting growth areas 
into the millennium. 

VR could also precipitate 
change in wider context. 

The pessimistic view is that 
it will lead to the disturbing 
future described by Aldous 
Huxley where people hide from 
the grlmness of the physical 
world at the ‘feelies’. The opti- 
mistic view is that VR will 
enable humans to find a richer 
form of communication, unim- 
peded by the laws of the real 
world. 

One thing is clear, an 
increasing amount of commu- 
nication between humans will 
be mediated by computer soft- 
ware and, even when this is 
not called VR, that is exactly 
what it will be. 





%sm 


. • - I*!*.; i '.y < "l*y ' *'>!*:. 1 





Success for a VR 
software developer 

The City 
gives its 
backing 


T he business opportunities 
that virtual reality soft- 
ware technology can offer 
were underlined recently by 
the public flotation of the UK 
company. Virtuality Group. 

It came to the London Stock 
Exchange in October 1993 with 
a share price of I70p, valuing 
the company at £44m and turn- 
ing its founders into multi-mil- 
lionaires, unites Philip Man- 
chester. 

Since then, the share price 
has doubled and Virtuality is 
seen as a hot investment 
Started as W Industries in 
1987 in the classic computer 
industry style - in a garage on 
the outskirts of Leicester in 
the UK - Virtuality earned rev- 
enues of about £5m last year 
from sales of VR equipment 
and software, placing it among 
the world leaders of the emerg- 
ing VR industry. 

Its customers include Mat- 
sushita, MCA Universal Stu- 
dios and games company Sega. 

Virtuality has also attracted 
investment funds from IBM 
and Motorola, and has ambi- 
tious plans in the VR software 
industry. 

C o-founder and managing 
director Dr Jonathan Wal- 
dron Is reported as saying 
he wants the company to be 
the Microsoft of VR. 

Virtuality's current products 
are at the high end of the VR 
market. The company concen- 
trates on what it calls leisure 
products - although its defini- 
tion includes education appli- 
cations, as well as advertising 
and promotional tools. 

Virtuality's primary product 
is an ‘immersive' arcade game 
machine which sells for £25,000 
upwards. 

Sega plans to install Virtual- 
ity games in the 'super-ar- 
cades' it is building world- 
wide. 


The Picasso system 
AT&T's Picasso still-image 
phone, above, allows users to 
send fuH-colour, TV -quality still 
pictures, using an ordinary 
phone line - while simulta- 
neously talking over the same 
line. The system, priced at 
$3,295, takes about ten seconds 
to transmit a tingle Image. The 
intended market is for engineers 
and other professionals needing 
fast transmission of detailed 


Clever software helps cut the cost of virtual reality 

A new world on your desktop 


The device looks rate an office 
phone, but contains a data 
modem and transceiver. To 
transmit a picture, users plug In 
a video camera, photo compact 
disk player or digital still cam- 
eras. On the receiving end, & 
computer monitor or TV set dis- 
plays the picture. 


O ne of the most 

Important recent 
developments in 
Virtual Reality (VR) is the fall 
in prices of hardware and 
software packages. 

VR systems demand large 
computer resources and 
high-quality input and output 
- which has been expensive 
until recently. 

But advances in hardware 
technology, such as tester PC 
processors, larger capacity 


storage and graphics software 
have made desktop systems 
possible. 

The most important element 
Is the clever software which 
is needed firstly, to build a 
virtual reality to suit a 
specific need and, secondly, 
allow a user to vlstt and 
inter-act with it. 

UK-based software developer 
Dimension sees a growing 
opportunity In the emerging 
commercial market for VR 


tools on the desktop. 

Its Superscapc package, 
which sells for around £3,500, 
can be used to build specific 
VR environments on a desktop 
computer. 

The package has a broad 
range of users from British 
Telecom, which has built a 
virtual network with 
Superscape, to the Shepherd 
School, which is using VR to 
help children with learning 
difficulties. 


One of the more exciting 
applications or Superscape 
is Tyne and Wear 
Development Corporation's 
creation of VR model of the 
£180m Quayside development 
in Newcastle. 

The VR Quayside Is being 
used to view how the 
development will look in 
advance and sell it to 
prospective investors. 

Philip Manchester 


r* 


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FINANCIAL u^nNRSPAY MARCH 16 19gj 


Information and communications technology 18 

FACTORY OF THE FUTURE 


A central link in the chain 


A fter 20 years or dramatic 
developments in the 
infonnatKM) technology 
used by manufa cturers - from 
the earliest computer-aided 
design systems to modern rela- 
tional databases and shopfloor 
management systems - there 
is no let-up in the pace of 
change. 

Information technology <TF) 
vendors still see plenty of 
opportunities to fulfil the 
changing needs of manufactur- 
ing companies, while the cus- 
tomers are reacting to the dis- 
appointments of the past by 
taking steps to ensure their IT 
needs really are met in future. 

It is partly because of past 
disappointments, and the fact 
that previous investments are 
no longer compatible with 
newer technologies, that 
spending on IT by manufactur- 
ers remains a high priority. 

According to a MORI survey 
last month for the ASK Group, 
developers of business soft- 
ware. and the accountants Coo- 
pers & Lybrand. 82 per cent of 
100 companies picked at ran- 
dom from the UK's top 1,000 
manufacturers expect to invest 
heavily in IT in the next five 
years - and 60 per cent of man- 
agers expect to spend more 
than £lm. 


Most of Britain’s leading manufacturing companies expect to invest 
heavily in information technology in the next five years, reports 
Andrew Baxter. The most popular planned investments are 
manufacturing management systems 


The most popular planned 
investments are manufactur- 
ing management systems, 
where 73 per cent plan to 
spend money, and supply chain 
systems to improve perfor- 
mance, where 62 per cent 
expect to invest 
This year's Computers in 
Manufacturing Show, at the 
National Exhibition Centre, 
Bir mingham , from November 
22-24, will demonstrate some of 
the state-of-the-art IT products 
seen by industry as a priority 
for their broader business 
needs. Examples are virtual 
reality and rapid prototyping 
tools to improve and accelerate 
product development, and just- 
in-time software which allows 
manufacturers to operate lean 
production techniques. 

T hese and other technol- 
ogy developments now 
becoming available pro- 
vide some clues as to what will 
be the IT needs of the factories 
of the future. 

Mr Graham Williams, man - 
aging director of AT&T istel's 


manufacturing division, 
believes the next five years 
could be exciting because of 
the products which IT vendors 
are offering industry in order 
to help to tackle key manufac- 
turing problems. 

The need for manufacturers 
to get closer to consumers has 
spawned the concept of the 
extended enterprise in which 
not only suppliers, but also dis- 
tribution. is included. For 
example, says Mr Williams, IT 
can be used by brewers as a 
means of viewing the hop- 
grower and also the public 
house as part of its enterprise. 

Similarly, the generation of 
electronic point-of-sales data 
can produce a works order, and 
in turn create all the orders for 
materials and sub-assemblies. 
This would aid the lean pro- 
duction process, as manufac- 
turers would only be making 
what their customers were 
buying. 

All the technology to do this 
exists, says Mr Williams. 
Indeed, it is already happening 
to some extent in the food 



Information technology vendors stffl see plenty of opportunities to fOH9 the changing needs of manufacturing 
companies. Above; an aerospace engineer usee a power desktop Compaq PC, the Deskpro 486/33L, to cany 
out computer-aided design and engineering applcations. 


Industry, and win start to hap- 
pen very quickly in the process 
industries. 

Mr Cliff Shuker, managing 
director of AT&T Istel's Rover 
division, sees an increasing 
need for IT applications that 
can be applied horizontally 
across processes rather than 
simply used to improve the 
performance of individual 
functions or departments. 

Also, as customers increas- 
ingly dictate what happens In 
Factories, they will use IT to 
inject their requirements 
straight into manufacturers’ 
production schedules. More- 
over, the development of mas- 
sive databases provides the 
basis for neural networks 
which can aid decision-making 
by tapping into past experi- 
ence. 

IT users in manufacturing, 
too, have been thinking about 
the next steps in their use of 
manufacturing technology. 
The most important initiative 
among users is the ATT project 
- advanced information tech- 
nology in design and manufac- 
turing - which is headed by 
Daimler-Benz and stems hum 
users' demands tor more effec- 
tive IT and better integration 
of systems at different sites. 

The pilot phase for the proj- 
ect, which comprises 16 aero- 
space and automotive compa- 
nies from six countries, began 
last November and the overall 
aim is to strengthen the com- 
petitiveness of key European 
industries by three consecutive 
action in three areas. 

F irst, the initiative will 
seek to establish, a con- 
sensus among European 
industrial users of IT on then- 
most important future require- 
ments for design and manufac- 
turing. 

Secondly, it will seek an 
agreement on these require- 
ments with the IT vendors, 
and, thirdly, an IT research 
and development initiative will 
be launched to support the 
commonly-agreed require- 
ments. 

Significantly, the initiative's 
backers say they want it to 
become a substantial user 
force recognised by the IT com- 
munity, to ensure that future 
products meet users' require- 
ments. 



Two other projects, combin- 
ing users, vendors and univer- 
sities, underline further priori- 
ties for the development of IT 
in the Factories of the future. 
Just before Christmas, Craw- 
ley-based Reflex Manufactur- 
ing Systems, a subsidiary of 
Rolls-Royce Aerospace, won 
approval from the European 
Union for a project under the 
Esprit programme known as 
Discrete Cell Control- 

Over the past five years, the 
adoption of manufacturing 
cells has grown rapidly in 
industry because of their con- 
tribution to flexible manufac- 
turing, reducing work-in-prog- 
ress and enhancing teamwork 
ami multi-skilling. 

Helped by an Ecu 1.3m 
Esprit grant, project leader 
Reflex and its partners will, 
over the next 18 months, 
develop an open applications 
framework aimed at providing 
a firm foundation for all cell 
control systems. 

Reflex, a software house 
which specialises in manufac- 
turing control and shop floor 
scheduling systems, says the 
DCC wifi provide the means to 
design and build systems, and 
empower autonomous cell 
operation, while enabling the 
cell to co-operate with other 
production, and engineering 
teams. 

Mr Terr; Jones, managing 
director of Reflex, says the aim 
is a standard cell control envi- 
ronment which different IT 
suppliers can plug into effi- 
ciently. Internal and external 
customers would also be able 
to view where their products 
are in the ceil 

The applicability of DCC will 
be evaluated through pilot pro- 
jects at two of Reflex' partners 
in the scheme, Intracoin, the 
Greek electronics and telecoms 
equipment company, and the 
Odense Shipyard in DenmarK 

O dense, which has moved to 
cell manufacturing to produce 
super-tankers is also involved 
in a project being carried out 
under the auspices of the five- 
continent Intelligent ManuFac- 
turing Systems Initiative. This 
aims to work out how concur- 
rent engineering - interdisci- 
plinary teamwork to accelerate 
product development - can be 
carried out in a global manu- 
facturing context 

TransTec, the Birmingham- 
based specialist engineering 
group, is leading the European 
side of the project Like the 
Reflex project, it aims to 
design an architecture - in 
this case of a CE system for 
global, multi-site application. 



Keeping the goods mowing; Band Three Radio fa specifically designed for fleet convnunlcatkjns between 
vehicles and their base. In addition to voice communications, ft provides a range of data fadSltes such as the 
RacSotext service, featured above, allowing rapid transmission of text messages and report# 








Stock control: in Bristol, a Rolls-Royce Aerospace engineer uses a recently installed Reflex computer system 
to check the inventory of fabricated aero-engme products. Reflex Manufacturing Systems, based in Crawley, is 
a software house which specialises in manufacturing control and shop Root scheduling systems. It is a 
subsidiary of Rolls-Royce Aerospace. 



FAST SOFTWARE DEVELOPMENT 





ITALIAN TELECOMMUNICATIONS HAVE NO FRONTIERS 

Sirti offers integrated solutions ranging from longdistance interconnections 
to access networks and management systems. 

Sirti has established companies in Italy, France ; United Kingdom, Portugal, Spam*../, 
Argcn rmASmidi Arabia and opemteSinTnrmy othcr comtncs 




fiti'&r. 




3Wm : f 




Finding solutions takes time 


I n the ultra-competitive busi- 
ness world of the 1990s, a 
company’s ability to create 
new information systems rap- 
idly is a pre-requisite for sur- 
vival. 

The key Is to find ways to 
build application software 
which are both flexible and 
scalable. Object-oriented com- 
puting, which sees an informa- 
tion system as a set of self-con- 
tained components, is the most 
promising approach and it is 
steadily gaining favour with 
both software developers and 
users. 

Fast software development 
is a priority for both groups. A 
survey of delegates to last 
October's ‘Objectworid’ confer- 
ence in the OK. for example, 
cited “flexibility to change" 
and “reduced time to market" 
as the two main reasons for 
adopting the object-oriented. 

Object-oriented computing is 
widely acknowledged to be the 
future direction for software 
development and most soft- 
ware developers have pledged 
their allegiance to the cause. 
The Object Management 
Group (OMG), an industry 
organisation which promotes 


Object-oriented computing is widely 
acknowledged to be the future direction for 
software development. But discovering 
ways to build software fast is a painstaking 
process, says Philip Manchester 


object-oriented computing, 
now claims 370 members and 
points to growing attendance 
at shows and exhibitions. 

The object-oriented 
approach is malting the run- 
ning at both extremes and is 
central to any debate on speed- 
ing up the production of soft- 
ware. 

T here are several reasons: 
□ Firstly, object-ori- 
ented systems are built 
from sets of components which 
can be re-used elsewhere. 

This speeds up the develop- 
ment of new applications and 
makes existing ones easier to 
maintain. 

□ Secondly, object-oriented 
systems operate In a way that 
makes software “portable' 1 to 
other platforms and preserves 
investment in application soft- 
ware. 

□ Thirdly, objects reduce 


the complexity of applications 
software by enforcing tight 
design disciplines. 

□ Most importantly, object- 
oriented development tech- 
niques make it easy to build 
prototype systems to demon- 
strate to users - which is 
widely acknowledged as one of 
the keys to speedy application 
development 

“I think rapid application 
development is as much about 
tiie approach as it is about the 
tools you use,” says Mr Vic 
Morris, UK managing director 
of tools specialist Powersoft. 

“As far as possible you want 
to break the application down 
to make it easier for end users 
to do it themselves. 

*Tf you look at what many 
users have done with their 
PCs -building complex appli- 
cations with spreadsheets, for 
example - you can harness 
that talent,” he goes on. 


Thinking of applications in 
terms of objects is the key, 
according to Mr Morris. 

"In the past, we viewed 
applications as a set of func- 
tions like, say. an order pro- 
cessing system. It was very 
structured. Now with objects, 
we can think in terms of busi- 
ness processes and put in place 
applications which can sup- 
port them,” he explains. 

Mr Morris also places 
emphasis on the “scalability" 
of applications. This means, 
for example, an application 
program built for two or three 
users on a small network 
should be able to cope with 
hundreds -or even thousands 
- of users on a much larger 
system. 

“We have recently re-posi- 
tioned our Power builder tool 
set to reflect this. So you can 
start with a cheap desktop ver- 
sion and move up to a fall 
networked version and keep 
the same applications," Mr 
Morris says. 

Other tool vendors have 
taken a similar approach 
because it can speed up pro- 
duction of larger systems if 
Continued an foring page 


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NAME 

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COMPANY ADDRESS 


TITLE 












FINANCIAL TIMES WEDNESDAY MARCH 16 1994 


Information and communications technolo 












NEWS IN BRIEF 

„.j Most finance 
directors are 
dissatisfied 
with data 
management 


Despite the widespread 
acceptance or information tech- 
nology, more than half of the 
finance directors in a recent 
poll of top companies are still 
dissatisfied with the quality of 
their current information man - 
agement 

This is one of the findings of 
a survey by the independent 
research group, MRD, which 
targeted financial directors 
from 100 leading companies in 
the OK. 

While more than half the 
companies are now using their 
own internal IT department’s 
resources to develop their 
strategies for information tech- 
nology, only 13 per cent say 
they use an external IT 
resource. 

Together, these companies 
represented an investment in 
IT of more than £175m. 

The survey, commissioned 
by European Software Publish- 
ing (ESP), says that 96 per emit 
of respondents felt that per- 
sonal computers had made 
their work more productive, 
but the time-factor - not 'tech- 
nofear’ - was seen as the great- 
est restraint on the wider use 
of technology. 

“Even though the technology 
is sitting on their desks, still 
relatively few managers are 
using the communications and 
information-sharing capabili- 
ties of information technol- 
ogy," adds the report 

“Large amounts of their day 
are spent in communicating - 
meeting, telephoning, and so 
on - with their workgroup col- 
leagues, but few are folly using 
technology to support and 
enhance these activities.'* 

Afore details on the ESP 
Report from Sarah Howe, A 
Plus Group on 0753 790 700. 

Outsourcing 
contract with Ford 
of Europe 

Ford of Europe’s parts and ser- 
vices operations division has 
signed a five-year outsourcing 
contract with Computer Sci- 
ences Corporation (CSO, one 
or the world’s leading suppliers 
of IT services. 

CSC will provide Ford with 
IT services throughout Europe 
and take responsibility for 
applications development. 


sales analysis and accounting, for the South Queensferry 
CSC won almost £lbn of out> facility. This wiD increase pro- 
soucing business in Europe duction capacity for the Alpha 
last year. AXP silicon chip. 


SYSTEM SECURITY 




■*4 


Pioneering with the 
cordless office 

While most office workers 
are still ‘tied to their desks’ by 
fixed telephones, a new genera- 
tion of cordless telephone 
systems is set to open up a 
market worth up to ssbn a 
year by 1998, according to 
Ericsson, a pioneering com- 
pany in this sector. 

Ericsson began developing 
business cordless pbone 
systems in the mid-1980s and- 
claims to be the first company 
to launch a DECT-based sys- 
tem, last year. 

This Freese t system works 
as an “add-on" to a company’s 
existing phone network. Low- 
powered radio base-stations are 
installed throughout the prem- 
ises. and controlled from a 
radio exchange, which connect 
directly to the host telephone 
system. The main groups of 
users are organisations with a 
large number of mobile staff - 
such as hospitals, factories and 
exhibition centres - where 
instant communication is 
important. 

The second main group of 
users are companies which are 
trying to redefine the nature of 
office work, applying the ’hot 
desk’ principle. Digital Equip- 
ment Corporation, using the 
Freeset sy stem, has b een suc- 
cessfully experimenting with a 
mtnflar concept which it calls 
“the natural office* at its Swed- 
ish offices in Stockholm. 

“Once people start using a 
cordless phone at work, it’s 
impossible to take it away 
from them," comments Erics- 
son’s Hans van der Hoek. In 
five years’ time, he expects 
one-third of all business 
phones sold will be cordless. 

Digital’s investment 
in Scotland 

Digital Equipment Corpora- 
tion. a leading supplier of net- 
worked computer systems, has 
announced an investment 
package of more than £99m for 
its Scottish manufacturing 
sites in Ayr and South Queens- 
ferry. 

Mr Chris Conway, managing 
director of Digital UK says this 
investment confirms the com- 
pany’s commitment to manu- 
facturing in Scotland where it 
makes a range of products 
from silicon chips to imple- 
mented computer systems - 
“half of Digital’s revenues 
come from Europe and the UK 
leads the field in both sales 
and manufacturing." he adds. 
Digital’s total investment in 
Scotland stands at £300m. 

The latest investment pack- 
age involves more t h an £65m 


Quicker calls for 
Whitehall 

GPT Communication 
Systems has won a large order 
from the Central Computer 
Telecommunications Agency 
(CCTA) for the supply, installa- 
tion and maintenance of a new 
computerised telephone direc- 
tory serving all 82 government 
departments in Whitehall. 

The new system enables 
operators based in the Trea- 
sury to reduce response times 
significantly for about 5,000 
enquiries each working day. 

Mr Peter Spencer of the tele- 
communications division of the 
CCTA, explains: “With over 
30,000 people working in more 
than 80 different departments, 
our original system of using up 
to 12 paper directories had 
become too slow and cumber- 
some, with an average 
response time of 25 seconds - 
too high for what is essentially 
a public service." 

The new system allows the 
CCTA to locate individuals and 
redirect calls in a fraction of 
the time, eliminatin g caller- 
frustration, he adds. 

New paging system 
for Dutch prisons 

The Dutch group Teletech ni- 
com and the Swindon-based 
company Bhck Television have 
won a contract to upgrade 
potentially life-saving radio- 
paging systems installed in 
Dutch prisons. 

Since 1986. the two compa- 
nies have held the contract to 
supply radio-paging systems to 
30 of tiie 45 prisons in Holland. 
But an unprecedented series of 
attacks on prison guards 
forced the Dutch ministry of 
justice to put out a tender for a 
more sophisticated system to 
be developed. 

Hostage situations have 
resulted in serious injury and 
even loss of life. The new pag- 
ing system is marketed abroad 
under the title. Bodyguard. 
Location signals can be sent 
out by the pagers each time a 
guard passes one the many 
location code transmitters 
mgtnTlpd jn prisons buildings. 

The pagers also register the 
last two loctions of the user in 
case of emerge n cy and loss of 
contact This data is relayed to 
a computer terminal pro- 
grammed to show the location 
of all guards, using a sche- 
matic display erf the prison. 

Others features include a 
“man down” alarm, triggered 
by a floating mercury switch, a 
silent hostage alert button. 

Michael Wiltshire 


Weak links mean big risks 

As increasing amounts of data are moved around the world, the need to maintain security 
integrity has become paramount, writes Martin Banks 


T here is a direct relation- 
ship between the number 
of information tools used 
by a company and the chances 
of its information system being 
Insecure. 

A singleton PC used at home 
can be the victim of the occa- 
sional virus, which is often 
irritating to the user but rarely 
fetal to the system or the infor- 
mation. For a company with 
multiple, linked networks of 
PCs, workstations, departmen- 
tal servers and enterprise 
repositories, however, the 
potential risks can bonier on 
the incalculable. 

The PC has moved from 
being little more than a toy 
used for tactical personal pro- 
ductivity applications to 
become one of the key strate- 
gic tools for delivering mean- 
ingful information to users. As 
such it has moved centre-stage 
in the on-going struggle to 
keep information secure and 
systems up and running. 

The problem is, of course, 
that the PC’s history contains 
nothing to associate it with the 
concept of security. As security 
consultant. Robert Schifreen, 
suggested, even DOS, the PC’s 
native operating system, can 
be readily re-written to make 
the machines a source of 
secure info rmation. 

“For example, it is possible 


to embed code in the operating 
system that will log all key- 
strokes made on a PC," he 
says. “In that way. log-in 
sequences and passwords can 
be recorded for later use.” 

As increasing amounts of 
sensitive data are moved 
around the world using data- 

communications technologies, 

the need to maintain security 
and integrity becomes para- 
mount This not only affects 
how users should view the 
weak links in their information 
systems - predominantly the 
PCs being used - but also secu- 
rity at a higher level. 

Until now this has started to 
look like a problem solved. The 
US Government is. however, 
currently considering throwing 
what many see as a large span- 
ner in the works, in the form of 
what is generally referred to as 
the Clipper Chip technology. 

Currently, many companies 
regularly employ a data 
encryption technology known 
as DES (the Data Encryption 
System). This is one of several 
alternatives that are, ironi- 
cally, published specifications. 
This would seem to degrade 
their value, but as Schifreen 
put it: “Everyone knows how 
DES works, but it is not easy 
to crack. It can be done, but it 
would need a team of program- 
mers a year and a Cray super- 






Apart from Internal security breaches, larger businesses are taking more seriously tho need tor electronic 
back-up services in the event of sudden disruption to their information networks. Pictured here are police 
veMciaa new the New York Stock Exchange after security alarms In Manhattan’s financial restrict 



A security centre, above, using Phffips Telecom control equipment. 
Reports by the National Computing Centre show that mare then hetf at 
UK organisations in a survey had suffered "a significant security breach” 
in the pest five years. More than two-thirds of companies had not 
conducted a risk analysis of their information technology systems. The 
most common physical threat to a company’s IT system is power failure, 
with an average cost of £9,000 par incident. The average cost of an 
equipment failure incident was £12,000, accordng to the survey. 


computer to do it. By being a 
published specification every- 
one knows the weaknesses of 
DES and works to plug them." 

The US Government is cur- 
rently considering an alterna- 
tive to these encryption 
systems, based around a hard- 
ware chip, known as the Clip- 
per Chip, which would contain 
the encryption algorithm. A 
company using the chip would 
then be able to pass encrypted 
data to any other using the 
same system. 

What has upset users, 
according to Schifreen, is the 
feet that the US Government is 
considering passing use of this 
CIA-developed encryption tech- 
nology into law. All US data- 
commum cations users would 
then be legally obliged to 
employ Clipper, which would 
mean that recipients around 
the world would also be 
obliged to use it What makes 
the situation worse is the feet 
that Clipper is a proprietary 
system, and that the CIA has 
written a back door into the 
technology allowing informa- 
tion to be decrypted. 

The fear is that, either 
through theft, or the actions of 
a disgruntled employee, this 
code could fell into the wrong 
hands. Another fear is that, 
because it is from the CIA. the 
backdoor code may be made 
available to other national 
authorities. 

Perhaps most important of 
all, however, is that because it 
is a proprietary solution, its 
method of working and its 
weaknesses remain unknown. 
As all encryption systems are 
ultimately breakable, this is 
being seen as a serious poten- 
tial weakness of the system. 


As PCs become more preva- 
lent as a strategic tool, other 
weaknesses may serve to com- 
pound the potential problems 
of Clipper encryption. For 
example, access control on PCs 
is still a weak area, though 
there are now products avail- 
able to solve the problem, if 
companies are willing to make 
the investments necessary. 
This may be significant, for the 
most comprehensive solutions 
can cost up to £1,000 per PC. 

Many new PCs come with 
access control available as 
standard, but these tend to be 
simple password systems 
where the password is stored 
in a battery-backed CMOS 
memory. Removing the bat- 
tery. therefore, will normally 
circumvent the password. 

ment in security is a key factor 
not always considered by 
users. This starts with educa- 
tion about the simplest access 
issues. For example, it is rare 
for thought to be given to indi- 
vidual passwords and most 
people make obvious choices. 
“Many users choose words like 
FRED. SECRET. PASSWORD 
and LETMEIN," Schifreen said, 
“which are easy to guess." 

Even Unix systems, increas- 
ingly popular both as workstat- 
ions and servers, suffer access 
control weaknesses. For exam- 
ple. there is a well-known bug 
in Unix Mail which will allow 
embedded code in a mail mes- 
sage, which runs when the 
message is read. The code can, 
for example, request the sys- 
tem to transmit the receiver’s 
password file back to the 
sender. 

It can also be used to trans- 
mit a complete system’s pass- 


word listing. This contains 
user IDs and tbeir apparently 
safely encrypted passwords. 
There are. however, shareware 
products available - such as 
Websters. a program with 
234,000 unique English words - 
which, when passed through 
the Unix encryption algorithm, 
will produce a table against 
which the encrypted passwords 
can be compared, and cracked. 
Using numerals in passwords 
usually helps solve this prob- 
lem. 

Many such routes into 
systems can be trapped with 
sufficient thought and plan- 
ning by users. For example, an 
increasing number of these 
programs are now available 
from Bulletin Board Systems, 
so access by staff to such 
systems must be closely moni- 
tored. particularly on the 
larger networks. One way of 
doing this is to audit the appli- 
cations being run. 

There is now a new class of 
application appearing that 
scans all the disks on a net- 
work to locate and report on 
all applications found. This 
should include those that are 
hidden behind filenames that 
do not include the standard 
applications file extensions 
such as .exe, .com and .bas. 

In this way, systems manag- 
ers can know the location of all 
approved applications, as well 
as those that are not approved. 
The benefits of this are two- 
fold. Not only are potential 
security risk applications iden- 
tified. It also ensures that no 
illegal copies of applications 
are being used, preventing pos- 
sible legal action by the appli- 
cation's authors. 


Rise of object-oriented technology 


Continued from previous page: 

yon can start with small ones 
and “scale" them op. 

“All our tools are based on 
Smalltalk so you can move 
from our desktop product 
Enfin to our corporate Syn- 
chrony product,” says Mr Jeff 
Sutherland, vice-president or 
object development at soft- 
ware tools company EaseL 

“But it is not enough just to 
scale up to a large number of 
users. You need greater access 


to database and tools which 
can deliver the performance. 

“We see the answer in tools 
which wiD do 80 per cent of 
what a user wants automati- 
cally. The users can then con- 
centrate on the bits they 
understand best - the business 
objects," he says. 

Mr Sutherland believes that 
not enough is being done to 
promote object technology at 
the application level. He ts 
part of a group of software 
developers pushing for the 


specification of business-based 
“objects”. 

“We have a problem at Die 
moment with object-oriented 
technology. People talk a lot 
about code re-use - but where 
is it? 

“We see the need for re-us- 
able business objects which 
can give different views of the 
way the business operates to 
different users," says Mr Suth- 
erland- 

There are other, more seri- 
ous, reservations about the 


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use of object-oriented design 
for speeding up software - ini- 
tially, at least 

“Although object-oriented is 
the way forward, it Is not a 
panacea- It’s a solid frame- 
work to bmld re-usable code," 
says Mr Pan] Buford, a 
systems engineer with object- 
oriented tool specialist Next 
Computer. 

“In the short term, it is not 
a quid: way to get more out of 
programmers. Although it 
reduces the number of lines of , 
code yon need to produce, 
there is much more design 
input needed”. 

Mr Bnrford cites the exam- 
ple of the Swiss Bank which 
used Next’s Nextstep object- 
oriented tool to build its 
systems. 

"When we started at Swis s 
Rank four years ago we wrote 
objects that were not re-usable 
so there was no advantage. 
But they recognised over time 
that they had chunks of re-us- 
able software," he says. 

“If you take a new environ- 
ment it will never be quicker 
to start with because of teeth- 
ing problems. But by taking 
an object-oriented approach 
you have a chance to start put- 
ting in new features in a more 
natural way". 

W hile object-oriented 
design techniques 
provide a suitable 
framework for building appli- 
cations, the real productivity 
benefits come from software 
tools. 

Strategies for selecting 
development tools differ -ac- 
cording to the size and data 
processing heritage of the indi- 
vidual company. 

Larger companies tend to 
bring in programmer produc- 
tivity tools so that their infor- 
mation systems departments 
am respond more rapidly to 
users’ demands. 

Smaller companies give 
their users their own desktop 
tools. Many companies com- 
bine both of these approaches. 

The result is a growing 
demand for tools which can 
support fast software develop- 
ment and there is no doubt 
that these tools will use object- 
oriented computing as a 
starting point 
What is dear, however, is 
that finding ways to build soft- 
ware test, takes time. 


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V-' — 


Whether it’s easy access to international telephone 
lines, or setting up inter-office computer links, fast 


and efficient two-way communications are an absolute must for western companies doing business in the 
emerging markets of eastern Europe. Unfortunately, the existing public networks in these countries cannot 
cope with the traffic demand and this creates a severe problem for many companies. 

The solution? Thke advantage of our enviable eastern connections. Thanks to our modem satellite capabilities, 
Telekom can help you create and build up your own exclusive state-of-the-art east/west communications links 
in an impressively short time, and always at a competitive cost. As a leading and active member of the interna- 
tional satellite operator associations, we have access to the world’s largest satellite capacities. Our considerable 
experience and in-depth knowledge of satellite technology, allows us to give you total support in realizing your 
needs. Our expertise in turn, is backed by a history of close cooperation with our neighbouring telecommu- 
London.. niC&tiORS authorities in the east. It is, therefore, no surprise that Telekom is the leading provider of 

Tel.: +44 1 1 28/ t / 11 # # *__ 

f,x *44 7, 287 so 99 sa t e llite based data networks and services m eastern Europe. 

^ w :r^2 9 oo We have many other customized solutions to help you* For example, “Delos” is a Telekom service 
2 4 9 9 that has been especially developed for companies 
u ^ who need direct access from eastern Europe to 
Paris Germany’s telephone network and the world beyond* 

pax: .Is ! « S 0010 You can enjoy high quality two-way voice, fax and 
Moscow data transfer and avoid the frustration of waiting for 

Fax +7 50 22 56 51 10 & fj-gg JjjQg 

“2 2 775 05 t, So - if a demanding communications challenge is 

Fax: +32 2 775 05 99 , , , , n 1 - . , 

looming on your eastern horizon, have a word with 
Europe’s No. 1 - Telekom. 

£; *49 »i l 82 82 Tr^ecmmimicaticns made in Gennsny We tie markets together. 


Tel.: +33 1 44 43 00 00 
Fax: +33 1 44 43 00 10 

Moscow 

Te!.: +7 50 22 56 51 09 
Fax: +7 50 22 56 51 10 

Brussels 

Tel.: +32 2 775 05 11 
Fax: +32 2 775 05 99 

Koblenz 

International Key 
Account Management 


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