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^ m 



The other side 
of the coin 


isatSfl 


Page 14 


Workforce skiBs 

Blue-collar team, 
white-collar wise . 

PDgftll 



Farm equipment 

An industry 
on stony ground 


On the fringe 


Rage 14 


• • • r .^*ei!?s 


Union 

Survey, Pages 27-30 


FINANCIAL TIMES 





• l:' Ui'-d pe : s B u c.t n ess Mewspape 1 ' 


North Yemen sacks 
southern premier 
amid heavy fighting 

North Yemen's leaders stepped up their propaganda 
offensive in the civO war with the sooth by 
denouncing prime minister Haydar Abu Bakr 
al-Attas and stripping him of all powers. Attas 
is the fifth southerner dismisse d in a week as 
northern leaders try to consolidate and legitimise 
their authority throughout the country. The mili- 
tary situation remained unclear, with each side 
broadcasting its own version of events. Heavy 
fighting Is reported around Aden. Page 16 

Hata calls for opposition support: Tsutomu 
Hata, Japan's new prime minister, appealed for 
opposition support to help his minority government 
tackle the host of urgent and contentious issues 
ahead. Page 16; Japan economy stfD sluggish. 

Page 4; Boost far foreign cars. Page S 

Warning on UK Interest rates: The Rank 
of England warned it would have to increase 
interest rates if high inflationary expectations 
in Britain led to a quickening in the pace of wage 
and price inflation. Page 16; Editorial Comment, 
Page 15; Lex, Page 16 

BSN, France's largest food group, is changing 
its nama to Danone, its loading yoghurt brand, 
and Has unveiled several international deals, 
including the FFrUftra ($332m) acquisition of 
San Miguel, one of Spain's largest brewers. Page 17 

Catalan leader names price for Gonz&lez 

Catalan leader Jordi 
Pujol (left) wants "sub- 
stantial agreements” 
on economic, labour 
and regional policies 
as a condition for con- 
tinuing to prop up 
Spain’s minority Social- 
ist government He 
expressed confidence 
in the determination 
of Felipe Gonzalez's 
government to tackle 
corruption, but warned that if it foiled "we will 
have to withdraw our support". Page 2 

Ma«or soaks to defuse Euro row: UK prime 
minister John Major rejected calls foam Conserva- 
tive party Euro-sceptics to commit his government 
to a referendum on the next stage of European 
integration. Page 16; Continental debate. Page 3 

Bankers defend derivatives: Senior hanking 
executives rallied in Washington to fight off calls 
for more government regulation of derivatives, 
amid growing congressional concern about the 
risks raised by these financial products. Page fi 

Russia's defence spending to surge: 

President Boris Yeltsin has agreed to a 66 per 
cent increase in Russia's defence budget in the 
biggest deviation yet from fiscal commitments 
to the International Monetary Fund, according 
to a senior parliamentarian. Page 3 

BBC aims to be ‘number one’s The BBC 

intends to become “number one in world television" 
to match its lead in radio, director general John 
Birt said. Its new commenaal partner is Pearson, 
the media group which owns Thames Television 
and the Financial Times. Page 8 

Galt seeks new head: The General Agreement 
on Tariffs and Trade launched its hunt for a succes- 
sor to director-general Peter Sutherland, who 
plans to stand down at the end of the year. Pages 

Smith Kline Beecharac The Anglo-US drugs 
company is to launch an unbranded version of 
its former best-selling ulcer drug Tagamet in 
the US in an attempt to stave off competition 
from makers of cut-price generic products after 
Tagamet's US patent expires on May 17. Page 17 

Australian budget looks to asset sales: 

Australia’s budget for the 1994-95 fin a nc i a l year 
drew heavily on the country's recent surge in 
economic growth and expected about A$2.4bn 
i SI. 73b n) in proceeds from asset sales. Page 4 

India set to tackle Inflation: The Reserve 
Bank of India is set to move against soaring infla- 
tionary pressures at Its board meeting this Satur- 
day. Page 4 

Zil back in business: ZLL Russia's ailing truck 
manufacturer, said it had reopened after a 10-day 
stoppage and planned to recover money from 
debtors, expand its vehicle range and trim its 
workforce. Page 2 

Racial abuse falls at UK football grounds: 

Britain's football grounds have seen a marked 
decline in incidents of racial abuse and harassment 
at the end of a season-long campaign aimed at 
tackling the problem. Page 10 


WEDNESDAY MAY 1 1 1994 


■ STOCK MARKET INDICES 


FT-SE 100: 3,1363 H38.5I 

Yield 187 

FT-SE EUnftack 100 . -1,45539 ftULKfl 

FT-SM Afl-SWB 1,581.23 H09W 

ma 1BJ17.78 ftt 30.82) 

HbwYmIc lunchtime 

Dow Jones Ind Aw 3£51S5 f+22.91) 

S&P Composite 44137 <+2.05) 

■ US LUNCHTIME RATES 


Federal Funds 3{i% 

3-mo Treas His: YU .. .1388% 

Long Bond 85^ 

rwW ...- 7.508% 

■ LONDON HOMEY 


3-mo interbank 5&t% (same) 

Ufte long g» Mure: _ Jw 103^ (JUI103& 
■ NORTH SEA OIL (Aipua) 


Brent 15-day (June) .—$1611 fl621) 

■ Gold 


Itow York Come* (Jun) .—$3768 (3823) 

London — $3862 (381.251 


New YOrk uxffiknK 
$ 14875 

London: 

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DM 24907 (2.4801) 
FFt 65287 (8.4996) 

SFr 2.1387 (2.1164) 

Y 151915 (153.896) 
£ Index 766 (79.4) 

■ DOLLAR 


Now Ynfc kmchUmo: 


Berlusconi promises shake-up 


By Robert Graham In Rome 

Mr Silvio Berlusconi yesterday 
announced a 25-member cabinet 
for Italy's 53rd post-war govern- 
ment, which he committed to der- 
egulating the economy, and shak- 
ing up and decentralising public 
administration. 

The formation of the cabinet 
took 11 days of difficult negotia- 
tions and comes nearly seven 
weeks after Mr Berlusconi's 
four-party Freedom Alliance won 
a landslide victory in the March 
27-28 general elections. 

The presence of ministers from 
the neo-fascist MSI/National Alli- 
ance also marks an historic break 


Neo-fascists appointed to cabinet in break with past 


with the party's long-standing 
political isolation. 

The government, composed of 
Mr Berlusconi's Forza Italia, the 
populist Northern League of Mr 
Umberto Bossi. the MSI and the 
small Christian Democratic Cen- 
tre, will be sworn in today. But it 
is still uncertain whether Mr Ber- 
lusconi will go to parliament 
with his programme to obtain a 
vote of confidence this week. 

Mr Berlusconi gave the main 
economic portfolio, the treasury 
ministry, to Mr Lamberto Dini, 


the number two at the Bank of 
Italy, who was passed over for 
the governorship last year. 

Mr Dini is well known interna- 
tionally having worked with the 
International Monetary Fund but 
he is a political novice and his 
move to the treasury raises ques- 
tions about the existing treasury 
team as well as his replacement 
at the central bank. 

Mr Berlusconi decided not to 
scrap the budget and finance 
portf olios which have gone 
respectively to Mr Giancarlo Pag- 


liarini, a former accountant and 
League senator, and to Mr Giulio 
Tremonti, a tax expert. 

Mr Berlusconi was obliged to 
make some important last- 
minute changes. The most signif- 
icant involved Mr Cesare Previn, 
who handles the legal affairs of 
Mr Berlusconi's Fininvest 
empire. 

He was switched from the jus- 
tice ministry to the defence min- 
istry after objections from the 
Freedom Alliance as well as from 
President Oscar Luigi Scalfaro. 


The presence of Mr Previti in 
the justice ministry was consid- 
ered likely to cause a conflict of 
interest at a time when magis- 
trates are investigating various 
aspect of Fininvest activities. 

He was also viewed with hostil- 
ity by Italy's powerful magis- 
trates. 

President Scalfaro himself took 
the unprecdented step of writing 
a curt letter to Mr Berlusconi 
reminding him of his duties in 
choosing ministers. The letter, 
sent on Monday but onlv 



South African generals and black guerrilla leaders provide escort at oath-taking 

President 
Mandela 
sworn in 
as white 
rule ends 

By Patti Waldmolr, Michael 
Holman, Gordon Cramb and 
Mark Suzman in Pretoria 

White South Africans handed 
over power to blacks, voluntarily 
and peacefully, yesterday when 
Mr Nelson Mandela was sworn in 
as president in a ceremony 
which formally ended more than 
three centuries of white role. 

The reality of the transfer of 
power struck home when jets 
from the most powerful military 
machine on the continent paid 
homage to Africa's newest head 
of state. 

White South African generals 
joined black guerrilla leaders to 
escort their new president to tile 
podium to take the oath of office, 

signalling an overnight shift in 

allegiance to the man they once Nelson Mandela is swam in as South Africa’s first black president, formally ending more than three centuries of white rale ■ 

hunted down for terrorism. 

As princes and kings, prime the words of Nkosi sikele i’Af- Mbetti. In the open parkland far below ANC in exile, and bringing 

ministers and presidents from rika (God bless Africa), the liber- Prince Philip, The Duke of the imposing sandstone Union proceedings temporarily ti 
more than 140 countries listened, atkm hymn. Both are now offi- Edinburgh, shared the fourth Buildings, a predominantly halt 

Mr Mandela pledged his own dal anthems. row of the impressive Union black crowd of at least 50,000 Back at the Union Buildu 

allegiance to the South African Mr Mandela praised the man Buildings amphitheatre with US could see the proceedings even the policmen and sold 

state he once sought to over- who opened the chapter which vice-president A1 Gore, his wife only on a giant television screen, began to relax and join iru n 

throw. closed with yesterday's cere- Tipper and Mrs Hillary Clinton. After the ceremony, President tary policeman stuck new Sc 

“I do hereby swear to be faith- mony - Mr F.W. de Klerk, the Cuban President Fidel Castro, Mandela treated thousands of African flags in their gun 

ful to the republic of South outgoing president and yester- Palestine Liberation Organisa- guests to lunch before dropping sters and a soldier read a co 

Africa and do solemnly and sin- day installed as Mr Mandela’s tion leader Yassir Arafat, Israeli in, by helicopter, to a celebratory book atop an armoured car. T 

eerely promise to promote that second deputy president president Ezer Welzman, and soccer match between South were, for one day at least 

which will advance and to “He has made for himself a United Nations secretary-general Africa and Zambia, home to the Mandela's “rainbow people”. 

oppose all that may harm the niche in history. He has turned Boutros Boutros GhaU were also 

republic . . . and to devote oat to be one of the greatest in the crowd. 

myself to the well-being of the reformers, one of the greatest Zola King Goodwill Zweli third 

republic and all its people.” sons of our soil,” said Mr Maud- was moved to a place directly in 

As blacks struggled to ring Die ela, speaking from a giant bullet- front of Mr Mandela when ANC 

Stem (The Voice), once the proof cage, where he stood officials realised they had foiled 

anthem of apartheid, white flanked by Mr de Klerk and first to accord the monarch a central w 

South Africans haltingly sang deputy president Mr Thabo seat Md 



the words of Nkosi sikele i'Af- 
rika (God bless Africa), the liber- 
ation hymn. Both are now offi- 
cial anthems. 

Mr Mandela praised the man 
who opened the chapter which 
closed with yesterday's cere- 
mony - Mr F.W. de Klerk, the 
outgoing president and yester- 
day installed as Mr Mandela’s 
second deputy president 

“He has made for himself a 
niche in history. He has turned 
ont to be one of the greatest 
reformers, one of the greatest 
sons of our soil,” said Mr Mand- 
ela, speaking from a giant bullet- 
proof cage, where he stood 
flanked by Mr de Klerk and first 
deputy president Mr Thabo 


Mbetti. 

Prince Philip, The Duke of 
Edinburgh, shared the fourth 
row of the impressive Union 
Buildings amphitheatre with US 
vice-president AI Gore, his wife 
Upper and Mrs Hillary Clinton. 
Cuban President Fidel Castro. 
Palestine Liberation Organisa- 
tion leader Yassir Arafat, Israeli 
president Ezer Welzman, and 
United Nations secretary-general 
Boutros Boutros Ghah were also 
in the crowd. 

Zulu King Goodwill Zwelithini 
was moved to a place directly in 
front of Mr Mandela when ANC 
officials realised they had foiled 
to accord the monarch a central 


In the open parkland for below 
the imposing sandstone Union 
Buildings, a predominantly 
black crowd of at least 50,000 
could see tbe proceedings 
only on a giant television screen. 

After the ceremony, President 
Mandela treated thousands of 
guests to lunch before dropping 
in, by helicopter, to a celebratory 
soccer match between South 
Africa and Zambia, home to the 


ANC in exile, and bringing the 
proceedings temporarily to a 
halt 

Back at the Union Buildings, 
even the policmen and soldiers 
began to relax and join in; mili- 
tary policeman stuck new South 
African flags in their gun hol- 
sters and a soldier read a comic 
book atop an armoured car. They 
were, for one day at least Mr 
Mandela's “rainbow people”. 


revealed yesterday, highlighted 
three points. 

The president reminded Mr 
Berlusconi that foreign policy 
must take account of Italy's exist- 
ing international obligations and 
alliances as well as support for 
European Union. 

This was seen as an implicit 
reference to Mr Berlusconi's 
choice of Mr Antonio Martino, 
his economic adviser, os foreign 
minister. Mr Martino, a Chicago- 
trained economist, is seen as a 
“ Euro-sceptic”. 

In his second point. Mr Scal- 
faro said the interior minister 

Contlnned on Page 16 


Airbus 

wins 

$1.4bn Air 

Canada 

order 


By Paul Betts, Aerospace 
Correspondent 

Air Canada yesterday said it 
planned to buy up to 35 European 
Airbus A319 twin-engine, narrow- 
body airliners worth $1.4bn to 
replace its fleet of old McDonnell 
Douglas DC9 aircraft 

The deal is a boost for the con- 
sortium. which lost out earlier 
this year to its two US competi- 
tors - Boeing and McDonnell 
Douglas - in a $6bn Saudi Ara- 
bian civil aircraft order. 

Air Canada rejected McDonnell 
Douglas's proposal to rebuild and 
reengine the fleet of 35 DCSs to 
modem aircraft standards as a 
cheaper alternative. 

Boeing had also competed for 
the deal with its 737 twin-engine, 
narrowbody airliner, while Fok- 
ker, the Dutch aircraft manufac- 
turer controlled by Deutsche 
Aerospace, had offered its Fokker 
100 jeL 

Air Canada's decision is also a 
setback for UK aero-engine man- 
ufacturer Rolls-Royce, which was 
offering a derivative of the BR700 
engine it is developing jointly 
with BMW of Germany as part of 
the McDonnell Douglas proposal. 
The Airbus A319 engine is sup- 
plied by CFM International, the 
engine joint venture between 

Continued on Page 16 


Rivals say lobbying helped 
AT&T win $4bn Saudi deal 


VACHERON CONSTANTIN 

Geneva, since 1755 


Ffir 

5.734 


SFf 

1.432 


Y 

London: 

1043 


DM 

15705 

(1.6579) 

FFf 

5.7268 

&G817) 

SFT 

1.428 

(1.4147) 

Y 

1IBS 

(101875) 

S index 

ffiMS 

(653) 

1 Tokyo cknY 103.18 


By Andrew Adonis in London and 
Christopher Brown-Humas 
in Stockholm 

Canadian and European 
telecommunications equipment 
suppliers which lost out to 
AT&T, the US company, in a 
$4hn Saudi contract earlier this 
week claim political pressure by 
the Clinton administration cost 
them the deaL 

The Saudi contract, one of the 
largest awarded in telecoms, pro- 
vides for wholesale upgrading of 
the kingdom's telecoms network 
over the next seven years, includ- 
ing l-5m new telephone lines and 
a new digital mobile cellular net- 
work. 

AT&T hailed the contract as “a 
big boost to our globalisation 
efforts’*. It is a staging post in the 
attainment of the company’s goal 
of increasing the non-US share of 
its equipment supply business 
from 20 to 50 per cent of total 
turnover by the end of the 
decade. The mmpany declined to 
comment on the suggestion that 
political pressure had helped to 
win the deaL 

The contract was bitterly 


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fought between AT&T and Sie- 
mens of Germany, Alcatel of 
Ftance, Ericsson of Sweden, and 
Northern Telecom of Canada. All 
four non-US companies are 
believed to be aggrieved at the 
extent of lobbying by Washing- 
ton on AT&T’s behalf. Yesterday 
Ericsson claimed political factors 
had been “decisive." 

The group said its offer had 
been lower than its competitors, 
although it declined to be spe- 
cific. It noted AT&T’s eventual 
order at LSm lines was bigger 
than specified in the original ten- 
der. 

Mr Lars Ramqvist, Ericsson 
chief executive, said last year 
Ericsson was losing orders 
because of its lack of political 
clout. "We could easily double 
our revenues if we had the same 
political and financial muscle as 
our competitors." he stated. 

Stockholm analysts said the US 
role in the Gulf war and Presi- 
dent Bill Clinton’s intervention 
in the contract talks had almost 
certainly helped AT&T clinch the 
order. But they believed Ericsson 
was well placed to recover from 
the setback, particularly when a 


CONTENTS 


new batch of cellular mobile 
licences are auctioned in the US 
later this year. 

The group played down the 
impact of the loss on its overall 
business. 

“The value of this order corre- 
sponds to roughly 2 per cent of 
our yearly order intake; the vol- 
ume of 200,000 lines per year 
should be compared to Ericsson's 
annual deliveries of around 10m 
lines,” said Mr Bo Landin, a 
senior vice-president 

Mr Ron Brown, US commerce 
secretary, cited the contract as a 
prime example of the effective- 
ness of the Clinton administra- 
tion's promotion of US business. 

Mr Brown visited Saudi Arabia 
in the past year to press the 
cause of US suppliers - not only 
for the telecommunications con- 
tract, but also for SSbn of aircraft 
orders won by Boeing and 
McDonnell Dougks- 

Tbe latest controversy follows 
strong complaints by European 
and other manufacturers at tbe 
pressure exerted by the US on 
trading partners. 

Ericsson results. Page 18 




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Int. Bond Senlca 22 Bam 3738 


tfacheran Carstaiun. 1 rue As Uoutas. QJ 1204 Genta 


C THE FINANCIAL TIMES LIMITED 1994 No 32^63 Week No 19 LON DON - PA RI S ■ FRANKFURT ■ MEW YORK ■ TOKYO 


4 









FINANCIAL TIMES WEDNESDAY MAY 11 1994 


2 

NEWS: EUROPE 


EU curbs 
urged on 
cash card 
issuers 


Catalan chief 
names price 
for Gonzalez 


By DavW White in Barcelona 

Mr Jordi Pujol, the Catalan 
leader, wants "substantial 
agreements” on economic, 
labour and regional policies as 
ft condition for «mttmrlng to 

prop np Spain’s minority 
Socialist government 

La an interview, he expressed 
confid ence in the determina- 
tion of Mr Felipe Gonzalez's 
embattled government to 
tackle corruption. But he 
warned that if it failed to take 
effective action "we will have 
to withdraw our support”. 

Mr Pujol is the guarantor of 
the government's survival as 
Mr Gonzalez tries to overcome 
a serious crisis brought about 
by a succession of corruption 
scandals involving members of 
his administration, including a 
former central bank governor 
and a former head of the Civil 
Guard. 

Mr Pujol, who is president of 
Catalonia’s regional govern- 
ment and of the Catalan 
nationalist party, Convergta- 
da L \3ni6, took a calculated 
gamble last week by reaffirm- 
ing his backing for Mr Gonz- 
alez in the midst of the politi- 
cal crisis. 

As long as his party's 17 dep- 
uties vote with the socialists, 
Mr Gonz&lez is assured of a 
narrow majority in the 350- 
member parliament. Mr Gonz- 
alez also received a pledge of 
support from the Basque 
Nationalist party, which is 
similarly conservative in its 
economic views and has five 
seats. 

Mr Pujol set out four priori- 
ties: 

• Further measures to support 
industry and exports, through 
tax policies. This would 
include backing for research 
and development and special 
assistance for small and medi- 
um-sized companies; 

• Labour deregulation. Mr 
Pujol left open the question of 
whether additional measures 
would be needed after the gov- 
ernment's current package of 
labour reforms, due to be 
implemented shortly. “We 


have to see how it works in 
practice," be said. 

• Transfers to Catalonia. Mir 
Pujol said he did not want to 
re-negotiate the agreement 
reached last year under which 
15 per of the income tax 
normally raised by the central 
government in Catalonia is 
remitted directly to the Cata- 
lan regional government But 
he had specific demands on 
arrangements for fi mining the 
region's health system and the 
building-up of its own police 
force. 

• st emming corruption. Mr 
Pujol said he bad demanded 
that the government “do every- 
thing to control corruption”, 
anil added- "I ttifnlc It is doing 
it" 

He made clear that despite 
his renewed support for the 
government he would not con- 
sider joining a coalition. Mr 
Gonz&lez said last week that a 
coalition - such as he tried to 
form after last year’s general 
election - would provide more 
stability than a parliament ary 
pact However, Mr Pujol said 
that being part of the govern- 
ment would leave his party 
with "no capacity for manoeu- 
vre". 

"The truth is that we can be 
more useful outside the gov- 
ernment than inside it," he 
said. 

He would not set any time- 
frame for his affiance with the 
socialists. 

The two parties will confront 
each other in municipal elec- 
tions next spring and in elec- 
tions for the Catalan regional 
government in 1996. 

"In two years we do not 
know what will happen." Mr 
Pujol said. 

Mr Gonzalez has, meanwhile, 
secured backing from bis party 
to place one of his moderate 
allies. Mr Joaquin Almunla, as 
its new parliamentary leader, 
replacing the former economy 
minister, Mr Carlos Solchaga, 
who resigned last week. 

Mr Almimia was labour and 
civil service minister in previ- 
ous Socialist governments. 
Survey, Section n 


By John Gapper, 

Banking EcBtor 

Central bank governors 

yesterday advised ED govern- 
ments to prevent companies 
other tfaw* banks from iwnfap 
electronic cards which can be 
used as a substitute for cash. 
They said that this would help 
to protect consumers. 

The European Monetary 
Institute council approved a 
study which called for only 

authorised credit institutions 
to be allowed to issue pre-paid 
cards. Banks hope that such 
cards may eventually ta k e the 
place of notes and coins. 

Several European banks and 
credit card issuers are work- 
ing on schemes for multi-pur- 
pose cash cards which consum- 
ers could load with money 
electronically. They would 
then use the cards for small 
transactions in shops and 
retail outlets. 

The report by the EMI’s 
working group on EU pay- 
ments systems is the first cen- 
tral bank response to the 
grow th in schemes such as the 
M o nd ay initiat ive by 

National Westminster Bank, 
Midland Bank and British 
Telecom. It said that central 
banks would have to monitor 
the fraud, prevention mea- 
sures, and might have to act if 
these were not satisfactory. 

Some EU states already have 
laws preventing companies 
which are not licensed credit 
hwrttntiflng from issuing eaieli 
cards. However, an amend- 
ment to EU legislation might 
be required to ensure that this 
policy applied in all countries. 

Although telecom companies 
and others now issue cards 
with cash values far limited 
uses, the central banks’ pro- 
posals would only apply to 
“multi-use" cards which are 
intended as a nearperfect sub- 
stitute for cash. 

Banks in EU countries 
including Portugal, Denmark, 
Belgium and France are work- 
ing on multi-use cash cards. 
Banks believe they could save 
substantial amounts if they 
were adopted by consumers 
because they would have to 
handle less cash. 


Russian defence spending to surge 



Russian Orthodox Bishop Feofan conducting a service at the 
Soviet second world war memorial In Berlin yesterday *> 


Zil says it’s back in business 


By Layla Boulton to Moscow 

President Boris Yeltsin, 
seeking to broaden his political 
support, has agreed to a 66 per 
cent increase in this year’s 
defence budget in the biggest 
deviation yet from recent Rus- 
sian fiscal commitments to the 
International Monetary Fond, 
according to a senior 
parliamentarian 

A member of the lower 
house of parliament's defence 
committee told reporters yes- 
terday that the offices of Mr 
Yeltsin and the prime minister, 
Mr Victor Chernomyrdin, had 
agreed to increase defence 
spending from Rbs33tr£mon to 
Rbs55 trillion in the 1994 
budget. 

The increase appears to be 
part of efforts by die govern- 
ment to convince parliament to 
finally adopt a budget when it 
returns to the issue today. 

Mr Yeltsin appears keen to 
boost his domestic popularity 
and develop a working rela- 
tionship with the conservative 
parliament he ushered in with 
elections and a new constitu- 
tion last December. 

But the increase in dpfpp ce 
Spending, if implemented, will 
run counter to the spirit of the 
recent pledges of fiscal recti- 
tude made by Moscow to the 
IMF in return for release of the 
second half of a S3bn (£2bn) 
reconstruction loan. 

“If he cannot hold back the 


By Layla Boulton 

Zil, Russia’s ailing truck 
manufacturer, said yesterday it 
bad reopened after a 10-day 
stoppage and much political 
furore over its troubles. 

Executives at SI, a Moscow- 
based enterprise with an old- 
style management and 85,000 
employees, said they proposed 
to reverse the company's for- 
tunes by focusing on recover- 
ing money from its debtors in 
the former Soviet Union, and 
expanding its range of 
vehicles. 

They also said 231 would take 
long-overdue steps to trim its 
work force. 

Rather than begin painful 
restructuring and lower their 
prices to attract customers, 
many enterprises, including 


dgftmrp spending, Chernomyr- 
din will suffer a Mg blow to his 
credibility," said Professor 
Anders Aslnnd. a former eco- 
nomic adviser to the Russian 

^u wrn i itfutt- 

Mr Chernomyrdin led the 
final round of loan negotia- 
tions with the IMF two months 
ago. 

The parliamentarian, who 
declined to be identified, said 
the new defence figure was 
agreed during last week's par- 
liamentary recess. 

It had initially been negoti- 
ated between , the president’s 
n at ional security adviser and 
the defence and interior 
ministries. 

The increase followed an 
appeal last week by Mr Alexan- 
der Livshits, an economic aide 
to the president, for increased 
spending on defence factories 
and research institutes. 

Mr Livshits said this was 
necessary to "compensate" for 
the government’s failur e to 
im plement a policy of selective 
support for strategic factories 
and sectors. 

He also sought to prepare the 
ground for such increases by 
calling on the international 
community to react with 
understanding to Russia's 
Inability to keep promises on 
inflation and budget targets 
maria to the IMF. 

Mr Chernomyrdin had vowed 
to the IMF earlier this year 
that he would stick to a tight 


Zil, have so for successfully 
put pressure on the govern- 
ment to give them soft loans 
by threatening to close down. 

As part of the lobbying pro- 
cess, various ministries have 
issued dire warn i ngs of immi- 
nent closures and mass Lay- 
offs, even if it Is exactly such 
results that the government 
has sought to achieve. 

One ffinstratian af continu- 
ing extravagance at SI is pro- 
vided by the fact that it still 
runs one of the best hospitals 
in Moscow. 

A recent patient was Mr 
Anders Aslund, a Swedish 
adviser to Russian radical min- 
isters who were forced out of 
office last winter. Mr Aslund 
had long advocated bank- 
j ruptcy proceedings for poarly- 
' performing companies such as 


money policy to drive down 
inflation, even if it meant 
bankruptcies of enterprises 
which were a drain on the rest 
of the economy. 

Accordingly, he sent a mem- 
orandum to the IMF setting the 
1994 budget deficit at Rbs53trtl* 
lion - which, according to IMF 
officials, amounts, together 
with local budget deficits, to 8 
per cent of GDP. 

But lest month the govern- 
ment agreed to further 
increases in. agricultural subst 
digs which increased the defi- 
cit to Rbs68 ^trillion. Unless 
cuts are mariw elsewhere in the 
budget, the new defence spend- 
ing-much of it likely to be 
spent on new orders or subsi- 
dies to ailing defence plants 
- will increase the deficit to 
Rbs8QtriffioiL 

It is not clear how the IMF, 
which is due to consider fur- 
ther inane to Russia later this 
year, will react should the bud- 
get begin to diverge for from 
its premised target 

“We cannot control the gov- 
ernment on a day to day 
baas," said one western offi- 
ciaL “At the end of the day, it 
is up to than to deliver as best 
at they are able to. The IMF 
can always give them absolu- 
tion but then there is the day 
of reckoning, qn ^ that is with- 
out appeal, ” he said, referring 
to the potential riamag p of put- 
ting off economic adjustment 
for very much longer. 


ZlL El had earlier msigtori that 
it needed cheap credits to 
reopen but these were not 
mentioned by its executives 
yesterday. 

However, Professor Yevgeny 
Yasin, the newly-named eco- 
nomic adviser to President 
Boris Yeltsin, told the Finan- 
cial Times (hat 231 bad man- 
aged to secure financial sup- 
port from the Moscow mayor's 
office. 

Mr Yuri Luzhkov, the mayor, 
is fundamentally opposed to 
the ratfical restructuring and 
privatisation policies pursued 
by the government 

It was not clear yesterday 
how the Moscow city authori- 
ties, who frequently complain 
that the city is bankrupt bad 
managed to find money for Zil, 
but the mayor was clearly 


unhappy at the prospect of the 
closure of such a large indus- 
trial enterprise on his door- 
step. 

Prof Yasin stressed that the 
Russian government could not 
have afforded to help 231 out 
Zil was an exceptional benefi- 
ciary because the Russian gov- 
ernment unlike the Moscow 
authorities, could not afford 
such help for other troubled 
fla g shi ps of the former Soviet 
industrial machine. 

He also distanced himself 
from comments by a less 
senior presidential aide, Mr 
Alexander Livshits, who last 
week called for new financial 
injections into ailing enter- 
prises to “compensate” for the 
government’s tight money pol- 
icy and to prevent mass 
unemployment 


THE FINANCIAL TIMES 
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Company is iacorponttd under tbe bn of 
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ISSN: ISSN U4M7S3. Commsuu Paribas 
No 678QSD. 

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TeL: 644302 1 /6436045/Fax: 6430642 


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Tel: (966-1) 41 1 7373 Fax: 41 19967 


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PO ‘ 8001 56272 ~ Wyadh 1 1554 Saudi Arabia 
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•I: 2 6 11 16 19 35 39 43 49 51 
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SAUDI ARABIA 

The Biggest and Fastest Growing 
Market in the Middle East 

Items of Interest for Imports CO 
and Exports 06) 

tExdvcEng Crude CXi) 

The following activities of Saudi 
companies are indicated In the 
accompanying panel marked with Jc 


1 

ADVERTISING AGENCY 

46 

MARINE-SURVEY teEqT 

2 

AGRICULTURE A EQT. 

47 

MATERIAL HANDLING EQT. 

3 

AIR COMPRESSORS 

48 

MEDICAL ft. LAB. EQT 

4 

ALUMINUM CASTINGS 

49 

MILITARY SUPPLES 

5 

AUCTIONEERS 

50 

MINING EQUIPMENT 

6 

AVIATION 

51 

MOTOR CARS/nOICKS 

7 

BABY PRODUCTS 

52 

OPERATION &. MAINE 

8 

BEVERAGES A EQT. 

S2A OFFICE EQUIPMENT 

9 

BUILDING MATERIALS 

53 

OILFIELD SERVICES 

10 

CAN A END MftL 

54 

ONAW SHORE SERVICES 

11 

CATERING 

55 

PACKAGING 

12 

OC TV SYSTEMS 

56. 

. PAINES 

13 

CHEMICALS 

57 

PAVING PRODUCTS 

14 

COATINGS 

58 

PHARMACEUTICALS 

15 

COMMEROALREP. 

59 

PLASTICS 

16 

COMMERCIAL TRADING 

60 

POWER CABLES 

I6A COMPUTERS 8. FORMS 

61 

POWER DISTN. TOWERS 

17 

CONSTRUCTION &. EQT. 

62 

PROJECT MANAGEMENT 

18 

CONSUMER. PRODUCTS 

63 

PUBLICATION DISTRIBUTION 

19 

CONTRACTING 

64 

PUBLISHERS AGENTS 

20 

COPPER &, ALU. RODS 

65 

PUMPS/DRHJUNGEQT. 

21 

COSMETICS &. PERFUMES 

66 

PVC COMPOUNDS 

22 

DAIRY/ KX CREAM 

67 

REAL ESTATE 

23 

ELECTROMECHANICAL 

68 

RECYCLING 

24 

ELECTRONIC EQT 

69 

REFRIGERATION 

25 

FIBRE OPTICS 

69A RICE 

26 

FOAM LAMINATE. 

70 

SAFETY 6. SECURITY EQT. 

27 

POOD PROCESSING 

71 

SECURITY SYSTEMS 

28 

FOOD STUTfS/JUJCE5 

72 

SHIPPING 

29 

FURNISHING & FABRICS 

73 

SOLAR ENERGY 

30 

GARMENTS 

74 

SPARE PARTS (ALfTO) 

31 

GENERAL TRADING 

74A SPL. TEXTILE TREATMENT 

32 

GENERATORS 

75 

STEAM BORERS 

33 

GLASS 

76 

STEEL &. FABRICATION 

34 

GLASS MAXING 

77 

STREET LIGHTING COLUMNS 

3S 

HEALTH CARE te PRODUCTS 

78 

SUBSCRIPTIONS 

36 

HOUSE HOLD ITEMS 

7SA SUPERMARKET SUPPUES 

37 

INDUSTRIAL ENGINES 

79 

TELECOM CABLES 

38 

INDUSTRIAL MFG 

80 

TELECOM te TOWERS/MASTS 

39 

INSPECTION SERVICES 

81 

TEXTILES 

40 

INSURANCE 

8IA TOOLS A HARDWARE 

41 

IEWELLRY4 DIAMONDS 

82 

TRANSPORTATION 

42 

JOINT VENTURES 

83 

TRAVEL A TOURISM 


43 MACHINERY/HEAVY EQT. 

44 MANPOWER SERVICES 

45 MARBLE 


84 TYRES &. BATTERIES 
84A WASHING MACHINES 

85 WATER TREATMENT 

86 WOODEN REELS A. PALLETS 


REPLYFORM 

Name 

Company 

Address 

Fax 


Fax to : (+9(563)8947182 


— Title 


.Country 


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F _ G _H__ I_ _J K L N 0 P Q_ 
| *raira«oiW( n >;ii rarM ri«da, ira »Bt>ntmira g ii u il«ttiimiM>TiaM^ 8 iv vi e M W 



FINANCIAL TIMES WEDNESDAY MAY 11 1994 


NEWS: EUROPE 


3 


EUROPEAN NEWS DIGEST 

Public monitors 
‘abused office’ 

Antbcorruption magistrates in Rome have requested that 16 
senior members of the court of public accounts, the 132-year- 
old Judicial body monitoring public spending, be sent for trial 
on a string of charges related to abuse of office and falsifying 
documents. The charges involve Mr Giuseppe Carbone, the 
court’s chairman, and Mr Emldio Di Giambattista, the chief 
prosecutor, and relate to allegations of tampering with evi- 
dence in some of the most sensitive financial scandals of 
recent years. Mr Carbone has claimed the accusations are 
des i gned to discredit the operations of the court or relate to 
Investigations that have already been shelved. 

The investigations began more than gyp years ago when two 
magistrates renowned for their zeal spoke out In the court, 
saying they were being forcibly transferred in order to stifle 
an Investigation. An equity was opened only to be quietly 
shelved. The cases allegedly tampered with included investiga- 
tions into the conduct of the state-run railways in the 1980s, 
when controlled by Mr Lodovico Ugato (assassinated in 1989), 
and the Enimont affair, to pronounce on the price being paid 
by ENl the state oil concern, for its purchase of the stake held 
by Ferruzn-Montedison in their joint chemicals venture, Eni- 
mont. The court said the mice was fair even though the 
market claimed it was 20 per cent higher than necessary. 
Robert Graham, Rome. 

Germans in beef ban row 

A row between German ministries could delay any decision 
today on unilateral action to ban British beef imports because 
of popular German fears about human infection with “mad 
cow disease”. The German health ministry insisted yesterday 
that it was pressing its case for an impart ban on public health 
grounds, but other nffiefais suggested the issue might be 
postponed pending further negotiation s in Brussels. The for- 
eign ministry, economics m in i st r y and agriculture ministry 
have all expressed doubts over the practicability of introduc- 
ing a unilateral ban on British beef imports, and over its 
political and legal consequences. One senior diplomat said the 
only way of stopping British beef imports - which total no 
more than 2300 tonnes a year - would be “to close the 
Channel.” The German farmers' union has aian argued that it 
would be impossible to control A health ministry official said 
yesterday that veterinary experts from the 16 federal states 
Tisiri agreed lmanfanongiy that the haw — on all cattle over three 
years old - could be enforced. Quentin Peel, Barm. 

Kohl to back land deal 

Chancellor Helmut Kohl’s governing Christian Democrats 
are close to a compromise agreement to allow former landown- 
ers in eastern Ge rmany the right to buy back some of their 
property in the five eastern states. The agreement would end a 
bitter dispute within the CDlTs ranks and pave the way for 
investment and restructuring of agriculture in eastern Ger- 
many. Under the terms of the compromise reached this week 
between eastern and western German CDO parliamentary 
deputies, former landowners will be eligible to buy back, at 
reduced price, some of their property. It is estimated that only 
1,000 of the 14,000 former owners will take advantage of this 
compromise. Until now, the 1990 unification treaty had legally 
barred former owners whose property was expropriated by the 
Soviet authorities between 1945 and 1949 from any restitution 
or compensation. At the same time, the CDU is planning to 
Increase from about DM12bn to DM19bn a comp ensation fond 
for people whose property was confiscated between 1933 and 
1945 and between 1949 and 1990. Judy Dempsey , Berlin. 

UN issues warning to Serbs . 

The United Nations yesterday said Bosnian Serb forces were 
flouting terms of a UN “safe area” accord in the Moslem 
enclave of Gorazde and warned them not to test UN/Nato 
resolve. UN special envoy Yasushi Akashi had written to 
Bosnian Sab leader Radovan Karadzic to try to reverse “a 
deterioration” of conditions Inside Gorazde’s 20km weapons 
exclusion zone, a UN spokesman said. Foreign ministers of 
major western powers and Russia will meet in Geneva an 
Friday to discuss new peace moves for Bosnia but there seems 
little hope they will find a quick way to end the war, diplo- 
mats in Geneva said yesterday. Meanwhile, the Yugoslav news 
agency Tanjug reported that Moslem units started shelling the 
northern Bosnian Serb-held town of Brcko with heavy shell- 
ing. There was no independent confirmation. Reuter, Zagreb. 

Iraq to repay debt in oil 

Iraq has agreed to repay a $L5bn debt to Bulgaria, mostly 
with oO supplies, after the United Nations embargo is lifted, 
Bulgaria said yesterday. The debt was ran up under the old 
communist regime when Bulgaria, like other countries in 
eastern Europe, supplied Iraq with arms and other goods on 
credit during the war with Iran. Under an agreement signed in 
1990, Iraq was to cover part of its debt by supplying Bulgaria 
with 4.75m tonnes of oil by 1994 but the invasion interrupted 
the deal. Reuter, Sofia. 

Satirist blocks Schneider credit 

A journalist from a German satirical magazine has cut off 
fugitive real-estate tycoon Juergen Schneider from one source 
of cash - by rin ging up Schneider’s credit card company and 
cancelling his account. The magazine Titanic said journalist 
Bernd Fritz had telephoned the Eurocard company and 
blocked the account by giving Schneider’s name and date of 
birth. Mr Detlev BuchaL, Eurocard's managing director, said it 
was not easy to block an account Mr Fritz had given Schnei- 
der’s date of birth, address, bank account and private and 
office telephone numbers. Mr fritz said he had just named a 
bank at random. Eurocard said the name of the bank bad in 
fact been correct Titanic said it planned to build on the 
Schneider experience by b locking accounts of other prominent 
politicians and businessmen. Reuter, Frankfurt. 

ECONOMIC WATCH 


Norway’s inflation falls below 1% 


Vorway 

nfatton (annual % chonge} 



Norway’s inflation rate 
continued its fall from a 
March 1987 peak erf 10.4 per 
cent a year to reach a new 
low of 0.9 per cent in April 
1994. The consumer price 
index rose by only 0.1 per 
cant in April from March and 
03 per cent from April last 
year, according to the central 
statistics bureau. The 01 per 
cent rise in consumer prices 
in April followed an 03 per 
cent gain in March, the 
bureau said. 

■ The Spanish government 
achieved its best budgetary 
18878a 88 90 oi 82 8384 performance this decade, nar- 
jurac Dataansom rowing the deficit by a provi- 

n n a l 20 per cent to an accumulated Pta599bn (£2J9bn) in the 
■st four months of 1994. This compares with Pta744bn in th e 
me period erf 1993 and follows a surprise surplus of around 
al4bn in April, the Finance Ministry announced yesterday. 
The Bundesbank yesterday revised German M3 money sup- 
y growth through March to a seaso n a ll y adjusted and ann- 
dised 15.4 per cent rate from the preliminary 153 per cent 
te reported last month. 

The National Bank of Poland lowered its obligatory rate at 
verse repurchase auctions by 03 percentage points to 263 
a - rent for one day deals. This s igna ls that official interest 
tea will be cut, a senior banker said yesterday. 

French industrialists expect an increase In investment this 
sar of 3 per cent in value terms following a 15 per cent drop 
1993, the National Statistics Institute said yesterday. 


Other parties have doubts but none flirt with ideas of a withdrawal from European Union 


Tory Euro-debate echoed on Continent 


By Lionel Barber in Brussels 

The ruling British 
Conservative party's dance of 
death over Europe is being 
watched with a mixture of 
bemusement and trepidation 
ingifjp the European Union. 

Experienced diplomats in 
Brussels find it hard to fathom 
the self-destructive streak 
inside the Tory party; but 
there is a grudging admission 
that, however distorted the 
British debate on the pace of 
European integration, there 
are echoes on the Continent. 

Whether these echoes por- 
tend a profound constitutional 
debate on the future erf Europe 
remains an open question; but 
the evidence suggests that the 
UK Euro-sceptics are far from 
isolated. 

In Italy, the new Berlusconi 
government unveiled last night 
included Mr Antonio Martino, 
a Chicago school economist 
and prominent opponent of a 
European cnn mcy p as 
foreign minister. 

In France, the Baliadur gov- 
ernment haa haatiad “Brussels" 
ever since it came to power 
last year. Mr Jacques Delors, 
President of the European 
Commission, comp laine d this 
week that his fellow Socialists 
were deliberately ignoring 
Europe's successes hi the Euro- 
parllamentary election cam- 



paign. 

In Germany. Chancellor Hel- 
mut Kohl has chosen to fight 
an election campaign on a 
theme of more, not less 
Europe; but the jury is out on 
whether this pro-European 
message will deliver a winning 
hand. 

Yet it is important to stress 
that none of the mainstream 
parties or political figures in 
Europe have veered so far as 
the Tory Eurosceptics in flirt- 
ing with withdrawal from toe 
European Union. 

Nor has there been a call for 
a referendum on a single Euro- 



Helm ut Kohl: pro-Europe 


pean currency, or a plebiscite 
on the outcome of the 1996 
inter-governmental conference 
to review the Maastricht 
treaty. 

Reluctance to embrace the 
idea of a referendum is linked 
to toe painful process of secur- 
ing ratification of the Maas- 
tricht treaty. 

When the Danes rejected 
Maastricht two years ago. the 
crisis was compounded by the 
wafer-thin support in the 
French referendum three 
months later. “The lesson from 
France and Denmark is that 
people do not vote on toe ques- 



Jacques Delors: Europe’s 
successes Ignored 


Hon of a complicated interna- 
tional treaty, they vote on 
something eke.” 

In Brussels, the right-wing 
Tory campaign for a referen- 
dum on a single currency looks 
like tilting at windmills. Even 
ardent supporters of European 
monetary union concede that 
toe prospects for EMU being 
achieved by the first target 
date of 1997 look remote - 
though that does not mean 
that the goal has been aban- 
doned. 

Similarly. British calls for a 
referendum on toe results of 
the 1996 intergovernmental 


"r 



Raymond Seitz: US wants an 
integrated Europe 


conference reviewing the 
Maastricht treaty look prema- 
ture - the result of factional 
party infighting rather than a 
calculation of vital British 
national interest 

“How can you support a ref- 
erendum on a conference 
where the outcome is com- 
pletely unknown?" said one 
senior Eurocrat in Brussels 
yesterday. 

A senior German official 
warned, however, that if Tory 
Eurosceptics continue to drive 
British policy on Europe, the 
1996 conference would be a 
write-off. That would upset 


plans to deepen co-operation 
on immigration, crime and jus- 
tice affairs, and it would make 
it much more difficult to plan 
for the admission of the central 
and East Europeans - both of 

which are Anglo-German prior- 
ities. 

Moreover, debate in the UK 
appears to assume that 1996 
will be a “Big Bang" confer- 
ence which will deepen inte- 
gration. Yet in Europe, senior 
French and German diplomats 
make no such assumption. 
“The public is simply not 
ready." said a French 
official. 

Lastly, neither the pro nor 
anti-Europeans appear to have 
taken sufficient note of (JS 
views on the desirability of 
European integration. These 
were expounded by Mr Ray- 
mond Seitz, outgoing US 
ambassador to the Court of St 
Janies. 

Mr Seitz, a noted Anglophile, 
made clear that toe US wants 
the UK fully Involved in 
Europe. He offered little hope 
of Britain standing on the mar- 
gins dreaming about a special 
relationship with the US or 
even membership of the Nnfta 
free trade accord. 

Characteristically. his 
farewell speech received little 
attention in the British 
media. 


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i 







FINANCIAL TIMES WEDNESDAY MAY 11 1994 


NEWS: INTERNATIONAL 



Indian central bank aims to curb inflation 


By Stefan WOgstyl 
in New Delhi 


The Reserve Bank of India Is 
set to move against soaring 
inflationary pressures at its 
board meeting this Saturday. 

But with industry only 
be ginning to recover from two 
years* stagnation, Mr C. Ranga- 
rajan. the governor, and bis 
colleagues will be reluctant to 
clamp dawn on the supply of 
funds to business. 

“The RBI is in a difficult 
position, it is worried about 
infla tion and lack of private 
Investment in the economy,” 


says Mr SI*. Rao, director of 
the National Council for 
Applied Economic Research, 
an inHapanitant think-tank. 

Figures this week show the 
inflatio n rate has risen to its 
highest level since July 1992, 
with the wholesale price Index 
for the week ending April 16 
showing an annual increase of 
1L1 per Prices have been 
pushed up by fi nancial pres- 
sures and shortages in specific 
commodities, caused by poor 
harvests. 

The main fmanoial pressure 

has been increased borrowing 
by the government which saw 


the fiscal Hafirit for the year 
ending hi March rise to T3 per 
cent of GDP, against a target of 
4.7 per cent The target for the 
current year is 6 per cent. 
Inflationar y effects have been 
compounded by the large 
inflow of foreign capital into 
India' s financial markets, help- 
ing to take foreign exchange 
reserves to a record $l6bn 
(£7-6bn). 

Mr Manmohan Singh, 
finance minister, said last 
week he expected the inflation 
rate to fall after the next three 
months, because the current 
rate of increase has been influ- 


enced by a round of rises in 
government-administered 
prices for fuel and other com- 
modities early this year. 

Inflationary pressures tend 
to ease in the autumn, when 
crops are harvested in many 


The authorities are under 
pressure from industry to keep 
down the cost of credit Latest 
figures for industrial produc- 
tion at first glance appear to 
show strong advances, with a 
year-on-year rise of 6.7 per cent 
recorded in December; prelimi- 
nary estimates Indicate gains 
of 7.2 per cent and 7.6 per 


rap t in January and February. 

But these figures, which fol- 
low marginal gains of 2 per 
emit or less in ear her m o n t hs, 
exaggerate the improvement, 
because industry was hit by 
unrest following the destruc- 
tion of the Ayodhya mosque in 
the same months in 1992-%. 
There was an underlying gain 
in output, but It was more 
modest 

One factor complicating the 
RBI’s discussions is that 
demand for credit has been 
generally weak. Large compa- 
nies have been raising capital 
in domestic and interna tio nal 


markets and using it, not for 
new investments, but for pay- 
ing off expensive loans. The 
hnnWng system is awash with 
excess liquidity. 

A tightening of credit policy, 
through an increase in interest 
rates or curbs on loans, may 
have little effect The central 
bank's other main option is to 
increase the cash reserve ratio. 
The RBI hoard usually sets 
credit policy in six-month 
cycles. But because of delays 
in forming the present board, 
this week's meeting - for the 
period up to the end of Septem- 
ber - is being held late. 


Australia budgets for privatisation pay-off 


Budget deficit projections By NBdd Tait In Sydney 


Percenter OOP 


4 - — 



1902-3 84-S 84-S K4 98-7 07-6 
Source PiaXraBm Tiauuy " • 


Australia's treasurer Mr Ralph 
Willis yesterday delivered a 
budget for the 1994-95 financial 
year which drew heavily on 
Australia’s recent surge in eco- 
nomic growth and expected 
about Aj2.4bn (£L15hn>worth 
of asset sale proceeds. 

Financial markets were 
watching to see what economic 
assumptions the government 
used to underpin its f orecasts. 
In the event, Mr Willis took a 
fairly generous, by no means 
outlandish tack, suggesting 
GDP would grow 4£ per cent 


in 1994-95, against 4 per cent in 
fhft current year. 

Employment, he suggested, 
would increase about 3 per 
cent, roughly in line with mar- 
ket expectations, while unem- 
ployment should drop to about 
9.5 per cent by June 1995, 
against 10.3 per cent at pres- 
ent. inflation should average 
2J25 per cent in 1994-95. 

The budget predicted the 
government deficit for the cur- 
rent financial year would be 
A$13.6bn, A$2.4bn less than 
originally forecast; next year's 
deficit should roll out at 
A$11.7bn (SL5 per cent of GDP). 


The gover n ment believes it is 
still on course to have the defi- 
cit down, to 1 per cent of GDP 
by 1996-97: Mr Willis said the 
figure should now come in at 
0.9 per cent, with Australia 
moving into surplus shortly 
after that. 

He also predicted business 
investment, which has lagged 
in the current recovery, would 
grow 14£ per cent next year. 
Such an upsurge could affect 
imports, but the current 
account deficit should increase 
“mly slightly". 

The government’s mam new 
spending programme (the 


A$&5bn jobs package) was out- 
lined in a White Paper last 
week. Among the few new 
other expenditure items was 
the A$L5bn "land fund" for 
Aborigines who do not bmefit 
directly fro m the new Native 
Title legislation, although the 
contributions will be spread 
over 10 years. Mr Willis also 
unveiled some significant 
increases in health spending. 

On the income side, the gov- 
ernment plans to raise more 
than A$2.4bn from asset sales, 
notably the disposal of its 
remaining 75 per cent in 
Qian tag , the Australian airtime. 


But In general, it herpes the 
higher tax revenues stemming 
from the economic recovery, 
and a tightening of tax recov- 
eries, will fund expenditure 
measures and keep the deficit 
reduction strategy on track. 
Earlier fears that there would 
be either a jobs levy or an 
increase in the Medicare levy 
were not borne out 
Ms Cheryl Keroot, leader of 
the Australian Democrats (erne 
of the minor parties holding 
balance of power in the Senate) 
describing the budget as a 
“tread water" one drafted with 
a view to the next election. 


Aid for 


African 


refugees 

sought 


The United Nations High 
Commissioner for Refugees 
yesterday appealed for 556.7!m 
(£37.9m) to cover the urgent 
needs of 860.000 refugees who 
have fled ethnic strife in 
Rwanda and Burundi, writes 
Frances Williams in Geneva. 
The appeal is intended to 
cover food, drinking water, 
shelter and sanitation over the 
next three months for refugees 
now In Tanzania, Burundi, 
Zaire and Uganda. 

Two weeks ago, in the larg- 
est and swiftest exodus 
UNHCR hes ever seen, a some 

250.000 people surge into 
north-western Tanzania in the 
space of 24 hours. 

The UNHCR, which has set 

up a mak eshift wimp at Ben- 

aco 18km from the Rwandan 
border, says it is stm receiving 
400-1,500 new refugees each 
day. Children make up half 
Benaco’s 250,000 population. 

Only last week UNHCR said 
it would need £&5m for refu- 
gee aid, but the agency has 
revised upwards its immediate 
requirements as the numbers 
escaping the civil war In 
Rwanda continue to grow. 

Separately, Canada has 
asked for a special session of 
the UN Human Rights Com- 
mission to discuss tiie atroci- 
ties in Rwanda, where up to 

200.000 may have died in 
remit weeks. If agreed by a 
majority of the 53 members, 
the commission will meet lata* 
this month in Geneva. 

• The US. in Its first military 
involvement in Africa since 
pulling out of the bloody 15- 
month operation in Somalia, 
announced yesterday it had 
started flying relief supplies to 
Rwandan refugees in Tanza- 
nia, Reuter adds. 

The US embassy in Nairobi 
said 15 Starlifter C-141 mili- 
tary planes were flying relief 
supplies to nearly 250,000 
Rwandan refugees in Tanzania 
and Burundi. It said further 
flights were possible. 


Palestinian police 
enter Gaza Strip 


The first group of Palestinian 
policemen crossed from Egypt 
into the occupied Gaza Strip 
yesterday under the Israeli- 
PLO peace accord and started 
making preparations to take 
over security from withdraw- 
ing Israeli soldiers, Julian 
Ozanne reports. 

The 30 policemen, some vet- 
erans of wars with Israel, were 
greeted by some 300 Palestin- 
ians waving the national flag 
who had evaded Israeli road- 
blocks to welcome them. 
Israeli soldiers and police tried 
to keep things ealm after vio- 
lence erupted on Monday 
when several hundred Pales- 
tinian youths became unruly 
as they got increasingly frus- 
trated with tiie delay in the 
policemen’s arrival. 

A feather 200-300 Palestin- 
ian police, waiting on the 
Egyptian side of the border, 
were expected to cross into 
Gaza last night and today 
after a two-day delay and con- 
fusion on both sides. Some 270 
policemen remain camped on 
the Jordan-Israeli border 
waiting to enter Jericho - the 
future seat of the Palestinian 
administration. Israeli offi- 
cials said they could enter Jer- 
icho this morning. 


France in 


push for 
aid to 
Algeria 


By David Buchan 
in Paris 


France has redoubled its 
promises to try to win the 
Algerian government an 
increase in new international 
aid and a decrease in the bur- 
den of repaying old aid, amid 
new evidence that France is 
being used as a conduit for 
arms to anti-government rebels 
in Algeria. 

Mr Ahmed Bentntour, Alge- 
rian finance minister, met his 
French counterpart, Mr 
Edmond Alphanddry, this 
week to discuss the prepara- 
tion of Algeria’s formal agree- 
ment with the International 
Monetary Fund, next week's 
discussion by European Union, 
finance ministers of the 
unblocking of a EculSOm 
(£H5m) loan by the EU to 
Algeria, and the Paris Club 
meeting of Algeria’s official 
creditors in late May or early 
June. 

Mr Alphandfiry told Mr Ben- 
bitonr that, once it settles debt 
relief terms with the Paris 
Club, Algeria will get new 
bilateral aid from France, prob- 
ably equivalent to the FFrSbn 
(£697m) credit Paris granted 
last year. 

The French minister 

has written to other members 
of the Group of Seven, asking 
them, especially the US and 
Japan, to give Algeria maxi- 
mum debt r elief Algeria is <p»id 
to want to reduce by $4bn 
(£l9bn) its 1994 debt service 
bill of $9.5bn. 

The anti-terrorist unit of the 
French police yesterday took 
custody of an Algerian 
arrested last Friday in eastern 
France. 

He was said to have with 
him an arsenal of weapons In 
his car, including, appa rently , 
129 sticks of explosive, 99 deto- 
nators, 5,000 rounds of ammu- 
nition, three automatic pistols, 
one assault rifle, night-sights 
and walkie-talkies. 

He was suspected of smug- 
gling thp aims from Germany 
to Algeria, probably to Islamic 
militants there. 

But so far the French inte- 
rior ministry remains con- 
vinced that the Islamic Salva- 
tion Front’s hold over the large 
Algerian community is rela- 
tively slight 



Eddy Tansfl (left) leaves a Jakarta court yesterday at the start of a trial of six suspects accused of involvement in a (430m (£204m) 
letter of credit scandaL Tansfl, head of the Golden Key petrochemicals group, could be sentenced to life imprisonment if convicted of 
violating hanking laws. Fifty-five witnesses are expected to be called. Wahono, the Hoase speaker, told parliament’s opening session 
on Monday the scandal was merely the tip of the iceberg and that much of the country’s co rrup tion had yet to be exposed. am* 


Labour faces Histadrut defeat 


By Julian Ozanne In Jerusalem 


Israel’s governing Labour 
party looked set for defeat last 
night in nationwide elections 
for leadership of the country’s 
biggest trade union federation, 
at the hands of Mr Haim 
Ramon, a former Labour minis- 
ter set an breaking the mould 
of Israeli politics. 

Opinion polls showed Mr 
Ramon, a young politician 
touted as a possible successor 
to Prime Minister Yitzhak 
Rabin, was well ahead of 
Labour incumbent Mr waim 
Haberfeld. About 1.6m Israelis 


are eligible to vote. 

Political analysts believe Mr 
Ramon, 44, who resigned as 
health minister in February, 
intends to use his victory as a 
springboard for challenging Mr 
Rabin rather from within the 
Labour party car by establish- 
ing his own party. 

Mr Ramon, standing on an 
independent list, represents 
the young generation of the 
Labour party who are desper- 
ate for reform and a change In 
the old-guard leadership sym- 
bolised by Mr Rabin, 72, Mr 
Haberfeld, 62, and Mr Shimon 
Peres, the 70-year-old foreign 


minister. They also want to 
break the HIstadruFs strangle- 
hold on Labour party policy 
and speed Israel’s transition 
from socialism to the social 

market. 

Mr Ramon, in coalition with 
the left-wing Meretz bloc and 
the ultra-orthodox Shas party, 
has foCUSed hiS rennpalgn on 
social issues and vowed to curb 
the Histadrut* s huge bureau- 
cracy. 

The popular Tel-Aviv bom 
lawyer, once a dose adviser to 
Mr Rabin, quit the cabinet 
after It withdrew his health bill 
which sought to break the fink 


between Histadrut membership 
and the national health ser- 
vice. The bill was abandon e d 
by Mr Rabin after intense pres- 
sure from the Histadrut, ner- 
vous about its dwindling 
power. 

Polls published yesterday 
showed Mr Ramon’s list, 
dubbed “NewLife”, would 
emerge as the largest bloc in a 
three-way split between 
Ramon, Labour and the right- 
wing coalition formed of the 
Likud and Tkoznet parties. If 
Mr Ramon does not win a 
majority, he will be forced to 
form a coalition. 


Interest rate increase attacked 


Israel’s banking and business community 
yesterday attacked Monday’s 0.5 percent- 
age points rise in interest rates and 
warned the central hank's action would 
damp economic growth, harm exports and 
hinder private investment, writes Johan 
Ozanne. 

Israel's finance ministry, deeply critical 
of an earlier interest rate rise, made no 
public comment but officials said the min- 
ister was fnrions with the independent 
move by the Bank of Israel. 

The Bank of Israel raised its prime lend- 
ing rate from 10.5 to 11 per cent to reach 
this year’s annual inflation target of 8 per 
cent Inflation last year was 11.3 per cent 


and bank officials said data from the first 
font mouths of this year showed tnflainnn 
was running at about 10 per cent. 
Members of the Knesset (parliament) 
finance committee demanded the central 
bank lower interest rates by 1 per cent 
They are preparing a law according to 
which all future interest-rate decisions 
will be taken Jointly by the central bank 
and Finance Ministry. 

Mr Dan Tlchon, a member of the com- 
mittee, said: “To prove it exists, the cen- 
tral bank is punishing the business sector 
and preventing continued growth by 
unjustified rises in interest rates.” 

Mr Dan Proper, chairman of the Israeli 


Manufacturer's Association, said yester- 
day the 8 per cent inflation target was 
unrealistic and would defeat the govern- 
ment's mat™ aims of stimulating growt h 
and fighting an unemployment rate of 
more than 10 per cent 

“There will be a negative impact on 
investment, an the rate of exchange and 
therefore on exports," he said. “We are 
going to lose the momentum of growth 
and not gain anything.” 

Mr Proper also hit out at Mr Jacob 
Frenkel, governor of the Bank of Israel, 
saying; “The problem Is that the Bank of 
Israel wants to show independence at the 
expense of the economy.” 


Nigeria wonders when its turn will come 


By Paul Adams In Lagos 


W hile the Nigerian 
military leadership 
was in Pretoria to 
witness the start of South 
Africa’s majority rule, many of 
Nigeria's 88m people were at 
home wondering when their 
tom would come. 

Nigerians’ admiration for 
South Africa's transfer of 
power is mixed with realisa- 
tion that South Africa can now 
claim the title to which Nigeria 
has long aspired: foremost 
black African state. Mr Mand- 
ela's inauguration Is poignant 
for Nigeria, which has champi- 
oned black majorities in. 
southern Africa more success- 
fully than it has resolved its 
own political problems. 

Nearly seven months after 
Gen Sani Abacha seised power, 
promising a swift transition to 



Abacha: promised democracy 


lasting democracy, Nigeria is 
no nearer civilian rule than 
when the armed Forces took 
over a decade ago. 

“I wish Abacha had worn 
army uniform instead of the 
agbada (traditional dress) to 
show the world we have mili- 
tary rule,” said a Nigerian 
after watching the Inaugura- 


tion on television. There will 
be no political activity until 
next year at least, after a 
national constitutional confer- 
ence, supposed to be starting 
rai June 27, has debated and 
passed Its recommendations to 
the government before the 
drafting of a new constitution. 

Until next year, political par- 
ties are illegal, all democrati- 
cally-elected institutions are 
dissolved, and all political 
activity is banned. 

The conference was Gen 
Abacha’s idea. Many hoped it 
would be a sovereign confer- 
ence in which Nigerians could 
resolve some of the country’s 
political problems, not least 
the role of central government 
and minorities representation. 

But the goodwill evaporated 
as the government delayed the 
start date for the conference 
and began to limit Its scope 


and powers. The C ampaign for 
Democracy (CD) has refused to 
share in or support the confer- 
ence and lias called for a boy- 
cott of the election of 270 dele- 
gates, due to start on May 23. 

"This conference is a ruse, 
designed, to buy tima for a mili- 
tary regime in no hurry to go," 
says Mr Sylvester Odlon- 
AkhaJne , the CD’s general sec- 
retary in Lagos. “The regime 
has removed all substance 
from the conference. If the gov- 
ernment disapproves of any of 
the elected delegates, it can 
replace them at any stage. How 
can the divergent views of a 
country like Nigeria coalesce 
when a ban exists on all pre- 
conference political activity?” 

Information Minister Jerry 
Gana denies this charge. “The 
constitutional conference is 
definitely not a ploy to buy 
time; we believe we are 


answering the yearnings of 
Nigerians," he said recently. 

Since then, Gen Abacha has 
said his Provisional Ruling 
Council will vet the outcome of 
the conference's report. Mr 
Aminu Saleh, secretary to the 
government, has said the final 
report of the conference will be 
written by a commission 
appointed by the military. 

That commission will in turn 
report to a political bureau, to 
be appointed by the regime, 
which will draft the constitu- 
tion. “The so-called constitu- 
tional conference is unneces- 
sary says Mr Moshood 
Ahiola, who won the majority 
in last June's annulled presi- 
dential election. “We don't 
need it because when you have 
held an election, the nAvf step 
should be the formation of an 
elected government. We have 
not had that” 


Political rift 
in Lebanon 


jolts currency 


By Mark Nicholson in Cairo 


The paralysing stand-off 
between Mr Rafik Hariri, Leb- 
anese prime minister, and 
President Elias Hrawi further 
jolted confidence in the coun- 
try’s currency yesterday -forc- 
ing the central bank to sell an 
estimated 330m in US dollars 
for the second day running in 
local markets to hold the 
pound steady. 

The row between the leaders, 
ostensibly over who to appoint 
in a cabinet reshuffle intonrigd 
to boost Christian representa- 
tion in government, appeared 
likely to prompt direct inter- 
vention from Syria, which 
exerts considerable influence 
in Lebanon. Local commenta- 
tors said the dispute does not 
now look rasdveaMe without a. 
wholsale change in Mr Hariri's 
iS-month-old administration. 

Mr Hariri, the Sunni busi- 
nessman flrtnniwfarf mime min* 
ister by Mr Hrawi in 1932 to 
revive confidence in the coun- 
try after its 17-year civil war, 
remained ensconced at home 
yesterday, having “withdrawn” 
from his duties at the weekend 
after the dispute with Mr 
Hrawi, a Christian, and Mr 
Nabhi Beni, the Shin speaker 
of parliament 

Both Mr Bern and Mr Hrawi 
appear to have opposed Mr 
Hariri’s plan to bring into the 
30-member cabinet two senior 
Maronite Christians in a ges- 
ture his supporters say was 
intended to “enhance internal 
unity” amid deepening bitter- 
ness in the Christian commu- 
nity over Mr Hariri's govern- 
ment style and their perceived 
political marginalisation. 

However, neither Mr Hrawi 
nor Mr Berri approved the men 
suggested; politicians in Beirut 
said both, wanted a far wider 
cabinet shake-out than Mr Har- 
iri had proposed, though nei- 
ther was apparently pressing 
for the prime minister's resig- 
nation. 

The politicians said the row 


Politicians say 
the row arose 
because Mr 
Hariri has 
appointed dose 
aides to critical 
ministries 


pricing system 
for Singapore 


Singapore, which, heavily taxes 
cars and restricts their entry 
into the business district dur- 
ing peak hours, is launching 
the world’s first electronic road 
pricing system in a new 
attempt to reduce road conges- 
tion, public works depart ment 
officials said yesterday, Reuter 
reports from Singapore. 

“The system win permit a 
more flexible pricing structure 
and a more effective way to 
control traffic,” said executive 
engineer Mr Lew 711 Der. 

Under the Systran, now being 
tested in some areas in Singa- 
pore, selected entry points will 
send a signal to an electronic 
card fixed to a vehicle when It 
passes a marker to enter a 
restricted area. 

The card will “store” a cer- 
tain amount of money wna 
each time a vehicle passes an 
entry point a fere will be auto- 
matically deducted. If the 
stored-value card is absent or 
does not contain enough 
money, the system will trigger 
cameras to photograph the 
rear number plate of the 
vehicle as it passes. 

Motorists driving to Singa- 
pore's busy shopping and busi- 
ness districts in peak hours 
must now buy a permit or face 


Japan stuck in 


economic mire 


By WBBam Dawkins In Tokyo 


Japan’s economy continues to 
be generally sluggish, accord- 
ing to the latest monthly 
report of the government’s 
Economic Planning Agency. 

The economic itocHwo passed 
its 37th month in April, the 
longest downturn in post-war 
history, showing almost no 
change from the previous 
month. 

The economy “is going 
through an adjustment phase, 
and showing an overall slump, 
though there are some bright 
signs,” said the EPA, using the 
same phrase as last month’s 
report 

The agency - over-optimistic 
about the recovery outlook 
last year - has in recent 
mont h s become more ptwriwi^ 
tic than some other official 
government forecasters, espe- 
cially the Bank of Japan, 


iin| , ° 


arose from a more gen&«i 
accusation that Mr Hariri has 
appointed dose aides to critical 
ministries - to which Mr Hari- 
ri’s backets have responded by 
accusing some ministers and 
other senior political figures & 
“hindering** and “delaying” Hr 
Hariri's ambitious multi-bfi. 
lkm-doflar rebuilding plans for 
Beirut with their “private 
Interests”. 



They also suggested Ur Har- 
iri had not been able to win 
“basic” ministerial co-opera- 
tion with the present cabinet 

The row, the most serious 
yet between Mr Hariri and Mr 
Hrawi, comes amid a more gen- 
eral souring of the optimism 
which initially greeted the bil- 
lionaire businessman's arrival 
in Beirut 

Although the flotation ear- 
lier this year of Sdidftre, the 
comp an y created to rebuild the 
city’s shattered core, was a 
success, share distribution has 
since been delayed and the 
company this week said it 
would take at least “another 
month” before reconstruction 
work can begin. 

Last week, Banque Audi also 
said in its economic bulletin 
that growth in the first quarter 
had slowed and that only a 
“huge investment effort* 
would revive output 

Money in the country, the 
report said, was increasingly 
being directed into money man 
ket placements rather than 
productive enterprises, partly 
the result of high interest rates 
an the Lebanese pound. 



Electronic road 


a ticket from the island's effi- 
cient traffic police. 

Authorities fear tiny Singa- 
pore, just 42 km (26 miles) kmg 
and 23 km (14 miles) wide, will 
soon be clogged by a growing 
number of vehicles. 

Rising yfflngnnp is prompt- 
ing more Singaporeans to buy 
cars, despite eye-popping price 
tags inflated by a stiff pre- 
mium for new cars, decided 
during government auctions 
- a new L6-litre Honda Civic, 
for example, costs around 
SS122.000 (378.710). 

Three groups of interna- 
tional telecom and electronic 
companies have been short- 
listed from 10 who originally 
bid for the project, officials 
said. Teledata (Singapore) and 
Japan's Nippon Telegraph ft I 
Telephone International sub- 
mitted the lowest bid of 
S$193.4m (5135m). 

The second consortium, with 
a S$231m ($149m), bid for com- 
prises Singapore Electronic ft 
Engineering, General Electric 
Company (S), Britain's GEC 
Traffic Automation and Daly's 
Marconi 

The third group with a bid of 
1268.9m (S173.48m) comprises 
Philips Singapore and Miyodd 
Electric of Japan. 


which believes that the condi- 
tions for an upturn are fellW 
into place. 

Among the bright sign* 
highlighted by the EPA 
the continued strength » 
housing starts at 1.5m P® 
month, an apparent end to tee 
decline in corporate eaefr 
dence ami an upturn in p®' 
tonal spending. 

However, Mr Yoshio Ter* 
sawa, the EPA’s new dj»«® 
general, warned yesterday 
that tiie Impart of tiie 
recent rise was “extr eme j 
severe". Recovery prog**® ^ 
are weakened by the cootm® 1 
fall in corporate earnWJ 
down four years in a w*J“ 
the annual results reason J™* 
confirm over the next w* 
weeks. Industrial outpntcffr 
tinoes to fall, though C(BB *Z 
rues are ™gMng progress n> 
catting stocks 
said the EPA. 




. t 


4 _ 


FINANCIAL TIMES WEDNESDAY MAY II 1994 


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Car imports 
hit a peak 
in Japan 


By Kevin Done, 

Motorlnduatry Correspondent 

Imported cars captured a 
retard 8.4 per cent share of the 
Japanese new car market in 
April, figures released yester- 
day by the Japan Automobile 
Importers' Association show. 

Sales of imported cars rose 
last month by 35.1 per cent 
ysar-on-year to 2MJ56, in con- 
trast to the continuing decline 
in the overall Japanese new 
car market, where total car 
sales fell 6.1 per cent to 259.249. 

The volume of imported cars 
is being increased significantly 
by rising imports to Japan 
from Japanese vehicle makers’ 
overseas plants. Total imports 
of Japanese- bad ged cars 
jumped 6L5 per cent to 5,459 
from 3,381 a year ago. 

Overall, new car sales in 
Japan have fallen for three 
years, in succession from 5.1m 
in 1990 to 4.2m last year, total 
new vehicle sales declined by a 
further 5.8 per cent year-on- 
year in the first four months 
this year. By contrast, sales of 


imported vehicles in the first 
four months Jumped 37.6 per 
cent year -on-year to 86,662, 
including a 28 per cent 
increase in sales of imported 

cars to 7SJ325 cars. 

The recovery in sales of 
imported cars began already 
last year with an increase erf 
75 per cent to 195,090 following 
two years of decline, and the 
growth rate has accelerated 
this year. In the whole erf last 
year, imported cars accounted 
for 4.6 per cent of the total 
Japanese new car market 

Sales of German can rose 
26.6 per cent year-on-year in 
April to 9,834, Including 
increases of more than 40 per 
cent by BMW, Volkswagen and 
Audi. Sales by Rover group of 
the UK jumped a third in 
April, while the Swedish car- 
makers Volvo and Saab dou- 
bled their sales year-on-year. 

Sales of imported cars from 
the US rose 465 per cent to 
6534; over half this total was 
accounted for by cars imported 
by Honda and Toyota from 
their plants in North America. 


Four shipping 
groups plan 
global pact 


By Paul Abrahams in Tokyo, 
Simon Holberton in Hong 
Kong and Ronald van da Krol 
in Am s ter da m 

Four of the world's top 10 
container groups yesterday 
announced plans for an alli- 
ance linking japan, China, 
Europe and North America, 
the globe's largest trading 
blocs. 

Mitsui OSK of Japan. Ned- 
iloyd Lijhen of the Nether- 
lands, American President 
Lines of the US, and Hong 
Kong’s Orient Overseas Con- 
tainer Line, said they had 
started negotiations aimed at 
sharing capacity around the 
world. The lines will not 
take equity stakes in each 
other. 

The planned partnership is 
the latest in a series of world- 
wide agreements between ship- 
ping companies as they seek to 
achieve economies of scale in 
an increasingly competitive 
environment The four aim to 
dominate the high value-added 
segment of the container ship- 
ping market which involves 
greater attention to customer 
service. 

“This configuration will 
allow the four companies to 
use their ships more effec- 
tively. improving use of capac- 
ity, offering more frequent, 
more direct and foster sail- 
ings,” said Mr HldeyuJd Sada- 
matsu, Mitsui OSK’s deputy 
general manager for Europe 
and Oceania. 

The groups were still negoti- 
ating how many ships would 
be allocated to the alliance 
which should be agreed within 
four months and implemented 
within two years, he said. 

Mr Simon Brough, finance 
director of Orient Overseas, 
said the alliance would allow 
the partners to offer a frequent 
service to their customers. 
Each company would, how- 
ever, be responsible for its own 
marketing, sales and service, 
he said. The new alliance could 
eventually Include joint truck- 
ing, logistics, warehousing and 
inland operations as well as 
ship-sharing. 


In Rotterdam, Nedlloyd said 
the proposed alliance would 
enable it to improve services to 
cargo customers. “It means we 
can offer a greater frequency of 
services, and more direct ser- 
vices to more harbours, than 
before," Mr Hans Teeuw, 
senior vice-president of Ned- 
Uoyd Lines, said. 

He said the partnership was 
not aimed at bolstering freight 
rates but added that Nedlloyd 
hoped that ' rates would 
recover. The recent stabilisa- 
tion of rates after sharp 
declines in past years, plus 
growth in cargo volumes, is 
expected to allow Nedlloyd to 
return to profit in 19M after 
several years of losses. 

The shipping industry, 
which is highly capital inten- 
sive, is suffering from overca- 
pacity and poor rates. This has 
forced operators into capacity 
sharing agreements to make 
the most efficient use of assets 
and improve returns. 

Last year. Hapag-Uoyd, Ger- 
many's biggest container com- 
pany, Neptune Orient Lines of 
Singapore, and Nippon Yusen 
Kaisha, Japan's largest contai- 
nership company, concluded 
an agreement to provide ser- 
vices between Asia, North 
America and Europe. Mitsui, 
which previously had a part- 
nership for Asian-European 
trade with Nippon Yusen 
Kaisha and Hapag-Lloyd, 
severed its links with these 
companies after the creation of 
the alliance. 

American President Lines 
and Orient Overseas are the 
largest container shipper on 
the trans-pacific route since 
fo rming an alliance in which 
they share capacity, co-ordi- 
nate sailings and share con- 
tainer terminals. Mitsui has 
tpamprl np with thfr Mala ysian 
International Shipping Corpo- 
ration. Nedlloyd Lines and 
Compagnle G€n£ Mar itime to 
provide scheduled services 
between Europe and the Far 
East The Japanese company 
said the latest deal would not 
affect this arrangement, called 
the Tonnage Sharing Agree- 
ment. 


ABB plans power 
projects in China 


By Our Bering Staff 

ABB, the world’s largest 
electrical engineering gronp, 
plans to invest $500m (£335m) 
in power projects and equip- 
ment in China by 1996; but 
low government-mandated 
returns of 12 per emit are dis- 
couraging equity participation 
in power stations. 

Mr Percy Barnevik, presi- 
dent of the Zurich-based com- 
pany, told reporters in Beijing 
yesterday ABB was adopting a 
“long-term perspective" in its 
approach to the Chinese mar- 
ket where there is enormous 
demand for energy. “We are 
optimistic about China’s 
potential,” he said, "even if 
economic growth is slower 
than the last five years”. 

China more then doubled its 
power-generating capacity in 
the last decade but to reach 


Europe's electricity per capita 
consumption would mean har- 
nessing 1,500 gigawatts of gen- 
erating capacity - half of 
today's global capacity- (A gig- 
awatt is equivalent to lbn 
watts). 

“China needs 15,000*18,000 
MW annually -that is 30 
power plants a year, or two- 
and-a-half a month,” Mr Bar- 
nevik said. 

ABB has some ll ventures 
in China, including four power 
stations. It plans a further 10 
projects in the next few years, 
mostly in the power sector. 

Beijing recently dampened 
investor enthusiasm for build- 
operate-transfer <BOT) projects 
by seeking to cap returns at 12 
per cent This compares with 
some earlier deals in southern 
China Involving as much as an 
18 per cent return on invest- 
ment 


Gatt launches drive to find new chief 


By Frances Williams in Geneva 

The General Agreement on Tariffs 
and Trade yesterday formally 
launched its hunt fbr a successor to 
Mr Peter Sutherland, who plans to 
stand down from Gaft's top job at the 
end of t his year. 

The successful candidate will 
become the first director-general of 
the new World Trade Organisation 
which will absorb Gatt in 1995. How- 
ever, he or she will be selected under 
current Gatt procedures. Mr Andras 
Szepesi of Hungary, this year’s chair- 
man of the contracting parties (mem- 
bers), said yesterday he would begin 
the necessary consultations, which 
are designed to secure a consensus. 

Trade diplomats in Geneva said 
they hoped agreement could be 
reached by the summer. No names 
are yet officially in the ring, but sev- 
eral possible candidates have been 
mentioned, not necessarily with their 



Possible successors to Sutherland (centre): Rubens Rlcnpero (left) and Ruggiero 


are yet omoauy m we img, out sev- knowledge or approval minister ana an early advocate or me uatt amoassaoor, ana mt rnuip uur- sponsorsmp, of the leading ti 

eral possible candidates have been Among the more plausible are Mr WTO, Mr Rubens Rlcupero, Brazil’s don. trade minister of New Zealand. powers - the US. the European 

mentioned, not necessarily with their Rena to Ruggiero, former Italian trade environment minis ter and a former Developing countries, which and, to a lesser extent. Japan. 

Sutherland urges early Chinese entry to trade body 

By Tony Wafter in Bepng return to Gatt or its successor body, nese capital were clearly aimed at per- the Gatt issue late this month and to ensure compliance and a 

the World Trade Organisation. suadlng the Americans and the Euro- with the US early in June. A meeting guards clause to counter Ci 

Mr Peter fSirtherland dtreetor eenernl “We are mrv anxious thp neentia. neans that the time Is rme for fThinn of the Gatt “wnrkine rrar+v” on China exnnrt siiroes. 


minister and an early advocate of the 
WTO, Mr Rubens Rlcupero, Brazil’s 
environment minis ter and a former 


Gatt ambassador, sa nd Mr Philip Bur- 
don. trade minister of New Zealand. 
Developing countries, which 


account for three-quarters of Gatt's 
123 members, are expected to make a 
strong push for the WTO top job. 
Many Third World nations, who 
played a key role in the just-com- 
pleted Uruguay Round of trade talks, 
see the vacancy as a golden opportu- 
nity to break the hegemony of tbe 
industrialised powers over the big 
international economic institutions. 
Latin American candidates mounted a 
vigorous challenge to Mr Sutherland 
last year. 

US officials in Geneva yesterday- 
denied suggestions that Washington 
was opposed to the WTO job going to 
a developing country national "We 
have no geographical or developed-de- 
veloping country limitations", said 
one senior US diplomat. 

Whoever succeeds Mr Sutherland 
will need to win the assent, if not the 
sponsorship, of the leading trading 
powers - the US. the European Union 
and, to a lesser extent, Japan. 


Mr Peter Sutherland, director general 
of thw General Agreement on Tariff^ 
and Trade, yesterday urged a speedy 
conclusion to negotiations on China's 
application to resume its Gatt status. 
Befjing withdrew in 1950, a year after 
the communists came to power. 

Mr Sutherland in Beijing for a busi- 
ness seminar said the international 
community favoured China's early 


return to Gatt or its successor body, 
the World Trade Organisation. 

“We are very anxious the negotia- 
ting process should be pursued speed- 
ily. constructively and with a view to 
finding solutions to any difficulties 
that may remain,” he said. 

“AH parties involved in the negotia- 
tions have to co-operate to find solu- 
tions and bring China into the World 
Trade Organisation.” 

Mr Sutherland's remarks in the Chi- 


nese capital were clearly aimed at per- 
suading the Americans and the Euro- 
peans that the time is ripe for China 
to resume its Gatt status. 

They come just weeks before Presi- 
dent Clinton is due to rule on whether 
to extend China's Most Favoured 
Nation trading status in the US. 
Denial of MFN would certainly affect 
Gatt negotiations. 

Beijing is due to resume bilateral 
discussions with the Europeans on 


the Gatt issue late this month and 
with the US early in June. A meeting 
of the Gatt “working party" on China 
is scheduled to be held in Geneva 
next month. 

Gatt negotiators have narrowed dis- 
cussions on terms for China's entry to 
such issues as a transitional period 
during which Beijing would be expec- 
ted to make further progress towards 
liberalising its economy. Talks are 
also focusing on review arrangements 


to ensure compliance and a safe- 
guards clause to counter Chinese 
export surges. 

Mr Long Yongtu, China’s chief Gatt 
negotiator, said it was time for negoti- 
ations to be accelerated. It would 
make no sense for China, which 
accounts for one-fifth of the world's 
population and ranks number 11 
among trading nations, to be excluded 
from the WTO when it is formed next 
year, he said. 


FINANCIAL TIMES 

LONDON - PARIS • FRANKFURT - NEW YORK • TOKYO 


EUROPEAN PRIZE FOR 
THE BEST BUSINESS LAW STUDENT 1 994 


The European Prize will be open to citizens of the European Union who are 
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FINANCIAL TIMES WEDNESDAY MAY II 1994 


NEWS: THE AMERICAS 


Bankers defend derivatives 


By George Graham 
in Wa shingto n 

Senior banking executives 
rallied in Washington yester- 
day to fight off e giis for more 
government regulation of 
derivatives. There is growing 
congressional concern about 
the risks raised by these some- 
times co m plex finannial prod- 
ucts, such, as interest rate 
swaps and foreign exchange 


A panel of senior bankers 
and former financial services 
regulators told a Bouse of Rep- 
resentatives committee yester- 
day that the risks associated 
with derivatives had been 
greatly exaggerated and that 
they saw no need for farther 

legislation. 

“Whatever else is true -and 
there are real issues that 
should be addressed - the sky 


Is not falling, " said Mr Richard 
Breeden, former chairman of 
the Securities and Exchange 
Commission. 

Mr Gerald Corrigan, farmer 
head of the new York Federal 
Reserve, also rejected the need 
far legislation- 

“I am hard pressed to think 
of sensible things that might 
be done through legislation 
that would better equip the 
Fed or other official bodies to 
d<wl with a flrnmHal disruption 
of consequence." Mr Corrigan 
said. 

“So far the normal 
are working. It is hard to make 
a case that additional regula- 
tion or legislation is needed to 
make up for a deficiency,'* 
added Mr Dennis Weather- 
stone, chairman of JP Morgan, 
who headed a study last year 
by the Group of 30 of deriva- 
tives practices. 


The three financiers scoffed 
at measures proposed by tbs 
Office of the Comptroller of fite 
Currency, one of the principal 
bank regulatory agencies, to 
broaden the requirement for 
banks to determine whether a 
derivatives transaction Is 
appropriate for a particular 
customer. 

Expanding on a circular it 
put out last year, the OCC said 
ban lrn ghniiH the SUft- 

ability of a derivative instru- 
ment for their customer, 
whether they were acting as a 
ftenlnr OT an. ftwd chrmTH 
Tnafcg sure the mi^nw under- 
stood the risks of the transac- 
tion. 

But Mr Breeden dismissed 
the need for such concern 
about the large and sophisti- 
cated financial investors who 
may be engaged in derivatives. 

“The traditional and still 


appropriate answer as to 
whether a dealer should have a 
duty to make a suitability 
determination with respect to a 
major multinational corpora- 
tion is simply no. There 
not been a category of “widow 

and orphan wmltitiaKimal coy. 

potation,' and I do not believe 
that we should create one 
now,” Mr Breeden said. 

Mr Corrigan added that it 
would be a “colossal mistake” 
to try to extend the system of 
finauriai regulation to corpo- 
rate end users of d e r i v ati ves. 

The General Accounting 
Office, tiie investigative arm of 
Congress, is dne to publish a 
report on derivatives later this 
month which is expected to 
call for more comprehensive 
capital standards for banks 
dealing In derivatives, along 
with greater federal scrutiny of 
the market 


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Law fees 
eclipse 
court 
selection 

By Jurek Ma rt in In W aah togtan 

In a week when American eyre 
might have been on President 
Bill Clinton’s search for a new 
justice for the S u p reme Court 
attention has been diverted by 
as issue evmi than the 
highest bench; the relationship 
between the law and money. 

Mr did confer yester- 

day with senior advisers on 
the court selection after 
mounting speculation over 
who has beer on and off his 
moveable short list Most fre- 
quently mentioned names 
ineindg Mr Richard Arnold, a 
distinguished federal judge 
who happens to hail from 
Arkansas, Mr Brace Babbitt, 
the interior secretary, and Mr 
Jose Cabranes, a federal judge 
of Hispanic extraction. 

But the White House staff 
has been preoccupied with a 
far more prosaic issue - how 
to pay for Mr and Mrs CHn- 
too’s private legal fees result- 
ing from the Whitewater 
investigations and the sexual 
harassment law suit filed by 
Ms Paula Jones against the 
president Ms Jones has an 
equivalent financial problem 
on her hands, the cost of pros- 
ecuting her case. 

The first family (declared 
income last year $293,000) has 
contracted with two high- 
priced ($4004500 an hour) law- 
yers. The White House is con- 
sidering Inviting private con- 
tributions to finwnra the bills 
which could easily rise 
towards the $lm range, capa- 
ble of wiping out their known 
private assets. Rough prece- 
dents include private dona- 
tions to the to help 

redecorate the White House, 
but tha* also attrac te d «»n<wrt 
of interest criticisms. 

Ms Janes (income unknown 
bnt small) might well find 
backing from conservative 
sources intent on embarrass- 
ing Mr Clinton. But accepting 
funding from such sources 
would suggest her action was 
politically motivated, not 
exactly the way to win over a 
jury in her $750,000 damages 
suit if the case ever comes to 
trial. Ho- lawyer said yester- 
day that only one $50 contri- 
bution had been received. 

But even the financial scale 
of their problems were 
dwarfed this week by news of 
another lawsuit. Mr Brian 
Mooar, a reporter/photogra- 
pher for the Washington Post, 
sued the District of Columbia 
gover n ment far no less than 
$17lm - and this from a gov- 
ernment whose budgetary 
shortfall is such that it wants 
to postpone $23 Dm in pay- 
ments to its pension fund. 
Even his editor expressed 
doubts about the size of the 
damages sought 
Mr Mooar, en route one 
night last December to 
another crime story, photo- 
graphed a woman handcuffed 
to a mail box after she had 
been pulled over on suspicion 
of drunken driving. Two 
policemen who tried to grab 
his camera in a tussle in 
which the reporter suffered 
back injuries were later 
cleared by an internal police 
investigation. 

Mr Mooter's lawyer declared: 
“This suit is not about 
money.” These were exactly 
the same words used by Ms 
Jones’s lawyer last week, 
prompting Mr Robert Bennett, 
Mr Clinton's attorney, to 
counter-charge: “This suit is 
all about money.” 



Perez de Cufellar: opposition dream ticket 


Peru’s opposition ‘in 
search of candidate’ 

Former UN chief Perez de Cuellar is being touted 
as likely opponent to Fujimori, writes Sally Bowen 


L ima's leading news mag- 
azine recently carried a 
photographic mock-up 
of a “dream ticket" far next 
year's presidential elections: as 
president, Mr Javier Pferez de 
Cu£Uar, farmer UN secretary 
general; running mates , Mr 
Ricardo Behnoat, a television 
personality twice elected 
mayor of r.im» and General 
Ketin Vidal, who master- 
minded the capture of Sendero 
Luminoso guerrilla leader Ahl- 
Guzman. 

The three are not known 
ever to have met and none 
- least of all General Vidal 
-has expressed a firm inten- 
tion to run. But speculation 
about who might have a 
chance of beating Mr Alberto 
Fujimori. next year is growing. 

Influential opposition figures 
are busily promoting a Pferez 
de Cufellar candidacy. And a 
series of opinion polls in the 
past month have indicated 
that, in a straight two-way 
fight, the former diplomat 
would beat Mr Fujimori by six 
points. 

"What we really have at 
present Is an opposition in 
search of a candidate,” says Mr 
Manuel Torrado, head of politi- 
cal research at local polling 
organisation Datum. 

Mr Pferez de CofeQar towers 
over other presidential hope- 
fuls. What is most important, 
he fits the bill as a political 
“independent” -80 per cent of 
Peruvians claim to have no 
party loyalty and the tradi- 
tional political groupings are 
still suffering from the general- 
ised discredit both self-inflicted 
and skflfaQy promoted by Mr 
Fujimori. 

Supporters of Mr Pferez de 
Cufellar point to his impeccable 
democratic credentials and 
high international standing. 
He would, they argue, help 


Peru’s government can spend 
up to $876m from its privatise 
tion pr ogr amm e on social and 
capital investment projects 
this year, according to an 
agreement with the Interna- 
tional Umwi la i y Fund, Rwiter 
reports from Lima. 

A letter of i n te n t, published 
in the nBMui gazette and doe 
to be signed soon, lays out the 
1994 targets for Fern’s eco- 
nomic programme undo* a 
three-year extended fund facil- 
ity which the government 
si gned with the IMF in March 
1993. 

Inflation will be reduced to 
between 15 and 20 per cent, 
gross domestic product will 
grow between 4 and 5 per cent 
and net international reserves 
will rise by 1151m. it said. 

“The government will 
deepen structural ref onus to 
improve efficiency and 
increase national savings, lay- 
ing the base for sustained 
growth and balance-of-pay- 
ments viability,” the letter 


rebuild the still-precarious 
bridges between Peru and the 
rest of tiie world. His experi- 
ence in seeking consensus 
could also be a welcome 
change from Mr Fujimori's 
authoritarian style. 

On the down side are Mr 
Pferez de Cuellar’s age (he is 74) 
and his lack of familiarity with 
his native land: he has lived 
abroad most of his life and con- 
tinues to do so. A senior Fuji- 
mori aide describes the former 
UN secret ar y general as "col- 
ourless, tasteless and odour- 
less”. Former president Mr Fer- 
nand o Belaun.de Terry, 
meanwhile, is reported to have 
said that “this is a product that 
won’t sen in the Andes”. 

Mr Torrado, a veteran of 


Peruvian political campaigriq 
disagrees. With proper market- 
ing, he says, Andean peasants 
in the remote highlands would 
vote en masse for Mr Pferez de 
Cufellar. “How could they not? 
In their eyes, he’s already been 
present of the world.” 

President Fujimori, however, 
will be hard to beat His 
approval ratings remain high 
and, though be has yet to 
announce his candidacy far a 
second term, he already 
appears to be cm the campaign 
trail. 

For weds he has been visit- 
ing remote rural areas and 
urban shanty-towns, opening 
new schools and the like. The 
1991 public purse has been con- 
veniently swelled by a 
stepped-up “social compensa- 
tionfimd” budget as well as by 
cash from privatisations. 

One tiling Mr Fujimori nota- 
bly lacks is a political party. 
Cambio (Change) 90, which he 
created to support his 1990 
presidential campaign and 
New Majority, conjured up to . 
run candidates in the 1992 postr 
coup constitutional elec ti ons, 
have failed to put down roots. 
With the king-established Apra 
and Popular Action parties 
gearing up to nm candidates, a 
1995 congressional majority for 
Mr Fujimori looks unlikely. 

Increasingly, the army has 
substituted for the political 
party Mr Fu jimori lacks. That, 
too, may create problems. 
Army support la always ossa*: 
tial in electoral processes in 
Peru -to distribute electoral 
material, guarantee order and 
collect ballot boxes. 

The biggest test for Peruvian 
democracy over the 11 months 
before the first round may be 
whether tiie armed farces can 
maintain neutrality towards a 
presidenbeandidate with, whom 
they are intimately iTntawf. 


Sony in Mexico 
labour complaint 


By Damian Fraser 
in Mexico Cfty 

The AFL-CIO, the US labour 
union grouping, is preparing to 
file a complaint against Sony 
Electronics for allegedly violat- 
ing the labour rights of its 
Mexican workers, in a poten- 


tially important test case of the 
North American Free Trade 
Agreement’s side accord on 
labour. 

Mr Michael Byrne, spokes- 
man for the AFL-CIO, said its 
complaint would be filed 
within weeks. The union 
alleges a Sony-owned plant in 
Noevo Laredo, Mexico, fired 
workers for union activism in 
January, played a substantial 
role in staging fraudulent 
union elections last month, 
and called riot police into the 
plant to put down a peaceful 
demonstration. 

Sony denied the allegations, 
saying it had been caught in a 
dispute between two factions 
in the company union. It says 
two workers were fired in 
March, but for di srupti ng work 
rather than union activism, 
and that Sony played no part 
at all in union elections. 

The AFL-CIO complaint will 


be the third presented to the 
National Administrative Office 
of tiie US Labour Department, 
which was set up to implement 
the labour side agreement of 
Nafta. The first two complaints 
were filed against General 
Electric and Honeywell for 
allegedly firing workers for 
seeking to organise a union in 
their Mexican-owned plants. 

The NAO agreed last month 
to review the complaints 
against General Electric and 
Honeywell, and has up to 180 
days to issue a non-binding 
public report which could be 
followed by a public hearing. 
However, the alleged violations 
are not punishable by sanc- 
tions, and it is not clear what 
the next step would be if the 
complaints were upheld. 

Under the Nafta side accord, 
labour offices are established 
in each member country to 
receive and report on com- 
plaints labour laws have been 
violated in other member coun- 
tries. However, in most cases 
the result of the report win be 
a recommendation, since sanc- 
tions are only applicable if a 
country fails to enforce its 
m in i mum wage, child labour 
or health and safety laws. 


BANK OF ENGLAND 

A REMINDER 
OLD £10 NOTES 



AS ALREADY ANNOUNCED, 
NOTES OF THE TYPE SHOWN ABOVE 
CEASE TO BE LEGAL TENDER 
AFTER 20 MAY 

You are urged to pay any such notes 
into your bank account, or to exchange 
them for current notes, by 20 May. 

After that date, most banks will continue 
to accept old notes for a limited period. 
These notes can be exchanged at die 
Bank of England indefi ni tely. 





f 




It’s nothing to do 
with logic. 

It’s all about love. 

In Sweden the average temperature is rather lower 
than we’d like it to be. And while our summers have a 
unique kind of beauty we can’t pretend they’re parti- 
cularly long or. hot. 

Nevertheless, at Saab we have always had a passion- 
ate love affair with the convertible. It isn’t remotely 
logical. But then, logic never did have anything to do 
with love. The result is a convertible you might want 
to take a look at: the new Saab 900 Convertible. 

GRABBING THE SUN; 

Almost any convertible looks good when the top is 
down. But at Saab we have a different set of priori- 
ties; we also have to make sure it looks good when 
the top is up. (That’s because in Sweden it’s rare that 
the top isn't up.) 

And when that fleeting ray of sunshine comes we 


can’t afford to waste 
time. We need to get 
that top down but fast. 
So we made sure the 
900 Convertible’s elec- 
tro-mechanical action 
works smoothly and 
efficiently every time. 
Even at temperatures 
well below zero. 

EAR PROTECTION. 

The Saab 900 Conver- 
tible’s top is also leak- 
proof and windproof. 
By which we don’t sim- 
ply mean that it protects you from the odd drop 
of gentle rain. We mean it’s proof against the full 
force of the Swedish winter — including the very real 
hazard of frostbitten ears. Particularly useful if, like 
us, you do your driving uncomfortably close to the 
Arctic Circle. 

Some convertibles have their back window made 
of plastic. The new 900 Convertible has one made of 
glass, complete with defroster. We like it because it 
keeps out the cold. 

You’ll like it because it 
keeps out the noise. 

PACK THE SKIS. 

Being Swedish, we’re 
dedicated organisers. 

We like to make sure 
we start every Journey with 
aii the necessary bits and 
pieces neatly in place. So we’ve taken pains to en- 
sure the new Saab 900 Convertible has a wealth of 
luggage space. 

That’s why the rear seat folds down and locks into 
position, giving you enough space to store a couple 
of pairs of skis. 

That’s why we made the- storage compartment 


for the convertible top out of soft fabric - so you can 
fold the whole thing away when the top is up. 

VERY SAAB. 

In our excitement at building our ideal convertible 
we didn’t forget that above all we are building a Saab. 
So the new 900 Convertible has ail the other engi- 
neering and styling features you’ve come to expect. 

it has ABS brakes and air bag as standard. Side 
collision protection in the doors. Seat-beit tension- 
ers. Soft, impact- 
absorbing interior 
panelling. Front 
wheel drive to give 
you superb road- 
holding even in the 
worst conditions. Intelligently designed crash zones. 
Even a specially strengthened body designed to with- 
stand one of chose regrettable but sometimes un- 
avoidable hazards of driving in Sweden - collisions 
■ with wild elks. 

Engine options include a 1 50 bhp 2.3 litre. The ali- 
new 170 bhp V6. And the exhilarating 1 85 bhp turbo. 

And we even throw in a very Saab kind of luxury 
-the feel and fragrance of real leather upholstery. 

FOR PERSONAL REASONS. 

At Saab we’ve had a long-term love affair with the 
convertible. That’s why we can’t resist making them, 
even though conventional business practice dic- 
tates that we shouldn’t make one at all. 

The result is the new Saab 900 Convertible. 
It’s exactly the kind of convertible we always 
wanted to make. And we hope you’re going to 
love it as much as we do. 

Exactly why you might love it is up to you. Every 
Saab driver has his or her own reasons. We’ve simply 
tried to give you as many reasons as we can. 

In feet, we have only one regret. We wish we had 
your weather rather than ours. Then we could put 
the top down Just as much 

as you’re going to. rarani SlAAES 




FOR FURTHER INFORMATION. A TEST DRIVE OR DETAILS OF OUR INTERNATIONAL/DIPLOMAT SALES PROGRAMME CALL SAAB INFORMATION SERVICE ON +44-71 240 3033 OR FAX TO +44-71 240 6033. 



Introducing the new Saab 900 Convertible. 














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NEWS: UK 


Major seeks to 
defuse Tory 
row on Europe 



FINANCIAL TIMES WEDNESDAY MAY II 1994 


Britain in brief 








% PMlp Stephens, 

Political Edftor 

Mr John Motor yesterday 
rejected from Conserva- 
tive Euro-sceptics to commit 
his government now to a refer- 
endum on the next stage of 
European integration. 

Bat he sought to defuse the 
tensions within the Tory parly 
ahead of next month's Euro- 
pean elections by insisting he 
would adopt a tough stance 
against farther integration at 
the 1996 intergovernmental 
conference. 

With his leadership again 
under fire, Mr Major under- 
lined also his dete rmina tion 
not to be driven from office. He 
told MPs: “We received a five- 
year mandate to carry oat our 
policies. I intend to exercise 
that fire-year mandate”. 

Mr Douglas Hurd, the foreign 
secretary, will now seek to 
repair the damage left by the 
row by setting out later today 
at the Scottish Tory conference 
the key planks of the Conser- 
vatives' European manifesto. 

Mr Hurd will stress that the 
underlying forces shaping 
Europe point to a flexible, mul- 
ti-speed Union in which Britain 
can feel entirely comfortable 
rather than to the centralised 
anti uniform e ntit y feared by 
Tory Eurosceptics. 

After two days of confusion 
and division in Tory ranks, Mr 
Major responded to opposition 
attacks by refusing to promise 
a referendum on the outcome 
of the 1996 conference. 


He left open the possibility of 
a future government taking a 
different view if there was a 
move to a single European cur- 
rency. But Downing Street 
stressed the re f ere n dum issue 
was off the agenda for the fore- 
seeable future. 

Despite an upsurge in sup- 
port for the referendum idea as 
a potential device to unite the 
Conservatives before the June 
9 European poll, kb- Major indi- 
cated there is no question of 
such a proposal appearing in 
the party's manifesto. 

He had not c h an g ed his mind 
since voicing vigorous opposi- 
tion a referendum on the Maas- 
tricht treaty. Be agreed with 
Sir Terence wigging. a senior 
backbench MP, that such votes 
were: “An alim concept incon- 
sistent with oar system of rep- 
resentative parliamentary 
democracy” 

Mr Major pledged that he 
would not agree to any new 
arrangements in 1996 which 
were unacceptable to the Brit- 
ish parliament. 

He dismissed calls from Tory 
Euro-sceptics for a commit- 
ment now to call a referendum 
on a future single European 
currency but refused to rule 
oat a change of heart by a 
future pwlwnMnl 1 - 

Pro-European Tories, who 
have campaigned against any 
referendum commitment, 
expressed themselves satisfied 
with Mr Major’s stance while 
the sceptics claimed that he 
had not closed the door 
entirely on their demands. 


J nlm M^ jor the lint flanfegrf, tn lrift lirft, hy chftQgriUw Xwi^ fTlartrp, and rtfrfonrp wyrrtary Malfnhn 

Right-wing plotters split over PM 


By DsnM Owen 

Right-wing Conservative MPs 
plotting over how to get the 
party to adopt their agenda are 
divided between those wanting 
Mr John Major to go and those 
who think sustaining him In 
offing is their best course of 
action. 

The split suggests that all 
may not yet be lost for the 
prime minister even. If the Con- 
servative party does badly in 
next month's European elec- 
tions. 

The disagreement stems 
partly from a widespread feel- 
ing among rightwingers that 
Mr Michael Portillo - the 
ThatcberitB chief Treasury sec- 
retary who is the preferred 
candidate of - m any o£ — 
would be unlikely to beat Mr 


Minimal Wftggtting hi a leader- 
ship contest later this year. 

Some rightwingers believe 
broadly that the dapgpr that 
the pro-European trade and 
industry secretary would suc- 
ceed Mr Major does not under- 
mine the case for a «*h»ng a of 
leadership. 

Encouraged by Mr 
Heseltine’s voting record on 
ijBspflg Biro lowering the age of 
consent for homosexuals - they 
argue that on many subjects 
he is closer to the right of the 
party than the irft 

If he came out in favour of a 
referendum an the next step of 
European In tegr a tion they say 
they would warm towards him 
Anther. 

A number of rightwingers 
supported Mr Heseltine against 
Mr Major and Mr Douglas 


Hurd In the last Tory leader- 
ship contest in 1990. 

MPs falling into this cate- 
gory include Mr John Carlisle 
MP who recently said he was 
ready to stand in an autumn 
leadership contest, Mr Tony 
Marlow MP, who stunned the 
Commons in March . by 
demanding Mr Major’s resigna- 
tion, Sir Peter Tapsell, the 
Eurosceptic MP, and Mr David 
Evans, a member of the 1922 
«wnmtt tHP. executive. 

The second right-wing camp 
believe that a Heseltine pre- 
miership is to be avoided at 
virtually any cost 

Since a leadership contest 
later thfa year is therefo re best 
avoided, they reason that then- 
best bet is to promise Mr Major 
their support while urging hfrn 
to adopt more righiwing poli- 


cies and to appoint rightwin- 
gers to more prominent cabi- 
net posts in a summer reshuf- 
fle. 

Some of til pm think Mr 
Major could in effect be U9ed in 
this way as a sort of interim 
Tappet until Mr Portillo, or an 
alternative candidate from the 
right, is ready to mount a win- 
ning chflitong p Their attitud e 
is disparaged by their oppo- 
nents as “dinging to nurse for 
fear of something worse.” 

There is Mt fle or n o enthusi- 
asm among rightwingers for a 
prolonged Major premiership 
as anything other than a 
wiAaiw to an and Arran- dtng to 
one MP: “The big difference 
between now and 1990 is that 
no one is gr»ing around saying 
this is a prime minister we 
have to go to the wall for.” - 


deal moves 
to shortlist 

TheBfflDsttQceisddsetD - 
decking on the final shortlist 
of companies to implement - 
tile UK’s first co m prehensive 
national automated - 
flnggprintrecOg n itioh " 
system, a final decision wifi ‘ 
be made before the aid of the 
year. 

Hie system, which will east 
£45m at current prices, will 
be used by the 43 pofice forces 
in England and Wales, 

The original eighteen 
tenderers have been whittled 
down to 10. TheySre:Arvin - 
Catepan, Digital Equipment, 
Electronic Data Systems, 
l afa watibnal B aainere 
Machines, SAlC, TSWand 
Unisys of tile US, GroupeBun 
of France, K2L owned by 
Fujitsu of Japan and Siemens 
. Ntxdorf of Germany. 

Next Monday tiie list will 
be reduced to four and a final 
decision will be made in 
October ferthe system which 
will be introduced in three 
years time. 

The new system; known as 
Nafls, wffl. forth* first time . 
combine boto Identifying 
fin ge rpr ints d is covered at the ' 
scene of the crime, and 
personal identification 
comparing a suspect’s prints 
With those held on the data 


BBC and Pearson link up in global TV venture 


By Raymond Snoddy 

The BBC intends to become "number 
one in world television” to match its 
lead In radio, where the BBC World 
Service has 130m regular listeners a 
week, Mr John Birt, director general, 
said yesterday. 

To complement its expertise and its 
lack of capital for investment in com- 
mercial ventures, the BBC unvefied 
its new International commercial 
partner — Pearson, the media group 
which has a 17 per cent stake in Brit- 
ish Sky Broadcasting and owns 
Thames Television and the Financial 
Times. 

So it was that yesterday Lord Blak- 
gnham chairman chief executive 
of Pearson, found himself in the BBC 
Council Chamber under a portrait of 
the last director general but one Mr 
Alasdalr Wine talking of virtues such 
as "honesty, integrity, belief in 


quality and editorial mdqmndanap " 

The public corporation and the pub- 
licly-quoted media group will be 
responsible for the launch of two sat- 
ellite television channels aimad at ftp 
European market by ftis autumn - a 
24-hour news channel funded by 
advertising and an entertainment 
channel funded by subscription. 

Pearson is oonmiilted to investing 
rip to V30m In the venture, though 
this will fall to £2Qm if, as expected, a 
third mmttnpTitfli European partner 
joins the project 

As fax as anyone could detwi miup at 
the BBC yesterday the “global strate- 
gic alliance ” with Pearson is a 
unique example of a public service 
broadcaster linking up with a com- 
mercial group without obvious paral- 
lel anywhere else in the world. 

"We are satisfied, one with another, 
that we share a similar set of corpo- 
rate values that underpin what we 


do." said Mr Bob Phillis. deputy direc- 
tor general of the BBC and a principal 
architect of the new st r ate gy. 

The government has accepted in 
prindpiw the fttoa of such an alliance 
ahead of a policy paper on the fixture 
of the BBC. But Ifr Birt accepted yes- 
terday ft«t the government had nei- 
ther seen nor agreed the details. 

- - The alliance - designed said Mr 
Phillis to Britain i nto a mnlti-me- 

dia world - proved politically contro- 
versial. 

Ms Marjorie Mowlam. Labour party 
spokesman, expressed deep concern 
that the darisfow had been takan prior 
to the launch of the BBC white paper. 
The Campaign For Press and Broad- 
casting- Freedom said the alliance as a 
purely com mer cial venture “calls into 
question the very existence of the 
liomoe fee and the role of the BBC as 
a public service broadcaster.” 

The liberal Democrats said the deal 


would provide “a British-based 
counterweight to Rupert Murdoch 
anH to the other large international 
affiances." 

The alliance will concentrate on 
provision of satellite channels outside 
the UK aimed primarily at «mthnm- 
tal Europe, Asia and the Americas. To 
begin with the language will be 
English although other ■ language 
chanaeta could follow. ■ 

Apart from taking World Service 
Television News around the world the 
partners will look at the possibility of 
la unching channels or part channels 
devoted to documentaries, childrens 
p rogr a mmes and education. 

“These strengths are not particu- 
larly Rupert Murdoch's strengths," 
observed Mr Richard Dunn, chief 
executive of Thames and managing 
director of Pearson Television Hold- 
ings, the subsidiary which will repre- 
sent Pearson in the alliance. 


The BBC detailed a far-reaching 

commercial ventures yesterday to 
make sure “no public funding plays 
an y part in financing the Interna- 
tional television developments.” 

A new organisation - BBC World- 
wide - has been set up' with, three 
separate divisions all reporting to a 
Worldwide .Board chaired by Mr Phil- 
lis which will have no Pearson repre- 
sentatives. 

BBC International Television, to be 
run by Mr John Thomas, will be 
responsible for everything from, pro- 
gramme sales and coproductions to 
joint ventures with Pearson, and other, 
partners. 

The BBC, which already works wife 
Pearson in satellite channels such as 
UK Gold, the UK library channel, will 
take equity in the new joint venture , 
subsidiaries but will usually not put | 
up capital. i 


Body aims for 
EU R&D aid 

A new organisation to wjn 
Britain a bigger share of the 
European Commission's £&5bn 
re search development 
budget was launched by the - 
construction industry. 

Hie. Construction Industry 
Europ ean Research Chib 
(CIERQwiiL provide 
information an impending 
projects, arrange partnerships 
with other European 
companies and research 
organisations as well as - 
provide contacts and- prepare -■ 
submissionstotheEC. . - 

The scheme, supported by - 
the E nv iron ment Department, 
will be managed by the 
Independent Building Research 
Establishment «ftWi has 
extensive contacts with 
research organisations in 
continental Europe • 

To qualify for EC funds 
applica t i on s must be supported 
by bodies from at least two 
EC countries. 

Establishing cooperative 


- ran** sector, -and arranging 
cross-border support has 
. jrpwd rfiffierilt to the part. 

Nissan football 
row not settled 

. A final attempt to resoive the 
disagreement between Nissan, 
tire carmaker, and Sunderland 
football dob over the club’s 
plans for a £7Snt stadium and 

leisure centre on green belt 
JandbesMetbecar maker’s 
plant appeared to have 
foundered. - 

The dub said it had broken 
off talks with Nissan, in the 
belief further discussion would 
save no purpose. 

Nissan opposes the club’s 
development proposal, fearing 
fiwmtfock the car pla nt's 
faiure expansion and disrupt 
component delivery and 
production schedules by 
increasing traffic on nearby 

roads. AynbUc inquiry into 
the .dub's plans is to be held, 
probably fat the aut u mn . . ' 

New vehicle 
registrations 

New commercial v oWcia 
registrations rose by IL6 per 
cent lastnwnth to 1R384 
according to figures released . 
by the Society of Motor 
Manufactur er and Traders. 

New coomnerdal vehicle 
sales, an Imp or tant economic - 
indicator, have beea higher 
than, a year ago in seven of . 

tha fast: night m onths 

Imported vehicles are 
gaining a growing share, as 
the market recovers from 
.recession, however. Imports 
accounted for 45J pa cent of 
. the market in April compared 
with 39.L per cent a year ago. 

In the first four months cf 
the year raw commercial ■ - 
vehicle registrations rasaby 
12.4 per centto 75,486. The 
share taken by imports jumped 
to 43J. per cent from 40 .3 per 
cent a year ago. 

. Green audit 
finds slippage 

The government has failed . 
to keep more than 27 
environmental commitments, 
according to fia annuel 
of tts environmental • 
performance. 

Use iOOpage report, wttch 
Is the third annual assessment 
of “This Common 
Inheritance," the 
government's environment 
stra teg y p n MMud in 1990, 
Hstothe action taken on S57 .. 
separate environmental 
ooraritoieHt* The report, 
which was due to be published 
she months ago, was delayed 
by pressure of work br ibe 
Department of the 
Env ir o nm ent, officials said. - 



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Charles N. Coppi dream. But in 1995, when the Gulfstream V flies, it 
*5wfi£* -iU be a reality.” 

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“Some of these new planes seem pre-occupied with bells and 
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and performance” 

Charlie just shrugs when someone suggests he’s an m 

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, . /lerospace 

Gulfstreams are the legend. 


Contact: Robert Cooper, Executive V.E 
(912) 965-5555 Fax (912) 965-3084 


Setting the Standards 
Others Follow. 











FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


Attack over bootleg 
beer from Europe 


By Tony Jackson 

The head of one of Britain’s 
biggest regional brewers bit- 
terly attacked the government 
yesterday over the “scandal** of 
bootleg Imports of beer from 
mainland Europe. 

Sir Paul Nicholson, chair- 
man of Vaux Group of Sunder- 
land in the north east of 
England, said there was a 
“strong criminal element” in 
the cross-channel beer trade. 
“It's easy money - easier than 
drugs,” be said. 

Cross-channel shipments 
were now running at over 2m 
barrels a year, he i-iatwigri This 
was equivalent to four times 
the production of Vaux itself, 
which last year sold beer 
worth over ElOQm. Smuggling 
was not confined to the south 
of England. “We have evidence 
of vans crossing the channel 
and transferring to 40ft wag- 
ons. A large proportion of 
those wagons came from the 
north,” he said. 

Much of the trade is thought 
to be illegal, since the UK Cus- 
toms and Excise require that 
duty-free beer should be 
brought in only for personal 
consumption. However, Sir 
Paul said, it was unclear 
whether this was enforceable 


imHpr EC rules. "The customs 
are showing a remarkable 
reluctance to do anything 
about it”, he said. 

Sir Paul's strictures, coming as 
Vaux kicked off the brewers’ 
reporting season, may be fol- 
lowed by other brewery chiefs. 
The brewers have been lobby- 
ing the government to reduce 
the duty on beer to bring it 
closer to French levels. How- 
ever, most accept privately 
that they are unlikely to suc- 
ceed in the near term, due to 
the government's shaky 
finances. 

Sir Paul strongly criticised 
the paymaster general Sir John 
Cope, who recently defended 
the government’s position on 
the grounds that revenue from 
drinks duty was up this year. 
“If they let it go on. they will 
destroy a huge swathe of Brit- 
ish brewing and pubs. Then 
they will lose revenue, panic, 
reduce duty, and allow a fur- 
ther wave of French beer in," 
he said 

Calling for an immediate 
hairing of beer duty to ISp a 
pint. Sir Paul recalled that the 
last cut in duty had been under 
Heathcote Amory as chancellor 
in 1959. The period 1959-79 had 
been one of steadily increasing 
consumption, winch h ft d -vastly 


benefitted the Treasury over 
the long term. 

“The first pub we opened 
[after the 1959 cot] we called 
the Jolly Minister", he said 
Tm quite prepared to repaint 
Ok sign with a portrait of the 
present chancellor if he listens 
to our suggestions.” 

• The European single mar- 
ket trading system has left the 
logistic departments of many 
UK businesses celebrating, as 
they benefit from better trade 
structures - but drawn rather 
more fire from companies’ 
finance directors, who free a 
new accounting headache. 

That is the message of a 
study released by the Customs 
and Excise on the impact of 
the removal of community 
trade barriers an British com- 
panies, after the first full year 
of using the new trading and 
European Union statistical sys- 
tem - Tntrawt -fft 

The study, based on a survey 
of 1,000 companies, reaffirms 
the department’s earlier predic- 
tion that British business 
should reap at least £440m 
pounds worth of benefit from j 
the single market over the nert 
five years - although it admits 
that many businessmen 
r emain far from convinced 
about these gains. 


NEWSs UK 

Where the money goes... 

Change In consumer spantfng at constant prices, 1977-02 

- 900(10 ! HiHHHH 

AtahoWotraceo ■' < 1 

Food ’ } | . .. • { 

■’ Ldtstn goods . \ . — 1 

DuraWee ; * IZJ 1 

SmlflM ! • : SHH 

Rents rattssrid water ; | \ 1 

Leisure services ! (. D . { 

• ExpeodBufe abroad \ i ■ H3 

Ottecffnancfa! rentes \ I • — - 


and how that will change to the year 2000 


Sows: CSOt MUM 


-8-4-4 -2 0 2 4 6 

% paint chang* 


Wfnnars wffl kuducto 

CaUafntaracdwTV 

Computer games and aquqttMrit 

DfY and gwdening 

TheatWarts 

GoBffisHng 

Museums 

Famfiy aCtfufcy taGdsya 
TafcMwoy rods 
Lft assu ranc e 
Personal pensions 
Private hsaHti insurance 

Chfldren'a dotting 

Homo strapping 


Losers wflfhchids 
BanK overdrafts 


Wre purchase 
Youth fashion 

Red meat 
package hobdaya 
Video and TV nmlata 
Auto cassettes 
Pubdrinkftfj 
Youth music 
Rock concerts 
Theme parks 
Whits goods 


Mintel sees ‘self-reliant’ consumer 


By Diane Summers, 

Marketing Correspondent 

The eme r gence of “self-reliant” 
consumers, more willing to 
take responsibility for their 
health and economic well 
being, is one of the main 
trends identified by Mintel, the 
market research group, in a 
report reviewing social 
changes over the last 20 years. 

The past decade, in particu- 
lar, has seen the shift of 
responsibility from the state to 
the individual, says the report 

“Council house sales, prob- 
lems with the NHS, and the 
move away from state pensions 
have forced people to take 
more responsibility for their 
own lives and made them more 
confident in their ability to go 


private, or go it atone," says 
the Mintel report 

The change is reflected in 
the increased role of personal 
pensions and haalth insurance, 
a n d the increase in personal 
transport, self-employment and 
home ownership, says the 
report 

“It is also evident in the 
move away from mass market- 
ing and fashion. Today’s con- 
sumer is more likely to make a 
choice based on their awn style 
rather than current fashion or 
national norm," says Mintel, 
which has put together trend 
data from its own previous 
research and other published 
sources far the report 

Spending has shifted away 
from goods towards services, 
finds Mintel. In particular. 


there has been a decrease in 
spending on food, alcoholic 
drink and tobacco and an 
increase on spending on non- 
utility, especially leisure, ser- 
vices. 

Main lifestyle trends over 
the last 20 years Identified by 
Mintel Include: 

• Greater interest and aware- 
ness of health issues, leading 
to reduced smoking and 
greater attention to healthy 
gat in g 

• Increased interest in envi- 
ronmental issues 

• Growth of home-centred- 
ness, as the home becomes an 
important leisure centre 

• Increased self-reliance as 
manifested by the increased 
role of personal transport, 
self-employment, personal 


pensions and home ownership 

• Increased individualism, 
leading to greater segmenta- 
tion within consumer markets 

• Increased mobility, leading 
to greater use of superstores 
and out-of-town shopping cen- 
tres 

• A rise in crime, leading to a 
growth in home and personal 
security. 

These changes mean that 
many of the consumer spend- 
ing growth areas which are 
today taken for granted, did 
not exist or were only in an 
embryonic state 20 years ago, 
says the report 

These areas include satellite 
TV, video recorders, home 
computers, and the emergence 
of the large DIY super- 
store. 


Summer 
holiday 
sales set 
for record 

Summer holidays sold through 
agents are expected to reach « 
record 9m this year, but «mnv 
age prices are lower than they 
were three years ago, the 
travel retailers Loan Paly sahl 
yesterday, Michael Skapin^ 
writes. 

Lunn Poly, toe largest travel 
agents' chain, said summer 
sales this year were expected 
to be 13 per cent higher than 
last year, breaking the previ- 
ous record of am sold in i»n. 

Luna Poly's price data 
revealed, however, that the 
increase in holidays sold has 
been achieved by heavy price 
discounting. The average price 
of a summer holiday booked 
through Lmm Poly by the end 
of March this year was £376. 
This compares with £383 last 
year, £390 In 1992 and £379 In 
1991. 

A post-Christmas price-cut- 
ting campaign by travel 
agate led to a 40 par cent 
increase in the number of sum- 
mer holidays sold by the end 
of January. Lunn Poly said, 
however, that the end of the 
discount campaigns led to 
sales in February and March 
felling below the level of the 
corresponding period in 1993. 



Saatchi bewails 
‘sloppy t hinking ’ 

in advertising 


By Diane Summers 

The advertising industry 
should end “vague, sloppy 
thinking” and get back to 
“simple and direct” messages, 

Mr Manrire Saatchi, chairman 

of Saatchi & Saatchi. the global 
advertising agency, said last 
night 

A grim picture of an indus- 
try which has lost its sense of 
direction and is searching, like 
the character Hamlet, for a rea- 
son for existence was painted 
by Mr Saatchi in the speech to 
women advertising executives 
in London. 

“The advertising industry 
I now is more lacking in 
self-confidence, self-worth, 
than at any time I can remem- 
ber," he said. The recession 
could no longer be blamed for 
this bleak state of affairs. 

It is highly unusual for Mr 
Saatchi to speak out about the 
state of the industry. 

His comments come as Saat- 
chi is battling to regain market 
share, particularly in the US, 
and follows a period of widely- 
publicised conflict between Mr 
Saatchi and the group's chief 
executive, Mr Charlie Scott. 

Manufacturers which fail to 
invest in their brands came 
under particular attack from 
Mr Saatchi 

“The old verities about 
advertising seem to have bro- 
ken down. Advertising seems 
no longer to be part of that 
virtuous circle, in which the 
gift that advertising bestows - 
a premium price - is used to 
provide funds to reinvest in 


superior product quality, inno- 
vation, product development, 
which is the only true justifica- 
tion for a premium price," be 
said. 

Saatchi, together with WFP 
and the other large advertising 
groups, has always stressed to 
clients the benefit of global 
campaigns and has built world- 
wide networks accordingly. 
Yesterday, however, Mr Saat- 
chi pointed to the difficulties of 
sustaining such campaigns. 

“HOW do you cnmirtmi irate to 

lots of different people in all 
these different countries across 
the world without being so 
bland and jelly-like that you 
have n othing real to say?" he 
asked. 

He also said that network 
agency systems "mean coordi- 
nation, which often means 
committees - not the best envi- 
ronment for inspired creativ- 
ity. in feet, global advertising 
quickly becomes trite and 
clicked - the lowest common 
denominator, not the highest 
form of expression of creative 
talent”. 

For advertising to meet the 
challenges of the future ft 
needs to “speak in simple, uni- 
versally-recognised truths,” he 
said. This will mean that every 
brand has “a consistent strate- 
gic focus". 

“it will mean the end of 
vague, sloppy thinking which 
leads to the vague, sloppy 
clothes in which so many 
brands go out in public. It will 
mean creative work so simple 
and direct that it strikes a 
chord in humans every where." 


Football grounds 
register big fall 
in racial abuse 


By Stephen McGootdn 

Britain’s football grounds 
have seen a narked decline in 
incidents of racial abuse and 
harassment at the end of a sea- 
son-long campaign aimed at 
tack H ng the problem. 

Bat the Commission for 
Racial Equality warns that 
despite the improvement there 
is still work to be done to pro- 
mote clubs as safe, welcoming 
environments. 

Launching the second phase 
of the ’Let’s Kick Racism oat 
of Football* campaign, CRE 
chairman Mr Herman Ouseley 
said that 91 of the 92 league 
clubs - the exception being 
York City - were supporting 
the initiative and the feedback 
from boardrooms and support- 
ers had been positive. 

But, be said, “In the coming 
season, clnbs will need to sus- 
tain the momentum to rid the 
game of racial harassment and 
prejudice, so that national 
pride in the way the game is 
ran, in a racism-free way, can 
be fully justified.” 

Mr Gordon Taylor, chief 
executive of the Professional 
Footballers Association, said 
that in the three years since 
the passing of the Football 
Offences Art, which outlawed 
racist chanting and abuse, the 
number of arrests had fallen; 
from 76 in 1991/92, to 40 in 


1992/93 and 12 In 1993/94. 

He also said that support for 
the CRE 's initiative from both 
UEFA and FIFA showed the 
problem was international, 
and in spite of recent initia- 
tives by toe Italian and Dutch 
football authorities “It still 
needs to be on everyone's 
agenda.” 

He praised the improvement 
hi cooperation between police 
forces - such as the setting up 
of the national intelligence 
databank - and toe gathering 
of undercover information on 
racist groups which had 
attached themselves to foot 
ball in the past 

Mr Ouseley added: “Football 
has a responsibility to its cus- 
tomers and to the wider com- 
munity to provide a safer and 
happier environment for black 
players and to encourage 
black people to come back to 
the sport as spectators." 

Handing over a cheque for 
£50,000 in continued support 
for toe project, Mr Richard 
Faulkner, of the Football 
Trust, said that the Taylor 

Report - which recommended 

a move to aB-seater stadia fol- 
lowing the Hillsborough (lisas' 
ter - had helped to create a 
less-intimidating atmosphere* 
“It is easier to identify some- 
one shouting racist abuse 
when they’re sitting down,” be 
said. 


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Game, set, match for 
the Rule of Benedict 

Tim Dickson on tennis and the Church of England 


W hen a handful of 
Chrysler assembly 
workers gathered late 
last year with sugges- 
tions on cost-cutting, they ramp op 
with an innovative solution to 
replace the expensive sealer used in 
car boots. The idea amounte d to an 
annual saving of $250,000 (£171,000). 

The car company says this is just 
one example of the boost In produc- 
tivity derived from a better-edu- 
cated, more participative workforce. 

“The days of the cattle-call are 
over.” says Dennis Pauley, execu- 
tive vice-president of manufactur- 
ing at Chrysler. “We used to put out 
the word on Fridays that we needed 
X number of workers Uonday 
morning. If you could walk and 
breathe you were in. That's not how 
it is anymore." 

US car manufacturers hope 
tougher hiring standards will 
ensure they get the skilled workers 
they need to stay competitive. Blue- 
collar employees in the Industry are 
looking more like white-collar work- 
ers in terms of educational back- 
ground. 

At Chrysler's Windsor plant in 
Ontario, for instance, some 20 per 
cent of new assembly plant workers 
are college graduates, while nearly 
5 per cent of new blue-collar 
employees for Ford Motor Company 
are university graduates, up from 
almost none 10 years ago. 

Even more striking is the singe In 
the number of workers who have 
completed high school. About 97 per 
cent of the blue-collar employees 
Ford Has taic«yn on since 1991 pos- 
sess a high school diploma or 
higher degree. More si gnificantl y, 
since nearly half the blue-collar 
workers at US car manufacturers 
will become eligible for retirement 
over the next five years, “this offers 
us a major opportunity to reshape 
our workforce", says Pauley. 

Hie American car sector is taking 
its cue from Japan, where groups 
such as Toyota and Honda have 
built up a highly-skilled employee 
base. “The Japanese assembly-line 
workers graduated in the top 20 per 
cent of their technical school," says 
David Jones, president of the con- 
sulting group HR Enterprises, 
which advises US car companies on 
assembly line hiring. “They put the 
same energy into blue-collar recruit- 
ing that the companies here put 
Into management recruiting at the 
top universities." 

US car manufacturers now realise 
that to compete with the Japanese, 
they need a workforce with similar 
accom pMahment g. "In the past, we 
put our energy into making sure we 
had a well-educated management 
force," says Pauley. "Now, we know 
that assembly-line workers are just 
as important My workforce needs 
to be at least as good as that of the 
Japanese, or I'm out of the game." 

Recruitment of the highly-edu- 
cated is made easier because uni- 


-ass w 


W ith more than a touch 

of worldly scepticism, 
even trepidation, 13 
Church of England vicars last 
week swapped their dog collars 
for (rack suits and co n verged on 
a sooth London tennis centre. 

The unlikely occasion was a 
Chinch-sponsored training course 
aimed at impro vin g clerical 
coaching skills, in particular 
participants' ability to bring out 
the best In curates placed under 
their care. 

Just as the supervisor/ 
subordinate relationship in a 
company can be tricky, so the 
chemistry between vicars and 
curates is potentially unstable, 
sometimes even explosive. 

Not everyone would *h*nfc of 
a tennis court as the best place 
to tackle this issue, but by the 
time last week's "class’* had been 
run off their feet and showered, 
most confessed to having 
overcame initial doubts. 

"I think many of us had 
misgivings about what it was all 
costing the Church, and we were 
wandering why we woe being 
asked to dig out our own tennis 
kit,” explained one. “But 1 think 
it has been successful You realise 
there are unbounded possibilities 
in looking at things afresh." 

Tennis, explains Stephen 
Bampfylde of coarse organisers 
Saxton Bampfylde International, . 
is merely a vehicle for exploring 
the coaching process. "We like 
it because it’s fun and also 
because it’s important for people 
to see that you can win and lose. 
It’s a banns, however, if anyone 
comes out at the end with a better 
serve or a better backhand." 

Roughly three hours during 
the first of the two days is 
actually spent on court, part of 
it with the vicars divided into 
groups of three (me playing the 
role of coach, another the pupQ 
with file third observing). The 
rest of toe first day is devoted 
to discussion and analysis, while 
the second concentrates on the 
"real world” problems of parish 
life and how the tennis analog y 
can be applied. 

"It doesn't matter if yon can’t 
catch a ball,” adds Mar tin 
Kitchen, priest in charge of 
training to toe Diocese of 
Southwark, where all the vicars 



CaroHne Harris, Iannis coach, and the Rav Tom Wooderson of St John’s, RedNI 


attending the course have then- 
parishes. "The message we want 
them to take away is that their 
curates wfl] probably arrive with 
a lot of learning, knowledge and 
drills and that it is better for these 
to be drawn out than for the vicar 
just to tell them what to do." 

Whatever the difficulty for 
outsiders of making the 
connections, phrases Hke "current 
reality", "focused attention”, 
“process" and “task" were all 
being happily batted around toe 
tennis court (and who knows, may 
pepper sermons in south London 
churches for some time to crane). 
As one participant put it "The 
clergy is used to using parable 
and metaphor. There is also an 
openness in the Church about 

l earning from lmmug pi m eilt 

studies, just as toe Church has 
leant from history, philosophy, 
linguistics and other studies over 
the centuries.” 

He added: "As I see it, 
management is about making 
decisions that affect people and 
resources - if there is expertise 
from which we can learn, we 

shnnlri do it." 

Bampfylde and partner Anthony 
Saxton are ablates of the order 
of St Benedict, or "part-time 


Benedictine monks” as Bampfylde 
puts it He argues that the process 
is two way, and suggests that the 
Rule of Benedict (written at the 
start of the sixth century) can 
be seen as a useful management 
text. 

"Benedict says that those who 
hold authority to a community 
are not to be above the group,” 
writes Joan Chittister to a 
commentary on St Benedict’s 
thoughts on the qualities to mak«» 
a good abbot (or ceo?), "they are 
to be toe centres of it, toe norm 
of it, the movers of it They 
themselves are to mirror its 
values. Their job is not simply 
to give orders. Their job is to live 
out the ideals. It Is an authority 
for removed from office elitism 
or pompous hierarchy or 
high-handed parenting." 

Saxton Bampfylde, best known 
as a headhunter but also active 
in toe fields of psychological 
assessment ami team building, 
gives 10 per cent of its profits to 
charity and employs a high 
proportion of Christians: some 
80 per cent of the staff claim 
commitment to the faith. "We 
do have our resident atheist, 
though," says Bampfylde 
reassuringly- 



Blue-collar team, 
white-collar wise 

Victoria Griffith on how a better-educated workforce is 
helping the US car industry to raise productivity 


versity graduates are finding assem- 
bly-line jobs appealing. The work is 
less physically strenous, and mare 
intellectually challenging, than it 
was just a decade ago. High salaries 
are also enticing. Hourly wages usu- 
ally range from between $15 and $18 
an hour, generous even by univer- 
sity graduate standards. 

To select the best workers, car 
makers have adopted strict new 
screening methods. Potential 
employees are required to take 
examinations which measure read- 
ing, writing and mathematics abil- 
ity. manual dexterity and inter-per- 
sonal skills No specific degree is 
required, but the tests automati- 
cally favour the well-educated. 

“It is more likely that people with 
high school diplomas will do better 
on the exams, and individuals who 
score higher clearly are more pro- 
ductive on their jobs," says Jones. 

Changes to the industry over the 
last decade have made educated 
workers more of a necessity. Com- 
panies have been pitminaKng mid- 
dle management to slice costs; as a 
result, more workers are being left 
to their own devices. 

At Chrysler there are now 50 
workers to every manager. Ten 
years ago that n umb er was 20; soon. 


Nlli 


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London, 6 & 7 July 1994 

The Financial Times and the Centre for the Study of Financial Innovation are 
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says the company, it will be 100. 

“Once you back out the supervi- 
sor. you need more self-directed 
workers.” says Pauley. “By having 
fewer managers, you redefine the 
job of the assembly plant worker.” 

Manufacturing jobs are also more 
technical than they once were. 
"Many jobs have changed beyond 
recognition,” says Arthur Johnson, 
supervisor in charge of employment 
and t raining planning at Ford. "For 
instance, a welding line used to con- 
sist of a man holding a piece of 
metal on to the car, and someone 
welding it with a hand-held 
machine. Today, robots do all that” 

These changes require new skills. 
The ability to read an instruction 
manna! is DOW more important than 
brute strength, and with new tech- 
nology being adopted all toe time, 
workers must be capable of learning 
new tasks qui ckly . 

Workers must have the flexibility 
to perform more than one job. To 
keep the plant running smoothly, 
and cut down on overtime pay, 
assembly-line employees are often 
expected to fill in for absentee 
workers, or ease the work load in 
another section of the plant. 

Employees are also asked to par- 
ticipate in the daily running of the 


company. At the Dodge City Com- 
plex, a Chrysler operation which 
opened last July, each worker has 
tbe right to halt the assembly line 
at any time. The company says it 
helped them Iron out the wrinkles 
and address inefficiencies which 
under the old system would never 
have come to light. 

“One guy suggested we put in a 
computer program which would tell 
him what materials he’d need for a 
particular vehicle in advance. Now, 
he prepares the stuff ahead of 
time." explains Norman Hunt, a 
supervisor assistant who will soon 
receive an engineering degree. 

Even General Motors, which 
because it is not hiring has less 
flexibility in shaping its workforce, 
is attempting to improve blue-collar 
educational levels. The company, in 
conjunction with the Auto Workers 
Union, has launched a programme 
which subsidises employees’ tuition 
at university and technical schools. 
The company says that 17 per cent 
of assembly-line workers involved 
in the initiative are working 
towards a college degree. 

An article an Rover's shopfloor revo- 
lution appeared on Monday ‘s 
Mangement Page. 


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FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


BUSINESS AND THE ENVIRONMENT 


Utilities] R 

9 Rivers i 

unite in ?•" 

- _ National 

E7 club sP 


T he chairmen of eight of 
the world's largest 
electric utilities meet in 
Tokyo tomorrow to establish 
a co-operative framework for 
promoting “s us tainable 
development* 1 on a global scale. 

They have formed a dub - 
called £7 after the G7 group 
of large industrialised countries 
- to support joint action. Its 
gftmi range from informal 
discussions about energy policy 
to practical consultancy work 
in developing countries ami the 
former Soviet Union. 

Early proposals include the 
promotion of solar power in 
Indonesia and Malaysia, 
pollution control in India, dean 
coal technology in China and 
hydroelectric development in 
Georgia. A small E7 secretariat 
In Montreal, Canada, 
co-ordinates the projects. 

The eight utilities include two 

from finwada and Japan and 

one each from Italy, France, 
Germany and the US. Two of 
the club’s leading figures are 
Gilles Menage, rinrinnan of 
Electridto de France, and 
Maurice Strong, chairman of 
Ontario Hydro. 

The UK is the only G7 country 
not represented. After the 
privatisation and restructuring 
of the electricity industry, there 
is no British company which 
satisfies the E7 rule that 
members should be integrated 
utilities both generating 
electricity and selling it to 
consumers. There is likely to 
be a debate in Tokyo about 
whether to expand E7. “It se ems 
too bad that we cannot have 
a British member when the UK 
has led the way in restructuring 
its power sector,” said one 
partic ip ant 

But toe priority will be to 
convince funding agencies such 
as toe World Bank and toe 
European Bank for 
Reconstruction and 
Development that toe dub is 
not a vehicle to promote its 
members* business Interests. 
They will give their experts’ 
services free of charge to E7 
consultancy projects. 

Clive Cookson 


R ivers have natural colours. 
They may look grey ami 
uninviting in whiter, hut 
that is toe way they are. 
Rivers are not for colouring by 
stray effluents from a textile plant. 
That is aesthetic pollution. 

So much Is agreed by the 
National Rivers Authority, toe offi- 
cial guardian which sets toe stan- 
dards of Britain's water purity, the 
water companies whose sewage 
plants expel treated effluent into 
the rivers and the textile companies 
whose dyes are toe source of the 
colour. 

“The removal of colour from dye- 
house waste waters is currently a 
major problem in the textile sec- 
tor,” says Peter Cooper, technical 
executive of Coortaulds Textiles. 
The problem is concentrated in 
three areas of the UK Midlands: 
around Leicester and Loughbor- 
ough where, with about 100 mills, 
there is toe most intense concentra- 
tion; around T<e*4r. and in the Ere- 
wash Valley. All are in the region 
covered by toe operations of Severn 
Trent Water. 

Purple and black are “persistent 
and noticeable”, according to Brian 
Waters, the NRA's area general 
manager for the Severn Trent 
region. The dyes are not toxic. 
“Their problem is that they're 
consistent and they’re not removed 
by conventional sewage treatment 
systems,” he says. 

There are possible solutions bat 
none so for available at a price 
which industry finds acceptable. In 
an ideal world, colour would be 
eliminated from effluent running 
into the sewage system at the dye- 
house. But, warns Barry Hazel, 
director of the Textile Finishers' 
Association: “If every site has to do 
its own treatment, there's a risk 
quite a few of the small companies 
would go out of business. The capi- 
tal costs frighten the dye works.” 

The plants would cost £2£m, a 
considerable in vestment for compa- 
nies with up to 100 employees, turn- 
ing over between £5m and £10m a 
year. They operate in a harsh com- 
mercial environment, where longer 
term investment decisions are 
rare. 

Many companies would prefer to 
push the colour problem away. 
There needs to be cost-benefit anal- 
ysis and “there is a need for Severn 
Trent Water to accept responsibil- 
ity”, according to John Harrison, 
director of the Knitting industries' 
Federation. 

Severn Trent, however, feels 
caught between industry and regu- 
lator. “Sewage works are not 
designed to cope with these issues,” 
says David Woods, the environmen- 
tal director. 

“The NRA response [to the colour 
question] is to go after us. They are 
imposing very stringent colour con- 
sent conditions - or they’ve been 



A costly 
colour run 

Textile dye pollution is turning 
some of Britain’s rivers purple. 
Paul Cheeseright reports 


seeking to impose them,” he says. 

Pressure on Severn Trent was one 
way of forcing the Issue on the tex- 
tile companies; water companies in 
their turn can place restrictions on 
the industrial waste they will 
accept in their sewage works. “The 
proper way to tackle it is at 
source ” says Waters, mindful that 
the Water Act 1989, which set up 
the NRA, embodies the principle 
that “the polluter pays”. 

With companies worried about 
high capital outlays, the easiest 
solution for them is to pump toe 
coloured waste into the sewer and 
leave the question of separating out 
the residual dyes and disposing of 


them to toe water company. But 
Severn Trent has also had its prob- 
lems: it bac spent around £5m on a 
treatment plant at Leek without 
finding a foolproof economic solu- 
tion. 

As Cooper comments: “Apportion- 
ment of costs is more difficult to 
arrange than reaching a technologi- 
cal solution.” But the NRA attitude 
conc e ntrated minds in the textile 
and water industries. Discharges to 
rivers are controlled by “consents”, 
or authorisations by the NRA. It 
can review these consents and it 
threatened to withdraw, from the 
beginning of this year, those where 
discharges were putting colour into 


the rivers. 

Brandishing its consent powers, 
the NRA has given an urgency to 
work on solutions to the colour 
problem, which was already under 
way. It has removed its threat to 
withdraw consents in exchange for 
a collaborative programme with 
industry to gKnUnate colour from 
the water over about three years. 

“I thought two years ago than 
was a technology void. Now, Tm 
beguning to worry about time- 
scales to turn iflpas into the ulti- 
mate panacea. I think now that 
treatment will have to be different 
for each business unless Severn 
Trent Water can do anything at the 
sewage works,” Cooper says. Cer- 
tainly. the range of technological 
solutions is varied. 

The collaborative approach to 
environmental problems which are 
higgw fhan »ny single company has 
been used before in the textile 
industry - and worked. The Textile 
Finishers Association, four compa- 
nies and the Department of Trade 
and Industry have just completed a 
ES9GUOOO study of waste minimisa- 
tion and pffliiAnt treatment 

In the process, a way has been 
found to treat pentachlorophenol 
(PCP) - a toxic substance on the 
EU*s red list of nasty chemicals - 
used to stop mildew forming an 
cloth in transit and washed out in 
the mills during scouring. Big 
nhangws have taken place in the 
technology, says HazeL “All PCP 
used is in closed systems. Before, it 
was swilled down the drain.” At the 
same time, the mills have per- 
suaded the doth importers to spec- 
ify materials to which no PCP has 
been applied. 

There is no such simple answer to 
the colour problem. Over the short 
to medium term, efforts will be con- 
centrated on treating the waste 
water either before or after It goes 
into the sewage system. But over 
the longer term the most effective 
solution may be to tackle the prob- 
lem at its source. 

Cooper has noted that this has 
been applied to the colour problem 
on three levels: improving the abil- 
ity of toe dye molecules to stay on 
the material so that fewer escape as 
waste, chang in g the molecular 
structure of the dyes so that they 
are more readily biodegradable and 
the recovery and reuse of dye col- 
ours which otherwise become efflu- 
ent. 

The difficulty is that the scientific 
solutions reduce the choice of col- 
ours for the consumer. The water 
companies are caught between the 
regulators and the mills and the 
mills are caught between two sorts 
of consumers. One sort wants 
bright coloured clothes, the other 
wants clean rivers. The two 
demands need not be mutually 
exclusive - if there is somebody to 
pay the bill. 


Alison Maitland on the EU's first 
environmental audit for farms 

Best practice 
for survival 


F armers pride themselves 
on being the guardians of 
the countryside. So it is 
perhaps surprising that many 
of them have given little thought 
to measuring production methods 
at yvMiiTTig to their Impact on the 

environment 

This week, however, the 
European Union’s first 
environmental audit for forms 
was launched in London. The 
brainchild of Leaf (Linking 
Environment and Fanning), a 
British organisation promoting 

profitable but 

envlranmen tally-friendly forming, 
toe audit has won support from 
government, conservationists, 
supermarkets, banks an d eve n 
agrochemical manufacturers. 

Farmers' very survival could 
depend on adopting practices such 
as careful pesticide use, crop 
rotation and energy conservation 
which the audit is d esig n ed to 
monitor, according to some of 
toe speakers at the launch. 

“Care and concern for the 
environment does not necessarily 
add cost, but lack of quality 
certainly does,” says Don Phillips, 
sales marketing director of 
Dalgety Agriculture, the UK grain 
trader, which helped sponsor the 
audit 

“We need to associate ourselves 
with formers who clearly 
understand the need for best 
forming practices. They will be 
the survivors.” 

Gillian Shephard, the UK 
agriculture minister, glimpsed 
the potential for countering 
Britain's £6bn trade deficit in food 
and drink. “I hope that carrying 
out this exercise will help formers 
get and maintain markets for their 
produce by building a better 
image for their products,” she 
says. 

Leaf is part of a pan-European 
project to promote “integrated 
crop management”. This involves 
n«ring crop rotations and natural 
predators to reduce reliance on 
pesticides and fertilisers, along 
with positive management of the 
landscape and wildlife habitats. 

For the agrochemical 
companies. 

pnw rnnmgntalty-fipnqfi pp fa rming 

is preferable to a public backlash 
against all chemical inputs if 


intensive production methods 
continue. 

Initially the audit is being 
targeted at larger formers. Thom 
with 100 hectares or more will 
be invited to buy the 
questionnaire, which costs CD . 
and takes about two hours to fill 
in, according to Leaf. It is divided 
into eight sections covering the 
landscape, wildlife habitats, soil 
management, crop protection, 
energy conservation, pollution 
control, animal welfare, form 
planning and organisation. 

Caroline Drummond, 
coordinator of Leaf, hopes the 
audit will be used by about 3,000 
British formers in toe first year 
and eventually be taken up as 
an annual exercise “by the 
industry as a whole”. 
Self-assessment by formers Is the 
first step, but Leaf is considering 
a three-yearly external audit to 
monitor the scheme if there is 
demand for it. 

Rente Stelchen, EU agriculture 
commissioner, backed toe 
“integrated” forming approach 
in a speech in Brussels last 
month. Surpluses could not be 
reduced just by price cuts, 
compensatory payments and 
laying follow arable land, he said. 
“Farms must optimise their 
production costs, adapt to market 
forces and compete by producing 
goods with a high level of defined 
quality, for which they can '■ - 

command attractive prices 
without the need for agricultmal 
subsidies.” 

Some formers at the launch 
remained unconvinced- Hugh 
Oliver-BeUasis. a member of the 
council of toe National Fanners' 
Union, said he feared that 

maintaining - hi gh production 

standards would put UK formers 
at a disadvantage to producers 
using cheaper methods elsewhere. 
“In vegetable production, there 
are some very nasty, very cheap 
insecticides on the market, arm 
there are some very good, very 
safe products which are 
considerably more expensive,” 
he said. 

But Geoff Spriegel of J. 
Sainsbury, the UK supermarket 
chain, insisted the same standards 
applied to all the group's 
suppliers. 


When twelve 
nationalities 
vote together, 

who 

interprets? 


On June 9th and 12th, millions of people from 12 different 
countries will vote to elect a new European Parliament. 

From May 12th The European will analyse the major issues, and debate 
the implications of unfolding events - right across the continent. 
We’ve commissioned MORI to poll the opinions of both MEPs and voters. 

So, for informed and objective coverage of the European 
elections, unmatched by any national paper, read The European. 

Out this Thursday and every Thursday. 


PEOPLE 


Des Wilson takes 
off for Heathrow 


BAA, the privatised UK 
airports operator, is enlisting 
Des Wilson, one of the coun- 
try's most experienced lobby- 
ists, to strengthen its hand in 
the public inquiry over the 
company’s controversial plans 
to build a fifth terminal at Lon- 
don’s Heathrow airport 

A former president of the 
liberal Party and the party's 
campaign director in the 1992 
general election, Wilson 
founded Shelter, the national 
campaign for foe homele ss , as 
well as a former chairman of 
Friends of the Earth UK and 
ran CLEAR, which campaigned 
for lead-free petrol. 

He is currently vice-chair- 
man. public affairs, worldwide, 
of Burson-MarstelLer. one of 
the leading international pub- 


lic relations firms. 

He has also been a columnist 
for both the Guardian and 
Observer, a deputy editor on 
the Illustrated London News, 
and bead of public affairs for 
toe Royal Shakespeare Com- 
pany. 

Wilson will join BAA at a 
time when the airports opera- 
tor is preparing itself to fight a 
long and difficult planning 
inquiry fix- toe construction of 
Heathrow’s fifth terminal esti- 
mated at between £800m and 
SXXbn. The inquiry is expected 
to start in spring 1995 and to 
last about three years. 

BAA claims the new termi- 
nal is critical fix the future of 
Heathrow, the world's busiest 
international passenger airport 
and one of the most congested. 



Sandy Stewart to chair 
Scottish Amicable 


t./.- 


■; 3 : . 


THE WEEKLY NEWSPAPER FOR EUROPE 




If Scottish Amicable, the 
mutual life insurer, ever 
wishes to flex its muscles in 
Thailand, it has made a wise 
derision in the appointing of 
Sandy Stewart as Its nonexec- 
utive chairman. For among his 
many other activities he also 
squeezes in time to act as Thai, 
land's honorary consul in Scot- 
land. 

Stewart, 60, is taking over 
the stewardship of Scottish 
Amicable from William Brown, 
64, who was chairman from 
June 1989 following the death 
in office of William Cuthbert 
The normal duration for a 
chairmanship Is two periods of 
two years. Brown remains a 
non-executive director of the 
company. Sir Ronald Miller 
has been appointed deputy 

rhalrman 

Scottish Amicable's IS mem- 
ber board has just three execu- 
tive directors, with Roy Nicol- 
son, 49, as managing director. 


One of its mere senior figures, 
Lord Elgin, has just retired on 
reaching 70. The title of presi- 
dent of the board will also 
retire with him, in recognition 
of what toe company describes 
as his “unique contribution to 
Scottish Amicable”. He was a 
director since 1970 and presi- 
dent since 1975. 

Bom in Edinburgh, Stewart 
is a solicitor by training, a for- 
ma: partner of McGrigor Don- 
ald, specialising in company 
law. He is also a former, and 
acts as deputy lieutenant for 
the county of Perth. He joined 
Scottish Amicable's board in 
1985. 

As fix his Thai cons ulshi p - 
it is clearly more than just an 
honorary title. Next week he 
will he shepherding a senior 
Thai government minister 
through the highways and 
byways of the Scottish busi- 
ness and political world. 

■ Margaret Belson, Stephen 
Matanle and Peter Sweet have 
been appointed directors of 
C.T. BOWRING & Co 
(Insurance). David Ivey has 
been appointed a director of 
Carpenter Bowring. Mark 
Gregory has been appointed a 
director of Bowring Worldwide 
Insurance Brokers. 

■ David Binding hag been 
appointed group secretary and 
group compliance officer at 
LEGAL & GENERAL GROUP 
on the retirement of John 
NrilL 


Wilson is appointed director 
of corporate and public affairs 
and will become a member of 
BAA’s top management team 
reporting to chief executive Sir 
John Egan; he joins in Septem- 
ber on completion of Burson- 
Mareteller’s recently won con- 
tract to re-launch the TUC, and 
replaces Terry Morgan who 
next week becomes managing 
director of BAA’s Stansted air- 
port. 


Bodies politic 

■ David Sieff, a director of 
Marks and Spencer since 1972 
who is currently responsible 
for corporate and external 
affairs, is to be fthfllrman of 
the NATIONAL LOTTERY 
CHARITIES BOARD. 

Sleff, 55, has been appointed 
for three years and intends 
to devote on average two days 
a week to working for the 
board, which will be 
responsible for distributing 
20 per cent of the proceeds 
allocated to good causes. 

He is a member of the 
Horserace Totalisator Board, 
chairman of the Personnel 
Standards Lead Body and a 
member of the National Board 
for Crime Prevention. 

Earlier appointments include ; 
part-time membership of the 
Board of the National Freight 
Corporation, chairman of the 
North Metropolitan 
Conciliation Committee of the 
Race Relations Board, and 
membership of the Policy 
Studies Institute. 

Voluntary sector experience 
includes being a founder and 
serving on the board of 
Business in the Community; 
chairman of Racing Welfare 
Charities and a trustee of 
Glyndebourne Arts Trust 

■ David Tyson, of Sidlaw 
Packaging, has been appointed 
chairman of the PACKAGING 
AND INDUSTRIAL FILMS 
ASSOCIATION. 

■ Michael Walker, chief 
executive of Clive Discount, 
has been appointed chairman 
of the LONDON DISCOUNT 
MARKET ASSOCIATION. 


Morgan and 
Thomas to 
put steel into 
G.M. Firth 

Peter Morgan, 58, who stays 
dawn as director general of the 
Institute of Directors in July, to 
teaming up with Sir Alan 
Thomas, brad of Out govern- 
ment's defence mips organisa- 
tion, to try and revitalise toe 
fortunes of GJML Firth (Bidd- 
ings), the small Wakefield- 
based engineering company 
with a turbulent past 

Morgan, who spent 30 years 
with IBM before being head- 
hunted for the loD job in 198% 
has been appointed a nan-exeo- 
utive director of GJL Firth 
(Holdings). The loss-making 
group, currently capitalised at 
£14.5 m, recently had a £4m 
rights issue to repair Us bal- 
ance sheet and announced that 
Sir Alan Thomas, 5L a former 
Raytheon executive, would 
take over as executive chair- 
man in July when he finished 
his MoD job. 

The two men go back a long 
way together. They both ball 
from Wales, made their names 
in computers and have more ’ 
than a pawring knowledge of 

the steel business. Mo rgan's 
first job was programming 
computers for the Steel Com- 
pany of Wales and he came to 
know Sir Alan during Ms IBM 
days because Sir Alan's Data Ir 
ogic was an important IBM 
customer. Having sold his toot ~ 
pany to Raytheon, Sir Alan 
continued as a senior Bar 
theou executive. They took up 
their posts at the IoD and th 0 
MoD at the same time. 

Morgan is a non-execuh* 8 
director of South Wales BhjC; 
tricity and National Provident, 
and is also an adviser to Ap®* 
Partners, the venture capital 
firm. 


Other non- execs 

■ Sir Desmond Pitcher, chaff" 
man of North West W atear, at 
NATIONAL WESTMINSTER 
BANK. Sir Michael Angu* lg* 
retired as deputy chairman 6® 
remains on toe board. 

■ Sir David Kfaaloch, a 
director of Caledonia 
Investments, as chairman at 
The FLEMING CHINESE 
INVESTMENT TRUST, v 
Michael MQes has resign** 
and also from The FLEMING 

FAR EASTERN INVESTMENT 

TRUST. 

■ Barry Spencer as drains* 0 
of BTTG. 


T$ 

Di 


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FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


ARTS 


U seful idea the 
holiday. Helps 
you put things to 
perspective. 
Beautiful 
Umbrian hillside, nice old 
farmhouse. Why not read 
David Copperfield? Bit long; 
836 pages in the excellent £l 
Wordsworth edition. But it's a 
treat A joy. I had forgotten 
that although Dickens was a 
barnstormer and a sentimen- 
talist, he was, first, a master of 
character and narrative, and 
set out to give his readers 

enjoyment. His books still da 

We are told Dickens would 
have been at borne in the tele- 
vision age because, like so 
much fiction on television, his 
work is episodic, having been 
written as part- works for 
monthly publication. There is 
probably less to this than 
meets the eye. The question I 
bring back to the old green 
sofa in London is simple: 
although I spend much of my 
time defending television and 
arguing that, as in most other 
aspects of life, the best is very 
good, do X ever get as much 
pleasure from it as I get from 
reading David Copperfield? The 
answer after one week back in 
front of the screen Is a quali- 
fied no. 

The first programme I see is 
a new comedy series called 
Once Upon A Time In The 
North. BBCl seems to have 
invented it to show that Bern- 
ard HOI, flavour of the ifasuip, 
who has done everything else 
from Yosser to a police chief, 
can also turn his hand to com- 
edy. Well, yes, it seems he can. 
but is that surprising when the 

material is as tmJpnumiting 38 

this? Hill is saddled with that 
standard comedy figure in the 
age of feminism: the useless 
paterfamilias. Out of work, 
unable to do even the smallest 
thing (putting a message an an 
answerphone) correctly, he is 
treated with contempt by 
everyone from wife to young- 
est child. This might have 
seemed novel, shocking and 
hinny in, say, 1850 when patri- 
archy was still the norm, but 
in 1991? It is time British com- 
edy writers caught up with 
their American cousins who 
moved into the post-feminist 
age four or five years ago. I 
itch to get back to David Cop- 
perfieUL 

Instead I watch The Lifeboat, 
an episodic drama (BBCl 
again) featuring a group of 
characters brought together by 
the dangers of the sea. But 
where in this soggy, soapy 
story of darts and extra marital 
sex is there a single character 
as memorable as Copperfield, 
Steerfortfcu Traddles, Betsey 
Trotwood, Uriah Heep, Agnes 
Wickfield, Peggotty, Elam, Lit- 
tle Emly, Dora, Rosa Dartle, or 



Comedy in a feminist age: Bernard Fnn as the useless paterfamilias in ‘Once Upon a Time in the North’ 


Television/Christopher Dunkley 

No match for Dickens 


Doctor Strong? You could list a 
dozen more: even minor Dick- 
ens characters such as Rayfcig 
the carrier, and Creakle, the 
Chenevix-Trench of his day, 
have more life In them, more 
vividness, than the entire cast 
of The Lifeboat. Good grief, Jip 
the dog is more memorable 
than the characters in most of 
last week’s television dramas. 

T here was one pro- 
gramme which did 
have something of 
Dickens’ power to 
evoke the very smell of its 
milieu. Family (yet another 
from BBCl) on Sunday, the 
first in a four-part drama writ- 
ten specifically for television 
by Roddy Doyle, author of The 
Commitments and The Snap- 
per, reeked of Dublin. Its por- 
trayal of Chario, the violent, 
thieving, lying, brawling, 
unfaithful t unemployed pater- 
familias, was very powerful. 
Indeed, even after all these 
years of working class realism 
in television drama. Doyle - 


and superb acting from Sean 
McGinley - made this a truly 
shocking portrait 
The trouble lay in the bleak- 
ness. Though Doyle has shown 
us brutishness before, there 
have always been redeeming 
moments, but the opening epi- 
sode of Family lacked even a 
hint of redemption. However 
imii»h one may admire the pro- 
fessionalism of the production, 
that makes enjoyment diffinnit 
Dickens painted some grim pic- 
tures, but his canvases were so 
broad, covering the whole of 
society, that it was almost 
impossible for the gloom to be 
unrelieved. In this, television 
is at a terrible disadvantage, 
being such a desperately literal 
medium. While print can leap 
in one sentence from the real 
to the imagined, from the lit- 
eral to the metaphorical, from 
the inside of someone’s head to 
the outside of the stagecoach 
in which he rides, television's 
cameras have a terrible ten- 
dency to bind you to the 
actual 


Perhaps that is why the most 
vivid and engir«Kmp d rama of 
the television week was not fic- 
tional but factual. Watergate, 
the first In a five-part series of 
BBC2 documentaries, began to 
re-tell the story of how men 
employed by the late Richard 
Nixon brake into the offices of 
his political opponents and, 
crucially, how Nixon and his 
cronies then plotted to cover 
this up. 

One of the difficulties is that 
although producers Norma 
Percy, Mick Gold and Paul 
Mitchell are doubtless so famil- 
iar with every nook and 
cranny of the story that they 
cheered at every new morsel 
they unearthed, most of us, as 
non-experts, feel we have 
heard It all before. 

However, this does not 
matter because here, at last, 
television comes up with a 
truly Dickensian cast and the 
sort of narrative drive that 
would have mate the old boy 
beam with pleasure. What 
writer of fiction would dare 


have Jeb Magruder deliver his 
reminiscences while dressed as 
a priest? And follow that with 
a performance from Gordon 
Liddy - seemingly in front of a 
table spread with hand guns - 
which makes Micawber seen 
quiet and retiring? 

H aving roped in just 
about everybody 
who played any 
part (as with her 
outstanding series The Second 
Russian Revolution) Norma 
Percy has once again made the 
process of telling true stories 
on television look easy. Yet 
when you think of the inter- 
viewing and then the editing 
which must have gone into 
this apparently seamless narra- 
tive. with John Dean picking 
up from Hal deman, or Ehrlich- 
man seeming to take his cue 
from Alexander Haig, you real- 
ise that this is the art that con- 
ceals art 

As a collector of eccentrics 
and onetime political reporter. 
Dickens would have loved it 


Opera/ Richard Fairman 

Giordano’s ‘Fedora’ 


A t the first interval one man 
was overheard to remark dole- 
fully, “You realise this is cost- 
ing us more than £1 per min- 
ute”. Giordano might have been 
amused, as his opera Fedora panders 
shamelessly to the desire to see the 
rich on stage, caught up in same ftrtlle 
story of love and revenge in a selection 
of the world's most luxurious loca- 
tions. 

It is said that Jos£ Carreras wanted 
Fedora staged in London. Any request 
from mie of the “three tenors” is probar 
bty difficult to resist and the Royal 
Opera has responded by borrowing this 
existing production (by Lamberto Png- 
gelli) from La Scala, Milan - a sensible 
move, given that the opera is unlikely 
to come back often. Caruso helped 
launch it and since then it has become 
the vehicle for a star tenor or soprano, 
or both. 

A poor man’s Tosco would be a chari- 
table description. Sardou (soon to pro- 
vide Puccini with his “shabby little 
shocker”) prided himself on potting 
together historical melodramas from a 
stock handful of props and some exotic 
locations: this production of Fedora 


takes us on a charter trip from the 
Winter Palace in St Petersburg to an 
aristocratic salon In Paris and the 
miMinfariin of Switzerland. 

If file composer bad been Verdi, be 
might have focussed on some political 
or social issue. IT Puccini, he would 
have invested the characters with 
deeper emotional psyches. Instead, as 
humble Giordano, be was content to 
put the music to a creaky outline of a 
period thriller. For an opera lasting 
barely 90 minutes Fedora remarkably 
manages to seem too long, forever 
staffing before malting its next point. 
At the denouement, as the hero stands 
around helplessly, one wants to call 
out, It was her. Don’t you see? She did 
itr 

The music needs pace at all costs if it 
is to build up any feeling of anticipa- 
tion, but Edward Downes was not in a 
burry. The opening scenes do have 


some theatrical bustle written into 
them, but here the smaller parts had to 
work hard to make the business look 
busy. Jonathan Summers gets the main 
supporting role as the diplomat, De Sir- 
iex. Judith Howarth needed more fizz 
for her song on the delights of Veuve 
Clicquot (is this one of the earliest 
cases of “product placement"?) 

Fedora herself is any diva’s dream of 
a role - a Russian princess, who makes 
her entrance swathed in white fur, 
dripping in diamonds (cue audience 
applause). The role asks for an extrava- 
gant soprano who is unashamed at 
playing the Joan Collins of the verismo 
dynasty. Mirella Freni is not that kind 
of singer and her performance Is more 
about being thrifty, using a few well- 
chosen gestures for the character and 
pressing her bright, contained voice to 
do duty for the lavish dramatic 
soprano It has never been. What she 


does offer is Italian style in abundance. 

Carreras sounded hard pressed in the 
tenor role. So long as he is able to sing 
loudly and get a grip on the consonants 
the music suits his* present style well 
enough, but there is little in the way of 
phrased, legato singing. He hangs on to 
some of the top notes more by will- 
power than anything else. Ever since 
we first saw him nearly 20 years ago, 
Carreras has given body and soul to 
every role be has sung and he does so 
again here. It is not his fault that poor 
Loris falls to touch the heart 

In the final scene Giordano lays on 
the agony: Loris’s brother has been 
drowned in prison, his mother has died 
at tiie news, his lover has effectively 
irffted off his family and betrayed hnw 
too. But do we care? Not for a minute. 
Real inspiration in an opera composer 
costs more than money can buy. 


Royal Opera House, Covent Garden. 
Sponsored by Union Bank of Switzer- 
land. five further performances until 
May 27. Covent Garden Proms May 24 
and 27. Live relay on big screen in 
piazza May 19 


Theatre in London 

The Ralf Ralf illusion 


T he brothers Jonathan 
and Barnaby Stone - 
a.lta. Ralf Ralf - are 
so crazily concerned 
with Illusion and with theatri- 
cality that I would call them 
baroque artists if I did not feel 
that might lead to confusions. 
They are entirely modem, and 
they keep presenting you with 
satires of modem life. But. in 
their current show It's Staring 
You Right in the Face - which 
launches this year's Barclays 
New Stages season at the 
Royal Court - they play 
sketches-within-sketches and 
roles- within-roles. so that you 
are seamlessly led from one 
stage event into another. They 
even wear suits- within-suits. 

Again and again, they make 
uncanny jokes about fake 
spontaneity. They present sev- 
eral sketches as if they were 
TV presenters, and we the stu- 
dio audience; they catch per- 
fectly the awful, synthetic 
manners of such people, even 
though most of the time they 
are speaking not English but a 
brilliant genre of jabberwocky. 
They conduct an entire chat 
show in this lingo, through 


which somehow they repro- 
duce the inflections of real 
English as it is spoken on TV, 
SO effectively that the audience 
cackles. And, while one of the 

star guests reads a nonsense 

poem with richly inflected sin- 
cerity, the show’s presenter 
quietly slips off into sleep. 

Then the guest poet turns 
the words of his poem into a 
kind of hypnotism on the TV 
presenter ... and from then -on 
we no longer know where we 
are. Is everything that follows 
part of the presenter's trance? 
Even when the whole show 
suddenly las if we had 
switched channels and found 
ourselves watching American 
TV) becomes a Bible-belt 
show? Replete with casting out 
devils, banding over all 
worldly goods, and leading on 
“live” members of the audience 
to sing the praises of Him . . . 
all of which is achieved in 
more coherent nonsense lan- 
guage, with every twanging 
vowel somehow speaking of 
the religious fervour of the 
American South. 

Behind these satires is a dis- 
turbing vision. You laugh at 


the soul-barings of this reli- 
gious event, but you also know 
the alarming realities it 
evokes. You laugh at the con- 
man smoothness of other TV 
presenter types, while knowing 
that their banality is one of the 
most depressing features of 
modem life. You laugh because 
Ralf Ralf shows how hike these 
things are; but you are dis- 
turbed because you know how 
effective they are. And the con- 
nection of reality and illusion. 
keei>s you happily bewildered. 

This is a considerably 
revised and improved version 
by the way (it toured from the 
middle of 1993 until early ’94.) 
There are still moments when 
the show gets struck in a 
groove, but these do not last 
long now. And the show's 
structural ingenuity is far 
more apparent and far more 
baroque. Docs the word 
baroque does confuse? Ralf 
Ralf confuses too, and bril- 
liantly. 

Alastair Macaulay 


At the Royal Court Theatre 
until June 1 1 


Falling over England 


T here is one minor sur- 
prise in Falling Over 
England. Harry Cow- 
per. the man who has 
risen from sub-lieutenant to 
captain daring six years in 
Egypt, wants to go into politics 
when he comes back from the 
second world war. He chooses 
the Tory Party, not Labour. 

In the event, his wife 
iippiinw! to let him stand since 
she does not want to live in 
Tintagel, even for the odd 
weekend, nor in London either. 
So the political amhitinn has 
turned out to be something of 
a red herring. It has merely 
served to establish Cowper as a 
bit of a bounder anti-foreigner, 
mildly corrupt, pro-public 
school and generally refusing 
to grow up. 

J ulian Mitchell, the author, 
seems reluctant to grow up. 
too. Falling Over England is 
the sort of play that should 
have stopped being written 
around the mid-1960s. It has 
three periods: 1945 and the end 


of the war, 1956 - the year of 
Suez, and the present day. 
Suez is dominant Cowper' s 20- 
year-old son. Matt, leaves the 
country rather than respond to 
the call to enrol as a para- 
trooper during the Suez cam- 
paign. The father dies of a mix- 
ture of drink and 
incomprehension. 

By the present day. the same 
Matt is having problems with 
his own son, Tom, who has 
unleashed a load pigs onto the 
M4 in the interests of animal 
rights. His Oxford career may 
be jeopardised. 

The message is that English 
family life, in its rather 
unpleasant way, goes on: tea in 
the garden, the move from 
mil d idealism in youth to mild 
reaction in middle age. As 
Matt, now Matthew puts It: 
“When I was Tom's age 1 
thought there'd be no public 
schools by now. Or private 
medicine. Or dukes with mil- 
lions of acres ... I thought peo- 
ple could be educated to a 


higher standard. Nothing's 
happened." The only change is 
a debate in the Cowper family 
on whether the next genera- 
tion might possibly go to a 
state school; there Is a passing 
reference to someone reading 
law at Durham. All the charac- 
ters are stereotypes except the 
daughter Sarah, who has a 
kind of independence in her 
painting and journalism, but 
seldom steps far out of the fam- 
ily line. The aim cannot be sat- 
ire because the characters are 
not strong enough; nor is it 
affection since most of them 
are so unattractive and Falling 
Over England is certainly not 
comedy - more old-fashioned 
soap. 

James Laurcnson plays the 
elder Cowper. Matthew Francis 
directs. 

Malcolm 
Rutherford 

Greenwich Theatre. (081) S58 
7755 


The Wasteland 


T his is not called, you 
will notice. The Waste 
Land : this “thriller 
opera” has nothing to 
do with T.S. Eliot, oh no, cer- 
tainly not Not literally, any- 
how - because the pernickety 
Eliot estate forbade the use of 
any name or recognisable 
phrase from the sacred text 
The estate is odd that way. 
For several years after his 
friend Stravinsky set “The 
Dove descending" as a cantata, 
Eliot's poem could not be 
reproduced in programme- 
notes for performances. The 
ban seems now to have been 
lifted for “serious” music, and 
of course Cats was acceptable 
(and very profitable) - but not. 
app a r e ntly, a scintillating par- 
ody like Martin Rowson's com- 
to-book “Waste Land”, which 
was the basis for this show. 

Luckily, The Waste Land 
Itself provides a loophole 
which the librettist Andy Rash- 
leigh and composer Stephen 
McNeff have exploited with 
glee. Some of its best-remem- 
bered lines are quotations from 


other sources, and they get 
mischievously prominent set- 
tings here. Nor are the mythi- 
cal seers Tiresias and Sosos tris 
pure inventions of the Master, 
so they can appear with their 
own names (or almost: just for 
safety, the seeress is spelt 
“Sesostris”). 

All this is byplay, however, 
for the basic joke is to turn 
The WastelLand Into a Ray- 
mond Chandler mystery. Row- 
son's knowing cartoons over- 
flowed with visible puns and 
gags. In the Modern Music 
Theatre Troupe's operatic ver- 
sion, crisply directed by Caro- 
line Sharman, they meld into a 
cod film noir, which has to 
trail the perpetual Eliot refer- 
ences with less recourse to Lit.- 
Crit. visuals. Hie private-dick 
hero, cutely called “Chris 
Marlowe", only speaks (Mat- 
thew Aldridge looks wearily 
right, though his spoken Amer- 
ican is as pallid as most of 
Rashleigh's Chandlerisms). 
Five Intrepid singers sing 
everybody else - clients, mis- 
tresses. victims, obscurely sin- 


ister figures and cops. 

That gives each of them a ' 
crack at a flashy cameo or two. ' 
There is plenty of action, van- 
ety and contrast, crucially' 
underpinned by McNefFs 
score: pitched between Kurt 
Weill and Sir Arthur Sullivan, 
leaning this way and that as 
opportunity dictates. More 
strenuously chromatic than 
cither of them, more than a big 
commercial musical would 
risk; but economical, crafts- 
manly - there are a couple of 
very ingenious ensembles - 
and endearingly loyal to the 
fihn noir sound. 

The excellent singing cast 
take to it easily. Battered by 
the Donmar acoustic. Some- 
thing irretrievably Lit.-Crit.- 
clever clings to the piece; for 
maximal appreciation, you 
should re-read 77»e Waste Land 
just before you go. 

David Murray 

BOC Covent Garden Festival: 
at the Donmar Warehouse 
until Saturday 


9 


INTERNATIONAL 



■ BONN 

Oper Tonight, Sat, Tues: La fancfuRa 
del West with Sherrill MBnes as Jack 
Ranee. Tomorrow, Sure Las Contes 
d' Hoffmann. Fri; Toeca. More 
Thomas Mohr song recital 
(0228-773687) 

Beethovenhafle Sun: Sergiu 
Celibidache conducts Munich 
Philharmonic Orchestra in 
Beethoven's Frith and Sixth 
Symphonies. Members of the 
orchestra also give concerts on Sat 
and Mon (0228-773666) 


■ BORDEAUX 

MAY FESTIVAL 

Tonight and tomorrow at Pafais des 
Sports, Gianlulgi Geimetti conducts 
Orchestra National Bordeaux 
Aquitaine in works by Britten, 

Mozart mid Tchaikovsky, with 
soprano Danielle Borst aid piano 
soloist Maria Tlpo. At 
Grand-Theatre, Frangois-Rend gives 
a piano recital on Sat evening. Abai 
Lombard conducts a Haydn 
programme on Sun afternoon, and 


Gunter Wagner conducts Rossini’s 
Petite Masse SotenneUe next Tues. 
Thera Is also a rectal series at 
castles in the surrounding region, 
featuring distinguished soloists such 
as Jean-Bemard Pommier, Victor 
Tretlakov, Yuri Bashmet and 
Alexander Baiffle. The festival runs 
tffl May 20 (5648 5854) 


■ COLOGNE 

Pfnfftamtonle Tonight James 

Cordon conducts SOrzenfch 
Orchestra in works by Zimmermann, 
Bartok and Janacek. Tomorrow, 

Fri: Sergiu Celibidache conducts 
Munich Philharmonic Orchestra in 
Ravel and Debussy. Sat, Sun: 
Claudio Abbado conducts Beilin 
Philharmonic Orchestra in two 
programmes, including Mahler’s 
Ninth Symphony. Mon: WDR Big 
Band plays Duke EUington. Next 
Tues, Wed: Hans Vonk conducts 
Cologne Radio Symphony Orchestra 
in Bartok and Stravinsky, with prana 
soloist Mikhail Rudy (0221-2801) 


■ COPENHAGEN 

Royal Theatre Tonight, tomorrow: 
John Neumetor's ballets set to 
Mahler’s Des Knaben Wunderhom 
and Fifth Symphony. Fri, next Mon 
and Wed: Heinz Fricke conducts 
Nicolas Joel’s production of 
Lohengrin, with alternating casts 
Including Poul Hming aid Tina 
Kfoerg. Sat Don Pasquale. Tues: 
Cosi fan tutte (tel 3314 1002 fax 
3312 3692) 

Tivofl Tonight Tokyo Quartet plays 
string quartets by Haydn, Barber 
and Debussy. Fri: Hfroyuta' Wakasugi 
conducts Tivoli Symphony Orchestra 


in works by Yuasa, Mozart and 
Richard Strauss. Sun: Copenhagen 
Symphony Orchestra plays Dvorak 
and Rimsky-Korsakov. Next Tues: 
Isaac Stem violin recta (3315 1012) 


■ DRESDEN 

DRESDEN FESTIVAL 
This year's programme (May 
21 -June 5) is inspired by August 
the Strong, whose accession as 
Saxon ruler 300 years ago heralded 

a golden era in Dresden's artistic 
life. Visiting baroque specialists 
include I Soiisti Venetl, Concerto 
Kdfri and Virtuosi Saxoniae, and 
there w9l be a chance to hear rare 
choral and operatic works by 
Telemann, Hasse and Handel Other 
highlights: Bach's 8 minor Mass 
conducted by Riccardo Muti, 
Capriedo with cast headed by 
FeSdty Lott, and Alfred Bren del 
playing Mozart. Repertory at the 
Semperoper over the coming week 
includes Parsifal and Der 
RosenkavaJfer, plus a Barbsa 
Bonney song recital on Mon (tel 
0351-486 6666 fox 0351-486 6307) 


■ FRANKFURT 

Aite Oper Tonj^rt James Levine 
is conductor and piano soloist In 
a Mozart and Mahler programme, 
the first of four with the Metropolitan 
Opera Orchestra and Chorus. 

Tomorrow: concert performance 
of Der fliegende Ho Binder with 
Jamas Morris, Ben Heppner and 
Deborah Vogt Fri: I Lombardi with 
Aprile Milks and Luciano Pavarotti. 
Sat Die Walkure Act 1 and 
Qfltterdfimmerung Act 3 wfth 
Siegfried Jerusalem, Waftraud Meier, 
Gwyneth Jones and Wolfgang 


Schmidt (069-134 0400) 

Oper Tonight, Fri: Cornelius’ comic 
opera Der Barbier von Bagdad. 
Tomorrow, Sun, next Wed: Guido 
Johannes Rumstadt conducts Nuria 
Espert’s production of Bektra, wfth 
Jarvs Martin and Livia Budai. Sat 
Frankfurt Ballet in choreographies 
by WITUam Forsythe and Amanda 
Miller (069-236061) 

Schausplelhaus Tomorrow, Fri, 
Sun: Frankfurt Ballet in 
choreographies by MiRer. Rlzzi and 
Schumacher (069*2123 7444) 
Jahrtwnderttialle Hoechst Fri, Sat 
Warsaw State Operetta in 
Offenbach's La vie parisferme. 
(069-360 1240) 


■ HAMBURG 

Staatsoper Tonight, Sat, Mon, Tues, 
Wed: John Neunafer's version of 
Swan Lake. Tomorrow, Sun (also 
May 20, 23, 26, 29): Gerti Albrecht 
conducts Harry Kupferts new 
production of Khovanshchlna, with 
cast headed by Olga Borodina and 
Marti Salmfnen. Fri: Le nozze di 
Figaro (040*351721) 

Musfkhaile Tonight Sfcnon Rattle 
conducts City of Birmingham 
Symphony Orchestra in works by 
Bartok arid Debussy. Tomorrow; 
Deutsche KammerphBharmonle 
plays Brahms and Schoenberg. Fri: 
Karl VBdor Nielsen piano recital. 

Sun morning, Mon and Tues 
evenings: Gerd ABxecht conducts 
Hamburg State Philharmonic 
Orchestra in symphonies by 
Beethoven and Allan Pettersson 
(04D-354414) 


■ HELSINKI 

Finnish National Opera Tonight, 


Sat L’ellslr d’amore. Tomorrow, 
next Wed: Carmen. Fri: Jorma 
Uotinen’s new ballet Sonata in 
Glass, music by Sfoefius (0-4030 
2211) 


■ LEIPZIG 
Qpemhaus Tomorrow: Don 
Giovanni. Sat Britten's A 
Midsummer Night's Dream. Sun: 

La boheme (0341 -291036) 
Gewandhaus Sun: Anato! Ugorski 
piano recital. Mon: Horst Fflrster 
conducts Leipzig Academic 
Orchestra in works by Mendelssohn, 
Weber, Bizet and Gershwin, with 
piano soloist Raif-Torsten Zichner 
(0341-713 2280) 


■ MUNICH 

MUNICH BIENNALE 

Munich's fourth festival of new 
music-theatre runs M May 22 at 
various venues around the city. The 
main event this week is the premiere 
of Der blaue Stein by Pad Engel 
(b1949), about hostile behaviour 
towards foreigners (tomorrow. Sat 
and Sun at Muffathane). Benedict 
Mason's football opera Raying Away 
receives Its first performance on 
May 19, In a production staged by 
David Pountney and conducted 
by Paul Daniel (089-48098 614) 
EVENTS 

Staatsoper Tonight Salome with 
Gwyneth Jones. Tomorrow: La 
Cenerentola. Fri: Don Giovanni. Sat 
and Sun: opening of week-long 
dance festival with Bavarian State 
Ballet's new American programme, 
featuring Bena Pankova. Evelyn 
Hart, Manuel Legris and Kiki 
Lammersen. Tues: gala featuring 


Sylvie Guillem and other guests. 
May 20. 21. 22: National Ballet of 
Canada (089-221316) 
Kammerspiele A new. production 
of Shakespeare’s The Tempest, 
directed by Dieter Dom, has just 
entered the repertory, alongside 
Bob Wilson’s latest theatre piece 
and plays by Thomas Bernhard and 
Aeschylus (089-2372 1328) 
Deutsches Theater Ballet Teatro 
Espanol presents choreographies 
by Rafael Aguilar, daily till Sun 
(089-5523 4360) 


■ STRASBOURG 

Th&tre Municipal A new 
production of The Makropoulos 
Case, staged by Bernard Sobei and 
conducted by Rudolf Krecmer, 
opens on Fri with a cast headed 
by Sofia Larson (repeated May 15, 
24, 26 and June 3). Strasbourg Wind 
Quintet plays works by Dvorak and 
Janacek on Sat, and Fiorestan 
Quartet plays string quartets by 
Beethoven and Schubert next Mon 
and Tues (8875 4823) 


■ STUTTGART 

S t aatetheater Tonight: Don 
Giovanni, with cast led by Wolfgang 
Schflne. Tomorrow, Tues: Johannes 
Schaafs production of Wozzeck. 

Fri, Sat: Stuttgart Ballet in Marcia 
Haydfre's version of Raymonds, 

Sun morning, Mon evening: Philippe 
Auguin conducts orchestral concerts 
In the Liederhalle (0711-221795) 


ARTS GLIDE 

Monday: Berlin. New York and 
Paris. 

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

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

Friday: Exhibitions Guide. 

European Cable and 

Satellite Business TV 

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

MONDAY 

NBC/Supor Channel: FT 
Reports 1230. 

TUESDAY 

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

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/ Super Channel: FT 
Reports 1230 

Sky News: FT Reports 0230. 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News FT Reports 0430, 
1730; 







Edward Mortimer 


It would be 
wiser not to 
write about 
Rwanda. Very 
few FT readers 
want to know 
about it, and if 
they did I 
should not be 
the best person to inform 

than. 

There may not even be any- 
thing one ram usefully say, let 
alone do. about what is, for 
most of us in London and New 
York and Tokyo, a very far- 
away country indeed. Maybe 
we should be better off, and 
the Rwandans themselves at 
least no worse off, if we liter- 
ally knew nothing of their 
affairs. 

But that state of innocence is 
denied us. We have eaten of 
the fruit of the tree of know- 
ledge, alias the global media 
network. We do know that “up 
to 200,00 0” people have been 
massacred in Rwanda since the 
death of President Juvenal 
Habyarimana an April 6. Even 
a mind like mine, long since 
numbed with the arithmetic of 
horror, finds that rather a 
large pile of corpses to pass by 
in silence - 

So I am forcing myself to 
think about Rwanda, at least 
for a minute or two. To what 
purpose, you may ask. “If 
those people insist on killing 
each other, is it any affair of 
ours? Can we be expected to 
fight their wars for them? How 
many troops would it take to 
stop this slaughter, and how 
long would they have to stay 
there? Wouldn't foreign troops 
soon become one side in the 
war, or even unite all sides 
against them? Aren't you 
advocating a new colonial- 
ism?” 

If those questions are asked 
about Bosnia, which is in the 
heart of Europe, and about 
which we have now had two 
years to educate ourselves, 
they are bound to be asked 
about Rwanda, an obscure ex- 
Belgian colony in the heart of 
Africa. 

Let me answer the last one 
first, in order to avoid the oth- 
ers. At this stage I am not 
advocating anything, except 
that we pay more attention to 
these terrifying events and 
take them seriously. 

1 am willing to admit, and I 
hope it does not malm me a 
racist, that as a European I feel 
more directly concerned by 
Bosnia than by Rwanda. But 1 
have a strong and uncomfort- 
able impression that many 
Europeans, including edu c at e d 


A blot 
on the 


map 

The genocide 
in distant 
Rwanda can 
no longer 
be ignored 


and well-mformed ones, do not 
fed concerned by Rwanda at 
all 

Part of the reason is proba- 
bly that during the past 
month, while the Rwanda trag- 
edy has Wi happening. flip 
attention of almost all our 
Africa specialists has been riv- 
eted an South Africa. Indeed 
most of them have been physi- 
cally there, caught up in the 
tana* end moving denouement 
of the epic struggle to end 
apartheid. They have had little 
time, and probably even less to 
spare of energy or emotional 


Many Europeans 
do not feel 
at all concerned 
by the tragedy 
in Rwanda 


commitment, for events else- 
where in Africa, as well as 
being less accessible to diplo- 
mats, or relief a genci es 
involved in Rwanda than they 
would have been at home. 

But that is not the whole 
story. The truth is that Africa 
specialists in themselves are a 
dwindling and embattled 
breed. The South African elec- 
tion might even be their last 
hurrah. They have been find- 
ing it increasingly difficult to 
hold the attention of their col- 
leagues and bosses for events 
in other parts of the continent 
where neither while lives nor 
foreign investments are at 
stake on a large scale. 

We in the west, or north, 
have got into the habit of writ- 
ing off, or shrugging off, Black 
Africa as a hopeless case. We 
think of it as a grim and tragic 
story, but one “told by an idiot, 
signifying nothing” to the rest 
of the world. “Why can't Afri- 
cans be more like Asians?” has 


become the essence cf cur con- 
ventional wisdom on the sub- 
ject 

That wisdom was challenged 
in a recent article in the Atlan- 
tic Monthly, which caused a bit 
of a stir when copies of it were 

distributed among the emam nf 

the Anglo-American establish- 
ment at a recent foreign affairs 
conference at Dttchley Park, 
near London. 

The author. Robert Kaplan, 
suggested that many parts of 
Asia, and even some parts of 
North America, are actually 
very like what we think cf as 
typical Black Africa, and are 
going to get more so; and that 
even if more Asians than Afri- 
cans are likely to jom the privi- 
leged elite of global capitalism, 
that elite will increasingly 
have to spend its time in a 
kind of air-conditioned, heavily 
defended ghetto - since large 
areas of most big American 
cities, not to mention the 
urban sprawl between Hong 
Kong and Guangzhou, are 
already little safer or healthier 
t han tiie anamhte , Aids-ridden 
shanty towns in which so 
many Africans now live their 
short and miserable lives. 

The article, entitled The 
Coming Anarchy, raised a very 
uncomfortable question: could 
it be that an "African” future - 
in which the majority cf the 
world's population would have 
to live with emtonin violence, 
rampant disease, soil erosion, 
malnutrition, and the collapse 
cf family structures and values 
- is not the alternative to an 
"Asian” future of headlong 
economic growth, but actually 
the other side of the same 
coin? 

Mr Kaplan raised that ques- 
tion. He did not answer it alto- 
gether convincingly. And any- 
way he was not trying to 
explain the genocide in 
Rwanda, winch happened since 
he wrote the article. But he did 
succeed in making Africa a lit- 
tle harder to shrug off. 

Meanwhile, there is another 
habit which western commen- 
tators need to break, namely 
that of lumping together vic- 
tims and murderers, and of 
assuming that violence is 
deeply ingrained in any society 
where large-scale violence 
occurs, rather than looking for 
specific causes and Indeed spe- 
cific culprits. 

Genocide does not just hap- 
pen. It has to be carefully 
planned, and evidence is 
already c oming out that this 
was the case in Rwanda, per- 
haps even more clearly than it 
was in Bosnia. 


F or years farm equip- 
ment manufacturers in 
the US and Europe 
have ploughed a 
lonely, and increasin&itv tough, 
farrow. Sales have declined as 
farmers have battled against 
recession and tended to buy 
fewer, larger tractors. Other 
opportunities - in Asia, for 
instance - have been slow to 
open up, and offer limited 
immediate rewards. Factories 
have been dosed, merged or 
sold. 

But in the last rnnmtb there 
have been tentative signs of a 
revival of interest to the indus- 
try’s growth prospects. Agco, 
the fast-growing, Atlanta-based 

farm equipment group, has 

paid S328m to buy Massey 
F e rgu so n, the UK tr a ctor man- 
ufacturer based in the Mid- 
lands, from Varity, the US 
Industrial group. 

A day before that deal was 
announced, Tenneco. the Hous- 
ton-based industrial group, 
said it intended to sdl 35 per 
cent of its J.LCase farm and 
construction equipment divi- 
sion via a public share offer- 
ing. The decision apparently 
reflected a belief that it was a 
good time to sell 
If the deals go through, two 
diversified US corporations 
will have signalled a strategic 
shift away from the tractor and 
farm equipment imbi gf i y But 
others will have taken their 
place. 

It is easier to explain the 
motives of the sellers than the 
buyers. Demand for the indus- 
try's products has sunk, result- 
ing in serious overcapacity and 
fimmrial losses for manufac- 
turers. In the US, recession and 
the heavy burden of fans debts 
In the mid-1980s forced many 
farmers off the land and a con- 
solidation of small farms intn 
larger ones. The farmers that 
wen left have bought larger, 
better-made tractors which last 
longer than they did 20 years 
ago. In consequence, North 
American tractor sales have 
fallen from 195,000 units in 
1980 to 115,000 last year. 

In Europe, tractor sales have 
plunged from about 300,000 in 
1980 to 135,000 last year. This Is 
because of the European 
Union’s farm set-aside pro- 
grammes, high interest rates 
which have dented farmers’ 
willingness to invest, and farm- 
ers’ “machinery rings" for 
sharing heavy equipment, 
including tractors. 

Reforms to the Common 
Agricultural Policy in 1992, 
including cuts in cereal prices 
and increased compensation 
payments for farmers who take 
land out of production, have 
piled on the pressure. 

No farm equipment maker 


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At. TIMES WEDNESDAY MAY l I 1994 


Andrew Baxter and Laurie Morse on upheavals 
in the US and European farm equipment industry 



Swiss Bank 
Corporation 


The key Swiss bank 


Ploughs in search 
of fertile lands 


Tractor manufacturers: heavy going 


North American sales 


jftfjSfi 1993 total 1 15/500 units 


1993 tOtaM 35 ,200 units 


Market share 


Others Ratagrt/ForcT 


Massey Ferguson 


J.Deere] 
36% 'J 


Kubota J -Deere 


Case \ 15% 
22 % \ j 





escaped unscathed. Massey 
Ferguson, for example, has 
shut all its North American 
plants. In Europe, larger pro- 
ducers, which formerly had 
three or four tractor factories, 
have cut back to one or two. 
Case, for example, is to shut its 
Neuss tractor factory, near 
Dfisseldorf, to 1996, leaving 
Doncaster in the UK as its only 
European tractor plant. It is 
also restructuring its UK and 
French operations. 

Besides closing factories, 
farm equipment manufac turers 
are also sharing production. 
The most important deal was 
announced in January, 
between Renault, the French 
vehicle manufacturer, and 
Deere, the largest US tractor 
maker. Renault will supply 
medium-sized tractors to 
replace a Deere model cur- 
rently manufactured to Mann- 
heim, Germany, and Madrid. In 
return, Deere’s plant in Saran. 
France, will supply diesel 
engines for Renault tractors. 

Another result of the 
retrenchment has been a series 
of big takeovers, mainly in the 
US. Once-thriving enterprises 
have been swallowed up 
as their losses have 
become unsustainable - most 
of International Harvester, 
the US farm equipment 
group, ha example, was bought 


fay Case in 1985. 

In Europe, the process of 
retrenchment seems far from 
complete: it stQI has at least 40 
tractor producers, many with 
very small market shares and 
declining volumes. 

In the past year market con- 
ditions have improved. UK 
tractor sales are at their high- 
est level since 1989, while in 
the US “there is a mini-boom 
taking place”, says Mr Eli 
Lustgarten, analyst with Pai- 
neWebber, the US broker. But 
rafhy than y«>w»rs* n g the trend 
towards retrenchment, some 
large farm equipment manu- 
facturers have taken the 
revival as a chance to sell up. 


E xplaining why his 
company sold Massey 
Ferguson, Mr Victor 
Rice, Verity’s chair- 
man, says it sees stronger 
growth to its other businesses 
- diesel m ginpg and automo- 
tive braking systems. 

Tenneco, too, says it will 
redeploy proceeds from the 
sale of its stake in Case - 
expected to be about $500m - 
into less cyclical, higher- 
growth businesses, such as 
automotive parts. 

Their decisions reflect an 
assumption that, notwithstand- 
ing the current revival, the 
long-term outlook for the trac- 


tor and farm equipment indus- 
try is lacklustre. “We, like the 
whole industry, believe that 
over the long term retail sales 
cf agricultural equipment will 
continue to decline. Europe is 
a very difficult environment 
for our business, given the 
CAP and weakness in the gen- 
eral economy," says a Deere 
spokesman. 

Economic conditions are 
only part of the story: there Is 
also a belief that the long-term 
growth areas are going to be 
those where profit margins are 
smaller. “The most discourag- 
ing factor is the likely shrink- 
age of the market size in profit- 
able areas, where you can sell 
tractors with higher specifica- 
tion," says Mr Chris Barrow- 
Williams, analyst at the Lon- 
don-based consultancy. Corpo- 
rate Intelligence Group. 

“In Europe and the US. trac- 
tors are four-wheel drive, not 
two-wheel drive, and often 
have a computer on board. 
They have 36-speed gearboxes, 
while Africa wants eight-speed 
gearboxes,” he says. 

But if the announcements of 
the last month were logical 
moves for Varity and Tenneco, 
what are the motives of the 
new owners? 

One possible explanation is 
that they believe farm equip- 
ment manufacturers fare bet- 


ter when separated from other 
operations. In the 1980s. when 
Ford Motor of the US was stiU 
Is the tractor business, its 
commitment to the industry 
was often questioned: there 
seemed little synergy between 
its tractor operation, with its 
very long product eyries, and 
the more dynamic car busi- 
ness. 

But in 1985, Ford's tractor 
business took over the fans 
equipment division of Sperry 
(now part of Unlays, the US 
computer group) to create Fort 
New Holland, to 1991. Fort 
New Holland was taken over 
by Fiat and combined with the 
Italian group's earth-moving 
and farm equipment interests. 
Though still under the wing of 
a large vehicle group, the 
increased size of the company, 
now called New Holland, and 
its global spread have resulted 
to a greater independence. 

The workforce of 30,000 fa 
1991 has been cut to 18L200. but 
New Holland has riiiniim ftH l 
duplication, streamlined pro- 
duction and stripped out 
bureaucracy, enabling it to 
direct more money to product 
developmen t It claims to have 
raised its share of tin main 
world tractor markets, and its 
financial performance is 
improving, although last year 
it still made a pre-tax loss. 

Similarly, Agw believes Mas- 
sey can flourish under its 
whig, rather than under the 
control of a broad Industrial 
conglomerate such as Varity. 
Mr Robert Ratliff, Agco 
chairman, notes that Massey 
has already made capacity 
cuts. 

Mr Dominic Chauvfa, Mas- 
sey’s president, says toe take- 
over could bring new opportu- 
nities for Massey's plants at 
Coventry and Beauvais, 
France, as Agco move* to 
exploit its expanded global 
base through broadening sides 
of farm equipment lines 
acquired in the US over the 
past three years. 

Mr Chauvfa says there is 
also potential for growth in 
developing countries of the Far 
East and to eastern Europe, 
although sales are constrained 
because local farmers rarely 
have sufficient finance to buy 
expensive tractors. “As soon as 
there is a mechanism for 
improving financing, there 
should be additional (opportuni- 
ties," he says. 

Such patience requires a 
long-term commitment to the 
farm equipment industry. But 
the larger manufacturers that 
remain to the industry appear 
confident of reaping reasonable , 
returns from a global market - 
where much of the ground is 
stony. 


LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SE1 9HL 

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


Competitiveness matters in the real world 


From Mr Douglas McWUHams. 

Sir, As someone who has 
done as much as anyone to 
awaken interest to Europe's 
competitive difficulties, I find 
it unfortunate that your leader, 
“Jobs agenda for Europe” (May 
9), repeats uncritically the 
assertion by the economist 
Paul Krugman that European 
competitiveness “is not the 
burning issue”. 

Since 1980, European eco- 
nomic growth has averaged 0.4 
per cent per annum less than 
the OECD as a whole. Few 
forecasters, if any, expect any 
catching up in the near future . 
Over the same period the Euro- 
pean Union's share of the 
world non-commodity exports 
(if trade within Europe is 
excluded) has fallen, by more 
than a quarter. European 
investment to i n novation as a 


percentage of gross domestic 
product is running 25 per cent 
lower than that in the US and 
30 per cent lower than in 
Japan. As a result, it is not 
surprising that toe proportion 
of European industry described 
as “high technology-based” in 
1990 was only 14^5 per cent, 
compared with 19 per cent for 
the US and 20 per cent 'for 
Japan. 

One of the causes of those 
problems is lack of profitabil- 
ity; OECD figures show that 
toe real return on capital in 
the business sector from 
1981-91 was 15.4 per cent to the 
US, 143 per cent to Japan and 
12 per cent to Europe. This is 
partly because European 
hourly labour costs are about a 
fifth fai g ftpi* thfln those in the 
US, while industrial productiv- 
ity is about a quarter lower. 


Moreover, the economic diffi- 
culties resulting from Europe's 
competitive problem of being a 
high cost economy with only 
medium levels of skills and 
technology will be exacerbated 
in coming years by the likely 
pattern of world economic 
development, especially to 
Asia and South America. 

Because Europe’s problems 
go beyond labour markets, the 
overhaul of labour market reg- 
ulations and of labour taxes 
and benefit systems which 
your leader correctly recom- 
mends is unlikely to be suffi- 
cient on its own to solve 
Europe's jobs problem. In addi- 
tion, deregulation, privatisa- 
tion, lower levels of taxation 
generally and the ending of the 
subsidies and protectionism 
that preserve inefficient indus- 
tries to Europe will also be 


required. Even then, reversing 
Europe’s declining ability to 
create jobs may take a genera- 
tion to achieve. 

Your leader’s assertion that 
the concept of competitiveness 
“in relation to an entire econo- 
my . . . lacks m uch meaning” is 
based on the academic notion 
that exchange rates can always 
adjust freely to handle compet- 
itive imbalances. 

But to the real world devalu- 
ation normally adds to infla- 
tion and worsens the terms of 
trade. This is why competitive 
problems are just as likely to 
result in deflation, loarifag to 
loss of jobs, as devaluation. 
Douglas Mc Williams, 
chief executive. 

Centre for Economics and 
Business Research, 

18 Kent Terrace, 

London NW1 4RP 


No right to speculate Japan’s regret for the past 

(Wm XU A rumnhlo I tn them and Hip rmnlirafirm XVmn Ur I u wlj. u. n 


From WA. Gamble. 

Sir, Your article on retail 
I recovery and cash surpluses 
(“Pleasing some of the people". 
May 5) highlights an issue 
which is fundamental and yet 
is all too infrequently 
addressed. Whereas the analyst 
who advocates the return to 
shareholders of cash surpluses 
which are beyond tie immedi- 
ate needs of the business has 
an rmnggn liable case, the argu- 
ments (pleadings) against are 
devoid of substance and cannot 
be sustained. 

The twin suggestions emana- 
ting from directors of compa- 
nies featured - that share buy- 
backs and special dividend 
payments would be “. . .judged 
poorly by Investors . . and 
“...would be Indicative of a 
moribund management team 
with no ideas" - are in each 
case fatuous. There can be few 
recorded cases of investors 
being opposed to receiving a 
payment of cash which belongs 


to them, and the implication 
that investors cannot came up 
with ideas of their own cm how 
to deploy their surplus cash is 
both arrogant and insulting. 

Managements (ie, the ser- 
vants of the owners of the busi- 
ness) should be aware that it is 
not their function to speculate 
with their owners’ money in 
fields beyond their briefs and 
outside their areas of compe- 
tence. While this may clip their 
wings in a manner they find 
irksome, experience suggests 
that by being restricted to 
activities which they know aw? 
understand, even thoug h these 
activities may be “mature”, 
they (and their shareholders) 
are more likely to prosper than 
If they are permitted to specu- 
late with money which does 
not belong to them. 

WJL Gamble, 


Marsham Lane, 

Gerrards Cross, 
Buckinghamshire SL9 8HD 


From Mr Akihiko Fuhmaga. 

Sir. Your article, “Japan 
withdraws atrocity claim” 
(May 7/8), has some historical 
misunderstanding. It says that 
Japan “lags far behind Ger- 
many to voicing nffiraa! regret 
for the past”, but from 1954 to 
1976 Japan paid enormous 
amounts of reparations to its 
neighbouring 12 countries. It 
even paid reparations to pris- 
oners of war of 14 countries in 
1955 (including the UK). Ger- 
many never paid “official repa- 
rations” to its neighbouring 
countries (except victims of 
“scientific" experiments). It 
only compensated victims of 
the holocaust and Germans 
who suffered persecution. 

It is difficult to compare 
what Nazi Germany and Japan 
did during the war. Nazi Ger- 
many was dominated by an 
organised violence; the Nazi 
party tried to liquidate Its 
political opponents, several 
races, cultures and civilisa- 


tions. This is quite aimflar to 
the Stalinist Soviet Union (I 
have never heard . that the . 
Soviet Union apologised or 
paid reparation to its victims). 

The “crimes” Japan commit- 
ted were colonisation, killing 
of civilians and ill-treatment of 
IHDWs. Every country has at 
some time committed these 
“crimes” (I have never heard erf 
any country apologising for 
committing these “crimes” 
escort Japan). 

it is difficult to evaluate and 
reflect history because, unifies 
natural science, it does not 
have only one answer. If we 
changed our viewpoints, there 
is a totally different dimension. 

I am not defending militarism, 
but I want to defend our ances- 
tors who died in the war. 
AJdhiko Fukunaga, - 
department of behaviour in 
organisations, 

Management Sc&oot 
Lancaster University, 

Lancaster LAI 4YX 


Effect on actuaries valuations of dividend limits ‘broadly neutral 9 

KWrnn JU*> 1/iMn I u I J 


From Mr Martin Lowes. 

Sir, Lex (“UK savings”, April 
25) considers the effect of a 
reduction in dividend payouts 
on actuaries' valuations of pen- 
sion funds. 

Actuaries* valuations reflect 
both the current dividend 
income and anticipated future 
increases in that income. If 
current dividends were lower. 


the higher earnings retained 
by companies would be expec- 
ted to produce highw earn in gp 
to future years, and in turn 
higher dividend growth. The 
overall effect on actuaries’ val- 
uations of pension funds 
should be broadly neutral. 

So fears that any restriction 
of dividends might cause an 
increase in companies’ pension 


fund contributions and there- 
fore a reduction In the g overn- 
mentis tax take should prove 
groundless. 

The effect of the change to 
the tax treatment of dividends 
introduced by the Finance Act 
1993 was different. The reduc- 
tion in the income received by 
pension funds went to the 
Exchequer. As a result, actu- 


aries did indeed place a lower, 
value on the assets of pension 
funds, to many cases causing 
an increase in companies’ pen* . 
slan fund contributions. 

Martin Lowes, 

Bacon & Woodrow, 

Parkside House, 

Ashley Road, 

Epsom, 

Surrey KT18SBS 



I' 1 


a uiU 


# l!lt 


ardi n 


foreign •, 


FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


15 


w orld 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Wednesday May 11 1994 


Bank warns 
on inflation 


M r Robert Palmer, 
president and chief 
executive of Digital 
Equipment, 
described the out- 
look for the computer company in 
brutally honest terms last week. He 
told employees that the “entire 
enterprise could be at risk" if dras- 
tic steps were not taken to cut 
costs. 

At least 20,000 jobs had to be axed 
and segments of the business sold 
or abandoned if Digital was to 
return to profitability, he warned. 
“We must achieve a competitive 
cost structure as rapidly as possi- 
ble, and unfortunately we cannot 
escape the fact that significant addi- 
tional downsizing at Digital is 
unavoidable.” 

Digital has been thrown into cri- 
sis by heavier than expected losses 
for the January-to-March third- 
quarter period (its 1994 fiscal year 
ends in June), which revealed seri- 
ous weaknesses in the company's 
management and a further decline 
in profit margins. Losses widened to 
$lS3m, from $30m in the same 
period of 1993. Revenues for the 
quarter declined by 6 per cent to 
$3.26bn. 

In the wake of the financial 
report. Digital's share price plum- 
meted 20 per cent to $23- On Mon- 
day it closed at $21%, and rating 
agencies have downgraded the com- 
pany's debt Wall Street is not alone 
in its fears for Digital’s future. Mr 
Palmer this week tried to reassure 
the company's customers that It 
remains a “viable, long-term part- 
ner that you can rely on". However, 
confidence in his ability to steer 
Digital back from the brink of disas- 
ter has been severely shaken. 

After sustained criticism from 
financial analysts, the press, direc- 
tors and customers, Mr Palmer feels 
chastened. “One of us has a brand 
new and personal appreciation for 
what it feels like to undergo a pub- 
lic lynching," he told employees. 

Mr Palmer’s attackers charge that 
Digital has failed to come to grips 
with its principal problems - high 
sales costs, weak marketing and 
poor management controls. 
Although the strength of Digital's 
technology is widely recognised, the 
company is still struggling to adjust 
to an industry-wide trend toward 
lower profit margins. 

Just 18 months ago. when he took 
over the top job from Digital 
founder Mr Kenneth Olsen. Mr 
Palmer hoped to engineer a speedy 
turnround at the ailing computer 
group and restore it to former glory. 

In the 1970s and 1960s, Digital was 
second to International Business 
Machines in the world computer 
market The company “looked as if 
it could walk on water", says Mr 
Boh Djurdjevic of Annex Research, 
a US market research firm, recall- 
ing the days when Digital's Vax 
minicomputers were best-sellers. 
-But-Distal’* -earnings began to 
slump in 1989 as competition from 
lower-cost powerful desktop work- 
stations made by companies such as 
Sun Microsystems and from net- 
works of personal computers by 
IBM, Compaq and many others run- 


Mr Major, be warned. The Bank of 
England's latest quarterly Infla- 
tion Report is bad news for you. It 
predicts that, if interest rates were 
to remain unchanged, underlying 
inflation two years hence would 
be 3-3% per cent This would mean 
that the government's inflation 
target of 1-2% per cent a year by 
the end of the current parliament 
will not be met The Bank's mes- 
sage is crystal clean the next 
move in interest rates will not 
only be upwards but may have to 
come quite soon. 

The report identifies three main 
risks. First rates of monetary 
growth have continued to 
increase. Second, expectations of 
inflation have risen. Finally, the 
growth of underlying average 
earnings has picked up. 

Narrow money, which grew at 
an annual rate of 6.2 per cent in 
April, is still well above its 04 per 
cent monitoring range. But this, 
says the Bank, may reflect an 
adjustment of cash balances 
towards a new equilibrium level, 
as interest rates have fallen. The 
growth of the broader measure of 
the money supply, M4, has 
increased for three consecutive 
quarters, to reach an annual rate 
of 58 per cent in March, which is 
near the centre of its 3-9 per cent 
monitoring range. Furthermore, 
the Bank's own weighted measure 
of the money supply has also 
begun to pick up. 

The clearest evidence of a dete- 
rioration in expectations of infla- 
tion is In financial markets, where 
gilt yields have risen by more 
than two percentage points since 
the turn of the year. This rise has 
been a global phenomenon, but it 
has been Ear greater in the UK 
than in most major economies, 
'riie gap between yields on index- 
linked and conventional gilts, a 
good indicator of expected infla- 
tion, has also risen by almost 1% 
percentage points since January, 
to 4.7 per cent Obviously, inves- 
tors doubt whether the govern- 
ment’s inflation target will be met 

Greater uncertainty 

The rise in yields may also 
reflect greater uncertainty about 
future inflation and real yields. 
The Bank points, mischievously, 
to the last cut in interest rates, on 
February 8. now known to have 
been imposed, against its advice, 
by the chancellor of the exche- 
quer. “The substantial rise in 


no minal bond yields some days 
after this cut" notes the report 
“suggested revised perceptions of 
the authorities' commitment to 
monetary stability." 

- The pick-up in the growth of 
underlying average earnings, from 
3 per cent in November to 3% per 
cent in February, may be early 
evidence that expectations of 
tofiatinn have risen flnmn g wage 
bargainers too. This rise is rightly 
deemed puzzling, since there 
remains a large excess simply of 
labour in the UK economy. The 
number of hours worked in the 
economy has, after all, fallen sig- 
nificantly since its peak in 1989. 
The Bank iself estimates the “out- 
put gap" - a measure of economy - 
wide excess capacity - at just 
under 6 per cent This ought to 
give the UK several years of rapid 
growth before strong inflationary 
pressures re-emerge. But the evi- 
dence of higher pay inflation 
means that “it will be necessary to 
monitor labour market develop- 
ments extremely carefully over 
the next few months.” 

Wage levels 

The repeat warns wage bargain- 
ers that “monetary policy will not 
be used to validate inflation out- 
side the target range". If hi gher 
Inflation is assumed in pay negoti- 
ations. “real wage levels will turn 
out to be too high, with the result 
that labour demand will be lower 
mid unemployment higher than it 
need be.” 

The warning is needed. If policy 
were expected to accommodate 
higher levels of wages and prices, 
that belief could lead to higher 
wage bargains and settlements. 
People must have faith in the 
inflation target and “that belief 
must be reinforced by adherence 
to a firm monetary stance”. 

Unfortunately, the government 
is responsible for the actions 
needed to reinforce credibility 
and. not surprisingly, given the 
past record of the British govern- 
ment and the current political 
shambles, its commitment is in 
serious- doubt. -This means f to 
turn, that the real cost of achiev- 
ing the target is higher than it 
need be, which farther reduces its 
credibility. Whatever the political 
difficulties, the chancellor must 
heed the Bazik's warning. Neither 
he, nor the country, can afford to 
preside over yet another missed 
target 


In search of 
a foreign policy 


Bill Clinton never intended to be a 
foreign policy president He knew 
• ' well that his predecessor was 
. r ejected from the White House in 
part because of a perception that 
he was more interested in interaa- 
. tional affairs than in sorting out 
-. US domestic problems. President 
Clinton was determined not to 
make the same mistake. 

From his inaugural speech 
onwards, the focus was on his 
social and economic agenda at 
home; references to the wider 
world were brief, unspecific and 
emphasised the constraints on 
American leadership. The foreign 
policy priority - in presidential 
rhetoric as much as in top govem- 
meat appointments - was damage 
limitation; to prevent crises 
abroad from intruding on his 
■ domestic tasks. 

Yet as Mr Clinton has discov- 
ered repeatedly in the past 18 
months, the demands of interna- 
tional affairs will not go away. 
Time and again, he has found him- 
self distracted by foreign policy 
; brushftres as well as by bigger 
j questions concerning relations 
: with Russia, China and Japan. 

To almost every brushfire, his 
response has appeared fitful and 
reactive: witness the bursts of 
interventionism on Bosnia, or the 
' sudden reversals on Haiti. On big- 
ger questions, his policy has often 
Seemed hesitant or riven with 
internal contradictions; for exam- 
ple, China, where his campaign 
promise to link renewal of most 
favoured nation trading status 
with progress on human rights 
coexists uneasily with his desire 
to boost relations with Asia’s fast- 
est-growing economic power. 

Nervous allies 

As a result he stands accused by 
the foreign policy establishment at 
home and by nervous allies 
abroad of failing to take a consist- 
ent lead commensurate with the 
US’s role as the world's only 
superpower. Above all, he is 
charged with failing to articulate 
a coherent set of principles or pri- 
‘ orities for American engagement 
with the outside world. 

Seen from the Oval Office, a 
good deal of this criticism must 
seem unjust Challenged on the 
administration’s foreign record. 
Clinton aides tick off successes 
such as completion of the Uru- 
guay Round and Nafta; even In 


Bosnia, they raw rinim that the 
conflict hfl-s so far been contained. 

Moreover, they argue, the US 
like every other power is still com- 
ing to terms with the post-coldwar 
era - one in which there are no 
reliable precedents to guide policy, 
tile US faces no strategic threats, 
and parts of the world are gripped 
with Intractable civil conflicts 
whose direct relevance to Amer- 
ica's national interests can seem 
hard to define. 

Valid charge 

Yet the fact that a task is diffi- 
cult does not mean It should not 
be attempted. The US’s impor- 
tance to, and Involvement in, the 
wider world means that It, of all 
countries, cannot afford not to 
have a coherent foreign policy. 

The most valid charge against 
President Clinton is that he has 
devoted insufficient energy to 
developing an intellectual frame- 
work within which such a policy 
could take shape. Instead of set- 
ting the agenda, or even entering 
a full-scale debate on what the 
agenda should be, he has let the 
stuffing tides of Congressional 
opinion and lobby group pressure 
set it for him. Instead of attempt- 
ing to define the criteria on which 
the US would be prepared to inter- 
vene in foreign trouble spots, he 
has wavered between stressing the 
limits on American action and 
promising actions that he cannot 
deliver or which will not have the 
desired effect 

The least incoherent thread of 
this patchwork is the Clinton 
administration’s attempt to put 
US economic and commercial con- 
cerns at the heart of foreign pol- 
icy. But even this can seem nar- 
row - as to the obsessive focus cm 
America's bilateral trade deficit 
with Japan - and tangled, as to 
China. Neither it nor sporadic 
activism over peace-keeping, 
peace-making and the promotion ; 
of democracy reflects a clear and 1 
internally consistent concept of j 
US international interests. 

It is not too late for Mr Clinton 
to begin articulating such a con- 
cepL With one, however limited in 
scope, he would have a basis for 
weighing the huge competing 
demands on America’s attention 
and resources. Without one, Urn 
domestic-policy president will con- 
tinue to be buffeted by foreign pol- 
icy crises not of his choosing. 


E mployees at Digital’s Gal- 
way, Ireland, manufactur- 
ing facility used to receive 
free turkeys at Christmas. 
Today, the Ballybrit hardware 
plant is dosed, tire biggest victim 
of a continuing and seemingly inev- 
itable retrenchment 
In the 1970s and mid-1980s. Digi- 
tal spread its manufacturing across 
Europe: minicomputers in Galway 
and Ayr, Scotland, storage products 
and peripheral systems at Kanfben- 
ren in Germany, printers and ter- 
minals at Valbonne, France, semi- 
conductors in South Queensforry, 
near Edinburgh, Scotland, and net- 
work systems at Clonmel In 
Ireland. 

Today, only Ayr and South 
Queensferry remain big manufac- 
turing sties. The South Queensferry 
site, where Digital makes the 
Alpha microprocessor, said to be 
the world’s fastest is now manu- 
facturing chips under contract to 
the US company Advanced Micro 
Devices. There are powerful sugges- 
tions that Digital is considering 
selling the plant to AMD. Mr Vm- 


He who 
laughs last 

■ The sight of the Duke of 
Edinburgh strolling tire streets of 
South Africa - attending President 
Mandela’s inauguration - will 
probably have infuriated 
hard-bitten Afrikaners, for whom 
the British royal family is scarcely 
lots palatable than the African 
National Congress. 

The British monarchy last 
officially set foot in the Boer 
heartlands to 1947, just before 
another seminal election - that 
of 1948, which brought the country's 
first all-Afrikaner government to 

power. 

Hendrik Verwoerd. the architect 
of apartheid, was then editor of 
Die Transvaler. the official organ 
of the Transvaal National party. 

The newspaper was viscerally 
anti-royalist and studiously carried 
no reports on the visit of King 
George VI, the present Queen 
Mother and the two princesses. 

Except for one. On the day they 
were due In Johannesburg, a single 
paragraph stated that certain 
streets to the city would be dosed 
to traffic - because of the visit of 
the British king and queen. 


Futile exercise 

■ Among the more arcane 
absurdities iff British law is a power 
granted to Customs and Excise 


Survival at stake 
as losses byte 

Louise Kehoe says Digital Equipment’s restructuring 
plan may not be enough to remedy its failures 


Digital Equipment: the chips are. down 


Revenues {Sfcnj 



Net Income (Sm) 
500 



■' -V 




1990 91 92 93 94* 10* 

-Reporting year ends Jwie 30. 1994 Is Juty-Mareh only 


-2000 

-2600 


—3000 - - 

1990 91 92 93 94* 



Gross margin (%) 

50 — — 



1990 91 92 93 94** 

Souhsb: DtgM Equipment 

ning industry-standard software 
began to eat into its core busi- 
nesses. Digital was slow to respond 
to these shifts in technology. 

So in October 1992 Mr Palmer 
took on a company with flat reve- 
nues and deepening losses. Digital 
had already reduced its workforce 
by 12,000 to 114,000 and taken 
restructuring charges of $2.75bu 
over the prior three years. Still the 
company had foiled to stem deepen- 
ing operating losses. 

Moving quickly to cut expenses 
and institute tighter management 
controls, the new chief executive 
seemed to be making all the right 
moves. He rationalised the compa- 
ny’s structure, forming nine cus- 
tomer-focused and product divisions 
out of Digital's more than 140 busi- 
ness units. 

In sharp contrast to Mr Olsen, 
who believed strongly in encourag- 
ing entrepreneurial spirit within his 
company, Mr Palmer began shifting 
Digital towards “a more directive, 
decisive, top-down management 
style” to streamline fie company. 

In important moves that his pre- 
decessor had vetoed. Mr Palmer 
announced workforce cuts, stream- 
lined engineering and manufactur- 
ing operations and introduced a 


Total ampfoyses (000 's) 

□ Indudhg &30O temporary emptoyoea 

. 120 


irra 

Mil 


1990 91 92 S3 94** 


commission-based pay scheme to 
provide incentives to the salesforce. 

Mr Palmer also finally put to rest 
debate over Digital's commitment 
to “open systems” software which 
enables different types and brands 
of computers to work together more 
efficiently. Although Digital 
declared itself an “open systems" 
company to 1990, Mr Olsen contin- 
ued - ri ght up to the time of his 
retirement - to undermine the 
efforts of his marketing staff by 
expressing doubts about the perfor- 
mance of open systems software. In 
a symbolic break with the past, Mr 
Palmer announced in April 1993 
that Digital would vacate the dis- 
used woollen mill in Maynard, Mas- 
sachusetts, its headquarters since 
the company was founded to 1957. 
When Digital recorded a small 
profit of $113m in the fourth quarter 
of fiscal 1993 (March-June) it 
seemed that the company was on 
the road to recovery. 

With the introduction of its first 
“Alpha” computers, it set in place 
the cornerstone of a strategy to 
restore revenue growth and offset 
declining sales of older minicompu- 
ters. A super-fast microprocessor, 
Alpha is the core technology for a 
broad new range of products. 








Europe in the firing line 

Alan Cane on problems in Digital’s biggest market 


cenzo Damiani. Digital’s European 
president said this week, however, 
that it was unlikely the semicon- 
ductor operations would be sold. 

Europe is nevertheless to the fir- 
ing line. The total workforce is 
down to about 27,000 from 29,000 
last year, and Mr Damiani confirms 
it is on course to fall to 23,000 by 
December. About 1,000 redundan- 
cies will fan on Digital's bloated 
direct salesforce. 

This total does not include extra 
job cuts which might be demanded 
following the latest analysis by Mr 
Robert Palmer, Digital chief execu- 
tive, of the imbalance between the 
company's revenues and the size of 
its workforce. 

The 23,000 figure for Europe, 
however, was calculated by project 
teams commissioned by Mr Dami- 
ani. as soon as he took up his posi- 


prosecutors to overturn court 
decisions and spring from jail 
anyone convicted of a Customs 
ofEence, no matter how long the 
sentence or serious the offence. 
Given by Parliament in 1979. it's 
apparently Intended to enable a 
convicted criminal to be a witness 
in other countries. 

This power was probed yesterday 
at the Scott inquiry by Lord Justice 
Scott. Customs chairman Valerie 
Strachan agreed It was “totally 
amazing”. So unusual, that even 
the Customs Commissioners were 
initially astonished to find they 
had been given it, she averred. 

Lord Scott, dig deeper. What 
else have they got up their 
sleeves? 


Educational 

■ Freedom must taste sweet. At 
the start of this year. Sir Geoffrey 
Holland was still permanent 
secretary at the Department for 
Education. John Patten was his 
boss. Then Sir Geoffrey handed 
to Ids notice and headed off far 
Exeter University. Contrary to the 
gossip, the official line was that 
it had nothing to do with any 
political differences with his 
admirable ministerial ehiaf. 

Yesterday, the Labour party 
unveiled plans for a new University 
for Industry - an ambitious plan 
at odds with current government . 
policy. Among those addressing 
the launch conference for the 
university in June will be left-wing 


tion at the beginning of the year. 
He said yesterday that the balance 
between performance and resources 
was monitored continuously: “If 
revenue growth does not come, we 
will have to take action accord- 
ingly." 

Europe, however, performed no 
better than the rest of the company 
last quarter and ft Is clear that the 
disappointing results wore due to a 
large extent to poor management 
information. “We were unable to 
ship enough workstations and net- 
work servers to satisfy demand. 
Our ability to forecast customer 
requirements accurately is not ade- 
quate. Our internal processes are 
not yet sufficiently customer- 
focused,” said Mr Damiani. 

Having diagnosed the fault lines, 
it will take time, perhaps up to a 
year, to bring the monitoring 


Observer 



"Gordon really comes into his own 
during a partial eclipse’ 

stalwarts like Jacques Delors, 
Clinton economic adviser Lawrence 
Summers, and film-maker David 
Puttnmn. And Sir Geoffrey Holland. 


Liberal aid 

■ Nazmu Virani, the convicted 
Asian property entrepreneur and 
former boss of pubs-to-property 
group Control Securities, has been 
raffing in his lOUs from the Liberal 
party. Sir David Steel and his 
successor as Liberal party leader 
Paddy Ashdown were among those 
submitting character references 
for VlranL The Ugandan Asian was 
a familiar figure on tiie Liberal 


systems up to scratch. It will be a 
nervous period for Mr Damiani and 
his team. Europe is Digital Equip- 
ment’s stogie largest market, gen- 
erating about half the faltering 
computer giant's annual sales. The 
US accounts for less than 40 per 
cent of annual revenues. 

As a result, the company has 
been disproportionately hit as 
Europe's economies slid into reces- 
sion over the past three years. The 
outlook in the UK is getting 
brighter, but France and Germany 
are still black spots. In Germany, 
Digital admitted recently that it 
had achieved little more than 
access to Kienzie’s customers when 
it spent £i22m for a controlling 
interest in Kienzle, a struggling 
computer company. 

Mr Damiani. who joined the com- 
pany after 29 years with IBM, has 


party circuit, although he never 
joined the party. Sir David's office 
said Virani was “kind, considerate 
and helpful". 

Just how helpfiil Sir David has 
been will emerge when Virani is 
sentenced today. 


Fat chance 

■ Sometimes feet of clay are 
preferable to being rock-steady. 

As much as 600 tonnes of gold has 
moved from the US Federal Reserve 
bank’s vaults to London and Zurich 
in the past year, and the word Is 
that tiie B ank of En gland has 
captured the lion's share. 

The Bank of England's big selling 
point is its better filing system. 

The Fed stacks its gold from floor 
to railing , which makes finding 
and shipping it a costly, lengthy 
business. The Old Lady, by 
contrast, stores its gold on 
easy-to-move forklift pallets. 

This Is more luck than judgment 
Terry Smeeton. the Bank's foreign 
exchange guru, says: “The 
difference is . . . that the Fed in New 
York is built on rock whereas the 
Bank of England is founded on 
London clay. There is therefore 
a limit to the weight our floors will 
bear.” 


Shear bluff 

■ Who’s to blame for Glasgow's 
failure to get its new art gallery? 
The finger is being pointed at 


revenues compared with the same 
period last year, os Digital's soles 
continued to shift from high-profit 
proprietary systems to lower-mar- 
gin Alpha workstations and per- 
sonal computers. 

Worse than this performance, in 
the eyes of investors, was Digital's 
inability to foresee sales trends. The 
company has “not done a good job 
of being able to forecast In suffi- 
cient detail the mix of products that 
our customers are likely to buy”. 
Mr Palmer acknowledged to the FT 
this week. For example, the com- 
pany could not keep pace with 
orders for its Alpbas, because it 
wrongly predicted which models 
would be in demand. This resulted 
in excess inventories of some prod- 
ucts and a shortage of others. 

“This has a cascading effect on 
other parts of the business," Mr 
Palmer said. For example, the ser- 
vice business suffered and soles of 
disc drives for workstations were 
held up. 


H eavy discounting of 
prices by Digital's 
salesforce was 
another problem, Mr 
Palmer told the FT. 
“There is some concern that our 
sales people were put under tremen- 
dous pressure to meet their num- 
bers." Digital’s head of worldwide 
sales and marketing, Ed Lucente, 
resigned to the wake of the results. 

Digital is “like the barber's son 
who needs a haircut", said Mr 
Palmer. The company lacks the 
sophisticated management Informa- 
tion systems needed for forecasting, 
matching supply and demand and 
other standard business procedures, 
he explained. "We are reengineer- 
ing our business processes and rede- 
signing our whole management 
information system." 

But such measures are unlikely 
to solve ail of Digital's problems. 
Last week Mr Palmer announced 
the “second phase" of his restruct- 
uring plan. To be cost-competitive 
with companies such as IBM and 
Hewlett-Packard, Digital will cut Its 
workforce by about 20 per cent. 

Mr Palmer said he was reviewing 
all the company's activities and 
would decide over the next six to 
eight weeks which parts of the busi- 
ness might be sold to reduce costs 
and raise cash to offset further 
restructuring expenses. 

Digital’s salesforce is expected to 
take the brunt of the job cuts. 
Unlike other computer companies, 
Digital has been slow to switch 
sales to less expensive, "indirect” 
channels, via independent resellers. 
Such distribution channels would 
need to be in place before swingeing 
cuts are introduced if revenues are 
to be protected. 

Although Mr Palmer has yet to 
set a timetable for the next round of 
job losses, he has made it clear that 
the survival of the company is at 
stake. “I intend Digital's operations 
to be profitable by the end of this 
calendar year at the latest. Share- 
holders demand it, the board of 
directors expects it, and I expect us 
to deliver it” Mr Palmer's job also 
depends upon it. 


*nnn it.iutmtimmii 


But it has been downhill for Digi- 
tal ever since. Between July and 
September last year Digital dropped 
back into the red. as its European 
sales - typically about half of total 
revenues - declined sharply. The 
quarter to December produced 
another disappointing performance 
with higher than expected losses 
and a 12 per cent fell in revenues. 
Sales of Digital's “Alpha" comput- 
ers were not growing as quickly as 
the company hart hoped, to part due 
to delays to the development of soft- 
ware and poor marketing. 

Then came the shocking third 
quarter - a “slap to the face", Mr 
Palmer acknowledged, “a complete 
surprise". 

Although sales of the Alpha 
increased by 66 per cent over the 
previous quarter and Digital more 
than doubled its personal computer 
sales, the gains did not offset a 
steep drop in minicomputer sales 
and an unexpected foil to service 
revenues. Some customers are 
upgrading older minicomputer 
systems with new Digital disc 
drives that are more reliable and 
require less maintenance, the com- 
pany sa id. 

Gross profit margins fell 6 per- 
centage points to 338 per cent of 


put to place a strategy he calls “Go 
to Market", based on a three-tier 
approach. Digital’s 500 main Euro- 
pean accounts will be managed 
directly by account executives. The 
small and medium-sized companies 
will be handled by a combination of 
the direct salesforce and other dis- 
tributors. A new executive, Mr 
Barry Moloney, with extensive 
experience in the components and 
peripherals business, has been 
appointed to manage relationships 
with the large computer dealers 
and distributors. 

Substantial improvements will 
have to be made to the company's 
ability to meet its customers' needs 
by matching supply to demand. 
One senior Digital executive said; 
“Our management processes have 
been focused internally, rather 
than on customer 155065." 

Overall, Digital employees in 
Europe speak of a sense of frustra- 
tion with the system; a sense that a 
company with the technology, 
products and expertise that Digital 
undoubtedly possesses should have 
come to such a perilous pass. 


Michael Shea, the Queen’s former 
press secretary and part-time spin 
doctor for Lord Hanson. 

Shea became a trustee of the 
National Galleries of Scotland after 
he moved back to his native 
Scotland in 1992. He never liked 
the idea of the new gallery’s 
nucleus being the Scottish national 
portrait collection, which would 
have been removed from Edinburgh 
to the new gallery. Shea persuaded 
his fellow trustees and his 
chairman, the terse merchant 
banker Angus Grossart, to state 
in February that while they wanted 
the new gallery to go ahead, they 
also wished to leave the portrait 
gallery intact 

That not only defused the row; 
it also made it easy for Ian Lang, 
Scottish secretary, to point out this 
week that the proposals not only 
lacked general support but also, 
by excluding the portrait collection, 
had “lost their core”. 


Dear John 


■ The University of Virginia is 
running a “worst rejection letter" 
contest for its band of student 
Job-seekers. 

The runner-up missive from a 
computer company first rejected, 
then thanked the applicant for 
coming to an interview that never 
took place. The winner - from a 
financial services company - 
rejected the applicant but asked 
that he suggest others for 
consideration. 








16 



World 
Leader 
in rolling 
bearings 


FINANCIAL TIMES 

Wednesday May 11 1994 



nUUFAKMJOSSl 

(K WCWI — f 

~comMnxto roouAtirr 


Focus on tax and electoral reform and trade issues 

Hata lays out his plan 
for Japan’s renewal 


By WBTram Dawkins In Tokyo 

Mr Tsutomu Bata, Japan's new 
prime minister, yesterday 
appealed for opposition support 
to help his minority government 
tackle the host of urgent and con- 
tentious Issues ahead. 

In his first policy speech, Mr 
Hata asked for co-operation in 
completing political reforms 
agreed in January; passing a bud- 
get for the current year; reform- 
ing the tax system; and in defus- 
ing trade tensions with the US. 

But the two main opposition 
groups, the Liberal Democratic 
party and Social Democratic 
party, were unimpressed. 

The Hata speech was “void of 
substance", according to Mr 
Kiichi Miyazawa, a former LDP 
prime minister. Both opposition 
parties are considering a no- 
confidence motion soon after the 
budget is passed next month. 

Mr Hata used the speech to 
apologise to neighbouring coun- 
tries for the offence created by a 
former justice minister's denial 


of an infamous wartime massa- 
cre. It is regrettable such a situ- 
ation arose," he said. 

“Japan's wartime aggression 
and colonial rule caused unbear- 
able suffering and sorrow for 
many people." 

Despite the unpromising out- 
look for his government, Mr Wata 
promised to continue business as 
normally as possible. His admin- 
istration would use “plain lan- 
guage" and would seek “as wide 
an agreement as possible". 

The prime minis ter laid out a 
busy agenda, sticking to the pol- 
icy accord agreed by the coalition 
before the SDP*s walk-out three 
weeks ago. He planned “as soon 
as possible" to enact a hill to 
redraw Japan's electoral bound- 
aries, which represents the final 
stage of the switch from the cur- 
rent multi-seat constituency sys- 
tem to a mix of single seats and 
proportional representation. 

The aim was to hold the next 
general election under the new 
system, likely to be in place by 
late autumn. This could be opti- 


mistic, given the growing pres- 
sure awnng SDP pnlttirianit for 
an early election under the exist- 
ing system, on the grounds that 
the party mi ght do better t han 
under the new rules. 

It is unclear, however, whether 
the liberal Democratic party, the 
largest opposition group, would 
similarly benefit The SDP would 
need LDP help to vote the gov- 
ernment down. 

Mr Hata said his administra- 
tion aimed to produce draft tax 
reform plans in June. The main 
point wffl be a cut in income tax, 
seen as essential to stimulate the 
economy, and a rise in indirect 
taxes, which would be anathema 
to the SDP. 

On trade, Mr Hata said he 
would strive to reopen economic 
framework talks with the US, 
stalled since February. “It is 
important to make efforts. . . to 
achieve a phased reduction of the 
current account surplus," he 

said These efforts WOUld Tnrlnrto 

deregulation and measures to 
stimulate domestic denumri 


North Yemen tightens grip 
and sacks southern premier 


By Eric Watkins in Sanaa 

North Yemen's political leaders 
yesterday stepped up their propa- 
ganda offensive in the civil war 
with the south by denouncing the 
prime minister, Mr Haydar Abu 
Bakr al-Attas, and stripping him 
of all powers. 

Mr Attas is the fifth southerner 
dismissed in a week as northern 
leaders try to consolidate and leg- 
itimise their authority through- 
out the country. 

The military situation 
remained unclear, with each side 
broadcasting its own version of 
events. Heavy fighting is 
reported around Aden. Northern 
troops were said to have 
advanced to within three miles of 
the southern stronghold on Mon- 
day, but reports from Aden said 
the situation there was normaL 

Northern troops appear to have 


secured the region around Lodah, 
about 100 miles to the north-east 
of Aden, and to have wr it rein- 
forcements on the road to Ataq, 
350 miles north-east of Aden, in 
anticipation of further fighting 
there. Southern troops, reported 
to have taken heavy losses in last 
week’s fighting, are now regroup- 
ing to rebuff the expected 
offensive. 

So Ear, the main oilfields have 
been spared in the fighting. But 
observers say that could easily 
change as the battle unfolds 
around Aden. 

The north's main oilfields, 
which produce about 180,000 bar- 
rels a day, are located at Mareb, 
150 miles east of Sanaa, the 
northern capital. The south’s 
main fields are in the Hadramout 
valley at Wadi MasQa and pro- 
duce 150,000 b/d. 

Oilmen say that between those 


fields 300 northern and southern 
tanks are ar r a yed against 
other. If a battle should take 
place, it could mean one side tak- 
ing control of all the country's 
ofl. 

The dismissal of Mr Attas fol- 
lowed his appeal last week for 
outside forces to help end the 
civil war, now in its second week. 
The Yemeni parliament, meeting 
without its southern members, 
insisted that Mr Attas' actions 
were illegal and notified embas- 
sies in Sanaa that he no longer 
represented the government. 

The .Sanaa government, which 
now describes itself as the only 
legitimate government in the 
divided country, h ng also sacked 
Mr Saleh Abu Husaynoan, the oil 
minister, claiming- he and other 
southern leaders diverted some 
(375m (£178m) from the state 
treasury. 


Italy cabinet 

Continued from Page 1 

must he held by someone who 
sustains the “indivisible unity" 
of Italy - a reference to the 
choice of Mr Roberto Maroni, 
number two in the Northern 
League, which wants a transfer 
of power to the regions. 

The third warning covered the 
need to retain “social solidarity” 
and create jobs for the young. It 
was unclear why President Scal- 
faro should have placed such 
emphasis upon this point, 
though, perhaps, he feared Mr 
Berlusconi might adopt free mar- 
ket economic policies that might 
lead to a risk to social stability. 


Airbus wins $1.4bn deal 


Continued from Page 1 

General Electric of the US and 
Snecma of France. 

Airbus launched its new A3 IS 
aircraft at the Paris Air Show 
last summer. It is a smaller 124- 
seat version of the 150-seat A320 
twin engine airliner. Air Canada 
said Us A319 cabin configuration 
would offer 112 seats. 

Until the Air Canada d e cision. 
Airbus had won a total of 18 
orders and commitments for the 
A319 from Swissair, Air biter, the 
French domestic carrier, and the 
Californian-based leasing com- 
pany ILFC. Air Canada said it 
intended to place firm orders for 


25 A319 worth about (lbn and 
take options for an additional 10 
aircraft worth another (400m. 

The A319 orders will turn Air 
Canada into the largest operator 
of Airbus aircraft in North Amer- 
ica. The airline operates 34 A320s 
and has also ordered 6 A340 
long-range, widebody airliners. 

Air Canada said Airbus and 
CFM International bad agreed to 
arrange commitments for the fin- 
juicing. 

“The selection of the A319 was 
based on obtaining attractive 
acquisition terms for an aircraft," 
said Mr Hollis Harris. Air Cana- 
da's chairman and chief execu- 
tive. 


Bank of 
England 
warns on 
inflation 


Peter Norman, 

Economics Editor 

The Bank of England warned 
yesterday that it would increase 
interest rates if expectations of 
higher motion in Britain led to 
a quickening in th e pure of wage 
and price rises. 

In its latest quarterly inflation 
report, however, it said the most 
likely outcome, assuming bank 
base rates stay at 525 per cent, 
would be for underlying inflation 
to be between 3 and 3% per cent 
In two years rime, within the UK 
government's target range of l to 
4 per cent 

The hank believes underlying 
inflation, which is measured by 
ftgrfnding mortgage interest pay- 
ments from the retail prices 
indmr, will be sli g htly higher in 
April, May and June than the 2.4 
per cent rate in March. 

inflati on fell in the first three 
months of this year because of a 
squeeze on retail margins but is 
set to rise because of local coun- 
cil tax changes and the imposi- 
tion of value added tax on fuel, 
which both took effect in April 

Over 1994 as a whole, the bank 
expects inflation to be slightly 
lower than projected in its Febru- 
ary inflation report But the hank 

revised upwards its forecast of 
infla tion next year. It now 
expects the rate to he flat rather 
than move gently downwards. 

The bank has revised its expec- 
tations of inflation because of 
two factors: February's quarter- 
point cut in bank base rates and 
a Easter than expected increase in 
average earnings. 

“If these (labour cost) pres- 
sures are maintainpd, this could 
tr anslate into hi ghe r inflat ion 

next year," the bank warned. 

The h ank pinpoints three 
“small early warning signs": 

• Rates of monetary growth 
have continued to increase. 
Al thoug h this is not a threat to 
the infla tion target at the 
moment, a continued increase in 
the months aiipad would have 
“more disturbing" implications. 

• Inflation expectations have 
risen and are no longer coming 
down into line with the target 

• Average earnings growth 
accelerated to 3.5 per cent in Feb- 
ruary from 3 per cent in Novem- 
ber and may have been higher in 
March. 

The bank is worried that 
higher inflation expectations will 
trigger higher wage settlements. 
It said pay developments “will 
need to he monitored closely" 
and urged a “adherence to a firm 
monetary stance" to reinforce the 
“fragile" credibility of Britain’s 
inflation target 

The bank’s report implies that 
it regards the February cut in 
base rates as a mistake. “The rise 
in gilt yields after that announce- 
ment suggested that the market 
was revising its view of the 
authorities' commitment to mon- 
etary stability ,” it said. 


Editorial Comment, Page 15 
Lex, Page 16 
Barry Rfley, Page 17 


FT WEATHER GUIDE 


Europe today 

Thunder showers will develop over western 
France, northern Portugal and north-west 
Spain as cool Atlantic air meets warm 
continental air. The rest of France, Spain 
and Portugal will stay dry with frequent 
sunny spells. Western Britain wiN be mainly 
overcast with outbreaks of rain, but central 
and eastern areas will see sunny spells. The 
Benelux, Alps, Germany and Poland wHI 
have abundant sunshine. Central 
Scandinavia wRi have limited sunshine owing 
to an old frontal zone, but sides will be deer 
over northern and southern areas The 
Batons, northern Italy and western Turkey 
wfll have thunder showers but Greece will 
stay mainly dry. 

Five-day forecast 

Western Europe will have outbreaks of 
thunder showers but temperatures will 
remain above normal. Only south-east Spain 
wifl stay dry. The Balkans will continue 
showery but will improve over the weekend. 
Italy will be rather sumy, with just an 
Isolated shower on Saturday. Central Europe 
win have plenty of sun but showers will 
develop from Sunday. Scandinavia will have 
cloud and sun with showers over northern 
regions. 

TODAY’S TEMPERATURES 



Stoation df 72 GMT. Tertfpetaluraa maximum for <hy. Forecasts by Mateo Conut of Afatfwrtwds 



Moorman 

Ba#ng 

fair 

27 

Caracas 

fair 

28 

Edntwgh 

Mr 

14 

Madrid 

fair 

18 


Celsius 

Belfast 

rain 

ID 

CanSff 

fair 

20 

Faro 

sun 

19 

Majoroa 


24 

Abu Dhabi 

awi 

98 

Belgrade 

shower 

21 

Casablanca 

doudy 

20 

Frankfurt 

sun 

24 

Mafia 


27 

Accra 

thund 

32 

Berlin 

sun 

24 

Chicago 

rain 

24 

Gsnsva 

fair 

23 

Manchester 

fair 

20 

Algiers 

fair 

27 

Bermuda 

fair 

28 

Cologna 

Ml 

25 

Gfcretter 

3U1 

23 

Martin 


33 

Amsterdam 

sun 

23 

Bogota 

doudy 

19 

D* Salaam 

showar 

30 

Glasgow 

fair 

10 

MaBnune 

shower 

16 

Athens 

ft* 

22 

Bombay 

fair 

33 

Dakar 

sun 

25 

Hambug 

SW1 

23 

Mexico City 

fair 

26 

Atlanta 

two 

29 

Brussels 

sw 

25 

DaBas 

fair 

SO 

Helsinki 

fair 

21 

Miami 

fair 

31 

B. Aires 

sun 

16 

Budapest 

thund 

16 

Delhi 

-sun 

40 

Hong Kong 

show 

76 

Man 


23 

B.bam 

fair 

21 

C-hagan 

sun 

20 

Dubai 

sun 

39 

HoncMu 

fair 

30 

Montreal 

fair 

15 

Bangkok 

shower 

31 

Cairo 

sun 

37 

Diiafin 

rain 

14 

Istanbul 

thwd 

16 

Moscow 

fair 

20 

Barakxw 

fair 

22 

Cape Town 

far 

21 

Dubrovnik 

Ur 

21 


thund 

14 

Munich 

sun 

20 


dourly 



Quality flights made in Germany. 

Lufthansa 

German Airlines 


Kuwait 

L Anastas 

Las Palmas 

lima 

Lisbon 

London 

Lucboxg 

Lycn 

Madeira 


sun 

sin 

fair 

Hr 

doudy 

showar 

ft* 

sun 

fair 

fair 


34 Naples 

21 Nassau 

22 New Yah 

22 Mca 
17 Nicosia 

23 Oslo 

24 Paris 

25 Perth 
19 Prague 


sun 

SOI 

fair 

sin 

aun 

ft* 

sot 

fair 

sun 

tar 


22 Toronto 
30 Vancower 
22 Venice 
20 Vienna 
25 Warsaw 
22 Washington 
28 Wellington 
24 Winnipeg 
20 Zurich 


33 

. 11 
rah 23 
sun 21 

SOI 22 

fair 25 
showar 30 
far 22 
Mr 23 
shower 18 
cloudy 17 
aun 32 
rfiower 22 
showar 13 
rain 19 
showar 20 
18 
20 
23 
14 
14 
23 


fat 

sun 

rain 

doudy 

sun 


THE LEX COLUMN 


Turning expectations 


The dear message from yesterday's 
inflation report Is that the Bank of 
En gland has now entered that difficult 
territory where it mist start wonder- 
ing when and whether to pat interest 
rates up again. On the one band, it 
must prepare the ground; on the 
other, it cannot want to spook toe 
markets. Hence the report is both pep- 
pered with warnings about what 
might , happen and reasons why the 
most recent news is not yet alarming. 
Thus M0 money supply is still return- 
ing to a new equilibrium. Earnings 
are growing faster than expected for 
this stage in the cycle, but there 
is no logical reason why they should 
run away with themselves. Bond mar- 
kets are Indicating higher inflation 
down the road but they may have 
overshot. 

Yet stubbornly high inflation expec- 
tations cannot be that easily brushed 
away. There must be a reason why 
gilts have p er fo rmed worse than other 
leading hand markets this year- premi- 
ums over US ««d German issues have 
widened by GO and 100 basis points 
respectively. Perhaps the mar kets 
have been worried that Mr John 
Major's weak standing will sap his 
determination on inflation. The UK 
certainly doe not yet have a strong 
record to fell bade on. 

The Bank thus fanpg a struggle to 
establish credibility, especially after 
the botched rate cut in February. As 
of now, it is difficult to believe money 
market projections of base rates at 9 
per cent within a couple of years, 

thnng h that might be co nsistent With 

sustained pressure an sterling. But if 
the tomk moans what it says about 
expectations, the turn in rates must 
have came closer. Any investors still 
hoping for one last cut are in for a 
disappointment. 

Kwik Save 

Kwik Save has done well to Improve 
earnings in a harsh environment The 
food discounter suffered a 1 per cent 
decline in its selling prices in Its first 
half year but managed to contain the 
decline in trading margins to just 0.1 
per cent and increase earnings per 
share by 7 per cent But it will be hard 
to repeat the performance. Price 
competition is intensifying while the 
scope to squeeze further costs out of 
the supply chain is probably declining. 

The main problem is in groceries, 
where the pace of price cuts has 
stepped up. Year-on-year deflation 
averaged 2 per cent during the half 
year but has since risen to 3.5 per 


FT-SE Index; 3136.3 (+38.5) 


Kwik 8m 

Share pricaratatto to ttta 
FT-SE-A Food flataBan Index 
IOS 



remaining 140 stores to a nawtnrfw 
format, it is too early, to say u»Tt3 
format is a runaway success. Even tf 
Do It All can hang on to third jn 
DIY. shrinking must have its and- 
vantages. Yet nimbler competitors, 
such as Salisbury's Homebase. have 
shown that brain is more important 
than brawn. With a new trading for- 
mat. better distribution and a little 
help from the housing market, Do a 
All must stand a fair chance of 
log break-even at a trading level next 


cent Moreover, Kwik Save is strug- 
gling to increase sales: like-for-Uke 
sates are currently running at 1 per 
cent less than their level of a year ago. 
Though chief executive Mr Graeme 
Bowler may be right to blame the gov- 
ernment's tax rises, tougher competi- 
tion from superstores and rival dis- 
counters must also be a factor. 

Kwik Save’s strategy for growth is 
now dependent on its ambitious store 
opening programme. The group plans 
to double toe number of outlets to 
1,600 over seven to ten years. Its 
return of 35 per cent or more on capi- 
tal clearly justifies further expansion. 

Still, given the sector’s existing 
overcapacity and rival groups’ expan- 
sion plans, further price pressure 
looks inevitable. Since Kwik Save’s 
market positioning has exposed it to 
more severe price deflation than Tesco 
or J. Sainsbury, the recent under- 
performance in its share price seems 
logical. 

Do It All 

Boots and WH Smith have finally 
accepted that Do It All needs more 
than a fresh lick of paint The disap- 
pointment is that the structural work 
outlined yesterday will take so long to 
complete. Of the 100 stores earmarked 
for disposal, only 14 have actually 
been sold. The £G0m provision - which 
will be split equally between the two 
parents - covers trading losses from 
unwanted stores for the next two 
years. That may hint at how long toe 
remaining work will take. 

Whether toe stimmed-down chain 
can show a decent return thereafter is 
difficult to judge. While money is 
being made available to convert the 


But Do It All’s competitors wifi not 
stand still while the restructuring pn> 
ceeds. New retail space is beiiq; added 
elsewhere In the DIY market So it is 
by no means dear that Do It All can 
carve a niche large enough to allow it 
to flourish. With something like a 
credible plan in place, ***«^g*i, Boots 
and WH Smith can spend a year or 
two deciding for themselves. 

General Accident 

General Accident is a prime example 
of the way in which Insurance compa- 
nies have been de-rated this year. The 
company’s net asset value has EaUea 
by 16 per cent since the turn of the 
year, while the shares have fallen by 
25 per cent Gloom about the outioak 
for stock and hood markets - espe- 
cially in North. America, which 
accounts for half of GA's premium 
income - are partly to blame. Even if 
asset markets now calm down, 
though, worries about competition in 
insurance markets will not go away. 

There is little doubt that the insur- 
ance cycle is turning down in UK per- 
sonal lines. Private motor premiums 
have already started to fell, natmq 
will probably become more frequent as 
the economy turns up. Current 
returns on household insurance are 
also immstaiwaHTp With underwriting 
profits of £28 per £100 of homeowners’ 
premium income in the first quarter, 
GA must have been making a pre-tax 
return on capital close to 100 per cent 
It is little wonder that direct Insurance 
writers are tinning their attention to 
thi« linp of business. 

Still, GA’s shares now yield 60 per 
cent more than the market average. 
That valuation only makes sense on a 
bleak view of both asset markets and 
the underwriting cycle. The plunge in 
stock and bond markets may thus be a 
blessing in disguise. Having seen its 
solvency ratio fell by 10 percentage 
points to 55 per cent so for this year,. 
GA cannot afford to lower its under 
writing standards. 


CREATING A CONVERTIBLE 

requires judgement: the right timing, 
the right structure and the right currency. 









Ot«ta-a«9 


Man* MM 



#5, 


‘%r"~ 

Lit. 283,000,000,000 


PENNZOIL COMmNY 


2% Guaranteed Exchangeable 




Hanson America Inc. 

Notes due 1998 

glassy 1 -" 


USl $500,000,000 


USl $1^55,115,000 

CER &piA. -Compagnie 
Industrial! Riunite 




2.39% Senior Exchangeable • 
Discount Notes due 2001 


Exclimjplilf farnnmmivn kyiy.lc; of 


Exchangeable for American 
Depositary Shares Representing 

nnrfcinjiiMi to«*MTihu rfULl£M*«' 


Chevron Corporation 


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Hanson nr 

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Lehman Brothers 




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AM mm 

PSA i 
proctors 
crraoEN 5 


Thermo Electron 
Corporation 

Peugeot SA. 


FF 3,960,000^)00 


US. $345,000,000 

2.0% Bonds due January 4 2001 



convertible into shares of 


5 % Senior Convertible 
Debentures due 2001 

Peugeot SA. 


JttdleadUaMgBf 

Banque Lehman Brothers SlA. 


Joml Uad Manager 

Lehman Brothers 


It is vital that your convertible issue be properly 
targeted to appeal to the right investors. Which is why 
Lehman Brothers applies a global multi-dimensional 
approach to reach buyers of convertibles: dedicated 
convertible specialists as well as equity and fixed- 
income investors. As a result of this approach, we were 
toe #1 bookrunner for U.S. dollar convertible bonds 
in the first quarter ofl 994. 

”* AN INNOVATIVE APPROACH 
BACKED BY GLOBAL PLACEMENT POWER 

Lehman Brothers' highly rated research analysts 
and sales force are in daily contact with investors 
world-wide. This is to ensure that your issue is timed 
and structured correctly to meet toe demands of a 


challenging market. Our global expertise also alto* 
you toe flexibility to access all major markets in the 
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to support your offering in toe secondary markets. 

WORLD-WIDE COMMITMENT 

We provide toe distribution power, experience 
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Our success comes solely from serving our clients’ 
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to work with you. 









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Lehman Brothers 


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brother 

FINANCIAL TIMES 

TOSHIBA 

TYPEWRITERS 

WORD PROCESSORS 
PRINTERS 

COMPANIES & MARKETS 

THE PRINCIPAL NAME IN 

AIR CONDITIONING 

COMPUTERS 

FAX 

©the financial times limited i9« Wednesday MflV 11 1994 

Call the Cool-Line 0865 202697 


IN BRIEF 


Mobile phones 
boom for Ericsson 

Pre-tax profits at Ericsson, the Swedish 
telecommunications group, almost doubled In 
the first quarter, on the back of booming sales 
of mobile phone equipment Page 18 

Zurich Insurance surges 25% 

Zurich Insurance, one of the world's largest insur- 
ance groups, has reported a 2L8 per cent jump 
in 1933 net income. Page 18 

Shake-out In drugs 

The bomb under the US drugs industry last year 
by Merck’s $6-7bn takeover of Medco, a drug distrib- 
utor, has been reverberating loudly. Page 20 

CS Holding provides capital for subsidiary 

CS Holding, the Swiss financial group, confirmed 
yesterday its plans to provide its US-based invest- 
ment banking subsidiary, CS First Boston, with 
a capital infusion of about $400m. Page 20 

Veba optimistic 

Veba, the German energy conglomerate, has 
reported a sharp rise in first-quarter profits and 
predicted profits for all 1994 would be "markedly 
better" than last year. Page 19 

A6rospatf3fe seeks alliances 

Aerospatiale, the French statecontrolled aerospace 
group, is stepping up efforts to forge European 
allianc es in defence and commercial activities. 

Page 19 

A squeeze on lift- truck makers 

Last week's takeover of the UK’s Lancer Boss 
by Jungheinrich of Germany is unlikely to be 
the last in an industry where Tnaflhrm and small 
companies are becoming increasingly squeezed. 
Page 21 

Gold back bi favour 



A revival of interest in gold was sparked among 
American and some European investors by the 
well-publicised activities last year of two high-pro- 
file international financiers, Sr James Goldsmith 
and Mr George Soros. Page 26 

Vaux rises de spi te cross-Channel trade 

Sir Pahl Nicholson, chairman of Vaux the UK 
brewer, said there was a "strong criminal element 0 
in the bootleg cross-channel beer trade. "It’s easy 
money - easier than drugs." Page 10; Results, 

Page 24 

Scottish Widows cuts HK Investment 

Scottish Widows, one of Britain’s leading institu- 
tional investors, has decided to reduce its invest- 
ment in the Hong King market because it believes 
property valuations are overblown. Page 25 


Companies In this Issue 


Aerospatiale IB 

Agco 14 

Air Canada 20 

ABtaHa 18 

American Airlines 20 

Arlan 24 

Ashanti GoWftekte 23 

Autofiv 17 

BAA 12 

BSN 18,17 

Bearing Power Inti 24 

Boots 24 

CS Holding - 20 

Cable and Wireless 2S 

Cardiff Property 23 

Cassell 23 

Chamberlain Phipps 24 

ChartweA 24 

Cheeterfletd Props 23 

Chime Comms 24 

Coca-Cola 17 

Danone 18 

Deere 14 

Degussa 19 

Digital Equipment 15 

Drayton Blue Chip 2S 

Electrolux 17 

Ericsson 18 

Hrst Choice Easts 23 

GM Firth (Hldgs) 12 

GR (Holdings) 25 

General Accident 23 

Glasgow Income Trust 25 
Glaxo 20 

Great Centra! Mines 2t 

Havas 18 


Market Statistics 


fAnmal reports senilce 32-33 

Benchmark Govt bonds 22 

Bond Mures and options 22 

Bond prtoae and yWds 22 

CommtxStias prices 28 

DhrtdendB announced, UK 24 

BAS currency rates 38 

Eurobond prices 22 

Fixed fritErest fndlces 22 

FT-A World tndlcas Back Page 
FT Gold MbKS index Back Pega 
FT/E3IA toll bond SVC 22 

FT-SE Actuates Endless 31 


Headtem 

23 

Heath (CE) 

25 

Hogg Robinson 

25 

Holmes & Marchant 

as 

JH Sander 

21 

Jungheinrich 

21 

Kennedy Farm 

24 

LOT 

20 

Lancer Boss 

21 

Massey Ferguson 

14 

McKesson 

20 

NewHofend 

14 

Pharmacia 

18 

Ptarmigan Inti 

25 

Qantas 

21 

Redrew 

2* 

Rocha 

17 

Royal Bar* Scotland 

24 

Sainsbury (J) 

17 

San Miguel 

17 

Schroder Japan 

25 

Scottish Amlcabte 

12 

Scottish Widows 

25 

Smith a Nephew 

28 

Smith (WH) 

24 

SmlthKBne Beecham 

17 

Syntex 

17 

Tenneco 

14 

Time Products 

23 

Tiphook 

25 

Uni Storebrand 

19 

Vaux 

24 

Veba 

19 

Wanfle Storeys 

26 

Wiseman (R) Dairies 

24 

Zurich Irtsiranoe 

18 


Foreign exchange 3B 

QBs prices 22 

LBta equity options Bosk Page 
Union share service 32-33 

London tod options Back Rap 

Managed tends service 34-38 
Money markets 38 

Hew kill bond bam 22 

Recent issues, UK 31 

Short-term M rates 38 

US interest rates 22 

Vtoti stock Mart*) 39 


Chief price changes yesterday 


FRANKFURT (DM) 

Mam 

« fl 1845 + 7.4 

Degussa 636 + 12 

MWPrt 360 + 11 

VEW 3845 + 11.5 

Zandsra FftR) Nfl + B 

Ms 

AstaPrf 885 - 24 

NEW YORK (S) 

Mam 

flow T & T 53* ► 1ft 

Ban Mom 54* + ft 

HWfW-FWod 78* + 1ft 

DB Crane 16ft + 1ft 

Uadtaa-SdMSr 12* + ft 

PDA Eng 5W + 2ft 

nunm 

Ram 

ter 522 + is 

Nnr York prism at 1230, 


BNP 

2flS4 

+ 

8.4 

STV-Biro» 

481 

+ 

11 

PgettmM 

Fate 

1S& 

+ 

&5 

TiMnggr 

2900 

- 

85 

WBMtt 
TOKYO (Van) 
RfaM 

312 


&e 

MR tap 

745 

+ 

27 

NftHO 0 h*O 

488 

+ 

18 

Mrttea 

777 

+ 

Z1 

UBEMb 

Fans 

382 

+ 

14 

MpRUgKIfefBl 

831 

- 

16 

Znd 

613 

- 

17 


LONDON (PancaJ 


Mra 

3D 


3 

Brttaft Ges 

298ft 

+ 

lift 

Cat*a wtc 

483 

* 

19 

E uw&nosBsc 

567 

* 

19ft 

K38C (750 atwt 

724 

* 

29 

ML Lain 

234 


IB 

MUmtoBac 

5T2 


13ft 

Fanm 

850 

* 

2B 

PtvmSnh 

388 


14 

FUOfc 

879 

* 

44 

REAMdgs 

120 

* 

10 

Royal Bk Seat 

440H 

* 

izn 


Scott* Power 

387 

* 

13 

T™ Prouets 

240 

+ 

8 

Triple* Uoyd 

148 

4 

fl 

ffiBHSfl CQ 

741 

t 

18 

Yota BdfM 

472 

+ 

13 

M* 

EuoOtaney 

333 

_ 

10 

Hobnea IflHdwt 

58 

- 

6 

fttpgeOt 

415 

- 

13 

van 

278 

- 

9 


BSN changes name for global growth 


By John Ridding in Paris 

BSN, France's largest food group, 
is changing its name to Danone, 
its leading yoghurt brand, and 
has unveiled several interna- 
tional deals, including the 
FFrl.9bn ($332m) acquisition of 
San Miguel, one of Spam's largest 
brewers. 

Mr Antoine Rfboud, chairman, 
gfliri the rhang p of nama to Dan- 
one, the company's strongest 
brand, would help the group 
expand internationally, parti cu- 


By Daniel Green in London 

SmithKline Beecham, the 
Anglo-US drugs company, is to 
launch an unbranded version of 
its former best-selling ulcer drug 
Tagamet in the US in an attempt 
to stave off competition from 
makers of cut-price generic prod- 
ucts after Tagamet’s US patent 
expires on May 17. 

SB has said that as many as 10 
generics manufacturers could 
enter the market after the patent 
expired. The US accounted for 
two-thirds of Tagamet's global 
sales of £873m (film) in 1993. 

From next week, SB will sell 
Tagamet under its generic name 
dmetidhie directly to US hospi- 
tals and the health management 
organisations, which run health- 
care services for employers and 
in cure n re companies. Customers 


By Robert Poston In London 

j.Sainsbnry, the leading UK 
supermarket group, is making 
minor changes to the packaging 
of its look-alike cola to ward off 
the threat of legal action from 
Coca-Cola, in a dispute whieh 
exemplifies the growing row in 
Britain over brands and retail- 
ers* own-label products. 

Sainsbury, however, will 
retain the "Classic" name, which 
Coca-Cola uses in the US, and all 
the core elements of the design 
and the colour. 

Mr Tom Vyner, Sainsbury's 
deputy chairman, said customers 
would not notice the difference 
in the packaging. 

Sainsbury is modifying the 


lariy into non-European markets. 

'‘BSN plans to become a world- 
scale contender in the food indus- 
try. But the three letters that 
make up its name reflect the past 
rather than the future and are 
not well known in the interna- 
tional arena,” the company said. 

Industry observers described 
the move, which will take effect 
in July, as a positive step. "BSN 
doesn't mean much to most peo- 
ple. Danone is the one business 
where they are number one 
worldwide " said Mr Sylvain Mas- 


co uld include Diversified Phar- 
maceuticals Services which SB 
bought for $23bn last week. 

SB has also signed a distribu- 
tion agreement with Lederle, part 
of American Cyanamid, known 
for its aggressive selling of gener- 
ics. Lederle will sell the drug, 
pre-bottled by SB, to pharmacies. 

The generics will be made at 
Tagamet's Puerto Rican site but 
sold by SB’s subsidiary Penn 
Labs. No pricing details were 
revealed, but Mr Jerry Karabelas, 
president of SB’s North American 
pharmaceuticals business, 
acknowledged that previous 
patent expiries have seen prices 
fell by more than go per cent 
within 18 months. 

SB is unlikely to en g a g e many 
more distributors of the drug 
because the industry has seen 
the results of US company Syn- 


typeface of a vertically printed 
"cola” inscription and removing 
a sqiriggle underneath it 

A survey by market research 
group AGB shows that in its 
third week, Sainsbury's Classic 
has captured approximately 15 
per emit by value of all cola sales 
through UK retail outlets, com- 
pared with the 2-5 to 3 per cent 
share held by Sainsbury's exist- 
ing own-brand cola before the 
launch. 

The dispute has been keenly 
watched by other manufacturers, 
increasingly angry at the dam- 
age to sales of market-leading 
brands by supermarkets’ own-la- 
bel look-alikes. Under UK law, it 
is difficult for them to take legal 
action for "passing off". 


sot, analyst at Morgan Stanley. 

Mr Riboud also announced a 
string of investments and acqui- 
sitions, including the purchase of 
San Miguel, one of Spain’s five 
largest brewers, with sales last 
year of Pta3Sbn <$277m). 

BSN already holds 24 per cent 
of the Spanish brewer and will 
increase its stake to 100 per cent 
through annual payments in 
each of the next four years. 

The French food group also 
announced the creation of its 
first production facility in Russia. 


tax's efforts to become the domi- 
nant supplier of the raw active 
ingredient 

Over the last six months Syn- 
tax tried to c ushi on the blow of 
patent expiry by supplying the 
active ingredient of its anti- 
inflammatory Naprosyn to 
generic manufacturers. Sales 


By Christopher Brown-Himes 
in Stockholm 

Electrolux, the world’s leading 
maker of household appliances, 
yesterday stepped up its refocus- 
ing programme by launching a 
global offering of 25m shares in 
Autoliv, Europe's leading sup- 
plier of car safety equipment The 
move could raise up to SKnLSbn 
(5562m), of which SKr3bn would 
be a capital gain. 

Mr Lennart Ribohn, senior 
executive vice-president said the 
money would be used to expand 
activities in the Far East South 
America and eastern Europe. 
Proceeds will also help fund the 


BSN is to set up a Joint venture, 
called Danone-Volga. to produce 
yoghurts and dairy produce. The 
French group is investing about 
FFr20m and will take an 80 per 
cent stake in the new company. 

In Brazil, BSN is to pay an esti- 
mated FFr200m for a 49 per cent 
stake in Campineira de Alimen- 
tos, the country's second largest 
biscuit manufacturer. In Moroc- 
co, BSN will pay about FFriOOm 
for a 2.7 per cent stake in ONA. 
the country's largest private sec- 
tor food group. 


nevertheless fell rapidly, one of 
the factors behind last week's 
$5.3bn takeover of Syntex by 
Switzerland’s Roche. 

SB is likely to reveal further 
parts of its strategy to limit the 
damage of the patent expiry. 
They have already included legal 


group's newly-finalised DM73Qm 
($426m) purchase of HausgerSte, 
AEG's household appliance unit 

Autoliv has 40 per cent of the 
European market in car safety 
equipment such as seat belts, air 
bags and child restraint seats. 

Last year Autoliv ’s sales 
climbed to SKr5.33bn from 
SKr3-53bn, and operating income 
rose to SKr310m from SKr21lm. 

The issue will have three 
tranches. The biggest. 8.75m 
shares, will be allocated to Swed- 
ish institutional and retail inves- 
tors. The balance will be split 
equally between the US and 
international markets. Enskilda 
Corporate. Skandinaviska 


Last year, non-European sales 
accounted for about 9 per cent of 
total turnover of FFr85.5bn 
(including norwonsolidated affili- 
ates). Mr Riboud hopes that non- 
European sales will amount to 
half of the total within the next 
20 years. He expected profits to 
rise this year, from FFr3.42bn in 
1993. Mr Georges Lecallier. vice- 
chairman, said that sales in tbe 
first quarter, which rose 7.3 per 
cent to FFrift5bn. were slightly 
better than expected. 
Background, Page 18 


pany Myian, which has US Food 
and Drug Administration 
approval to sell cimetidine from 
next week. That action, begun 
last' Friday, alleges trademark 
infringements: Mylan’s cimeti- 
dine is the same pale green col- 
our as Tagamet and could con- 
fuse patients, said Mr Karabelas. 


Enskilda Banken and Merrill 
Lynch International are the joint 
global co-ordinators of the issue. 

Shares are to be sold to institu- 
tions for between SKrlSO and 
SKrl80 per share, following a 
book-building exercise. Swedish 
retail investors, who are expected 
to buy about 5 per cent of the 
company, will be offered a SKr9 
per share discount 

Selling Autoliv enables Electro- 
lux to avoid tending the Hausger- 
ate purchase with a rights issue. 
The company’s finances have 
also been strengthened through 
the $ 11 4m sale of Blaw Knox Con- 
struction Equipment Corp, a US 
unit last month. 


Roche 
assures 
investors 
on Syntex 

By Ian Rodger in Basle 

Roche, the leading Swiss 
pharmaceutical group, claimed 
yesterday that Syntex, tbe US 
drugs group for which it 
launched an agreed $5.3bn bid 
last week, would be an “optimal 
addition” to the group. It said 
the cost of financing the take- 
over would not dilute its earn- 
ings. 

The price of Roche's non-vot- 
ing securities has fallen about 7 
per cent since the bid was 
announced, reflecting investors' 
worries about the offer price, 59 
per cent above the pre-bid mar- 
ket capitalisation, and potential 
dilntion. 

Mr Fritz Gerber, chairman, 
said at the group's annual press 
conference yesterday that he 
assnmed dilution would be 
avoided. "We expect to see 
another increase in group 
income {in 1994]. In making this 
forecast, I have taken our offer 
to the Syntex shareholders Into 
account" 

Mr Henri Meier, finance direc- 
tor, said Roche would decide cm 
exactly how to finance the deal 
only when and if the tender was 
snccessfblly completed. 

He said the group had shown 
its ability to nse innovative 
devices, such as bull spreads and 
knock-out warrants, to finance 
previous large acquisitions on 
favourable terms. 

Roche officials also pointed 
out that the group had a massive 
SFrl4.6bn ($10.4bn) in liquid 
funds at the end of last year, 
enabling it to raise money on the 
finest terms. 

Syntex is expected to achieve 
net earnings of about $380m in 
the year to Jnly 1994. 

Mr Gerber said Syntax's well- 
established clinical research anil 
would enable Roche to develop 
products more quickly, and that 
its "interesting products" in the 
research pipeline would add to 
Roche's own core areas. 

He said Roche would not fol- 
low recent moves by rivals 
Merck and SmithKline Beecham 
to acquire drag distributors. He 
was leery or diversifications, and 
said Roche was fully-occupied 
with researching and developing 
new drags and confident of its 
strengths in its field. 

Mr Gerber was not worried 
about the increased pressure by 
many governments on drag 
prices. "If we can continue to 
meet the need for better solu- 
tions with innovative and cost 
effective products and services, 
we wffl also be able to continue 
asking fair prices." he predicted. 


SmithKline 
seeks to limi t 
generic rivalry 



action against US generics com- 


Sainsbury adapts cola cans 
to avoid Coke legal action 


Electrolux steps up refocusing 
with planned offering for Autoliv 


Barry Riley 


NB-400 notebook PCs from Elonex. 


Why Ken and Eddie 
need not have bothered 


A ghost is stalking 
the world's finan- 
cial markets, but 
Its identity 
remains shadowy. 
Is it the spectre of 
resurgent infla- 
tion? It is hard to 
see where it would 
come from, at any rate in the US, 
Europe and Japan. Perhaps we 
are seeing the unwinding of too 
much speculation, a spooky 
enough problem which was 
focused during tbe winter on the 
hedge funds and Is currently 
being fleshed out by the shifts in 
the US mutual fund market. 
Alternatively, there is simply too 
much borrowing by govern- 
ments. 

Consider the plight of the Bank 
of England, which yesterday 
issued its quarterly Inflation 
Report Since the last one came 
out, the yield on 10-year UK gov- 
ernment bonds has jumped by 2 
percentage points. Can the Bank 
possibly consider issuing gilts at 
a ruinous 8.4 per cent? 

The publication of the Febru- 
ary report ironically coincided 
with the damaging argument 
between Eddie George, the 
Bank’s governor, and Kenneth 
Clarke, the chancellor of the 
exchequer, over whether 
short-term rates should be cut 
from 5% to 5 per cent They need 
not have bothered. In the event 
monetary policy has been crudely 
tightened for them by the mar- 
kets (the one-year rate is already 
6 per cent). Mortgage lenders, for 
instance, have now withdrawn 
most of the cheap fixed-rate 
offers which were fuelling the 
housing market’s recovery. 

UK inflation an "RPIY” - the 
Bank’s preferred measure - is 
under 2 per cent Yet the yield 


structure in the gilt-edged mar- 
ket appears to discount a rate of 
almost 5 per cent, given a real 
yield on index-linked gilts of 
about 3V4 per cent. However, 
there are other interpretations. 
You can argue, for instance, that 
there is an unusually large risk 
premium on fixed interest gilts. 
But my own view is that the real 
yield on linkers is being tempo- 
rarily held down by tbe influence 
.of tbe equity market, which is 
about 20 times bigger. 

Inadequate arbitrage between 
the UK bond and equity markets 
has permitted an anomaly. It 
seems more realistic to suppose 


Equity managers 
do not appear to 
have woken up to 
the dangers 


that the real long-term gilt yield 
has risen to between 47a and 5 
per cent, forced up by the surge 
in bor r o win g over the past two or 
three years (no longer absorbed 
by speculators) and by recent 
political uncertainty. But equity 
investors have been reluctant to 
sell the share mar ket down below 
the current 3.7 per cent All-Share 
Index yield. The linkers' yield 
has therefore been trapped - 
within only about 10 basis points 
of the equity yield, a remarkably 
narrow gap which itself is a dear 
sign of distress. The anomaly 
could be corrected by a fall in gilt 
yields to TA per cent - or by a 
jump in the average equity yield 
to near 5 percent 
Is there a similar anomaly on 


Wall Street? Albert Edwards, 
strategist at Kleinwort Benson, 
has combed through the US 
mutual fond statistics for March 
and come to some very disturb- 
ing conclusions, using words 
such as “disaster” and "blood- 
bath". 

In March 1993 bond funds and 
stock funds both attracted net 
inflows of $12bn. In March 1994 
equity fund inflows were still 
$l2bn (though well down from 
the recent peaks) but bond fund 
net sales were down to {2bn- 
Worse, says Edwards, this does 
not allow for umbrella-type 
switches from bond to money 
funds, allowing for which bond 
funds suffered a negative net 
cash flow of $5bn. 

Where bond markets lead, 
equity markets tend eventually 
to follow. The problem is that 
equity managers do not appear to 
have woken up to the dangers. 
Whereas the band fund managers 
have been battening down the 
hatches and raising liquidity, 
stock fund managers have seen 
the market’s weakness as a buy- 
ing opportunity. So if they are hit 
by a wave of redemptions they 
will be unprepared. 

Goose-pimply comparisons 
with 1987 should be taken, warily, 
equity markets are not so over- 
valued as they were then, though 
on the other hand bond m a r ket 8 
may be fundamentally cheaper, 
with returns forced up by vast 
government borrowing. If bonds 
and equities suddenly come back 
into a coherent relationship, the 
impact if not bloodsoaked, could 
still be painful. 

Ghosts of the past may meet 
ghouls of the present Putting it 
another way, there is an unusu- 
ally attractive arbitrage opportu-' 
nity between bonds and equities. 




Built-in power 
supply (no 'brick'). 



Choose from two monochrome 

and one colour LCD screen 
options 


Upgradeable VGA video adapter 

supports Stmulscen (dt splays 
on notebook screen and 
external monitor at the 
same time). 


BuBt-in PCMCIA 2.0 sht 
accommodates the latest 
credit-card-sued \ 
connectivity 
options. 


CPU options ranging from entrrtevet 
436SX 25 to the topend J86DX2 h56. 


'Intel agent' E2P2 parallel 
j connector. 


4MB RAM module supplied as 
standard. Options include SMB. 
16MB and 32MB. 


Simple -edek-andatida’ 
mechanism 
makes 
/ snapping 

‘ screens 
easy. 


Integral trackball ’mouse 
with drag lock button. 


Use one battery pack, or 
two for twice as tong 


Removable, interchangeable 

hard disk module. 


Now you don’t have to compromise. 


Until now. choosing a Mrlbbte PC meant compromising on 
poser end flexJbttty. Etonen's N3-JOO notebook PC range changes 
afl That, Designed from scratcn by Done* to W3? the best in tee 
world, the NB400 range matches the versatility ana processing 
speeds at many bigger and heavier machines. 

The NB-400's unique modular design means that jusi like 
drcftuo PCs. they can evolve as lecnnoiogy advances and your 
needs change. Vbu can simply upgrade the CPU, RAM. screen, 
video card, batteries or haid risk as and when you need to. 

There are flve NB-400 hard cSsS modules, for example, ranging 
from BOMB to a massw 450MB. These can ao o De used with 
conventional desktop PCs. 4 communfceiions cable comas as 
standard for loading appflodtions or iracfing data with other PCs. 
An external 3K" ctsk erve e also avatinte as an option. 

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FINANCIAL TIMES WEDNESDAY MAY 11 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Mobile phone sales lead 
profits surge at Ericsson 


By Christopher Browm-Humes 
In Stockholm 

Pre-tax profits at Ericsson, the 
Swedish telecommunications 
group, almost doubled in the 
first quarter, rising to SKr813m 
($105 58m) Cram SKr428m with 
booming sales of mobile phone 

equipment 

But the figures disappointed 
a market already concerned by 
the group's loss of a log Saudi 
Arabian contract to AT SIS. The 
group's B shares fell SKrt to 
dose at SKr340. 

Mr Lars Ramqvist, Ericsson 
chief executive, said income 
and sales showed a "clearly 
positive trend... in a market 
that is anything but easy.” 

He said the group was stand- 
ing by its forecast that earn- 
ings for the full year would 


exceed. last year's SKrt-lbn, In 
spite of increasingly fierce 
competition. 

Mr Ramqvist said the market 
was characterised by "lower 
investments, depressed prices, 
politicising and financing prob- 
lems." 

In an obliqne reference to 
AT&T’s Saudi Arabian success, 
he said there was "increased 
political involvement in negoti- 
ations for major telecommuni- 
cations projects’’. 

Group net sales were 24 per 
cent ahead at SKrt6.0bn. The 
best area was the group’s radio 
communications division, 
which includes cellular 
operations, where sales rose 
SL6 per cent to SKr7-2bn from 
SKr4.7ba 

Public telecommunications 
sales climbed by only 6 per 


emit to SKiS^SbZL 

Orders were 23 per cent 
higher at SKr2L5bn. Ericsson’s 
orders have risen for 10 consec- 
utive quarters, with a success- 
ful expansion in mobile phone 
systems. The group won big 
radio communications orders 
in China, Ge rmany , the OS and 
Australia. 

By contrast, public commu- 
nications orders were lower. 
The group said this was 
because it benefited from big 
orders in the UK and Thailand 
in the first quarter of 1993. 

Europe is the company’s 
main market, accounting for 
half of net rales. However, the 
US is the single largest market, 
with a 12 per cent share. Uhtna 
is the group’s fourth-biggest 
market, accou ntin g for 8 per 
cent of sales. 


Pharmacia rises to SKrl.3bn 


By Chr is to ph er Brown-Humes 

Pharmacia, the Swedish drugs 
group being privatised next 
month, yesterday announced a 
big jump in first-quarter 
profits, after benefiting from 
higher sales and cost-cutting. 

Profits after financial items 
amounted to SKrl.33bn 
($172m). compared with 
SKr486m in the same 1993 
period. 

The result was better than 
expected, and the A shares 
rose SKrt to SKrl30. Analysts 
said the figures should assist 
the privatisation process, with 
the government p lanning to 
sell a 47.4 per cent voting stake 
in the group. The disposal is 
expected to raise around 


SKrlObn in Sweden’s -biggest 
privatisation. 

Group turnover rose 3 per* 
cent, to SKrf>.78bn. However, 
on an underlying basis the 
increase was 6 per cent. Oper- 
ating costs fell 2 per cent to 
SKr5.12bn from SKr5-22bn. 

The group benefited from 
one-off gains of SKrl83m, 
compared with costs of 
SKr308m a year ago. This 
helped lift operating profit to 
SKrl.38bn from SKrS77m. 
Evrliiriing one-off item* , oper- 
ating profits were 35 per emit 
higher at SKrlJSbn. 

Financial costs, linked 
mainly to the financing of the 
group's acquisition of the Ital- 
ian drugs group Farmitalia 
Carlo Elba (Pice), dragged the 


overall figures down. Net 

financial ex pen se to 

SKr48m, compared with finan- 
cial income of SKrl70m in the 
first quarter of 1993- 

The results contained some 
disappointments. Sales of the 
growth hormone Genotropin 
fell 4 per cent to SKr654m from 
SKr684m, as good sales in the 
UK, German and Italian mar- 
kets were offset by weakness 
in Spain and Australia. 

Hefllon. a substance used in 
eye surgery , saw sales drop 6 
per cent to SKr369m from 
SKrS93m. There were lower 
sale* in the US, Spanish and 
Nordic markets. By contrast, 
anti-cancer drugs Farmorubi- 
dn and Adriamycin lifted sales 
by 18 per cent. 


Havas expects return to growth 


By A&ce Rawsthom in Paris 

Havas, the French media and 
leisure group recently 
embroiled in the battle for con- 
trol of the Canal-Plus televi- 
sion company, hopes this year 
to return to profits growth 
after sustaining a fell during 
1993, according to Mr Pierre 
Dauzier, chairman 
The group, , in the throes of 
reshuffling its shareholder 
structure, was affected last 


year by the economic recession 
and net profits fell 14 per rapt 
to FFr708m ($l2l.44m) from 
FFr823m in the previous year. 

However, Mr Dauzier told an 
analysts’ meeting in Paris that 
Havas expects this year to be 
able to maintain stable profits 
on a strictly comparable basis 
and to achieve an increase in 
total profits through disposals 
and the benefits of strategic 
agreements. 

He said the group might be 


able to achieve a higher 
increase in profits during 1994 
if its markets improved. 

Havas is reshuffling its 
shareholding. Groupe Brux- 
elles Lambert, its partner in 
CLT, the Luxembourg-based 
broadcasting group, recently 
acquired a 3.59 per cent stake. 

Mr Dauzier also signalled 
that Gdngrale des Eaux, the 
French utilities group, might 
increase its recently acquired 
2£ per cent stake in Havas. 


Alitalia 
faces tough 
cuts instead 
of subsidies 

By Robert Graham in Rome 

A tough r e stru cturing pi™ to 
cut mounting losses at Alit- 
alia, the national carrier, will 
be tiie first test of the Italian 
government's resolve to avoid 
subsidising state companies 
and prepare them for prtvati- 


BSN puts new name on the table 

Danone wants to expand across the globe, writes John Ridding 


W hat’s in a name? For 
Mr Antoine Riboud. 
chairman of BSN, 
France's largest food group, 
the answer is a great deal. 

Yesterday, the 75-year-old 
founder of the company 
announced that BSN would 
change its name to Danone, 
after its dairy and yoghurt 
products and the company’s 
most important brand in an 
industry where brands are 
aft-important *Tt is one of the 
most significant announce- 
ments I have made," said Mr 
Riboud. “I built BSN with my 
own bands." 

The importance of the deci- 
sion lies partly in a break with 
the company's past Formed in 
1966 through the fusion of two 
glass manufacturing compa- 
nies, Boussois and Souchon- 
Neuvesel, the group moved 
rapidly into foods. In the past 
25 years, it has risen to become 
the biggest in the sector in 
France, and the third-largest 
food group in Europe, with 
annual sales of FFr85 -5bn 
($622m). 

More significantly, however, 
the decision to become Danone 
reflects Mr Rfboud’s strategy of 
aggressively expanding in mar - 
kets beyond Europe. “The 
three letters that make up our 
name reflect its past more titan 
its future. These initials are 
not well-known in the interna- 
tional arena ... Danone is the 
second brand name in Europe 
after Coca-Cola, and my dream 
is to make Danone the Coca- 
Cola of the ftiture," said Mr 
Riboud. His ambition is to 
become a worldwide group 
through expansion in Asia, 
eastern Europe, Russia, and 
Africa. 

To illustrate these goals, the 
BSN nhairmfln announced a 
string of investment and acqui- 
sition plans. In Russia, the 
company is to set up its first 


The plan has yet to be made 
public but the three-month-old 
board of AiHntia unveiled Its 
broad aims tids week. 

These Included "a sizeable 
reduction" in the group's 
18,000 personnel, mainly 
among ground staff; more flex- 
ible employment for pilots and 
cabin crew; better use of the 
fleet; and “decisive action" on 
spending. 

The outgoing Ciampi gov- 
ernment approved plans for 
paying 800 early retirement 
pensions as a means of shed- 
ding staff. But the new 
restructuring plan appears to 
be much more radical than 

The tone of some members 
of the Berlusconi gov e r nm ent 
sugges ts considerable hostility 
to the instrument of early 
retirement as a way of balanc- 
ing the books. If this is trans- 
lated into action, Alitalia 
could a ahnflar confronta- 
tion with unions as did Air 
France. 

Unless measures are agreed 
quickly to cut Alitalia's losses, 
the company has warned it 
will have to call a special 
shareholders' meeting and 
might have to write down 
some capital. 

During the first quarter of 
this year losses reached 
L190bn ($1 18.75m) against 
losses of L345bn for 1993 as a 
whole. 

On Monday, a company 
statement blamed the figures 
on a combination of the 
depressed state of interna- 
tional economies, airline over- 
capacity, a drop in business 
travel and fierce fares compe- 
tition. 

Last year Alitalia made 
L791bn w orth of i n v estm ents 
of which L580bn went towards 
five new aircraft and L146bu 
in equity interests. This also 
helped push up the company's 
debt which rose from L6941m 
to Ll,645bn in 1993. 


SALES BY AREA 


France 

46.4% 

Rest of Europe 

21.5% 

Italy 

14.7% 

Spin 

8.8% 

Rest of the world 

8.6% 

FINANCIAL BRIEF {FFrbn} 


1993 1992 

Sates 

70.1 70.8 

Net Income 

3.4 3.6 

Capital expenditure 
Market capaafisatkm 

3.1 3-5 

at 31 December 

63.4 60.6 



resources with BSN's p^. 
gramme of rapid expansion: 
"The problem, they face 


production plant there, called 
Danone Volga, in which it will 
hold an 80 per cent stake. In 
Brazil, it win take a 49 per rant 
stake in Campineira de Ali- 
Twpwfras , the country’s second- 
largest biscuit producer, in 
Morocco, the French group is 
to take 2.7 per cent of the capi- 
tal in ONA, the country’s lead- 
ing food group. In Spain, it will 
take full control of San M i guel 
breweries, one of the country's 
largest brewers, in which it 
already has a 24 per cent stake. 


F or Mr Riboud, such 
international expansion 
is essential to keep pace 
with the development of the 
industry. "Since the beginning 
of the 1990s, the globalisation 
of the food industry has accel- 
erated,” he says. This is attri- 
buted partly to the develop- 
ment of more international 
ferefgg by consumers and the 
growth of tourism. In this con- 
text, the eme r g e nce of world- 
wide distribution groups and 
television advertising have 
enabled the development of 
global brands. 

BSN, says Mr Riboud, has 
been left behind in the battle 
for name recognition. "A 
recent survey showed our 


Antoine Riband: the 
weakness Is our name* 


name was recognised by 93 per 
rant of people in France, but 
just 7 per cent in Italy and 5 
per emit In Spain," he said. In 
Malaysia. BSN is the name of a 
bank; in the US, the name of a 
textiles company: and in 
Japan, the name of a television 
network. "We have a weak- 
ness," he admitted. "The weak- 
ness is our name.” 

Hence the decision to change 
to Danone, a brand which 
accounts for one-quarter of the 
group's sales and is present in 
30 countries. "It is an interest- 
ing move, which is in line with 
the decision of other compa- 
nies, such as Heinz, to focus on 
a corporate name," said Mr 
SylvaJn Massot, European food 
and drink analyst at Morgan 
Stanley. 

However, if ehang in g a name 
is relatively easy and cheap, 
becoming a global group is 
expensive and a great deal 
more complex. Mr Riboud 
admits to hiccups on the trail 
of international growth, citing 
the group’s battle with its part- 
ner in India for control of Bri- 
tannia. the Indian foods group, 
which was finally resolved last 
year. 

Industry observers point to 
the strain on management 


as a relatively young comp®* 
they need to grow qtikklrfe 
catch up with the Nestles m 
Unilevers of the world." say* 
one industry analyst in Park 
"But this dearly costa 
and is open to risks." 

Mr Georges Lecallier, BSN 
vice-chairman, counters that 
expanding through the tievgL 
opment ol existing brands sad. 
as Danone limits the risks. 
And by establishing joint wq, 
tures and partnerships, exist- 
ing groups supply fl rat-fond 
knowledge on the local 
markets. 

On the financial front Mr 
Christian Laubte, finance 
director, points to the health 
the balance sheet, reinforced 
last year by a FFtt5bn con- 
vertible bond issue. He sub 
that cashflow, which reached 
FFrS.Sbn after industrial 
investments last year, provides 
adequate scope for 
through acquisition. Total ret 
debt fell from FFrloahn at foe 
rad of 1992 to FFr8.6121 at foe 
rad of last year, giving a debt, 
toequity ratio of 22 per cauL 


A ccording to BSN, yes- 
terday's deals win be 
easily absorbed. The 
FFrLSbn to be spent on acquir- 
ing San Miguel, the biggest of 
yesterday's deals, is to be 
spread over a four-year period. 
The investment in Russia is 
described by Mr Riboud as 
"light", with annual produc- 
tion of between 2JXQ and 8400 
tonnes. "We can build on it 
later,” be says. 

Given his ambitions, this is 
highly likely. "We want to 
become a French aircraft car- 
rier," he said yesterday, refer- 
ring to his expansion pirns. 
Investors will hope that he can 
steer dear of the reefs. 


Non-life side helps boost Zurich Insurance 


By Ian Rodger 

Zurich Insurance, one of the 
world's largest insurance 
groups, has reported a 24B per 
cent jump in 1993 net income, 
to SFr613-2m (S434Jm). It 
attributed the advance to an 
improved result in 
non-life business and to 


buoyant investment income. 

The directors have proposed 
a 14 per rant rise in dividends, 
to SFrtO per share. 

Gross premium revenue was 
up 16 per rant to SFrtLSbn, 
with about half of the rise com- 
ing from acquisitions and the 
widening of the consolidation. 

Among the group's more 


important additions last year 
was the business of Municipal 
Mutual Insurance in the UK, 
and the purchase of the 
remaining minority interests 
in Bermuda-based Centre Rein- 
surance. 

Zorich said its expense ratio 
declined in both life and non- 
life sectors. There was a "sub- 


stantial increase” in invest- 
ment income, and total invest- 
ments stood at SFr7K6bn at 
the end of 1993, UL9 per cent 
higher than a year eariler. . 

Shareholders' equity at 
year-end, prior to the dividend 
payment, was SFrl0.2bo, 
SFrl.5bn higher than at the 
end of 1992. 


IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIHHIIIIIIIIIIIIIIIHII 


This announcement appears as a matter of record only. 


S.G.Warburg Securities 


is pleased to announce the opening 
of its branch office in Korea 


A 


PT ULTRA JAYA MILK INDUSTRY & 
TRADING COMPANY 


Address 

19th Floor Young Poong Building 
33, Seorin-dong, Chongro-ku 
Seoul 110-110 
Korea 


INDONESIA 

FOOD AND DRINK INDUSTRY 

Rp 165,050,400,000.00 

(One Hundred Sixty Five Billion, Fifty Million and Four Handled Thousand Rupiah) 


Telephone 
(822) 399 5566 


Rights Offer of 66,020,160 Shares 


Facsimile 
(822) 399 5577 


S.GWarburg 


S.G.Warburg Group pic 
London, New York, Tokyo 

Amsterdam, Auckland, Bangkok, Boston, Chicago, Frankfurt, Geneva, Hong Kong, Istanbul, Kuala Lumpur 
Lisbon, Luxembourg, Madrid, Melbourne, Milan, Montreal, Moscow, Osaka, Paris, Seoul, Singapore 
Stockholm, Sydney, Taipei, Toronto, Vancouver, Warsaw, Wellington, Zurich 

lllllllIIIIlIlIIHIIIIIIlilllHIlfHllllllllllIlIIHIIllIIIIIIIIIIlllllllHIHIIIIIIIHIIIIIIIIIIIII 



Manager of Rights Offering 
and 

Stand-by Underwriter 


m P.T. MAKIND0 


March 1994 



9 


sJ,ih «Ri3 Veba ahead 18.5% in first term 


is is i 




By David Waller 
In Frankfurt 

Veba, the German energy 
conglomerate, has reported a 
sharp rise in first-quarter prof- 
its and predicted profits for afi 
1994 would be “markedly bet- 
ter" than Last year. 

The DQsseldorf-based group, 
which has around 1,000 subsid- 
iaries in areas such as power 
generation, oh, chemicals, trad- 
ing and services, said pre-tax 
profits in the first three 
months of the year rose 18.5 
per cent to DM608m ($367m). 

Much of the increase was 
due to an extensive group-wide 
rationalisation programme set 
in motion last year. The plan is 
to cut the 131,000 workforce by 
10,000 over 1993-94 in measures 


which are designed to save 
DMl^bn costs a year. 

Veba said the rationalisation 
programme would be the chief 
factor behind the expected 
marked improvement in this 
year’s profits. 

As Veba announced In 
March, group net profits for 
1993 fell 9 per cent to DMS25m 
on turnover up by L4 per cent 
to DM66-3bn. 

In the first three months of 
the year turnover climbed to 
DM17-5bn, an increase of 6 per 
cent, which reflects the impact 
of acquisitions in the eastern 
German power sector. 

A 28 per cent increase in 
turnover from energy, to 
DM4.36bn, offset stagnant or 
failing sales in the other main 
business areas, although Veba 


made clear that, excluding 
acquisitions, turnover in 
energy was fiat 

The group gave no detailed 
profits breakdown at the three 
months stage, but it said it had 
substantially reduced losses in 
its chemicals division, the 
focus of intensive rationalisa- 
tion. Losses in petrochemicals 
were also reduced and there 
was an increase in profits in 
services, trading and transport 
• Degussa, the Frankfort- 
based specialty chemicals and 
precious metals group which 
recently completed an exten- 
sive rationalisation pro- 
gramme, reported a 58 per cent 
increase in pre-tax profits in 
the six months to Manth. 

The increase in pre-tax prof- 
its to DM12lm followed a 25 


per cent gain in the first 
quarter. 

Degussa said its performance 
In the first half was better than 
anticipated, with all business 
areas improving their results. 
It singled out the chemicals 
division as a beneficiary of 
rationalisation measures and 
increased sales. 

The company predicted that 
earnings in the second half of 
the year would improve, but 
warned that the rate of growth 
would not be as high as in the 
first halt 

Group profits for the year to 
the end of last September 
dropped 14 per cent to DM1 72m 
on sales up 16 per cent to 
DMISbn. Sales in the first half 
of the current year rose 2 per 
cent to DM7.2 per cent 


| Aerospatiale pins hopes on Europe 

■*„* French aerospace group is seeking new alliances, reports Paul Betts 


A erospatiale, the French 
state-controlled aero- 
space group, is step- 
ping up its efforts to forge 
European ai Hair nan in both its 
defence and commercial activi- 
ties as part of its strategy to 
return to profit 
After reducing net losses to 
FFrl.42bn ($250m) last year 
from FFr2. 3Sbn in 1992, Mr 
Louis G allots, Aerospatiale's 
chairman, said the group was 
on target to break-even this 
year. 

Like the rest of the aero- 
space industry, the French 
group has been hit by the pro- 
longed slump in the civil air- 
craft sector and the decline in 
the defence market 
However, Aerospatiale is 
more vulnerable than other 
European aerospace groups to 
the problems of the civil rather 
than the defence side of the 
business, because it relies on 
civil aerospace for about 70 per 
cent of Its FFr50bn annual con- 
solidated turnover. 

“After Boeing of the US, we 
are probably the most civil 
aerospace company in the 
world, but we don't have the 
same substantial 60 per cent 
market share of the civil mar- 
ket as Boeing,” Mr Gallo is 
explained. He added that he 
did not expect any sustained 
recovery in the civil aircraft 
sector before 1996 or 1997. 

To consolidate his company’s 
financial recovery, Mr Galtois 
said a priority was to reduce 
the production break-even 
point of the group's principal 
civil aerospace products. 
Aerospatiale holds a 37.9 per 
cent stake in the European Air- 
bus consortium and a 50 per 
cent stake in the Franco-Itahan 
ATR regional turbo-propeller 
aircraft group. 

The big Airbus Investments 
made over the last 10 years to 
compete against Boeing and 
McDonnell Douglas of the US 
were based on an average 
French franc-US dollar 
exchange rate of FFrS.80 and 



Main European aerospace groups’ turnover - 1903 


Saab (drcrafO 
Volvo (Flygmotot) 
Westland 
Casa 
Mania 

Matra (defsncoand space) 
Dawaun {aviation) 
Snecrna 
- Rofis-Royco 
BAa* 
AorospaMala 



Loins Gallois: *we simply must 
adjust the European industry’ 

Airbus annual aircraft deliv- 
eries of around 200 airliners a 
year. In the regional turbo- 
prop market, the annual pro- 
duction break-even point for 
ATR aircraft was estimated at 
around 60 aircraft, explained 
Mr Yves Michot, Aerospatiale's 
managing director. 

The problem for Aerospatiale 
is that Airbus production has 
now dropped to around 130 air- 
liners a year while ATR pro- 
duction is down to 42 aircraft 

“We simply must adjust the 
European industry to manufac- 
ture profitably Airbus aircraft 
at a rate of around 130 aircraft 
a year,” Mr Gallois stressed. At 
the same time, Airbus is facing 
increasing competition from 
Boeing, which is seeking to 
reduce its production costs by 
25 per cent 

“We have also reduced our 
production cycle times for nar- 
row-body airliners to around 
nina months, but the problem 
is that Boeing wants to bring 
them down to six months,” 
said Mr Claude Terrazzoni, 
head of Aerospatiale's civil air- 
craft division. 

“In the wide-body sector, 
Boeing cycle times are down to 
10.5 months while Airbus is 
around 12.5 months, but we 
plan to come down to 10.5 
months as well,” he added. 


Source; Aarospettate 


O 10 20 30 40 GO. BO 70 

FFrtan 

•Aircraft. ttalanoe retd apnea. "Indudee fafckor 


Both Mr Gallois and Mr Ter- 
razzani also stressed Airbus’s 
intention to challenge Boeing’s 
monopoly of the jumbo airliner 
market. 

“We simply cant afford not 
to be part of that market,” Mr 
Terrazzoni said, explaining 
that aircraft of 400 seats or 
more will account for an 
increasing share of the market 
during the next 20 years. 

In tide turbo-prop sector, it is 
vital to rationalise the Euro- 
pean industry suffering from 
over-capacity and competing 
products. “You now need to 
produce about 70 to SO aircraft 
a year to break even in this 
sector there’s therefore no 
other way out but to regroup 
the industry in Europe," Mr 
Gallois said. 


A erospatiale is continu- 
ing discussions with 
British Aerospace in an 
effort to merge BAe’s Jets- 
tream turbo-prop activities 
based in Prestwick, Scotland, 
with those of ATR. Aerospa- 
tiale has proposed to combine 
the two groups around a new 
project, the development of a 
larger 82-seat turbo-propeller 
aircraft, the ATR 82. 

There are still doubts on 
whether there is a nfahe in the 
market for an 82-seat turbo- 


prop competing against 
smaller regional jets, but 
Aerospatiale believes if ATR 
and BAe can combine forces in 
this sector, other European 
manufacturers will join. 

Aerospatiale also hopes to 
complete by the end of this 
year its long negotiations to 
merge its guided weapons and 
satellite activities with those of 
Deutsche Aerospace in sepa- 
rate joint ventures. (Aerospa- 
tiale already has a joint heli- 
copter venture with Deutsche 
Aerospace, called Eurocopter.) 
These joint ventures could lead 
to wider European alliances in 
both missiles and satellites. 

“We need to achieve a much 
deeper integration of our Euro- 
pean defence industries to 
compete with the US, where 
consolidation is taking place at 
a very rapid pace,” Mr Gallois 
said. 

“The difficulty in Europe is 
that consolidation in the 
defence sector is bound to take 
much longer. You need a bal- 
ance between partners, for no 
country will allow its defence 
industry to pass under foreign 
control. You must create real 
joint ventures, which is much 
harder than simply buying out 
another company as our US 
competitors are doing in their 
domestic market," he added. 


Downturn in earnings at Uni Storebrand 


By Karen Fossil In Oslo 

Uni Storebrand, Norway's 
largest Insurer, yesterday 
announced a series of impor- 
tant moves, coinciding with 
the publication of weaker first- 
quarter results, including the 
surprise departure of its chief 
executive, Mr Per Terje Void, 
who led an extensive one-year 
tumround of the group. 

Uni also disclosed that it had 
signed a letter of intent with a 
foreign investor for the dis- 
posal of Christiania Re Corpo- 
ration. the group’s US subsid- 
iary, but would not be drawn 
on details. 


The group also announced 
plans for a one-for-14 rights 
Issue for restricted and free 
shareholders, priced at 
NKrl2,25 a share to raise 
NKr307.4m during a subscrip- 
tion period from May 25 to 
June 7. 

Uni said Mir Aage Korsvold, 
vice-chairman of the board, is 
to replace Mr Void from July L 
Mr Korsvold also holds a key 
position within the group's 
strategic operations. 

The company said Mr Void 
had successfully led Uni’s 
restructuring following the 
group's release from a board 
appointed by the government 


This followed Uni's collapse 
after a foiled raid launched two 
years ago on Skandia Forsakr- 
ings, Sweden's biggest insurer. 

“The group's results for 1993 
were good and the company is 
well on its way with a strategic 
process for a further position- 
ing in the market," Uni said. 

Mr Jon Gundersen, board 
chairman, said he was looking 
forward to the fresh approach 
that Mr Korsvold would bring 
in addressing the challenges 
facing Uni, including the grow- 
ing domestic savings market 
which has been chosen as a 
central area for group expan- 
sion. 


Mr Void had been asked to 
remain with Uni and his posi- 
tion would be clarified shortly, 
the company said. 

Uni reported a decline in 
first-quarter operating profit, 
before policyholders’ alloca- 
tions. to NKr998m ($139m) 
from NKrl.03bn. It blamed 
higher interest rates which 
produced lower financial 
income. 

Group net operating income 
rose to NKr7.07bn from 
NKr&38bn as operating costs 
increased to NKr5-5Gbn from 
NKr4£2bn. Pre-tax profit, after 
allocations to policyholders, 
fell to NKr84m from NKrl50m. 


RUSSIAN - BELGIAN BANK 
IS LOOKING FOR A PARTNER 

The " Unibest " Commercial Bank was registered in March 
1992 as a commercial bank. PLC. Its Authorised Fund 
amounts to 5 billion rubles. All the bank's activities are 
Insured by one of the "Unibest" Bank shareholders - 
"S Unrest" State Insurance Company. 

THE "UNIBEST BANK CARRIES OUT 
THE FOLLOWING OPERATIONS: 

O Metier operations. 

□ Short term speculations Including all of Russia’s 
Financial Instruments. 

□ Mor tgaging projects In Moscow and St Petersburg, 

0 Diversification of capital in currency deposits and 
securities (Portfolio). 

0 Organisation of financial and Investment projects, 
according to foreign investor's preference. 

0 Operations with state liabilities of the internal 
currency loan. 

With a view to strengthening mutually beneficial business 
contacts with the reliable financial partner the "Unibest" 
Bank Is ready to let him have up to 20% of the presently 
selling stock issue for 5 billion rubles of authorised 
capital. 

If you need any reference please contact Mr Emmanuel 
Van Hilo rSpaarkredlet" Bank. Antwerp. Belgium. Tel*. 
03X223-02-70, Fax: 03X226-36-821. 

Unibest Bonk 

5. Noro-Zykovaky proezd. Moscow. 125X67 Russian Federation 
Fax 10951 966-15-47, Td: [095) 956-15-50. Telex: 91 1088 ustta su 


INVESTISSEMENTS ATLANTIQUES SICAV 

Soeidtd dlnvestissement k capital variable 

Registered Office: Luxembourg, T4, rue Aldringen 


Commercial Register: Luxembourg Section B 8722 
Notice of the Annual General Meeting of Shareholders 

fhe annual general meeting of Shanataidais of NVEsnssaons 
fflANnaUES SICAV wB be neW at its registered office in 


Luxembourg, 14. ruo AUrtngert onwsyam 1994 at 2 pun tor 
fie_puipc&e of oonsHering and voting upon foe folovring maBere: 
IJTohear and accept 

a) the management report cf the Directors 

b) the report of the Aucflbr. 

To apprewe tie s t atem ent of assets and EabiEss aid foe state- 
merit of operations for (he year ended 31st December, 1991 


their duSes during the year ended 31st December, 1993. 

5) To elect fo© Dseetos to serve unfl foe nod Annual Genets 
Meeting of Sharaholdeis. 

6) To sled the Auditor to serve unfl the nod Annual General 
Meeting of Sharehoktere. 


T?ie^!^^^raareacMsedfoat no quorum tor foe statutory^ 
general meeting is required and that derisions wa be taken ante 


maorily of foe shares present or represented at foe meeting 
In older to take part A foe sfakitoty meeting of May 20th, 1994 foe 
owners of bearer shares w3 have to depoel their snares five deer 
days before foe meeting at foe registered office of foe Fund, 14, 
raeAldringer iUMBf ribotiaorv^ 

Banque Gereiate du VjLDflerrboug SA 
14, iue Aldringen, Luxemboug 

The Board of Directors 


t. 


1TCDC 

•- i s_: *. 


1UUU 


24 hours a day - only Si 00 a monthl 

LIVE FINANCIAL DATA DIRECT TO YOUR PC 
— =*“ hypS * _CC * S Fax +45 4587 0773 * 


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ADDITIONAL INTEREST STATEMENT 

THE WALT DISNEY COMPANY 

U.S. $400^)00,000 

SENIOR PARTICIPATING NOTES DUE 1999 

0 Quarterly Statement Dated: Mav 11 , 1994 

for the period from January 1 to March 31. 1994 (the “Period") 

D Semiannual Statement 

for the period from February 28, 199_ to August 31. 199_ 

(the "Period") 

□ Annual Statement 

for the period from September 1, 199_ to August 31. 199_ 

(the "Period-) 

Pursuant to the terms of the above-referenced Notes, this Additional 
In terest Statement (foe "Statement") is being furnished to Holders of such 
Notes of The Walt Disney Company (the "Company"). Capitalized terms 
used Ln this Statement have the meanings ascribed to them in the Notes and 
the Fiscal Agency Agreement, dated as of October 1, 1992, between the 
Company and Citibank, NA.. as Fiscal Agent, Principal Paying Agent: 
Transfer Agent and Registrar. The information contained in this Statement 


is given forboth the Period covered by this Statement (indicated by the bo* 
checked above) and for the period from October 20, 199?, the date of 
issuance of the Notes (the "Issue Date"), through the end of the Period 
covered by this Statement. 

This Statement is accompanied by a descriptive report discussing the 
activity and status of Eli^ble Films. Cities of such descriptive report can 
be obtained by Holders of the Notes upon request to the Fiscal Agent at the 
following address and telephone number Citibank, MA, 120 Wall Street. 
New York, New York 10043; Attention: Corporate Trust Department 
telephone: (212) 412-5214. If this Statement is an Annual Statement, it is 
also accompanied by a Supplemental Audit Report of the Company's 
independent public accountants. In this Statement, references to are to 
United States dollars. 

1. Names of EftgSXe Fims included in the Portfolio: 


a. amafaM; 

Cabin Boy A Muppel Christmas Carol 

Iron Wifi The Cemetery ChJb 

The Adventures ot Huck Finn 
Mian Summer 
GuByAsSh 
Ufa With hficey 

Wtefs Love Gof To Do With It 
Savin-tow 
Hocus Pocus 
Another Stakeout 
My Boyfriend’s Back 
Father Hood 
The Joy Luck dub 
Money For Nothing . 

Cod Runnings 

The Three Musketeers 

Stater Act 2: Back in the Habit 

Cabin Boy 

bonWfl 

2. Names of shot subfectsfo which any potion of Totti Revenues has been alocated: 
a. Forme Period: WA 


I'M «tVnI I iTesj I Ml (FimT iT-M U. UEL'.i 4 VI. 


1 Names of the Sgbia Ftina together wfth rtiich the above shot subjects were 

released 

a- For the Period WA 


•'••I'-iirini i ,| i-' | i»!iv iiri iv i v- 


From the Issue 
Data through 
For the Period: end of Period: 

EfigWeFirasklffiePorttoSo S3S.440.000 S440.339.000 

5. The Portfolo Amount Sg2.777.000 S400.000.000 

ft figfonaSB Domestic Theatrical Ratals 
ofadbe Fflmslntte PniHoio‘ S5R609.336 5160.698314 

7. CakaMon of Contingent Interest 

Total Revenues $188,113,969 $335352,113 

Distribution Fen ($32369,945) ($58,791,620) 

Estinated Third Party 

Participation Payments” ($9305,699) ($16,797,606) 

Residuals ($150327) (5292362) 

Short Subject RavaniiM S 0 $ J) 

ElgHa Ftkn Revenues $144368398 $260,070325 

Ban Amount 1 Q (5800.000.0001 

ESgfeieFkn Revenues In 

Excess of Ban Amourt S Q $ Q 

x5Q% x50*. 

Contingent Interest — $ Q S Q 

ft Contingent Interest paid per 

$1 300 principal a Nates $ Q S Q 

* Domestic Theatrical Rentals of EEgfek* films in the Portfolio arr adjusted on a pro rata 
basis in the am manner as EBgiWoRIm Revenues are prorated pursuant to tfaeNotn. 
™ Actual Thud Party Pfcitkspaticm Paymente am used with respect to the final Interest 
Payment. 

9. Supplemental briefest $ Q S 0 

10. Sipptatnstrial Merest pad per 

SI 300 principal amourt of Notes— $ Q S Q 

11. Provisional Interest $ Q $ Q 

12. ProvtsjoreJ Merest paid per $1 ,000 

principal amouri of Notes S Q S Q 

If this Statement is an Annual Statement, the Company has indicated 
below whether any default by the Company in foe performance and 
observance of its obligations under the Notes or the Fiscal Agency Agree- 
ment has occurred and/or is continuing. 

0 No Default 

□ Yes; Description: 

The Walt Disney Company 

By /s/ Steven I. Schoch 
Vice President — Assistant Treasurer 


.$144368396 $260,070325 

—1 Q (S800.000.0001 


x50* 


CITY OF COPENHAGEN 
Notice of a Meeting 
of foe holders ol the outstanding 
DKK 500,000,000 

8tt per cent Notes due 1995-1998 (the ‘Notes') 

TO THE NOTEHOLDERS 

tn fra (frg tkuoi'i wit be nakJ al fro otimr, ot Lmtums & Panes. 

Sjnmgion Hast. SM? Gieuum Snoot. Lonocn EC2V 7JA on Sid Juno 1994 at J p.m 
ILQiwan ditib) Hy me p(flpou>oJ cortjfla ^ ano. i! tnooflhl Ij passing iho ioBowhto loaohinon 
wnet anil dp proposed as an Eflraordirurv HcsoiuKwi In acroictinco *nm I no ptovi&ara ottno 
fiscal Agency Agreement rotating re ihn Mows ifre "Fitcpt Agency AgieemeflO dated &trd 
Ma*. i986modoOM»*on me bat**. Vrwjmnwi* S A Lutemsourgoaise as fiscal agom ime 
-Feca Agent-] and Wed* thank N v , Qr-cn Royal Bank limited ;nofl known as Royal Bank ot 
Canada) ana Piwalhankon A’S |naw known as urwur*. ASI » Mv-ng agents rtw "Paying 
Agons") 

EXTRAORDINARY RESOLUTION 

-That tflsmeetmo of the holdkrcol fro outstanding Cw'KSCO.OMOOdB'.pi.fcort. Notes due 
I99SM998 ittie-Nown ot irte Coy w Copminagon nne-fciuen esueaoui&ujni to tw Fiscal 
Agency Agreement leuung to the Note*. Ltrro -F«ji Agency Agtecmenn dated ’M May. 
1986 made Dementi freimie».itnxJwtt>.TnkS A Luiemtworoeo*wasti^agtiiil(iho-Ft3col 
Agenri. and Krecfcetoanh n v . Orion Royal Bar* Lunnea trow Known m Renal Bank at 
Caracal and PmatBanKon A/S tnow Known os urWbonk AS) on paying agents line -Paying 
Agents') tweDy ■ 

til assents to fro mortil.-.Mion O Contucn 2 ot fro Terms ono Conojnorrc ol ttw Notes (os 
pnntod on fro reverse of from and m Erttfri A to me Fiscal Agonry Agrevntenn BVOte nsoroon 
dl fro voids "ora loan granted to fro City frrnuph Pjneli ntorlgago institutions in frucouree ol 
ordinary business acmnoes-afiv llw words "assets acquu«duy utaCay" so frm Comfioon 2 U 
moaned to read-- 

1 Stetua ot tfte Now and Ne gel luo Pledge 

Tho Notes and no Coupons a»e dnect. unconditional ana goraoi oobganons ol fro Coy 
and ran* a- toast oqualtv with oU ofrui ouKionding loon moubtodnoss. mdudmg 
guarontoes and ofrer OAgabons at a Similar n-iturc. ot the City, aiepl insotar as and to 
fro anent fret suen ofrer loan inoctMeonass is secured by a rriortgage on as s ets Ol fro 
Coy. The cny undertaxes that n v snot m fro hnuro secure any loan, out* guaiaittee or 
other ootgaixxv odung on or alter fro ai'o ol tssua or frn Notes, by any Ion ptedgo or 
ofrer efiarge upon any ot os prownt or Mure assets oi lovunuus (otner man a bon. pledge 
or ofrarchargo aaotod to secure n wrioto ei m p>vt fru puremse pnoo ot asoets acqumd 
by me C>ty or a loan grained to fro City frtougo Dortisn mortgage institutions m the course 
ol Of dnory business acbvnus). fro Notes and mo Coupons snafl be uaualiy and ramabiv 
secured tqi suen len. pteoge o' ofrer cm oign.' 

(2) sanctions every abrogation, modlicaiion, compromise or arrangement m tiXOUGi ot fro 
ngn* ol fro noktorsoMho Notes and me hoiderr- ol me coupons lolving to fro Notes against 
fro Issuer involved in or residing horn fro modi Keaton i alerted to in paragraph lit of frn 
Reeohiban: 

[3| authorises me euecuiari of a Suoptemmul Fdcnt Agency Agroernurti in fro kxmoMrie 
draft produced to fret meeting and lor tha puiposes ot IdenMcabon <agned by fro ctunrnan to 
gKeoflecl fr tliemodJIcabons iirlmicrd to fipaiogiapn |i) ol ttor. Hesohnian und 
(41 waves any potential breach by fro issuor ol <ts obbg.frons under fro nugntwe pledge 
prowsion in Conoition 2 of fro Notes Kitten may hpvu occurred pn» fa fro motUScnnons 
referred to in paragraph niol tins Resekmanconungfriounuci ' 

BACKGROUND TO THE PROPOSAL 

n nas recenpy coma u the Issuer's attention mat 4 a kkefy frat fru bsuu nos brnachod fro 
negatnro pledge provision contained in Condi bon 2 ot the Terms find Conditions o < fro Nates 
The effect of mb provision is not the Issuor may not gnro any bon. ptodga or other charge i*ton 
any ot its presenl or luturo assets or rovenuus i ofrer than id seouro fru puichasa pr«o ol 
assets iKquaed by lira tssuartvnfrautprmvPnginai me Notes snail be uqualy and raleafily 
secured by such Hen. pudge or other charge. Tho ovunt ol detoutl provisions r Condoon 7 ol 
fre Notea provide that a Noteholder may gun- the Fiscal Agent noucu or the Issuer saetauROl 
any terms ol the Notes, it the detauff is not cured rwfrm 30 (ttys, the NorehoWoi may gmo notice 
lb the Focal Agent that fro Nou ie due and payable 

Alter fre Notes tm Issued in ISSfi. fre issuer decided to avail itsett ol fre osgortuntty to takd 
up loans from Darns!) mortgago insUniuons The procoeds from ti»«o loons wore used to 
n ranee renovations on buldngs already owned by Iho Issuer Such loans are subsuAsed by 
fro Kingdom oi Denmark as pari ala general city tenovation plan The Kingdom ot Denmark's 
subsidy is on integral part of fre loan scheme m that fro Kingdom of Denmark pays an interest 
as well as one- seventh of fro principal amount on pan oi fre bans and under certain 
circumstances also pays Interest on fro lemander ot Iho loans. The Kingdom oi Danmark's 
subsidy Aewattaktaerty ti fre loans are given by Dansft mortgage iratnUMns.Ufltat Danish 
>ow. sedan 1 ol Act no 341 ot 2Gfr December. 1989 on Danah Mortgage Insfrutons. as 
amended, loans bsm Dansh mortgago Institutions are requned » be socured by mortgages 
on the relevant property . acconkngiy the loans to finance fro renovotrons to fre issuer's 
buBdings are secured by mortgages on fra relevaru properties. II shotAd Denoted that tor some 
of these loans, an integral part ot the loan scheme is a guarantee trom me Kingdom ol Denmark 
at favour of fre mortgage insthwJons (provided that fre Issuer undertakes to refund to fre 
Kingdom ot Denmark naff ot any amounts paid oul under the guarantee) Thus uniter some ot 
the loans, fra mortgage Instnutions have bath a guarantee and a mortgage on the property. 

In order » ehrsnate this uncertainty, fre Issuer proposes to modrty ow negative ptoogo 
provision In Condaon 2 of fre Notes co as to include an exclusion tor loans granted through 
Qanl sh mortgage mstmiUons at fre eou roe of ordinary bsemoss aettvtus end to obesn a waiver 

01 any breach by the Issuer of such provision wtedi may have occurred poor to such 
modi kca t tonB corning into etfea. 

FURTHER DETAILS 

The atlentton of the NoMtoidars la parucuiarty drawn to the quorum requ red tor fro meeting 
and tor an ad|oumed meeting which is set out in paragraph 2 of "Voting and Quorum' betow. 
Copies ol the Fiscal Agency Atpeement (Inckitang ttw Condi Uonsj and ttw draft Supplemental 
Fiscal Agency Agreement referred to m fre Extraordinary Resolution set oul above <*« be 
available tor tnepectron by Noteholder ai the speeded oflees of the Paying Agents set 
out below. 

VOTING AND QUORUM 

1. A Noteholder vnshmg to attend and vote at the meewig m person musi produce at iho 
meetmg mther the Notefa). or a vald voeng certtficatefs) esued by a Paying Agsni relating to 
the Nore(s) hi respea of wMdt he wtshes to vota. 

A NMflhold* not wishing to attend and vote at the meeting hi person may ortho deliver tas 
Notefs) or voting cerflOcatefs) to fre person whom he wmhes lo attend on Ns Damn or give a 
voting nstroalon (on a voting Insinjctlon term obtainable tram fre speotled offices at fre 
Paying Agents set oul below) Instructing a Paying Agent to appoint a proxy » attend and vma ai 
fra meeting In accordance Mth hta Instruction 

Nolee may be deposited with any Paying Agent or (to the sattaiacWm Df such Paying Agent) 
held to hs order or under its control by Eurodear or Cedel or sty other person approved by a. tor 
fre purpose of obtammg voting cervficaiea. or appointing proxies or giving voting instructions 
in raped of fre relevant meeting run later then 48 hours before fro time appointed tar holding 
fre meeUng (or. H applicable, any aG|oumment of such neethigl. Notes so deposited or held 
wd not be released until fre earter of fre conclusion of fre meeting (or. u applicable, any 
adjournment ol such meeting} and (I) fre surrender of fro vgftng cerfttiKnofS) to fro Paying 
Agent who issued fra same or. <n) fre surrender (not less than 72 hours before fre tuna lor 
whldt the meeting (or. H appicable. any actiouromaitl ol such maebng) * eonvenod}. ol fre 
relevant votng nwucOon recaipi(s) to fre Paying Agent who issued fre same m respect ot 
each 5uchdepostad Note wNch is to be released and fre gnHngolNobcebv fre Pavmg Agent 
to fre Issuer ol such siarender. 

It a hofcfcr of a Note who has already ghron young instructions m respect ot ms Motels) 
subsequently wtshea to revoke or amend such voting msiructki ns. he must gwe nonce ot such 
mended revocation or amendment to fre roievani Paying Agent not later than 48 hours before 

the lane bed tar holding the meeting or any adpurned such meeting 

2 The quorum required at we meeting is two or more persons present n person holding 
autsnndfrg Notes or votng canttcatas or being prone* and holding ot representing in 
aggregate more than anoxia* of the principal amount ot fre Notes lor fre time bong 
outstanding (as defined In fre fiscal Agency Agreement). If within halt an hour tram fre tune 
toed tor the meeting a quorum Is not pres am fre meeting shal stand afrourned tor such 
period, not being less than M days nor more than days, ono to such dmo ono place, as may 
be appointed by fre chairman ot fra meeting AI such accounted meeting fre quorum shall be 
two or more persons present at poison holding Outstanding Notes or rang certificates ot being 
proxies [whatever the principal amount ol me Notes so hett or represented) 

3. Every question submitted*) the meeting wtl be deemed on n show ot hands unless a poll ts 
frky demanded by fro Chairman of the meathg. or by one or more parsons holding one or more 
outstanding Notes or voting careficatee or being pro wS9 and leprasenbng fr aggregate not less 

than one-htbeth port ottno principal amount ol the Notes then outstanding. O a show of hands 

every parson whole present and produces a Now or a vakngcartAcate w Wapraxy shall haw 
one vote. On a pal evay such person shal have one vote In respect ol each DKK 20.000 In 
principal amount ol Notes so produced or represented by fre voting certihcafe so produced or 
in respsa of wtich ha Is a proxy 

4. To be passed, fre Extraoidnary Resolution requires a majority n favour consisvng of not 
less than frroe-qunmre ol fre votes cast It passed, fre Extraortfnary Resolution ml be 
btndng on al ttw Nolehotdeis. whether or not present at such meeting and whether or not 
voBng. and upon d mo hoidere of the coupons retalhg to me Note*. 

fiscal Agent and Paying Agent 
KredtetbankSA Luxembourgeorse 
43 Boulevard Royal. L-2955 Luxembourg 
Paying Agent* 

Royal Bank of Canada Unibank A/S KredfrtbankNV. 

71 Queen Victoria Street STonregade Aranbergitreai 7 

London EC4V 4DE DK-17B6 Copenhagen V B-WOO Brussels 

City of Copenhagen 
nth May. 1994 



This Survey will be an overview of 
Norway. ormMne a amoretvntfve 
analysis or the economic end 
poKtaei shuaiion. together witn In- 
depth comment on key areas such 
as Norway's EU Menfrarehlp, Qfl & 
Gas. Banking. Manufacturing and 
Shipping. 

The Survey wU be seen by owr 1 
irfHSen FT readers woridretde. 

To advertise In this feahaw. piers* 
contact; 

Cfarls S chaa nr tl me on 
Tel: +44-21 454 0922. 

Fate +44-21 455 0869, Of 

Klrety Saunders on 
Tel: +44-21 873 4823, 

Foe +44-71 873 3428 

FT Surveys 


The survey win review tire taxation system worldwide and examine the 
challenges it will face In 1994 and the Implications for the international 
business community. The survey will reach an estimated International 
readership of 1 million. 

For an editorial synopsis aid in f orma tion on advertising opportunities please 
contact MELANIE MILES on Tefc 071 873 4874 Fax: 071 873 3064 

FT Surveys 


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our current Terms and Conditions, copies of 
which are available by writing to: 

The Advertisement Production Director 
The Financial Times, 

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Tel: 071 873 3223 Fax: 071 873 3064 



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FUTURES & OPTIONS BROKERS 



StXjeorge 

acn 0G5 s, a iwn 



ACN 065 513 070 *“ r xa t ) 

U.S. $100,000,000 

Floating Rate Notes due 1998 

Notice is hereby given ihnt for the Incenst Fen tad I0rh May, 1994 
to 10th Augusr, 1994 the Notes will carry A Race of I merest c-f 5.i>125% 
per -annum. The (merest Ankunts payable will be U-S. S17B.10 
perU.S. $10,000 Nore and U S. Sl,i80,97 per U.S. $100,000 Note. 
The Interest Payment Dare will be 10ih August, i9 t »4. 


Bankers Trust 
Company, London 


Agent Bank 


EXECUTION ONLY 







20 


GROUPE BRUXELLES LAMBERT SA/N.V. 

Bnd Office 34 ntMH Mm* - 1050 Brands 
Bread* Trade BqpffW 2*188 

Nfltkg a hereby OnTmary GtOCltl iStetiB^ Of SHtw h oKteTS wfll be 

haW on Tuesday. 31 May 1994 at 5 pm at Jbe bad office, where to feUowfog ^cada 
willbeconsidemfe 

1. Report of Ae Directors and Repots of the Auditor* for the financial year 1993. 

2. Animal eccowJtJ tt at 31 December 1993. 

Tie Board will aak die Met dag W approve tie accoenta, udaduig tie 
appropriation of lie result. 

3. Dfsdtnjc of the Directors. 

The Bond vjH **k die Meeting to dfastage lie Dhwaoo. 

4. Discharge of fteAuditcc 

The Bourd will ask tbc Meeting to dadiaige [lie Auditors. 

5- A^ibiii inicnp : 

Tie Bond win ufc the Assembly to re-elect five Direaoti whose teon of office 
a doe to expire and no elect two new Dtactta. 

Shndxddecs who wish to attend this Meeting most, acc ordin g to article 25 of the 
articta of miortarinn , deposit their glares no later than no Friday, 27th May 1994; 

In Hotgtmn- Head Office 

Braque BnneQea Lambert 
Braque Puibss Belgique 
G t n t nh de Bamjnc 
Krtsfiahank 
CSdsaePdvdc BBttqoo 
Banqoc Ipp* 

In Prance: Banqne Bnetelks Lambert Prance 

Benqne Paribas 

[n the Grand Podiy of Uae m b ourg. Banqne Intenmiiopnlc > U oonn bo Mg 

Banqoc l^ tib aa (I ami iboitin) 

UnUl LUTOpccii 

In The Netberiandc ABN-AMRO Bank 

In Switzerland: Banqne BnneHes Lambert (Suisse) 

Sbarcholdczn are allowed bo be repre s ented at the Meeting according K> the condHons 
determin ed by aaidc 26 of the articles of atio cfati on- Totha end, they mart dcpcaft a 
pnsy no later than on 27tfa May I99A 
The Board of Directors 



RankW est 

BartcofWBBtemAustraSaUd. fiCN 050484 454 

Notice to Note Holders 
CHANGE OF NAME 

On 30th March 1 994, the Patenent of Wteiam 
Auama passed tha R8J Bank Amendment Act 1 994 
f Amendment Act!- 

The /Wnandront Act prouiefee. Her afta. for the change 
of tun name of the Bank from ■ FWJ Bank of VMsstsm 
AuBtrafaLUT to TBank of Western Auetrsta Lid*. 

It to. however, not neceesary to anand documents In 
which the (bmtar name of the Bank appeera as the 
Amendment Act also provides that a reference m any 
document of any kind to the termer nano of the Bade to 
to be caratruad as If It has been amended to be, or to 
Include, a reference to the new name of the Bank, 
except where the context raqufres otherwise. 

The Amendment Act confirms that the current statutory 
guarantee of the Treasurer of the State of Western 
Australia wi oontinua to apply without modification to el 
financial aUgettoiw existing and entered Into prior toe 
day to be faced by proclam at ion (*HlBCtrve Data*) urtM 
matutty of each fedBy. lb date die EBacdwe Date has 
not been proclaimed. 

AooonJIngly, the paynwit of amounts due and pivabiabi 
respect of Notes Issued by the Bank prior to the elective 
Dais continues to be guaranteed by the Treasurer of the 
Stats of western Austrsia on behaH of the State of 
Western AustraSa. 

The statutory guarantee w» not apply to new (Vtandal 
obBgetlorw entered irtto by the Bank after tho Htechwe Date. 
Dated this 26th day of Aprl 1094. 


INTERNATIONAL COMPANIES AND FINANCE 


FINANCIAL TIMES WEDNHSDAY_MAY_llJ9g4 


Drugs industry seeks prescription for growth 

Battle between manufacturers and distributors is hotting up, writes Richard Waters 


T he bomb detonated 
under the US drugs 
industry last year by 
March's $6.7bn takeover of 
Medco, a drug distributor, has 

been reverberating loudly in 
recent weeks. 

In a rapid series of takeovers 
and alliances, some of the big- 
gest distributors in the US 
have aligned themselves with 
pharmaceutical manufacturers. 
And with a shrinking number 
of distributors not yet spoken 
tor, the scramble tor market 
position is getting infwnw 
“We dearly want to keep our 
lines of distribution open as 
much as possible,” says Mr 
Edward Bessey, president of 
Pfizer’s US pharmaceuticals 
business. Pfizer, winch has had 
one of the best records among 
manufacturers for launching 
big-selling new drugs, has been 
quick to mate its own arrange- 
ments, forming Mnks with two 
distributors in recent weeks. 

The panic prompted in drag 
company boardrooms by the 
Merck/Medco deal is under- 
standable. Medco is <me of a 
new breed of distributors, 
known as Pharmacy Benefit 
Managers (PBMs}, which has 
come to prominence In recent 
years. These companies have a 
strong grip an drugs mine in 
the US: access to their distribu- 
tion channels has became vital. 

Medco, for instance, dafms 
to account for 38m people 
(known in the trade as ‘‘lives’’) 
under assarted managed care 
arrangements. Diversified 
Pharmaceutical Services - 
which, under a deal announced 
last week, is being bought by 
SmithKline Beecham - riinma 
44m. lives, PCS (a subsidiary of 
4Sm and Caremark, 
another independent, 28m. 
Even allowing for some 
inflated claims and a degree of 


Glaxo of the UK is understood still to be in talks on 
alliances with US healthcare companies including the 


have been under way for several months as 
the company searches for a corporate response to 
changes in the CS healthcare system. 

The slow progress of the fa»Tk« reflects Glaxo’s 
unwillingness to boy a US company. It does not want 
to follow us rival Merck ana Anglo-US company 
SmithKline Beecham which have spent $6bn and 
$L3bn respectively on distribution companies. 

Instead n wants to sign alliances such as that agreed 
last week bet we en US company Pfizer with Value 
Health, a distributor, in a 8100m joint venture. McKes- 
son remains one of the largest potential partners yet 
to sign such a deal. 

Sir Richard Sykes (fight), chief executive, has said 
that deals with mtermeaiaries and even other pharma- 
ceuticals companies were under consideration. 



overlap, it is a fair bet that 
more than half of all 
Americans buy drugs through 
these com pan i e s. 

The distributors have won 
their position by discounting 
heavily. They fill out prescrip- 
tions for people covered under 
company health plans and 
other bulk programmes. 

The main weapon in the dis- 
tributors’ armoury, though - 
and the one that frightens 

gmre> rnai wf flR tn Tiftrs — is thwr 

formularies. These are lists of 
recommended drugs they 
maintain , and which doctors 
are steered towards whan pres- 
cribing. A doctor prescribing a 
drug not on the formulary is 
likely to girt a call suggesting 
they switch to another (usually 
cheaper) drug that is. Care- 
mark Riaims that it manages to 
persuade three out of every 
five doctors to change their 
in fhpsp circum- 
stances. ■ 

Mr4C<»«B«n riarmg grant* Mw 

lives are covered by its formu- 
lary, while Med co claims 18m, 
Caremark 12J>m, Diversified 


Tim and Value Health, another 
of the distributors, 5m. These 
numbers axe likely to grow 
tost the distributors have all 
made it a priority to convert 
their customers to the formu- 
lary approach, and are using 
aggressive pricing as an 
inducement 

T he result has been a 
scramble. Merck and 
SmithKline Beecham 
have already bought two of the 
biggest PBMs (the latter still 
needs approval). Two other dis- 
tributors, Caremark and Value 
Health, have clear their 
intention to remain indepen- 
dent of any one drug company. 
A month ago. Caremark signed 
agreements to put the products 
of three manufacturers on its 
formulary - Pfizer, Rhone- 
Poulenc Borer and (it is widely 
believed) Bristol-Myers Squibb. 
Value Health last week agreed 
a similar deal with Pfizer. 

Other, smaller companies 
could also become takeover 
candidates. For instance. 
Express Scripts, a small PBM 


based in Missouri, has seen its 
market value leap from 3175m 
to $450m in recent months. 
McKesson, though, stands out 
as the only big company that 
has yet to show its hand. 

Control of iHstribution may 
be the main force behind the 
realignment, but there is also a 
second motivating factor: 
access to information. 

Tha manufacturers' thinking 
goes like this. Under pressure 
to hold down prices, both from 
bulk buyers of their products 
and politicians in Washington, 
they need new data both to 
support their marketing and 
develop new markets. Informa- 
tion on how their drugs are 
being used, and the effective- 
ness of the treatments, is vital: 
it would enable the wiawnfiatv 
turers to make a better case for 
the effectiveness of their prod- 
ucts, and at the same time 
would enable * b«n to develop 
closer ties with the users of 
their drugs. 

It would also enable them to 
sell drugs to big buyers under 
capitation arrangements - 


agreements to provide all of a 
patients' drugs over a set 
period for a predetermined fee. 

Some of the information that 
the manufacturers needs sits 
the databases of the PBMs. 
More of it, though, resides with 
the Health Management 
Organisations (HMOs) and 
other managed care groups 
who provide overall healthcare 
cover to many Americans. 
Notably. SmithKline’s deal 
with United Healthcare - the 
company from which it is buy- 
ing Diversified - will give it 
access to United’s database. 
Pfizer will likewise have access 
to information about Value 
Health’s patients. 

“Disease management” - an 
overall approach to treating ill- 
ness that goes beyond just sell- 
ing drags - has become the 
fashi onable industry jargon for 
this approach. Explaining the 
Value Health deal, Mr Bessey 
at Pfizer says: “We saw the 
capability and the data that 
will allow us to move very 
quickly into disease manage- 
ment - from diagnosis to 
cure." 

U ltimately, that 
approach could help 
the st ro n g e r manufac- 
turers both to take market 
share off weaker rivals, and at 
the same Bmp grow their over- 
all market by giving pharma- 
ceuticals a more significant 
role in overall courses of treat- 
ment than they currently enjoy 
(only 7 per cent of US health- 
care spending is on drugs, for 
instance, compared with more 
than 60 pa 1 cent on hospitals). 

Over the long tom. the drug 
companies hope, this approach 
could sustain the sort of 
growth which has beat lading 
in the industry in recent 
years. 


Parent to boost capital of CS First Boston by $400m 


By Ian Rodger 
bi Zurich 

CS Holding, the Swiss financial 
group, confirmed yesterday its 
plans to provide its US- 
based Investment banking 
subsidiary, CS First Boston, 
with a capital infmntm of about 
3400m. 

The move is being maria in 
an effort to boost CS First 
Boston’s earning power. 


Mr Gerhard Beindorff, a 
spokesman for CS Holding, 
said yesterday that work on an 
equity capital increase for CS 
First Boston of about 3400m 
was at "an advanced stage". 

It will be the second large 
infusion of capital at CS First 
Boston in four years. In 1990, 
its parent provided 3300m in 
equity capital as part of an 
3800m recapitalisation plan 
aimed at restoring c onfidence 


in the bank, which was 
struggling at the time under 
the weight of troubled loans. 

When this latest infusion is 
completed, probably at some 
point in this quarter, CS First 
Boston will have capital of 
$L7bn. This is stfil relatively 

small by the standar ds of its 

biggest Wall Street rivals such 
as Salomon Brothers ($5 Jim in 
capital). Goldman Sachs (S5bn) 
and Morgan Stanley ($4&n). 


Equity capital is crucial for 
Investment banks. The larger 
their capital base, the more 
they can use their own money 
in the finanrial markets for 
proprietary trading and 
underwriting activities, and 
the more likely they are to 
earn a high credit rating which 
allows them to conduct 
derivatives business with 
clients. 

In recsit years, a large share 


of investment banks* profits 
have come from capital- 
intensive businesses such as 
proprietary derivatives 
trading. 

The decision to provide the 
- capital infusi on comes a month 
after CS Holding increased its 
stake in CS First Boston from 
68.5 per cent to 75.7 per 
cent by purchasing the stakes 
of five foreign institutional 
shareholders. 


Air Canada 
chief sees 
break-even 
this year 

By Robert Gfobeos . 

In Montreal 

Air Canada, which yesterday 
placed orders for *5 Airbus 
319 112-seat short-haul 
era, reduced losses is the first 
quarter and is on target to « 
least break even for 1S64, said 
Mr Hollis Harris, etoSnT 

The March quarter, nop. 
mally the slowest, showed a 
loss of CSSXm (US$33.1aO t or 

27 cents a share, against a lost 

of C3 8 93 m , or C3&96, a y^r 
earlier, Including res timrl gr- 
tug charges. The operating 
loss was C$l2m agntesta 
C$M3m loss. . 

Mr Harris said operating 
results had exceeded expecta- 
tion and Air Canada's tar* 
round was continuing with foe 
benefits of cost redaction, ris- 
ing efficiency and steps ' to 
build new North Anmricmi tod 
o v erseas markets. 

Passenger traffic rase a re 
cent, helping to push revranes 
to Ctaazm for Ore quarter,^ 
Its per cent Yield per reve- 
nue passenger mile gained j 
per cent dm to reduced tore 
discounting. 


LOT, American 
Airlines sign 
partnership 

By Paul Berta, 

Aerospace Correspondent 

LOT Polish Airlines yester da y 
signed a comnusdal putw- 
ship agreement with American 
Airthres, the second largest BS 
carrier, to give it greater 
access to the US market The 
deal is expected to lead to a 
long term strategic alliance, 
LOT said. 

The partnership will involve 
ticket code sharing, co-ordina- 
tion of timetables, baggage 
handling co-operation, and the 
nse for LOT of American's air- 
craft purchase and leasing 
opportunities. 

The Polish airline, which 
has been battling with British 
Airways for North Atlantic 
traffic from Poland to the US. 
has been seeking a western 
partner to help U modernise 
and become more competitive. 


S wed bank 

has increased its capital base byoverSEK8 billion. The Savings Bank 
Foundations, the major shareholders, have also sold shares valued at 
SEK1.6 billion: 

Spin tab 

SEK 1$00 billion perpetual debt in August 1993 

Swedbank 

SEK 2,350 billion perpetual debt in October and Nooember 1993 

Robur 

SEK 1,900 billion sale of 90% of Robur in January 1994 

Swedbank 

SEK 2,200 billion share issue in March 199* 

Swedbank 

SEK 1,600 billion sale of shares in March 1994 

JJP. Morgan and Alfred Berg acted as financial advisers and were responsible 
for the new share issue and the sale of Swedbank shares for the 
Savings Bank Foundations. 


JPMorgan & 


SWEDBANK 


OMjO • LPMOC B i ■ Ncwroax 


March 1994 


This announcement appears as a matter of record only- 




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FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Qantas sell-off 
expected in next 
financial year 


By NBdkl Taft fen Sydney 

Qantas, the state-owned 
Australian airline in which 
British Airways holds a 25 per 
cent stake, will be privatised in 

1994-95. 

In its animal budget state- 
ment yesterday, Australia's 
federal government announced 
a number of asset sale propos- 
als which are expected to take 
place in the next financial 
year. The sale of the govern- 
ment's remaining 75 per cent 
interest in Qantas is the big- 
gest single itpro 

The shares are likely to be 
sold through a stock market 
flotation. “Current planning Is 
proceeding on the basis that a 
float will be undertaken within 
199495,’* the budget stated. 

The sale of the government’s 
remaining interest in Qantas 
has already been much-delayed 
- largely because of the inter- 
nal turmoil within Qantas as it 
tries to meld its international 
operations with the business of 
Australian Airlines, the domes- 
tic carrier acquired in 1992. 

Although privatisation had 
been seen as likely in the 
1994-95 financial year, both Mr 
Gary Pemberton, Qantas’ 
chairman, and Sir Colin Mar- 
shall, his counterpart at BA 
have suggested that they 



GCM buys remaining 
Bronzewing interest 


By NRdd Taft 

Great Central Mines, the 
Australian exploration com- 
pany headed by Mr Joseph 
Gutnick, Is to acquire the out- 
standing SO per cent interest in 
the Bronzewing gold prospect 
in Western Australia. 

GCM will also buy the 49 per 
cent interest in the Jundee ten- 
ements, north of Bronzewing. 
In both cases, GCM is raising 
its interest to 100 per cent, and 
buying the stakes from pros- 
pector Mr Mark Creasy. 

The total payment will com- 
prise^ non-reftmdable deposit 
of A$5m (US$3.5m) and lm 
GCM shares. The company will 
then make a final payment of 
A$107m within 120 days, or 
A$117m within 12 months. 


GCM said that it intended to 
raise debt finance to fund the 
final payment. Its shares were 
steady at AS9.50 yesterday. 

GCM sprang into the lime- 
light a year ago, when its 
shares climbed strongly after a 
New York rabbi. Brooklyn- 
based Rebbe Schneerson of the 
ultra-orthodox Lubavicher 
sect, prophesied that it would 
enjoy large finds. 

GCM’s market capitalisation 
soared to more than Aflbn, on 
the back of the discovery of 
"micro diamonds" in the 
Greater Nabberu region of 
Western Australia and talk of 
the rabbi's prophesy. 

The diamond interests have 
yet to prove economic, but 
GCM has discovered a gold 
deposit at Bronzewing. 


Lift-truck producers go global ! 

Takeover of Lancer Boss will not be the last ? writes Andrew Baxter investors .TPtnpiK . porpofatf treasure rs 



Are you dealing in over $ 1 m? 
Fast, Competitive Quotes 24 Hours 
on 071 815 0400 or fax 07 1 -329 39 1 9 


Sir Colin Marshall: BA chief 
would prefer later Qantas sale 

would prefer this to be under- 
taken later, rather than sooner. 

In March, when Qantas 
announced interim figures, Mr 
Pemberton refered to Qantas' 
A$400m-plus (US$288m) profits 
target as “the right return on 
shareholder funds”, although 
he added that this was not 
“quite meant as a precondition 
to privatisation". 

In the first half of 1993-94, 
the airltna marie only A$71.6m, 
and warned that the second 
half could produce "something 
less”. 


L ast week's takeover of 
the UK's Lancer Boss by 
Jungheinrich of Ger- 
many is unlikely to be the last 
such deal in an industry where 
medium and small-sized com- 
panies are becoming increas- 
ingly squeezed as the "big 
boys" pull away from the pack. 

In spite of a series of mergers 
in the 1980s, the industry is 
still plagued by excess manu- 
facturing capacity - especially 
in Europe - and increasing 
price competition exacerbated 
by the strong growth in the 
past decade of Japanese and 
Asian producers. 

Success in traditional but 
mature western markets 
requires financial strength to 
weather the business cycles 
inevitable in industrial equip- 
ment. Meanwhile, the best 
long-term growth prospects are 
elsewhere, notably in Asia. 

To succeed, large producers 
of lift trucks are taking a 
global approach, either 
through acquisition or organic 
growth. 

Medium-sized producers, in 
contrast, are finding they lack 
the volume to generate suffi- 
cient cash flow when markets 
are strong, while small compa- 
nies are left to exploit special- 
ist niches 

Since the 1980s, the industry 
has been reshaped- The big 
acquirers of the past decade 
have been Linde of Germany 
and Nacco of the US. 

T inrip has hpraimp the indus- 
try leader through a string of 
acquisitions in Europe - Fen- 
wick in France, Wagner and 
Still in Germany, and Tji Turing - 
Ragnaii in the UK. 

Nacco (North American Coal 
Corporation Industries) has 
made its purchases in the US. 
It bought Yale in 19% and Hys- 
ter in 1999. 

Speculation of forth a- deals 
continues - Nacco, for exam- 
ple, is said to be keen to buy 
Swedish-owned BT. Nacco sup- 
plies four-wheeled counterbal- 


WORLD TOP TEN LIFT TRUCK PRODUCERS 


Company 


Linda (Germany) 

Jungheinrich (Germany)*’ 

Toyota (Japan) 

NACCO - Hyster/YaleftfS} 

Komatsu (Japan) 

Terex - Clark (US) 

Toyo UinbaAl (Japan) 

MtsubtaN (Japan) 

Crown (US) 

Nonflco - BT (Swden) 

* Lift truck tanow onfcp - ft® form Sgura I 


1992 turnover' 
D-Mark (m) 


Jungheinrich’s profits fall 


Jungheinrich, the Hamburg- 
based lift truck producer, yes- 
terday announced a sharp fall 
in group net profits to DM8. lm 
(85.06m) last year from 
DM54.3m in 1992, writes 
Andrew Baxter. 

The group which also has 
property interests, said it is 
cutting its 1998 dividend per 
ordinary share from DM7 to 
DM3, while the payout on pref- 
erence shares was cut from 
DM8 to DM4. 

The group said the “tough- 
est ever post-war year for west 
European liftrtruck producers" 
had left its mark, but the com- 

anced electric trucks and 
engined trucks to Junghetn- 
rich, which could eventually 
produce these machines 
in-house, following the take- 
over of Lancer Boss and Us 
German unit, steinbock Boss. 

“There are a few smaller 
companies left in Europe, 
which will fall by the way- 
side,” said Mr Bob Bischof, 
chairman of Jungheinrich 
(GB), yesterday. “It will be dif- 
ficult for them to survive.” 

Before its twin receivership 
in the UK «nri Germany, 
Lancer Boss was a classic 
medium-sized company, whose 
global sales peaked at about 


pany had retained its strong 
portion worldwide. Group 
sales fell from DMl.fibn to 
DM1.4bn, and group income 
from ordinary activities fell 
from DM90m to DM34 .5m. 

The company said 1993 dis- 
tributable profit was 
DMIOJim. The 1992 figure was 
not available. 

Jungheinrich, which pro- 
duces mainly at tts large Ham- 
burg plant and also buys in 
lift trucks, said it expected a 
slight Improvement In earn- 
ings this year, with group 
sales recovering to about 
DM1.6bn. 


£200m (2298m). It. too, had 
expanded by acquisition in 
Europe, but wanted to become 
bigger. 

Sir Neville Bowman-Shaw, 
its former chairman, believed 
the company needed sales 
of £500m to secure its global 
position. 

Its problems have given 
Jungheinrich an excellent 
opportunity to bolster its 
global position. In contrast to 
Linde and Nacco, the 
Hamburg-based company has 
until this month followed the 
Japanese-style organic 
approach to growth. Its last 
lift-truck acquisition was a 


small French deal in 1974. but 
by 1991 it had grown quietly to 
third place in the industry 
behind Linde and Toyota. 

Jungheinrich slipped to 
fourth in 1992, the latest year 
for which rankings were avail- 
able, but the takeovers of 
Lancer Boss and Steinbock 
Boss would have put it into 
second place with turnover of 
nearly DMLflbn (SLOSbn) and 
more than 8,000 employees. 

For Jungheinrich, though, 
the rankings are less impor- 
tant than the impact on its 
competitiveness. Overall, says 
Mr Bischof. Jungheinrich has 
both broadened its product 
range and "taken the first step 
to looking outside Europe into 
a global market." 

The acquisition of Steinbock 
significantly strengthens 
Jungheinrich’s position in the 
market for very narrow aisle 
(VNA) trucks used in ware- 
houses. 

By taking over Lancer Boss, 
the Hamburg company says its 
potential to penetrate the 
counterbalanced electric and 
combustion engined market is 
strengthened because of the 
UK company’s "excellent engi- 
neering” in this area. 

The deal takes Jungheinrich 
for the first time into sidellft 
trucks and container handling 
trucks. For all its financial 
problems. Boss was the world 
leader in trucks to handle 
empty shipping containers, 
and has been very successful 
in the booming Asian market , 
that Jungheinrich wants to 
exploit 

Mr Bischof hints that the 
twin acquisitions may not be 
the last made by Jungheinrich, 
and says they mil make a posi- 
tive contribution to Juoghein- 
rich’s profits next year. 

As one observer points out 
there are some “lovely" profit 
margins on big container han- 
dling trucks. And Lancer Boss' 
home market is recovering 
strongly from recession. 


German fashion designer raises dividend 


By Judy Dempsey 
In Berlin 

Jll Sander, one of Germany’s 
le ading fashion designers, will 
increase its aruma! dividend by 
DM350 to DM25 after the com- 
pany announced a 2 per cent 
rise in profits last year. 

In spite of the recession. 


which has particularly affected 
Germany’s textile industry, the 
group's profits rose by 22 per 
cent to 0M9.5m (85.9m) on 
turnover of DM133.3m, a 
decline of 12 per cent on the 
previous year. 

Exports last year accounted 
for 422 per cent of total turn- 
over, and are expected to rise 


above 45 per cent this year, 

• Debis, the services subsid- 
iary of Daimler Benz, yester- 
day announced a 40 per cent 
rise in operating profits for 
1993, with the financial ser- 
vices division heading the 
group’s strong performance. 

Operating profits rose in 1993 
to DM400m from DM3l2m the 


previous year, while total sales 
for the group, which consists 
of 59 companies organised 
under seven divisions 
increased by 20 per cent to 
DMS-Sbn. 

Performance in the the 
financial services division, 
increased by 18 per cent to 
DM6.7bn. 


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Tills announcement appears as a matter of record only. 


May 1994 


■arnni' 


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A Higher Level of Service, A Higher Level of Profi-abilHy 

THROUGH THE PRIVATISATION 
OF SELECTED TURBAN HOTELS 
AND REAL ESTATE • 


ANNOUNCEMENT REPUBLIC OF TURKEY PRIME MINISTRY PUBLIC 
PARTICIPATION ADMINISTRATION 

The Republic of Turkey, Public Participation Administration (PPA) oilers the below fisted facilities 
and lands owned by TURBAN TURlZM A£, as to be privatised separately. 

The faciiy and fend whose names are written below will be privatised according, to the Public 
Participation High Council’s Derision number 93/93, dated 01. IZ 1993 

TURBAN TURtZM A.§. FACILITIES AND LANDS 

No. Name of toe Facfflty AnoiatofBttBondfTL) No. Name of the Lad Area (sq-ia.) Anwunl of Bd Bond (TL) 

I QepaeHt&dsrfAmQES 3 ,000, 000,000.- I Lind of Carina Hotel, bunted 6,07347 4,000,000, 000.- 


feme Hotel lodgings 
Kema Marina Hotel 


iooboopoa- 

3j000.000.000.- 


ktinje Land, kanbol 

KOtflksu Land, Istanbul 


1 ,000.000.000. 
250 l 000 1 00a- 


1. The Infexmitlaa Meaonndim refatrig In eadifadlliy tod land o8oed can be obtained bom PPA tor a be at 500,000.- U per copy. 

2. the prindsaritm ct die above menrionedtadaiks and land: dial be reafaed by accepting bids aodnegpriadng with ihepotenitil 
tereapgtseqnnuty. 

I Tbe btds may be sutaWed fereacri tadST ^ laod sepanidy or for more ton one together. 

4 The OaUBties,ieceMds and tamdcriesofibefacBicstBS oxbe subfoct istteate. 

5l Tbe&effittKaDdhndsoBe^diaUbelnfldef^loibeBUyEBintheialEslrooditkBasorthesalediie. 

& AD ofafipfioos related witti fee rights and receivaUes wWcb abtady derived or mayderiw tom law Nat 475 and ihe ament Lata 
Agreemes on bebtf cf the pecomid at ferae H«d and Annex nhafl be btedaed by die BUYEL The senate pipnenc oi the 

ppwm nri in ihp ng ga ta tfmw 

7. 11^33 Sara ibe lad of tie feme Hotel Lodgings sMfesufiffdio ttrs*. 

8. Only rise btfldtagoC tbe bold w8 be gt|ea to ihe ale In dtepdratbaHonoI toner Marina Hold The General Managmem at 
Nattnat Ptopoty (Mil Embt Gend M&firiOgO] nil proride ibe rigtn ofeasanea of (lie land fori duniiDneldgjejis. 

9. TbebtddmsMsabmnantoevKaUeuQCQoi&kmlWb^ wtdia[D3ttfft^(d6axoriBaQQtzxtiigi}wrtmaconQpoo^ 
aDoml at tbe name d tte Why and bod, In a sealed envelope on which "CONFIDENTIAL' Is wteen, unil the bust date of 
Mny 27, 1 994 and 5fW pjn. to the written betow aifalress. 

10. llieEDlknrtngdoaiiiia3isAdbeaaacliata>tlieaflerlnilieeremthai 

a) it* bidder fc i ral pecno, cenificare of specimen sigaaiure; 

b) riebidcBngSHBde by a pnoy, rite power oCarginwypanicutar^ authorizing tbe piwurator to bid in tbe teodefotTintBAN 
fades and hods on bddf of (he bidder aid the centSase rf spectates agouue a ttomey, 

c) thebldderbaMpecuAaceniBatetfpoTOptovireihHihepmona^oa&elBlIoribelegalpenDnhaKiheuBtsarbyig 
rqreatt ad obUpie the legal peoon icgaher whh specimen spoon: 

11. BHdffi hare two attenuates dpeyineiiip^aiim and piyDeni by ImalmeaB. On (tetnOeo (butte Mb to be paid fay 

ttEtaImedS,lt£25XdU£tMsbsu]dbep^a!oiice23de^aDdt)KbEQXm0periajshoddoii(bel(Higrt'i]un2ye». 

0b the coaffiioR the hid bon tosaBmeattatis, other nsues win be dartfled dtitig tbe negoriulon meetings. 

II Ota sipBraii natters rebttog u> the pdvadBifon al ibe above ailed fxiilte and lands stsfl Ire notified io (he bUdea dirt« the 


11 The PPA fc not srtjea to the Sow Tender Uw tfa 2986 and reserves (he rigus n dtdds wtaber or not to privatise the 
properties and® extend the deaSne or to temtate tbe tender, B deans oeeesjaq, 

14. Tbe sk tS ibe praperBes b teal pasocs and ibe legal enldcs tbnfcaed abmd Is stdsject w rise edstk% law aul regianons ot 
. loreign cental, copies ofwtndi on be obainelEtun the IbdeBeaaataorTiBBuiy and Foreign Trade, Cawal Wrectaaie of 
Rn^lttiesonaiL 


nmui 

r m. 


dO-tiS93®5>5 TT/^\ T 
0896M««0 If S I I 


REPUBLIC Of TIRW-Y PfilME MINI5TW PUBUC PABtiaPAtiON AIMNSTCATKlN 

HOseylnBabndGflirmarSokikNa 2 febyj 06680 ANM8A/TUKET let (90-3121 441 IS 00 Fat (90312) 440 32 71 






22 



FINANCIAL, TIMES WEDNESDAY MAY U 1994 


INTERNATIONAL CAPITAL MARKETS 


Overseas buying helps US Treasuries rebound 


% Patrick Harvorson in 
New York and Sara Webb 
m London 

US Treasury prices yesterday 
rebounded smartly from Mon- 
day’s lows, aided by overseas 
buying and short-covering by 

dealers. 

By midday, the benchmark 
30-year government bond was 
up % at 84 i, yielding 7.561 per 
cent. Prices were also firmer at 
the short end, where the two- 
year note was up % at 983, to 
yield 6.183 per cent 

The bond market got off to a 
positive start thanks to strong 
overnight buying of Treasuries 
by Japanese and Middle East- 
ern investors. That demand 
quickly triggered heavy buying 
in New York, which forced 


many dealers to hurriedly buy 
securities to cover their short 
positions. 

Jh spite of the gains, analysts 
said that the mood of the mar- 
ket remained downbeat in the 
wake of the Federal Reserve's 
decision not to raise Interest 
rates on Monday. Investors and 
traders had been hoping that 
the Fed would tighten mone- 
tary policy to slow the econ- 
omy down and stifle inflation. 

It is now thought likely that 
the Fed win not make a move 
until the May 17 meeting of Us 
policy-making open market 
committee 

■ European government bond 
markets temporarily recovered 
their composure, closing 
higher as the Bundesbank's 


decision to cut its closely- 
watched repo rate yesterday 
raised market hopes of a fur- 
ther cut in the key discount 
rate at today's Bundesbank 
mu nr i i meeting. 

GOVERNMENT 

BONDS 

The securities repurchase, or 
repo, rate fell from 6.41 per 
cent to 535 per cent, with the 
Bundesb ank adding a net 
DMl.lbn in liquidity, and nar- 
rowing the gap between the 
repo and the discount rate, 
which effectively provides the 
floor for money market rates. 

The move, which was within 
the market’s expected range, 
prompted speculation that the 


Lloyds Bank funds C&G bid 
with £400m two-tranche deal 


By Antonia Sharpe 

Lloyds Bank’s £400m 
two-tranche transaction of sub- 
ordinated debt dominated a rel- 
atively busy day in the interna- 
tional bond market yesterday. 

Of the total amount, which 
Lloyds said would satisfy all 
Its loan requirements in rela- 
tion to its proposed takeover of 
Cheltenham & Gloucester 
Building Society, £3 00m was 
raised through an offering of 
five-year floating-rate notes 
(FRNs) exchangeable at the 
bank's option into a further 10- 
year issue. The notes were 
priced to yield 70 basis points 
over three-month Libor. 

The balance was made up of 
an issue of 15-year fixed-rate 
bonds priced to yteld 110 basis 
points over the 9 per cent UK 
government bond due 2008. 

Dealers noted that the 
spread on Lloyds' 10-year sub- 
ordinated bonds launched in 
February stood at 90 basis 
points yesterday, so it was pay- 


ing an extra 20 basis points for 
the additional five years. 

Mr John GiUbe, nhtef man.- 
ager group finance at Lloyds 
Bank, said the structure of the 
deal was designed to keep the 
average cost as low as possible. 
In addition, the call option on 
the FRNs gave the bank flexi- 
bility with its capital require- 
ments. “We may not need the 
capital for that long," he said. 

INTERNATIONAL 

BONDS 

Syndicate managers said the 
greater proportion of FRNs and 
the generous pricing reflected 
Lloyds' desire to overcome dif- 
ficult market conditions and 
ensure a successful transac- 
tion. “It was a greedy trade by 
people who need the money,” 
said one syndicate manager. 

The three joint lead manag- 
ers, Goldman Sachs. Salomon 
Brothers and S. G. Warburg, 
reported that the FRNs sold 


quicker than the fixed-rate 
bonds. 

The perception that the 
FRNs were cheap caused the 
discounted margin on the 
notes to tighten to 62 Vz basis 
points over Libor at one stage. 
However, it settled at 65 basis 
points in late trading. 

By contrast, the fixed-rate 
bonds went almost exclusively 
to UK institutions and the 
spread remained unchanged 
when they were freed to trade. 

“There is not the same depth 
of demand for fixed-rate ster- 
ling bonds as there was three 
months ago," said Salomon. 
However. S. G. Warburg said 
the statement by Lloyds that it 
had no further plans to raise 
loan capital facilitated sales. 

Elsewhere. Unilever, the 
Anglo-Dutch consumer prod- 
ucts group, raised FFrl.Sbn 
through an offering of 10-year 
Eurobonds. 

Joint lead manager SBC said 
Unilever's wide following 
' among institutional and retail 


Bundesbank will cut its dis- 
count rate by 25 bads points 
today from 5.00 per cent to 4.75 
per cent, and that the Bank of 
France will have room to ease 
again, possibly at next Mon- 
day’s repo. 

The European markets have 
been jittery since Friday, when 
the release of the latest US 
payrolj data sparked fears of 
an Imminent rise in short-term 
US interest rates. 

“There is mounting specula- 
tion that we could see the Fed- 
eral Reserve raise rates on 
Wednesday while the Bundes- 
bank could cut rates,” said Mr 
Kit Juckes. economist at 
S. G. Warburg Securities. 

Adding to the optimistic 
mood in the bund market was 
the fact that April inflation 


was revised downwards from 
&2 per cent year-on-year to 3.1 
per cent Meanwhile, news that 
the German March M3 figure 
was revised upwards to 15.4 
per cent, from a preliminary 
figure of 15.2 per cent, was 
largely ignored by the market. 

Dealers commented that 
there was very little cash busi- 
ness, with mast of the activity 
taking place in the futures 
market- The bund futures con- 
tract opened at 94-27 and 
slipped back to a low of 9L25 
soon afterwards, but then 
picked up and recovered to 
reach 95.10 by late afternoon. 

B UK government bonds 
gahwt V* points despite a vol- 
atile session, but the most 
important news came alter the 


gilt market had closed, when 
the Bank of England released 
its quarterly bulletin and infla- 
tion report. 

The Bank revised upwards 
Its inflation forecast lor 1995, 
citing higher monetary growth 
and rising labour market costs. 
However, dealers said the gilt 
futures contract climbed a 
quarter point from 103.15 to 
I03 l 23 in after-hours trading as 
participants chose to focus on 
the relatively favourable 
short-term inflation outlook. 

B Japanese government bond 
prices closed higher, driven up 
by modest domestic buying 
and helped by the Bank of 
Japan’s decision to inject 
liquidity at its money market 
operations. 


Sorrower 
US DOLLARS 

Tokyo Sehntau Cojf* 

D-MARKS 

S-Auat Gav.AiAuttiarity$ 

vS 

HeOer Rnencefc) 

KFW intL Franco 

STERLING 
Lloyd* Banfcfdtt 
Lloyds Barite} 

Patriache Bank Fh-Oiracooffl 

FRENCH FRANCS 
Uritaweffl) 

Cto Bencedns 

CANADIAN DOLLARS 
Banque Nattonate do Pariaft) 

GUILDERS 
ABN Amro 

SWISS FRANCS 
Crodtt Local do Franca 


NEW INTERNATIONAL BOND ISSUES 

Amount Coupon Price Maturity Fern Spread Book runner 

m. % * bP 


50 (a)* 100 May 1998 imdted. 

350 (b) 1QOR Juno 1998 Q.10R 

15bn 3JJ 9O90H Aufl.1997 CL2SR 

lObn SOS# law May 1899 OXSR 


Fuji WL Branco 

SBC (PoulacftaySonwa BK. 

Marti Lynch M. 

Datura Europe/MBaul T*L 


300 (d) 99.89R Juno 2009 CLSSR - Goldman Sacha/Satoroon/SG 

100 9.5 99*44R Juno 2009 QJ55R <-110 (9%-08) Warburg. 

100 7XS untfiscL Poc-199a iwtfacL - Dmmcho Bank 

IJbn 7.125 99.201 R Juno 2004 032SR +20 pJMt -04) BNfVSBS Franco 

Ibn 5. 75 99X4B Dec. 1895 0.15R CCF 

100 8* 99X4R Juno 1997 OXOR +40 (BWM-96) Dajwa Europe 

500 ft. 75 99.1 OR May 2001 O30R +35 ABN Amro 


100 4,76 102.25 June 1999 


Meritil Lynch Cop. MkbL 


Final terms and non-cafiaHe unless stated. Tha yield spread (over relevant government bond) at bunch la suppSed by the load 
manager. *Prfvate pbcmranL SOonvertibte. $Wi(h equity warrants. {Roaring rate note. aSend-onnual coupon. R: toed re-offer price; 
fees ore shown at the re-offer level, a) Coupon pays 8-month Libor + 0X15%. tg Coupon pays 3-month DM LImt flat c) Short flret 
coupon, e) Tranche A of 2400m doaL Long first coupon. Callable on 2.039 at par. Coupon pays 3-momh Libor + 0.62596 than 3-month 
Libor +- 1.00% after 5 years. 4 Tranche B of £400m deal. I) Fungible with ouMantfng £300m deal launched 13.4.83. g) Spread relates 
to CATs, h) Spread relates to Canarian Gw. Bds. 9 Over interpolated yield. 


investors enabled it to achieve 
pricing comparable with 
French public sector debt. 
Eurofima, L'Orgal and Carre- 
four are also thought to be 
looking to raise French francs. 
• Standard & Poor's has 
revised its outlook on the 


Republic of Ireland's long-term 
foreign currency rating of dou- 
ble-A minus to positive from 
stable. The revision reflects the 
government's adherence to 
conservative demand manage- 
ment policies and structural 
reform. 


• IBCA, the rating agency, has 
upgraded Fokus Bank of Nor- 
way to A- from BBB+, writes 
Karen Fossli from Oslo. 

The move follows a strong 
Improvement in the bank’s 
financial position, including a 
return to profit in 1993. 


Austria launches 
road-show to 
promote sell-offs 


By Patrick Blum In Vienna 

Austria is launching on 
international campaign to pro- 
mote forthcoming privatisation 
issues and broaden the appeal 
of the Vienna stock exchange, 

The government hopes to 
raise around S500ra from the 
sale of its 51 per cent stake In 
VA-Tech. the engineering, 
power and construction group, 
shortly. Altogether. 7.65m 
shares are being offered (at an 
indicated price range of SchSZO 
-Sch92Q per share), with 4.59m 
of those available to interna- 
tional Investors. 

The deal is being priced on 
Friday and Mr Viktor KUma. 
minister for the nationalised 
industries and transport, will 
be in L ondon tomorrow to pub- 

INTERNATIONAL 
EQUITY ISSUES 

lidse the event. In all, it is 
hoped privatisation will raise 
around Sch20bn over the next 
18 months. 

Sales will include Sch4bn for 
Boehler-Udderholm, the steel 
maker, and SchlObn for QMV, 
the oil, gas and chemicals 
group. Mr KUma said there had 
been strong interest in 
VA-Tech from international 
institutional investors. 

A private partner for a stake 
of around 20 per cent in OMV - 
28 per cent is already held by 
private shareholders - is 
expected to he chosen within a 
month. A group of investors 
from Abu Dhabi, and sepa- 
rately Bayemwerke of Ger- 
many, have shown interest in 
buying the stake. OMV also 
plans a one-for-eight rights 
issue to raise around Sch3bn, 
at current prices. 

Boehler-Udderholm was 
given a Sch2L5bn capital injec- 


tion this year to prepare for 
privatisation in 1995. 

The government also plans 
to sell part of its holdings fo 
Bank Austria and Creditan- 
stalt the country's two largest 
banks, and at least hair its Ms 
per cent stake In Vienna Inter- 
national Airport It is also 
looking for a strategic partner 
for Austrian Airlines, the state 
carrier. Later, it wants to pit. 
vatise the state railways, and 
the country's post and telecom- 
munications company. 

The privatisation programme 
is the most ambitious yet by 
an Austrian government Mr 
Kiima says it will improve the 
companies’ competitiveness 
and give a boost to the domes- 
tic capital market by attracting 
more foreign investors. ' 

“In the past we fiailed to pro- 
mote the Vienna stock 
exchange to the international 
community,” he said. As a 
result the market remained 
weak, because there are no 
major institutional investors 
such as large pension funds la 
Austria, and individual inves- 
tors prefer to place their 
money into savings accounts. 

Austrians are among the 
world’s leading savers, with 
more than SchKOQObn In vari- 
ous forms of savings: Only 4 
per cent own shares. 

The preference for inrirvidn- 
als to place their money in 
savings books, and fur compa- 
nies to borrow money rather 
than go to the stock exchange, 
has been good for the banks 
but has restricted the growth 
of the local capital market 

The government has 
improved the legal environ- 
ment, abolished Its tax <m 
assets, and reduced taxation to 
make Issuing and baying 
shares more attractive, and 
several private companies are 
planning issues. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rad Da/a 

Coupon Data 


Australia 9.500 06/03 1044200 +1040 

Brirtum 7250 04/04 97-9400 +0X60 

Canada * a 500 06/04 802000 +0200 

Denmark 7.000 12/04 97.0500 +0.800 

Franca BTAN 8.000 06/38 106.0000 +0470 

OAT 5500 04AM 802100 +0840 

Germany a 000 09/03 96.4400 +0890 

ttNy 8200 01/04 96.7100 +0.710 

Japan No 119 4.800 06/89 1008110 +0230 

No 157 4.500 06/03 103.7520 +0.070 

Netherlands a 750 01/04 63.0200 +0860 

Spain 10.500 10/03 1052500 +0.750 

UK Gifts 6.000 08/89 91-31 +0/32 

6.750 1104 89-19 +9/32 

9.000 10AD8 105-15 +13/32 

US Treasury- 5.875 02/04 89-22 +17/32 

6250 03/23 84-24 + IB/32 

ECU (French Govt) 6800 04/04 90.1500 +0.910 

Londoi dodng, T*s» York mu-day 

t Grass pnekalng mHit ukky tax si 128 per cm puyabto by noma 
PrtcsK U£L UK h 32m±n. omen In dsctmai 

US INTEREST RATES 


Week Month 


Price change 

Yield 

ago 

ego 

(UFFE)' Lire 200m lOOhs of 100X 





104*200 +1*40 
97*400 +0X60 
88X000 +0*00 
97.0600 +0800 

071 

7.55 

ass 

740 

075 

7.40 

039 

7.44 

012 

7.13 

007 

083 

Jun 

Sep 

Open 

111.43 

11090 

Sen price 

112*5 

111X6 

Change 

+093 

+OS1 

»S* 

11048 

111X5 

Low 

111d43 

11089 

Est VOl 

50340 

1134 

Open ML 
77457 
2841 


1068000 +0y470 627 622 6.70 

898100 +0840 688 784 621 

96.4400 +0290 0 22 6.49 8.17 

96.7100 +0.710 9.02t M3 074 

1062110 +0230 329 323 321 

103.7520 +0.070 3.94 329 4.12 

93.0200 +0260 6.75 a 80 628 

1052500 +0.750 9.59 920 822 

91-31 +8/32 7.90 723 7.13 

69-19 +9/32 825 820 722 

105-15 +13/32 824 620 7.71 

89-22 +17/32 727 7.10 626 

64-24 +18/32 7.55 728 726 

90.1500 +0.910 7.44 7.49 620 

YWd* Local motet standard, 
cm psyabia by narafctana) 

Sounx MM8 HMm a fiwai 


ITALIAN GOVT- BOND (BTP) FUTURES OPTIONS (UFFQ Ura200m tOOttw of 100% 


Strtk» 

Price 

Jin 

■ CALLS — — — 
Sep 

Jun 

- pure — — 

Sep 

11200 

075 

2.02 

070 

2.77 

11250 

052 

1.79 

0X7 

3*4 

11300 

036 

1*9 

130 

334 


One Modi 

Prtn* ran 61« Two nxwfi 

BrahartaMim 5*a Ttaem*® 

FafiAadi 34, Shoo* 

FtaUInbattafcnrteton- - Onyear 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FHB4CH BONO FUTURES ftiATlF) 


Treasury BHs and Bond Yields 


Eat voL total. Cuts 1810 Putt 1970. Proteus day's apart ire. Crib 78387 ft** 7+705 


Spain 

a NOTIONAL SPANISH BOND FUTURES (MEFF) 
Open Seri price Change High 
Jun 9426 96.02 +0.79 9027 

Sep - 9425 


Est voL Open ire. 
62253 112.109 

230 1238 


4.12 

Two year 

617 

4X3 

Twee ye* 

650 

4X9 

F*» JOT, 

698 

4X7 

linear 

738 

8*7 

30-jm 

7X1 


■ NOTIONAL UK OILT HJTURES (LlFFg* C50800 32nda Of 100% 

Open Sett price Change Kgh Low Ere voi Open ire. 
Jwi 103-14 103-16 +0-13 10321 102-30 67832 123399 

Sep - 102-12 +0-06 0 398 

a UN O <MLT HTTUHfS OPTIONS (UFFE) E60.000 64tha of 100% 


Open 

Sett price 

Change 

High 

Law 

Eat voL 

Open inL 

Straw 

F’rtee 


■ CALLS 


■ PUTS 

Jun 119.10 

119.70 

+088 

12000 

119*8 

211,393 

120419 

Jun 

Sep 

Jun 

Sep 

Sep 11008 

118.74 

+088 

118.90 

118*8 

1381 

18,643 

103 

1-16 

2-27 

0-50 

3*3 

Dec 117.18 

11732 

+084 

117.94 

117.18 

1.128 

3X73 

104 

0-48 

2-00 

1-18 

3-40 

■ LONGTERM FRE 

NCHBOfO 

OPTIONS 

(MAT1F1 




100 

0-28 

1-40 

1-60 

4-18 


Strike 

Price 

Jun 

— CALLS — 
Sep 

Dec 

Jun 

~ PUIS 
Sep 

119 

1.17 

1*0 

_ 

0.47 

2*1 

120 

0*2 

1*8 

1.40 

0.88 

. 

121 

0X2 

0*1 

. 

1 -49 

- 

122 

0.07 

0*2 

- 

2.34 

- 

123 

003 

0*5 

- 

• 

- 


Eat *d. MO, Cato 31288 Pita 38227 . Protteui day's open mu 0*t 400.185 Puts 395.778. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFE)" DM 250.000 IQOttra of 100% 

Open Soa price Change Wflti Low Eat vol Open hit 
Jji 9427 95.06 +082 9525 9*25 195769 186323 

Sep 93.B3 9424 +021 9480 9323 5533 16952 

B BUNO FUTURES OFTlOfiS (UFFE) DM2SO.QOQ poms Ctf 1 0016 


Strike 

Price 

Jun 

M 

CALLS — 
Aug 

Sep 

Jui 

Jd 

PUTS — 
Aug 

0500 

0.58 

0.08 

1.10 

134 

O.S2 

1*4 

1*2 

9550 

038 

0.07 

095 

1.11 

080 

1.63 

1.01 

9600 

019 

050 

078 

090 

1.13 

1*6 

9-99 


Ed. ML toed Cals 10981 Puts 18401. Prevtaia day's open Ire, Cola 318247 Puts 294374 

■ NOTIONAL MEDIUM TERM GERMAN OOVT. BOND 

(BOBUflJFFg- DM2S0800 1001113 of IQOSfi 

Open Sett price Change Mgfi Low Est vo) Open An 
Jun 10020 10023 +0.30 10020 10020 8 1761 


Ecu 

a BCU BOND FUTURES {MATT) 

Open Sett price Change Ugh Low Ere wot Open bit 

Jun 8880 86.62 +020 8623 88.00 3.619 8280 


a US TREASURY BOND HJTWE8 (CffT) 9100800 32rsfa of 10096 

Open Latoet Change hSgfi Low Eel voL Open hit 
Jun 101-14 102-11 +0-24 102-20 101-14 444232 421,114 

Sep 100-10 101-13 +0-24 101-21 100-18 10.073 65,120 

Dec 99-29 100-28 +0-28 101-03 99-29 546 33240 


Japan 

B NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 

qJFFq VTOOm IQOtfa of 10016 

Open Close Change High Low Est voi Open ire. 
Jun 11280 - - 11281 112.66 2139 0 

Sop 11123 - - 111.85 111.70 342 0 

■ UFFE ramcn ndtd on AFT, M Open Harm Igs. are tor prevtaus <tty. 


64— _ 1994 

Bed Mcat+ar- Loti 


VWU —IBM — 

h Red Price e» a- Lew 


Id— -1894- 

PJ PricoE *or- 


aorta" (Urea « la Ms Vsart) 

Traas. lOpcLn. 1994LL- 09S 

Etth 12l^pe1Q94 1U4 

TireaSpe 8*3 

tapciSSS «.*7 

Ena 3K Gas 90-95 — — 3.06 

lOVpc 1995 STB 

TnsalSLK'*Stt — 1185 

1 +pc 1096 1150 

IS'+pc 1896f+ 13-19 

Ena i3««pe ims** — ii82 
Coanran tone 1006 — 9.40 

Trim 131+pc 1B97# 1180 

EnAia>aiiei997 9-7+ 

TrasIkK lWTJt B.47 

Bch 15pe 1W7 1132 

BfepG199B 820 

Tm 74*1* 7J8 

TianfiL8e1W&-«m- 636 

HOC 116-1 1128 

flea 15*21* ■«« 12-17 

Enn izpc l4M 1048 

1taai9ltfc1W9tt— 980 


FhakNOahre 

Enk 13^1999 

Irina lOijri* 1988 

Frea*6BClS»tt~ 
Cling lire lOW: 1999. 
Irtas RB RjN W — — 

speam ott - 

Tteas I3pt BBO 

fOps 2001 

7pc'0l 

7pc *01 A 

9kpc2002 

8*3003# 

10*200 — - — ... 


481100UN 
58? (03% 
5.18101 Hal 
589 1041a 
483 90 

583 105 

820109AN 
041 112 

089 1159a 
071 I12&N 
7.16106%* 

781 114% 

738 107% 
738 103.V 
7.71 I21H 
785 10SH 
7.7B 98A 

782 97 
8.Q6120jW 
?M 12713 
089 1 14 W 
004 lOSA 


8.10 IlSJi 
O18108UN 
7 SO 91)1 
025 10B 5 ** 

- MB* 
8.10 10U 

047 121U 
041 10711 
023 93i 
025 m 
047 1077. 
835 WAN 
047 10B% 


— IQZA 
IWB 

— inn 
-A 107* 

9B 

1D7fl 

113% 

117A 
+i* I21U 
+/. 11713 
+2. iia/. 
+A 1S1H 
+A TI4£ 
+% 110,'. 
+A 131U 
+A 114J1 
+A lOW 
102 
+* 131/a 
+& 140.1 
+A 12R1 
♦% 1184 


+4 1284 
+14 131,1 

*a ioin 

+4 i2t B 

920 

+A I18A 
-U 138fl 
+4 I»A 
+4 1064 
+4 I01& 
+A 1234 
+% 1I3« 
+4 127 A 


Trass r i >]* am -4 

10013 F*K«nH3%«m-4__ 
in% CttNBn*Mi9%pc3nH_ 

2ft core a ^ *2005 

Traas )2%DC 2003-5 

ia £ 7i*a mi 

7^ 

II Bi Traas 1 1 Hre 2003-7 — 
1124 Traas a>2pc sow # — 

km* i3%* w-a 

I14A TMs9ec20«l± 

107ft 
103ft 
121 H 

1050 

M OvwROMaaTSwi 

118% nw6pe20(B 

1274 Traas 6 1/4* Ml 0 

1144 Con* 9* In 201 1 tt — 

1054 nsM«Kmi£tt 

Tie»5 l a*3a»-I2tt- 

TlWSB*20I3tt 

7%*2012-1Ett 

Trass 8%* 201 7tt 

ins ebii i2* i3-T7 

108% 

91ft 

108ft 

1 

!2?u oofttd 

12111 fl.JlAilMI 

107« 

Sjt telansiiKH 

gw COn»3'a*'OT/UL 

107% TiWSacWNL--— . 

874 C0Mris2i«e 

109ft Trm.2%* 


684 11441 
7J8 72& 

889 107% 
034 89ftd 
039 107JJ 
07712313a) 
031 OSft 
038 97% 

077 117% 
033 10IU 
077 130ft 
033 1054 


625 

834 

*7 

7*0 

831 82 Ad 

649 

631 

10SJJ 

era 

631 

k£A 

733 

80S 

7BA 

&M 

sxa 


8*9 

637 


B3S 

833 

104% 

9X0 

I48133£d 


+4 I29ft 
-4 86& 
+4 125ft 
+% 105% 
+4 125% 
+% 143ft 
+ft 112ft 
ttt 111% 
+ft 1384 
+ft 1194 
+% 131ft 

♦4 1«ll 


+% 1ISA 
+% 884 
+4 12BH 

♦A 127% 

+% 93% 
+4 11733 

+1% 114% 

-a i28% 

+A 159% 


+% 59% 

+% 54ft 

71 

+% 44% 

38% 

+% 37% 


Traas fee -94 {tffius 


20C-9E -mra 285 381 18 

4 %* van — (issa 2.82 152 id 


- 138% +% I3B% 13 


Otfi 3AB183%Hl +4 IT 
3.19 3.48 11 Oft +ft 11 


4%pClMtt (136-6) 3.19 3.48 110ft +ft 118% 110% 

2*1)8 . <89 a 3^2 145 171ft +A 104ft 170% 

2%*™ - — p a«t 3JQ 155 15451, ^ +% iMli 134|< 

2%*U J74* 038 387 1B0A +% 175% IfiOft 

2%*'13 m>2i 0+3 389 13E% +% 146% I3T% 

2%DC’1B (81. B) 047 383 148% +% 157ft 140% 

2%pC3) JB3M 18* 165 136ft +ft It2fl 134% 

2%K'34ft (97 J) 382 38S 112ft +-% 129ft 112ft 

4%* - SSiJ — (135.1) 154 367 112ft +% 1»li. 11H1 
Prospeefas real rerisripOeri rata on prajactsd Metkn of (1) ION 
and (2) b%, (b) Hams hi p ar anltiee es show RPI (Mas tor 
Indadng fie 8 months prior to l+iue) and ham bean abutted la 
refect rebesbig or RPI re 100 h Janueiy 1987. Cremrarion (soar 
3S45 l RPI tor AugiBnega MIX and ftrll«h 1964: 1415. 


2%*'20 (83JB 


2 

+% 146% I3T% 
+% 167ft 140% 
+,i l62fl 134% 
+% 129ft 112ft 
+% 12011 lllli 


FT-ACTU ARIES FIXED INTEREST DIDICES 

Price Imfices Tub • Day's Mon Accrued xd ad). 

10 change 96 May 9 mterost ytd 


1 Up to 5 years (22) 122.16 +6.16 121.97 


2 5-15 yeare (23) 

3 Over 15 yean (9) 

4 Inad a e ina fatea 

5 Al stocks {60) 


6 Up to 6 yeare (2) 

7 Over 5 years (11) 

8 AB stocks (19 

Debe n tur— end Loans 

9 Dete SLoans (76) 


141.74 +023 141.41 

15926 +027 158.79 

17927 +023 178.43 

13829 +024 13827 


184.65 +0.08 184.49 

17829 +02S 17525 

17627 +024 17525 


424 5 yre 
522 Ifiyre 
4.06 20 yre 

6.12 bred.t 

422 


2.53 Up to 6 yrs 
1.69 Oyer 5 yrs 
1.77 


May 10 

May 9 

era 

May 10 

May 8 

Yr. ago May 10 

Mays 

Yr. ago 

7.96 

8*0 

7.10 

8.17 

8X3 

7*9 

8X7 

8*1 

7*3 

8X8 

8.32 

&08 

8*8 

8.41 

8X9 

069 

072 

6.74 

8X8 

8*5 

8*2 

8*9 

8X8 

8*3 

8*8 

8A1 

8*8 

8*3 

8*8 

078 

— 

- Inflation 5%-— 

- . 

— 

- MBetton W* — 

- 



323 326 2.77 
360 322 321 


2.61 2.83 127 
3.42 344 343 


-15 year yield- 
10 May 9 Yt. 


♦020 129.19 


5 year yield — - 15 year yield 25 year yield 

May 10 May 9 Vr. ego May 10 May 9 Yr. ago May 10 May 9 Yr. ago 

349 920 9.00 945 9.49 925 341 343 929 


Anaea grass redarapfen ytekfa are shown above. Capon Banda; Low. 0W-7WN; Madkim 8«rtON«; Mflh 11N and Over, f Rat yWd. yW Year to data. 


FT FIXED INTEREST INDICES GILT EDGED ACTIVITY INDICES 

May 10 May 9 May 6 Mays May 4 Vr ago Ugh* Leer May 9 May 6 May 5 May 4 May 3 

Govt Secs. (UK) 9345 9320 9369 9427 9428 9424 10724 9320 flit Edged bargafes 734 104,6 1033 95.1 902- 

Hrod Interest 11032 112.15 11221 11228 11357 11122 13387 11022 »day araraga 922 95.4 97.4 1001 1022 

* tor 1984 G o ver n mus Sacutbes high sum rnmp i ata n; 127AO (9/1/39. tow 49.18 0/1/760 Rwd Haw «gH ilnea conpa a ia n. 13387 (Zi/i/BG , tow 5053 (3/1/739 • Basto 100; O ovamnwre Ssorftos 18/16/ 
88 and Foote inmost T82& 8£ acMy hdtoas mbaaed 1974 


FT/iSMA INTERNATIONAL BOND SERVICE 


Llaled ere Ow tatoat Matfand bonds hr «ddch dim ta an adequata woonday mokat Lata* otosa at 7)00 pm on May TO 
Issued BU Oder Cfag. VWd bawd BM Ofer Chj 


250 107% 1UB% -% 788 HaWHW%97e 500 W% IOOj .tX 

iso 101% tta% -% aafl swsa franc straights HSBCHrtqsiiaazc isa 112% 112% A a* 

500 10% 10% 864 AdanOw Bank BID 100 103% 104% +% 564 triy 10% 14 £ 400 109% 110 »% Ml 

— -* ■“ uL «- ■“ «■— 4*."" ,1000 89% 90% « — ”, — 


-250 107% 108% -4 738 

-150 101% 102% -% 898 SVRSa FRANC STRAfCK 

. 1500 10% 10% 864 Man Day Bank 8 10 

. 1000 W4 104% -% 854 Auaata4%00 

-500 80% 90% 848 Quid Btepe 4% 88 _ 

. 1000 84% 85% 304 □nnafc4%B9 

- 100 102% 103% -% SJ3 SB 6% 04 

- 800 107% 108 -% 753 Hue da Franca 7% 06 

.moo 98% 98% 094 FHaid7%99 

-188 KB 103% +% 800 Hymdal Motor Fki 8% 97 . 

-100 U£% TC3% 873 lodand7%OD 

-250 100 «»% -% 071 Kobe 6% 01 

.1000 108 10ft -% 723 Onatoft 03 

-200 105% Wfl -% 733 Qudxc Hyde 5 08 

_ ioo 104% 104% -% aea sncf7 04 


. 500 100% 101% 


766 VfcMBrtSOa 


_ 1® 107% 107% -% 7.40 Watt Ba* 7 01 _ 

- 200 102% HB% +% 8l07 

-200 103% 104% -% 048 YS( STRAIGHTS 

.1500 98% 96% -% 7J57 BrigUn5 99 

-300 104% W5% -% 677 QBB%00 


.200 100% WS% 


728 FMandftSB 


200 102% 102% +% 724 Inter Arner Dev 7% 00 


_ 200 101% KE% 
.3500 82% 82% 


■ to toaue) and have bean adjusted to DEUTSCHE I 
00 In Janueiy 1987. Comraton tactor AataftSd 
r 1413 and 6r Mach 1994: 1433 Ora*ftnds 


US. DCHLM1 STRAIGHTS UritedKngdam7%87- 

Abbey Nad Tmawyftai 1000 90% Oft -% 829 IWwmpn M Rn 7 00 , 

Abatefturtaca 9% 95 COO 104 194% 637 WWdBa*01fi 

AuaUa8% 00 400 104% 104% -% 724 Wold 00*6% 03 

Bared Tokyo ft 96 100 Iffi 10ft +% 662 WoMBariftOO 

Berlin 3% 90 250 W7% 10ft -% 738 

BFCE7% 97 150 101% 102% -% 838 SWB8 FRANC SnWKf 

&aHiGas021 1500 10% 1ft 864 Aden Dw Bank 8 10 _ 

Canada 9 56 MOO 104. 104% -% 854 Auaata4%00 

CheugKmgRnftSB 500 89% 9ft 848 CDWd Btepe 4% 88 _ 

O*aft04 1000 84% 85% 904 Dmnsfc4%» 

CaundBmpe8 98 100 102% 103% -% 873 SB 6% 04 

Credt Fcndnrft 99 300 KJ7% 108 -% 753 Sac da fiance 7% 08 _ 

Danmark 5% 93 MOO 08% 95% 694 FHmd7%99 — 

ECSC8%96 183 W3 103% ♦% 820 Hyundai Motor Fki 8% 97 

SC 8% 98 100 102% W3% 873 MandftOD 

SB 7% 98 250 IDS f®?% -% 671 KobaftOI 

B8 9%97 - 1000 108 10ft -% 723 Or*artoO% 03 

Sac da Fiance 9 98 200 105% Wfl -% 733 Quab* Hyde 5 03 

Brataaftsfl . 100 104% 104% -% 6ffi SNCF7 04 

&4n Baft Japan 8 02 500 100% 101% 725 Watt Bn* 5 03 

Expat Dev cup 9% 98 ISO 107% 107% -% 7.40 Watt Ba* 7 01 

Frtsnd 7% 97 200 102% W2% ♦% 827 

FMdi Span 0% 95 200 103% 104% -% 048 YW STRAIGHTS 

Fort Motor CMC ft 96 1500 98% 9ft -% 7J57 BrigUn5 96 

GeiSacCarerift 96 300 104% 105% -% 677 QBB%00 

GUACftflfl 200 103% Wft 728 Rrttedftflfl 

hd 6k Japan Rn 7% 97 200 102% 102% +% 724 Inter Arner Dau 7% 00 _ 

Mr Ana Dev 7% 96 200 101% BE% STB My3%01 

Rdy6% 23 3B00 82% 82% 673 J*sr Dsv 8X 5 90 

Jgpan Dw 6k ft 01 800 103% 103% -% 7.75 Japan Dev Bk 8% 01 

Xante Bee Par 10 98 350 105% 10ft -% ft57 Nfpon T<* Tri 5% 98 __ 

Korea BW Pom 6% 03 1380 85% 85% -% 828 NoreayftCT 

LTC8FWI8 97 200 102% 103% 4% 6S2 SNCF0%OD 

MBSUrta B« 7% 02 1000 95% Oft -% 610 Span ft CP 

NtpoiQte Bk10% 95 150 W3% 104% -% 675 Swaden4%9B 

Noway 7% 97 ; 1000 10ft 101% -% 490 Matt Bank ft 02 

Ontario 7% 03 3000 95% 9ft -% 622 

aorta**®* 8% 01 200 103% 104% -% 7J8 OTHER, SHWCHIS 

Mre^aada7% 98 200 «0% 101% -% 677 Abed7%96U+ 

PDAgd5%03 MOO 85% 85% 813 Go*nan» Uk 9% 99 LFr 

Quebec Hydra 9% 88 150 107% 107% -% 7.75 Watt B3* 8 98 Ur 

Queb«Pl»B98 200 105% 105% +% 740 Bar* Itoor Ned Gm 7% 0 

SaMtuyft98 150 M4% 104% -% 7.18 EnatfeBekerft 96 H . 

SAS1099 200 108% 107 ft 638 AtooftAmfexra 1ft 98 Q 

88489% 95 800 103% 104 (US 8d Cowtt 1ft 98 CS _ 

6NCF8% 98 150 107% 107% -% 704 BHNh COkltttalO 98 CS 

Spteft®-- 1500 95% 95% 751 BS 10% BSCS 

saea few 8% ® an 102% «n% -% 699 BacfeFmcaftMCS 

9M3den5%95 2000 n 8B% -% 618 Gan Bee CadU 10 96 CS 

Swxtoh Export ft,® 700 10% 103% -% 657 NW M Rn 10 01 C* 

Tokyo Sue ftwyr ft 96 an 103% 104% -% a® N^pan Td Tri 1ft 99 CS 

Totora MOopato ft 98 200 103 10ft -% 687 Omfci 6 03 CS 

i S i 0«atoHlA*OlO%»«' 

L* 08 *2 98% -% 7.79 Osa Kontdbare 1ft 99 

,SD0 ,lWt U ? 742 Oueboc Par 70% 98 CS . 

Watt Ba* 8% 97 — . 1500 105 10ft -% &S7 Belgkin ft 96 Ecu 

naismu.syM.^unr CaLnelB«pa801 Ecu . 

DBRSOg MAW ffmwGHTS Q«fl lyorxab 0 96 Ecu . 

fl*atas%24.^ sooo aft ae% +% qbtoweoi 

OwStFmder7% 03 — — 2000 101% 102% +% 695 Fmhwmsmi inL use— 


lawad BM Ofler Chg. Yield taeued BU Otter Chg. Wf 


— 5600 108% 104 ♦% 584 Abbey Nal Dvaauy S 03 E 1000 93% 93% 908 

-. 1000 98 99% 7.15 Afenoa Ldn11%97C WO 108% 109% «T 

-2000 24% S 670 EHHi Land 8% 23 E 150 88% 89 +% W08 

-3000 93% 93% 4% 678 BBM97E 637 105% 105% +% 70S 

- 1260 lift 112% +% ftM H)*ax 1ft 07 C WO 108% 108% Til 

Hansen Hft 97 e 500 105% 10ft .838 


480 Jfean Ctor Bk 7 U £ 


_250 10ft 101 ♦% 460 Land Saca 9% 07 C 

. 1000 98% 9ft -lj 457 (Malta 11% 01 E 

- 390 108 108% 670 Rrangenft03E 

- 100 lift 111% f% 5 l 94 Severn Dentil % 98 E _ 

-300 109% 110 -% 518 Tckyo Bee Ponrer 1 1 01 ? 

-WO 107% 108% 544 Watt 8tec 11% 00 £ 

-100 lift 111% 562 Abbey Netaial 098 NZS- 

- 240 106% 107 4% 586 TOK Rn ft 02 NZS 


.400 103% 104% 

. 100 95% 96 

. 450 110% 111% 

. 150 98% 99 

. 000 110 lift 


589 CEFVE 109S FFr 

+% 550 Bsc da Fence ft 22 FFr . 

560 SNCF9% 97 FFr 

521 

522 FLOATMQ RATE MOTB3 


-200 83% 93% MB 

-300 89% 100% +% as 

-100 10ft 110% 808 

-250 98% 98% ft 1M 

-150 nft in ft a* 

- ifio 110% lift aw 

- too 10ft 105% ft ai4 

- 100 82% 83% -% 821 

- 73 104 MS -1% 854 

. 2000 104% 101% 5JI 

.3000 Wft W9% N MB 

. 4000 107% 107% MB 

leaned BU Obr CUpfl 


B7B MyftOI 

873 fepan Do/ & 890. 


-«» 103% 103% -% 7.75 Japan De» 0k 8% 01 

-350 105% 10ft -% 657 Mppan Tri Tri ft 96 

. 1360 85% 85% -% 888 ferny 5% 97 

-200 102% 103% +% 652 SNCF6%00 

. 1000 Oft 06% -% 610 Span ft 02 

-150 Wft 104% ft 675 Sweden 4% 98 

. 1000 10ft 101% ft 690 Watt Bankft 02 

.3000 95% 96% ft 622 

-200 103% 104% ft 7J8 OTHER, StMGHIS 

-200 Wft 101% ft 677 Azbad 7% 96 L/+ 

. 1000 69% 85% 813 GottnanM Uri 9% 99 LF/ 

-ISO 107% M7% ft 7.7S Wbdd Bank 8 98 Ur 


- 75000 105% 105% +% 196 

. 100000 112% 113% AW 

- 50000 MS% 107 ft 233 

- 30000 116% lift 4J6 

.300000 B5% 9ft 435 

. 100000 105% Wft +% 350 

. 120000 114% 114% 422 


AUrayfWTremry ft 99 WOO 8619 9923 3J» 


4W fierne 0 99 , 

J, sum Britan A 87 EM 
4xn BFCE-a0298 _ 
4JS DtarntaaW9SE 

+% 380 — 

A'yt CCCEO 06 Ecu — 


I4WN B lfe-1 I — ; 

.30000 100% Wft ft 204 Cwttly qwfaAOO 

150000 106% 10S% +% 321 Mnmartft98 


- 30000 113% 113% 

.125000 108% 108% 


. 150000 103% 103% ft 3S7 finknd037 

.280000 107% 107% ft 420 ^‘2*J B8i,aSE 
WandOSB .... 


- 600 100 ioi 

. 1000 108 109 

.1000 101% W2% 


«u h«-i -f r.ra iron B4 »owut 1000 101% W2% 7.14 BED 9881 100.14 a** 

200 105% 10ft ft 7 j 40 Brt Vo* Ned Gam 7% 02 R _ iQQD 103% 103% ft 7.10 ^ Za * nd ® WOO 917* 8579 

^ 10 ^» -j 1 7.16 Eno^a Briiear 6% 98 FI 500 111% m% agg Ontano098.. 3000 8934 98A4 

S“ ^ 52 AberttRwttcra M% 93 CS 500 103% 104% ft 620 8937 8957 -5S* 

800 103% 104 S2G Bel Cowb W% 98 CS 19) uKfc irsa j! a* Sadaie Generate 0 86 300 90*7 9983 -*188 


200 9974 9983 3BJ8B 

500 10007 10618 8»» 

380 99.78 9900 4*™ 

! ISO 9904 10004 MW 

2000 99/40 0949 *305 

200 9802 9907 8 Z» 

00 300 9659 9325 *fl» 

WOO 9648 9860 

nee i 88 DM 1000 9858 W005 W» 

aW97 430 10613 tOO08 40® 6 

WOO 9809 9898 

350 9957 10006 6*» 

300 9BJB0 98» 

2000 10035 10042 . 

RnftBfl — 1000 9950 9050 ***- 

saw 800 82*7 8437 4.W 

660 90*1 100.14 W® 


-200 106% W7 ft 638 /toatoRwtece W% 98 CS 500 103% 104% +% ftjm Rb*098 

-600 103% W 6*5 M Grata W%9BCS ISO 1«% S ft S S^Q^rattOOS 

- WO 107% 107% ft 734 BrSah Cofarctfe 10 98 CS 500 103 «n% «34 S’ 33 **"* BaSn 4L05 

- 1SOO 95% 8ft 7-5) aaini»BB« ingL j. ajft 8bto Bk Vlctorta 005 E 

■’mo XIX m ft S S m '? £ S3 

^ JSi s ssMi’srirs is; a * s 

“ann 10 uw j! Mppon Td Tri 10% 99 CS 200 105% 10ft ft a« C«"HmBLE BOND 

-200 103 W3% ft 687 On«ata603CS ism 93% 93% ft om 

* S i J-2 s» W Si ft m - 

- 3000 96j VSh -4 7.79 OSff KafidM lO 1 * 99 CS 150 10BU 1054 JL. am ^ _ 

.JSDO 104% 105 742 Quebec ftw W*j 98 CS » ffi ffi ft S 

. 1500 WS W5% ft OB7 ^”3 3 “S * & SZ£Ei&m 

Caund&npaSOI Eou 1100 109% 108% ft 7.49 

.2000 88% «% ft 746 mwWtef 8 ” 68 * ,S Jfi ft ,tn8Qn3, * WC 

. 2000 101% 102% +% 695 Fan ad Su 1 « S "2 5 ? “ HareayPWOOZ 


-ISO 107% 107% ft 734 BMall COklttfa 10 98 CS . 

■ WOO 95% 8ft 7S0 BS 10% BSCS 

-3M 102% KH% ft 699 Bec.de Fima 9% 99 CS _ 

.2000 99 99% ft 6W Gan Bee CadU 10 98 CS . 

- 700 «S% 103% ft 657 WWW Ftt 10 01(3 

-300 103% 104% ft 6*8 Wppon Tri Tri 10% 99 CS . 

-200 103 103% ft 6*7 Ottata 6 03 CS 


Other Fixed Interest 


brook 6% 98, 


88 900 9937 9937 

Generate 096 300 9047 9083 

I* Bain -00596 DM -6000 0608. 10002 

i Vkfttta 60S B9 125 99*8 BO02 

1600 mn mto. 

OngdamftSS 4000 B9J9 89*8 


„YhW_ — 1994 _ 

W Red Wree+ra- HgA Lon 


AfctanOeeimana 
A*te«0B¥.1l»%-*“ 


922 
9*5 

8Hnii%9e20i3 0*2 

kriaea Cfe B%* 10 8,40 

9*Cao 1990 891 

l3W9r-2 11*2 

HpfeQeeb* 15*3011- W3S 
— 1038 




LCCfeC-aDM 809 

MercbeOer 114*2007. 1009 

MetWr.fecV 444 

(MdsAn^aftpcasi. 

4%*L20Z4 

matters*! nfc* 2008 11.72 


8*8 iaffl 
8*4 113% 
620 119% 
- 101 % 
- 101 

- lift 
0*9 144% 

- 130 

- arh 

33 

658 114% 
8*6 67% 
431 136 

438 129% 

- 140% 


+% 142A 120U 
+B 138% 112E 

— 142 ill? 

+% 116% 101 
+% tB8% 100% 
ft 115% Wft 
ft mi 144% 

— 149% 130 

— 44% 33% 

— 78 67% 

— 156% 135 

— 145% 129% 

— 159% 140% 


BCSC8%98 

Ep-ft ” ' luo ? 1UU, 4 ft 638 BP Amora 12% 98 AS 1IM 107% ’ 7Z w+ w> t Z30 438 Wft WV 

* 1500 ®% 09% 638 CaimBKAuftNai3%«AS nw ini «r2 t I™ OQ^siAE 85 30077 87% 98% 

ESS® *“ A S Si^*T S "m Tsrn IS SSS4 

10 ^* *** aiB ^a»Cw3al5B/inri2 wS 5% S am Sum romo B ank3% 04 „300 3608* 58% 89% 

SSM “HE * “1 NSW Traasuy Zera 0 20 AS iqqq ft 2 25 155 “ 

-»9n 04 0ft ft 7.12 R & I Bank 7% 03 AS 125 aft m TewCsiWMIOfiE — 20D Ml lift 117 

!£1^ ^ ™ Sdi Aial flwt Ri fl 02 AS in 07% Jf til *“ 103% W*% 

a * d “ 887 2600 ^ fit i?ft 3 S . 

terant rifedre pto. ri aferiktt *«. « ^ 

ttTfe^Ttote l *Li904 F ^ h n M .crttcteteteyamm P m^ 


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FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 

GA tops £60m 
but balance 
sheet suffers 


COMPANY NEWS: UK 


By Richard Lapper 

A sharp decline in the value of 
its investments in equities and 
gilts has dented the balance 
sheet of General Accident, one 
of the largest UK composite 
insurers. 

The Perth-based company 
yesterday disclosed the extent 
of the damage when reporting 
a rise in its pretax profits to 
£60.4m (£4 l.3zn) for the first 
three months of 1994. 

GA's solvency margin - the 
yardstick which compares 
shareholders’ funds as a per- 
centage of non-life premium 
income - had fallen to 55.4 per 
cent by May 6, compared with 
65.5 per cent at the end of last 
year. Net asset value per ordi- 
nary share fell from 545p to 
455p over the same period. 

However, Mr Nelson Robert- 
son, group chief executive, 
described the operating result 
as the best “ever achieved in 
an opening quarter". 

The impact of severe winter 
weather in the US and Canada, 
which added an extra £2 7m in 
losses compared with last year, 
was offset by continued 
improvement in UK underwrit- 
ing results, with a profit of 
£30 (£4.1m deficit) for the 
three months. 

"The control of costs, more 
selective underwriting proce- 
dures and an increased empha- 
sis on customer service,” were 
singled out as factors behind 
the improvement by Mr 
Robertson. Each of GA's UK 




Nelson Robertson: increased 
emphasis on customer service 

underwriting lines was in sur- 
plus. with the exception of lia- 
bility business. 

Underwriting losses in the 
US amounted to $57.8m 
(£39-5m) against $60.1m, while 
losses in Canada increased to 
C$63. lm (£31zn) compared with 
C$2?..4m. Parts of nswafla have 
experienced one of the coldest 
winters in living memory. 

Overall general premium 
income increased to £LQ7bn 
(£L01bn). life premiums rose 
to £21&6m (£207m). Investment 
income rose to £118.8m 
(£U7.3m). 

Estate agency losses were 
marginally hi gher at £3 8m 
(£3. 7m). Underwriting losses 
were £63.3m (£77.1m deficit). 
Life profits were £l2.1m 
(£10 -5m). Interest on loans 
amounted to £3.4m (£5.7m). 


Ashanti on course to 
hit lm ounces a year 


By Kenneth Goocfing, 

Mining Correspondent 

Ashanti Goldfields of Ghana, 
which was floated on the Lon- 
don Stock Exchange last 
month, is still on course to 
become one of the world’s few 
lm ounces a year gold produc- 
ers in 1996. 

This was revealed yesterday 
by Mr Sam Jonah, managing 
director, who also reported a 
marginal Increase in pre-tax 
profits for the six months to 
end-March. 

The profits figure of $42. 6m 
(£29m) was in line with most 
expectations and compared 
with $4 1.5m. Turnover 
increased from $l27-3m to 
$1428m and earning s per share 
emerged at 58 cents (52 cents). 

Mr Jonah said gold produc- 
tion in the half-year was below 
the budgeted 395,268 ounces at 
380.581 ounces, principally 
because of a lower grade 
of ore processed at the 

Cassell 

pathfinder 

published 

By Andrew Bolger 

Cassell, the publisher which 
will soon come to the market 
with a market capitalisation of 
about £15m, yesterday pub- 
lished its pathfinder prospec- 
tus. 

The document said the 
group, which recently bought 
the Victor Gollancz fiction 
imprint, made an operating 
profit of £1.2m on sales of 
£20.1m in 1993. 

Cassell Is being floated by 
way of a placing by Charter- 
house Bank, with Charter- 
house Tflney acting as broker. 

It will raise about £7m of 
new money to redeem prefer' 
ence shares and su b stanti ally 
reduce debt. Impact day is 
May 24 and dealings are expec- 
ted to begin on June 2. 

The gr o up is best known as 
a publisher of dictionaries and 
reference books. Its other 
imprints include Ward Lock, 
which includes the Mrs Beeton 
cookery books. 


Pompom treatment plant. 

A higher gold price encour- 
aged Ashanti to use more low- 
grade ore from its stockpile. 
Also, a lower average grade of 
ore mined underground pushed 
Ashanti’s cash costs from $157 
an ounce in the same period a 
year ago to $184. 

Mr Jonah said these under- 
ground difficulties should 
come to an end in about a 
month’s time 

Ashanti expected production 
to increase significantly in the 
second half following the fUll 
commissioning of a biological 
sulphide treatment plant and 
further development of the 
underground mine. The pro- 
duction target of 860.000 
ounces for the year was expec- 
ted to be met at cash costs 
below $180 an ounce over the 
full year. 

The average gold price 
achieved before hedging in the 
half-year rose from $339 to $382 
an ounce. 

Cardiff 
Property 
set to expand 

Cardiff Property yesterday 
announced It was making a 
share offer for First Choice 
Estates, which values the resi- 
dential property developer at 
ggJim. 

The purchase, which is being 
made on Cardiff's behalf by 
Brown Shipley, will be satis- 
fied by the issue of 78L557 new 
shares at 20p apiece. 

Cardiff is offering 13 new 
shares for every 125 ordinary 
£1 shares in First Choice and 
23 new shares for every 16 £1 A 
ordinary shares. 

The underlying net asset 
value of First Choice at Sep- 
tember 30 1988 was £L27m, and 
the rtflim- values each share at 
3S.3p - a 10 per cent premium 
over the net asset value - and 
460p for each First Choice A 
ordinary - a premium of 9.6 
percent. 

In addition, Cardiff has 
placed 200,000 new shares at 
315p apiece to raise £630,000. 
The placing and offer are not 
intercOnditionaL 


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Acquisitive 
Headlam 
launches 
£9m rights 

Headlam, the acquisitive 
floorcoverings and fabrics dis- 
tribution group, has launched 
hs second rights issue within 
a year in order to help finance 
two farther purchases. 

The cash call, via the issue 
of up to 5.05m new ordinary 
shares on a l-for-7 basis at 
185p, will raise £9m net of 
expenses. 

The acquisitions are of Gor- 
! don John Textiles, a converter 
and distributor of plain and 
printed fabrics for the domes- 
tic and contract curtain mar- 
kets. and WQtrex Readymades, 
an operator in the ready made 
soft furnishings market 

Consideration for Manches- 
ter-based Gordon John is 
£2.98m while that of north 
London-based WHtex amounts 
to £900,000. Both transactions 
will be in cash. For the 1993 
year Gordon John returned 
pre-tax profits of £500,000 on 
turnover of £14.7m. Wiltex 
achieved pre-tax profits of 
£200,000 from turnover of 
£2. 3m for the same year. 

Mr Graham Waldron, Head- 
lam chairman, said the acqui- 
sitions would complement last 
year’s purchase of Claremont 
Fabrics, which was part 
financed by a £5. 04m rights 


Luxury end helps Time Products rise 15% 


By David Blackwell 

A successful year in the luxury 
wrist watch market, with one item being 
soid for £500,000. helped Time Products 
to boost 1993 profits by 15 per 
cent 

The watch and jewellery distribution 
group reported pre-tax profits up from 
£9£m to £lL4m, including £1.5m from 
the disposal of the group's remaining 
property interests in Hoag Kong. 
Turnover expanded 13 per cent from 
£59 Jim to £67.1m. The 1992 turnover 
contained £9.6m from discontinued 
operations. 

Mr Marcus Margulies, chairman, said 
tha group’s luxury business hnrf had an 


outstanding year. Luxury items now 
accounted for 80 per cent of operating 
profits, compared with 20 per cent from 
the volume operations, which include 
Sekonda watches. 

Last March the group paid £llBm for 
Judith Lelber, an American designer of 
l uxur y handbag s and evening bags sold 

at between $1,200 and $4,000 (£820 to 

£2,740). It also bought the North Ameri- 
can distribution rights for Audemars 
Piguet, the Swiss watchmaker, for £2m. 

The two acquisitions contributed 
£lS.6m to last year's turnover and 
£1.57m to operating profits of £9.15m 
(£6 -34m). 

Mr Margulies predicted that near- 
term growth would come predomi- 


nantly from expanding the Judith Lei- 
ber brand beyond the US. The group 
was already supplying two outlets in 
Thailand. 

The group had also opened a luxury 
watch showroom at Judith Leiber's 
premises in New York. It holds agencies 
for seven luxury watchmakers includ- 
ing Blancpain, Vacheron Constantin, 
and Audemars Piguet. 

Since the year end it has purchased 
78 per cent of the marketing company 
for Audemars Piguet in Switzerland - 
which Mr Margulies described as “a 
real feather in our cap”. 

Net interest receivable fell from 
£2. 12m to £728,000. 

Earnings per share rose 14 per cent to 


15 Bp fi3.9p). A proposed final dividend 
of 5.5p takes the total for the year to 
K5p (7.95p). 

• COMMENT 

The strategy of concentrating on luxury 
brand names appears to be bearing 
fruit. Taking non-recurring Items out, 
profits were ahead by 12 per cent - a 
good underlying performance - and the 
group ended the year with net cash of 
£l0.9m. If the management's faith in the 
expansion possibilities of the Judith 
Leiber brand is realised, further strong 
growth can be expected. Pre-tax profits 
of £ ll.5m this year would put the 
shares on a prospective multiple of 16, 
which looks fair value. 


Chesterfield shares rise on 
63% net assets increase 


Smith & Nephew sets 
up new joint venture 


By Simon Davies 

Shares of Chesterfield 
Properties yesterday rose 12p 
to 613p after the company 
announced a 63 per cent rise to 
S50p in its net asset value per 
share as at December 31. 

The figure partly reflected 
the write-back of a £25. 7m pro- 
vision in the previous year; thp 
investment property portfolio 
increased by 17 per cent in 
value, with its central London 
component improving by 24 
per cent 

Pre-tax profits leapt to 
£37.4m in 1993, compared with 


a restated loss of £l8.1m. 
Excluding the write-back, prof- 
its rose 7 per cent to £82m. 

The group’s entertainment 
interests, which range from its 
three Curzon cinemas to a 
number of West End theatres, 
suffered from a £500,000 provi- 
sion for bad debt and contrib- 
uted a loss of Elm. 

Rental Income fell from 
£3 6.1m to £26. 9m reflecting 
property disposals. Mr David 
Kieman. finance director, said 
one further small property dis- 
posal was under consideration, 
but the company was seeking 
acquisitions. 


Net debt amounted to £160m 
at the year end, representing 
gearing of 102 per cent, less 
than half the 1992 figure. 

The company’s £56m of 
development properties are 
still valued at cost, with £30m 
of these in the US. Mr Kieman 
was confident that this 
reflected current market value, 
and no provisions would be 
required. 

A proposed final dividend of 
8p makes a total of I2p (lip). 
Earnings per share were 
171.54p, of which 137p was 
accounted for by the revalua- 
tion. 


By Dante! Green 

Smith & Nephew, the medical 
goods company, has made the 
first of what could be a series 
of investments in the biotech- 
nology sector by setting up a 
joint venture to develop a prod- 
uct for what it says will be a 
$lbn a year market. 

The venture is with 
Advanced TissueSciences, a 
California-based Nasdaq-listed 
company with a market capi- 
talisation of about $200m 
(£137m). 

AT1S grows living cartilage 
in the laboratory which 
is then surgically inserted 


into the patient's knee. 

The technology has been 
demonstrated in animal tests 
and the joint venture would 
now put it into clinical trials, 
said Mr John Robinson, chief 
executive. 

S&N is already a large sup- 
plier of joint replacement 
systems such as knees and 
hips, but the technology has 
not changed fundamentally for 
many years. It is putting $10m 
cash into the venture, with the 
cartilage technology valued at 
$10m coming from ATIS. 

Mr Robinson hoped to have 
the product on the market by 
1999. 




GeneraLAccident 


A RECOR 


/feres 


QUARTER 






a mm 




Wf General Premiums 
\ ! Life Premiums 

i \ \ Net Investm ent Income 
\ % Underwriting Result 
^ ” Profit before Taxation 

£ \ Profit attributable to Shareholders 
* \ Earnings per Ordinary Share 


3 Months 
to 313.94 
Estimated 
£m 

1,070.2 

216.6 

115.4 

(63.3) 


3 Months 
to 31.3.93 
Estimated 
£m 

1 , 012.2 

207.0 

111.6 

(77.1) 



o 




Hi 


5 offset by 


underlying irr 

severe stor m lo!g lsr~~ — 

E^cSIentresults\h5ni the Pacific. 

Some welcome improvement in Europe. 

Life operations continue to make good progress. 


Nelson Robertson, Group Chief Executive, comments: 
"We have achieved a record start to 1994 despite 
additional weather losses in North America of £27m." 

General Accident pic 

General Accident pic, World Headquarters: Pitheavlis, Perth, Scotland PH2 0NH 





FINANCIAL TIMES WEDNESDAY MAY 11 1994 


COMPANY NEWS: UK 



sal plan will 
All to 140 st 


Where diversity helps balance 

John Gapper on Royal Bank of Scotland and its true worth 


books 


Royal bank of tcottawt 


By Ne3 Buckley 


Boots and WH Smith said 

yesterday they planned to sell 
up to 100 stores in Do It AH, 
their lossmaktng DIY Joint ven- 
ture, with 40 disposals already 
agreed. They are making total 

provisions of £80m. 

Do It AH currently has 220 
stores trading, with 20 already 
closed. The disposals would 
leave the chain with 140 stares, 
all of which will be refitted to a 
new design called the “new 
trading concept”. 

The joint venture partners 
said they expected the chain to 
return to a trading profit in the 
next finanrial year, 1995-96. 

The number of agreed sales 
Is less than the City had expec- 
ted. although the eventual 
total is larger and the provi- 
sions smaller. Analysts pointed 
out, however, that of the 40 
“agreed" sales, only 14 had 
been finalised , contracts had 
been exchanged for a further 


10, but 16 were still under 
negotiation. 

But Sir Malcol m Fi eld, chief 
executive of WH Smith, 
described the programme as 
“decisive action", which would 
“put Do It All into operating 
profits over the next two years 
and create a strongly competi- 
tive business for the longer 
term". 

The partners said they expec- 
ted to announce further dispos- 
als in coming months, arid 
were “reasonably optimistic" 
about meeting the 100-store 
target 

Boots' shares closed up 3p at 
556p, but WH Smith's dropped 
9%p to 506Kp. 

The reorganisation provision 
will be taken in Do It All's 
profit and loss account for the 
year to February 1994. It 
includes £55m to cover the dis- 
posals - including a £19m 
write-off of fittings, fixtures 
and stock, £5m for trading 
losses, and £3lm far other costs 


including reverse premiums, 
rents on vacant stores and 
redundancies. 

The remaining £5m is to 
cover write-offs associated with 
refitting remaining stores. 

Mr Steve Russell, msmatfng 
director cf Do It AH, said it was 
difficult to forecast the number 
of redundancies resulting from 
the disposals, but they were 
unlikely to be large. 

There would be some redun- 
dancies at head office, but 
these would result not just 
from the disposal programme, 
but from an extensive review 
of management systems 
designed to increase efficiency. 
Efficiency would also be 
unproved through the intro- 
duction of centralised distribu- 
tion. 

B i gg e st buyer of the stores is 
the Focus DIY chain with 10 - 
and which is expected to take 
more after its flotation in Octo- 
ber - and Courts, the furniture 
retailer. 


Chime confirms Chartwell deal 


By Paul Taytor 


Chime Communications, Sir 
Tim Bell's private PR business, 
confirmed plans yesterday to 
come to market through a 
reverse takeover of Chartwell 
Group, the USM-quoted toilet 
cubicle «wi carpet tile manu- 
facturer. 

The proposed deal provides a 
partial 34p a share cash offer 
for ChartweH’s existing share- 
holders. Shares in Chartwell, 
which yesterday reported a 


substantially higher pre-tax 
loss of £L19m (£445,000) in the 
year to March 31 an turnover 
of £6.26m (£5.62m), were 
suspended last week at 48p 
pending an announcement 

The Gravesend-based group 
will pay a total of £14J3m to 
acquire Chim e, which was set 
up by Sir Tim in 1989 following 
a management buy-out from 
Lowe Howard Spink, the adver- 
tising company. 

The acquisition will be 
partly funded through the plac- 


| DIVIDENDS ANNOUNCED 



IBM 


Current 

payment 

Data o 1 
payment 

Carres - 

ponding 

dividend 

Total 

for 

year 

Total 

bat 

year 


8t 

July 8 

7.5 

12 

11 

Dray'll Blue Chip fin 

5.495 

July 26 

5.485 

8.4 

8.4 

Oartmoro Amor fin 

1 

. 

1 

4 

4 

Glasgow Inc Tot int 

0.6* 

Aug 31 

0.6 

- 

2.75 

KwikSava- Int 

5.75 

July 1 

5.4 

- 

1&3 

Tims Products fin 

5.5 

July 22 

5.2 

8.5 

7.85 

Vaux Jnt 

3.35 

July 4 

3JJ5 

- 

9.5 

Dividends shown pence per share net fOn increased capital. ^Second 
Interim; makes l.2p to date. 


ing by Panmure Gordon of 
11.9m new shares at 34p each 
with institutional shareholders 
to raise £4. 05m. The remaining 
£10. 2m will be satisfied 
through the issue of a further 
30.1m shares to the vendors. 

A further 7.35m shares will 
be placed to raise £2Am which 
win be used to reduce the debt 
incurred by chfm«> at the Hma 
of buy-out. 

The enlarged group, which 
wfll be renamed Chime Com- 
munications, has applied for a 
London listing. It plans to dis- 
pose of the current Chartwell 
businesses “In due course”. 

Chime made 1993 pre-tax 
profits of £L05m (£918,000) on 
turnover of £12.7m (£lL9m). 

Because of “the fundamental 
change” in the nature of Chart- 
well’s business, ChartweH’s 
existing shareho lders are being 
offered 34p a share cash for up 
to 3m shares, repres enting 45 
per cent of its fully diluted 
equity. 


I n the four years since Mr 
George Mathewson took 
control of Royal Ban> of 
Scotland, Us constant refrain 
has been that his bank’s true 
value is not appreciated. 

The steep dhnh in its share 
price over the past two years 
has reduced the volume of his 
complaint, but not yet stopped 

htm ma ’ frfpg jt. 

Tm in a bind, because when 
I say value Is not recognised, 
people ask why we don’t 
release value by floating some- 
thing. But no, I still don't 
. think it is," he says, undaunted 
by the foot that his bank's 
shares now trade at 2^6 times 
their book value - marginally 

hi gh nr than even Lloyds BawTr 
This is a considerable turn- 
around from when Mr Mathew- 
son was appointed deputy chief 
executive in 1990. It was part of 
a reshuffle engineered by Lord 
Younger, the rdiairman, to 
shake up what Mr Chris EHer- 
ton, a bank analyst at SG War- 
burg, refers to as its “mori- 
bund" former management 
The publication of its 
inte ri m results today rnarire a 
further Step m ife^ f^u^n pmpn t*. 
since than. The flowering of 
businesses such as Direct Ldne, 
its telephone insurance arm, 
and Citizens, its US subsidiary; 
have now pushed its value to 
some £L25bn more than its old 
rival. Bank of Scotland. 

Yet whatever the quality of 
the former senior executives, it 


was they who made a series of 
strategic decisions that have 
paid handsomely. These 
include the acquisition of 
Direct T.ine and Citizens, and 
forming an alliance with Banco 
Santander after it bought 99 
per cent of Royal Bank's 
equity. 

Mr Mathewson, a former 
engineer who joined the b ank 

from the Scottish Development 

Agency, has cemented what 
once seemed a strained link 
with Mr Peter Wood, chief 
executive of Direct Line. He 
has also developed the San- 
tander strongly by invest- 
ing in its Ibos cross-border pay- 
ments system. 

But questions remain over 
whether be has turned Royal 
Bank into a coherent business, 
rather than a collection of sev- 
eral. The bank has faced con- 
stant speculation about the flo- 
tation. of Citizens or Direct 
Line, despite his insistence 
that he will continue to 
develop the hank as a single 
entity. 

The rising share price has 
helped. Doubts about it having 
overlapping distribution meth- 
ods in Direct Line and its 
branch bank are also easing. 
As more banks reduce their 
branches and turn to telephone 
and direct selling methods, 
Royal Bank’s dual delivery 
appr oa ch appears increasingly 
sensible. 

“I think it does make sense 


Profit boforo provision* 
divisional analysis C Cml 

18Q2 1883 

Branch banMna 282.1 307.1 


Branch banldnfl 
Corporate and 
tretttuttooW banking 
Qkact Una 
Cttzans 
Operations 
Central Hams 


1179 155.8 
15.1 502 

35.5 56.0 

35.6 519 
(89) (23.7) 


458.6 598.8 


as a business, because banking 
Is boiling down to the number 
quality of the customers 
you can get,” says Mr Elision. 
He says that Direct line’s abil- 
ity to attract reliable, well-off 
customers means that Royal 
pnnk can frike market share 
cheaply, ar *d with little risk. 

“People do not realise the 
value of having more than one 
brand” says Mr Mathewson. 
He cites Direct line’s ability to 
price personal loans differently 
according to its assessment of 
how credit-worthy the bor- 
rower is. The branch bank 
could not do it because it 
would be socially unaccept- 
able. 

This ability to deploy a vari- 
ety of selling approaches is one 
reason why Mr Mathewson 
likes having a diversified 
bank. 

A second is that he has been 
trying to reduce the volatility 
of the bank’s earnings after the 
shock of the £Llbn bad debt 
provisions it had to make 


between 1991 and 1993. 

He says that corporate lend- 
ing has proved the most vola- 
tile activity. The bank has 
partly tried to address this by 
working harder to sell things 
such as treasury products, and 
custodial services to large com- 
panies. But its main emphasis 
has been on diversifying its 
businesses to balance volatile 
ones. 

Mr Mathewson says this Is 
one reason for keeping Citi- 
zens, which made £l9.7m in 
1992 when pre-tax profits of the 
whole group fell to £20. 9m. 
“Citizens earnings were very 
convenient then. The US bank- 
ing market is not directly cor- 
related with the UK one, so it 
gives us a balance," he says. 

This belief in diversification, 
and reducing volatility cf earn- 
ings, means that speculation 
about Royal Bank has been 
turning from the question of 
whether it will sell businesses 
to whether it will buy another 
one. Mr Mathewson himself 
insists that the latter is the 
more obvious course. 

He argues that Royal Bank's 
capital backing and manage- 
ment expertise have helped to 
develop operations such as Cit- 
izens and Direct Line. “We 
have added value to Citizens 
even though we do not run the 
operations, and we wfll con- 
tinue to try to create new and 
nxritfng businesses," he says. 

Mr Mathewson sees the obvi- 


Stsm pric* raWfe* ft* • 
FT-BBA Bertw htfaft iv 


no -- - — 


90 — 1—1 




Sourik FT SnoMW 


ous next target as a buOdOoe 
society. The bank has already 
been selling mom mortgages 
because they -provide more 
consistent income than landtag 
to companies. “The right sati- 
ety would give us a stable 
earnings stream, and perfume 
higher credit rating,” he says. 
The problem la that aoctetfcs 
have been alerted to ttadr 
potential value by Lloyds' 

For the moment, many ana- 
lysts think that investors have 
already recognised at least foe 
greater part of Royal Banks 
value. “The expectations are 
built into the price already/ 
says Mr Ellerton. it remains 
for Mr Mathewson to prove 
that these expectations are stCQ 
not great enough. 


Hotels and nursing homes behind rise at Vaux 


By Tony Jackson 


A strong performance in hotels and 
nursing homes helped Vaux, the 
Sunderland-based brewer, to a 10 per 
cent rise in pre-tax profit to £10. 7m for 
the six months to March 19. 

The price war in the wholesale beer 
trade continued to take its toll, with a 
10 per cent fall in Vaux's volume sales 
to the free trade. 

Sir Paul Nicholson, chairman , said 
the overaH beer market had fallen by 3 
per cent, and by 10 per cent over the 
past three years. Vaux had resisted 
pressure to cut prices, he said. “We 
weren't prepared to trade margin.” 


Sales to Vaux pubs were also down 1 
per cent 

However, this was more than offset 
by the start-up of a contract to brew 
Heineken. lager for Whitbread, which 
helped contract brewing volume to dou- 
ble. The net effect was a 7 per cent rise 
in beer volume and a 3 per emit rise in 
trading profit to £8-7m, on sales up l 
percent 

Group turnover was up 8 per cent at 
£1 09.1m. Profits from Swallow Hotels 
were up 13 per cent at £6m, with room 
rates held steady over the period and 
occupancy rates up slightly at 58 per 
cent Profits from St Andrew Homes, 
the nursing homes chain, rose 13 per 


cent to £2Am Profits from Vaux pubs 
were up 4 per cent at £2.4m. 

Net debt was £l25m (£l32m) at mid- 
year, resulting in gearing of 33 per cent 
After interest charges of £6.23m 
(£6.i6m) and tax of £2. 13m (same), earn- 
ings per share emerged 12 per cent 
higher at 6.09p. The interim dividend is 
raised 3 per cent to 395p. 

Sir Paul criticised the government for 
inaction over beer imports. “The brew- 
ing industry la looking at difficult times 
ahead”, he said. However, though the 
strength of recovery in consumer 
spending remained uncertain, Easter 
trade had been up to expectations and 
profits were ahead in the year to date. 



Holding SA 
GENEVA 


Wiseman 
buys rival 
for £8.1m 


Redrow’s small public response 


By Andrew Taylor, 
Construction Correspondent 


By Maggie Uny 


Notice is hereby given that an 
ANNUAL GENERAL MEETING OF SHAREHOLDERS 
will be held os Wednesday Jaae 1, 1994, at 10 ua. 
at the registered office of 
BANQUE Paribas (SUISSE) Sjv. 

2, place dc Hoi land e, CH-1204. Geneva 


TO CONSIDER AND TO VOTE ON THE FOLLOWING MATTERS 


1. Annual report, consolidated nccoaats, and statutory accounts for the year ended December 31, 1993, and the report of the Anditora 
The Board of Directors proposes that the annual report, the consolidated accounts and the statutory accounts for the year ended 
December 31, 1993, be adopted. 


2. Appropriation of profits 

The Board of Directors proposes to pay a dividend of SF 102361 107 (SF 68 per share), out of available profits of SF 215 803 047, 
which comprise a net profit for 1993 or SF 108856689 and a balance carried forward from 1992 or SF 106946358. After an 
allocation of SF 5445000 to the statutory reserves, SF 107996940 will be carried forward. 


3. Release of the Directors 

The Board of Directors proposes that a release be issued to the Directors. 


4. Elections 

4.1 Board of Directors 

The Board of Directors proposes that 

a) Messrs. Michel Francois- Poncet and Pierre Languetin be re-elected for a three-year period ; 

b) Messrs. Andre Levy- Lang and Hans-JOrg RudlofT be elected for a three-year period. 

4JI Auditors 


The Board of Directors proposes that ATAG Ernst & Young S.A. be re-appointed for a one-year period as the Auditors or 
tbe statutory and the consolidated accounts. 


5. Creation of an authorized capital of a nominal amount of SF 148500000 ; amendment of the articles of association by creation of a 
new article 5 bis 


The Board or Directors proposes the creation of an authorized capital up to a maximum amount oFSF 148 500000 by the issue of 
a maximum of 135000 bearer shares with a nominal value or SF 1 000 each and by the issue of n maximum of 135000 registered 
shares with a nominal value or SF 100 each within the proportions provided by article 1 1 of the articles of association, with 
authoription to the Board of Directors to suppress the shareholder’s preemptive rights Tor cause, namely if the shares are issued 
in relation to the acquisition or (he merger of businesses, or parts of businesses or the acquisition of interests or in relation to the 
placement of shares on foreign markets in order to widen the shareholder base. 


Robert Wiseman Dairies, the 
Scottish milk processor which 
floated on the stock market hi 
March, is paying £8.lm to boy 
Kennerty Farm Dairies, a rival 
Scottish processor and distrib- 
utor. The deal follows Wise- 
man’s purchase of Mackies, 
another Scottish dairy group, 
in April for £3.17m. 

The deal will take Wise- 
man’s share of the Scottish 
milk market from 21 per cent 
to 31 per cent, audits share of 
the total UK market from 2 to 
3 per cart. 

Kennerty, owned by 
Juranom, a private company, 
sells to independent retailers, 
caterers and honseholds 
through doorstep deliveries. It 
has three processing sitesand 
a half share of a dairy in Don- 
dee. It also has 15 distribution 
depots and a dairy farm. 

In the float which valued it 
at £63.7m, Wiseman raised 
£14Jim cash for the company. 
The Wiseman fondly retained 
a 7441 per cent stake. 

Wiseman said Jnranom had 
net assets of £3 -2m at January 
L and made a pre-tax profit of 
£338,000 on sates of £45£m in 
the year to that date. 


The £117m flotation by 
Redraw, the third housebuilder 
to come to the market this 
year, has fallen foul of the 
recent fatigue in the London 
stock market for new issues. 

The company announced 
yesterday that while all of the 
87m shares on offer had been 
taken up, the public had sub- 
scribed far only 1702m or 78.7 
per cent of the wiiwimniw 


21.75m shares they had been 
offered. 

The short&U has been placed 
with institutions which have 
acquired 4.6m more shares 
than they had expected. The 
issue at 13Sp was fully under- 
written by Barclays do Zoete 
Wedd with Cazenove acting as 
broker. 

The issue price valued the 
company at £298m. The com- 
pany scaled down the offer 
price following a foil in build- 
ing share prices this spring. It 


bad originally considered an 
Issue price of 145p, valuing tbe 
company at £350m. 

Under the terms of the issue 
Redraw gained £55.4m from foe 
sale of 41m shares while Mr 
Steve Morgan, the founder and 
chief executive, raised £62m 
from the sale of 46m shares, 
reducing his stake to 60 per 
cent Mr Morgan originally had 
planned to raise ElOOm and 
reduce his stake to 50 per cent 

Dealings are due to start is 
the shares on May 17. 


Exceptional costs put 
Arlen f 6.81m in red 


A provision for the loss on the 
sate of a subsidiary, reorgani- 
sation costs and compensation 
to former directors left Arlen, 
tbe light fitting s and electrical 
accessories company, with a 
pretax loss of £&81m for the 
nine months to December 81. 

The provision, relating to the 
sale of Highland Electronic, 
amounted to £637ta, of which 
£5Am was for goodwill previ- 
ously written off. 

The operating loss of £456,000 
on continuing activities was 
the result of the compensation 
and reorganisation, directors 
said. 

There is a deficit on revenue 


reserves and a capital reorgani- 
sation is planned. 

Turnover for the period was 
226.5m, of which £64>lm was 
for discontinued activities. In 
the previous 12 months pre-tax 
profits were £719,000 on turn- 
over of BBL2m. The net interest 
charge fell from £486,000 to 
£144,000. 

Losses per share were l3-2p 
(earnings 0.9p). During the 
period there was a £6.7m rights 
issue which left Fortress Trust 
with a 25 per cent stake. 

Directors said the first quar- 
ter’s trading was satisfactory. 

The shares rose 3p to close at 

sop. 


Bearing 
Power at 
£404,000 


Despite continuing pressure 
on margins, Bearing Power 
International, which distrib- 
utes precision bearings dad 
power transmission compo- 
nents, raised pre-tax profits 
from £257,000 to £404,000 in 
the half year to March SL 
Acquisitions helped turn- 
over jump 58 per cent to 
£17.9m. After a tax charge' uf 
£120,000 (£28,000 credit), earn- 
ings per share emerged lower 
at 0.84p (0.91p). There 
again no interim dividend - 
last year's stogie dtatributett 
was 0.75p. . 


6. Creation of a conditional capital of a nominal amount ofSF 242000000 ; amendment of die articles of association by creation of a 
new article 5 ter 


Chamberlain Phipps to seek relisting 


In view of the issue oF convertible bonds or options, the Board of Directors proposes the creation of a conditional capital up to a 
maximum amount of SF 242000000 through tbe issue of a maximum of 220000 bearer shares of a nominal value or SF 1000 
each and a maximum of 220000 registered shares of a nominal value of SF 100 each within the proportions provided by article 
1 1 of the articles of association, with authorization to the Board of Directors to suppress the shareholders' right to subscribe to 
the convertible bonds or to the options for cause, namely if the convertible bonds or the options are issued in relation to the 
acquisition or the merger of businesses, parts or businesses or the acquisition of interests or in relation to the placement of the 
shares on foreign markets in order to widen tbe shareholder base. 


By Peggy HoSinger 


7. Other basiaess 


The annual r 
for review as 
on request. 


report, the statutory accounts and the consolidated accounts together with the report of the Auditors will be available 
i of May 1 1, 1994 at the Company’s registered office in Geneva. A copy of these documents will be sent to shareboidere 


Holders of registered shares recorded in the share register are hereby advised that they wfll receive an invitation to the Annual 


General Meeting. Only holders of registered shares recorded in the shore register as of May 20, 1994* will be entitled to vote at the 
Annual General Meeting. 


Holders of bearer shares may obtain an admission card from May 1 1 to noon on May 30, 1994. at the offices of Banque Paribas 
(Suisse) S.A, Union Bank of Switzerland or Credit Suisse, against deposit of their shares or of a document certifying their deposit 
at another bank. Deposited shares will be blocked until the dose of the Annual General Meeting. 


Pursuant to Artide 18. para. 3. of the Company's articles of association. each shareholder is entitled to be represented by a bolder of 
the same category of share. In addition, each shareholder is authorized, under Swiss law, to be represented by Pargesa’s officers or 
by a bank as depositoty representative, or by M* Jean-Paul Aeschimann, Attorney-ax- Law, 25 Grand-Rue, CH-121 1 Geneva 1 1, as 
independent representative. Unless proxies Include explidt instructions upon remittance, voting rights will be exercised following 
the Board's recommendations. 


Depository representatives, as defined in Artide 689d of the Swiss Code of Obligations are requested to dedare at their earliest 
convenience, out at the latest by noon on May 30. 1994, the number, the category and par value of the shares they represent to 
Banque Paribas (Suisse) S.A„ together with the reference numbers of the admission cards. Institutions subject to the Swiss Federal 
Act on Banks and Saving Banks of November 8, 1934, and professional fund managers may be considered as depository represen- 
tatives. 


The full text or the statutory clauses relating to points 5 and 6 of the Agenda may be reviewed in the notice of convocation published 
in the Swiss Official Gazette of Commerce of May 1 1, 1994. 


Geneva, May 11, 1994 


For the Board of Directors 
P. Desmarais Sr. 
Chairman / 


As the British footwear 
industry fights against the 
threat of east Asian Imports, 
one UK company is making a 
healthy living by supplying 
shoe components to Asian 
manufa ct urer s. 

Chamberlain Phipps - which 
manufactures plastic and rub- 
bar soles, as well as shoes - Is 
hoping to t-flgh in on its suc- 
cess by returning to the mar- 
ket this summer valued at 
more than £90m. 

The group was last quoted 
an the London Stock Exchange 
in 1989, when it was acquired 
by Evode, the adhesives com- 
pany, as part of a larger pur- 
chase. 

By 1992, however, the com- 
pany had begun to suffer the 
effects of recession and a sharp 
downturn in tbe UK shoe mar- 
ket Evode opted to sell Cham- 
berlain to Mr Dan Sullivan, a 
US investor, and Legal & Gen- 
eral Ventures, the venture cap- 
ital company, for £12nv 

Since then, the two share- 
holders have invested a further 
£30m in acquisitions and 
restructuring. Chamberlain 
now claims to be a leading 
exporter of plastic and rubber 
shoe components to east Asia, 


and France's largest private-la- 
bel shoe supplier. Profits have 
risen from just under £5m in 
1992 to about £llm this year. 

The company alma to raise 
£50m in the float, of which 
£35m wOl be used to reduce 
debt The r emaining w )fl 

be split between the founding 
shareholders. 

Mr Sullivan, who boasts a 
track record of more than 30 
buy-ins and flotations in the 
US, including Tyco Toys, is 
expected to recoup his £4m 
original investment in return 
for selling about 10 per cent of 
his 50 per cent holding 

After the float, which will 
roughly double Chamberlain's 
equity base, Mr Sullivan wfll 
hold between 27 and SO per 
cent 

Legal & General Is selling 
about half its stake and will 
retain between 15 and 20 per 
cent of the enlarged group. 

Mr Sullivan said the export 
market, particularly in east 
Asia, represented great poten- 
tial. “Demand is high for west- 
ern European materials," be 
said. They offered quality and 
choice at a price which could 
be incorporated into the 
cheaper east Aslan shoes, 
because of the relatively low 
labour coat 




Gettiug into gear. Dan Sullivan sees Chamberlain's _ . 
retracing the company's steps to the London Stock Exd*#** 


s|H 

rr 1 

V s . 


Though tbe shares dipped 9p to 278p, 
there was nothing in the figures to sur- 
prise. The dividend Increase looks 
mean, but Vaux is on record as wanting 
to rebuild cover to 2 to 2^ times. Com- 
ing at the start of the brewers' results 
season, the profits performance may 
compare favourably with the rest of the 
sector. Assuming a ftdl year pre-tax rise 
of some 10 per cent to £29, 5m, the 
shares are on 15 times earnings. 
Though this is not hugely attractive, 
Vaux has the advantage of exposure to 
an apparently reviving hotels sector, in 
which it Invested heavily through the 
recession. 


’fflttl S-iil; t- 1^ * 

Sftparaihsis, 1 ^ 
SMbtion 1 1 

fill 






COMPANY NEWS: UK 


25 



I 



>c at Vain 


» COMMENT 





!v.*;irins 

f t’T 


FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


C&W spurns 
partners for 
outsourcing 


By Andrew Adonis 

Cable and Wireless, the 
telecommunications group, 
yesterday re affirm ed its inten- 
tion to attack the growing cor- 
porate market for telecoms 
contracting-oat without seek- 
ing international partners. 

It claimed it had won a quar- 
ter of the contracts awarded by 
large multinationals for tele- 
coms outsourcing in the past 
IB months, and that its exist- 
ing federation of companies 
made an external alliance 
unnecessary. 

Caw’s strategy contrasts 
with those of British Telecom- 
munications and AT&T, the US 
group, both of which have 
forged international alliances 
to develop corporate business 
over the past year. 

BT has formed a $5.3bn 
(£3.68bn) alliance with MCI. 
the second largest US carrier, 
while AT&T launched World- 
source last year in partnership 
with leading telecoms opera- 
tors in the Asia-Pacific region. 
It is seeking a similar arrange- 
ment with state operators in 
Europe. 

Some analysts believed that 
C&W, which is far smaller 
than BT and AT&T, would also 
seek an alliance. But Lord 
Young, C&W chairman. 


emphasised his company’s 
determination to develop its 
international business throu gh 
its existing companies. 

“It is the alliance 'of C&W 
companies which gives us our 
competitive edge ” he said. 
C&W owns a majority stake in 
MCrcury and Hong Kong Tele- 
com and has significant stakes 
in operators in the Caribbean, 
Sweden. Australia and the Bal- 
tic, as well as a US subsidiary. 

Mr James Ross, chief execu- 
tive, claimed that c&w had an 
8 per cent stake in the Interna- 
tional telecoms network ser- 
vices market and could develop 
its multinationals business 
through its business networks 
division, established 18 months 
ago to pioneer outsourcing. 
The division has staff of 200 
liaising with C&W operations 
in 56 countries. "We already do 
business with more than L500 

Of the 2^500 *n irWfnati male we 

are targeting," Mr Ross said. 

C&W estimates that the con- 
tracting-out market for the top 
2JS00 multinationals could be 
worth S15bn a year. In March, 
C&W launched a £Um network 
upgrading programme, Etarting 
with a new £20Qm "backbone" 
network for the UK capable of 
offering advanced services 
such as video-conference and 
corporate phone meetings. 


How to disguise the embarrassment of riches 

Michael Smith previews the electricity companies’ preliminary results season 


B ritain’s electricity com- 
panies are a cautious 
bunch. In the four years 
since privatisation began, the 
17 quoted companies in the sec- 
tor have established a tradition 
of hnUflrng VtanV from the maxi- 
mum possible when declaring 
profits. 

It has not stopped them from 
announcing profits way above 
pre-privatisation expectations. 
But taking a “prudent” 
approach on issues like provi- 
sions for bad debts and busi- 
ness restructuring has enabled 
than to reduce the potential 
political flak which would have 
arisen from even stronger 

fmanrial p u rfi n y w i ancoc 

It however, the sector has in 
the past hidden its financial 
light under a bushel the temp- 
tation for mrret companies this 
time will be to dig a deep hole 
for it 

As the sector’s seven-week 
preliminary results season 
begins today, with an 
ann o uncement from Scottish 
Power, the focus of attention 
for 14 of the 17 privatised com- 
panies and their investors is a 
review that Professor 
Stephen t the indus- 

try regulator, has launched 
into their distribution busi- 
nesses. 

The review takes in the two 
Scottish companies as wen as 
the 12 recs in England nrui 
Wales but the latter wUl be 
most affected since a larger 
proportion, in some cases vir- 
tually all. of their profits 


POWER PRELnUNAHES 


Company 

Ode 

Pre-tax profit* 


| Net DhWends 

1903 

festal 
tv UBS 
1004 

Fcaecast 

Howe Govett 
1004 

1003 

Foracaat 

bytes 

1004 

rnwu«evt 

Bom Govett 
1904 

Eastern 

June 29 

183A 

221 

212 

19.2 

22 

22 

East Midlands 

June 20 

155.1 

60- 

50" 

19.5 

22.7 

22.7 

London 

June 15 

145l5 

183 

190 

19£ 

22A 

22.2 

Mamveb 

June 21 

111.2 

129 

126 

21 

24.1 

24.1 

Midlands 

Jure 28 

167.1 

201 

195 

20 

2X2 

23 

Northern 

June 28 

111.4 

123 

128 

21.44 

24.6 

24.7 

Norweb 

June 27 

157.1 

179 

175 

20 

223 

22.7 

— t 

Jim 28 

112.7 

125 

125 

10 

113 

11.6 

Southern 

June 23 

187.3 

215 

218 

19A 

23.4 

223 

South Wales 

June 16 

87 

99 

104 

223 

25.3 

25.3 

South Western 

June 30 

101.1 

116 

115 

20 

23^3 

233 

Yorkshire 

June 17 

156.3 

175 

175 

20.42 

23-5 

2X2 

NIE 

June 1 

57.9 

81 

81 

10.02 

11.3 

11.4 

National Power 

May 18 

580 

670 

680 

10.6 

12.2 

12.3 

PowerGen 

June 9 

425 

472 

465 

105 

123 

12.4 

f, rv« ■ 

acomsn ruwor 

May 11 

297.1 

350 

345 

11.15 

12.4 

12.4 

Hydro- Electric 

June 8 

146.6 

160 

170 

11.38 

12.6 

12^ 


Taxing Wo account ycmcrOay’a atateiiwnt 


nomas fr om distribution. 

Early Indications in a letter 
from Prof Littlechild to the 
distributors are that some com- 
panies may have to reduce 
their prices by as much as 20 
per cent from next April when 
the new regime comes into 
effect 

Desperate to avoid this fate, 
companies will be doing their 
best in the results season to 
disguise the embarrassment of 
riches that have flowed their 
way since privatisation. 

"Caution win be the watch- 
word,” says Mr Nigel Hawkins, 
utilities analyst at Hoare 
Govett 

"Anything which could be 
Interpreted as excessive will 
make the regulator’s job more 


difficult and may worsen the 
outcome of the review from the 
companies' point of view.” 

Mr John Wilson, analyst at 
UBS. detects a considerable 
slowdown in regional compa- 
nies' cost control exercises 
ahead of the review. 

He says there may also be a 
reverse of the traditional divi- 
dend race in which oompmles 
appear to have been in compe- 
tition with each other to see 
who can pay out the biggest 
increase to shareholders. 

But however hard they try, 
the regional companies are 
bound to show exceedingly 
healthy profit increases from 
1992-93. UBS expects average 
pre-tax profits for the recs to 
be about £163m in 1993-94. 


against £l40m the previous 
year. 

Growth in sale volumes 
mi ght be low, perhaps up 1 per 
cent to 2 per cent if half-year 
results are anything to go by, 
but the companies are still ben- 
efiting enormously from the 
improvements in efficiency 
that have been effected in the 
last four years. 

Most of the companies will 
have had cash in hand by the 
end of last March - the end of 
the financial year. 

That would have been the 
case even 

if they had not benefited 
from customers paying more 
than £50 0m of their bills in 
advance to avoid paying value 
added tax which the govern- 


ment introduced from April 1. 

Companies* plans for the pre- 
payments will be one of the 
side issues around the results. 

The Labour party and con- 
sumer groups are stepping up 
their pressure for tine money to 
be set aside for helping disad- 
vantaged customers rather 
than be used to boost company 
profits. 

However, the issue that 
every investor and analyst will 
try to resolve at the regional 
companies’ presentation of 
results will be how each com- 
pany will come out of the dis- 
tribution review. 

With company executives 
under strict instructions to 
keep secret the progress of 
their negotiations with Offer, 
the industry regulator, the 
questioners may be disap- 
pointed. 

The large generating compa- 
nies will be less constrained in 
giving their results, particu- 
larly the two sowing England 
and Wales. National Power and 
PowerGen have just come 
through their own regulatory 
review and are still smarting 
from the results. 

Over the two years from last 
month their profits could be 
depressed by about £l20m in 
total as a result of the 
price cap negotiated with Prof 
Littlechild, according to SG 
Warburg Securities. The cap 
will not affect their results for 
1993-94. 

However, the companies will 
be attempting to show the City 


that they can still grow profits 
and dividends by impressive 
amounts because of continuing 
cost cuts and expansion over- 
seas. 

North of the border, Scottish 
Power will also be emphasising 
its improved efficiency with 
some analysts expecting the 
company today to show job 
cuts in the last year of 7 per 
cent to 8 per cent. 

Hydro-Electric's results will 
be watched for the company’s 
latest word on the weather, 
which the company warned 
recently would depress- profits 
this year because low rainfall 
had reduced the scope for gen- 
eration through hydro electric 
power. 

However, most clouds have a 
silver lining and some Hydro 
watchers hope heavier rainfall 
so far this year will produce an 
equally freakish result - this 
time in Hydro's favour. 

The star of this year's results 
could turn out to be Northern 
Ireland Electricity, the small- 
est company of afl. 

Having come to the market 
just last year, it does not face a 
big regulatory review for three 
years. 

This gives it stability and the 
company appears to be using 
the opportunities well by cut- 
ting costs vigorously. Hoare 
Govett's Mr Hawkins thinks 
earnings* growth could be as 
high as 30 per cent, facilitating 
one of the highest dividend 
increases among power distrib- 
utors. 


Scottish Widows gloom over HK 


By Norma Cohen, 

•' Investments Correspondent 

Scottish Widows, one of 
Britain's leading institutional 
investors, has decided to 
reduce its investment in the 
Hong Kong market because it 
believes property valuations 
are overblown. 

Mr Robin Garrow, director in 
charge of global asset alloca- 
tion. made a particularly glum 
assessment of the Hong Kong 
stock market following a visit 
there in AprIL 

"In terms of investment pol- 
icy my main mnnhwino was to 
confirm a negative view of 
Hong Kang” Mr Garrow wrote 
in a recent briefing note. "This 
has all the hallmarks of a clas- 
sic bubble." 

He also noted that fund man- 


agers. perhaps wrongly, 
approach investment in south- 
east Asia cm a country basis 
and not an an individual stock 
basis. 

Hong Kong forms about 38 
pa- cent of the FT-A Pacific 
Basin Ex-Japan Index and 
many fund managers feel they 
must hold a weighting roughly 
equal to that even when they 
are uncertain about the colo- 
ny’s prospects. 

"This is understandable if 
not laudable for stock markets 
but, I believe, regrettahle for 
fund managers. Why should 
we feel constrained to keeping 
Hong Kong, for example, as a 
proportionately high holding 
in the area?” Mr Garrow wrote. 

Scottish Widows, with 
roughly £20bn in assets, has 
about £600m in east Asia, 


excluding Japan, with only 15 
per cent of that in Hong 
Kong. 

In citing his reasons for 
reducing exposure, Mr Garrow 
said that analysts attending a 
recent Rank Credit conference 
believed that profits of prop- 
erty mmpanigg accounted for 
65 per cent of the whole of the 
Hong Kong stock market and 
that some companies may be 
producing paper profits by 
counting the ftrture value of 
properties still under develop- 
ment. 

Also, he noted, one company 
he Visited in Shenzhen which 

described itself as a conglomer- 
ate turned out to be largely 
involved in property devdop- 
ment 

Meanwhile, Mr Tom Crom- 
bie, investment director at 


Scottish Equitable, s aid he had 
alsn significantly pared invest- 
ment in Hong Knng since the 
beginning of the year to about 
20 per cent of Pacific Basin 
holdings outside Japan, and 
would consider catting further. 

"A property babble of 
hair-raising proportions has 
just taken place," Mr Crambie 
said, noting that a bouse on 
the Peak in Hang Kang has 
just sold flu* £10,000 per sq ft - 
about 250 timas more expen- 
sive tha-n the top residential 
neig hbourhood in London. 

Mr Crombie said investors 
counting on a shortage of 
space to keep up property 
prices were mistaken. *Tf you 
go up in a helicopter you can 
see that there is plenty of land 
in Hong Kong and that there is 
even more over the border." 


Schroders poised to launch 
Japanese investment trust 


Wardle Storeys 
denies parachute 
speculation 

Wardle Storeys, the plastics 
and safety equipment group 
which makes specialist para- 
chutes, issued a statement yes- 
terday denying its GQ para- 
chutes were involved in a 
weekend incident involving 
paratroopers injured when 
they landed on hard ground 
during a Nato exercise in Sar- 
dinia, writes Paul Taylor. 

The company issued the 
statement after its shares fell 
amid mar ket speculation about 
the incident The shares, which 
initially fell to 398p. subse- 
quently rallied to close lOp 
lower on balance at 400p. 


By Bethan Hutton 

Schroders is to launch an 
investment trust to catch the 
current wave of enthusiasm for 
Japan. 

The Schroder Japan Growth 
Fund will invest in the whole 
range of Japanese companies, 
from the Tokyo Stock 
Exchange first section to the 
over-the-counter market 

It is the second new Japa- 
nese trust to be launched this 
year, while at least two 
gristing funds have raised new 


capital or are planning to do 
so. 

Many trusts in the sector 
have been trading at a slight 
premium to net asset value, 
making new issues compara- 
tively attractive. 

Schroder Investment Man- 
agement is better known for 
unit than investment trusts: it 
already has four Japanese 
unit trusts. The new trust will 
be managed from Tokyo by Mr 
Ed Merrier, who has been 
responsible for the Schroder 
Japanese Smaller Companies 


unit trust since its launch 10 
years ago. 

Mr Jeremy Hill, a director of 
Schroder Investment Manage- 
ment. said the company 
believed there was growing 
evidence of recovery in Japan. 

The fund is being launched 
by means of a plac i n g and pub- 
lic offer for subscription which 
opens on June 7 and cl wrap on 
June 3A Shares will be issued 
at lOOp, with warrants 
attached on a l-for-5 basis. 
D ealing s are due to s t a r t on 
July 1L 


NEWS DIGEST 


Holmes & 
Mar chant 
25% ahead 

Holmes & Marchant Group, the 
marketing services company, 
reported pre-tax profits ahead 
25 per cent from £461,000 to 
£576,000 for the six months to 
end-March, 

The improvement was 
achieved an turnover down by 
to £1 3 3m Warning s per 
share emerged at LTBp (1.45p). 
Comparative figures have been 
restated to reflect the account- 
ing policy adopted for empty 
leasehold property costs. 

Mr John Holmes, chairman 
and chief executive, Slid £lm 
of the decline in turnover was 
accounted for by the closure of 
the group's consumer advertis- 
ing agency in February 1993, 
while a further £L5m related to 
client expenditure on new 
product launches. 

With lower average borrow- 
ings in the period and a reduc- 
tion in interest rates, net 
interest payable was reduced 
from £450,000 to £350,000. 
Net borrowings at March 31 
stood at £8.6m, an improve- 
ment of £400,000 an the 1993 
year and. 

Glasgow Income net 
asset value rises 

Glasgow Income Trust 
reported a net asset value of 
48£4p per share as at March 
31, up from 47.68p at its Sep- 
tember year end and 43.46p at 
end-March 1993. 

The total return on net 
assets at the period end was 5.2 


per cent, against &5 per cent 
on the FT-SE-A All-Share 
Index. 

Gearing stood at 83 per cent, 
fund ed by short-term borrow- 
ing; directors «airt the employ- 
ment of gearing reflected 
their view that after recent 
weakness, particularly among 
large capitalisation stocks, UK 
equities represented "good 
value". 

Net revenue dipped to 
£3534)00 (£362,000) for earnings 
of 1.18p (l.23p). A second 
interi m dividend of 0.6p main- 
tains the total at l-2p, requir- 
ing a transfer of £17.000 from 
the revenue reserve. 

Hogg Robinson 
acquisition 

Hogg Robinson, the business 
services group, has acquired 
International Transportbedrijf 
G Snel of the Netherlands for 
an aggregate FI 8m (£2£5m) in 
cash. 

The directors said the pur- 
chase. carried out by Hogg 
Robinson Transport, would 
complement the group's 
existing operations in the 
Netherlands, the UK and 
Belgium. 

GR to become 
investment company 

GR (Holdings), the leisure, 
property and sheepskin pro- 
cessing company, is being 
transformed into an invest- 
ment vehicle by its control- 
ling shareholders, Mr Anthony 
Stalbrow and Mr John Stal- 
hrow. 

Through a specially created 
company. A Stanford, they are 
making an agreed bid at 64p a 


share, which values the com- 
pany at 29 jam. Stanford has 
acquired the Stalbrow’s 51.1 
per cent holding in GR and the 
offer has been, accepted in 
respect of a further 16.5 per 
cent 

GR’s shares were unchanged 
yesterday at 64p. 

The move continues an ongo- 
ing process at GR where the 
traditional trading activities 
have declined so that now only 
40 per cent of current assets 
are deployed in this area, the 
balance being used in securi- 
ties and property. 

In March, GR reported 
increased pre-tax losses of 
£216,882 (£124,753) for the six 
months to December 31. 

Heath buys more of 
Bermudan offshoot 

CE Heath, the insurance bro- 
ker. is paying 24.41m (£3. 02m) 
in accordance with an earnout 
arrangement to acquire 2,401 
further ordinary shares in 
Heath Fielding (Latin Amer- 
ica), its Bermuda-based subsid- 
iary. 

The purchase raises Heath's 
stake in the company from 80.4 
per cent to 90.2 per cent Con- 
sideration will be met by the 
allotment of 796,029 ordinary 
shares, which ire being placed 
through SG Warburg Securi- 
ties. 

Ptarmigan Inti 
C share conversion 

Following conversion of its 
shares issued in March, Ptar- 
migan International Capital 
Trust has applied for admis- 
sion to the Stock Exchange of 
1.89m new ordinary shares and 


377,813 new warrants. 

Conversion has arisen fol- 
lowing the investment of over 
80 per cent of the assets attrib- 
utable to the C shares. 

Dealings are expected to 
begin on May 16. 

Tiphook plans 
name change 

Tiphook, the debt-laden trans- 
port leasing group, wants to 
rhangp its name to the Central 
Transport Rental Group and be 
known as CTR. 

A resolution to adopt the 
new name will be put to share- 
holders at the next annual gen- 
eral meeting, expected in Sep- 
tember. 

In March Tiphook confirmed 
the sale of the group's biggest 
asset, its container business, to 
Transamerica, the US financial 
services group. It was paid 
£673m then and may receive a 
further £4 9m from the deal, 
subject to a completion audit 

Tiphook, which had debts of 
more than £lbn before the sale, 
had warned that its survival 
depended on the disposal. 

Slight fall at 
Drayton Blue Chip 

Drayton Blue Chip Trust 
reported a slight fall in net 
asset value per share to 80.7p 
at March 31 1994, against 8L8p 
3 year earlier. 

Calculated value per pre- 
ferred growth share, however, 
rose from I24.8p to 139.4p. 

Net revenue slipped from 
£l.l4m to £1.09m in the year 
and earnings per share came to 
&59p Op). The final dividend is 
unchanged at 5.49Sp for a 
same-again total of 8.4p. 




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I PAN - HOLDING 

I Soeidtd Anonyroe - Registered Office: Luxembourg 
I R.C. Luxembourg: B 7023 

NOTICE OF ANNUAL GENERAL MEETING 
OF SHAREHOLDERS - 

The ahareboJdera of PAN-HOLDfNG SA are invrted to attend the 
ANNUAL GENERAL MEETING 

which wS be held at the Restaurant Hamrart, 5. Plateau du Salnt-Esprit, 
Luxernbovg, at 3£0 pm, on May 30, 1904, with the following agenda: 

1. To accept the Directors' and the Statutory Aucftor'8 reports and 
to approve the financial statements and accouits tor the year 
ended December 31, 1993. 

2. To approve the appropriation of the results, to declare a dividend 
and to fbc ttw dale of payment 

3. To &ant dseharge to the Directors and to the Statutory Aurftor 
tor the proper per fe tm an oa of their duties. 

4. To re-elect Directors. 

5. To fix the Directors’ emofcjments for the year 1993. 

6. To re-elect the Statutory AucStor. 

7. To fix the Statutory Audtor's emoluments for the year 1993, 

The bearershare certificates msy be deposited with a bank or financial 
institution acceptable to the Company. The corrmpondng deposit 

certificates should be forwarded to the Company, PAS.408, 
L- 201 4 Luxomtooug, so aa to reach them not lat er t ha n May 24, 
1994. 

Tha owners of registered shares need not deposit thefr share 

cert i fica tes. 

‘ THE BOARD OF DIRECTORS 


Ab of April 30. 19B4, the unconsolidated net asset value was 
USD 349,148,4581)3, La. USD 834 A2 per shna of USD 200 per value. 

The coneoTidated net aseat value per share amounted as of Aprfl 30. 
1994 to USD 689.1 5. 



TNDEXIA 

Technical Analysis A Traded Options Software 

j (N DEXIA Rcae*n±. 121 Hub Sr. Scrummed, HP4 2D) 
1 Td (0442) 878015 H*x [D4421S76S34 



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Bee our u p I B d e w pftf lag, la Op a on ToUl»l pag» 60 S 


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26 


FINANCIAL TIMES WEDNESDAY MAY I X 1994 


COMMODITIES AND AGRICULTURE 


Coffee futures 
burst through 
$1,900 a tonne 


By Alison MaWand 

Coffee futures stared briefly 
into the abyss yesterday before 
regaining their poise and 
bursting back through &900 a 
tonne to a fresh five-year high, 
up 6.7 per cent on the day. 

The London robusta market 
began strongly but then 
dropped over £70 after New 
York arabica futures stumbled 
into profit-taking shortly after 
the opening. The subsequent 
recovery in New York fired 
London into another round of 
buying. 

The July contract in London 
closed up £122 at SLS35, just 
below the day's high of $1£47. 
In afternoon trading In New 
York, the second position was 
up marginally at 109.2 cents a 
pound. 

“I think the two markets are 
goading each other on," said 
one London trader. However, 
the dip In New York had “put 
the frighteners on” because US 
funds were believed to be 
about 30,000 lots long. 

Traders have been warning 
of a huge correction after the 
London market’s 62 per cent 
rise this year, much of it in the 
past two weeks. But news yes- 
terday that arabica coffee pro- 
ducers are free to release 50 
per cent of their stocks now 


Coffee 

London Robusta, 2nd position ' 
Spar tome 
2J0Q0‘ 



Survey shows gold investment rallied strongly in 1993 


that the trigger price has 
passed 85 cents a pound caused 
only a blip In the upward 
momentum. 

“Sometimes a market just 
goes and goes and goes,” said 
Mr Bill O’Neill, analyst at Mer- 
rill Lynch in New York. “We 
view stocks as being extremely 
fight and the fundamental situ- 
ation as constructive. But 
we’re starting to discount a lot 
of the news. We should be cau- 
tious.” He added, however, that 
further g»fris might be justified 
by the significant reductions in 

flnlnmhlan anri Rr agfKan crops 

pnri high, mtamai prices in Bra- 
zil, which, were discouraging 
exports. 


MARKET REPORT 

Copper prices beat retreat 


COPPER prices finished lower 
at the London Metal Exchange 
yesterday, with the market 
beating a retreat from new 13- 
month highs on expected tech- 
nical sailing and profit-taking. 

The high-water mark for 
three months delivery was 
£2,097 a tonne, but final busi- 
ness was at £2.073, down $4 
from Monday's after hours 
close. 

Other metals were pulled 
back from artificially hi gh lev- 
els by copper, although ALU- 


COMMODITIES PRICES 


MINIUM proved resilient, and 
continued its technical base- 
building above the $l,330-a- 
tonne level 

Complied from Reuter ■ 


(A3 ac Monday's dare* 


Atomtatan -3,178 to 2926975 

AtsiMn Bay -660 tn 37.800 

Copper -10022 to 446X00 

Laad +125 to 343.126 

MOM -852 to 132996 

23nC +6,100 to 1.184,875 

Tin +880 to 27.840 


By Kanneih Gooding, 

Mining Correspondent 

Some 348 tonnes of investment 
gold, the highest level for more 
than tan years, was bought in 
1993, compared with only 69 
tonnes in 1992, according to the 
latest survey of the market by 
the (Sold Fields Minerals Ser- 
vices research group. 

A revival of interest in gold 
was sparked among American 
and some European investors 
by the well-publicised activi- 
ties in April and May last year 
of two high-profile interna- 
tional financiers. Sir James 
Goldsmith and Mr George 
Soros. 

They helped to end a five- 
year bear market in gold and 
lift the price by £60 a troy 
ounce, or about 18 per cent, 
during 1903. 

On the other hand, a combi- 
nation of higher prices and 
economic weakness in Europe 
and Japan caused the first fall 
in the use of gold in fabrication 


Global Gold Supply and Pomand (toreros} 



1990 

1991 

1992 

1993 


1990 

1991 

1992 

Supply 





Demand 




Mine production 

2,133 

2.161 

2£37 

2^81 

Babricatton 




Not official sains 

187 

119 

602 

522 

Jewellery 

2,145 

2,306 

2.193 

Old gold scrap 

524 

461 

463 

535 

Bearartcs 

217 

206 

176 

GoU loons 

5 




Other 

277 

305 

274 

Forward sties 

224 

96 

16S 

198 

Total fabrication 

2.539 

2^15 

3,143 

Option hedgfcio 

7 

IS 

103 

2 

Bar hoarding 

224 

252 

273 






Gold loams 


45 

85 

Implied cSstnuestiTient 


263 



fmpfied investment 

218 


69 

Total Supply 

3,080 

3,114 

3,570 

3,538 

Total Demand 

3.080 

3,114 

3,570 


183 

304 

1,989 

137 

65 

348 


Skune CaH FUkk Mharrf Mm 


in the western world since 
1987. The drop was particularly 
noticeable in the jewellery sec- 
tor - which accounts for more 
than 70 per cent of gold 

demand and n se d almo st 7 per 
cent less gold: 2,302 tonnes 
against 2,474 in 1992. 

Mr Stewart Murray, GFMS 
managing director, po inted out 
yesterday that speculators and 
investors could drive the mar- 
ket either way this year, 
depending on such thing s as 


their perception of whether the 
US authorities had inflation, 
under controL This made it 
impossible to make sensible 
price forecasts. 

Nevertheless, “based on fig- 
ures for the first quarter of 
1994, it appears that consumers 
in the main Asian markets 
have adjusted to the higher 
price levels, and there is now 
good support for gold in the 
£270 to $390 an ounce range”. 

Mr Murray admitted some 


producers might find it worry- 
ing that with the average price 
for the year only 4 JB per cent 
up from 1992 a record 516 
tonnes of scrap supply was 
encouraged into the market, 
mainly from the recycling of 

old jewellery. However, he said 
the Dow was not surprising, 
given the rapid rise in the past 
few years of the “pool” of gold 
jewellery. Last year there were 
special factors such as many 
Indian investors turning tem- 


porarily from jewellery to bars 
of gold, property and equities. 
Also many of the Saudi Ara- 
bian sales were to exchange 
old jewellery for items of more 
modern design. 

Other points from the sur- 
vey, the fifth since GFMS - 
which is financially supported 
by Gold Fields or South Africa, 
that country's second-largest 
gold producer, and Newmont. 
the biggest North American 
producer - took it over, 
include: 

• Mine production outside the 
former eastern bloc countries 
rose only 2 per emit to 1,891 
tonnes, the lowest growth in 
output since 1980; 

• Both average western world 
cash and total mine production 
costs fell by 5 per emit, to £233 
an ounce and $285 respectively. 

• Forward sales by gold mist- 
ing companies increased to 
their highest level since 1990 
and the second highest level 
since 1980 - 180 tonnes against 
165 in 1932; 


• Central hank sales added a 
net 475 tonnes to supply, dotu 
from 626 tonnes. Cress 
totalled 608 tonnes involving a 
central banks or other goro&. 
ment organisations. In 1993 
some IS official organisatio ns 
sold 978 tonnes, including boo 
tonnes sold between thfm by 
the Belgian and Dutch cental 
banks; 

• Global supply was sBgfcQy 
down, from 3,570 teanasio 
3538. even though output & 
the Commonwealth of hdqnn- 
dent States la estisated to 
have held up well atm toman 
against 237 tonnes; 

• The so-called "afobal 
between supply and nhy Sfo 
demand narrowed from Ttotu 
300 tonnes. Mr Murray asb*&- 
“Will private or official hoUScs 
011 the gap as they did .b^ 
year or wtXL the price iuw&tte 
rise to tease the gold aut# 1- " 
Gold 299€ £SS or G&& 
GFMS, Qnmcoat , 
as S treet Lon don, 

UK 



Cyprus rebids for 
Chilean copper 

By Jason Webb in Santiago 

Cyprus Amax, the US mining 
group, showed it was still 
interested buying 51 per cent 
of El Abra in Chile, one of the 
world's biggest undeveloped 
copper deposits, by delivering 
a revised offer to Codelco of 
Chile six days ahead of the 
May 15 deadline. 

No details were given of the 
revised terms. Cyprus and its 
partner Lac Minerals of Can- 
ada asked for changes after 
tests showed the copper con- 
tent of the El Abra ore was 
lower than suggested by Codel- 
co’s test work. Lac recently 
sai d it would hand its shar e of 
the project to Cyprus, if the 
new offer was accepted. 

Codelco’s board will consider 
the new offer on May 18. It has 
said that It will call another 

Internati onal fainter if the bid 

fails to meet requirements. 
Two of the world’s biggest min- 
ing groups, BHP of Australia 
and RTZ of the UK, which lost 
to Cyprus in the first tender, 
have indicated they may rebid. 


Russia’s cashless trade in Kazakhstan’s gas 

Diplomacy is keeping an ‘incomprehensible 5 system going, writes Robert Corztoe 


P olitical confusion as well 
as natural gas conden- 
sate flows along the pipe- 
line that. ImlcQ the giant Kar a- 

chaganak gas condensate field 
in Kazakhstan with one of the 
world’s largest de-sulphurisa- 
tion plante in the neighbouring 
Russian region of Orenburg in 
the southern Urals. 

The break-up of the former 
Soviet Union has left an inter- 
national border r unnin g 
through an oil and gas-rich 
area developed according to a 
single integrated plan. Produc- 
tion on both si d e s of the fron- 
tier has been mamtefnad But 

there Is deep political and eco- 
nomic uncertainty about the 
future relationship between 
the various elements of the 
industry. 

It is compounded by a chain 
of non-payments. In the case of 
Orenburg, Gazprom, the inte- 
grated Russian gas company 
that runs the processing plant, 
pays nothing to the Kazakhs 
for the 3 9m tnrmpg of Karacha- 



ganak condensate it processes 
each year. And it receives no 
payment from the refinery 
400km away in the autono- 
mous Russian republic of Bash- 
kiria, to which it sends the 
partly treated mnrtengnfa. 

“Its incomprehensible as to 
how the system works,” con- 
cedes Mr Vladimir Mirititanov, 
an official of the regional gov- 


ernment But tiie products con- 
tinue to flow because It is dip- 
lomatically expedient for them 
to do so. 

Officials say mnnh effort is 
heing spent to “recreate tom 
ties” with Kasakhstan on a 
co mme rcial basis. But there 
are also moves to boost the 
capability of the regional 
energy industry to operate 
ZO0TB inHepenriantiy , a develop- 
ment which is mirrored in 
other energy-rich regions 
throughout Russia. 

The debate in Orenburg and 
elsewhere over the future 
structure of their oil and gas 
industries inrindaw the degr ee 
to which re gio ns control their 
resources and the role of for- 
eign ffrtmpantoft Tho outcome 

is not only crucial to the eco- 
nomic well-being of tha produc- 
ing areas; over tima it could 
affect the level of Russian oil 
production and the flwimmt it 
can export 

The debate in Orenburg has 
been given added flavour by 


frequent interventions by Mr 
Victor Chernomyrdin, the Rus- 
sian prime minister, who was 
bom in the area and began his 
previous career in the Russian 
gas industry with the local 
Gazprom subsidiary. 

He recently chided managers 
at the local gas industry, 
which produces about 6 per 
cent of Russian gas, for failing 
to move more qtoddy on plans 
to expand the number of prod- 
ucts recovered from the raw 
gas. 

Buginniii frftiriaiic say recent 

annual oil output of about 7.5m 
tonnes has matched the best 
levels achieved during the 
Soviet era. But Mr Chernomyr- 
din has criticised the local 
industry for skimming off the 
“cream" of the resource, and 
failing to realise the full poten- 
tial of M i sti ng wells. 

Mr V ladimir Vqia g in , Oren- 
burg’s president, believes 
increased production of oil, gas 
and minerals - combined with 
a move towards extracting 


more valuable refined products 
from raw resources - is toe 
key to developing the region 
But Orenburg needs to gaf& 
control over a greater portion 
of its resources and attract for- 
eign investment if it to to 
imptomgnt a strategy cf using 
such reserves as coQatend 
loans to finance canverefato gf 
defence plants and notkeongy 
joint ventures. /- 

At present regions control # 
per cent of their resources, bat 
are demanding 50 per cent 
even if they succeed: in tSs 
political struggle with Moscow, 
the problem of attr a c ti ng for- 
eign capital remains. _ »\ : 

The take up of sduanea.lo 
encourage export-oriented 
energy joint ventures has so 
far been patchy. It la also 
uncertain how many nampa- 
nies wm take advantage cT-a 
privatisation {dan which will 
allow foreigners to bid for 90 
per cent of the shares in 
regional oil companies fetor ' 
tills year. y 


CROSSWORD 


^%r- 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices from AmafganvM Mots! Tradtog) 


CaNi 

Ctone 1305_5-a5 

Pravtous 1301-2 

Koh/low 1309J 

AM Official 1309^5-10.0 

Karti dose 

open tot 247.629 

Total daily twnovar 28,381 
■ AUMNMM ALLOY (S per tonne) 

3 nttha 

1333-4 

1328-0 

133871328 

13365-7X1 

1333-4 

Ctoso 

1315-25 

1330-40 

Pravtous 

1290-6 

1305-10 

High/tow 

1355/1330 

135071320 

AM Official 

1355-80 

13345-7D 

Kart] dose 


1350-60 

Open tot 

X938 


Total daOy tunovw 
■ LEAD (S per tonne] 

741 


CtoM 

4ffiL£KL5 

479-80 

Previous 

461i+2J 

476-9 

Hghriow 

463 

463/47^5 

AM Official 

462-3 

480-05 

Kerb dose 


48005 

Open Irt. 

35.199 

474-5 

Total daty ttmtwr 

5,432 


■ IflCKH. (S per tonne) 


Close 

5780-5 

8835-40 

Pravtous 

57B0-70 

6836-40 

Hfgh/tow 

- 

5660/5796 

AM Offidd 

5757 -B 

56305 

Kerb dose 


6790-000 

Open toL 

56^07 


Total doRy sanover 
■ TO <$ per tome) 

0.004 


Close 

53834 

5446-50 

Previous 

5345-55 

54206 

tflgMaw 

- 

5470/5410 

AM OffidN 

5400-5 

5455^0 

Kerb dose 


5445-50 

Open W. 

16.B40 


TotN defy turnover 

10562 


■ ZINC, special Mgh grade (S per tonne) 

Ctoaa 

944J-W 

9607 

Previous 

955^-6^ 

977-8 

Hgh/kw 

949 

974/963 

AM Official 

B49-9X 

8705-1.0 

Kerb dose 


984-6 

Open tot 

101^03 


TotN dafy turnover 

20.384 


■ COPPER, grade A(S par tomN 


Ctosa 

2076^-7^ 

208005 

Previous 

2055.5-6.3 

20507 

hfigh/tow 

20B5 

2098/2005 

AM Official 

2065-6 

208090 


Precious Metals continued 

■ QOLP COMEX POP Troy ca.; S/troy ca.) 

Sett Dart Open 

■toe cttHga W H» U M 

Uar 378,8 -14 

Jm 37B9 -Z5 38X5 3713 7*408 24,840 

JN 381.1 -ZS 

haa 38215 -25 3855 3823 17.791 1,088 

Oet 3853 -25 388.1 3855 9988 1Z1 

Dao 380.1 -23 391J 3883 14,480 586 

TaM 142017 27,808 

PLATINUM NTMEX (50 Troy OZ 4 Stacy Qgj 


JN 

3853 

■08 

4009 

3950 18,742 

2093 

ON 

3076 

•05 

4015 

3075 

2545 

115 

Ml 

S99.1 

-65 

4025 

399,1 

834 

1 


4008 

-55 

4060 

4009 

831 

5 

TotN 





21,082 

2X14 

■ PALLADIUM NYMEX (100 Troy at: Wroy or.) 

JB 

135.10 

-2.80 

13890 

13400 

2910 

148 

SB 

13465 

-250 

- 

- 

1922 

187 

Dec 

13520 

-290 137J5 

13400 

482 

160 

Mar 

13470 

-29Q 

- 

- 

6 

- 

ToM 





5,100 

508 

■ 8B.VER COMEX (100 Tray a^Centa/boyoz) 


823.1 

-129 

5409 

5285 

1.153 

530 

Jb 

529.1 

-128 

5315 

529.1 

3 

- 

JN 

531J 

-128 

5445 

5305 80,788 15^96 

SB 

53BJ 

-128 

3465 

538L0 

8,085 

306 

Dac 

5443 

-129 


5440 11704 

271 

Jb 

5464 

-129 

- 

- 

32 

- 


GRAINS AND OIL SEEDS 

■ WHEAT LCE g per tome) 

Salt Date Opm 

prim ctouga Ugfa Low fat M 

■ay 114-23 -130 11&25 11425 282 67 

Jaa 114.15 -ISO 11 525 11420 1,015 99 

Sap 3830 4136 9825 9550 48 5 

New 9935 -030 9085 90S 1371 172 

JB 10155 -033 10130 10130 1, 212 13 

Nbr 10570 -030 1(070 • 358 26 

ToM 5JB2 404 

■ WHEAT CHT (S.OOObu rata; centataOto btahoQ 

Kw 31644 -3/2 320/0 31574 810 205 

JN 3214} -316 327/D 320V 140320 22370 

Sap 325/4 -38) 3300 323/8 35300 4340 

Dae 335(2 4/0 340/2 334/2 37375 4305 

Mar 338/6 -VO 342/4 338/0 2305 225 

Nay 335/6 -2/0 3384) 335flJ 150 

TaM 2I73H 31(070 

■ MAIZE COT ftOOO bu into; centa/5gb buNwQ 

■ay 2584) 40/4 258/4 256/4 28360 23JB5 

JN 257/4 40/4 25945 257/0880300129355 

Sap 240/6 +06 252/0 248/4167.485 11270 

Dae 243/2 +2/2 245/4 242^ 388216 46JB5 

Mm 2504} +143 253/2 290/2 41275 3310 

My 2554) +1/4 266/4 255/0 4325 185 

ToM 1327M2KX00 

■ BARLEY LCE (E par tonne) 


SOFTS 

■ COCOA LCE (E/tome) 


VM 


Sait Date Opaa 

prtea drags HgP Low tat 
Hay 897 -2 903 888 209 25 

JN 930 -3 937 928 21.478 1290 

Sap 947 -2 853 945 14231 616 

Doc 868 -2 975 970 22221 202 

Mm 989 -3 995 988 27305 397 

■ay 1003 -2 1009 1008 10245 10 

ToM 107,152 3365 

■ COCOA CSCE (10 tames; S/tannss) 


MEAT AND LIVESTOCK 

■ LIVE CATTLE GME (40,000a»; cerrts/Bjs) 

SNi fate 0pm 

prim drags Ogfa Low M VM 

JB 68250 -0050 88350 S7325 27258 8371 

Mag 67325 -0025 88200 67380 18227 3303 

Oet 70200 -0175 70700 70058 1222B 2388 

Dec 71290 -0025 71200 70900 8202 1.137 

» 71325 -0025 71350 71.425 2278 $34 

Apr 72329 ■ 72300 72300 1398 92 

ToM 80997 10483 

■ LIVE HOGS CME (409006*; canta/toa} 


No.8,450 Set by DANTE 


*B 

JN 

SB 

Dae 


ToM 

■ COCOA pCCO) (SPR*aAoma) 


1183 

-8 

1188 

1188 

48 

. 

JB 

48950 

-0.400 46900 48900 145B3 

3932 

1208 

-8 

1221 

1202 38930 5585 

JN 

48590 

-0L700 50450 49.450 

8519 

1943 

1229 

-12 

1246 

1227 14J64 1904 

fao 

48.100 

-0X25 48800 48050 

3986 

1.148 

1270 

-10 

1281 

1270 


732 

Oct 

43900 

-0X50 4457S 48900 

25« 

353 

1301 

-13 

1314 

1300 

10581 

SB 

Ob 

44700 

-0X25 48190 44950 

2929 

228 

1330 

-13 

1333 

1330 

4928 

585 

Hft 

44858 

-8150 44950 44900 

540 

33 





81912 8JB2 

ToM 



30^H 

79« 


M7 


Pika 
. 93957 


10 day average 
■ COFFEE LCE (S/toraie) 


n/a 


Prat By 
93043 

ate 


TaM 


114387 17,141 


ENERGY 

■ CRUDE Ott. NYMBC (42900 US gate. StaerraQ 

UBrt Date opm 

prim drags Ugh Low lot VN 

Jan 1734 -009 1730 1732111,495 57384 
JN 1725 -007 17.46 1721 79.721 30182 

*41 1735 -008 1724 1734 30311 1039S 

SB 1096 -007 17.12 1638 28289 10250 

Oet 1634 -033 1733 1634 10244 3286 

*W 1632 -002 1734 1832 12201 3316 

ToM 43E2BB141JD02 

■ CRUDE OP. jPE Ihwj 


Mat 

10950 

+150 10990 

58 

10 

SB 

9790 

-050 8790 

- 137 

4 

Hov 

3890 

-080 9990 

- 177 

32 

Jm 

10025 

- 

- 30 

- 

Mm 

101 JO 

■015 10196 

5 

10 

Ha 

103.75 

• 

5 

.. 

TOM 



4Q 

a 

■ SOYABEANS C8T (SJXObu mh; carMOU CuaM) 


Kart) doea 2072-3 

Open tat 182317 

TotN daiy turnover 80301 

■ LME AM OflMM C/S rate: 14843 

LME Ctoatng E/S rate: 14817 

Spot 1.4003 3ntel.4888 8mttKl4B88 8m6*lX888 

■ HIGH QBAPe COPPER (COMEX) 



latat 

fate 


OpB 



Prt» 

dMga 

9* 

Urn tat 

VN 

Jb 

1810 

•012 

1830 

1898 58958 24510 

JN 

1SL91 

-097 

1098 

1588 54537 1492S 


1592 

- 

1595 

1577 17540 

2979 

SB 

1870 

-004 

1597 

1570 12948 

198Z 

ON 

1573 

■OJJ2 

1892 

1573 8514 

1580 

Mat 

1598 

-097 

1582 

1588 4537 

387 

TOM 




1B1519 48587 

■ HEATDra OIL NIKX (42900 US gatatdUSgtis) 



CtoM 

Date 

dtoga 

non 

tew 

OPB 

tat 

M 

Hay 

0020 

-190 

8795 

8810 

3510 

760 

JB 

9810 

-195 

9750 

9810 

1978 

2 

JN 

8690 

-155 

8795 

8580 44983 

284 

JtaB 

9590 

-155 

8790 

8090 

435 

1 

SB 

04 an 

-150 

8880 

9510 

7929 

4 

ON 

9495 

-150 

- 

- 

202 

15 

TaM 





87968 

1936 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
[ftlcoB suppBad Dy N M flotfacMd} 



LtaaN 

Date 


OPB 



aria 

d“B 

Hgh 

lam tat 

VN 

Jb 

4890 

-034 

4855 

4790 46,127 15222 

JN 

4895 

-032 

4870 

4025 32255 

89*4 

AB 

4090 

022 

48.12 

4880 13946 

1934 

fap 

4875 

022 

50.15 

48.75 11.107 

1981 

ON 

5870 

0.17 

5090 

50.70 8912 

187 

Rev 

SI 90 

0.12 

5196 

5190 5,425 

5B1 

T&M 




1439a Z79B4 

■ QAS OIL PE (S/toraN 




Sett 

fate 


faB 



griaa 

faB 

U* 

In tat 

W 

■ay 

15390 

■1.70 

15425 

15290 17932 

S9B 

Jm 

15225 

■125 

15390 15225 28X56 

7.720 

M 

13ZJ3 

■1.00 

15490 152J5 159*6 

4,174 

Aag 

15425 

-0J5 

15525 

18490 6228 

1990 

SB 

1SG.0Q 

OJ5 

15790 

15590 6954 

1920 

ON 

156.75 

-090 

15930 

15820 8432 

040 

TaM 




98,708 21257 

■ NATURAL GAS NYMEX (10900 rnBbL; SfanBOi) 


Hay 

86510 

+1/4 

671/0 

B8M) 18720 

8055 

JN 

683/0 

+0/4 

aes/o 

088/0321380128X15 

Aag 

857/4 

+MJ 

863/4 

6S3/0 84,140 

6985 

Sag 

832/4 

+0/4 

837/4 

0SO« 35995 

5305 

fla* 

814/2 

+2/0 

6184) 

610*4218345 35390 

JB 

62QM 

+1/2 

024/4 

817/0 21305 

445 

1 MN 




880993186,190 

■ SOYABEAN OD. COT (BO.OOOtoa; cantarib) 

May 

28X8 

+098 

2872 

78,-% 

4332 

1X85 

JN 

28X0 

+0.12 

2804 

2823 38938 

5917 


2808 

+0.16 

Tuns 

2793 12306 

738 

SB 

27.48 

+0.14 

2793 

2727 

10748 

252 

ON 

2830 

+0.15 

2830 

7H7K 

8920 

200 

Dac 

2538 

+0.18 

235 

25X8 

18982 13334 

TaM 





99988 

9982 

■ SOYABEAN MEAL CBTflOO tons; S/tori) 


Mn 

1852 

•19 

1879 

1849 

1991 

1938 

JN 

1887 

-09 

1882 

1880 

37.002 

6912 

Aag 

1880 

-09 

1873 

1855 13344 

1X83 

SB 

18*3 

•07 

1852 

184.0 

8332 

384 

ON 

1813 

99 

1823 

1809 

1180 

330 

Dac 

1809 

-08 

1815 

1799 

16972 

1303 

TaM 





M9M 12202 

■ POTATOES LCE (E/tonnN 




JOB 

TWA 

. 

„ 


2 

_ 

NO* 

909 

- 

- 

- 

- 

- 

Mar 

1059 

- 

re 

- 

re 

re 

Apr 

1379 

+04 

1380 

1369 

542 

34 

mb 

1409 

. 

. 

. 

re 

re 

Jaa 

1073 

• 

- 

• 

• 

- 

ToM 





542 

34 

■ FRBGHT (HFF0Q LCE (SlCWndex pctaQ 


n*j 

1490 

. 

1485 

1470 

884 

197 

JB 

1385 

- 

1402 

1380 

687 

75 

JN 

1290 

-5 

1300 

1280 

626 

GO 

ON 

1375 

-6 

1383 

1375 

337 

12 

Jb 

1393 

-4 

1388 

1383 

IBS 

10 

Apr 

1380 

-8 

1380 

. 

41 

5 

TWN 

Ctaaa 

fttr 



2730 

348 

BH 

I486 

1433 






■V 2005 +115 2010 1900 1,782 121 

JN 1338 +123 1947 1870 17932 3X25 

SB 1884 +115 1800 1833 14.370 &76B 

Itav 1888 +127 1871 1810 60M 1/43 

JB 1849 +112 1850 1788 5953 19*0 

(far 1811 +103 1025 1800 2905 219 

TNN 47,74110929 

■ COHS *C CSCE (373009m; canta/ba) 

Mm 

10890 

+030 

11195 107.15 259 

47 

JN 

10890 

+070 

11390 10530 3437S 10928 

Sap 

103.10 

+070 

11295 106JO 13.7H7 3,188 

Dac 

11H.T5 

+010 

111.75 10690 7919 

723 

UtM 

10000 

+095 

11190 10735 3971 

438 

Mm 

107.75 

-025 

11130 10050 429 

2D 

TaM 



0992814901 

■ COH=S OCO) (l)S cents/pound) 


■Bra 



Price Prwf. t 

tar 

Ornpoam 


.10095 9837 

IS My araraga 


_ 8897 8539 

■ No7 RRSNIIM RAW SUQAR LCE (cmta/Kta) 

JN 

1298 

-007 

1216 - 2389 

16 

ON 

1191 

-008 

1200 - 563 

5 

JB 

1192 

- 

- 

“ 

Mxr 

1131 

•009 

- - - 

• 

TMN 



3.1B2 

21 

■ WHITE SUQAR LCE (Monrw) 


AB 

33450 

-130 33790 33400 119% 

475 

ON 

31430 

-150 31790 31490 7978 

389 

Dac 

30690 

-130 

- 512 

- 

■ar 

30400 

-230 

30870 30490 1,175 

209 

Bay 

30450 

-190 


1 

Jb 

30790 

•190 

- 215 

- 

TaM 



213» 1984 

■ SUQAR HI' CSCE (112900b8; centa/tM) 


JN 

1193 

-an 

1295 1192 9QX16 ! 

1,107 

ON 

1192 

■0.10 

1198 1191 35907 1,702 

Mw 

1133 

-ao7 

11.45 1130 10771 

434 

May 

1198 

-QJB 

11X0 1198 2303 

9 

JN 

1194 

-om 

- . - 1300 

4 

ON 

1193 

■am 

1132 1132 488 

32 

TaM 



10BJ2B 9988 

■ COTTON NYCE (50000K m centals) 


JN 

8093 

+oji 

8195 7800 833 

_ 


■ PORK BELLES CME HOOPatoa; c«nB/lb^ 

Bay 45J00 -0750 48200 45.100 275 100 

JN 46300 -0500 46200 48300 5384 2.141 

Mm 46300 -0125 44250 41000 1307 401 

FB 50575 -0129 6O7G0 50200 280 49 

■ar 48300 -0300 - 48300 22 2 

Mar 51460 13 2 

ToM 0883 2385 


LONDON TRADED OPTIONS 

Stifles prtea S tonna O aSa-— — -Puts— - 

■ AUAHNRM 


(88.7%) LME 

Jill 

ON 

JN 

Oct 

1300 — 

51 

85 

23 

34 

132S 

37 

71 

34 

44 

1350 

28 

58 

48 

58 

■ COPPER 





(Grade A) LME 

JN 

Oct 

JN 

ON 


89 

118 

25 

52 

2050 

68 

90 

44 

73 

2100 

44 

87 

69 

100 

■ COFFEE LCE 

JN 

Sep 

JN 

Sep 

1500 

438 

405 

2 

21 

1550 ... 

389 

383 

3 

28 

1000 

342 

324 

6 

40 

■ COCOA LCE 

JN 

Sap 

JN 

Sep 

875 

62 

88 

7 

16 


44 

71 

14 

24 

825 

28 

56 

24 

34 

■ BRENT CRUDE IPE 

Jui 

JN 

Jun 

JN 

1550 

. 

112 

5 

_ 

1600 

23 

71 

8 

29 

1850 

8 

51 

5 

48 



LONDON SPOT MARKETS 

■ CRUDE OB. R38 (per barrN/Jufi) +or- 


I (TroyozJ 


nkifl fa 
moon fa 
’s Mg* 

’a Low 
tone ctow 
b Ufa Mam 
□nth — 
oraha — . 


9 prtea 

38000^0040 

38230*382.40 

381.65 

380.15 

382.10-06230 
37820^378.70 
38130-381 .SO 




254312 


Gold Lantflng Rates (Vs USS) 

4.01 6 month s — — -438 

—..4.14 12 monBi a 6.03 

4L27 


no® 

r 

CeM 

anntt 
a Leal 
Sovereign 


prtroy at 
38035 
305.15 
368.75 
38025 
S prtc* 


38030-393.10 


US «ta aqidv. 
538.15 
54530 
5522S 
56735 
£«**. 
2S8-2&2 

59-62 



LateN 

ton 


OPB 



Prtea 

fata 

"til 

Law tot 

VN 

Jb 

1970 

-0920 

1-985 

I960 17952 

8,021 

JN 

2. CCS 

-0912 

2935 

2920 14.198 

2917 

Mtq 

2953 

-0908 

2960 

29H 10973 

880 

SB 

2985 

-0010 

2990 

2963 10841 

695 

ON 

2.140 

-0906 

2.146 

2.136 7933 

309 

■m 

2239 

-OHIO 

2940 

2230 S9« 

195 

TaM 




110362 149*8 

■ UNLEADED QA80U8E 



NYMEX (42900 US gife; PUS gtiaj 



UttN 

0 W« 


OpB 



Prtea 

dtanga 

"til 

Ism tot 

WN 

Jb 

0079 

-032 

51.50 

5070 43946 

23910 

JN 

31.15 

-027 

5195 

51.10 20918 

10368 

m 

0190 

-012 

51.70 

51.15 12962 

2938 

SB 

5030 

-027 

5190 

5095 8903 

1932 

ON 

«9S 

-012 

4UQ 

4896 2985 

780 

Itav 

48.10 

-002 

4030 

4015 2.139 

224 

IbM 




97969 

30388 


WfOR METALS 

Baopaan flee markeL bom Metal BNMtn, S 
par b in w ariiii w wSaas o tharmte o staled 
Oast mmritu In taaJa l i . wham changed). Aofl- 
mony: 99356. 3 per tome. 2450-2300 PL200- 
2300). BteoKtttc min. 9939%, tonne lata 22S- 
24a CtaMun mki 993%. 7S-8S cants a 
pound. Cobalt MB tree maM. 993%. 2080- 
2430 (24.00-25.00]; 982%. 19.00-1 9.80 
(1830-1930. Marciay: min. 9939%. S p» 76 
tb flask. 90-105 (90-100). Motybdenua: 
driaianad mdytm c oxtda. 3.15-0.25. Sato* 
nknc mb 993%. 330435 (330-43®. Ttng- 
atan ore: Wn d ar d mb. 65%. S par tame unit 
(10kg) VTO, cH. 33-45. Vvadham: min. 98%. 
etf. 125-145. Urwrfacr Nuexco exchange 
wtue. 7.00. 


1 7S83 +1.18 78.10 7435 27,116 4214 

K 74.42 +032 7420 7135 4JB2 978 

■r 7525 +030 7535 7440 1S38S yn 

qr 7800 +125 7B30 7430 1377 283 

I 7825 +1.10 7S.73 75.75 744 105 

M e^+cr y 

OR4WOE JUICE MYC£ t153Ka>s; canta/fca) 

«T 8130 -3.15 042S 8330 

I 9340 0.30 9530 9320 

P 9540 -320 9730 8620 

* 8140 090 OP TS 9840 

o 8735 015 10120 8726 

» 10030 430 10330 10030 


406 116 
13333 2.175 
2,457 480 
1211 109 
1118 291 
718 117 
28468 3280 


VOLUME DATA 

Open btaraat and Volume data shown tor 
contracts traded on COMEX. NYMEX. CUT. 
NYCE, CME. CSCE and IPE Crude 01 are m 
day in 


INDICES 

■ HBJIBg (Basot 18/H/31-1001 

“5J, 1 ® 9 month ago year ago 

1802.7 1887.1 18203 18804 

■ CRB ftnuroa (Baaa: 4^56=10^ 

® montt 890 Jew ago 

22621 22B31 222.13 207.77 


DubN 

S1494-498y 

-095 

Brer* Blend (rioted) 

S1R20-692 

-ai2 

Brent Bland (Junf 

3iaio-ai2 

-aio 

W.TX ( 1 pm esq 

*17.B3-7J50y 

-0X5 

■ Ofl- PRODUCTS NWEprompt deBvary OF (toma) 

Prardum QoaoSne 

Si 70-181 


Gas 09 

*152-153 

-2 

Heavy RjeJ 09 

*80-83 

+1 

Napritha 

*154-156 

-09 

Jet Fuel 

SI 85-167 

-3 

lareta EiiLyuAAA 

1 UULBJOHJi LWinm 



■ OTHER 



Gold (par tray 03 $ 

*38020 

-1.05 

Steer boar troy 

536.50c 

-590 

PtaHnun fcw troy ozj 

SS9690 

-1.6S 

Paladum (par troy oz.) 

Si 35. 75 

-1.75 

Copper (US prod) 

102.00c 

+2.00 

Lead (US prodj 

38.13c 


Tin (Kuda Lunpu) 

14-2Qr 

-091 

Tin |Naw YofH) 

25050c 

-2.00 

Ztoc (US Prtoia WJ 

Itoq. 


Collie Ohre wNghdt 

1Z7.18p 

+192* 

Shaap (tea vrelNWt4 

1S193p 

♦3X1* 

Plga pve vralglil) 

T723p 

+130- 

Lor. day sugar tew) 

*28790 

+095 

Lon. day sugar fete) 

$34190 

+3-00 

Tate & Lyle export 

£30490 

+11.00 

Barley (Eng. feed] 



Mate (US No3 YeSow) 

$13050 


Wheat (US Dark North) 

£1 80.0k 


Aubbertteiff 

71.73b 


Rubber (JuQV 

72-00p 


RN*or(KLRSSNo 1 Jun) 

25990m 

+050 


ACROSS 

1 Close - doubly close in fact 
(6) 

4 Church officer In charge of 
one side of Glasgow (6) 

8 rm in favour yet show dis- 
pleasure <7) 

9 Attack by a saint about one 
who became one (7) 

11 Racketeers’ go-between? (6,4) 

12 Port that's a credit to the east 
(4) 

13 Home far a rabbit is pointless 
for a donkey (6) 

14 Start on the green and accel- 
erate away &3) 

16 Oppressive cranny, it needs 
freshening op (8) 

18 Describing a boom in the 
travel industry (5) 

20 Maybe it needs vitamin Bl (4) 

21 Feel people should learn from 
it (10) 

23 Reel at different Umwi (7) 

24 A record about which there’s 
some correspondence? (7) 

25 Redial correctly, or get off the 
line (6) 

26 Minded being watched (6) 

DOWN 

1 Old raOwaymen have points 
to look after (5) 

2 She gives patient advice on 
social problems (7) 

3 Faces up, perhaps, but not to 
a challenge (5,4) 


5 Peg-legged supporter of the. 
school board (5) 

6 Two items on the afternoon 
menu - or Just one? (7) 

7 The value of heating - or eat 
tog? (9) 

10 Painters may paint it, and in 
a variety of places (9) 

13 Youngster put to bed and left 
alone (9) 

15 Protection at a premium (9) 

17 Individual who’s returned 
hurt (7) 

19 Outside left required to be 
prodded into action (7) 

21 Emile provides something fra- 
grant (5) 

22 Many grew old behind bars 
(5) 

Solution 8,449 - 



Cooon* 01 (PMJS S56O0r 

Wm Ofl (Matey. )§ isnjBy +7 JO 

Cosn(PhQ§ *3713 

tombmVSl 51933y 

Ccmon Outlook A Index 85.15c -040 

Woo/top. (64, &4»1 4tep 

r 1,11111 Mrimi p ptiea/lm. c cwaflL 


Of broking and jobbing the Pdikait's fond. 

See how sweetly he puls your word onto bond. 

S/bilkaa 0 


JOTTER PAD 






FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


27 





FINANCIAL TIMES SURVEY 



■ Politics: nationalists 
are the powerbrokers 
Page II 


SPAIN 


■ Foreign investment: 
costs are catching up 
Page IV 


i. 

■CS. 


. ' %■ 


' A-Tjf . 
*;■ ^ 

- • • Sfc 


an s gas 

lohvr ' C orzine 


• ,v •-faJj., 
r, - 'ar> . ’ 
’ ‘ vt.; -jg, 

'■ mo 5j^- 

'"■T.CrC- 

'• •• >■ 

"• -Mift 


• : sje 


•. ~.:u 

• ; ■: 


SSWORD 





Wednesday May 11 1994 



The Plaza San Juan de Dios In Chflz Fmg»wme 


The periphery is 
Just too far out 

Afraid it may be consigned to the margins of the 
European Union, Spain is seeking ways to re-enter 
the international mainstream, writes David White 


E urope ... goodbye. That 
was how the hea dline 
ran. It was enough to 
make anyone stop short, 
coming as it did in the heat of 
final negotiations for enlarging 
the European Union from 12 
countries to 16. Could it be 
that, eight years after Spain's 
long-awaited and enthusiastic 
entry, the experience of Europe 
had produced such 
disenchantment? 

. Well, no. The front-page 
belonged to Marca, Spam's big- 
gest-selling sports daily. The 
story was no more than Beal 
Madrid being knocked out 
simultaneously from Euro pean 
football and basketball compe- 
titions. Nobody in Spain is 
against Europe or even seri- 
ously Euro-sceptical. Joining 
fulfilled an aspiration of 40 
years. For Spaniards. Europe is 
a synonym for modernity. 

But even so, in the words of 
one senior government officii 
"Spain is lraiwg its European 
virginity." The terms for 
enlargement have created 
some bitterness. The new 
Nordic members - sometimes 
referred to as “Vikings" - are 
felt to have been better treated 
than Spain. The ElTs centre of 
gravity is perceived to be 
■shifting towards the north and 
east Having joined in order to 
end its historic isolation on the 
periphery of Europe, Spain 
sees itself in danger of being 
consigned back to the margins 
Criticised by the opposition 
for not having exacted better 
terms for' Spanish membership. 
Socialist administration 
officials are frustrated at not 
having obtained more leverage 
in the compromise over EU 
council voting rights. They feel 
that a country of 38m people 
ahoultihe less easily overruled. 
There is also a widespread 


feeling - partly the result of 
high expectations - that Spain 
might have got more out of 
membership, although it 
continues to be a net recipient 
of EU funds. 

From its entry in 1986 until 
1991, Spain enjoyed faster 
growth than the average 
among its European partners. 
Since then, it has fired worse 
than average. Last year’s 1 per 
cent fall in gross domestic 
product was the worst 
performance since Spain began 
opening its economic borders 
under the Franco regime’s 1959 
stabilisation programme. And 

althou gh activity sho ws signs 
of picking up, it is unclear 
when or whether Spain can 
regain its growth p remium and 
start catching up again with its 
richer northern partners. 

The gnt from the showpiece 
year of 1992 - the Barcelona 
Olympics and the Seville Expo 

- has flaked off. Just as 
Spaniards were late in waking 
up to recession, which began 
that year, so too the perception 
of deep economic crisis still 
persists, despite the evidence 
of economic improvement 

U nemplo yment - the actual 
size of which lies somewhere 
between the 18 per cent 
registered with the National 
Employment Institute anH the 
24 per cent classed as 
unemployed in the 
government’s quarterly survey 

- is the highest among OECD 
countries. Spain has lm 
households in which nobody 
has a job. Although its 
economy has grown almo st 
threefold in the last 30 years 
and its population has risen by 
a quarter, there are no more 
jobs now than there were in 
1964. 

The government of Mr Felipe 
Gonzalez needed a period of 


stability while nurturing the 
economy back to health. But 
its hopes have been 
dramatically shaken by a 
political crisis over corruption 

Public outrage over the cases 
of Mr Mariano Rubio, alleged 
to have salted away stock 
investment gains in a secret 
account while governor of the 
Bank of Spain, and Mr Luis 
Rold&n. another Socialist 
appointee who managed to 
amass a real estate fortune 
While head Of the par amilitar y 
Civil Guard, has created a 
serious predicament for the 
government, provoking two 
ministerial resignations and 
the departure from parliament 
of two of Mr Gonzalez's former 
cabinet colleagues. 

Despite the resignations and 
promises of a crackdown on 
corruption and unrelenting 
prosecution of offenders, the 
Socialists’ credibility has been 
gravely damaged by the affairs. 
The dirty linen of ll years in 
power is being dragged out of 
the closet. More is likely to 
come out through a parl- 
iamentary committee set up to 
investigate party financing . Mr 
fimwiiM may have diffic ulty 
salvaging his own "clean" 
image, which up to now has 
been a vital political asset. 
Both the conservative Popular 
Party headed by Mr Jose Maria 
Aznar and the communist 
United Left have done their 
best to pin responsibility for 
the affairs on Mr Gonz&lez 
himself. 

The prime minister faces the 
probability of heavy setbacks 
in June in the European 
parliament ballot and in 
regional elections the same day 
In his home ground of 
Andalucia. His party, divided 
by clan rivalries, has lost much 



of its support among the young 
and In urban centres. 

Mr Gonzalez himself often 
appears remote, while govern- 
ment power has become 
increasingly concentrated in 
the Mondoa Palace, the prime 
ministerial complex outside 
Madrid. Most of his ministers 
are virtually unknown to ordi- 
nary Spaniards. Only two cabi- 
net ministers besides himself 
have survived from the origi- 
nal 1982 team photo, and only 
three since 1990. 

it is dear that Mr Gonz&lez 
is coanting on economic 
recovery to revive the Socialist 
party's worn image by the next 
gen- eral election, due at the 
latest in 1997. Last year it 
scraped through to win a 
fourth term but in a hung 
parliament, depending on 
support from the 17 deputies of 
the Catalan nationalist party, 
Converg- tada i Unid. The 
alliance, like the one between 
the Socialists and the Basque 
Nationalist party in the Basque 
country, is delicate. The push 
towards ever greater autonomy 
in the two regions creates a 
constant, nagging unease at 
the centre of Spanish politics. 


made worse in the Basque case 
by the persistence of sporadic 
terrorist killings 

How long a weakened Mr 
Gonz&lez ran rely on the par- 
liamentary support he needs is 
uncertain. For the moment, 
however, the economically-con- 
servative nationalists are will- 
ing to back the government in 
its pursuit of pragmatic free- 
market policies, aimed at open- 
ing up monopolies, curbing the 
budget deficit and creating 
favourable conditions for busi- 
ness and job creation. 

Against trade union opposi- 
tion, the government Is press- 
ing ahead with a packag e of 
labour reforms to relax the 
notoriously stringent rules on 
hiring and firing. Although the 
idea or lifetime job security 
will be hard to dislodge, the 
Spaniards are coining around 
to the realisation that these 
rules might actually impede 
the creation of new employ- 
ment. As has been demonst- 
rated enough times before in 
the history of post-Franco 
Spain, seemingly entrenched 
attitudes do not necessarily 
survive from one chapter to 
the next 


There can be no better 
example of this kind of sea 
change than the row over Nato 
membership, culminating in a 
1986 referendum which almost 
unseated Mr Gonzdlez from 
office within three months of 
Spain's joining the European 
Community. Spaniards today 
must wonder what the crisis 
was all about. These days 
Spain is virtually a full Nato 
participant and 1,400 Spanish 
troops serve alongside British. 
French and Canadian UN 
battalions in Bosnia- 
Hercegovina, the biggest force 
deployed outside Spanish 
territories since the Blue 
Division went to fight under 
German command on the 
Russian front. 

Spanish opinion is just as 
happy to have them there as it 
was hostile, a few years back, 
to any idea of having soldiers 
engaged abroad. The fact that 
Spain is now seen playing a 
prominent and responsible 
role, in the midst of a conflict 
with many echoes of its own 
civil war of a previous 
generation, is a token of its 
re-entry into the international 
mainstream. 


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FINANCIAL TIMES WEDNESDAY MAY 1 i 1994 


28 

SPAIN II 


M r Jose Maila Aznar, the leader of 
the opposition, says that the gen- 
eral elections last June marked 
the end of a political cycle and the start of 
a new one. He im plies that the day when 
he win take power as head of a centre- 
right Partido Popular (PP) government is 
at hand, 

The first assertion is indisputably true, 
for last year's vote ended the overall par- 
liamentary majority that Mr Felipe Gonz- 
alez, the Socialist prime minister, had 
enjoyed over three terms since 1982. But 
the thntng of the next cycle Is open to 
doubt - quite apart from title inevitability 
of the big swing to the PP that Mir Aznar 
takes for granted. 

Opinion polls indicate that the PP oppo- 
sition is likely to win June’s European 
elections and that the Socialists will suffer 
their first nationwide electoral defeat in 12 
years. But Mr Gonz&lez, although he Is 
short of a parliamentary majority can in 
theory stagger on until 1997. 

This seems to be what Mr Gonzalez 
wants to do. Corruption scandals have 
severely dented bis credibility but he is 
hoping that over the next two years the 
economy will recover sufficiently to bring 
him, or his anointed successor in the 
socialist party, tack to power. 

But even with expert corruption damage 
control, the prime minister can only stag- 
ger an in theory. Mr Gonzfilez does not, in 
fact, control the timing of the next cycle, 
any more than Mr Aznar does. The power- 
brokers of domestic politics are Mr Jordi 
Pujol, leader of the Catalan nationalists, 
and to a lesser extent Mr Javier Arzallus, 
the of the Basque nationalis ts. 
When a hung parliament was returned 


One political cycle may have ended. But when will the next begin? Tom Bums reports 

The nationalists are the powerbrokers 


after last June's elections, the 17 represen- 
tatives of Catalonia’s Coverg&ntia i Unid 
(CiU) group in parliament and the five 
members of the Basque Nationalist Party 
(PNV) joined forces with the 159 Socialist 
deputies to ensure the necessary majority 
in the 350-member legislature for Mr Gouz- 
dlez’s investiture as prime minister for a 
fourth term. After long negotiations 
between Mr Gonzalez's So cialis ts and Mr 
Pujol's CIU. the Catalan nationalists sub- 
sequently voted alongside the socialists to 
push the government's budget through 
parliament last autumn and its Labour 
market reform legislation in the spring. 


In the future, neither of the main 
national parties may have a 
commanding majority to dictate 
terms to the nationalists 


The prime minister needs the nationalist 
votes to remain in power - just as the 
opposition leader needs them to prevent 
the Socialist government serving out its 
fun term. A Catalan and Basque defection 
to Mr Aznar’s 141-strong PP camp in par- 
liament WOUld SOOner r ather than later 
trigger a mid-term general election. 

There is nothing intrinsically worrying 
about a parliament in which a minority 


party, or in this case two minority parties, 
can make or break governments. But the 
situation in the Madrid parliament is dif- 
ferent Fundamentally, Mr Gonzfilez and 
Mr Aznar subscribe to the agenda. 
Mr Pujol and Mr Arzallus share a different 
one. 

The two nationalist leaders make no 
bones about the fact that their guiding 
political principle is an ever-greater degree 
of home rule for nataimifa and for the 
Basque country respectively. As power- 
brokers. the Catalan and the Basque 
nationalist parties are In an ideal position 
to exert the leverage which wifi further 
thetr political aims. 

To push through legislation, Mr Gonz- 
alez he has often had to resign hiTw«a>if to 
painstaking horse-trading on a case-by- 
case baas. As a result of the budget nego- 
tiations, Mr Pujol obtained a measure of 
fiscal autonomy for the Generalitat, the 
Barcelona-based Catalan government. He 
will certainly want more thin naming 
autumn (under the present arrangement 
the Generalitat keeps 15 per cent of the 
income tax raised in Catalonia) when the 
1995 budget is debated. 

Meanwhile, the PNV has abstained from 
further support for the gover n ment and 
Mr Arzallus has recently stepped up his 
nationalist rhetoric to emphasise Basque 
separateness. This is because elections to 


the 75-member Basque parliament are 
scheduled for October, this regional poll 
pits the PNV against the Socialists, the 
other main party in the area. 

Mr ArzaZtns is right to be concerned that 
PNV votes will be lost to Basque radicals 
and to conservative PP if his main- 
stream Nationalist party continues to back 
the Socialist government in Madrid. Mr 
Pujol, who shares the Basque leader's 
Christian Democrat policies, will face the 
«mp worry in th e spring of 1996, when 
elections to the 135-member C a t a lan par- 
liament take place, becaus e the CHI’s main 
rival is also the Sodalist party. 

The ro n ff p T ,OTir *^ of a hung parliament 
and of nationalist party powerbrokers are 
only now beginning to be properly 
digested by analysts. 

It is very possible that neither the social- 
ists nor the PP, that is to say the national 
p a rt fcfi as opposed to the nationalist par- 
ties, will in future elections ob tain t he sort 
of miwnanriing majority that from 1982-93 
allowed Mr Gonzalez to dictate terms to 
the Pujols and the Arzalluses of Spain’s 
political establishment. 

This means that, whether they like it or 
not, Mr Gonzalez and Mr Aznar will have 
to accept the inexorable drift towards fed- 
eralism of Spanish politics. It is Mr Pujol 
who best understands - or at least best 
explains - what Spanish-style federalism 



FsBpt Gonztiee baa had to resign Nm— If to 
honumini to push throu g h legislation 


could mean. 

The Catalan leader will continue to 
press for fiscal autonomy for his region’s 
6m population and he wfil also step up his 
campaign to make Catalan the language 
used in the area’s schools. 

But his central ambition is a loosely 
federated Spain in which the Spanish mon- 
arch is not King of Spain but King of "the 
Spains” - reigning over a federation of 


nationalities. 

Mr Arzallus's authority extends over a 
area where nationalism has more confron- 
tational overtones. Radical Basques, who 
represent at least 15 per emit of the area’s 
1.2m electorate, seek secession from Spain; 
they give political respectability to tbs 
ETA organisation which has been respon- 
sible for about 600 deaths In its 25-yea£old 
campaign for Bosque independence. 

On practical issues, for example, Mr 
Arzallus wants Basques to have sole pro. . 
relatives over the area's ports and ab- 
ports and over social security budgets fer 
the elderly and the une mplo yed, to. aft, 
there are 54 devolution "chaptered that tl» 

PNV has placed on the negotiating table. 

But the Basque leader's Ideal is to have 
an enlarged Basque country, inccapca- atlng 
parts of south-west France and the adjoin- 
ing Spanish province of Navarre, fannh® 
a Basque nation within the European 
Union. A former Jesuit and very much a 
realist despite his rhetoric, Mr Arzallus 
will settle for sort of monarch-viceroy rela- 
tionship that is championed by Mr PqfoL 

Unsurprisingly, Mr Gonzalez and Ur 
Aznar discuss in private the dangers ota 
drift towards a federalism and jointly 
exploring what they call a "unity of crite- 
ria'’ over the new framework of Spanish 
politics. They want to agree on ground 
rules which will allow them to say 
"enough is enough” to nationalist pres- 
sure. 

Neither politician relishes the prospect 
of Catalan or Basque parties setting tbs 
timing of political cycles. Nor are Ur 
Gonzalez «nrf Mr Aznar at all comfortable 
with a leverage which allows the national- 
ists to pursue their separate agendas. 


i n riireii fail production 

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David White considers the economic outlook 

Recovery seems likely 




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It is a fair bet that 
unemployment In Spain will 
cross the 25 per cent barrier 
this year. 

No doubt the official rate, as 
measured by the National Sta- 
tistics Institute's quarterly sur- 
vey, includes several percent- 
age points which correspond to 
people who work on the black 
market Still, to citizens of 
most other European countries 
feeing half that unemployment 
rate or less, it might well seem 
beyond tolerable limits. It is a 
testimony to the resilience of 
Spain’s extended family-based 
society that it can bear it 

Last year the figure rose by 
more than 600,000 to 3.68m, by 
far the largest-ever increase 
and the most telling evidence 
of Spain’s most horrible eco- 
nomic year of recent memory. 
Gross domestic product fell by 

1 per cent the sharpest reces- 
sion in three decades. Only 
once in that period had the 
economy shown an annual 
deefine - in 1981, and then by 

02 per cent In the first four 
years of Spanish membership 
of what is now the European 
Union, it had grown by an 
average 4 3 per cent a year. 

Mr Pedro Solbes, the inde- 


pendent technocrat promoted 
last year to economy and 
finance minister, says he is 
confident that Spain is on its 
way to recouping last year’s 
slide and achieving positive 
growth of more than l per 
cent, possibly close to 15 per 
cent With domestic demand 
depressed, the impetus for 
renewed growth is coming 
from exports and tourism. 

Spain's competitive position 
has improved in the wake of 
the three peseta devaluations 
between September 1992 and 
May 1993. Exports have been 
showing strong growth - not 
only to the rest of the £U, with 
which Spain was in surplus in 
January for the first time since 
it joined, but also to Latin 
America and emerging Asian 
economies. 

Tourism looks as if it may 
enjoy a boom year, helped by 
exchange rates - and by politi- 
cal violence in a number of 
other traditional Mediterra- 
nean destinations. The n umb er 
of visitors to Spain this year is 
expected to surpass last year's 
57hi. Of the total, it is reckoned 
about 40m can be classified as 
tourists, roughly equal to the 
resident population. 



This combination can be 
expected almost to wipe out 
the traditional deficit in 
Spain’s balance of payments 
current account, which fell last 
year by two-thirds to Pta632bn. 
Some analysts believe the fig- 
ure could move into surplus 
for the first time since 1986, the 
year of Spanish EU accession. 
Mr Solbes, however, believes 
that expectation would be 
“excessive’’. 

Encouraged by a slight 
reduction in March in the num- 
ber of unemployed registering 
with the National Employment 
Agency - a figure which in the 
past few years has shown a 
wide discrepancy with the 
quarterly survey - Mr Solbes 
believes unemployment will 
peak, beginning to fell towards 
the end of the year, and more 
sharply in 1995 and 1996. 

Most private forecasts are 
less optimistic on short-term 
growth than the government’s, 
however. Mr Jaime de Pinife, 
head of research at Santander 
Investment, the merchant 
banking arm of Banco San- 
tander, predicts GDP growth of 
0.7 per cent for the year, or 
roughly half the official fore- 
cast But he sees the economy 
picking up speed, growing 
towards the end of the year at 
an annual rate of L6 per cent 
Next year he predicts 2 per 
cent growth, reaching an 
annual rate of 3 per cent late 
in the year. 

The dimate is now favoured 
by a stable peseta and the low- 
est interest rates for many 
years. Last month the Bank of 
Spain’s b enchmar k rate was 
reduced to below 8 per cent for 
the first time since 1977. The 
12-month inflation rate stub- 
bornly stuck at 5 per cent in 
the first three months of thfo 
year, slightly higher than 1992 
levels, but is generally expec- 
ted to fell below 4 per cent for 
the year, with the government 
target set at 35 per cent Wags 
growth is for the moment con- 
tained. 

The risk which Mr Solbes 
recognises, however, is that in 
two or three years, with wage 
pressures undermining com- 
petitiveness and domestic 
demand pushing the current 
account deep into deficit, Spain 


Hie risk is that, hi two 
or three years, Spain 
could have to devalue 


could find itself once agai 
having to devalue its way 01 
of trouble. 

“There is no doubt we ha* 
to be very careful," Mr Solbt 
says, emphasising the need & 
wage moderation and contn 
of government sp endin g. Ave 
age wages last year rose by 
per cent above inflation - “ 
paradox” in a period of soarin 
unemployment. It makes n 
sense, he says, that the on) 
option for Spanish companle 
wishing to become more con 
petitive should be to shed job 
when there is such a larg 
reserve of spare labour. 

He also argues that the got 
eminent needs to "go further 
in steps to control spenduq 
and is running out of leeway t 
increase tax revenues. Th 
overall public sector defici 
rose by 69 per cent last year t 
75 per cent of GDP. Mr Solbe 
says it would be “very hard" t 
bring this down to 3 per cen 
by 1997, one of the targets se 
in the ETFs convergence pre 
gramme for the third pha«> c 
economic and monetary lining 
He advocates welfare reform 
and reduced subsidies to lost 
making state companies. 

But all these measures ar 
politically difficult. Althougl 
the ruling Socialist party, at it 
March conference, endorsei 



1 KEY FACTS I 

Atm , , , 







King Juan Cartas 1 







1999 SI al 02. 38 

I " 1993 SI-12756 1 




ECONOMY 

1992 

1993 

Total GDP (Sbn) 

574.8 

4625 

Real GDP growth (%). — 

+0.8 

-1.0 

Components of GDP (%) 



Private consumption.....^.... 

633 

62.7 

Total investment — — 

22.8 

20.8 

Government consumption — ~ — 

16.8 

172 

Exports —. 

17.6 

19.8 

Imports. ........ 

-20.4 

-205 

Annual average % growth In 



Consumer prices (%) — 

5.9 

4.6 

Ind. production (%)—. — 

-2.9 

-4.7 

Employment (%)...- 

-1.9 

-4.1 

Narrow money {%)-... 

5.4 

-1.8 

Broad money — 

4.7 

9.1 

Share price Index (%)' — 

-11.7 

49.1 

At year end 



Unemployment rate (%F 

19.6 

23.4 

Discount rate (%) 

12.5 

95 

3-month Inter-bank rate (%) 

15.0 

8.7 

Govt bond yield (%). 

12.5 

8.1 

Reserves minus gold (Sbn)........ 

455 

41.0 

Trade 



Current account balance (Sbn].. 

-24.6 

rta. 

Merchancflse exports (Sbn). 

64.7 

602 

Merchandise Imports (Sbn) 

1002 

78.7 

Trade balance ($bn) — 

-35.4 

-185 

Main trading partners (%) — 

Exports 

Imports 

France. 

202 

15.9 

Germany. 

15.7 

14.9 

Italy 

105 

95 

UK. 

' 7.7 

73 

US 

5.9 

7 A 

Portugal . _. 

75 

2.7 

EC - 

715 

59.6 

p) Fa canton ^mnti owr previou) j«sr and. 





government free-market poli- 
cies and a “rigorous choice” in 
public spending, these policies 
are unlikely to please the par- 
ty’s grass-roots supporters. 

Last month, the government 
launched a series of television, 
radio and newspaper advertise- 
ments to persuade Spaniards to 


be public-spirited and pay their 
taxes. As a public relations 
exercise, however, it backfired: 
on the morning of the launch 
reports appeared alleging that 
the former governor of the 
Bank of Spain had avoided 
taxes on profits from stock 
investments while in office. 


Tom Bums on 
Santander 

Bank at 
head of 
the pack 

Banco Santander's 
of Banesto at the end of test 
mmrtii ha« rtwmgwrt the land- 
scape of Spanish banking. &t 
the past, most of the estate 
belonged to four, roughly 
equal, landowners. After San- 
tander’s $2.05bn purchase, 
there is one very sizeable 
domain and a trio of compar- 
atively smaller holdings.' 

Before the auction, 
Santander was the most 
International, and most 
profitable of the big Spanish 
banks. It had more funds 
under management than its 
rivals. But Argentarla, the 
state-controlled bank, had a 
bigger loan portfolio, Banco 
Bilbao Vizcaya (BBV) had 
more assets and Banco Central 
Hispano Americano had more 
bank branches. 

With Banesto under its bett, 
Santander outstrips the rest 
across the board of financial 
services to becomo the 
unquestioned leader ?of 
domestic banking. The assets 
of the combined banking 
group, according to ; Sj£hr 
tander’s calculations, "mik 
number 22 in Europe and 
the world. / 

The second consequence -of 
the Banesto saga its hit# 
vention by the authorities*^ 
rescue and its subsequeuts£ij§. 

! . 

Continued oh next pom 


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FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


29 


SPAIN III 


Tom Burns on whether the public sector can provide all the solutions 


Women are becoming more visible in public life, writes Tom Bums 


Hard choices on welfare 


Spain is by no means alone in tlie 
European Union in baring an increasing 
deficit problem, but its budget s hor tf all is 
bigger and has grown more quickly than 
elsewhere, and it looks a lot tougher to 
cantroL 

At the root of Spain’s problem are the 
accelerated creation, within a short time, 
of what western society understands as. 
cradle-to-grave welfare and the onset of 
the most severe economic recession in liv- 
ing memory, just when social spending 
had reached record levels. 

Between 1982 when it came to power and 
last year when it won a fourth election, 
the governing Socialist party spent lav- 
ishly on education, health care, pensions 
and unemployment benefits. Idealistic 
(and certainly youthful In the early 1960s), 
Mr Felipe Gonzalez’s cabinet set out to 
redress what it perceived to be glaring 
social injustices. 

Milestones in the welfare drive have 
included: 

• Raising the school leaving age to 16; 
doubling the university student popula- 
tion; a big schools building programme 
and greatly increased budgets for teacher 

f.ra j riing; 

• The extension of the health service and 
of pension rights to the entire population 
- regardless of whether individuals had or 
had not paid social security contributions; 

• The creation - virtually from scratch - 
of a nationwide unemployment benefit 
scheme and enormous injections of cash to 
provide dole money for the lengthening 
queues of Job seekers. 

Mr Gonz&lez's governments added a 
social democratic spin on what was 
already a drift towards greater welfare 
allocations in the aftermath of General 
Franco's death and the restoration of 
democracy in Spain. All in all, social 
spending has risen from 27 per cent of 
GDP in 1977, when Spain staged its first 
free elections, to its present level of more 
than 50 per cent 

The government's welfare commitments 
hit trouble last year, when GDP shrank by 
11 per cent and the rising cost of social 
spending ran welLahead of what proved to 
be sharply diminishing revenues. A 
planned budget deficit of 3.5 per cent of 
GDP for 1993 was revised upwards to 45 
per cent mid ended up as a 7.2 per emit 
shortfall 

FOr Mr Pedro Solbes, fmanra* minister, 
the time for a sombre reckoning as to 
where and how can costs be contained 
and. if possible, reduced, is overdue. It is a 
reflection of the magnitude of his task that 
Mr Solbes has all but abandoned the EU’s 
economic and monetary union conver- 
gence target of a 3 per cent deficit in 1997 
and has circulated draft documents to the 
cabinet suggesting that the deficit will 
stand at “about" 4 per cent by that date. 

To bring the deficit down at all. let alone 
by three points, the g overnment will have 


to jettison much of the social democrat 
culture it has practised in the past 
The Socialist party recognised as much 
last March, when it held its first national 
congress in more than three years. It 
adopted a key resolution entitled Towards 
a New Social Democrat Model, which 
asserted that free markets and competi- 
tion were no longer “obstacles to the con- 
struction of socialism" but “simple data of 
existing reality". The resolution said the 
party had to “abandon a culture" which 
was “excessively weighted” towards toe 
state and which had “the public sector 
providing solutions for everything”. 



In Barcelona's Gothic quarter, the oldest part 
of the city, mugldana seek w o t faro from the 

pubBc Rayfktbara 


The choices facing the gove rnmen t, as it 
turns such principles into policies, are dif- 
ficult - and could have unpleasant conse- 
quences. University fees, for example, will 
have to be substantially increased, which 
may bring students out in force on to the 
streets. (At present 85 per cent of the cost 
of a student’s education is picked up by 
the tax payer.) 

Much mare controversial is the need for 
a radical overhaul of the state pension 
scheme. The present system, which fea- 
tures pensions based on 100 per cent of 
average earnings during the eight years 
previous to retirement, is more generous 
than in richer EU countries, where a life- 
time’s average aamingg is often the norm. 
Mare importantly, it is unsustainable. 


Spending on pensions represented 
PtaVB6tan ($11.4bn) in 1982 and grew to 99 
per cent of GDP - Pta5,758bn - in 1992. 
There are now 5.3m Spaniards over the 
age of 65 - more than double the total 30 
years earlier. In 1993 the average age of 
new pensioners was 63, two years below 
the official retirement age, reflecting the 
increasing number of employees who bad 
opted for voluntary redundancies and 
early retirement 

Mr Joaquin Ahmmia, a former cabinet 
minister who now chairs a parliamentary 
committee examining the future of the 
social security system, argues that the 
mandatory retirement age of 65 far civil 
servants should be raised to 70; that incen- 
tives should be introduced for those who 
choose to continue working after the age 
of 65; and that pensions themselves should 
be based an a longer earnings time scale. 

Unless such reforms are Introduced. 
Spain will not be able to pay pensions in 
2025-2020 - the decade when the domestic 
baby boomers - there was a high Spanish 
birth rate between 1955-1965 - are due to 
retire. 

The problem is made more difficult now 
by the collapse of Spam's birth rate. The 
fertility rate - the average number of chil- 
dren per woman of child-bearing age - has 
dropped from 2.6 per cent in 1977 and 2.2 
per cent in 1980 to 1.2 per cent, one of the 
lowest in Europe. 

Mr Almtmia suggests that the etiriwiring 
youth population means that Spain will 
have to impart labour in the owning years. 
Spanish society will thus be facing for the 
first time the problems which can accom- 
pany a large immigrant pop ulation. 

Nonetheless, the biggest immediate 
problems - insofar as they are most 
directly responsible for the growing deficit 
- are the health care amfl, in particular, 
the unemployment welfare systems. Cur- 
rent spending on unemployment repre- 
sents 4 per cent of GDP - one of the 
highest ratios in toe EU. Proportionally, 
Spain ban by for the highest number of 
registered unemployed 

The government is now reducing the 
number of pharmaceutical products avail- 
able free under the health care system and 
is negotiating tower costs with drug pro- 
ducers. On the unemployment front, it is 
increasing its inspections of unemploy- 
ment fraud. 

But tougher decisions are required. 
These range from deregulating the stran- 
glehold which pharmacies exert over the 
health care sector, to bringing the spend- 
thrift employment institute, the ZNEM, 
under direct control of the treasury. 

Along with thorough-going reforms, two 
thing s have to happen before Spain's pub- 
lic finances pick themselves up off the 
floor. First, the economy must recover - 
and recover strongly. Second, the limita- 
tions of a welfare system must be properly 
understood by politicians and by voters. 


Fewer births, more equality 


The changing face of Spain may be 
measured by toe investment Is infrastruc- 
ture, which makes it possible to drive 
1,300km from toe Portuguese border to 
the French frontier without encountering 
a traffic light Or it may be quantified by 
the surge in sophisticated savings that 
has prompted a twofold increase in 
domestic funds under management over 
the past year. 

The increasing prominence of women is 
another yardstick of a profoundly trans- 
formed society. In many aspects, Spain is 
now almost indistinguishable from its 
ostensibly richer and more established 
European Union partners. 

With nine women in its 60-member 
European parliament contingent, Spain 
has a marginally higher proportion than 
the UK and a slightly lower one than 
Belgium. The likelihood is that after the 
European elections tn June, toe Spanish 
proportion of women MEPs wiQ go up. 

Ms Marina Snbirachs, a sociologist who 
runs the Institute de la Mqjer, a govern- 
ment agency created in 1983 to promote 
women’s rights, argues that the Stras- 
bourg ratio is too low and that the 54 
women elected to the 350-member Madrid 
parliament in Spain’s general elections 
last year, also representing a 15 per cent 
proportion of women, are also far too few. 

Echoing the views of those with similar 
responsibilities for promoting the inter- 
ests of women, Ms Snbirachs believes the 
gender breakdown in any legislative 
assembly should be 50-50 - give or take a 
percentage point 

As elsewhere, in Spain women are on 
track to achieve this political parity. In 
1982, ont of 208 director-generals, the top 
civil service rank, three were women. By- 
last year 40 out of 289 were women. 

The gap is closing in Spain because, as 


in other European societies, there are now 
more women than men enrolled in higher 
education and gaining university degrees. 
By 1976 the number of Spanish girls had 
overtaken boys in secondary school enrol- 
ment By 1990 there were as many female 
as male undergraduates. 

The Institute de la Mqer notes a grow- 
ing men-women equality among those 
who pass the competitive exams for the 
main civil service positions. There are 
proportionally fewer women entrants to 
high-flying private sector jobs, particu- 
larly in industry - a fact Ms Subiracbs 
attributes to “greater transparency of the 
civil service’s recruitment’*. 


in the past year, it has been women, 
rather than men, who have found 
the scarce jobs available 

The growing success of women also 
owes something to the militancy of Ms 
Snbirachs and her colleagues, particularly 
In the Socialist party. Socialist women 
carried a motion at the party's 1986 con- 
gress that made mandatory a 25 per cent 
proportion of women on all the party’s 
internal committees. Last March the con- 
gress raised this proportion to 33 per cent 
There was regret last year, after last 
June’s elections, when Mr Felipe Gonz- 
alez, toe prime minister, chose only three 
women to join his 17-member government 
- just one more than tn his outgoing 
cabinet. The party's women's pressure 
group had expected six women ministers. 

The significant difference between the 
status and role of women In Spain and 
that in other European societies is the low 
overall women participation tn toe labour 
market Government surveys show that 
only 35 per cent of Spanish women in the 


16-65 years old age group are employed, 
or say they are actively seeking a job. 
This is dismally low by EU standards. 

But statistics show that 70 per cent of 
Spanish women under tbe age of 30 are 
employed or want employment - double 
the overall figure. (In Ms Subirachs’s 
home town of Barcelona the proportion 
has risen to 80 per cent.) 

The overall figure is gradually clim- 
bing. During the past year, which has 
registered a big rise in unemployment It 
has been women, rather than men. who 
are finding the scarce jobs available. New 
regulations encouraging part-time 
employment are part of present reform erf 
the existing labour legislation. They are 
expected to lead to a significant increase 
in female employment 

In the meantime, the fertility rate of 
childbearing Spanish women has dropped 
to 1.2 children - the lowest in Europe, 
along with the Italian women's fertility 
rate. This is a full point down from the 
“replacement" rate of 2.2. which was reg- 
istered in 1980. 

However, there ts little difference 
between Spain and the EU in the battle 
over equal pay for women. Although it is 
Illegal to discriminate between men's and 
women's salaries on gender grounds, the 
Institute de la Mnjer estimates that wom- 
en's take-home pay Is between 20 and 30 
per cent less than men's pay in compara- 
ble jobs - a gap similar to that elsewhere 
in Europe, 

Moreover, at far as the Institute de la 
Mujer is concerned, male chauvinism Is a 
fact of life in Spain. But &ls Snbirachs, 
who swaps views on the subject at inter- 
national conferences, says: “Macho man Is 
a very generalised phenomenon. He is not 
a specifically Spanish animal and the spe- 
cies is evolving only very slowly." 


Bank that outstrips the rest 


Continued from previous page 


- is the fillip it has provided to 
the whole domestic banking 
sector. In the space of four 
months, and at a cost of some 
$3.7bn, the sector has cleaned 
up the mess caused by the col- 
lapse of one its largest and 
most traditional members. 

The Bank of Spain, which 
stage-managed the auction 
through the Deposit Guarantee 
Fund, and the private banks 
which provided a high propor- 
tion of the funds required to 
cover Banesto's losses, proved 
themselves well up to the task 
of coping with the crisis. The 
reputation and solidity of 


Spain's financial system 
emerge enhanced as a result 

In the aftermath of the auc- 
tion, a third lesson is taking 
shape. This is linked to San- 
tander’s extraordinarily strong 
bid - well over what others 
had valued Banesto - to gain 
what Mr Emilio Botin, the 
bank's chairman, called “a 
unique opportunity". 

The oddest feature of San- 
tander’s determination to 
obtain Banesto is that Mr 
Botin's strategy had in past 
years focused on building up 
the bank’s network in Latin 
America and by further boost- 
ing its international business 
through equity holdings in 


First Fidelity of the US and the 
Royal Bank of Scotland. In con- 
trast Santander had sold three 
h anking subsidiaries in Spain, 
two of them to Credit Lyon- 
nais. 

Spain, and specifically retail 
banking on the borne front, 
appeared to come low on Mr 
Botin's list of priorities. In past 
years he had also allocated 
resources and time to develop- 
ing the merchant banking 
activities of the group through 
Banco Santander de Negocios, 
the unit run by his daughter, 
Ms Ana Patricia Botin, which 
has now been renamed San- 
tander Investment 

Now Santander's chairman 


seems to have turned this 
strategy on its head by acquir- 
ing Banesto, a bank that is 
emphatically Spanish and has 
historically been involved in 
the country's major industries, 
and whose main asset is an 
extensive branch network that 
reaches deep into the rural 
nooks and crannies of la 
Espana profunda. 

The lesson therefore has to 
do with what Mr Botin, whose 
family nama is a by-word in 
Spain for conservatism and 
banking professionalism, feels 
about toe future of the domes- 
tic economy. A working 
assumption is that Mr Botin is 
betting on domestic growth 
and that he is certain that 
there are a lot of pesetas to be 
made in Spain's small towns 
and pueblos. 



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31 


SPAIN IV 


David White examines the labour reform package 


Jobs no longer for life 


Changes in Spain's notoriously 
rigid labour laws to ease the 
hiring and firing of workers 
are due to take effect in a few 
weeks - to the distress of trade 
union s and the partial satisfac- 
tion of employers. 

The first part of the contro- 
versial labour reform package 
- the introduction of low-wage 
apprenticeship contracts - Is 
already in place. In contrast to 
France, where violent protests 
forced the conservative Balla- 
dur government to withdraw 
its similar "professional Inser- 
tion contract” scheme, Spain's 
Socialist government has 
pressed ahead. More than. 
70,000 young people have 
signed up for the new con- 
tracts since the plan was 
approved in December. 

Attempts to negotiate with 
unions on the changes, which 
include loosening administra- 
tive restrictions on redundan- 
cies, broke down last year, 
prompting a partly-successfnl 
24-hour general strike in Janu- 
ary. 

But the government, having 
limited the scope of Its reforms 
to what it judged politically 
possible for now, has stock to 
its guns. The remainder of the 
planned changes are due to 
come into force within the next 
few days. 

The reforms mainly involve: 

• Apprenticeship contracts for 
people between the ages of 16 
and 25, starting at 70 per cent 
of the statutory minimum 
wage and lasting between six 
months and three years; 

• An end to the monopoly 
held by the National Employ- 
ment Institute (INEM) as job 
placement agency, malting way 
for private firms; 

• Significant amendments to 
the 1980 Workers' Statute, the 
main plank of curre nt labour 
legislation, malting it earner to 
move employees and, to some 
extent, to lay them o ft 

The jobs-fbr-Hfe mentality is 
deeply engrained in Spain. The 
Franco dictatorship offered no 
right to strike or free collective 
bargaining, but Spaniards 
became accustomed to security 
of employment. The 1980 
labour legislation, following a 
period of militancy by unions 
legalised after Franco's death 
in 1975, combined new rights 
with a legacy from the past of 
heavy state intervention in 


labour relations. 

A significant measure of flex- 
ibility was brought into the 
labour market 10 years ago 
with provisions for fixed-term 
employment contracts. Until 
then, almost all Spanish 
employees were on permanent 
contracts. Now, according to 
Dr Simon Milner, a labour rela- 
tions expert at the London 
School of Economics’ Centre 
for Economic Performance, 30 
per cent of Spanish workers 
are on a fixed-term basis, the 
highest proportion in Europe. 

This deregulation has 


Unemployment 


Percentage of labour force 

eea/ IILI , ■■ , n — ir -- 

«70 


1990 91 92 

ague* Ottaattaant Sbm 


enabled Sp anish companies to 
adjust more quickly to changes 
in demand, especially in the 
private sector where the 
short-term contracts are most 
prevalent. These employees 
accounted for much of Spain’s 
employment growth in the 
boom years of the late 1980s. 
However, they also tend to be 
the first to suffer in hard eco- 
nomic times. As a result. Dr 
Milner says, the proportion of 
permanent employees with 
highly protected jobs has 
recently been Increasing. 

The amended Workers' Stat- 
ute will make it easier for com- 
panies to move employees from 
one job to another or between 
different sites. It will also 
extend the scope for justifying 
collective redundancies, not 
just on economic or technologi- 
cal grounds as at present but 
also to meet the needs of reor- 
ganising production. 

Employers will have same 
leeway to make cuts - up to 30 
employees or 10 per cent of the 
wor k force far small companies 
in any three-month period - 
without having to go through 


the laborious process applied 
to “collective" redundancies. 
Administrative redundancy 
procedures, now agonisingly 
slow, are to be speeded up. 

This in Itself promises to 
reduce the cost of labour 
adjustments. However, there is 
as yet no plan to reduce the 
level of statutory redundancy 
payments. 

These now stand at up to 45 
days of pay per year of service 
in cases where a court deems 
the redundancies to be unjusti- 
fied. The minimum level is 20 
days, but in practice compa- 
nies will often opt to pay the 
higher arnnimt to avoid having 
to continue pay salaries until 
the end of a court case. 

According to a European 
Commission study published 
last year, average severance 
pay in Spain amounted to 
about 45 weeks, a level 
equalled only by Italy and 
more than twice the average 
for other EU countries. 

"Raring red undan cies is a del- 
icate task for a Socialist admin- 
istration facing the highest 
unemployment in Europe - 
almost 24 per cent at the end of 
last year, according to the gov- 
ernment’s quarterly survey - 
and sometimes -explosive reac- 
tions in regions affected by fac- 
tory cutbacks. 

However, a study by the 
Argentaria banking group 
reckons that the reform pack- 
age as a whole could knock 
four percentage points off the 
unemployment rate between 
now and 1998. The government 
hopes that the new work con- 
tracts will help to restrain 
wage costs and enahip Spanish 
manufacturers to improve com- 
petitiveness without necessar- 
ily cutting their workforces. 

Business leaders criticise the 
scope of the reforms, the large 
amount of red tape r emaining 
and the discretionary powers 
left in the hands of judges. For- 
eign companies may still be 
wary about the risks of 
embarking on new ventures. 
The current measures may not 
be the end of the story, 
although ministers are reluc- 
tant to talk in terms of a fur- 
ther reform in the near future. 
"Multinationals know that this 
is something that cannot 
change from one day to 
another,” says one senior gov- 
ernment official 


T he blue work jackets of 
the Santana Motor fac- 
tory In the Andahician 
town of Linares have become a 
familiar symbol of Industrial 
protest in Spain over recent 
weeks. 

The company, a subsidiary of 
Suzuki, obtained protection 
from creditors in February, the 
Japanese parent declared that 
it had poured enough money 
into it, and then drew up pro- 
posals which included cutting 
L500 of the plant's 2,400 jobs. 

In an area overwhelmingly 
dependent on one foreign- 
o wired factory, the Santana 
conflict is a paradigm of Spait- 
ish worries about multination- 
als' commitment to fhutr local 
operations. The anti-Japanese 
reaction raised anxieties about 
the damage that the row could 
do to Spain’s image among 
investors, pro m p tin g the gov- 
ernment tO TTrtriprt flfrp a public 
relations campaign in Tokyo. 

It is not the only case. 
Another Japanese company, 
Kubota, announced it was clos- 
ing its Ebro Kubota tractor fac- 
tory outside Madrid with 300 
jobs. And, to the anguish of the 
hard-pressed regional authori- 
ties in Andaluda, Gillette of 
the US said it would abandon 
its razor blade plant near 
Seville, employing about 240, 
to concentrate its western 
European production in Ger- 
many and the UK. 

In the eyes of many Span- 
iards, the multinationals which 

only a few years ago seemed to 


FOREIGN INVESTMENT 


Costs are catching up 


be queueing up to enter Spain 
are now queuing up to leave. 

Not so, insists Mr Juan Igna- 
cio MoltO, state secretary at 
the industry ministry. For all 
the hard riTnps multinationals 
have been faHng — Including 
Volkswagen's Seat car subsid- 
iary and Nissan's Motor Ibfaica 
operation, both high profile 
acquisitions of the 1980s now 
going through drastic restruct- 
uring - investment levels 
remain high, he says. 

Net direct investment from 
abroad, according to thu minis- 
try’s provisional estimates, 
may have exceeded Ptal,000bn 
(37 2bo) last year; less than in 
the three previous years hot 
more than any other year in 
Spain's history including the 
boom period of the late 1980s. 

The c o ntrove rs y. Mr Moltfi 
argues, Iras came from isolated 
cases. Suzuki never wanted 
overall control of Santana and 
is in search of a new share- 
holder. Ebro Kubota Is not the 
only tractor company that has 
suffered - John Deere has 
stopped production near Mad- 
rid. And Gillette’s plans have 
nothing to do with the profit- 
ability of tha plant 

Nonetheless, these cases are 
symptomatic of more wide- 


spread concerns about the 
competitiveness of Spanish 

manufacturing operations. 

Spain is no longer the obvious 
place for investors seeking low 
wages, especially in compari- 
son with former communist 
economies in eastern Europe. 

“Until a few years ago,” Mr 
Jose Marta Cuevas, head of the 
CEOE employers’ organisation, 
wrote recently, "Spain was an 
attractive country for multina- 
tionals, not because it was very 
productive, but because it pro- 
duced at lower cost than other 


recent investments is that 
about 90 per cent involve addi- 
tional funds for existing 
operations or purchases of 
Spanish companies. Only a 
small proportion go towards 
setting up new projects. 

Circumstances have changed 
for many f ©reign-owned com- 
panies, set up in the 1950s, 
1960s or 1970s in a protectionist 
environment in which transfer- 
ring production to Spain was 
the only way of tapping the 
country's internal market 

Some older-established sub- 


Foreiqn direct Investment In Spain (Pta bn) 


1992 1993" 


727.3 843.3 1.24SJ 1,819.9 2.304.7 1.914J 1.477.2 


Sourcv Mnlgy of economy anti Rmw 


developed countries.” Costs are 
now close to those elsewhere. 
If there is still some advan- 
tage in labour costs, it is offset 
by the gap that still exists In 
productivity." 

Mr Moltt retorts that other 
factors than wage levels - such 
as location, market access and 
industrial tradition - weigh in 
investment decisions. 

However, a notable aspect of 


sidiaries set up under Spanish 
industrialisation programmes 
- Gillette, for instance - have 
been left behind in the move to 
new products and technologies. 
Withdrawals by large multina- 
tionals are not unprecedented. 
The Santana plant at Linares, 
for example, used to make 
Land Rovers for the Spanish 
and Latin American market, 
but the UK company progres- 


sively reduced its commit^* 
in the 1980s before selling «a. 
General Electric of the Us, 
Westiughouse and Bunn 
Boveri all ab and on ed Span iah 
subsidiaries when the apfai 
goods sector restructured 
ahead of Spain's accession & 
the European Community. 

However, EC entry in 19$ 
prompted an unpreeedsitad 
spurt of mw investment As 
much as half of Spain's ma&n- 
factoring capacity is reckoned 
to be in foreign hands. Tt® 
motor industry, Spain'* chief 
exporting sector, is entirely 
foreign-cantroUed. Muhhudion. 
ala hold a high proportion of 
Spain's chemical and food j®f 
drink sectors - increased by 
ALlied-Lyons' recent takaovw 
of the Donrecq wine and spirits 
group. Of Spain's top Id export- 
ere, nine are subsidiaries of 
foreign 

Industrial production baa 
declined since 1990 and last 
year fell 4.3 per cent But 
recovery began in November, 
when the indices moved ahead 
of the previous year’s figures. 
Recent confidence surveys 
show a matted improvement 

And if the government 
needed a psychological Blip to 
set against the misadventures 
of Suzuki In Spain, it received 
it last month when Nissan's 
Barcelona plant started tin 
first regular exports of Span- 
ish-made four-wheel-drive 
vehicles to Japan. ' 


David White 


S pain's telecommunications sector 
is a throwback to a time when 
the domestic economy was 
wholly inward-looking. Mr Jose Borrefl, 
the public works minis te r, fiercely pro- 
tects Telefonica, its prize dinosaur, 
from today’s competitive climate. 

Perhaps nothing illustrates this more 
poignantly than Telefonica's tariff 
structure. The government-controlled 
monopoly operator has low rates for 
inner city calls and by far the highest 
for international connections. 

Mr Borrell is Impenitent about his 
protectionist preferences. He argues 
that Telefonica. 32 per cent govern- 
ment-owned. the largest domestic 
employer and one of Spain’s biggest 
corporate b o rro we rs, needs to be nur- 
tured in advance of the domestic indus- 
try’s dereg ulation 

But free marketeers suggest that Ms 
policy is likely to keep Telefonica fat 
and flabby rather than transform it to 
mean and hungry fitness. "The Spanish 
government gives the Impression of 
being determined to resist to its dying 
breath any liberalisation of the telecom- 
munications market beyond that by 
which it is legally bound by EC regula- 
tions,” James Capel, the London-based 


Tom Bums on a protected species 


Dial D for dinosaur 


security house, noted in a recent report 

The minister has plenty of critics on 
the home front as welL In a swingeing 
attack on Mr Borrefl’s department the 
government's fair trading agency 
asserted: “Obviously, the Spanish econ- 
omy cannot hope to be competitive with 
Such expensive te lPen triTminiratifms . " 

Over the next four years, the domes- 
tic tariff s t r u c tu re will be turned on its 
head In order to adapt to a liberalised 
telecommunications market Charges 
for inner dty calls will be increased by 
63 per cart while the cost of interna- 
tional calls will come down by an aver- 
age 40 per cent 

The reduction is urgent because 
users in Spain are increasingly bypass- 
ing Telefonica when making foreign 
rarmperinns An outgoing call to the 
UK, for example, costs twice as much as 
an incoming call using BT or Mercury. 

There is less clarity over the deregu- 


lation of the cellular sector. Last month 
the government slashed prices by about 
60 per cent in the mobile telephone sec- 
tor which it controls, but has indicated 
that the award of a licence to a private 
cellular operator will be delayed. 

The cheaper rates should boost the 
analogue TMA cellular service, winch Is 
now offered by Telefonica before the 
introduction of updated GSM telephony 
under the deregulation package. 

The government originally promised 
to publish invitations to tender for two 
GSM licences - one of which will be 
reserved for Telefonica, the other going 
to a private operator - last year, but 
the new cellular services are now 
unlikely before next year. 

Mobile telephony is seen as an impor- 
tant growth market in Spain. It earned 
Telefonica Pta25bn (JlSlm) in 1992 and 
Mr Fernando Pardo, a telecommunica- 
tions analyst at Price Waterhouse in 


Madrid, believes that tire cellular bad- 
ness could represent an annual reiam 
of Pta2S0bn by 1997. 

Rival consortia seeking the licence 
include most of Spain's % banks and 
corporations in alliance with foreiga 
groups such as GTE ami BellSouth of 
the US and the UK's Vndaphone, . 

The sting In the government's cellu- 
lar deregulation pious is not so much 
delay as its decision, under the latest 
draft plan, to auction the private sector 
li cenc e instead of Inviting tender hM" 

The consortia could be forced to bid 
about S5Q0m, according to Mr Pardo, fa 
their effort to gain the cellular licence, 
while Telefonica obtains its own GSM 
licence free. 

The "protect Telefonica at all costs” 
policy also seems to shape the govern- 
ment's approach to cable TV deregula- 
tion. Private sector critics say this draft 
law, which is now in its fifth but possi- 
bly not yet final version, is weighted 
towards Telefonica, which would con- 
trol a great deal of the cable industry to 
protect its telephone business. 

Whatever the EU directives might 
dictate, the idea is that a dinosaur- 
friendly environment should, as far as 
possible, be maintained. 








FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


3 


I 



LONDON STOCK EXCHANGE 





/~S 





> 










*z' 

9 * . 

**. 




MARKET REPORT 


FT-SE-A. All-Share Index 


Equity Shares Traded 


Shift in rate views takes Footsie sharply higher 


By Terry Byland, 

UK Stock Market Editor 

London followed other European 
markets yesterday in turning 
strongly positive on the 
that the Bundesbank may cut Ger- 
man rates again while the US Fed- 
eral Reserve is preoccupied with its 
S29bn refunding programme. With 
US bands firmer and the Bundes- 
bank due to meet this morning after 
trimming repo rates yesterday, Brit- 
ish government bonds and stock 
index futures led UK equities to a 
38-point Footsie gain an the session. 

A modest check to the advance 
came in late trading when uncer- 
tainties over the domestic political 
scene resurfaced. 

Share prices opened easier but 
were driven forward when the stock 
index futures market opened with a 


burst of strength. “It is quite clear 
that the institutions are heavy sup- 
porters at the Footsie 3400 mark,” 
commented one trader. The FT-SE 
100 Index moved from 3,097.4 to 
8,1022 as soon as the June Footsie 
contract opened for trading. 

Equities then moved ahead 
steadily, taking their lead from UK 
bonds and derivatives and from the 
cut in German repo rates. At best 
the FT-SE 100 was 40.9 ahead. Lon- 
don received a farther boost when 
Wall Street opened with a 20-point 
gain on the Dow and US Federal 
bonds moved higher. 

The final reading put the FT-SE 
100 at 3.13&3 for a net advance of 
38A Once again, the action in the 
stock index future put the focus on 
the Footsie stocks, and the second 
line issues played a more subdued 
role. At 3.753.3. the FT-SE Mid 


Account Deafiog Dates 

■ARDMtotc 
te as 

May 18 

JUI< 

OpOcn Dadnoore 

May 12 

Jul 2 

Jui 10 

UrtPrefcgfc 

May 18 

Ju> 3 

Ju> 17 

Acoont Dsyi 

IM 23 

Jun 13 

Jut 27 




butan days carte. 




250 Index finished 1L2 ahead. 

Stock Exchange statistics con- 
firmed that selling pressure had 
been very light on Monday when 
the market came under pressure 
from bond prices. Monday's Seaq 
volume was only 480.6m shares »r>d 
was worth a mere £9UL9m at retail 
level, the lowest genuine daily 
investment total this year. Yester- 
day, Seaq turnover jumped to 
728.9m shares and traders were con- 


fident that retail value, which will 
be known today, will show a s imilar 
increase. 

Analysts suggested that London, 
like other European markets, had 
shown clear signs yesterday that it 
was decoupling from US Federal 
bonds. But same pointed out that 
global markets are under special 
pressures this week. 

With many European mar kets 
closed tomorrow for a religious holi- 
day and the Federal Reserve pinned 
down for two days by its refunding 
programme, today’s Bundesbank 
policy meeting has a clear market 
horizon. Markets are hopeful for a 
25 to 50 basis-point cut in the Ger- 
man disco unt rate. 

However, Thursday and Friday 
will bring a heavy flow of economic 
data in the US and this could renew 
pressure on the Fed to raise rates. 


Traders stressed that technical 
factors played a significant role yes- 
terday. The very thin trading vol- 
umes recorded on Monday, when 
the market appeared to be below 
the bottom of its trading range, 
indicated that marketmakers had 
been unable to attract much busi- 
ness at these levels. 

Since marketmaking firms cannot 
prosper by avoiding business, they 
were ready to mark prices higher 
yesterday as soon as the clouds 
lifted. 

Any move today by the Bundes- 
bank will have a positive effect on 
markets, but the more significant 
investment decisions may be held 
back until the end of the week 
when the Federal Reserve scans the 
statistics on US producer and retail 
prices, the consumer price index 
nnri jobless claims. 


1.G7S 



Tixnovar by rahm* imfflon) Ejctutfna 
bum-market and nwte.is 

1.000 

800 

600 

400 

200 



■ Key Indicators 
Indices and ratios 


FT-SE 100 

FT-SE Mid 2 SO 

FT-SE-A 350 

FT-SE-A AB-Share 
FT-SE-A AH -Share yield 

3136.3 

3753.3 
1589.8 

1561.23 

3.67 

•f38.5 

+11.2 

+16.0 

♦14.80 

(3.71) 

FT Ort may Index 2500.1 

FT-SE-A Non Fins p/e 20.49 

FT-SE 100 Fut Jun 3144.0 

10 yr Gtit yield 6.35 

Long gilt/equity ytd rauo: 2.32 

+22.9 

120.36) 

+43.0 

18.40) 

(2.31) 

Best performing sectors 


Worst performing sectors 






-0.6 

3 Elect nerry ...._ 



+1.8 

3 Chemicals 

-0.5 

4 Utdiuoa 

5 tile Assurance 



+1.7 

4 Extractive inds 

5 Building Materials 



Strong 
demand 
for Gas 

British Gas was by far the 
most actively traded FT-SE 100 
constituent as the market 
delivered a positive verdict to 
the joint Department of Trade/ 
Ofgas report on competition 
and pricing in domestic gas 
supply. 

The report was published on 
Monday afternoon, after which 
Gas closed mar ginally higher. 
But yesterday saw a surge in 


Gas shares, which jumped lift 
to 296ftp in exceptionally 
heavy turnover of 24m. 

Hoare Govett, Gas’s broker, 
described the report as 
“encouraging”, while Mr Step- 
hen Turner at Nomura was 
much more forthright, issuing 
his first buy recommendation 
on Gas for more than two 
years. The lack of detail in 
the DTT/Ofgas paper suggests 
that the gove rnmen t Is losing 
its enthusiasm for competition 
in the domestic gas market,” 
he 

The Nomura analyst also 
pointed out that Gas’s warning s 
are conservatively stated and 
that under generally accepted 
accounting policies net income 


would be 20 per cent higher, 
putting the shares on a 20 per 
cent discount to the market 
multiple in 1995- 

Do It All cuts 

The long-awaited restructur- 
ing annmnwnwgnt from Do It 
All, the home improvement 
group owned by WJL Smith 
and Boots, disappointed the 
markpl and shar es in the par- 
ent groups retreated. Around 
100 stores are to be closed or 
sold and provisions of £60m 
will be taken by Boots and 
Smith. But retail analysts com- 
mented that contracts had 
been exchanged on only about 
half of the 40 stores actually 


EQUITY FUTURES AND OPTIONS TRADING 


A rally in European bond 
markets led to strong trading 
in the derivatives sector, which 
In turn pulled the cash market 
higher, writes Joel Klbaza. 


In futures, dealers had 
expected a slow start to 
trading in the June contract 
on the FT-SE 100. However, 
buying from a US house and 


■ FT-SE 100 INDEX FUTURES (UFFE) £25 perM Index point 


(API) 



Open 

Sett price 

Change 

High 

Low 

EsL voi 

Open W. 

Jut 

3112.0 

3144.0 

+43 J) 

3171.0 

3103.0 

16662 

53441 

Sep 

312H.0 

31600 

+400 

31640 

8124j0 

703 

920 

Dec 

- 

3173JJ 

+43.0 

- 

- 

0 

201 


■ FT-SE MD 350 INDEX FUTURES (UFFE) CIO par ft* Mexpofrit 


Jun 


3745.0 3766X1 


+30.0 37660 3745.0 


101 


3788 


■ FT-3E MP 230 INDEX FUTURES fOMUQ £10 par ftj Index point 

Jun 3755X) 891 

A* upon MM Igm a* tor pmrina day. f Exact tone town. 

■ FT-SE 100 MDEX OPTION (LIFFEj (*3133) £10 per ful factor point 

2850 3000 3050 3100 3190 3200 32SD 3300 

CPCRCPCPCPCPCPCP 
200'} 1*2 153*2 3*j KM 1 } 7h 63 IB 3* **} 11% 86 % 3% 117 1 167 

ZOSiz 13% im 20% 1261} 34% S3 51 IS . 72 41*2 100 25% 134 14 174 

2231} 25fj 183*2 35 148 49 IIS 1 } 68 % 67*} 86 *} 65*2 116*} 45*2 147% 32 185 
245 39% 208 52 170% 65% 140% BS% 1 11% 106% H 133% 67*2 183% 51 198% 

295 98 198*2 133 146 17812 100 233 

UA BABB ft* 8.044 

■ EURO STYLE FT-SH 100 «DEX OPTION flLPFE) CIO per ful Index port 


May 

Jun 

Jul 

AUO 


2973 3005 

tar 173 2% 125 5*a 

Ml 1 84 15*2 144 26 

M 165 40>2 

*p 198 66 % 

lecf 242 38*2 


3078 


3105 3175 


79% 11 45*2 2B 20 50*2 7% 86*1 2 
108*2 40 781} 591} 53*2 84 35 1T5>2 21 


3275 


130 % 180 


151 


101% 78 68 120*2 

1371} 103*} 891} 153*2 

183 136*2 132% IB3*} 

1.701 nttU5i*UiM)taB tab* tabu. Piwb— Mown are baaed oa 

Ung ttdrd reply nun. 

EURO STYLE FT-SE MTO 250 MDPC OPTION £)MLX) CIO per Unban port 


.. 191*2 
27 199*} 
34*2 216*2 
94 241 


Mar 


3760 3800 38 

40 37*2 a 67% 9% 


3000 

3 % 


3050 
1 % 


4060 


4100 


a leading independent trader 
helped it open strongly at 
3,112. 

The reduction in the German 
Interest rates, together with 
the renewed strength in 
European bonds, only served 
to fuel the rise in the June 
future, and sent the cash 
market higher. June reached 
the peak of the day at around 
1pm when It stood at 3,155. 

Profit-taking after lunch saw 
it ease off the top but further 
buying was seen following a 
firm opening on Wail Street 

June ended at 3,144, up 43 
from the previous close and 
around 9 points above Its fair 
value premium to cash of 
about 3 points. Volume was 
16,662 contracts. The June 
Mid 250- future closed at 3,755 
after volume of 101 lots. 

The traded options were also 
busy and turnover rose to a 
hefty 49,203 lots. The FT-SE 
100 option saw business of 
14,251 contracts and 5,919 
were dealt in the Euro FT-SE 

Among the stock options, 
Tesco was the most active 
with a day's turnover of 3,042 
Pots. It was followed by British 
Gas at 3.039 and BT at 2,391. 
Hanson and Lasmo were also 


Cafc D PKi D Sadtanat prices red rabnre me Um Jl 430pm. 

busy. 





I .FT - SE Actuaries S 

rare 'In* 

diets 



The UK Senes 1 


Day's 

fctay 10 chge% May 9 May 6 May 6 

Year Dta. 
ago yield* 

Earn. 

yttd% 

PTE 

ratio 

Xd adj. 
ytd 

Total 

Betwn 

FT-SE 100 

313&3 

+12 3097^ 3106.0 3108.0 

2836.1 

337 

635 

1690 

3606 

116436 

FT-SE Md 250 

375X3 

+05 3742.1 3771.0 3770.6 

31313 

328 

5.50 

22.10 3620 

137624 

FT-SE MU 250 ax tmi Truata 

376&B 

+03 37594) 37802 37H7.7 

3160.7 

3.40 

5.93 

2038 

3642 

137735 

FT-SE-A 350 

158 aa 

+tO 1S73-B 1579B 1579.7 

1411.4 

3.73 

6.15 

1956 

1750 

120648 

FT-SE SmaPCap 

1933.03 

1933.40 1940.53 1941.68 1SS2J7 

231 

4.15 

2932 

1610 

148037 

FT-SE SmaflCop ex Im TYusts 

191137 

-0.1 191329 1910.42 1921 Jl 1604.15 

3.07 

439 

27.18 

1624 

1437.19 

FT-SE-A ALL-SHAilE 

1581^3 

+0.9 1566.43 157Z46 1672:46 139744 

337 

831 

2605 

17.11 

122236 

■ FT-SE Actuates Alt-Share 










Day's 

Year 

Mw. 

Earn 

P/E 

Xd adj. 

Tote 


May 10 chgeW May 9 May 6 May 5 

ago ytoU% 

yieUK 

ratio 

ytt 

Return 

10 MBUB1AL EXTRACnOWa 

2737.79 

+0.1 2736.00 2707.93 268154 2148^0 

3.40 

4.4B 

Z734 

3135 

1085.00 


3869.20 

-03 307836 3885.04 3873.64 299930 

3.38 

5.12 

24.48 

42.75 

105234 

IS Oft Irtegratedp) 

2681^0 

+0.1 268736 2655.152624.71 2079.00 

3.42 

439 

2648 

3238 

108627 

16 CM ExptoraHon & Prodrill 

204091 

+13202929 200022 198830 1951.10 

328 

121 

BOOOt 

1528 

117437 


re GEN MANUFACTURBtSgaq 2006.80 

21 BUkttng 6 Constnjctionpl) 1287.44 

22 BuUdtog Malta & Mercta(3a} 201348 

23 Chernicate<21) 248027 

24 Dreerafllad IntfljBt rta frflB) 210090 

25 Electronic & Beet EquW34) 208248 

26 EnghawtagPI) 195341 

27 Engineering, VoHctes(12) 243047 

28 Printing. Paper a PckgpT) 282344 


+04 2080-75 2097.38 2100-46 175030 3.61 448 28.71 23.14 104641 

-1.1 1301.70 1321.17 132*47 107840 290 3.7S 3344 1247 995.73 

-04 202240 2045.38 2058.43 108740 344 3.75 3440 20JS8 838.65 

-04 250341 2525.48 254243 213840 3.89 448 2742 2848 108648 

+14 2078.34 203844 209643 1837.70 448 4X5 2841 30.45 105644 

+04 207248 206648 204&49 1931.10 3.63 841 19.68 12.72 99840 

+04 1942.74 1963.42 198840 1491.50 244 0.78 3276 1527 110046 

-04 244S41 246845 2449.44 1763.40 441 2.12 8544 3248 1182.17 

+&5 2907.12 2921.15 2041.97 230940 244 448 24.78 2849 113543 

+14 1798.46 180348 161148 181840 342 640 234 8 20,45 10174 1 


30 CONSUMER 00008 ( 05 } 

277246 

+ 1.0 274438 273727 273937 279130 

4.19 

743 

15.89 

4153 

93689 


2317.78 

+13 229527 228433 229624 213650 

333 

7.41 

1057 

1131 

101625 

32 Spirits, Wines & CWereOO) 

306355 

+13 302522 2909.85 297630 282950 

652 

632 

1638 

41.70 

101322 


237352 

+02 235607 237322 2353.94 2320.70 

431 

757 

1542 

3668 

986.78 

34 Housenoid Goods(l 3 ) 

273677 

+02 272733 272735 2730.11 2287.00 

321 

652 

1613 

3067 

972.16 

36 Heteh Care( 20 ) 

173697 

+ 05 1724.80 173032 171672 167930 

618 

5.47 

21.70 

1930 

995.17 


2 B 1931 

+15 277759 278934 2784.75315630 

454 

7.78 

14.81 

41,70 

88020 

38 Tobacco( 1 ) 

371637 

+ 0.8 3887.00 3749.92 3745.73 379600 

5.87 

9.17 

1245 10235 

827.56 


40 SBWlCeSp20} 2046.79 

41 DtatritwtoraGI) 3067.45 

4? Leisure & Ho*ete(23) 225047 

43 MafepS) 307540 

44 Mates. FoodfJT) 164847 

45 Relates. Genera* 44) 176049 

48 Support Services( 40 ) 166046 

49 T>arapar!fl 6 ) 246043 

Si Other Services 8 BuefaewftO 122642 


+04 203042 2045.17 205055 1788160 245 544 21.40 1344 909.41 

+04 3056433068463051402595.70 245 540 2244 31.80 1049.91 

+14 2228.74 2234.76 223544 169940 3.18 4.17 28.13 1843 109442 

+-1.03028.713083.00300648224440 2.10 4.74 2443 3348 1060.15 

+1.1 163080 163947 1643.73 1S3340 34? 948 1241 1243 98545 

+04 175058 176041 176230 149840 245 648 2240 5.46 921.98 

+041658.11 1B8&24 168949 151020 242 848 1649 948 990X3 

248042 2488.72250021198840 343 4.11 27.78 15.14 94014 

+14 121148 1717/43 1249.10 446 248 80001 S.91 103846 


60 UTBJTIESm 

221734 

+13 217655 220238 221438 206600 

4.51 

7.66 

1670 

5.60 

82941 

62 BectricBy(17) 

207138 

+13 203459 207430 210137 170640 

430 

11.98 

1039 

1536 

93847 

64 0 ® Dtetrftuttona 

197835 

+33 1906-65 189733 1881.94 195130 

638 

t 

% 

a oo 

87431 


197609 

+1.4 194831 196731 197630 188680 

430 

6.13 

1093 

0.09 

82145 

68 WaterriS) 

164631 

+0.7 163688 1S53.41 1665.13 172670 

661 

1543 

-JML 

348 

79234 

09 NON-FINANCtALS(S31) 

171238 

+O.B 1699.70 1706.13 170733 152648 

336 

532 

2049 

1849 

1189106 

70 FIHANCiALSfHB) 

220833 

+13 216649 2173.99 216258 190640 

436 

739 

1690 3957 

86232 


279613 

+23 271539 2720.74 270635 233830 

3.86 

731 

1645 5666 

82662 


132641 

+06 132045 132043 130679 130830 

<132 

1065 

1066 

27.84 

88631 


242612 

+1.7 2380.40 2399.51 2377.47 2S2130 

614 

755 

1638 

6639 

919.74 


2967.46 

+12 293650 292542 288612 244030 

3.22 

1037 

1133 2338 

67731 

77 Other Rfwndalp4) 

188056 

+01 107638 1894.03 188738 142010 

352 

6.63 

1612 

1935 

38735 


161038 

+07 100066 1622.19 162643 1226.60 

678 

333 

32.76 

831 

90330 


282633 

+05 281078 283038 2820.08 224330 

2.17 

131 

5531 

1934 

94056 

99 FT-SE-A ALX-SHAAEtte* 

156123 

+03 1568 A3 161245 157245 13S744 

337 

601 

ZOOS 17.11 

1222.96 


■ Hourfy movements 



Open 

930 

1030 

1130 

1230 

1330 

1430 

1530 

1610 

Hgii/dsy Lam/dMf 

FT-SE 100 

30974 

31062 

3123.7 

31213 

31213 

31369 

31367 

3129.5 

31323 

31367 

3097.4 

FT-SE Mcl 250 

37404 

37453 

37453 

3748.7 

37404 

3752.1 

3752.4 

37524 

3753.1 

3753.4 

374a4 

FT-SE-A 350 

1573.4 

15773 

158 45 

15833 

15833 

15895 

15895 

1567.1 

15B64 

1580.6 

15734 


Tkne of FT-SE IDO »gh 12 Mpm Law 830 am 

■ FT-SE Actuaries 360 Industry baskets 

Open 940 1040 1140 1240 1340 

BWg 6 Onehcn 
Pharmaceutic* 

Woict 
Banks 


1440 1940 16.10 CkM Pranrkere Change 


12361 

12385 

12414 

1232.7 

12294 

12213 

1221.6 

12173 

12212 

12215 

12415 

-195 

2740.9 

27566 

2779.7 

27795 

2777.7 

27 B 83 

2788.4 

27785 

27892 

27915 

2748.8 

+425 

16393 

1640.6 

16362 

16373 

16425 

16467 

16464 

16464 

16425 

1642.6 

1631.7 

+105 

27535 

27695 

2741.7 

2783.0 

27965 

2822.1 

28262 

28163 

2824.1 

28293 

27461 

+812 



Um ol eonettuere* we avattb ftorr The FmendsJTVnM 

Sente. mriencwetB a range cftoctnnc and ptper-toeea produce 

^FT«1C0L tire FT-6E tad 2HLFT-BEA«rel»3SI red IWFT-0£Ataretaln*l*try 

10B el On UM Khgaoir ml fbpubse ol HM anti tin FT-SE Aetna Me A*- Snare man B 

Mi the ranne of Actuate ml me Footer of mbm indue santad teal wand nto. 

i fenttfc at katari lilted 1094, 61b Ftenota Thnea Lilted 1994. M rights reserved, 
of ifM London Slock Exdwngs and The Aundal Hmee LMted-lta FT-SE JVUriH Gtae 
jmr *te 00 we not Am J Mb* we negate. 


sold, and expressed concern 
over tbe likelihood of many 
more being bought There were 
also worries aver further trad- 
ing provisions to come from 
the unsold stores. 

Smith shares were the worst 
hit tumbling 9ft to SOfiftp, 
mainl y because Do It All is a 
bigger part of the company's 
trading than Boots. The latter’s 
shares, which rose 12 with the 
market closed 3 up at 556p. 

Smith is likely to remain In 
the news, with stores special- 
ists predicting an announce- 
ment fr om the retailer in the 
next few weeks that it is to 
restructure its shares. Smith B 
shares, which receive one fifth 
of the dividend of the A shares, 


TRADING VOLUME 


■ Major Stocks Yesterday 



VoL 

□oate DayY 


DOTS 

prtoa 

chanejo 

ASOAOreupt 

2.100 

58*2 

•1 

Abbey Naflotatt 

3JOO 

421 

«8 

AboiRshar 

4400 

57 


AJBed-Lyotat 

1500 

S80 

♦7 

AngteiWUar 

987 

432 

<8 

Aiyoe 

1300 

382 

-2 

Ai^TOroupt 

6200 

250 

«a 

Adowrmimt 

1A00 

J05 

+3 

Awoc. Kl Foodef 

298 

574 

-10 

Asaoc. Bet Pons 

607 

2S2 

-ft 

BAAt 

709 

079 

-4 

BAT tods, f 

4500 

443 

•9b 

BET 

2.400 

127 

-1 

ease 

2300 

460 

«z 

BOCf 

435 

680 

-ft 

BPt 

ftJBQO 

408i Z 

-1 

BPS tore. 

4300 

323 

-ft 

BT} 

5.000 

aasb 

42 

BTPVPMS 

5500 

248b 

«2b 

BTKt 

7.700 

393 

44 

Bank of Scodtadf 

2.100 

188*2 

42b 

Bredrerf 

0200 

537b 

+I4b 

aETkciot 

a,«n 

2200 

559 
311 lj 

43 

♦11 

Boc *j* 

263 

408 


Bootof 

2,000 

558 

+3 

nrererer} 

1.700 

454 

43 

Brt. Aeroopacet 

2JOO 

478 

42 *2 

BrttohAireaySt 

4200 

405 

♦11b 

BrfMhQtat 

24000 

298*2 

Brturi Land 

20 

394 

43 

Brttai Stoelt 

9300 

,5 ;s 

41*1 

Bind ^ 

363 

-1 

BuRtaiCaaMlt 

«i 

s 

44 

Sum 

852 

+^3 

Ctaieft Wkvf 

2000 

451 

Codbuyauwoppret 

2200 

492 

+2 

Color Gra^i 

9 

331 

-ft 

Owtat 

Cartlon Cornmo-T 

1300 

746 

329 

913 

♦» 

45 

CorraWyetat. 

906 

235 

47 

Conan. Union! 

Oil 

578 

■C 

Ctaksen 

1300 

277 

43 

CoiataJdaf 

1300 

534 

♦1 


122 

314 

455 

899 

42 

42 

OKona 

1300 

205 


Baatam BaeL 

999 

588 

3SS 

East Mdtand EJecL 

1300 

587 

Eng Ote CMa 
BtarprtaOrf 

sa 

219 

496 

447 

47 

43 

EueSaataLMU 

298 

430 

4ft 

TO 

701 

ESI 

♦1 

rtaona 

1300 

148 

-1 

Foote ft CoLLT. 
Fottof 

454 

1300 

140*1 

232 

♦1 

+7b 

Oan. Acodonrt 
OontaaS BacLT 

2J00 

2300 

563 

305b 

44 

42 

Otaot 

3300 

571 >} 

•Ob 

afynwed 

1300 

373 

48 

Gnradat 

854 

550 

45 

Orarx) Matt 

7.100 

491 

4ft 


875 

147 

803 

183b 

♦7 

*b 

OKN 

3300 

812 

-3 

Gutearef 

4.100 

489 

4ft 

HBBC(7Spriatt 

3.700 

724 

4C9 

1 termarecn 

7 

987 

-2 

tteaort 

4300 

2GB 

44 

Hantaan Cireted 

1300 

187 

-a 


990 

308 

4* 

FBadaan 

2300 

179 

43 

M 

1300 

357 


Of 

3300 

826 

-6 

btea+art 

940 

548 

♦1 

Jobnaon uuttay 

320 

599 


aw 

1300 

1300 

588 

570 

40 

-a 

LactorcfceT 

2.100 

180 


Land Sacutiaat 

989 

556b 

+8b 

laparu 

832 

788 

-8 

LagN ft GanersTt 

328 

458 

+10 


321 

2300 

370 

688 

♦1 

43 

LASMO 

7.100 

151b 


London EtecL 

2C3 

550 

Lorrho 

1300 

137b 

-a 

Lucas 

1300 

198 

-4 

ftffiPCt 

131 

481 

♦11 

MR 

3300 

158 


Msmob 

402 

67D 

♦11b 

Mario ft Spancarf 

2JX» 

424 b 

+4 

UdnhBra 

852 

572 

413b 

MuitoonflMiLl 

812 

122 

♦1 

wet 

1300 

220 

42 

MarWan BanKt, 

2.700 

482b 

♦12b 

Mauerta Poaret 

2300 

4®b 

42 

Non 

3.100 

ma 

47 

North Wail WMarf 

798 

■ 1 


Northern Bntt 

354 

BTJi 

416 

Northern Foortot 

199 

223 


Nonrab 

480 

612 

+?b 

Peanaart 

9300 

K31 

438 

PftOt 

854 


48 

Ptatogton 

1300 

El 

-3 

PowrrGant 

PrucMtaf 

1300 

2.700 

458 

307b 

43 

+ftb 

RMCt 

177 

874 

-4 

HTZt 

1300 

837 

-6 

Rate 

spin 

237 

-1 

Mcto?CDtoUnt 

2300 

*15*} 

+7b 

800 


♦2 

Radbndt 

1,000 


-ft 

RMdHLt 

872 

852 

+14 

Hereout 

Feutoof 

842 

2.700 

228 

485 

♦lb 

♦10 

s cr 

4300 

1300 

6300 

3500 

195 

440b 

288 

39ib 

+3 

twb 

42 

•3b 

GcMdora 

43 

1300 

♦17 

Scoctai ft Naar-t 

888 

5*1 

♦11 

Scce. Hydro-Bed. 

1300 

344 

413 

Soocfcti Pmnrt 

B5B 

387 

+13 

dearef 

888 

128*1 

+b 

Sedotek 

3400 

208 

+4 

Coitoaaifl 

2500 

310 

Mb 

Severn Trortt 

672 

481 

♦1 

EhadTaraparit 

9.400 

742 

43 

Stotet 

1300 

58S 

+7 

StoughEte 

Smen MJL) A 
arum i NBphant 

320 

253 

42 

367 

9S1 

606b 

148b 

■a 

SmWOeuJJaut 

2.40) 

407b 

♦iOb 

SmHBoedmUtat 

1.700 

37Z 

+9 

StateinOL . 

323 

4S9 

43 

Sounam Brett 

479 

563 

+i4b 

Bouto (Mate Bool 

41 

824 

♦7 

ScteiWwt Water 

J79 

497 

4ft 

Seuh WML Bid 

102 

SG3 

47 

Sounam water 

489 

489 


Smdtal CttelLt 

2.700 

£38 

+9 

BtorNtoure 

1.700 

214 

♦1 

Sun ADoncet 

3.100 

337 

♦1 

1BN 

200 

243 

♦1 

TTOrW^t 

HB 

301 


TC8f 

2.400 

210b 

Mb 

Tarrract 

2400 

182b 


TsteftLyto 

1300 

438 

Taytor Wodrirevr 

494 


-3 

Treeot 

11300 

22Bb 

a 

Thames Water} 

1300 

463 

4ft 

Thom art 

9+0 

1149 


Tomtdrtet 

7300 

238 

42 

Trafalgar Htua 
Unteta 

3.100 

101 

+1 

3» 

409 

4* 

Uhtetr} 

m 

1076 

42 

urtMBoeutaf 

2300 

3» 

♦7 

IM. Nearapepes 

780 

EU 

♦14 

VWatorwt 

wamuBlsair 

4500 

847 

635*2 

741 

-2 

+18 

Yrfto rrrwjT 

3J» 

5B3 

+8 

Wete Water 

69 

SK 

+2 

WnaMM 

» 

588 

+2 

iiiiuAmi 

1400 

589 

*« 

WStama Ftags-f 

1300 

368 

+10 

TMtaCorren 

465 

237 

+3 

mmpey 

428 

187 

-ft 

WAtaert 

1300 

836 

-4 

Torts)** Bee*. 

1.500 

S47 

48b 

Ya+tfaeWuer 

739 

477 

46 

^en+eef 

1300 

701b 

-b 


Based on m*o tome tar a aetoettn tf majai 

eamWca ffeah tfnugh SEAO lyMre 

ymdy irtfl -1.30pm. Treoss ta ana iireii or 

mere m nualfd down, t IreScaBs an FT-SE 

Ito kata* consdters 


are currently trading at a 16 
per cent premium to the A’s. A 
move to consolidate the shares 
would probably involve a 
slight dilution of the A’s and 
could be accompanied by a div- 
idend or share issue sweetener. 

Rees bounce 

A strong push by NatWest 
Securities transformed the 
recently battered electricity 
sector. 

Yesterday, NatWest advised 
its clients that the steep falls 
in share prices had gone far 
enough and tbat a prospective 
yield premium of 30 per cent in 
the recs made them a “strong 
buy”. The broker said the 
recent heavy selling was 
caused by a leaked letter from 
Offer to all the recs hinting at 
possible price cuts of 20 per 
cent or more as the basis for 
opening negotiations for the 
electricity distribution review 
now taking place. NatWest 
stressed, however, tbat the let- 
ter was merely an opening 
gambit in the negotiating pro- 
cess and that the recs will be 
able to negotiate their way to a 
better deal 

East Midland, up 19ft at 
567p, was NatWest’s prime 
selection, after the big job cuts 
and 380m asset write down. 
The broker also recommended 
Norweb, 7ft firmer at 612p, See- 
board, up 4ft at 31 Op and Mid- 
lands, 13ft stronger at 572p. 

Lasmo shares attracted per- 
sistent keen buying interest 
with dealers hinting at further 
support from some of the mar- 
ket’s leading long-term inves- 
tors. The Abu Dhabi Invest- 


NEW HIGHS AND 
LOWS FOR 1994 

NEWWOH8CF4. 

GILTS <tl BREWERIE S <«J tM tfl. BUILDMa 8 
CUSTOM |T) Edmond. BUM! MATES & KCHTS 
Si Octal DtSTOBUTORS p) *=f. 
Branrw, REA. ELECTRIC I EUECT COUP £) 
Delta, EuRtthamv ENClMCERmO H 
Thy+aan. FOOD MANUF (Q Mocn, Rc£wrt 
Wbwaa INVESTMENT TRUSTS pt 
INVESTMENT COMMNES D) LEISURE S 
MOTELS a Cnry+Mb. Fc>-odcn s (Mj. MEDIA 
ft) LSstaJ BiMBn. OB. EXPLORATION & PROD 
Dl GooL Oft. INTEGRATED D] leui B. OTHER 
SOWS S BUSKS (II EssbUo. PRTNG, PAPER A 
PACKO (3) KtartM he. PoRah. W,Txtonom 
Press. PROPERTY (I) Can* 1 *. SUPPORT SERVE 
M TRANBPORT (1) AMERICANS |T| SOUTH 
AFRICANS (1) 

NEW LOWS fl 2ft 

GR.TS CD BANKS B) BREWERIES (I) K3Aa\ 
BUILDMG A CNSTTW K BLDO MAILS A 
UCHTS n CHEMCALS (2) NStL+jd Faeau. 

W onto Slasys. USTHBUTDRS (2) Or. -upon 
Vanon. Enmi^itw CanxRPW. DCVEKStHED 
MHS CD hiww a ELECTRNC ft ELECT 
EOUP P) Alter., Johnson EMctKC. 

ENQHEERIMQ (1| Bactteom. BO. VEHICLES 
(1) Sytoro. FOOD MANUF C3 HEALTH CARE 
(6 Intmsra. Salon Hcottrctao, HOUSEHOLD 
GOODS (2) Anpna>3 FibtiAbbi SMcdn^tt. 
INSURANCE TO MVE5TMEMT TRUSTS PO) 
MVESTMENT COMPAMES O LESIEIE A 
HOTELS (2) Bu-Jornpm WL Euro Usury. UFE 
ASSURANCE (1) Rofcjg*. MEDIA (BJ AKIod 
Ibda BW>, RbobcIl Item Cop . On Demand 
Into. Scocah TV. MERCHANT BANKS (9 Oft. 
EXPLORATiaN ft PROD (I) Adame fWrfoU. 
OTHER RNANCIAL (5) BWD. Hendtracn Alton. 
Jalnon Fry. London Fnben). SfenM. 

OTTER SERVE ft BUSKS (1) General Motor? 
UntA PHARMACamCAl4 (1) Pnttoua Ml. 
PRTNG, PAPER ft PACKS (I) Field. PROPERTY 
n RETAILERS, FOOD (1) Snopnto. 

RETAILERS, GENERAL (3) Ahuon. UFL 
Sodtebys. SUPPORT SERVS (1J VrtjoPy 
TELECOMM LfNTCATtONS (1) GN Groafl Nordic. 
TEXTILES ft APPARB. (2) Jonea Stroud, SI»A 
TRANSPORT M Araoc. Brt. Pons. Bodgettne. 
CSX. CMXson «. WATER W AWMCANS HI) 
CANADIANS (7L 

ment Authority has announced 
it has built a declarable stake 
of almost 22m shares in Lasmo. 
while Philips & Drew Fund 
Management is thought to 
have continued to buy the 
stock, as has Legal & General. 
Lasmo shares closed 2ft up at 
151ftp after turnover of 7.1m. 


Royal Bank of Scotland put 
on another powerful display in 
front of this morning's inter- 
ims; the shares jumped 12V- 
more to 440' zp with bank spe- 
cialists confidently expecting 
an interim dividend increase of 
around 25 per cent. 

The composite insurance sec- 
tor’s first quarter reporting 
season started on a rather sub- 
dued note as General Accident 
reported profits in line with 
expectations, but disappointing 
figures for its solvency margin 
and net asset value. One ana- 
lyst said the solvency margin, 
excluding its life interest, 
dipped from 57 per cent to 47 
per cent. GenAcc shares settled 
4 ahead at 563p. 

A broadcasting deal struck 
between the BBC and Pearson 
lifted shares in the latter 14 
to 653p. 

The reporting season in the 
drinks sector was kicked off by 
Vaux, its figures being in line 
with market expectations, 
although there was some dis- 
appointment over the size of 
the dividend. The shares slid 9 
to 278p. Vaux s good hotel per- 
formance helped Greenalls add 
8 to 475p. Sentiment in Guin- 
ness was said to have been 
helped by BSN*s purchase of a 
Spanish beer group. Guinness, 
which has extensive Spanish 
interests, climbed 5 to 489p. 

Discount food retailer Kwik 
Save fell 2 to 570p after report- 
ing a one per cent drop in like- 
for-Iike value sales since mid- 
March. although interim prof- 
its for the 28 weeks were up 13. 
per cent to £65.4m. 

The announcement that 
J. Sainsbury was backing down 


in its row over its own label 
cola with Coca-Cola, which liad 
complained over the supermar- 
ket's aped product design, left 
the market unruffled and the 
shares gained 5ft to 391 ftp. 

Shares in British Aerospace 
firmed 2ft to 476p as the com- 
pany hosted an analysts visit 
to its defence operations. The 
stock was also helped by a pos- 
itive note from NatWest Secu- 
rities. The broker said; “Our 
valuation suggests a further 20 
per cent share upside." 

Strong trading iu British 
Steel brought volume of 9.8m 
by the close and tbe shares 
hardened 1ft to 151 '\p after 
Kleinwort Benson was said to 
have recommended the stock. 

Cable and Wireless jumped 
19 more to 463p as the market 
responded to a recent upgrade 
for Hong Kong Telecom - a 
subsidiary of C&W - by Gold- 
man Sachs, and the upturn in 
Hong Kong markets overnight, 
a move which was said to have 
broken a trend relative to the 
US market. 

Telecoms specialists also 
pointed out that Hong Kong 
Telecom’s preliminary figures 
are due on May 19, with those 
of C&W expected a week later. 
"C&W are cheap on fundamen- 
tals,” said an analyst 

Turnover in Tomkins rose to 
7.1m and the shares hardened 2 
to 239p, after recommendations 
from UBS and Nomura. 

MARKET REPORTERS: 

Steve Thompson, 

Christopher Price, 

Joei Kibazo. 

■ Other statistics. Page 35 


LONDON EQUITIES 




Uh — — puts 

Opto JM Oct Jan -M Pd Jar 

MaMym 5*0 484 S9ft - 11 18 - 

(-588 ) S89 18H S1H - 34 41K - 

Digit 240 18 23 27 13h T7 2? 
f-2<9 ) 260 8 12M 18 26 2JM 33K 

ASM SO 9 11 12 2 4 4H 

r=6 ) 60 JH 8V. 7 6* 9 Id 

91 Mm* 390 28 37V» 43 13* 23 Z8H 
(-4U5 ) 420 11V. 73V, 29V, 33 »h 44V. 

MBBMA 360 31 40 47V. 14 23*29* 
(*407 ) 420 16 26 33 30 39 45 

00*1 550 25 SB 45H 24 31* 38 

(-555 ) EDO CH 16% 25 59M 64 66» 

BP 390 3114 41 47 12 17 22 

(“408 ) 420 16 2514 32 2S» 32M 37 

9toSM 140 16b 21 24 5b 914 lib 
(•151 ) 160 6b 16b 14b 16 2D '22 

Baas 550 SI b 4>b 53b 22b 30 42b 
rsse ) 600 12 25 31 5B 60b 73 

Cttllb 450 36 - - 19b - - 

f461 ) 475 18 - — 34 - - 

CSUtaridi 500 44 94K 62 13 21b 26 
(•534 1 550 16 29 3Bb 39 4SM 54b 

Gann Uto S5U «3b 4Sb 57b 11 20b 24b 
(*575 ) 600 16 34b 32b 36 48 51b 

<0 800 63 67N 81b 21H 37 45K 

f82S 1 050 Z7b 43b 57 46b 64 71 

ttnglkter 550 47H 68b 79b 15b 25 32 
(•5W) BOO 21b Mb 48 41b 5167b 

Land Scar 650 22 32 38b 28 34 4011 
r®8 ) 7D0 5 14b 21b 68 71 73b 

Marts AS 420 16 Z733b1Eb20b 25 
(*434 > 480 5 12 17 45b 47 50 

NBlWMt 420 54 65b 67b Bb 14 16 
(-460 ) 460 29 35 44H 21 71 33 

Ssfesbl? 360 35b 47b 51b 10b 17b 21 
(*390 > 390 18b 28 35b 2Z» 32 35b 

snea Trana TOO 57 68b 75b 8b 19 24b 
(-740) 750 25 38b 47 25 b 40 b 47 

Storetaus 200 2Bb Sb 2Bb 6b 9b 12b 
(-213 J 220 8IH 25M 29H 8b BK 12b 




a- 

Cate 

— 

— 

Pub 

— 

Opto 


Hay 

Ate 

Ito 

«*»T 

Aug 

Nov 

Hareon 

260 

B 

18b 

21 

1 

9 

14b 

C2H » 

MO 

1 

7b 

12b 

14 

21 

25i: 

DSHD 

134 

1BVL 

27 

29b 

7 

e 

8 

nsi i 

154 

3 

15 

18 

4 

13 

14b 

Lucas tats 

180 

20 V, 

28 

31b 

1 

s 

10b 

P99) 

200 

2 

14 

19b 

3 

13 

19b 

PS 0 

650 

51b 

71 

83b 

1 

14 

29 

eras) 

700 

5b 

39b 

54b 

7 

33b 

S3 

puwnatai 

180 

11b 

18b 

24 

1 

7'» 

12 

r*89 1 

200 

1 

Bb 

17 

1Zb 

19 

23 

PnatenU* 

300 

»b 

24 

28 

2 

11 

17 

T307 1 

330 

1 

9 

14 

25 

a 

34 

RTZ 

800 

at 

67b 

B3 

1 

2?b 

38 

CB37) 

850 

2 

38V«! 

5814 

19 

45b 

63 

Roland 

500 

8 

34 

47 

2 b 

22b 

33 

rso5 j 

550 

1 

13b: 

Mb 

47 

52b 

64 

Ftarai tea 

260 

10 

24 

34 

lb 

I2t 

18 

ras7j 

280 

1 

14b: 

24b 

14b 

23!: 

29 

Testa 

220 

19 

20 : 

Z7b 

1 

9 

13b 

F2M J 

240 

1 

Bb 

14 

13b 

18 

25b 

Vodatore 

500 

38 

53b ( 

66b 

1 

16 

25 

F534 ) 

550 

IMr 

ZB 

42 

18b 1 

41b 

50 

WUama 

354 

11b 

26 : 

J3b 

1 

12 

18b 

(-364 ) 

384 

1 

12 

w : 

Mb 

29 

35b 

Opto 


Jot 

OCt 

Ja> 

Jul 

oa 

J2H 

BAA 

950 

51 

71 

B4 : 

an: 

33*1 • 

43b 

rS7B ) 

1000 

25 

45b 

58 1 

50b 

60 

68 

Ttanes Wlr 

460 

18b 

Z7 

29 ; 

Mb 

33 

40 

r«a ) 

500 

Bb 

13b 

15 ! 

58b 1 

61b 

67 

Dpuxl 


Jon 

Sep 

Dee 

Jun 

5fp 

Drc 

Attey NaS 

390 : 

38b 

45b 

53 

4 

12b 

15 

(■•MB) 

420 

15: 

28b Bb 

15 

25 

29 

AmsSaO 

30 

5 

7 

8 

r» 

3 

4 

(T3 ) 

35 

2b 

4b 

5 

3b 

5b 

6b 

Barclays 

500 

46 

58 

69 

5 

16 : 

Mb 

CM? ) 

550 

Mb 

29 

42 

2S 

39 48b 

Bte Ode 

300 

19 

32 

37 

6b 

15 

21 


rail ) 330 8 17b 23b 24b 32b 37 

B ffltt Gas 200 18 22 26 6b 17b 18b 

(*296 ) 300 5H 13b 16 17b 23b 30b 

Dtan 200 12 20 24b 6b 17 19b 

T204 ) 220 4 12 16b 19b 29 31b 


Tretagor 

97 

11 --Bb-- 

Hfcdtan 

160 

22 29 31 2 

5 Sft 

riot ) 

106 

8b — — 12 - - 

P78) 

190 

7b 16 19b 8 13b 14 

WBwer 

1050 68b 83V4 97b 20b 29b 3B 

LWlfH 

130 

13 19 24 4b 

11 1<ft 

(107® 

1100 

30 65V: 63b 45 53b Bib 

ri37 j 

140 

7K 14 18b 9 

16 19b 

Zewa 

700 

34 4914 58b 27 42 49b 

m Puns 

390 85» 34b 41ft 101915 24b 

(-701) 

750 

14 26b 37b SB 72 78b 

r«8j 

420 

8b 21 27b 28 

36 40b 

Opto 


Bar teg (to* Map Pag ito 

Sent Power 

360 19b 30 3Sb 9 23b 26b 

am m 

460 

33 « SB 1 11 18 

r»> 

MO 

7 IBM 23 26b 

41 45 

C*0) 

500 

IM 21 33H 13W 29 37 

Sen 

130 

Sft 12ft 16 3ft 

6 8 

istoto 

180 

Bb T7M 94 1 0 IS 

026 1 

130 

3 7 9 9 

12 14 

P186) 

an 

1 IK 15 16 20M 77 

forte 

220 

IB 28 Z9b 4 10ft 13ft 

IBdBfetets 

330 

Js 38b 47b 1 9 14K 

(■232 ) 

240 

7 T7 19 14 20b 24 

rs>5) 

380 

2 21 30b 8 21 28M 

Tbrrk 

155 

11 - - 6 


Opto 


Jui Sep Ok Jon Sap Dee 

062) 

174 

3b - - 18 

- - 

Fbona 

140 

12 19b 24b Sb 12 17 

Thom EM 

T100 

63 92 lit 1*ft 

48 60b 

(*145 ) 

160 

3b 11 ISM 18 24b 29 

01*71 

1150 

41 Bb 84 34ft 72ft 96 




TS8 

200 

S 29ft 33 2b 

8 11b 

Option 


toy Aug ito tan *» 

C219) 

220 

a 17b 22 9 

17 21 

MAau 

460 

18 Sb 67b 2 28 43H 

Toufcta 

220 

23 2Bft 31ft 3 

V-i lift 

(*473 ) 

500 

1 32b 49 27 51 65b 

r23B> 

MO 

8ft IS 20ft S 

18 Mb 

BAT MS 

42D 2415 39 4654 1 13H Z14 

Wetam 

550 46ft 69 79 8b 

28 35ft 

(-441 ) 

480 

1 W 28b 22b 34b 44 

(-562 ) 

600 

IB 4Z 54 33 

53 61 




opto 


Jri OCX Jm Jd 

oa jjn 

btb 

390 

4b 23 31b 2b 16b 24 


S50 49ft 62b 69 21ft 

41 48 

rs» j 

42D 

1 6b 18 2flb 35 41b 

rs?i j 

600 24ft 38 47 48b 

70 76ft 

H Teton 

360 

8b 22b 28K lb IT 23 

raersoda 

700 Ob 87 105 31 

5* 63 

(T66 ) 

390 

1 9 13 26b 39 42 

(723 ) 

750 

» 64b 81b 5Tb 

79 69b 

odnyscti 

453 

41 - - 1 - - 

Reuters 

475 

32 41 - 18 

29 - 

(■491 ) 

483 

IM - - 5b - - 

TABS j 

487 Sb 34b - 25 35b - 

Eas&m Bee 

550 

41 55 64b 1 18 28b 

Opto 

Wof Aug Hoe U37 Aug tar 

(*6M) 

600 

2 27 40 T4H 45 55 

ft* -Ropa 

180 

18 Mb 29 1 

G 11 

(Stores 

460 90* MU GS 1 11 IB 

096) 

300 

1 13 18b 7 

15 Wi 

(■497 1 

SOD 

1 19 S 16 29b 36 

' UMartytoB secutty pden Remans (town am 

SEC 

300 

7M 19 22 1b 1» 19 

based an ttostog , 

otter prtoa. 


r»i 

330 

1 4M 10M 27 37 39h 

May 10. ToU eanbiKM- 48,703 Crtlr SSjGrtS 




Ms 22,968 







Kay % dig Kay Stay Vbm Gross fly 52 weeft 

9 « day 6 6 ago |Md % «ob u» 


GeN Mtastadn (2S) 

■ Aeglnsai lacflcaa 
AfeKft (16) 

AKtoatsk (8) 

tan Amarica |11) 

CepR&C. Um Ftatotta Ttim Ltotod 1894. 

H«M Cl brectaa Haw» nuntoar el ujinpate Bnto IS DHtm Bore VHi» lOOBOa SL-17W. 
rtadjcaaior GoU Wire todec May itt. 2ia0 : a*yY ctenga; -JL2 pcM k Te» aja im. 7 t Panai 
LdH puces were nMHt ta HsedBcn. 


187&9B 

+1.1 

185020 T7HL88 151075 

2j01 

2367 AQ 162268 

2S7&73 

♦2.1 

2526.79 247022 200085 

465 

344080 1981 50 

22B&BS 

+5J 

2171^6 2174.97 1B92J0 

3 01 

301139 IGfO.29 

1607.15 

-0.4 

181456 1527.19 138524 

OBI 

203965 136300 


RISES AND FALLS YESTERDAY 



Rto» 

Falls 

Same 

British Fund* 

01 

3 

9 

Other Fuad irtorost 

6 

0 

9 

6 *oeral Ejdrodion —.1 

78 

50 

73 

General Manufacturers 

153 

141 

374 

Consumer Goods — 

43 

46 

103 

Services 

129 

112 

275 

Ltoftros 

31 

e 

9 

Financials — 

125 

77 

176 

Irwestmera Trusts _... __ ... 

131 

50 

290 

Others 

23 

80 

29 

Totes 

780 

SG 5 

1347 


Dsu based on those computes »Oed on it* Lontan Stare Savka. 


TRADITIONAL OPTIONS 

FWDooflngs May 3 Last Declarations Aug 11 

Last Dealings May 20 For setttarwni Aug 22 


Cals: Bolton. Beta, Jacobs (Jt), LASMO, Mosaic. NHL, Ronsomos. Signal Pub: 
Klearfohl Pub ft Cate Mosaic, Wlahsw. 


LONDON RECENT ISSUES: EQUITIES 


ksaia Amt 
txtoe paid 

P up 

MW. 

cap 

Em.) 

1804 

High Law Stock 

Close 

price 

P 

+/■ 

Net 

div. 

Div. Gfa 
cov. yld 

P.-E 

net 

ICO 

FS>. 

40.4 

102 

96 Abtruet High Inc 

101 


_ 

_ 

_ 

_ 

- 

F.P. 

134 

10 

9 Abtrust Scat Wits 

10 



re 


_ 

_ 

F.P. 

1J2394 C147} E14>2 Ashanti Gold 

C14ft 


_ 

. 

_ 


- 

F.P. 

303 

101 

100 Bela GtoOal Em C 

101 


- 

re 

_ 

_ 

100 

F.P. 

41.0 

115 

110 OPS Data & R*> 

115 


1*0.8 

1.1 

3.0 

27.4 

- 

FP. 

112 

30 

26*2 EdWxjh. Inca Wts 

29 

♦1 

- 

- 



- 

FP 

20.5 

42 

39 F&CGrth Wms 

41 


. 

re 

_ 

_ 

160 

FP. 

GOB 

171 

160 GRT Bus 

170 

-1 

RN3.8 

3.3 

2 & 

132 

120 

F.P. 

41.7 

128 

125 Go-Ahead 

125 


MN4.0 

1.6 

4.0 

19.0 

- 

F.P. 

10*2 

483 

470 Govett Global Sn* 

479 


- 

_ 


_ 

165 

FP. 

41J 

196 

180 Huidoys 

191 

-1 

W4.7 

JL2 

32 

17j4 

ISO 

FP. 

422Ji 

191 

178 House at Fraser 

164 

♦1 

LW5i) 


3.4 

166 

- 

F.P. 

- 

96 

94 ind Biolech 

94 

-1 

_ 

_ 



- 

F.P. 

- 

45 

X Da Warrants 

45 

+5 

_ 

. 

_ 

_ 

130 

FP. 

E&3 

138 

122 KeRer 

122 


WN04.7 

23 

3.9 

14.1 

- 

F.P. 

34.8 

15 

14*} My tQnda Town 

14b 


- 




155 

F.P. 

82.5 

164 

152 Nottingham 

167 


uS.52 

1.8 

4 A 

1S.4 

30 

F.P. 

208 

87 

70 Oxford MoiecUar 

70 

-5 

- 

- 

_ 

_ 

200 

F.P. 

71 A 

242 

218 Panco 

242 

+1 

L5JS 

23 

2-8 

20.9 

160 

F.P. 

21.9 

181 

160 Peraona 

1B1 


LNJ.84 

23 

2.7 

162 

- 

F.P. 

063 

60 

53 Secure netiremait 

56 

♦1 





120 

FP. 

26J> 

133 

131 Si James Bch Hot 

131 


RN3A 

1.7 

X6 

162 

IBS 

FP. 

12.4 

261 

196 Supencape VR 

234 

-1 

m 

re 



IDO 

F.P. 

42.5 

S3 

91 Tempielon La Am 

92 

J 2 

m 

re 

_ 


- 

F.P. 

3.79 

50 

41 Do Wft9 

41 

-1 

re 

_ 


_ 

- 

FP. 

1423 

104 

100 Tanpkaon Emg C 

102 

♦1 

re 

_ 

_ 

_ 

100 

FP 

612 102*2 

99 Undervalued Asu 

102 


- 

- 

. 

- 


RIGHTS OFFERS 


Issue 

price 

P 

Amu* 

paid 

up 

Latest 

Henurv 

date 

1994 

High Low 

Stock 

Closing 

price 

P 

♦a- 

- 

NJ 

- 

3 pm 

ipm 

Abtrust ScoUavf 

I 1 * pm 


390 

rw 

17 /B 

88 pm 

28 pm 

Aktoura 

87 pm 

+8 

52 

Mi 

2/6 

4 *}pm 

w 

Albert Rarm 

3 pm 


6 

27 

Nl 

Nl 

1610 

22,0 

lljpnt 

7 bpm 

**pm 

6 pm 

6 *rpm 

ABed Radio 

Babeech mo 

i+pm 

7 *}pm 

-’+ 

3 

N 4 

31 * 

7 bpm 

SCfaltal 

7 pm 


55 

N 9 

- 

16 pm 

6 pm 

Dale Electric 

5 pm 


500 

Ml 

26 15 

63 pm 

55 pm 

Derwent Vdtoy 

55 pm 

-3 

5 

Nt 

31.5 

Vpm 

bpm 

Ferrum Hldgs 

%pm 


192 

Nl 

15/6 

27 pm 

12 pm 

HuUCn Amtfty 

12 pm 

-2 

25 

ffl 

- 

4 pm 

1 %pm 

Panes 

3 pm 

+*4 

A 

IB 

24/5 

^ipm 

3 4 pm 

Tbmans 

J +om 

24 

M 

- 

11 pm 

10 pm 

Una 

10 pm 

-1 

330 

Nl 

W 6 

43 pm 

25 pm 

wnnmsHdgs 

36 (mi 

+10 


HNANCIAL TIMES EQUITY INDICES 



May 10 

May 9 

May B 

May 5 

May 4 

Yr ago 

*H<gh 

low 

Orcfinary Stera 

250 ai 

2477 J 

2481.0 

2481.9 

2463.8 

22152 

2713.0 

24392 

Old. div. yield 

399 

4.02 

4.01 

4.01 

4.03 

4.19 

4 JJ 5 

143 

Eam.ykt % fal 

5.44 

5.48 

5.47 

5.47 

5.49 

631 

Ml 

3.02 

P/E ratio net 

19.72 

19.58 

19.60 

19 £2 

10.56 

19.63 

33.43 

19.46 

P/E ratio ns 

20.61 

20.47 

2049 

20 S 1 

20.45 

1005 

3080 

2037 


■For IBB*. (Mreay SMW. «(hn retco compftdlm Hgii 27iac SAcm; loo 494 2 &riui 
FT Orrtnav Shaa man* base dale 1/7/35. 

Ordinary Sham hourly ch a ng es 

Open ftOO 10-00 11 J 0 12 jOQ 13 JXJ 14.00 15 JX) 1&00 High Lom 
2473.7 2481 S 2494.4 2491.9 2485 ^ 25042 2 S 03.1 2487.5 24960 2506.4 2473 3 
May IQ May 9 May 6 May S May 4 y r ago. 

SEAQ bregains 28.713 24.930 2 SA 04 

Eqtity Hanover (£m)t - 912 .B 1241.1 

Equty bargainsr - 27,439 28,845 

Shares Haded tndjt - 417.1 5703 

T EaeUng 4toreiVal htaa jnd as sn s Amowr. 


23.992 22304 J 8 J 90 

1409.0 1224.5 12929 

27.242 25968 32,778 

585.3 494.7 614.0 






















































FINANCIAL TIMES WEDNESDAY MAY 1 ! 1994 


33 


LONDON SHARE SERVICE 


375 30.7 
\aa 07 





- 965 

224 

-1305,3 

- 024 

7.1 

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4.7 

154 

-22 

614 

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27 2614 

124 

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97 

— 

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11.1 

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44 

44 3629 

30 

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ssnsssB 






















































































CURRENCIES AND MONEY 


FINANCIAL. TIMES WEDNESDAY MAY 1 1 1994 




MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE POUND 


Firmer tone to dollar 


Continued speculation of a 
tightening in US interest rates 
and positive developments on 
the US-Japan trade dispute 
helped the dollar finish firmer, 
yesterday, writes Philip 
Gawith. 

The US currency was also 
bought on the back of a 
rumour that the Fed. and the 
Bundesbank would move in 
concert today by respectively 
raising and lowering rates. 

The Fed did not move, as 
some had expected, to tighten 
policy ahead of the $29bn quar- 
terly Treasury refunding auc- 
tion which started yesterday 
and finishes today. 

Against a background of 
fairly quiet trade, the dollar 
dosed in London at DML6705 
from DML6579, and at T10&900 
from Y1Q2_875. Analysts said, 
however, that the dollar’s 
recovery had not yet gone Car 
enoug h to be convincing. 

Elsewhere, the Bundesbank 
cut the repo rate to 5J35 from 
5.41 per cent, in line with mar- 
ket expectations. There is spec- 
ulation in the market that the 
Bundesbank council may cut 
the discount rate when it 
meets today. 

Sterling was slightly firmer 
ji gama* the D-Mark on the hflrtlr 
of a firmer dollar, closing at 
DM2.4907 from DM2.4801. It lost 
half a cent against the dollar, 
finishing at £L4S1 from $L496. 

■ In his first policy speech to 
the Lower House of parlia- 
ment, after taking office on 
April 2S, Japanese prime minis- 
ter Mr Tsutomu Hata com- 
mented; “Given persistent for- 
eign criticism over the closed 
nature of Japan's markets, it is 
important to change the eco- 
nomic structure... in order to 
seek gradual shrinkage of the 
current account surplus.” 

He said Japan would also try 
and restart the deadlocked 
trade talks with the US. Mr 
Hata said Japan must pursue 
“drastic” economic reforms for 
its own benefit, opening its 
markets through deregulation 
and managing its economy to 
achieve domestic demand-led 
growth. 

He also said that Japan 
should implement the eco- 
nomic package adopted in Feb- 
ruary and implement the mar- 
ket opening measures, set out 
in March, by June. 


Germany 

Repo rate % 

•02- — 



52 *■ i ■ ■ n'. » ^ 

4» 1994 

SaurDKMMMwn* 

■ Pound In Hn> York 


tar ta 

— Latest 

- Pro*, das 

£toot 

1.4875 

1.4330 

Irate 

1A886 

1.4972 

State 

1.4861 

I MBS 

1 * 

1.4857 

1.4839 


The inability of Japan to 
reduce the size of the current 
account surplus is widely seen 
as a reason for recent yen 
strength. 

Earlier Mr Kantor had coun- 
selled patience in the stalled 
US trade talks, saying: “With 
some more discussion, we 
believe we could re-engage (the 
trade talks) on an informal 
basis.” 

Another explanation offered 
for the firmer dollar was 
rumoured dollar buying, later 
denied, by the Swiss National 
Rank in the Far East 

Mr Paul Chertkow, head of 
global currency research at 
UBS, said if the dollar broke 
above $1.69 and Y104J50, a sus- 
tained appreciation could be 
expected. In the short term, a 
successful refunding auction 
might improve the tone of the 
dollar. 

There was talk yesterday of 
Japanese participation in the 
auction as a possible quid pro 
quo for the US administration 
toning down Us critical rheto- 
ric. 

Mr Neil MacKinnon, chief 
economist at Citibank, said the 
dollar was being undermined 
by the re-rating of the D-Mark, 
based upon the upward revi- 
sion of German growth fore- 
casts, and money markets now 
discounting the bottom of Ger- 
man interest rates in Septem- 
ber 1394. 

■ Also lending support to the 
dollar was some anticipation of 


a possible 25 basis point cut in 
the German discount rate 
today, from the current level of 
5 per cent The rate was last 
cut on April 14. 

Arguments for and against 
are fairly evenly split. 
Although analysts believe a 
cut Is possible, few believe the 
Bundesbank is in a position 
where it must move. 

The cut In the repo rate to 
525 per cent means that the 
Bundesbank has now, over U 
consecutive weeks, cut the rate 
by 65 basis points to 525 per 
cent 

German call money was 
quoted at 5.50/60 per cent after 
the repo allocation, from 525 / 
50 per cent on Monday. Dealers 
cited weak bank reserve hold- 
ings as being the reason for 
firmer rates. 

Trade in the fixtures market 
was fairly weak, with the June 
euromark contract closing at 
95.02 from 95.03. The December 
contract closed four basis 
points firmer at 95.19. 

■ In Europe the Belgian Franc 
ended unchanged at BFr2028 
against the D-Mark after the 
Belgian National bank 
t rimm ed its central rate to 5.45 
per cent from 520 per cent Mr 
MacKinnon said the fact that 
the hank had felt constrained 
to cut by only 5, instead of the 
normal 10 , basis points, “sug- 
gests the pace of easing is 
being compelled to slow down 
(by the rate of darling in Ger- 
man rates).” 

The Italian lira finished 
firmer at L9542 against the 
D-Mark from L95&9. Mr Silvio 
Berlusconi was expected to 
present a new government to 
President Scalfaro yesterday 
evening. 

■ The Bank of England 
injected £420m liquidity into 
the UK money market after 
forecasting a £400m shortage. 
Overnight money moved in the 
3% -4% per cent range. In the 
fixtures market the June short 
sterling contract dosed at 94.60 
from 9426. 


May 10 

Ctosing 

rnkfuoint 

Onnge 
on day 

BUWfer 

spread 

Europe 

Austria 

CSeh) 

17.4694 

+0X468 

798 - 990 

Befgkan 

(BFr) 

51X643 

40X225 

255-031 

Demerit 

PKi) 

9.7424 

+0.0374 

374 - 473 

FWand 

P=M) 

a (7333 

+0X328 

831 - 035 

France 

(FFr) 

8X297 

+0X301 

249 - 344 

Gomany 

PM) 

£4907 

+0X106 891 -823 

Greece 

PD 

386.712 

+■1X78 

385 - 058 

Intend 

n 

1X284 

+0X033 

251 -27S 

tely 

04 

2377.40 

-OX 

588 - 894 

Luxembourg 

(Lfi) 

51X643 

+OX22S 26S . 031 

NaOwriends 

P) 

2.7964 

+0X127 947 - 961 

Norway 

W9) 

108098 

+0X433 

048 - 149 

Portugal 

E4 

257J049 

+1/468 

613-284 

Spain 

(Ptal 

204*40 

+0.719 

497 - 783 

Sweden 

(SKr) 

11X464 

+0X448 

389 • 558 

Suritzerfand 

(SFr) 

2.1307 

+0X143 

292 - 321 

UK 

B 

- 

- 

- 

Ecu 

- 

1X912 

+0X043 

903 - 921 

SORt 

_ 

0X4769 

. 

. 

Amortcas 

Argentina 

(Paso) 

1/4898 

-00033 

892 - 903 

Brezl 

(Cl) 

2175X3 

+28X7 

519-688 

Canada 

CCS) 

9IWM 

-0X115 

524 - 545 

Mexico (New Peso) 

49601 

-0X314 

410-592 

USA 

(5) 

1/4910 

-0X05 

906 - 915 

PaeMe/MUcSe EaatMMea 



Austrato 

(AS) 

SL0812 

-0X15 

588 - 828 

Hong Kong 

(HKS) 

11X198 

-0X402 

152 - 244 

mere 

(Rti 

48.7708 

-0.1534 

493 - 921 

Japan 

CO 

154X15 

+1X19 

803 - 027 

Mtaysia 

(M« 

3X005 

-0X062 

977-033 

Naw Zealand 

(NZS) 

2X674 

-0X147 

650 - 698 

PhfipP*nes 


40.5563 

-0.1348 

190-925 

Saudi Arabia 

(SA) 

5X918 

-0X184 

887 - 939 

Singapore 

(S5) 

2X148 

-00038 

133 - 163 

S Africa (Com) (R) 

5X907 

-0X074 

852 - 982 

S Africa (Rtl) 

n 

7.0823 

-0X235 

501 • 145 

Soreti Korea 

(Won) 

1201X3 

-8.15 

075 - 230 

Taiwan 

(T« 

39X918 

+00471 

580 - 275 

Thstaid 

m 

37X105 

-00875 

904 - 305 


to* te WL fttt WA M. IW6j. 

172873 17.4866 OS 17.48 OJt - - 11M 

£.5933 512593 0.1 512893 -02 51.0093 03 115.1 

9.7531 -as 9J5B2 -06 9.7756 -03 US3 
BBHfl - « • ■ 813 

04777 05355 -08 82411 -06 8X081 03 107-6 

14720 2.4814 -02 - - 14887 09 1232 


-08 1.0283 

-32 2333.55 

Ot 512893 

02 2.7957 

06 108187 
-4JS 259269 
-02 208.1 
-22 112984 
IX 2.1242 


-07 1.0303 -04 

-2.7 242425 -2J0 
-02 51X883 03 

01 2-7728 08 
-4L3 106078 OX 
-44 

-2 a 208X15 -2.1 
-IX 11.6674 -12 
12 2.0827 IX 




1.2935 12866 12919 -07 12625 -04 12864 02 


f3DR MM tor Mgr 9. eufaB* VMM In ta Pour* Spot tab* «M* otoy tta tare tfarae < 
burn h*tod by current Merest mm. Stafeg Mm eMM bf tie Bator to bdnl 
tie Dotar Spot HblM dartvsd tom THE WIWHEUTB® CUOSMQ SPOT RATES. Soma 


- -rg- 1 — T1 i.-l ^ — ■ 

i m ranted by tie FT. 




DOLLAR SPOT PQRvVARD AGAINST THE COLLAR 


May 10 

Clating 

mkl-potai 

Europe 



Austria 

(Sch) 

11.7300 

Beigkan 

PB) 

34X825 

Denmark 

PKl) 

6X341 

FWand 

<m 

5.4281 

France 

(FFr) 

5.7208 

Germany 

PI 

1.6705 

Greece 

(DO 

245X50 

Ireland 

(TEJ 

1/4528 

My 

W 

1594X0 

LucemboiBg 

CLFr) 

34X825 

Netherlands 

(H) 

1X765 

Norway 

(NKr) 

7X500 

Portugal 

(Es) 

172.400 

Spain 

(Pta) 

137X50 

Sweden 

(SKr) 

7.7441 

Switzerland 

(SFr) 

1.4290 

UK 

B 

1/4910 

Ecu 


1.1548 

SDftf 

- 

1.41754 

Americas 

Argentina 

(Paso) 

0X992 

Brad! 

Pri 

1459X8 

Canada 

PS) 

1X773 


Day’s mid 
Wj tear 


Ona roontti Three months One yaar XP Morgan 


40X715 275 
402825 680 
400486 330 
400399 231 
400891 196 
400126 700 
+1X 800 
-0X081 515 
45X7 400 
402625 680 
400146 750 
400569 490 
41X5 300 
4083S 200 
400556 403 
400143 285 
-0005 905 
-00077 543 


■ 325 11.7500 

■ 970 342670 : 

.352 6X39 

■ 331 5.4331 

. 220 5.7290 

■ 710 1X719 

- 100 246.100 : 
540 1.4636 

■ 500 1596X0 

■ 970 343970 : 

760 1X770 

510 72580 

500 172X00 
300 137270 

■ 478 7.7503 

■ 295 1-4310 

■ 915 1.4880 

552 1.1646 


Rat a 

%PA 

Rata 

MPA 

Rate 

MPA 

tadex 

11.7386 

-09 

11.7357 

-012 

11.7303 

OX 

103.1 

34.4175 

-IX 

344525 

-OX 

34X175 

-0.1 

104X 

6X433 

-IX 

6X516 

-1.1 

6X431 

-0.1 

103.8 

5/4321 

-ox 

5/4391 

-OX 

5X493 

-0.4 

78.7 

5.7283 

-IX 

5.7345 

-IX 

5X128 

&1 

KMX 

1.672 

-1.1 

1X729 

-ox 

1.663 

a4 

KMX 

249 3 

-1&3 

257X75 

-18.1 

286X5 

-16X 

700 

1.4502 

2.1 

1.4484 

1.8 

1.4383 

IX 

_ 

1589X6 

-4.0 

1607 

-3.1 

1628X 

-2.1 

79X 

34^4175 

-IX 

34.4525 

-OX 

34^175 

-0.1 

104X 

1X789 

-OX 

1X77 

-OX 

1X623 

0.7 

104X 

7X547 

-ox 

7X585 

-0.4 

7X375 

OX 

85.1 

173.635 

-ax 

175X 

-7.4 

180.6 

-4X 

02.9 

137.7 

-3X 

138X75 

-OX 

140X 

-2X 

BOX 

7.7831 

-2X 

7.7871 

-XX 

7X491 

-IX 

82X 

1A287 

OX 

1/4262 

OX 

1.4055 

1.6 

103.6 

1.4902 

0.7 

1/4896 

&4 

1/4895 

ai 

87.9 

1.1533 

IX 

1.1523 

ag 

1.1538 

ai 

- 


40X011 991 -992 0.9982 09991 

42037 937 - 938 14928 14925 


t 5 

153243 - 151520 102330 - 102230 
2613X0 - 251900 174880 - 175000 
04431 - 04440 02873 - 02961 

333723 - 334542 223900- 224300 
279123 - 277177 18820 - 185920 
5.4604 - 54778 33715 • 33735 


Mexico (New Peso) 32200 
USA IS) 

Padflc/Mdda Eaat/Afrtca 
Austraia (AS) 12625 

Hong Kong (HKS) 7.7262 
India m 312688 

Japan (Y) 103X00 

Mataysto (MS) 2.6160 
New Zealand (NZJ) 1.7219 
PMpptntf (Paso) 272000 
Saudi Arabia (SR) 3.7504 
Singapore (SS) 1XS2S 
S Africa (Cong (H) 3X19 
S Africa (F*g (R) 4.7500 

South Korea (Won) 805X50 
Taiwan (T3) 20.7550 

TheBand (Bt) 252250 

160R raster May «■ B tototorspee J e 
Ixe aa haded by curat Mats ran. 


-0.0031 

770- 7TS 

1X828 

1X753 

1X796 

-2X 

1X835 

-IX 

1X981 

-IX 

63X 

-0X1 

150 - 250 

3X310 

3X150 

3X21 

-0.4 

3X228 

-03 

33303 

-03 


- 

- 

- 

- 

- 

- 

- 

- 

■ 

- 

98.7 

-a 0053 

820 -829 

1X957 

1X793 

1X838 

-1.1 

1X884 

-1.7 

1X991 

-IX 

SOX 

-0.0013 

257 - 287 

7.7270 

7.7282 

7.7292 

-ax 

7.7352 

-05 

7.7589 

-04 

- 

+0.0013 

660 - 725 

31X725 31X850 

31.4338 

-2X 

31X688 

-2X 

m 

• 

- 

+1X25 

880- 940 

103X50 102.700 

103X35 

2 A 

103X45 

2X 

100755 

3.0 

1407 

+0.0045 

150 - 170 

2X220 

2X115 

2.609 

3 X 

2X935 

14 

2.658 

-IX 

- 

-0.0042 

209- 229 

1.7310 

1.7182 

1.7231 

-09 

1.7278 

-IX 

1.7485 

-1.6 

- 

- 

500 - 500 

27X500 27.0500 

_ 

- 

. 

. 

- 

. 

- 

+0X001 

502-505 

3.7505 

3.7502 

3.7511 

-OX 

3X534 

-ax 

3.7549 

-04 

- 

+0.0027 

620 - 530 

1.5553 

1X467 

1X519 

ox 

1X514 

03 

1X6 

OX 


+0X07 

130 - 180 

3X180 

3.6090 

3X32 

-6X 

36S" 

- 4.7 

3.751 

-3.7 

- 

- 

300-700 

4,7700 

4.7450 

4.784 

-6.6 

4X44 

-7X 

• 

- 

- 

-1.46 

600 - 100 

807X00 805X00 

AfMBS 

-4X 

812XS 

-3X 

830X5 

-3.1 

- 

+0.12 

400 - 700 

26.7800 26X700 

26X205 

-2X 

26X21 

-2X 

- 

- 

- 



v3v "Moa- 


40X25 200 - 300 
h tea Detor Spot table 
UK intend 8 ECU n i 


252200252000 25205 -32 2543 -32 25X5 -22 

i show only tie tare taree decSnre pleeee. Forweri mee ere nto dVeclty quotad te tea gaH 
quoted In US cmancy. J P. Morgan wdn d incScoo May 8. Ban aiaaga I9QCMOO 



CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

May 10 BRr DKr RFr 

Be lgiu m (BFr} 10 19X1 1064 


Ram 

Q ena a n y 


Norway 

Portugal 

Spain 

Sweden 

Swttzerfand 

UK 


Ecu 

Y<n per i.QOCt I 


(BFr) 10 
(PKl) 52X2 
(FFi) 00.10 
(DM) 20X8 
m 49X8 
W 2.156 
(H) 1823 
(Wr) 4742 
(Es) 16X4 
(Pta) 25X5 
(SKr) 4428 
(SR) 24.05 
(Q 5126 
(CS) 24X6 
« 3428 
(V) 330.9 
38.71 

te Kroner, Fan ch I 


■ P-MABK FUTURCS (IMM) DM 125X00 par OM 


Jun 

Opm 

06041 

Latest 

05888 

Change 

-00067 

06043 

Low 

05976 

Sep 

Dec 

05889 

0X982 

00005 

■00065 

0X992 

0X880 

06005 


2X02 4637 

1X53 2440 

1203 2787 

0412 9542 

1 2317 

0.043 100. 

0287 850.1 

0X49 2199 

0299 924X 

091 1162 

0888 2058 

0481 1115 

1X26 2377 

059 1157 

0888 1594 

0624 15345 

0795 1841 

IshKranr end SO* 


tow Eat wj* Open tot 


EfitS EUROPEAN CURRENCY UNIT RATES 

May 10 Ecu cen. Rare Change % +/- torn W spread ON. 

rates agtaratScu on day can. rets v weakest bid. 


Irela n d 0808628 0795804 

Nether le nd e 2.16672 Z168S7 

Belgium 402123 39.7638 

Oarmany 1X4964 1X3191 

France OS3883 081872 

Danmark 743879 7X5921 

Spain 154250 158X04 

Portugti 192X54 199407 


-0000579 -1X1 

•♦0X0237 -128 

40X432 -1.12 

40X0231 -091 

4000818 122 

4000859 1X5 

40038 2X2 

40292 040 


6X9 11 

422 

4X2 9 

4X5 

2.15 -10 

122 -11 
0X6 -20 

09 -23 




■ SWISS FRANC FUTURES (MM) SFr 125X9 per SFr 


07011 -0.0078 07089 

07028 -0X089 07035 

0.709 -0.0082 07068 


WORLD INTEREST RATES 


MONEY RATES 

May 10 Over Ona Three Six One 

night month mtha mtha year 



IHWI QMM) Yen 12X par Van 19 

Latest Change Wgh tow Esl vol Open tot 

0969 -0X102 09782 0X648 27X87 


0X728 -00109 0X338 0X727 1483 

09815 -0X101 09820 0989 270 

(IMM) 262X9 porg 

1489 -0009 14874 1.4690 11X13 45X28 

1.4890 -0979 14940 1489 140 1208 

1.499 -0X052 14910 1499 1 37 


NON Bftl MEMBERS 

Greece 264X13 284X70 4039 7X2 -3X2 

Maty 179X19 184X01 -7.45 2.78 09 

UK 0788749 0775146 -0003351 -1.47 4X6 

Em centra rate* ere W tea Earoprat Commtastan. COnanetea am In deeeeodtag ratatire a 
Pereetoege changes as tor Esc epatoBvecftengedmaiee a week anency.Otowgmcsd 
rare btewsan wo spreads tea paoarega ttatoraoee bateaai ilia acted rmdai and Em c 
te a agency. and tea madman patmtad p arc reto g a d a to fan to tea crarencyli market t 
Gar cared tree. 

P7X73B srerep and ttteton lira uppanited tan BM. AtMtoMm cteeteeted by tea ftoav 

■ PtfflJIDgLPHU agg/SOWTTOmeai 250 (canta per pound) 

Strto CAttS POTS 


1425 

149 

1478 

1X9 

1X05 

1X9 

Prewoul day's vat. 


i : : • - : *r > > S* t . ' ; i ' • i * • it: •?*•.’?! •, .. « , • ( 


028 

083 

087 

1X2 

2X4 

2.77 

3.78 

4.40 

6X6 

4TOB22 Puts 416 

6X6 

HOB 





INTEREST 


Btigkan 

Btt 

5M 

5» 

6ft 

5M 

7.40 

4.75 

_ 

week ego 

5ft 

514 

sa 

SM 

8M 

7/40 

4.75 

- 

Ftanoe 

68 

sa 

sa 

544 

5M 

5.70 

_ 

8.75 

week ego 

m. 

S3 

6a 

SM 

SM 

6.70 

_ 

7.75 

Oermany 

5X4 

5X0 

5.16 

5X8 

5X4 

6X0 

5X0 

5^7 

week ago 

5X2 

5X0 

5X2 

5X2 

5X0 

6X0 

&0Q 

5M7 

Ireland 

sa 

5% 

8 

64 

64 

- 

- 

8X0 

week ago 

5M 

6M 

6 

6ft 

6ft 

- 

- 

6X0 

IttiV 

aa 

73 

78 

78 

78 

- 

7X0 

8.10 

week ago 

8M 

7« 

8 

a 

6ft 

- 

8X0 

8X7 

Netherlands 

5X8 

sxo 

5.13 

5.11 

8.10 

— 

5X5 

— 

week ago 

6.46 

6X0 

6X2 

5X1 

SXO 

- 

5l25 

- 

Switzerland 

4ft 

4ft 

4 

4 

4 

6.825 

3X0 

- 

week ngs 

33 

44 

4 

4 

4 

6X25 

3X0 

— 

US 

33 

*i 

<fl 

64 

6* 

- 

300 

- 

week ago 

3M 

*a 

4ft 

40 

SM 

— 

3X0 

— 

Japan 
week ego 

2M 

2Vfc 

214 

2% 

214 

ZV. 

2M 

2H 

24 

2U 

- 

1.75 

1.75 

- 


■ TWH 

BE MOUTH EmOMARK FUTURES (UFFB* OMIm points oMOOM 



Open 

Sett price 

Change 

Ugh 

Low 

Est vol 

Open taL 

Jun 

85.04 

95X2 

-0X1 

96X5 

95X0 

23184 

196739 

Sep 

95X2 

OR 99 

+0X1 

ns3k 

95X0 

28570 

188557 

Dec 

95.18 

96.19 

+0X4 

96X0 

85-16 

24481 

177281 

Mar 

95X5 

96X9 

+0X6 

96.10 

95X6 

20636 

195121 



gcxj 



Saci 



HUF^LlOOOni potato oMOOH 



Open 

Stit price 

Change 

t*gh 

Low 

Eat vol 

Open lid. 

Jun 

92X0 

92X3 

+004 

92X4 

92X0 

6413 

43001 

Sep 

92.45 

opffi> 

+009 

9253 

92/46 

6413 

30678 

Deo 

92X4 

82X9 

+0X8 

9240 

92X4 

4644 

35036 

Mar 

82.19 

92X4 

+009 

92X6 

92.19 

704 

11966 


! FlfTUBes (LFFg SFrlm point s of 100% 



Open 

Sett price 

Chengs 

Hfcti 

Low 

Eat. vol 

Open taL 

Jun 

96.18 

96.17 

+0X1 

96X0 

96.16 

5647 

20464 

Sep 

96.17/ 

96.17 

+0X1 

98.18 

96.16 

1559 

10756 

Dee 

96. 04 1 

9008 

+0X2 

96X6 

96X4 

63 

5142 

Mar 

- 

96X7 

+0X2 

- 

- 

0 

883 


Interbank Stedtog 
O taritog COa 
Trsasuy BMa 
Bank BSs 


UK daartng barte bam tenting i 


Certs of Tax (top. (El 00X00) llg 4 

Oats editor dap. redafl 00X00 to Ttspc. Dreatete w*hreaw 
Am. tenctor rate e> Aeourn eJBeaBpe. BXZ> toad rae SBg. E 
1894. Apwd rate tar period MqtSS. 1894 to Jun 25. 1904. Sr 
period Apr 1,1904 to Apr 29. 1804. Scheme* IV » VSXBpc. 
May 1. 1994 


4B-4% 

5*» - 6 

8*4 * 5*s 

Sh-Sh 

6-5% 

- 

84-5 

5A-M, 

Sh-6h 

5B-5E 

- 

4B-4fi 

4B-4B 



- 


4Q-4B 

5*8 - BA 

. 

4S-4H 

5A-6 

«4-6% 

8*2-6% 

6-6% 


- ■ 




1 6*4 per cant tom February 8, 1994 


UP tel 

1-3 

5-6 

60 

9-12 

nu i0i 

month 

monte 

months 


1*2 

4 

3*» 

3 % 

3*2 


ilacateilipe. 

amt Rom Mtee (to <tey 4pril SB, 
hamea ■ S m nJSBpc. ftotama rate tor 
^nann House Bam Brno Mjpo from 


■ SUBOR FT London 

Interbank Rjdng - 4 i 4fl Si 5fl 

week ago 4ft W S* 

US Dollar COa - 425 4X6 4X9 5X0 

week ago - 4X8 4.14 4X6 5-15 

SDR Linked De - 3% 4 4ft 4ft 

week ago 3» 35k 3M 4 

ecu Uetoto Oa nrid RteB I ntffE tok 3 mtha; SWc 8 rndjo: 5*k 1 yea: 
MN ae etaad am tor JiOm qegM to tee martiat by Inr team 
dm. Tha banka ae: 8antma that 8s* or Tokyo, Snnfeqra and Nador 
Md rate* aa tenrni tar tea d u rn pa So Money Ratos, US S CDs aid SO 

EURO CURRENCY INTEREST RATES 


I KCU FUTURES (UFFE) Eculm points of 100M 






Open 

Sett price 

Change 

High 

Low 

ESL vol 

Opan frit 


“ 

“ 

tat 

94.46 

94.43 

-0X1 

9447 

9442 

692 

11209 




Sep 

94X8 

94X8 

0X2 

94X9 

04X6 

677 

11948 

" 

- 

- 

Dec 

9446 

9447 

0X3 

9440 

9446 

324 

7024 



“ 

Mto- 

94X3 

94X5 

0X4 

94X6 

94X3 

358 

2312 


■ THHM MOUTH 8TBBLBIQ FUTURES (UFFg £59X9 points Of 100 M 


55- S uaoR kMRMrk Mng 

bares at 1 lam daeti woritog 



Open 

Sett price 

Change 

High 

LOW 

EsL vol 

Open tat 

Jun 

94X7 

94X0 

+0X4 

94X4 

94X7 

8749 

80485 

Sep 

94X3 

94X8 

+0X5 

94X8 

94X3 

17329 

90657 

Dec 

93X8 

9172 

+006 

9178 

83X8 

13560 

128518 

Mar 

9110 

9114 

+006 

83X0 

9110 

5606 

52416 


j We cannot give yon one J 
■ reason \diy you should trade } 
i futures at IM-Waldock.,. i 


i MOUTH HOPOlilH 0MM} Sim pcfrria of 10056 





Open 

Latest 

Ctwiga 

H& 

Low 

ESL vol 

Open tat 



Jun 

94X4 

94X3 

+0X8 

94X4 

94.79 

126X44 

433X55 

She 

One 

Sep 

94.17 

94XS 

+007 

94X2 

94.12 

177X14 

436X47 

months 


Dec 

93X8 

8177 

♦0X7 

83X1 

93X4 

101911 

388X82 


Haded on APT. M Open Mansi Bps- an tar prsvtoua dm 


■ CTRUMO OtonOfS (UFFQ gSOO.OOO potott of 100 N 


Bte^an Piano 
Danish Krone 
O-Mafc 
Dutch Gutar 
FraKh Franc 
Portuguese Ere. 


Starling 
Sates Franc 
Cen-Dotor 

US DoOar 
baton Ura 

Yen 

AsMiSStog 
Short Mm rates i 


51J.SJI 

Sfi - BA 
5A-5A 
Sh -5V 
12 - 11% 
m-m 

4^-414 

4W-4 

9-Th 

2&-Zh 

1 ere tar tea 


6*1-541 5A - S& 
* - 5l» 61* - 511 
S*i-5% 5A - 6A 
5^4 - 8*S SA-8A 

- rt 5H - sa 
I2\» - 12 12% - 12V 
«-7H 713- 7fl 

5-4% 5* - 

4U - 4 4A - 3fi 
5*1 - 5% - BlJ 

4i - 4 A 4«a ■ 4% 
«-7*z 8-7*2 

2\ -2A 2*4 - 2d 
3*2 - 2*2 3*2 • 2*2 

US Ootor end Yen, ttewra: 


SA - BA 5*i - 5*a 

5A -5A 5A - 43 
6*, - 5 5*, - 5 

sa - SA 6% - 8*2 

12*« - 11S| 11*8 - 105, 
71J - 7J2 7{J - 7fi 
6A - 5A 5B - 3J3 
4 - 3% 4-3% 

6*a-«Je «%-& 
5*1 - 6*| 
8-7*2 7% - 7*2 

2 * 4 - 2 A Z\- 2 A 

4-3 4.3 

two dqis* naree. 


5% * 5*2 
8*S “ 5U 
BA-4U 
5*|-5 
5*,-s*a 
10*8 - 10*8 
8-7% 
s - sa 
4A-3B 

7A-7A 

2A-2*a 

4*4-34 


XURYBMJLPUlUSeSIRtoq Simper 100% 

95X0 65X4 40X4 95X5 95X0 2.782 25,744 

94.77 94.74 +0X4 84.77 94.73 2X26 11.19 

84X4 94X8 +0.06 94X8 94X3 1X25 6X57 

at flga. as tor prerigm<ta 

HK OWnOWaXIFFgDMIm potato Of 1009t 


Strike 


- CALLS 

Price 

Jut 

8ep 

9460 

0.14 

014 

9478 

004 

007 

9600 

0X1 

0X3 


I B Sererity. LWXWdoek his bsn 
aanang Wans Indan tinge I9$6k 

I WeaedesHngnetobsnafsl 

■Sinr OX. tatam atangn, wtti 

mMsaXOMOOtnatiensr 


°M» W57 FUa W7B. Prorious rteyto opan to. Oato ieSZ2S Pica 1S0770 


Strtea 

Price 

Jun 

~ CALLS - 
sep 

Dec 

Jun 

— PUIS 
Sep 

9600 

0.10 

0X9 

033 

008 

0X7 

9525 

003 

0.14 

018 

020 

017 

8550 

001 

006 

009 

049 

0X4 



■ THREE MONTH I 


iFUTURRS(MAUF) Pats koarbank oCared rate 


mL Cali 7450 Pun aa. PraSous da/a open to. Ctete 230720 Pirn isbmb 
I SMBS PHAMS OWTTOm (UF^ SR- 1m potato of 100K 


Open 

Sett price 

Change 

High 

Low 

Eat vol 

Opm taL 

Strike 


- CALLS - 



— PUTS 

94.44 

94.46 

*0X2 

34.47 

94.44 

11252 

61,171 

Price 

kit 

Sep 

Dec 

Jun 

Se*> 

94X8 

04.72 

+0X4 

94.74 

94X8 

8X90 

44X30 

9800 

019 

026 

028 

0X2 

009 

94.66 

04.70 

+0X6 

94.71 

04.66 

6X07 

36X86 

9825 

ao5 

012 

016 

013 

020 

94X1 

94X7 

4007 

94X8 

04X1 

4,718 

32X27 

9850 

002 

OK 

008 

036 

039 


■ THREM MOUTH BUROPOUXR 8JFFQ* Sim potato Of 100W 


Ere ksl rate. Gtea 0 Rite X PiMaa days opan M_ Oato 5t» Putt «054 


Op« 

Sea price 

Change 

wgi* 

Low 

Esl wai 

Open to. 

84.90 

94X0 

0X1 

04X1 

04X0 

537 

5045 

8423 

94X0 

-a 01 

94X3 

94X3 

9 

2151 

33.77 

0174 

0X2 

.93X0 

93.77 

50 

1372 


9146 

- 

- 

- 

0 

966 


Adam & Company — SJB 

AMe d Toot Bank 5X5 

Afiaar* GX5 

MtarayAiBbodier 5X5 

Ba* of Baade 6X5 

Banco Bti«Vtaaya_5XS 
Bar* Cyprus. 6X3 
Sark of Inland. axs 

BraAolfrda 5X5 

BankafSootond 5X5 

BardaysBank 625 

MBkof MdEeat-.H. 525 

•erawi a^My&co im xxs 
Ct Bank Nederland... 5X6 

C28a*NA JL25 

OitiestieBati 5X5 

The OoaparaflreBank. 52 

Ocua&co 529 

credkiyamte 6X5 

Cyprus Popular Bw*_SXS 


OmcanLonrie sai 

Exeter Bar* Umted_ 6 X 5 
FtateMti&OenBaik. 6 

•Fkfcart Flaming & Co _ 5X5 

Qkotwik 5XS 

teOutawa Mahon 5X5 

Hsha»B«kAQaafch. 6 X 5 
W lembu aBa* 526 

Haritefato A Qen bw Bk. 52 

MSnul _525 

C. Hoema CD 525 

Hongkong iShantthti. 6 X 5 
**>n Hodge Ba*._ 5X3 

•teopsld Joeetii &Sone 5XS 

tloydsBsnk _SX 5 

Meti»ajBo*LM 3X5 

MdsndBte* 5 S 

* Maura Banftog 6 

WteatiM o 525 

■HeaBmOm 529 


‘HatergheGuamm 
CorporaSonLkntedlsno 
kngarerahoriBQdae 
BbsaMngtasEuBon. 8 
RojMBkraseofcnd- 6 X 5 
•Smtei A women Sacs . 5X5 
Standard Chartered _ 325 

523 

•UhWdBkofKmtil^ 523 
Ur*yThMBa*nc_ 5 X 5 

Western That _5X5 

VMbowntzklaa 525 

Y aks h taO a k 525 

• Members of Brttteh 
Merchant Banking & 
Saaurtttae Houses 

Itote 1 1 1 JlMite 1 

* te a tiift toba Bon 


I Q TradtaKnqrgsrtToa^ta&l 

I rufpaftreOKia&raadBimd 
wppart-ftwckartirwIeaBrt, 
•ffcpfcWWdtato^BtilMB. 

I QC«MksleM.Sa2w«ptr 

maWtanttactatinsdrsutagfe, 

I eiHttestHgHtienfB8.r«iTlsn 
GO-monr tbs nto drered by 
(UfriRSrao. v 

I B NarereewtetYoeewplKeBt 

erto, jetsqsafe ar get afimmiiai 


era to staglHti ontas. TgaUme 
GO-WKorartbi rates drered by 

B 21 kta smtet. Yncsophctsi 
ordo.piaqoofewprtafanisttiOT 
« jMraoconti U boon every 
biAgdq. 


B Ortore xr ce tte e. We ta titan teb I 
toexcuainirefda'MtieiadbR . ■■ 
IwrOiaamltiqihMctiLMMrir ■ 
tne4Udaaroaraatenmnteoar - I - 
Hqnffiysa ■beta' sr •res* * 
iKtto* teas qSct Bool <6m | 

Owy'm traded. .1 

M accurate aod g 

tkn^rrtallr red aradfck wu re ti '■■■• I 
teitrwods. Dsayiua— taiba * 
mSAktiftbcWA. ; I 

B Sente Vtine, > Bh,aia«tir ' I 

cemented ti hi tl Maael ttiM 
ratietihAreisH. ■ 

lathetotokerewcftdctefhdiMrtti - I 
iteMOtobnwridteW^OM*- - 
iffitetedql 


0800^24720** 

WtinKOIS-USW 1 

fenwtffOOMlMW ■ /'l 




fflSig 5 !ES 3 EB 3 !i!S 3 






















39 




FINANCIAL TIMES WEDNESDAY MAY 11 1994 


WORLD STOCK MARKETS 


±J- »W Low VM 


EUROPE 

AOSTHA [May 10/Scft) 


•'"t M.„ 


-io Uni 
-5IX7D 
+14 834 
+30 4,290 ! 

+» i.na 1 

+9 1,387 1 
+81X71 
_1£B0 
+7 *w 
44 2S1 

44 406 

+1 781 

+1 800 
+40 4.340: 


BasuMuxamoBG (Mamo/Fn.) 


’•’••''“■lie. bi 


A0 Gro 2.885 
Mom 4.140 
UOBEl 8.100 
Mad Sia 
BBL 4jtBaJ 
EMnU 17.*bO 
BGnLPt 2S4XU 
BnqWB 40500 
BfeSrt Z7X7S 
CBRCra 12000 
~ - iBOCf 

tw>4 
197 
8JOOO 
1578 
moo 
EHAFV ELMO 
SftiAC 3W550 
6BL 4.41S 

OKirt* -1.300 

as Bp lifla 
SenSnq 8.420H1 
Omni 0510al 
avM 5580 
Huntti 3540 
Knflmk &940S 
Wu+JU- 05200) 
MCOMK 8.140 
Mourn 1580 
PmLra 17500 
Ptflna 10525 
PhUHi 3580 
Rena 400 
RlBMg 5500 
RyBAR/ sjsso 
S aeSnS 2075 

SGiiAFV 2585 

Settle 16576 
Sohoc 1545 
Soteay 18.025 
Tram 11,150 
34500 
2.000 


-20 Kras 2550 2A 
+20 4250 3.71)6 15 
+30 0590 7500 35 
+10 MOO 4flQ0 _ 
-16 4570 4.130 45 
-80 19590 17,150 25 
+1D0 78500 2274S 25 

+25-037540025 54 
-327500 20558 15 
+UO 1357611525 £5 
-20 3220 2200 34 
+30 0200 9.610 35 
+2 202 154 85 
—30 8500 0,100 12 
+215SBTJTO 25 
+30 8520 8580 05 
70 6.900 0500 0.1 
_ 3580 3^10 35 
IB 4500 3570 44 
... 4400 3550 45 
10 1.680 1430 Z3 
—60 9.1 BO 8500 _ 
-140 10500 6540 1J 
_ 5560 4,160 25 
-3D 3505 3570 45 
+108500 0.750 1.7 
_ 7550 8.770 14 
+10 6580 6500 _ 
830 1536 85 
500 1KOOB 0.1 
10575 0870 25 
5 3.680 3525 45 
-10 588 420 __ 
-130 8^00 5JOO 3.7 
-60 6500 6500 35 
-29 2500 2^76 45 
780 2540 44 
" H«S 42 

— inn 1402 U 
+1001755014250 4 2 

-M 71300 8.810 4.1 
+5026.100 222)0 24 

— 2^30 2440 46 


145J0 
1.247 
Lagma 6410 
277 
613 

.. _ 343 10 
Matts 13640 
KMMtt 1.108 
NnCvt 162.10 
Onai 237 
Part* 40160 
MR 438 
Ftoctiny 169 
PmRfc 38720 
Peutft SO* 
MW 1559 
Prren’d 1.061 
Ratten 643 
Red-* 820 
B«nM 14820 


sue __ 
Sun 2JM5 
Sfflosm 707 
aunM 1,005 
Sdndr 436 
Set) BA BEDS) 
S+ftno 473.10 
Etna 526 
SMsH 2525 
SocSen 848 
SnmmnA 2530 
SpMl 416.10 

SiatC SIB 

Tam zm 

ThmCSF 186.50 
ToMB 3S850 
UBP 15930 
UFBLOC 420 
IMal 480 
UntaA- 
ittteo 
wans 312 

WrmeO 28260 


+1.7010.7015960 _ 
11 1205 1,150 06 
— 0700 5480 0 J 
+2 29621050 _ 
-3 824 545 24 

+3.10 274207.10 06 
+260 1571000) 44 
-2 1-3*8 1568 54 
+160 16040 148 6.1 
_ 250 100 _ 
+&30 525 300 46 
+7 535 421 56 
+6J50 234 is.10 34 
+5604455 373 58 
+1 038 753 1.7 
+21 1J064 001 _ 
+41 1,150 1600 3.7 

_ Boisfiia _ 

-7 1,129 836 124 
+260 157.40 123JD 24 
-4 7SS GB1 13 
+5 MS Cl B3 
-2 3^90 2,710 1.7 
+5 734 £76 11 
-IB 1.788 1,527 27 
+1046190 384 __ 
+165 BOO 519 26 
-2.10 610 471 66 
-2 700 610 54 
+25 2.4701678 _ 
+12 792 587 3JS 
+20 2600 2600 16 
-760 528 412 _ 
+640 37730150 34 
-05 3.120 5*281 1J 
+660 21*16020 64 

+8357-9)283.10 26 
+60SU01536Q 26 
_ « 420 58 

-10 650 476 5.4 

+1 800 BOO 68 

16 1.536 1,272 0 7 
-060 335 240 36 
+160 355 27B 3J7 


- RETHEftLANDS fMsy 1 0 / FtS.) 


ABKAmrfiOXOal 
AEGON 6640 
AMd 4760 
AKZDH 2l66Qa 
AanDaR 7260 
Botttfe 4040 
fattOR 4340 


OsefaPo 10960 
Ffawr 170.10 
FMDlA 17 
Eana 0840 
ESTOpR 4&70H) 
iwgmjr 143 
HBtttn 23940)8 
KoBBB 32740 
6040 
7060 
*8X0 
PfEDlfi 7560») 


NUrt 4060 

Ustya Si 

=KE 1 84 

B2JO 
78 
5240 

rm 
118 

Rodmeo 60-70 
MkW 119-30 
Rom 0140 
RDutti 2DB 
StaiWi 4660 
ItaiOo 1902001 
VMJ 18340a) 
VWJOpfl 5260n) 

«nw<107.40a 


♦TSiSSSSSS 

+60 5340 *8_JD __ 
+30 226167 88 36 
+.10 0040 80.80 44 
+.70 47-20 3860 — 
-.SO 52 42 2.1 

JO 7760 B4 BO _ 
.10 14810580 1.1 
+7402019017370 24 
*4.10 1SS70 WZ.JD 14 
* JO 25 1360 4.4 
-40 10840 SB 4.1 
5840 4BJS 24 

+1601576) 123 _ 

+40S44X02HUD 16 
+2 33650 204 10 
.10 73 4860 04 

♦40 8190 7340 IS 
+40 45 3740 24 

+1 04.70 7*20 02 
9040 81 24 

5440 4060 16 
50 52 44 06 

+.40 57.20 48.50 10 
+1 60 8340 5640 4.1 

10020 83 24 

+60 63 69.75 ._ 

_ 69-60 8940 26 
+ JO 5740 40 14 

+240 8440 7340 14 
+40 131 11820 36 
+60 08 56 5.1 

+401394611820 2J 
_ 11040 0140 46 
+2202154010620 42 
+.70 9060 40JO 14 
-40 236 18<L® 30 

+64020040 109 26 
+.10 5640 4540 14 
+260 13350 10420 14 


RtiwBr 12.120 
Renafin 6430 
SGSBr 2440 
SMHBr 825 
SUHRg 174 
tab* 3420 
SnETC 3616 


Sitttfta 074 

SwBkfir 372a) 
SwBKRfl 1080 
SwfleGr G25 
SwMto 570 
S-nlif) 740 

Unfit® lfiSTta 
Vmfla 624 
ZwtnB 1433 


+20 1368H’ JOB 0.4 
+30 7470 8.150 06 
-20 2408 1.900 Z.3 

+3E1455 775 

*14 227 160 1.1 

+80 4,440 3460 16 
♦SB 4.200 2.S66 1.6 

+50 4450 3470 14 
+20 1450 1,480 2.4 
+14 1,100 84fi 1.B 
+14 531 358 4J 
+940 269 100 _ 

+15 BIS BIO __ 
+10 770 598 _ 
+2 085 735 _ 
+9214031,055 2J 
+14 832 610 _ 
+1316151.220 _ 



PACIFIC 

JAPAN (May 10 /Yen) 


Z OBBUNT<May 10/Dm.) 


■MOHY (Ifty 10/ Kronen 


Denmark (Msy 10/Kr) 


---vsi:. r »v«. - 

. ' 1 ‘ 


•; r -fa '4^ 






_ 730 505 13 

_ 2B1 215 12 

__ 333 284 14 
-200 74» 5600 06 
+525 mm 123J«0 0.-1 
+10 1,140 920 14 
+1 427 320 34 

♦1 20329 1B2 64 
+6 019 387 24 
-13 043 446 24 
_ 270 224 _ 
+1 625 350 26 

-240 1.050 1.150 £L3 
-66 385 2B4 17 
-1 78101 596 04 

-10 737 567 09 
-2.40 015 530 04 
+8 675 473 04 
+4 585 385 24 
+333160X0.49 
+15 1,372 B322C 1.1 
*1 287 20746 4.7 


RMJWD(MqMO/MKB) 


Amor A 137 

Qttr 141 

EQUA BO 

Boon 38.70a) 

Mtttt 213 

KOP 12 

Knhc 61 

XStcB 630 

Kymna 110 

HknA 182 

MMiaB 178 


MonpA 0640 
Puma Mm) 
pow 74al 

aS^ ^ 


+3 154 1 
-1 176 

-10 106 
-4D4&50: 
+1 228 
__ 17/10 1 
-40 58 

+10 7«K 
+2 182 

- 247 
+3 2S0 
.- 258 
_ 200 

— 466 
-20 8040 

... 104 
+140 102 
_ 120 1 
_ 210 
—60 31 

+.10 20.00 


FRANCE (May 10/ fo.) 




Wtcln' Times 
ftjlhv?:- r- Sarvor 




, *,t«ri 2^' 

id?i?» J ' na 


522 +18 670 403 

728 -1 701 695 13 

811 +8 890 778 24 

+5 013 066 ID 
1350 -11448 1.280 24 

USD -10 T43G 1354 14 
009 +21 1402 830 24 
285.40 +44028850 2*0 u_ 
574 +15 B63 537 24 

3,270 -30 17S0 1046 26 
872 -1 7B7 082 24 

-8 1480 1.U1 34 

-81.166 936 18 
17340 +4.40 228® 15880 04 
184 +3407114) 168. HJ — 
+10 2.1061413 3.1 
168.90 +440 206 161 4.4 

1.418 +2 1470142134 

446 *8 440 348 24 

240 -14030000225® 14 
1.135 -2214»1J3» 64 

634 +12 856 500 24 

41140 +6-10 498 400 _ 

572 -2 737 649106 

5,900 +40 1160 5430 07 

710 030 690 

«M-50 +140 439 381 14 
803 -7 960 780 24 

2J&7 +39 2404 2,520 24 

722 -8 780 638 11 

42640 +B4U503BSJO 44 
342 .... 802 328 „ 

958 +15 1,127 925 34 

KB -3 1JJS8 850 _ 
770 -1 66S 7-8® _ 

758 *17 830 S96 1.7 

3^80 +45 1400 2.730 24 

2419 -11 2480 I486 84 

690 +15 BH7 BB4 23 

2045 -.75 38.75 2820 23 
+2 1 82 1SS 6 2 

+6 939 800 14 
1240 +00 1020 4460 04 

461 +11 678 442 24 

yso +20 2.754 1002 04 
787 ...1.020 783 1.0 

606 +9 645 550 20 

454 *0.10481 HO 420 24 
+8 680 666 24 
552 -4 716 550 _ 

876 +61470 051 64 

8346 -140 119 05L25 12 
-2 670 500 84 
+1 701 500 11 

900 +12 90* 7Z7 24 

482 +64049140 435 24 


184 40 +74018670 153 04 
583 +40 612 544 14 
1.150 -30 1.448 1.120 14 

2.623 +23 2413 2370 04 

851 +160 070 576 14 
«■ -181.101 897 _ 

«T —24 1425 797 04 

M) -403&60 278 24 
497 +4 510 435 14 

384 -4 485 377 24 

360 +17D 40440 338 24 


BssasU 4SSU +40 &7S 48B 24 
El'MDr 985 +25 990 815 14 

BerlKr 29440 +1403*9® 238 1J 
BHFBk 440 „ 528 420 34 

Blffig 883 +140 14)05 825 1» 
OttOu 1.330 _ 1430 1.140 0.7 

OattnP 942 +1714BO 840 1.1 

CmnzMi 35940 +440 39B8M50 34 
COMM 278 -4 298 233 1.4 

DLW 659 -2 000465® 14 

DWrtr BB340 +440 014 77140 04 
Douna 520 +12 90S 443 14 

□flat) 2E7 +7-2028150 23S _ 
DlCttBk 70340 +1140 88750 747 2.1 
DWmn 10045) -1 188 132 24 

OoMl 50540 +5 607 531 2.* 

290 +4S0 310 2BQ 1.T 

Donffik 40140 +840 468.50 36140 14 

-14 618 483 1J 

-8 30727438 14 

OHM) 851.59 +140 806 590 2.1 

Hants 238 -4 248 108 18 

Hauzm 1-2B5 -35 1JB0 1,180 08 

Mtta8> 84440 +5 001 602 14 

Kltt 4C450ET +40 462 Z8S 24 

~ 1,128 +73 1J02 14MO U 

-403874020*2 24) 
-01.009 830 \A 

253 222 24 

30540 +440 324 285 33 
tad IK 41440 -1 433 363 14 

KOBE 140 +J0 16814140 _ 

man szisa -eso wa ne is 

m 535 -1 350 451 24 

151 ... 16140 115.10 _ 

IBB -40 17910270 10 
+5 BOO 073 14 
—6 850 600 14 
LhdB 027 -640 060 030 14 
UnoH 383 -3 410 359 2.1 

Uittm 20740 +123)40 106 — 

LuftPf 19740 +40 218 168 14 
46140 +11® 470 378 14 

360 +11 367 302 2.4 

460 +4046040 387 1.1 
_ 822 755 _ 
+1 28611540 34 
-15 3417 2JMO 04 
+440 257 210 _ 
+2 53050450 34 
_ 888 888 04 
487 +8 496 427 2.1 

47240 +362B8B 420 24 

37240 +240 424 336 12 
1,450 +10142014*0 04 

+8 37? 313 2.4 
_ 267 225 17 
-240 813 252 24 
+17® U*5» 970 14 
-3 430 350 14 
+47904)081® 14 
_ B9S 810 14 
„ 535 480 1.1 

291 +8 290230® 2.1 
340 +440 380 307 24 

62740 +840 532 458 24 
+11® 387 317 24 
-a 416 380 24 
472 +6 Ell® 441 14 

017 -140 554 418 04 
412 _ 443 338 05 

987 +2 055 TBO 1.4 

+4 270 220 14 


BnaaA i62* 
CtsOef 14.15 
Dynoin 163 
Efcnfr 90 
HgMH 118 
KMwl 3*0* 
Led H 102 
Mstafwl 2*2* 
MSfcoA? TOE 
Ortdi 239 
RM 257 
77* 

Si 75* 

■>6h m 48g 

68*1 1074Q* 
Unitar 1» 
Van) A 38 
VtalA 05* 


+1 112 
+1 100 
+48 1940 1 
+7 T03 
-40 1141 
+240 1481 

+150 396 
+1 11650 
+150 205 
-0 208 
+1 306 

— 285 
+140 SI 

- 485 

11140 C 

-2 151 
+1 6*40 
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- SHUN (May 10/ Pte.) 


Ataa 5J580 

SSE* iiS 

BCMH 2400* 
BEMBf 4.Z73 
jPPt* 


1.175 
CEPSA 2450 
Carom 4.175 
CUOrU 10410 
DrgdH 2420 
BmAa 1433 
EMwt 2.700 
EndeJfs B4B0 
Form 077 
GrDwF 546 
HldCBl 4.165 
BMBdr 049 
Ko*du tuoo 
Ueptro 6.700 
Mboa 54*0* 
PixTV 10400 
Rnpeot 4475 
SWAGE 100 
Sank) 845 
SovB 051 
TtSBoA 3400 
Tetalh 1 J7D 
Tudor 14B0 
Ita Fan 064 
UhfM 14K> 
Umffi 14*0 
tatthni 2446 
Vtacfn 3405 


+190 BJSO 6400 24 
+200 6.700 5,400 — 
+75 3435 2490 64 
+40 3.400 2450 74 
+35 44W 3475 42 
+140 17JO0 14.100 24 
+140 7^80 6450 4.7 
S 1 AS5 TOO T7.4 
+40 3270 2,410 14 
+176 4470 1400 24 
+43012X90 0420 24 
+85 2.715 2480 84 
+2D1J761480 1.8 
+16 3480 2X55 34 
+160 8,100 8,140 22 
+161,100 855 _ 
+6 710 418184 
+116 6.140 3400 34 
+24 1,210 921 — 
_ 8400 4400 SL3 
_ 7430 5X00 24 
+150 8X90 4410 24 
+320 11 J® 8,710 1.7 
+100 *400 3480 24 
+« 217 102 — 
+32 655 351 74 
+19 B15 810 84 
+50 4X50 3jEOO 54 
+4S 2,166 1495 15 
-fi 1X16 950 14 
+13 738 576 74 
+140 2X00 1X15 94 
+361X251.1® 54 
+60 3,120 2415 2.0 
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S£S7 IS 

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11450 
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2.400 

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+1®0 205302400 14 
+400 HIM 8.110 _ 
+16 3.100 1494 1.6 
+15 34001450 _ 
2499 1492 
+1014201490 — 
+76 2420 2,140 11 
+300 13400 1&2D0 _ 
-5024301400 _ 
+230 7460 4.071 IX 
+175 4420 2.110 24 
+20 7490 347B »4 
+200174801148) 8X 
-6 I486 1436 3.1 
+1400 4B®0 37420 _ 
+5 4479 2.675 
+700 20100 15400 14 
+21O14®012WO 
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+80 T?®01tLTO1) 14 
-50 6.440 4JBH 14 
+OUO 10000 11100 

+4001170013X10 1.1 
+24 1.840 870 _ 
+86 3.1401415 — 
— 6.100 341? — 
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+9GO3*jra23JD0 04 
+10 12.100 8488 _ 
-140 10500 7400 2.0 
_ 5.195 34ra 1.7 
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'450 4.005 1.7 

400 4.146 _ 

+125 4496 2478 „ 
+440 rijDO 11000 3.1 


+40 80* 

+2 311 


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+2 143 
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+2 480 

-1 1441 
-1 110 
+J 90 122 
-1 114 

+8 728 
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ARdJr ®0 
AklUR &£ 
Bel Ftp 2,480 
BrfMr t«5 
BiBuRd 238 
CSBr 985 

605 

OMflo S3* 
BMBr 368 
Bvta 1.700 
FtaMiB 1X80 

Finoar 2,750a 


+8 292 181 _ 
+15 6BO 368 1-0 
+16 60S 667 1.9 
+40 3.005 2.440 IX 
+15 1,348 1J)1S IX 
-4 250 1M> 15 
+27 765 5E8 8.1 
+35 970 810 1.7 
+36 842 776 IX 
+1 422 353 — 

+25 2/100 1^75 _ 
+60 1,610 1 J0Bg 2-7 
+10 2232 1 S 3 S 16 
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+20 971 782 1.7 

_ 172143® 1£ 
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+9 263 205 15 
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IQndon 1,800 

818 

1.250 
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+101X20 1200 
+25 BIO 4M 
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+e 744 563 
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+20 6X00 4®0 
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+2 655 515 — — 
+40 2X80 2J10 0.4 — 
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— 2X50 2X10 — ._ 

+1 1.000 BBS — — 
+8 526 415 — — 
-J 991 870 

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Amoift 8.75 
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□Farm 10.70 
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HSBC 82X0 
HukC 12X0 
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■ TOKYO - HOST ACTM STOCKS: Tuesday. May 10, 


NEC 

Sagami RaJway 

Kawasaki Steel 

Marubeni 

UBE Inda 


Stocks 

Ctosfag 

Change 


Stocks 

Closing 

Change 

Traded 

Price® 

on day 


Traded 

Prices 

on day 

7An 

1150 

+20 

Hitachi 

2.9m 

958 

+3 

4Xm 

528 

+8 

Nippon Steel ...... 

2Xm 

348 

-2 

4.6m 

379 

+2 

Japan Steal Wks 

2.7m 

382 

+3 

4Xm 

538 

+5 

Wbfahl Est 

2.6m 

1210 

+20 

3.9m 

332 

+14 

NKK 

2. 8m 

255 

-4 


INDICES 


INDICES 


nay 

ID 9 


W 1873409 1003128 2500® 16t2 17766X0 204 


Ssic**” 5 - 



AKMtataminM) 20062 20063 2004X 2340® 372 

Ml MUntn/tm 9366 931J 913.4 1136110 3T2 

O«NNl0aOOfl2»fl 41632 413X4 42045 4B0X6 2/2 

1 rased tadB^/WI) 1062X3 1053X6 107621 123225 172 


15E6J7 1529X2 1526J8 1542X5 ft? 


5 » 1 T "ij •t’M'r ,i 

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Bomoa pan2«5 
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Qtii wM (1975) 

talkaoS (4/17BS 
Qkk 

PGA Gan (31712AKI 


M 142100 15103.0 17257X0 26 

M 3443X5 35*1 JB 363059 18/3 

M *178.13 4254.10 4609X6 230 

M 192566 1967X9 215259 1/2 

U «0B2X 8180.1 4867® 4 & 


mw 56 
90450 56 


413X4 96 
103355 35 


3290X8 20M 

410550 20W 
191337 19M 


■y May May 

ID 9 6 tap*) 

Mca 

PC (to 19 78) 2158X7 2147® 2T78J0 5B81.T7 8/2 

CBS TBBaGaa£bd 83) 435X 4312 4342 454X0 31/1 

CBS AR Sit pH) B3I Z703 276LB 279.1 29450 31/1 


»V UK May 

9 8 5 


1994 

M0 Lon 


SncacompMoo 


417X0 SM 
28850 31/3 


caa 40 (1/706) 


2030® 204X49 2048X1 HUM 3/2 


La-- 




CBpart U Oang P /l/BS) 37X93 375X4 377.10 415J9 Hi 

Ffcdmd 

1808.4 iaoas ifloos mraxo vz 

tan 

Sff 250 P1/12/9Q 143558 142237 1434X3 1BS2B 2/2 
DC 40(31/12/37] 218498 213042 2)5822 2X63012 

OttWODf 

FNZ AUan^l/lXEB) B42X0 538X7 8*8® 85012 26 

Conr«tatt(l/l2/53) 24T7.1 2«5 lO 2035 205® 26 

DM BOnMTff 2235.15 221558 2237® 2288X5 26 

Greece 

Mbs 5E(31/126q 97035 98205 90052 11BV5B 18/1 

Hoag King 

Hag Saog01/7/Bq 8MCU® 8421 JO 888027 VBBUB 4/1 


BSESent/ISTS) 


37745 37S2J 37150 4287® 28/2 


Jetttta Onffiflflffi/83) 4G5M 454® 46X12 812X9 5/1 

Mm 

EEO Ond| 4 /UB 8 ) 180 X 78 180 X 26 181 X 49 2082.18 20/1 

Bnca caem U (1B73 BI7.17 80X37 000X4 817.17 106 
WEental(4/UW 131 afl Itaxn 129XS 1SUU0 106 


1402® 2W 
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77*33 2/3 
2221® 20 
282033 2/3 

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588® ion 

944® ion 


Offi) SEMI2/1A3) 1100.72 1091.44 1097® 1211.10 292 

M W 

Haifa Conp (2/1A5) 2913X0 B 286023 3306X7 4/1 

S814A 2841A 2886.4 3228® 18/2 

SB /N-S‘pcR<2W75) 55X10 558IC 666X1 641X1 4/1 

Send) Africa 

jse &« ( 28 e/m ti laazxY lazex 2331® 4/1 

4SE k*S. CBWTffi U 6609XY B5MX 060000 W5 

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SpMi 

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dream 

Mmatal n®37) 14807 1488X 15096 1603® 31/1 

MMM 

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SBC BanM tU4/B7) B33J6 817® 941.12 10B329 3V1 

IMwa 

m&adPc$umr 593737 soosxo 505927 646*® an 


1748100 W2 
5446X0 19*1 


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(3171) (4/4) (3171/94) (2/7/33) 

Home am 96.78 97® 9823 10551 9678 109J7 54® 

(21/1) p/5) (16/10/93) (1/10®) 

Trmport 158928 1606X2 183276 1682® 1548.02 IBS® 12® 

PIS (20/4) (2094) (8/7/32) 

(HHtoa 183® 18853 192.79 227® 183® 25K48 10® 

(3/1) (31/a93) (3/4/32) 

DJ tad DayV Ngh 3676X3 I37D2J1 ) Law 361030 (3826.77 ) (Tbecnocrdtl 
Day's last) 3685X3 (3695X7 1 Lew 3625.10 (3641® I lAdualf) 

447® 451® 48200 438X2 48200 V*0 

(2/2) (4/4) (2/2/64) (I«3Z) 

MWitfaf 517® S22XO S2B.C7 568® 510X5 560® 3X2 

PM) (21/41 (2/2/94) (21*92) 

Fhaocfat 43.12 41X8 4198 «® 41® 48® 164 

(3iD) i4/4) peraaa) (i/i&7*i 

HrSE CBS(L 2*5® 248.47 29L49 267.71 24114 267.71 4.48 

CTO (4/4) C/2/941 C5/4«2] 

Aik MOW 435.42 439.73 441® 487® 4Z7® 487® 2931 

Pm Pm C/2/90 (9/12/72) 

IHSDAD QDp 722X7 73988 740J5 803X3 7THJ1 8BU3 5(57 

(18/3 cm (1B/3W) pi/10/72) 


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Sep 

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447.10 

+2.70 

447X0 

Dec 

450X0 

450X5 

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WAN 22S (IBfiHS) 19917.78 19786X8 198B247 2DET7J7 180 17389® VI 
WAN 300 (1/1092) 296® 20W 29BB0 SBUS Ifl **22 W 

Topic (4/l®a 1917X3 1610X4 ttlMO 1M ««« ^ 

2nd Section (4/1/85 220® 2280X1 229891 23U8 l« ttH» 4fl 


&H*a* 1C0C8/1OW) 1455® 1437® 1450X3 040.18 31/1 1303® 2/3 

Eao Top-100 (2fi«*H T25BL53 12074 1254X1 1311X1 2/2 1202® 2/3 

JCapeOpiS (31/12/80) M 297X4 302X6 388.19 5/1 291128 21/3 

Bflltagi EflWgJZ/l/BS) 14341 14525 147.10 18272 14/2 Ml® Z1« 

■ cj«>*k) nnocK amex nmnaa (matf; 

Open EattPrted Change (Oflh Low EsL voi. Open tat 
May 2130.0 2162.0 +2741 21700 2135.0 27.162 22.007 

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Juo 2118X 2141.5 +27.0 2127 J 2118X G2 220 

Opart kuerare ^reaa far gmfaa day- 


Open rtB»*t figuva n tar pavtaua itay. 


■ MNl YORK ACTIVE STOCKS ■ TWU»HQ ACYTWTY 


Moodoy StKka Chn Chense • Wuno (mOon) 

ta flad price on day May 9 May 6 May 5 

Syria 5268X80 23« +M SE 2H» ZffiXU »XB j 

(UR MMfaca 3181300 SM -h MkW 14.154 17X02 14.141 

“ 2X15800 27)5 -44» SSMfl 22^92-^^2-^535 

ChrsfNtt 2X06.400 44H -IK NYSE 

PWP Monk 2,475,700 50 -2 tares Tmded 2j*B 2.784 2.773 

Ctrpn Ent 2®0X00 26 -Z Nns 511 548 1X20 

Men* 4382780 X -K Fafa 1.700 1®6 1X80 

Coca Qfa 2.123.100 39»t -fa Undnwgad 531 S2 67J 

Ban ttttn 1X84700 53V -ft War mglH 19 11 » 

SU 1X80X00 57 +K Hew Iren 191 128 02 

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end taea am tfw uafai nf lha Mghaat ana town* pitaa raacnad drekkl tta day W eart 
m IMPkad fa Talatata mpn^ dv «k) tawwd vefam tfa* tae Mm hae mtawd 
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M®CmW4/4/B6l 99048 99083 10T1X7 UMAS 5/1 920® 4M 

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Financial Times. Europe’s Business Newspaper. 





J 


40 


FINANCIAL TIMES WEDNESDAY MAY U 1994 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


** IMM 

17% 14% MR* 
3 tt%ALU»A 
®%S7%AMP2 
72$52%AI* 
BA AW 

30% 23%AIHL 
W$ 11%Att«Pr 
13$ 11% Acptaesfcl 
il 2^2 ACE Lid 
12b 10%ACUGKkl 

a 


YM. H 

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12 

11 $ 

A 

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DAS 12495 70 16 14% 1 

HIS 12 38 90 14b 14 1 

IX ZB 23 *345o65$ G3% 

29 2503 SGb 37b 57% 

TS a 4% 4% 

M0 4.7 2B 5*1 43b " 

078 2.7 1613899 A 

060 4J 9 290 11% 

23 21 12% 

044 IB 4 B33 28% 

1097 11 

J S 

m A 
341 9% 

229 6% 

84 12% 

29 7 



1.09101 

iagmoodp oao os 

P«ACMG«Sp MB 11.1 
ftACMGnSS 1J29IL5 
ftAWWn 1.08 11 J 
SAUIOnod 072 OB 
B$ ACmBChX 044 16 15 

TbAaneBed 31 

23 Aconts OSD 2.1 14 J1QQ 28% 

. A Aetna 038 4B 21106 A 
14% 1 1% Asaon 116 1434 nl5% 

18% 10%Adm6gr* 048 28 0 126 17% 

64«%MMao 100 5B 74 53% 

31% 18V AM*: 100115 10 6876 25% 

6% 5% Adi** ftp 016 11 8 31 5% __ 

20 1ft Msg 1C 010 06118 97 17% 17% 17$ 

57% 4B%AaggnADnxZB5 5.7 11 23 52 51 51% 

68% 48%AflHL 176 11 84351 54% 53% 54% 

32% 25% Ate 048 IB 13 2075 30% 30% 30% 

20% 16% Mnrai x 088 4£ 12 828 1^2 17% 18% 



4 1% AINU k® 
40% 40% AtftC 
39% 31%tttnaFttx 
28 19% AfegwK 

§ 14$ AMBUS 
21% AkTcft 

wimm.16 

13% AMaM’ 
Z1% 16 Atony « 

15% 13$Alnd 
20AKBBX 
1B% ACUwA 


’ * 


082 21 22 3520 41% _ 

030 09 20 380 34% 34% 34% 
37 144 71% 21% 21% 
194 11 j 12 40016% 15% 16 

12013 24 23% 24 

8.18 79 3 104 104 104 

020 1.3 8 283 15% 15% 15% 
035 1.9 32 241 19 18% 18% 


020 IB 1380 16 14% 15 

4 20 % 20 % 


. IftAtaiAl 
49% WeoS 
23% Ataftljun 
14% AlnM 
17 Maori LM 
72 Hof 

... 13% Altai Coo 

25% 20Msrgsn 
4% 2ADon 


028 1.4 14 SB 20% - , - 
028 15 13 23 18$ 818% It 
044 1.7 21 3413 27 26% 28% 
030 14 37 4623 71 20% 20% 
1.00 1.9 OS 413 52% 51% 32 

060 23 4 534 ' 


1.00 7j0 25 2081 
043 16 17 12S7 
194 7J 11 4748 
018 ID 14 4227 
040 1.7 14 1328 
6 495 


26% 26 26% 
14% 814% 14% 


19 18% 18% 
22% 821% Z1% 
17% 18% 18% 
23%*%^ 

a 


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27% 19%A8»E*Cap* 1J8C 8D 20 3B3 20% 18% V 


10% 9 Mm 9 
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27% 21% Akmax 
82 84% Alcoa X 
30% 20 %«zhQiA 
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35% 2B%AmBmdr 
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25% 20% Am Bra Prd 090 3.7 13 
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20% 17% Am Cap M 194 89 31 

g 19$AnCapCV 

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33% 28%Anfi«r 
29% 24% AmGonlX 
9% 7MM8X 077114 
27% 24% AaHOlPrx 290 89 


018 19 81 9% . _ 

194 59 13 22B 22% 21% 22% 

087 29 712748 33% 833% 33% 

088 34 18 1025 26% 25% 25% 

18 288 S% 5 3 

71088 23% 23% 23% 

190 14 01 2B86 68% 87% 87% 

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AMEX 


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■ Q 


FINANCIAL TIMES WEDNESDAY MAY 1 1 1994 


/ pm dose May 10 


NYSE COMPOSITE PRICES 


19* 

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44% 36%&*0nr 
71% i7%5nydaQa 
34 25%SdB±an 
33 26 Saw 
81% 49% Sony 
19% 14% Sctob* 

46% 40% Sara Cap 350 07 
45% 36% SooMam 250 03 



34 19%SBlJMM 
30 22% SVrtwn 
72 17% SBIHftx 
20% 1B% StQtoCp 
22 IfiSUnCax 
33% 28%SO0WGE 
36% 28% SNETd 
39 26%SW«r 

19% IS SouOiWS* x 078 45 18 230 
18% 15% SatottnB 024 1.4 17 196 
30% 27%awil»iW»*220 85 10 1035 
12% 9 Spot) food 046 45 173 

7% SSfarktiCp 
18% 14%SfftmD 
39% 31% Spring 
38% 32% SUM 
18 14% SRI 
18% 14 Sal Comm 

26% 14% Suiter x 


18 15% 15% +% 


1.44 7.1 12 38 20% 20 20% 

850 2.1114 1002 24% 24 24% 

150 6.1 10 52 18% 19% 19% 

068 35 8 2S8 19% 19% 19% 

1.19 65 51379* 18% d17% 18% 

1.65 55 It 28 28% <06 28 

1.76 55 S3 363 30% 26% 30% 

(UM 01 278696 28% 27% 28% 



11 

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1.00 27 26 6754 37% 38% 37% +% 

040 17 19 231 15% 14% 15 

040 25 8 144 16% 16 16 -1% 

032 15 11 315 16% 16% 16% +*2 


7%StwdPwUt*ai2 1.4145 318 9 8% 


38% 28% S&ffti 
30% 24% Slender* 

37 31%SMtaH 
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11% 10% Sue 4691 
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27% 19% Stop Step 
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33% 23% Stem Rgr 
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43% 33%Simmr* 

49 4isnhtr 
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3% 15% Synod Tec 
1044 7% SjntsCap 
19% T6%Syno«Ftl 
23% 12% Syntax 
29% 74 Sjcra 


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50 1890 25% 25 25% 

10 35 9% 7% 8% 

0*5 18 15 125 17% 17 17% 

154 45 12 6418 23% 23% 23% 

036 1.4 22 2423 25% 21% 25% 


16% 16TWEftop 
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39% 22%TtfwnFd 
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12 % lOTtikyPI 

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W. W Be 

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2*011 10 % *no*a 

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12% 8% Tara Hun 072 75 78 10 


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46% 34%TMefi«6A 
76 50%Tcta> 
54% 43% Taptol 


151 57 14 9*0 
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080 51 55 3222 
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27 1139339 
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6%T«n(ieGUi 050 8.7 68 

6% TCBMGFd * 060 85 822 


19% 13% 
29% 29 


56% *5%Tmta 
30 25%Tmeafti 
31% 20% Tetoyoe 
9% 6%Tem 
8% 6% Torn fate 
12% 5% Toora 
88% 61 Texaco 

51% SOTtaBOC 
36% 29% Taos tad 
89% 61 Tjfaa 

21% 1B%TmsPK 
43% 32% UtM 
4% 3% Ted Ms 
GO% 50% Total 
4% 4 Thadorar 

24%. 14%TMCBP 
37% 24% TM find 


150 15 171*669 46% 45% 


1*0 85 11 46 

23 1767 23% 23 

096 09 1 87 7% 8% 

OlOO 15 23 302 7% 7% 
a 434 11% 11% 
3L20 45 14 4244 »% 65% 
3J3 85 10 50% 50% 

020 05 44 747 36% 34% 
072 1.0 14 4362 75% 73% 
040 10 24 54 20 19% 

108 95 198401 33 031% 

1.10335 2 77 3% 0% 
1.40 18 12 573 54% 54 

212 rlOO 4% 4% 

055 22 144 15% 15% 

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44% 3S7MrmaBec 012 03 22 1 7M 38% 37% 
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040 25 33 230 20% 20% 
028 10 44 388 29428% 

032 05 69 8087 39% 38% 
156 14 24 779 31% 31 

150 35 79 213 33% 33% 
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150 85 7100 12% 12% 

5 66 4% 4% 

15% 11% TaMKtnCo 056 45 33 27 11% 11% 
27% S%TafcrtE251i 251109 2 25% 25% 

19% 11% Tsl Bras 14 233 13% 13 

756I%Tamn 058 06 19 33 64061% 

1.12 25 tO 1436 38% 38% 
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034 15 13 110 16% 16 

060 15 B9461 33% 33% 
024 XJ 14 72 14% 14 

ISO 7.1 8 35 34% 


48% 36% TcBBrt 
30% 2S Too Corp 
35 25% Tosco 

28% 22% TooiSra 

40% 32% Tysfah 
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16% U Tnsea t 
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17% 11 HaPtodn 
43 33%Tn*x 
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37% 34T4CenHS 
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150 122 UN. 


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29% 22 TJX 4 058 15 13 29K 22% d21% 22% 4% 


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27% a%UnCsb 
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54% 48 UnB 350 

87 80 Ute 450 
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41 % 29T« UbVMtel 
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30 24% Unocal 
58 46% IMUN Q»p 


054 11 19 1285 

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156 95 11 134 
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050 19 32 64 

056 51 10 299 
080 19 a 2631 
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1994 

M* Lew Stock 
30% 25% UCftei 
17% 15% USUCO 
10% a% usurers 
18% 15% USX Mx 
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158 5.7 15 494 29% 29 29% 


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AMEX COMPOSITE PRICES 


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AWBku 11 
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41 


NASDAQ NATIONAL MARKET 


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