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Management 


Japan's office staff get squeezed 


Media Futures 


Travel 


and . - . 


US advertising in the multimedia era The best and worst of eastern Europe Sports, Travel, Health, Arts and Style 


11 


12 


FINANCIAL TIMES 


Europe's Business Newsoaoer 


Eurotunnel on 
track for $1 .27bn 
rights issue 

Eurotunnel, operator of the Channel tunnel, pltm^ 
to launch its £850m (JL27&n) rights Issue this 
week, having received promises from its syndicate 
of 220 banks that they wflJ provide £700m of senior 
bank debt The company’s financial advisers, 
Morgan Grenfell and Warburg in the UK an d 
Banque Indosuez in Fiance, are in the process 
of finding underwriters for the company's biggest 
ever share issue. 

UK Conservatives split: The UK’s ruling 
Conservative party was trying to mpnd a renewed 
split over Europe as the liberal Democrats, 
Britain’s centre party, pledg ed a referendum on 
farther moves towards integration. Page IS 


ri «M predicted: New car 

sales worldwide are expected to rise 5.4 per 
this year to 3435m, after three years of faffing 
demand. Sustained growth in during 

1994 is expected, rising to record levels throughout 
the second half of the 1990s. Page 16 

Rwanda rebels capture Kigali barracks: 

Rwandan rebels seized pw annwnt a rmy har mcfrn 
in Kigali, removing the biggest obstacle in fHrfr 
drive to capture the capital. Page 6 

Mater loyalists chrtm Dublin a t tack : The 

loyalist Ulster Volunteer Force rfaimuri responsibil- 
ity fora gun and bomb attack on a &hm Ffim 
fund-raising event in Dublin in which one maw 
was killed and a second wounded. 

BoMh to load new Yemeni states South 
Yemen’s political leaders kept up d efianc e of 
northern ruler General Ali Abdullah Saleh by 
forming a new five -man presidential council, 
which then elected the southern leader. Ah Salem 
al-Beadh, president of the new state. In Aden, 
stronghold of the southern forces, four people 
were killed and nine seriously injured when a 
northern missile struck. Page 5; Sooth Yemenis 
rejoice at move to end union. Page 5 

ABM Bcaww chip to laming Acorn 
Rise Machines (ARM), the UK company that 
designed the sflicon chip which powers Apple's 
Newton electronic notepad, said it has licensed 
its microprocessor technology to Samsung Electron- 
ics of South Korea, the world's seventb-largest 
semiconductor manufacturer. Page 17 



Bosch-Slemofis seeks acquisitions: . 

BoscWStanen s HausgerSte, Germany’s largest 
producer of white goods, is seeking acquisitions 
in the UK, FrimcrfaiSaTSSy to stri&gthfti flA 
position in the flarcely-compet iti ve DM45hn ft27bn) 
European market Page 17 

Sing ap ore T elec o m rises 1A5%: 

Telecom (ST), the partly privatised trie 

tions and posts company, has announced annual 
pre-tax profits of SgLSSbn (Jlbn), a 193 per cent 
rise. Page 17 . 

European Monetar y B y st sms The order 

Of c irm mHpq tt) flu» RMR grid r enurinpd unchanged . 

last week. The peseta and the escudo remained 
at the bottom, with an the other currencies appreci- 
ating further against them. Currencies, Page 29 


ENSe Grid 


May 20,1994 



OOf* 


The chart shows the member currencies of the 
exchange rate mechanism measured against the 
toeaketi currency in the system. Mostofthecurrm- 
ties an permitted to fluctuate within IS per cent 
Of agreed central rates against the other members 
of themechamsm. The exceptions are the D-Mark 
and the guilder which move in a 2JS per cent band. 


to head constitution body: 

The African National Congress named Cyril Rama- 
phosa, the party’s secretary-general, as ch airm a n 
of South Africa's Constituent Assembly to write 
the country’s new constitution. 

UN tightens Hsltl sanctions: Tougher 
Inte rnational economic sanctions went into effect 
against Haiti alter leaders of the military junta 
fnfipd to leave the country by a United Nations 
deadline of May 31. But there was tittle assurance 
the sanctions would be more effective than their 
predecessors. Paget* 

lereoU troopo a lerte d: Troops in Israel's south 
Lebanon security rone and along the international 
border were placed on heightened alert, after 

Moslem militants t h reat e ned to avenge 
the kidnapping by Israel of Mustapha Dirani, 
leader of the pro-Iranian Faithful Resistance guer- 
rilla movement Page 5 
Malay*** ***** UK bom Mahathir 
ynfamHMi, Malaysian prime minister, has hin ted 
that his government might consider lifting its 
ban on offering government contracts to British 
companies. Page 4 

tndtaibrohers braced: miiinn stockbrokers 
are bracing themselves for a difficult week after 
the eqRapse of talks on ending a two-month ban 
on forward trading! Page 4 

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MONDAY MAY 23 1994 


D8523A 


Cycling nymph rides into Lopez legal battle 


hi the lengthening drama of the L6pez 
affair, there have already been many 
episodes in which things have not 
always been quite what they seemed. So 
it was with the cycling nymph, the mus- 
cular detective, the silent Swede and the 
sacked motor industry executive who 
joined the saga last week. 

They made their entrances in a. scene 
carefully stage-managed by Volkswagen, 
the automotive group whose production 
chief, Mr Jos£ Ignacio Ldpez de Arrior- 
tOa, is under criminal investigation 
based on suspicions that, he and col- 
leagues stole industrial secrets from 
their former employer. General Motors. 

Adam Opel, GATs German subsidiary, 
got wind of things to come when it 
received a list off questions from Stem, 
the popular weekly magazine, from 
which it was apparent that Stem, work- 
ing with the ARD television station, had 


Christopher Parkes reports on VW’s latest manoeuvres in its dispute with GM 


learnt that Opel lawyers last year set 
p rivate detectives on the suspects' trail 

Spiegel magazine, always well 
fnfnrmftH on the case, ran a pre-emptive 
story in Its May 16 issue, featuring a girl 
and her bicycle. Ms X, working for the 
PSS private detective agency, last sum- 
mer apparently suffered a puncture out- 
side a Braunschweig house occupied by 
two of Mr Lopez’s lieutenants and fellow 
suspects, Mr Rosario Piazza and Mr 
Jorg6 Alvarez. 

The gallant young Piazza helped, driv- 
ing her back to her hoteL Telephone 
numbers were CTrfwmg wH, and there ver- 
sions of subsequent events diverge 
sharply. 

On May 17, Volkswagen moved. The 


suspects' five lawyers issued a state- 
ment directed at Ms Dorothea Holland, 
the state prosecutor in charge of the 
official c3gc it a series of ‘indica- 
tions'’ cfllhwg into question her impar- 
tiality and professional standards in 
relation to the activities of the cyclist 
and her fellow private eye, Mr Jean- 
LouisRoyeL 

The thrust of the claims was that 
information on the use of private defec- 
tives and the mfonnatkm they gathered 
had been kept — against the rules — from 
VW’s legal representatives. Mr Gerhard 
Schroder, and a member of the VW 
supervisory board and prime minister of 
the state of Lower Saxony, which owns 
20 per cent of VW, simultaneously broke 


months of silence with a suggestion that 
the official investigation should be 
dosed. Mr Royet, a heftily built Tnartifll 
arts fan «nd a part-time private detec- 
tive at PSS (run by his wife, Dagmar) 
had in the interim also proved to be a 
frill-time officer in the R>»naTand.Pfiiig 
state criminal investigation bureau. The 
axposg was to cost him his badge. 

He made his first full appearance in 
the ARD broadcast, “The Battle of the 
Giants”, transmitted last Wednesday. He 
had been photographed at work last 
summer in Braunschweig. Also featured 
was an indignant Mr Eberhard Kem pf, 
tiie lawyer acting for Mr Alvarez, who 
also (as Opel pointed out) had acted for 
the journalist who made the programme. 


Then there was another new character, 
Mr Hans HQskes, recently fired from his 
post as a senior executive at GM Europe. 
He. as GM was to reveal in the interim, 
was being investigated by the Swiss 
authorities for unspecified alleged pro- 
fessional crimes. 

His contribution to the film comprised 
mainly a declaration of faith in Mr 
LOpez. He provided a human touch in a 
programme dominated by journalistic 
speculation and interspersed with shots 
of four cardboard boxes which once con- 
tained documents and other data alleg- 
edly stolen from GM. Found last June, 
they are now held in a police evidence 

Continued on Page 16 



Fraternal greeting: Johannes Ran (left), the German Social Democratic party’s candidate for the 
presidency of the country. Is welcomed to an SPD meeting in Berlin by his party leader, Rudolf 
Scharping. Today the electoral assemby meets to choose the successor to the current president, Richard 
vonWeizs&cker 


KhictaHi 


Treuhand 
to finance 
steel mill 
for two 
nonths 

By Judy Dempsey in Beribi 

Treuhand, the German 
privatisation agency, will for the 
next two months finance Eko 
Stahl, eastern Germany’s loss- 
making steel mill, after the 
recent decision by Riva, the Kal- 
ian privately owned steel 
manufacturers, not to buy the 
facility. 

The steel complex is losing 
DMlSfen (990m) a year an a turn- 
over of DMHm. 

At the same time, Treuhand is 
still determined to find a buyer 
for the mill, in spite of comments 
expressed by Mr Karel Van Miert, 
the European Union’s competi- 
tion enmmisstaner, who said last 
week that the EU*s rescue pack- 
age for steel was dead. 

The original EU package, 
announced last December, envis- 
aged cutting 25m-30m tonnes of 
crude steel capacity out erf a total 
170m tonnes. 

Among the measures included 
in the arrangement was hackfng 
for a DM813® investment and 
modernisation plan by the Ger- 
man g o v er nment for Eko Stahl, 
which is located in Eisenhfttten- 
stadt, dose to the Polish border. 

That plan had been contingent 
on Treuhand’s selling the mill to 
Riva. which in turn would have 
invested more than. DMlbn in 
transforming Rkn Stahl into an 
integrated steel mill producing 
900,000 tonnes of steel a year. 


Continued on Page 16 


Moscow s ummi t 
seeks to defuse 
Crimean tension 


By John Lkiyd In Moscow and 
JB Barshay fci Kiev 

The prime ministers of Russia 
and Ukraine ho l d urgent teiks in 
Moscow today in an attempt to 
relieve mounting tgn«rirm in Cri- 
mea, amid predictions that con- 
frontation between the two Slav 
states over the fate of the dis- 
puted peninsula might lead to 
bloodshed. 

Ten sian was fuelled on Friday 
when the Crimean parliament 
voted to unfreeze a two-year-old 
decision to adopt a separate con- 
stitution, - an act viewed by 
Ukraine as tantamount to a dec- 
laration of Independence. 

A delegation of Crimean dep- 
uties led by Mr Sergei Tsekov, 
tire speaka* of parliament, win 

TiiPftt loading i nn-ami an depu ties 

in Kiev tomorrow. 

The rhetoric - if not so far the 
actions - has been threatening on 
both sides. 

Mr My kola Mykhalchenko, the 
domestic-policy adviser to 
Ukraine's president. Mr Leonid 
Kravchuk, said at the weekend 
that “it is time to remind world 
opinion that Ukraine is a nuclear 


mean parliament has been 
stepped up, with armed guards 
and snipers deployed on the root 

Mr Tsekov, speaking in the Cri- 
mean capital of Simferopol on 
Saturday, said that a majority in 
the parliament wanted union 
with Russia - although other Cri- 
mean deputies insist that Fri- 
day’s decision remains within 
Ukrainian law. 

Tensions have flared between 


Ukraine seeks recipe for 
economic survival Page 3 


General Pavel Grachev, the 
Russian defence minister, said 
that if Ukrainian troops were 
sent into Crimea to enforce 
Ukrainian rule, “conflict is inevi- 
table”. Reports of Ukrainian spe- 
cial forces moving into the penin- 
sula have been denied in Kiev 
- as have Ukrainian reports of a 
tank and a missile battalion 
being moved In by the pro-Rns- 
dap Black Sea Fleet enrmnand. 

However, security at the Cri- 


CONTENTS 


Kiev and Crimea since Ukraine 
became an independent state in 
1991 with the collapse of the 
Soviet Union. Although Cri- 
means, nearly 70 per cent of 
whom are ethnic Russian, voted 
for an independent Ukraine In 
1991, the country’s appalling eco- 
nomic decline has driven the 
Russian majority to seek integra- 
tion with Russia. 

Mr Yuri Meshkov, the Crimean 
president, was elected this year 
by the large Russian majority in 
the region on a ticket of union 
with Russia. 

The animosity between Simfer- 
opol and Kiev has been exacer- 
bated by the growing links 
between Crimea and the Russian 
authorities. 

Mr Andrei Kozyrev, the Rus- 
sian foreign minister, repeated 
Russia’s desire for a peaceful set- 
tlement in a letter to Mr Anatoly 
Zlenko, his Ukrainian counter- 
part. 

Ukraine seeks recipe for eco- 
nomic survival. Page 3 


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Sh« Wmatoi 3031 

WMd Stock Marfas — Z* 


EC seeks to speed 
up single market 
by listing laggards 


by Emma Tucker in Brussels 

The European Commission is to 
publish a rogues gallery of man- 
lier states with the worst records 
on adopting EU legislation, amifl 
concerns that offending nations 

are holding up mmplgtinn of the 
single market 

A senior single market official 
said: “We are going to name 
names, and publish tables that 
show, in rtprftnhig order, the per- 
formance by tiie differen t states 
in different areas. It is time peo- 
ple realised who has what 
they were scRwsed tbT doT and 
who hasn’t” • - 

The of public humiliation 

tactics to highlight performance 
in specific areas, such as bank- 
ing, 18 months after barri- 

ers to trade and free movement 
in the EU were supposed to came 
down. Some senior nffirfals have 
expressed concern that impetus 
for the project is slackening . 

The move is part of an overall 
effort by Mr Raniero Vanni D’Ar- 
chirafi, internal market commis- 
si oner, to maintain momentum 
behind Europe’s grand project 

Other measures include the 
launch of “internal market 
weeks” in the 12 member states, 
during which cit izens and enter- 
prises win have access to Com- 


Official warns: ‘We are 
going to name names’ 


Tnigginn experts via a tel e phon e 
hotline. It will also provide feed- 
back for the Commission an how 
the project is working. 

Alt h o u g h four-fifths of the nec- 
essary legislation has been 
adopted by member states, the 
Commission is concerned that in 
certain areas - particularly bank- 
ing, other financial services and 
public procurement - countries 
have dragged their M r ■ 

The exercise is plannwl as a 
follow-up to next month’s minis- 
terial meeting on the internal 
market in Luxembourg. Gener- 
ally, assessments show that Den- 
mark and the UK have been 
quickest to adopt C ommis sion 

legislating nn the sin gte marVpt 

while Greece and Spain have 
been the laggards. Italy after a 
surprise effort in the second half 
of last year, is somewhere in the 
middle. 

An analysis of individual sec- 
tors shows sharply diverging per- 
formances. Germany, for exam- 
ple, has still to adopt nine 
directives on public procurement 
Greece and Germany have also 


been sent wanting letters over 
their failure to adopt certain 
banking directives. 

“From June onwards we will 
turn up the spotlight and really 
try to push people to finish all 
the Tmfiniiibpd business,” the offi- 
cial said. “In the past, people 
have tried to avoid being bottom 
of tiie league. Now we are going 
to move the debate away from 
who is t(g> and who is bottom to 
focusing on what is happening in 
certain key areas.” 

Another area of particular con- 
cern to single market officials is 
the high number of complaints 
about remaining technical barri- 
ers to trade. There is also signifi- 
cant grievance over the failure of 
member states to mutually recog- 
nise each other’s national prod- 
uct standards. 

The official added: “We have a 
problem with mutual recognition 
where people are supposed to 
accept products that have been 
recognised in one country in 
another. K is dear that this prin- 
ciple is very foreign to your aver- 
age local inspector." 


IF WNaWiAL TIMES LIMITED 1994 No 32,373 Week No 21 LOUP OH ■ PARIS - FHAHKFURT - MEW YORK - TOKYO 


This a n noun c ement oppems <a a m out if rtcord only 


m m m 


May. 1994 



Yorkshire Food Group PLC 

US $80,000,000 

Term Loan & Revolving Credit Facility 

Arranged by 

Nat West Capital Markets Limited 


Provided by 

225 National Westminster Bank Pic ABN AMRO Bank N.V., Manchester 

Bank of Scotland Rabobank Nederland , London Branch 

The Nikko Bank (UK) pic 

Facility Agent 

National Westminster Bank Pic 


Legal Advisers 

To the Borrower To the Arranger 

Eversheds Hep worth & Chadwick Allen & Overy 



: 


i/VWA; 

NatY 

\ F.Si Mark Li.'. 


’■ ' •• • •• •' : ’ 1 rr *".v 


Issued by National Wcstaiasur Bank Pk. a Member cflMKQ 

s 8* ^ m B ^ ^ ^ ^ 




T 









FINANCIAL TIMES MONDAY MAY 23 1994 


NEWS: INTERNATIONAL 


Rome plans 
Ina selloff 


safeguards 


Andreotti 
denies 
charge of 
links with 
Mafia 


Fugitive Schneider fails to surface } 


By OovM Wafer in Frankfurt, 
Angus Foster In Sao Ptauto and 
Peter Marsh in London 


By Andrew Hifl in MBan 


The Italian government is to 
take unprecedented steps to 
safeguard the rights of small 
shareholders when it privatises 
Ina, the state-owned insurance 
company, probably next 

mnnfh 

The Italian treasury, which 
owns 100 per cent of Ina, is this 
week expected to approve a 
very low ceiling on stakes hel d 
by individual shareholders, 
and an innovative new voting 
system for electing the first 
directors after privatisation. 

Late on Friday night, a cabi- 
net meeting agreed proposals 
to seQ off ina before the end of 
June. To meet that deadline, 
parliament will have to 
approve the plans this week. 

In particular, the govern- 
ment will have to put pressure 
on the elected upper house, 
where it does not have a major- 
ity. 

The decision on exactly how 
much of Ina to sell will not be 
feifc t y p 'raKi nearer the launch, 
date. However, the government 
is prepared to abandon control 
of the insurer. Mr Giancflrlo 
Pagliarlni, the budget minister, 
told journalists that 51 per cent 
of the company could be sold. 

When Banca Commerciale 
Baliana ang Credito I taEano, 
the state-controlled banks, 
were privatised earlier this 
year, a 3 per cent ceiling was 
set on individual stakes. 

But advocates of wider share 
ownership complained that: the 


elected boards were still domi- 
nated by large corporate inves- 
tors, many of them allies of the 
secretive Milan merchant 
bank, Mediobanca. 

The Ina ceiling on sharehold- 
ings could be as low as 0.5 per 
remt , backed up by a scheme 
which would reserve a number 
of seats cm the board for direc- 
tors elected by small share- 
holders. 

It is believed to be the first 
time such a system has been 
suggested. If successful it could 
be used later tftia year for th * 
much more sensitive sell-off of 
Stst, the state teleoonummica . 
turns company. 

The government has agreed 
to repay L5 ,5Q0bn ($3.45bn) of 
compulsory contributions 
which private Italian insurers 
were obliged to pay to Ina in 
its previous role as Italy’s 
insurer of last resort 
• Ravenna magistrates are 
gnamintng documents ta k e n on 
Friday from Mediobanca, relat- 
ing to discussions with the 
ill-fated Femtzzi-Mo nt edison 
group last year. 

The Guardia di Finanza, 
Italy's financial police, spent 
seven hours searching for doc- 
uments, which may throw 
light on how much Mediobanca 
knew about the “hole" in the 
1992 accounts of its main 
industrial subsidiary, Mnntwj j- 
son, which helped precipitate 
the collapse of Femmi Medio- i 
banca co-ordinated the com- i 
plex restructuring of the 
group. ] 


By Andrew HU in MBan 


OBITUARY 


Goria, the youngest 
Italian PM, dies 


Mr Giovanni Goria, 50, who 
served briefly as post-war 
Italy’s youngest prime minister 
and was the first major politi- 
cian to stand trial in the coun- 
try’s massive corruption scan- 
dal, died at tin weekend.- 

Mr- Goria, whose coalition 
governed from July 1987 to 
March 1988, died at his home in 
Asti in north-eastern Italy 
from a lung tumour which had 
deteriorated in the past month. 

The Christian Democratic 
party be joined in I960 changed 
its name to the Popular Party 


earlier this year before 
the March elections in which 
they were punished for 
the corruption scandal which 
also touched Mr Goria. 

He studied economics, 

entered pa rliament in 1976 and 

often described himself as “an 
accountant turned potitioan". 
He became one of the youngest 
Christian Democrats to told 
key posts. In a message to Mr 
Gorki's widow. Prime Minister 
Silvio Berlusconi praised his 
“generous, passionate and long 
political commitment” . 


Mr Giulia Andreotti, seven 
times prime minister of Italy, 
has condemned as “absurd and 
unfounded” charges that he 
had Hnlrs with the Mafia , fol- 
lowing Saturday’s call by Sicil- 
ian magistrates that he aHonTd 
stand trial 

Most of yesterday's Italian 
newspapos carried interviews 
with Mr Andreotti, 75, a life 
member of Italy’s upper house 
of parliament, in which he 
talked of tris “bitterness” about 
the Palermo magistrates deci- 
, sfon, leaked on Saturday. 

The magistrates will this 
week ask their judicial superi- 
ors to order the trial of Mr 
Andreotti, which would be one 
of the most sensational court 
cases ever to be held in Italy. 

But the former Christian 
Democrat prime minister also 
said he was relieved that he 
would he able to reply publicly 
to the charges, more than a 
year after he was told that he 
was being investigated. 

“Obviously I would have pre- 
ferred the prosecutors to 
shelve the case, and it would 
have been the logical conclu- 
sion from my point of view,” 
Mr Andreotti told La Stamps. 
“However I understand, given 
the way in which they started 
off the procedure - accusing 
me of being the ‘Roman centre* 
for all Mafia business - it j 
wasn't easy to torn bads.” I 

The Palermo magistrates, 
working on the basis of confes- 
sions from Mafia pentiti, have 
alleged that Mr Andreotti con- 
sorted with gang bosses, and 
even kissed top Mafia boss Mr 
Salvatore “Toto” Riina, as a 
mark of respect, at a meeting 
in 1987. The former prime min- 
ister again dented at the week- 
end that it would have been 
possible for him to shake off 
his police escort for such a 
meeting 

• Mr Antonio Martino, Italy’s 
foreign minister, yesterday 
flew to Washington to reassure 
the US administration over the 
policies of its new conservative 
coalition, .which includes neo- 
fascists to the first time in 50 
years. Reuter reports from 
Rome. 

Mr Martino’s trip is seen as a 
continuation of a mission, 
begun last week, when he vis- 
ited Brussels in an attempt to 
reassure European Union col- 
leagues. 


Nearly a month after the 
international hunt started for 
fugitive German businessman 
JfLrgen Schneider, the world’s 
police farces have drawn an 
embarrassing hl«mk 

Germany's Federal Criminal 
Office - the B nn^l t fiwfawi. 
amt-said at the weekend it 
had made little headway in 
tracking down Mr Schneider, 
who is alleged to have misap- 
propriated at least DM218m 
(£87 Jm) of his collapsed prop- 
erty group’s funds before dis- 
appearing last month. 

The Bundeskriminalamt, 
which has set up a special mat 
to deal with the case, has 
passed on details of Mr Schnei- 
der to other national police 
forces via the 174-member 
Interpol organisation in 
Lynns. 

The German police force's 
task is to find proof necessary 
to support the charge of band 
against the missing executive 
brought by Frankfort prosecu- 
tors on April 26. 

Since he failed to return to 
Germany from a holiday in 
Tuscany at ft? hogit n img- of 
Aprfl, the whereabouts of Mr 
Schneider, 59, has been the 
subject of widespread specula- 



Sdhneider: reported sightings as far afield as Paraguay and Iran 


tton. He has been reported to 
have been In a variety of 
places, including Paraguay, 
Swi t zerland, Telman, Florida, 
London and even Frankfurt 
But the reports so for have 
been insnffideot to persuade 
the Bundeskriminalamt to 


send agents to particular parts 
of the world to locate him, a 
spokesman said. “The trail has 
gone dead: the German police 
do not know which way to 
look,” said one i n vestigator. 

The latest reported sighting 
came at the weekend, when a 


Swiss newspaper reported that 
Mr Schneider was hMlng ha a 
mountain hut However, the 
Swiss authorities said they 
had no information to confirm 
or deny the report. 

Other interested parties In 
the search to Mr Schneider 
are Goman banks, whkh are 

owed DM5ta by the collapsed 
property group. Deutsche 
Baltic, Germany’s biggest 
bank, DMSOQm 

of Its money cteld be at risk, 
said it received “several phone 
calls a day” from people claim- 
ing they knew where Mr 
Schneider was. The bank 
passed any useful Information 
to the police since “we are not 
manhunters”, the bank sahL 

One of the focal points tu the 

search is Paraguay, where 
there have been at least two 
alleged sightings of Sir Schnei- 
der. In the past, Paraguay has 
harboured a number of Ger- 
man c rimina ls, many of them 
finked to the Nazi party, and 
the country has a large (to- 
man community. The AktueDe 
Rundschau, Paraguay's main 
German-language newspaper, 
is following up several leads. 

A spokesman for Paraguay's 
immigration de p a rtm e n t said: 
“Legally, he is not here. But 
he could have entered Illegally 

muter a differ e n t name.” 

The Bundeskriminalamt 


said that to the moment tt 
was engaged in "normal police 
work”, rifting through docs- 


Workers reject 


compromise on 
Suzuki job cuts 


Spain to reform penal 
code on corruption 


By David White 


By David White in Madrid 


Workers at the Suzuki car 
factory in southern Spain dug 
themselves in for a prolonged 
conflict yesterday, rejecting a 
compromise job-cutting plan 
agreed between the Japanese 
company and Andalucia’s 
Socialist regional government 

'The plan was designed as a 
holding exercise during the 
search for a new owner to 
replace Suzuki, which controls 
more than 60 per cent of the 
loss-making Santana Motor. 

The So cialis t government in 
Madrid and the regional 
authorities are anxious to 
defuse tension (hiring the cam- 
paign to regional elections in 
three weeks. 

Production of four-wheel- 
drive vehicles at the Santana 
factory in Linares has been 
blocked by the conflict; which 
began three months ago when 
the company applied for pro- 
tection from creditors and 


announced plans to diumiiw 
more than 60 per cent of the 
2,£3Q-«trang workforce. 

The plans have provoked a 
fierce local reaction and a 
series of demonstrations and 
protest marches. 

Last Thursday the Santana 
management reluctantly 
agreed to a regional govern- 
ment proposal to reduce the 
workforce at Linares and 
nearby La Carolina by 900, 
instead of the L500 proposed/- - 

The company said it was 
willing to support the plan “to 
contribute to the normalisation 
of the situation, and the search 
to definitiv e solutions’. 

The Andalurian .government 
linked the plan to a proposed I 
Ptal3-6ton ($99m) loan which 
would be either repaid after 
five years or converted into 
shares. However, the regional 
authorities said they had no 
vocation as car-makers, indic- 
ating they still hoped for a new 
partner to take over Santana. 


The Spanish authorities have 
drafted a bill to reform the 
country’s penal code in a move 
to dose loopholes and crack 
down on corruption. 

The reforms, presented at 
the weekend, ware drawn op at 
short notice following a politi- 
cal storm and a series of 
high-level resignations over 
corruption gcandals. 

Mr Juan Alberto Belloch, 
appointed earlier this month to 
head both the justice and inte- 
rior ministries, described the 
proposed reforms as “revolu- 
tionary". . 

However, the conservative 
opposition Popular party, 
described the measures as 
“electoralist” in the run-up to 
next month’s European elec- 
tions and regional elections in 
Andahida in which the ruling 
Socialist party is expected to 
suffer heavy setbacks. 

The draft bill provides for 
jail terms of between one and 
three years for government 


employees who use public 
property for their own 

benefit 

In what is seen as a 
preventive measures, it also 
provides exemption to people 
who denounce civil servants 


People refusing to 
testify to parliament 
may in future face 
prison sentences of 
between six months 
and a year, longer 
for civil servants 


to accepting or seeking bribes. 

Measures against insider 
dealing on the stock market 
are alsotightened. 

The bm provides for prison 
sentences of between one and 
four years, as well as fines, for 
use of privileged information - 
one of the allegations 
made against Mr Mariano 
Rubio, the former Bank of 


Spain governor currently on 
bafl. 

In seme cases the penalty 
for insider trading can be 
increased to six years. 

People refusing to testify to 
parliamentary committees may 
also in future toe prison sen- 
tences of between six months 
and a year, or up to two years’ 
imprisonment in the case of 
civil servants. 

Separate legislation is being 
prepared to tighten up on tax 
fraud. 

The measures were among a 
series of steps promised last 
month by Mr Felipe GonzAlez, 
the pri™ minister , in an effort 
to stem the controversy over 
corruption and financial mis- 
conduct by senior nfficiaia. 

. Other moves include setting 
up a special prosecutor's office 
to deal with corruption and 
strengthening the powers of 
the Audit Tribunal, which 
comes under the authority 
of parliament and Is responsi- 
ble for monitoring public 
finances. 


I’d travelled on other airlines, 
and F I> -V’t enjoyit. > 


Sunday opening victory for Virgin 


R icli*r4 £>!-•«*• n 
\ChaI rman of \ tr J* n 

ke'4<itmfctr cut 19 8 5. 


Virgin Stores, which defied a 
French ban on Sunday trading, 
quietly triumphed at the week- 
end after the government 
dropped the ban, Reuter 
reports from Paris. 

“Our stares open seven days 
a week," said a recorded tele- 
phone answer at the compa- 
ny's Virgin Megastore on the 
Champs Klysdes. 


Virgin Megastore, part of Mr 
Richard Branson’s business 
empire, opened Its doors on 
three successive Sundays last 
summer, angering nutans and 
risking huge fines in its fight 
against the government to the 
right to trade on Sundays. 

Virgin eventually agreed to 
abide by the law pending a 
legal review. 


Despite trade union opposi- 
tion, the French official 
gazette on Friday published 
new regulations allowing Sun- 
day trading in Idsara goods in 
tourist areas. Trade unions 
have argued that Sunday trad- 
ing will not create new Jobs 
and will induce businesses to 
deny workers’ right to a 
weekly break. 


Virgin Stores manager, Mr 
Patrick Zelnik, had argued 
that SO per cent of the store's 
annual 8m customers came on 
Sundays and closure on these 
days would cot sharply into 
profits. ' 

He had threatened to freeze 
investment projects in France 
if Virgin Stores was not 
exempted from the ban. 




• / »*» 
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PRANCE • 

ItobUdu Director; D. Good, I« to * * 
Unaranu Pad* Cede* Ol.-ptahora M 
4WMSI, Fta 01) <297-0623. Prater. 4A. 
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ISSN: ISSN I US-23 SJ. Cantata. Prate* 
No 67808D. 


DENMARK „ , 

Founds] Tfaaet CSceufemfe) Ut Wef 
ifcaftcd 42A, DK-II61 QtentafK bh- 
phcoc 33 114*41, ft* 33 fe flfe. 


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the Financial Times will publish Its 



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respondents In 93 countries world-wide. Nearly 52% of these requests 
came from chief executives and managing directors who would use the 
report for business. 


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ptf tffal bmlpctt daflfr ptara 

m in 49K JUNKET 



r 


from Mr Schneider’s former 
headquarters In a castle in 
KOnigstein, near Frankfort, 
Mr Schneider is also Oder 
investigation by the finance 
ministry in the state of Bone 
for alleged tax araston. This 
inquiry was launched after' 

numerous Schneider employ. 

ees reported income onwttich 
they had not paid tax, worry- 
Ing that they might toe 
charges of tax evasion. 

The German banks have 
been tigtabUpped about steps 
they may be taking to loads 
Mr Schneider or the money. 
They launched a successful 
action last month to Creese 
SFraoOm (£93r4m) of Schneider 
foods trued to a number of 
Swiss banks. But the banks 
refused to confirm whether 
fids cadi was the DM2l9m Mr 
Schneider la known to have 
transferred out of Germany tn 
March before he went mining. 

Popular cynicism that the 
reappearance of Mr Schneider 
on Goman soil could embar- 
rass the banks, with detailed 
disclosures of his connections 
to big business and govern- 
ment, have fuelled speculation 
and interest in his . 
whereabouts. . 


llil* 


as niv 


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FINANCIAL TIMES MONDAY MAY 23 1994 


NEWS: INTERNATIONAL 


Serb pledge to quit Gorazde zone 


orm pei 

ri, Ption 


lor Vila 



« By Laura SBber in B el gra de 

.Bosnian Serb leaders Have 
. reiterated their pledge to with- 
> draw from a 3km exclusion 
zone around Gorazde, the 
southeastern Moslem enclave 
. which is a United Nations 
. “safe area”, to try to pave the 
way for an overall ceasefire. 

Some ISO Bosnian Serb 
troops were due to withdraw 
by yesterday afternoon. The 
Serbs were up to lkm deep in 
the UN exclusion zone, set 
up four weeks ago under threat 
of further Nato air strikes. 

The Moslem-led Bosnian gov- 
ernment has refused to return 
to the negotiating table until 
Serb forces comply with their 
pledge. 

But even after Mr Yasushi 
Akashi, the UN special envoy, 
wrote to Bosnian and Serb 
leaders proposing renewed 
truce negotiations, both sides 
reported fighting along key 
supply lines In northern and 
eastern Bosnia. 

Tanjug, the Serbian news 
agency, said that five people 
were wounded on Saturday 
night when Bosnian Croat 
forces bombarded Brcko. at the 
eastern end of the corridor 
which joins Belgrade to Seri* 
held land in Bosnia and Croa- 
tia. 

Bosnian Croat forces have 
fought alongside their Moslem 
counterparts in the northern 
Sava River valley since the 
eruption of war 25 months ago 


while elsewhere their am«nr» 
was restored only in March in 
an agreement brokered by 
Washington. 

After the agreement, Croat 
leaders have turned their 
attention to the status of Serb- 
held territory in Croatia. Presi- 
dent Franjo Tudjman of Croa- 
tia at the weekend warned that 
he would use “all possible 
means” if Serb leaders of the 
self-styled state failed to accept 
Zagreb’s authority within four 
months. 

Brcko, which was mostly 
Moslem before the war, is now 
held by Serb forces and is 
viewed as the next possible 
flashpoint because of its impor- 
tance to all three communities. 
Serb forces control about 70 
per cent of Bosnian territory, 
but Moslems have advanced in- 
the region and may try to 
sever the corridor. 

UN officials said Serb forces 
shelled Tuzla, the second big- 
gest Bosnian government 
stronghold, shortly after the 
attack on Brcko. 

• A Spanish UN soldier and 
his interpreter were killed yes- 
terday when an armoured per- 
sonnel carrier crashed near 
Mostar in southern Bosnia. 

Three soldiers were also 
injured in the accident, as the 
vehicle went off the road. 

Spain has around 1,400 
troops serving with the United 
Nations peacekeeping forces in 
Bosnia, mostly concentrated 
around Mostar. . 



Ukraine looks for 
economic survival 


Serbian soldiers taking cover during fighting around the Bo snian town of Brcko 


| By John Lloyd 

Ukraine's economy is in deep 
crisis. Production has fallen an 
estimated 40 per cent com- 
pared with last year and both 
its currency and state revalues 
have plunged. 

Inflation has been screwed 
down from hyperinflationary 
levels to around 6 per cent a 
month nffirfa i unemploy- 
ment is a mere 100,000 people. 
But this is achieved, econo- 
mists say, at the cost of idle 
plants and millions of workers 
paid- or more often not paid 
—to do nothing. 

The plight of the economy, 
and possible reforms to drag it 
out of the mire, were discussed 
yesterday by International 
economists at a conference in 
Kiev organised by the World 
Bank, the Kiev International 
Centre for Advanced Studies 
and the Economic Policy jour- 
nal. 

Among those on the podium 
were Mr Leszek Balczerowicz, 
the former deputy prime minis- 
ter of Poland, Mr Sergei Vasi- 
Hev, deputy economics minis- 
ter of Russia, and Professor 
Jeffrey Sachs, the hlghest-pro- 
file western adviser to the 
economies in transition. Mr 
Balczerowicz. the Inspiration 
behind Polish reforms in 1990 


and 1991, told the audience 
that Poland in 1989 was in a 
similar position to Ukraine 
today, with suppressed hyper- 
inflation, a command economy 
and little private sector. “A 
radical programme can work,” 
Mr Balczerowicz said , “so long 

‘The growth of the 
black economy does 
demonstrate 
entrepreneurship, 
and the ability to 
adapt and survive of 
Ukraine’s citizens* 

as it includes s tabilisati on of 
the currency, privatisation and 
a unified exchange rate” 
-none of which Ukraine at 
present has. 

Mr Vasfliev, in the rare role 
for a Russian minister of being 
seen as the representative of a 
success story, said that “if 
Ukraine continues on the road 
it is now on it has no chance of 
coming out of Us crisis. Experi- 
ence shows that the more rap- 
idly you go, the faster you get 
out" 

The role of presenting the 
d ominant view in the Ukrai- 
nian parliament fell to Ms 


Natalia Vltrenko, a member of 
the presidium of the Socialist 
party with responsibility for 
the economy. Her rejection erf 
Polish reforms, espousal of the 
nhinww model of controlled 
development and rejection of 
radical privatisation measures 
disappointed the paneL 

Mr Victor Pynzenyk, a mem- 
ber of the Ukrainian parlia- 
ment anri a fanner reformist 
deputy prime minister with 
responsibility for the economy, 
commented: “We in Ukraine 
have chosen to show the world 
that we can commit every pos- 
sible mistake on the road to a 
market economy." 

Mr Daniel Kaufman , the 
head of the World Bank mis- 
sion in Kiev, said that the 
black economy was now grow- 
ing rapidly - despite increas- 
ingly desperate efforts by the 
government to tighten its grip 
on the state sector. 

“Literally speaking, assets, 
capital, activities and entrepre- 
neurs have departed from the 
official economy [but] the 
emergence and growth of the 
unofficial economy does 
demonstrate the entrepreneur- 
ship, creativity and ability to 
adapt and survive of Ukraine's 

ritispnK 

“This bodes well for .the 
future," said Mr Kaufman. 


Russia firm on Nato treaty 


By John Uoyd 

General Pavel Grachev, the 
Russian defence minister, will 
tomorrow tell Nato leaders in 
Brussels that Russia insists an 
a special treaty with Nato, rec- 
ognising its status as a mili- 
tary superpower, before it will 
agree to join the Partnership 
for Peace. 

The Partnership, announced 
in January, is designed to 
bring former Communist states 
into an association with Nato - 
falling short of the fall mem- 


bership which the central 
European and Baltic countries 
have requested and which Rus- 
sia sees as a threat 

Gen Grachev yesterday told 
the official Tass newsagency 
that President Boris Yeltsin, 
who has approved the defence 
minister's plan, expects recog- 
nition of Russia’s special sta- 
tus. 

“This can be done either 
with the aid of a protocol 
within the bounds of the Part- 
nership programme or by a 
joint document signed by Nato 


and the Russian Federation.” 

In an Interview last week in. 
the weekly Moscow News, Mr 
Andrei Kozyrev, the Russian 
foreign minister, laid out the 
baric conditions for such a pro- 
tocol These were, he said, an 
agreement on common 
approaches between the two 
military powers which recog- 
nised their “global strengths 
and responsibilities”; a com- 
mitment by Nato to invest in 
military conversion in Russia; 
tmH a commitment to grtwid 


political consultations. 

Nato leaders maintain that 
Russia must join the Partner- 
ship on the «pauiw terms as all 
other members, but have 
stressed that: Russia's size and 
militar y mi ght confer on it a 
special status. Speaking in the 
Latvian capital erf Ri ga on Sat- 
urday, Mr Luc Bouvard. presi- 
dent of the North Atlantic 
Assembly, said Nato “would 
never tolerate” a position 
where any Partnership mem- 
ber^ state had veto rights or 


joint peacekeeping and joint: i could dictate rules to Nato. 


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FT Surveys 


Loan for 
Russian 
banking 
sector 

By Anthony Robinson 

The World Bank and the 
European bank for Recon- 
struction and Development 
(EBRD) will provide the bulk 
of a 3390m (£260m) loan to 
build up a core group of 30 to 
40 Russian commercial banks 
capable of acting as a catalyst 
for wider development of the 
banking sector. 

'Ihe aim is to improve the 
quality of banking services 
and enable the core group to 
form the basis of a private 
clearing hank system. Techni- 
cal and other assistance will 
also be provided to help them 
qualify as “on-lenders” of 
World Bank and other interna- 
tional credit lines. 

The World Bank, whose 
board approved its 17-year 
loan for $200m of the total, 
said the loan would promote 
“twinning” with western 
banks and modernise and stan- 
dardise management and 
information systems. But it 
would also be used to train 
central bank inspectors and 
create early warning systems 
to detect problem banks. 

The World Bank also 
approved a SI 75m loan to sup- 
port private enterprise in 
Romania, of which $102m will 
finance projects to raise the 
competitiveness of industrial 
exporters and $70m for export 
finance. Loans will be chan- 
nelled through five selected 
Romanian Hawks. 

Rutskoi starts 
crusade to 
remove Yeltsin 

Former Russian Vice-President 
Alexander Rutskoi launched a 
crusade at the weekend to 
remove President Boris Yelt- 
sin and restore a Russian state 
wi thin the boundaries of the 
old Soviet Union, Reuter 
reports from Moscow. 

In a speech that marked his 
return to the political fray, Mr 
Rutskoi formally proclaimed | 
an end to any compromise I 
with the man who, in his eyes, 
had sought to humiliate him 
in the struggle that ended in 
bloodshed last October. 

Mr Rutskoi scared a political 
t ri u m ph in winning re-election 
as head of a party that 
appeared in October to have 
turned against him. Few in its 
ranks backed him publicly 
after he led an armed rebellion 
against Yeltsin in the name of 
the parliament the president 
had summarily dissolved. 


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FINANCIAL. TIMES MONDAY MAY 23 1994 


INTERNATIONAL 


Market faces difficult week after collapse of talks to end the forward trading ban I fS llO WflOWII VOtC 


idli 


Indian brokers braced as curb stays for Australian Ljetf 


By Stefan Wagstyi 
in New Delhi 


Indian stockbrokers are 
bracing themselves tor a diffi- 
cult week following the col- 
lapse of talks on ending a two- 
month ban on forward trading. 

Officials of the Bomba; 
Stock Exchange, the nation’s 
largest, and representatives of 
the Securities and Exchange 
Board of India, the. market 
watchdog, last week failed to 
agree ten ™ for lifting the ban 


that Sebi Imposed on March 12. 

The ban contributed to a 
sharp fail in shares, which 
were also pushed down by 
increases In OS interest rates 
and profit-taking following an 
earlier rally. 

The Bombay Stock 
Exchange's index of leading 
stocks fell from a high in Feb- 
ruary of more than 4300 to a 
low of 3,600 before recovering 
recently to around 3,800, partly 
on hopes of a settlement of the 
forward trading row. Volumes 


have also fallen sharply 
because the forward trading 
ban has greatly reduced the 
scope for speculative trading 
with borrowed funds. 

Sebi imposed the ban after 
faffing to persuade stockbro- 
kers to adopt transparent rules 
for the forward market - a 
long-established and informal 
market called Badla. Sebi 
believes Badla is easily abused 
by brokers for price manipula- 
tion at the expense of client 
investors. It also argues that 


Badla gives brokers opportuni- 
ties for excessively risky lever- 
aged forward trading. 

The brokers retort that same 
speculation is essential to pro- 
ride liquidity to the m artrpt - 
They claim they are ready to 
propose new rules tn ensure 
greater fairness but these have 
been rejected by SebL 

While the brokers axe angry 
at the failure of last week's 
talks, they are likely to try 
to make fresh proposals to 
Sebi, because forward trading 


is essential to their business. 

In a speech at the weekend, 
Mr AN Eolhafkar, the Bombay 
Stock Exchange executive 
director, that discussions 
were in deadlock but new alter- 
native solutions were likely to 
emerge in the next few 
month s. 

Mr S S Nadkaml the Sebi 

chairman, frag that he is 

ready to discuss details of pro- 
posed reforms but “there is no 
going back on the principles 
which led to the ban”. 


To ynalte matters worse for 
the brokers, the growth of for- 
eign portfolio investment, 
which was soaring in the 
months to February, has tailed 
oft Net investments by foreign 
institutions fell from 5398m in 
January and 5345m in Febru- 
ary to 5180m in March and 
5163m in April. The main 
causes of the decline were the 
worldwide stock market cor- 
rection and settlement difficul- 
ties in India, though the Badla 
ban may also have contributed. 


opposition chief 


tone 


By NBdd Talt to Sydney 


Saudis 
hope to 
set up oil 
refineries 


INTERNATIONAL PRESSREVIEW j 

BBC feels chill from China 


By Tony WaUoar 


By Tony Walker m Beqmg 


Saudi Arabia will send a 
delegation to China soon to 
explore new investment oppor- 
tunities in oil refining and 
exploration following last 
week’s visit to Beijing by Mr 
Hi sham Nazer, the Saadi oil 
minister. 

C hina ’s official Business 
Weekly reported that the Saudi 
ffiifaayw WOUld Visit IiaQJQQ- 
gang, a port city in northern 
Jiangsu, province, and Dagang 
in Tianjin on the Bahai gulf 
south-east of Beijing to investi- 
gate new projects. 

The newspaper quoted Mr 
Nazer, who was on his first 
visit to China, as saying that 
Saudi Arabia fames to estab- 
lish refineries to meet Chinese . 
rionwatir qpflris and to ensure a 
“stable, long-term supply of 
crude oil”. 

The Saudis are proposing to 
take a 45 per cent stake 
through Aramco, their state afl 
company, in a 200,000 b/d refi- 
nery to be located near Qing- 
dao in Shandong province, 
north of Shanghai other part- 
ners include South Korea's 
Ssangyong and Chinese organi- 
sations. 

China, which last year pro- 
duced 143.7m tonnes of oil, has 
become a net importer in the 
past 12 months. It is looking to 
the Gulf states to help over- 
come a growing shortfall as the 
Chinese economy continues its 
rapid growth. 

Mr Nazer, who was a guest 
of China National Petroleum 
Corporation, reportedly dis- 
cussed with China’s President 
Jiang Zemin several oil pro- 
jects in which the Saudis may 
become involved. Mr Jiang was 
quoted as saying that he would 
support Ah- Nazer’s proposals 
and “help forge agreements as 
soon as possible”. 

The Saudi minister said his 
country expected to set up 
joint venture refineries in 
China, similar to those it has 
established in the US, South 
Korea and the Philippines. 


It would be putting it ntildly to 
describe the present relations 
between the Chinese govern- 
ment and the British Broad - 
casting Corporation as 
Ill-starred. 

In tire nearly half a century 
since th» Comm unists fsnnp to 
power In ip®, the atmosphere 
between the world's premier 
broadcaster and Beijing has 
hardly been nhfliiw - except 
perhaps during the bleak days 
of the Cultural Revolution of 
the 1960’s and 1970’s. 

But in that era most interna- 
tional media organisations 
were regarded with suspicion, 
if not downright hostility, as 
pu r ve yors of capitalist propa- 
ganda. 

In this latest chase, however, 
the BBC finds itself the object 
of particular displeasure for 
transgressions, real or imag- 
ined, against China’s interests. 
The fact that these tgqwjnrw 
also coincide with the continu- 
ing row between Beijing and 
Landau over Hong Kang Is not 
helping matters. 

In the latest incident, China 
expressed outrage over a tele- 
vision rtnra ii i iwntar y which its 
makers said showed hitherto 
unrecorded footage of the Chi- 
nese gulag, or prison camps, in 
China’s far-west 

And, perhaps more irritating 
from the Chinese standpoint in 
the days leading up to Presi- 
dent Clinton’s decision on 
whether to continue China’s 
privileged trade access to the 
US market, the BBC also 
reported that prison labour 
was being used to make goods 
for export 

The US administration has 
laid down as one of its condi- 
tions for renewal of China’s 
Most Favoured Nation trading 
status an end to the export to 
the US of items manufactured 
by prisoners. 

A Chinese Foreign Ministry 
spokesman, quoted by the offi- 
cial Xinhua newsagency, 
described the BBC reports as 
"sheer fabrication” and 
suggested darkly that “hostile 



Beijing to 
step up 
action on 
unrest 


Months of speculation over the 
leadership of Australia's fed- 
eral opposition will come to a 
head in Canberra today, where 
Mr John Hewscm, the incum- 
bent, has said be will throw 
the matter open to a vote. 

Just over a year ago under 
Mr Hewson, the Liberal party 
lost a supposedly “untosable" 
election to Mr Paul Keating's 
Labor party. He regained some 
ground last summer, when the 
Labor government’s budget 
was stalled in pariigmant for 
several months, but since then 
seen hi& ranking in the 
opinion poiie fair sharply- 

By contrast, the Keating gov- 
ernment has pushed through a 
number of policy Initiatives 

inrindin g an aboriginal land 
title WH and a white paper on 
employment and industry, and 


its standing with the doctorate 
has risen. Ha latest budget pro- 
posals, announced eartter this 
m onth, contained a mlotaani 
of new measures and thus ran 
little risk of a repetition of bat 
summer's upheavals. 

Pressure on Mr Hanson has 
Increased over tin past lQdays 
as a field erf alternative leader- 
ship candidates has narrowed. 
Mr Alexander Downer, the 
opposition's spokesman on eco- 
nomic and treasury matters, 
and Mr Peter Costello, a young 
lawyer MP. are heading tbs 
challenge. 

Announcing his dedsfam to 
hoM a vrtA & Hewson said be 
believed speculation bad 
gained such a momentum that 
it needed to be resolved as 
soon as possible. He batoned 
his chances of retaining bis 
position were good: ”1 think I 
will win quite wefl”. . 


The Chinese are sensitive to criticism as the future of many companies such as this shoe factory 
depend on a US decision on Most Favoured Nation trading status on June 3 akmwm 


people with sinister motives 
have gone out of their way to 
smear China with fabricated 
stories”. 

That rebuttal, which was not 
reported by local media was 
supported by an unusually 
detailed statement from the 
Justice Ministry Indicating 
more than nor mal official sen- 
sitivity over the BBC report 

Whatever additional fallout 
may result from this most 
recent gfrrnnishfng , it cannot 
improve an already fractious 
relationship which has 
resulted in China-based BBC 
reporters being subjected to 
restrictions on their freedom of 
movement and access to offi- 
cials. Visas are also being 
denied to BBC programmers 
seeking entry to rhina 

It is not the least of ironies 
that at a moment when China 
is proclaiming its opening to 
the world, BBC reporters are 
finding to the contrary that 
doors are being closed. 

The BBC’s relations with 
China reached a nadir last 
December when Beijing 
reacted furiously - some might 
say over-reacted - to the BBC's 


screening of a documentary on 
the 100th anniversary of the 

birth of the late nhah-man Man 

Zedong entitled: Chairman 
Mao: The Last Emperor. 

Beijing unsuccessfully 
sought to have the film with- 
held and then protested to 
Britain for what it described as 
the “BBC’s vicious TV pro- 
gramme". China was infuriated 


apparently ±y suggestions that 
Mao had until fairly late in fife 
enjoyed the company of teen- 
age concubines, and sometimes 
more than one at a time. 

The programme also 
depicted the late Chinese 
leader as something of a tyrant 
who had been the cause either 
directly or indirectly of the 

dftatlm of Trrilljnnfl in the TrtafiK 

campaig ns that accompanied 
his idiosyncratic rule. 

Chinese sensitivity over the 
BBC’s output has been height- 
ened by vast improvements in 
the broadcaster’s signal to 
China and by the advent of sat- 
ellite television. China, which 
exerted pressure on Mr Rupert 
Murdoch, the Australian news- 
paper publisher, to drop BBC 
news broadcasts from his Star 
satellite television network 
may have been emboldened in 
its criticism of the BBC by ins 
decision to do so ( Mr Murdoch 
insists the BBC was banished 
to make way for Chinese lan- 
guage programmes more rele- 
vant to Star’s target audience). 

But World Service Radio in 



both Chinese and English is 
widely received in China, espe- 
cially since a new transmitter 
was Installed in Hong Kong in 
1967 and other transmitters are 
operating from near China’s 
borders in the former Soviet 
Union. 

Chinese concerns and mis- 
perceptions about the BBC, 
wilful or otherwise, were exem- 
plified by a commentary hi the 
official Yangchmg Wanbaa 
(Evening News) published last 
year in which the paper lam- 
basted the broadcaster’s inten- 
tions over plans to increase its 
transmissions to China. 

“The BBC’s main purpose in 
strengthening its broadcasting 
to China is to speed up its 
all-round invasion against 
socialist countries both spiritu- 
ally and ideologically,” the 
commentator said, adding: 
“When we listen to the freeof- 
charge information others pro- 
vide, we should he able to tell 
the truth from falsehood, the 
beautiful from the ugly. And 
furthermore, we shouldn’t let 
counterfeit and low-grade for- 
eign goods burst into our 
world.” 

Such sentiments may be out 
of step with China’s moderni- 
sing image, but the fact that 
they are fairly widely held, 
including, it appears, among 
those responsible for foreign 
media, does not augur well for 
an early end to the Sino-BBC 
drill. 


The Chinese Communist party 
said yesterday it would step 

UP its « " np«lg B n gainrf nn wrf 

in the countryside, where sta- 
bility is de teri orating due to 
“paralysis” among inept local 
officials, Reuter reports from 
Beijing. 

“The security management 
situation remains extremely 
grim nationwide this year,” 
Mr Ken Jianxin, a senior party 
official, was quoted by the offi- 
cial People’s Daily as telling a 
meeting on rural instability. 

The meeting of the party’s 
Committee for Comprehensive 
Management of Social Secu- 
rity, which Mr Ren heads, 
reflected Beijing’s concern 
over an alarming loss of politi- 
cal control in toe countryside. 

“All qflldal and legal organs 
must strengthen the force of 
their blows and mercilessly , 
attack serious criminal activi- 
ties and serious economic , 
crimes,” said Mr Ren, who is , 
also supreme court president j 
and member of the party secre- 
tariat 

The rise in unrest is evident 
from mounting reports in the 
party-controlled press of rural 
warlordism, banditry, deadly 
dan fends, violent uprisings 
and festering resentment 

Angry farmers have demon- 
strated a gains t crippling, ille- 
gal local taxes and have 
attacked corrupt officials who 
enrich themse lv e s by running 
their villages as personal fiefs. 

Peasants also resent high 
inflation and a growing 
income gap caused by the slow 
growth of farm earnings com- 
pared to the rapidly rising 
incomes in China's cities and 
coastal areas. 

Mr Ben made clear that Bei- 
jing would do anything to pre- 
vent the Communist party's 
worst nightmare: a collapse of 
order among 900m peasants 
that would plunge China into 
a chaos far broader than the 
student-led protests of 1989. 

“The security problems are 
escalating enormously in some 
rural areas and the public 
reaction is intense,” Mr Ren 
said. 

“We must never underesti- 
mate the affect of rural unrest 
on our n ational s ituation and 
must understand these prob- 
lems in terms of the overrid- 
ing interests of the party and 
state.” 


Manila defends 
East Timor 
conference ban 


By Joed Gatang in Manila 


The Philippine government 
went on toe defensive at the 
weekend after banning foreign 
participants from a conference 
on East Timor, apparently 
under pressure from Indonesia. 

President Fidel Ramos said 
the move was “for the protec- 
tion of national interests”. 

The Manila conference, 
scheduled for May 31-June 4, 
was conceived to discuss 
alleged repression in East 
Timor, which Indonesia 
annpTfid in 1976 after an earlier 
militar y invasion. 

Among those who had been 
expected to attend were Mr 
Josfe Ramos Horta, East Timor 
foreign minister in exile and a 
leader of Timorese indepen- 
dence movement, and Mr 
George Aditjondro, author of a 


Malaysia hints 
at end to UK ban 


By Kferan Coolca 
in Kuaia Lumpur 


Dr Mahathir Mohamad, the 
Malaysian prime minister, has 
hinted that his government 
might consider lifting its ban 
on offering government 
contracts to British compan 
ies. 

The ban, imposed in late 
February, was imposed in 
retaliation Soar a report in Lon- 
don’s Sunday Times newspaper 
alleging that a British com- 
pany had been involved In 
negotiations to offer Dr 
Mahathir bribes in exchange 
for a contract 

Dr Mahathir said that now 
that Mr Andrew Neil the Sun- 
day Times editor, had been 


transferred to a new post, Brit- 
ish media reports on Malaysia 
might improve. “If we find that 
toe British media reports the 
truth and no longer prints fire, 
there is no reason why we can- 
not resume business,” - Dr 
Mahathir told: Malaysia's 
national news agency Bex- 

natna 

Mr Nell, who is taking up & 
temporary post in New Yack, 
told Reuters that he- was 
delighted if his move was to be 
used as an excuse by Dr 
Mahathir to end what he 
described as the -•‘absurd 
embargo” against British com: 
p an 

Mr Richard Needham/ UK 
trade minister, is due to visit 
Malaysia nart Tnnrrth- 


Indonesian trial sounds alarms 


Manuela Saragosa on a bank case’s political overtones 


W hen Mr Eddy Tamil, 
an Indonesian entre- 
preneur, went on 
trial last week on charges of 
corruption, alarm bells rang 
throughout the country’s 
close-knit establishment 
The trial, one of the biggest 
alleged corruption scandals 
since Indonesia’s indepen- 
dence, could affect the reputa- 
tion of many high-ranking gov- 
ernment officials. It could also 
signal the beginning erf tighter 
supervision of Indonesia’s 
state-owned banks. 

Mr Tansil, owner of Golden 
Key, a retail and manufactur- 
ing group, received a 5430m 
loan in 1992 from Bank Pem- 
hangmmn Indonesia (Bapindo), 
the government's development 
bank, supposedly to finance a 
petrochemical project in West 
Java. 

The prosecution alleges that 
the loan was never serviced 
and that the funds were partly 
diverted to Hong Kong Bap- 
indo, though it continues to do 
business, fa now technically 
bankrupt and fa expected to be 
rescued by the government. 

It had been an open secret 
that Indonesian state banks 
were riddled with bad debts 
brought about by collusion 
between lenders and politically 
well connected borrowers. 
According to the government, 
21.2 per cent of their loam 
were bad or doubtful at the 
end of last year, compared 
with 17.4 per cent a year before 
and only 6 per cent in 1990. 


Vaadikr, if nm mitt. a patter 

plant, a trap, and a hhut for- 
««.. Thn'rr ffd nothing in 
hrtavr m Arm. empr 
fat .iiuoAfo. fit fat. rrmnnez 
prudm/e am/ gin ln W, fir in- 
•butntd graath in 
Purer anti 7hnpwMlm hat 

«b* HI into a nr of the bid- 

mp m mpanin at the fi rid of 
Utfnwhuia In ll alt. 
n'herr we’re [ram. irr'rr 
"•W rift brf (A- mate 
v/rrtrk mmpaml to pendant 
tuntr •'MTk nf the elretrtritY 

P I K It g C 


OUR JOB 
IS TO MOTE 

TIE WORLD II XOTI0I. 



mnmmeJ at the amntry. ht 
the Lulled .Suttee, tee hold 
SOS, of the raJnn iv dgmSing 
marie/, and ant the mapruoed 
vnU tr ader , if an ham 
fir our ofortfr tn a ffrr hmrfy 
retpoaeet to r/uretiont 
trhich art m utrmdr nob 
ingi ami rprnfit to latum a, 
the principal problem pond 
br economic deerlopmrnt 
m mart dm TO taaatria 


ar o und thr rorU • 1 u-nril that 


mo or*, je * She u. and moi, 
by might toy. thonhm to at. 
G d O U P 


These figures, however, 
came from the state banks 
themselves and the situation 
could be a lot worse, bankers 
say. “We might well see simi- 
lar cases being unearthed in 
the near future,” said a Jak- 
arta-based banker. 

The case has attracted public 
attention. One disappointed 
Indonesian wrote in a local 
daily newspaper “I hope that 
the government punishes the 
criminals and upholds justice 


The answer could lie with Mr 
Sudomo, former minister in 
charge of political and security 
affairs and now a government 
advi&er, and Mr J B S nmartm, 
the former finance minister 
and now chai rman of the coun- 
try’s audit agency. Mr Sudomo 
has admitted that he author- 
ised the Bapindo loan for Mr 
T ans il, and Mr Sumarlin is 
alleged by the prosecution to 
have overseen the loan. 

Both are due to give evi- 


Some bankers argue that details 
of the loan were leaked to 
discredit Jakarta’s technocrats 


because if they fail it means 
they are no better than crimi- 
nals themselves.” 

The trials of Mr Tansil and 
Mr Maman Suparman, a for- 
mer deputy branch manager at 
Bapindo, began last week in 
packed court rooms amid yells 
and catcalls from angry mobs. 

Both were charged with cor- 
ruption and violation of bonk- 
ing laws. Prosecutors have 
been trying to establish during 
a four- month investigation 
how Mr Tansil, who bad little 
capital to bade him up and bad 
a history of unsuccessful ven- 
tures In the motorcycle assem- 
bly and brewing businesses, 
could have qualified for a 
5430m loan from Bapindo with- 
out collateral. 



deuce at Mr Tansil’s trial, 
although they may be allowed 
merely to have their testimony 
read out in court. Their partici- 
pation may help indicate how 
immune from investigation the 
state's power brokers are in 
the Bapindo affair and how 
serious the government is 
about putting a halt to Illegal 
collusion between lenders and 
borrowers. 

In tiie central Javanese town 
of Bandung, students tussled 
with police as they demanded 
that Mr Sudomo and Mr 
Sumarlin stand trial for their 
role in approving the loan. 

Mr Tansil and Mr Suparman 
face a maximum penalty of life 
sentences in jail under anti- 
corruption laws. The prosecu- 


tion says that Mr Tansil 
obstructed the government’s 
efforts to develop tire economy 
by bis abuse of the loan from 
Bapindo. 

Mr Tansil’s lawyers have 
said that their client did sot 
receive demands or warnings 
from the hank about servicing 
the loan, and that the alleged 
deviations from legal b ank-tag 
practices were made with the 
blessing of Bapindo executives. 

“What makes the Bapindo 
case Interesting is not so much 
that it happened but that It 
was leaked to the public,” said 
a Jakarta-based diplomat. The 
case hints at political wran- 
gling taking place among the 
ruling elite. 

Some bankers argue that 
details of the loan were leaked 
as part of an attempt to dis- 
credit Jakarta's technocrats, of 
.which Mr Sumarlin was one. 
Go ver-ment technocrats are 
channelling billions of dollars 
into developing heavy indus- 
try, although some economists 
say this path erf industrialisa- 
tion offers little comparative 
advantage. 

Mr Mar’ie Muhammad, 
finance minister, told the 
Asian Development Bank's 
annual meeting in France this 
month that initancrfftn banks 
faced difficulties and that the 
government would further 
strengthen banking regulation. 
The outcome of the Bapindo : 
case may show the extent of 
the government’s determina- i 
tom to carry out this promise. : 


ThaiMP 
quits over 
US drug 
charges 


By.WMam Barnes In Banutok 


That (That nation) party, Hr 
Thanong Striprechapong, ha* 
resigned from parhameutW- 
lowfrtg revelations two wadB 
ago that he fa wanted fa 


tn smuggling 45 tonnes of can- 
nabis over a 10-year period- 


Mr Bauharn Silpa-ardtfi 
Chart Thai’s ambitious uCV 
leader, fa trying hard to refer- 
bish the image of a P*™ 
which Is the second biggest ® 


fainted with a reputation fr 


The police farther esnba£ 
reused the opposition fa# 
week by netting a Chart xj® 


MP in a raid on a gamWmj 
den. The move may be part® 


party coalition to regain tfa 
parliamentary , initiate 
wl rich they appeare d to ”* 
when a paroposal to reft*® 
constitution was reeenuj 


Earlier Mr Prasong soonw« 
the foreign minister, 
that seven more servi ng are 
10 former MPs are 
by the OS for suspected 
trafficking. Only oue 
named: a Chart Part**? 
(national progress) Mr, 
Mongkol Cbongsuthainanee' 


book that drtailed a massacre 
of East Timorese in U99L by 
Indonesian soldiers. 

Mr Horta fa currently identi- 
fied with the anti-Indonesia 
Fre tfHn guerrilla group in Por- 
tugal . 

The Philippine government 
said Mr Horta had sought that 
the conference try to make 
East Timor an Asian issue, to 
focus a global spotlight on the 
plight erf the people and to fos- 
ter dialogue among human 
rights advocates In the ragfan. 

Some members of the Philip- 
pine Congress had expressed 
apprehension that the confer- 
ence, if allowed as a precedent, 
could wiaVa Manila “a new 
base for subversive groups”. 

Manila’s move followed a 
threat of retaliation by Jakarta 
should the conference proceed 1 

with gnrornmgni parmlssimv. 


tadi 





r 









5 




\ 


FINANCIAL TIMES MONDAY MAY 23 1994 


Beidh named 
H to lead new 
Yemeni state 


NEWS: INTERNATIONAL 


South Yemenis rejoice at move to end union 

The four-year merger was seen to have favoured the president’s famil y., reports Robin Allen 


•'ly d C f, 


li 




nuor 
reiHe l 


Mil 


hint 

to I K it 


s 


I 'h;ii ^ 

ijiiil' » li; 

1 S 

than! 1 - 




By Eric Watkins to Man 

South Yemen's political 
leaders continued to defy 
northern ruler General Ali 

Abdull ah SulKh by. antimmri^g 
the formation of a new five- 
man presidential council yes- 
terday. The council proceeded 
to elect the southern leader, 
Mr All Salon al-Beidh, presi- 
dent of the new state. 

Drawing on a broad spec- 
trum of political persuasions, 
the new council is an obvious 
attempt to consolidate 
southern efforts at separating 
from the north and at estab- 
lishing an autonomous state. 
Gen Saleh, reversing promises 
not to bomb the south, has 
meanwhile resumed missile 
attache on Aden, stronghold of 
the southern forces. 

With members selected from 
five of South Yemen's six prov- 
inces, the aim of the new presi- 
dential council is to achieve 
cohesion against northern 
efforts to prevent any separat- 
ist movements. But the new 
council also brings together 
old political rivals in a show of 
non-partisan support for the 
Democratic Republic of Yemen, 
the new state announced on 
Saturday by Mr Beddh. 

Apart from Mr Beidh, leader 


of the Yemen Socialist party, 
other members of the council 
include the deputy leader of 
the YSP, Mr Salem Saleh 
Mohammed, the head of the 
Sons of Yemen League, Mr 
Abdul Rahman AH akflfri. the 
head of the Federation for the 
Liberation of South Yemen, Mr 
Abdul Kawi Makawi^and Mr 
Suleiman Nasser. Masoud, a 
member of the Ali Nasser 

Mohammed wing of the YSP. 

Western observers noted that 
members of the new council 
had all fought against the Brit- 
ish occupation of Aden in the 
1960s and that several bad 
struggled against one another 
in the run-up to South Yemen's 
independence in 1967. The new 
council is therefore seen as an 
attempt to transcend 
long-standing political rivalries 
in face of the more urgent 
threat to southern autonomy 
posed by Gen Saleh. 

Vowing on Saturday to cap- 
ture Aden at any cost, Gen 
Saleh has meanwhile resumed 
missile attacks on the city. 
Four people were killed and 
nine seriously injured early 
yesterday when a northern 
missile struck in the Khnrmak- 
sar district of Aden. It was the 
third missile to hit the city in 
as many days. 


A fter four years playing 
second fiddle to the 
united Yemen govern- 
ment of President Ah Abdullah 
Saleh, the south Yemenis, led 
by Mr Ali Salem al-Beidh, have 
now publicly thrown down the 
gauntlet On Saturday night . 
they announced their secession 
from Yemen, artfl the forma- 
tion of a five-man presidential 
council. 

In Aden, the south Yemen 
capital, celebrations went on 
all ni gh* - , even rimn gh a mis- 
sile fired by the north landed 
near VhnmminwT airport 
fighting continued around the 
key southern airbase at At 


Anad, 60km north of Aden. 

The news brought a predicta- 
bly vitriolic response from 
President Saleh, but southern 
opinion and the army wpm to 
be solidly behind Mr Al-Beidh. 
his deputy, Mr Saleh Salem 
Mohamed, and the Yemen 
Socialist party (YSP) leader- 
ship. 

The 2L5m-3m people in 
southern Yemen, including 
many northerners who have 
settled in Aden, are united in 
their <h»Ti 1 h» of a north- 

ern regime based on and 
favouring the president's fam- 
ily and relatives, and the 
Ahmar rfym within, the Wncheri 


tribal confederation to which 
the president belongs. This oli- 
garchy, they say. has abused 
its power and diverted the 
south’s oil revenue away from 
the south's economic develop- 
ment to satisfy the priorities of 
10m northerners. 

“If a referendum were to be 
held tomorrow in the eastern 
and southern governorates [of 
southern Yemeni there would 
be a dear majority in favour of 
south Yemen reverting to its 
former statehood," the 
southern leader and head of 
the YSP, Mr Ali Salem Al- 
Beidh, told the Dubai daily 
Gulf News in March. 



Northern troops patrol the streets of Sanaa after the first dvfl war clashes earlier this month ap 


The divisions between north 
and south were more than sim- 
ple ideology or tribal rivalry. 
In May 1990; when the north 
and south formally united, 
their two separate systems cf 
government were profoundly 
incompatible. The southern 
one was based on 20 years of 
h ardline Marxist control which 
emphasised a strong central 
authority. By contrast, the 
northern central government 
has never fully existed beyond 
Sanaa and two other cities. 
Hodeida and Taiz. Elsewhere, 
tribal authority imposes itself 
on and competes with the cen- 
tral government in Sanaa. 

There is widespread resent- 
ment in the south at the way 
the Saleh presidency lined up 
with Iraq after its invasion of 
Kuwait in August 1990. with- 
out consulting southern mem- 
bers of the government As a 
result of Saudi antagonism, up 
to a nzQhon northern Yemenis 
had to leave Saudi Arabia, dis- 
locating the entire Yemeni 
economy through the loss of 
remittances and the unwanted 
arrival in the south of several 
thousand northerners seeking 
work. 

The progressive devaluation 
of the north Yemeni rial - 84 
per cent since May 1990 - and 
the wide difference between 
file nffWni rate, YR12 to the 
dollar compared with the free- 
market rate of YR75, have 
dragged the southern dinar 
down with it 

The present cohesion in the 
south has depended to a large 


extent on the durability of the 
oral pact earlier this year 
between the army and the YSP 
leadership- According to this 
agreement the army high com 
mand, most of which comes 
from Dhala, Radfan, amd 
Yafai, the mountainous areas 
to the north of Aden, agreed to 
support the political leadership 
in secession providing the lat- 
ter stopped flirting with the 
idea of secession for the Hadra- 
mawt. the eastern oil-produc- 
ing part of south Yemen. 

M ost of the top leaders 
of the YSP come 
from the Hadra- 
mawL They include Mr Ali 
Salem Al-Beidh. the erstwhile 
prime minister, Mr Haider Abu 
Bakr Al-Attas, the former oil 
minister, and south Yemen 
chief-of-staff Saleh Abu Bakr 
Bin Hussalnoun, as well as the 
governor of Aden. Mr Salem 
Nasser Al-Siyafi. who has a 
Hadrami father and a Yaflte 
mother. 

All the signs are that this 
pact is holding up, thanks 
partly to the stiff resistance 
being put up by the army at 
al-Anad and the reciprocal sup- 
port it was getting from the 
YSP leadership. 

The south’s Marxist period 
from 1970 to 1990 rarely 
involved more than the politi- 
cal leadership and its acolytes 
in the internal security appara- 
tus. The loarffWBWp also util- 
ised the system handed to ft by 
the Soviet Union and used it to 
remain in power. It was more a 


personal desire for power than 
a power based on ideology. 

The south also has a wide 
degree of support from south 
Yemenis overseas, as well as a 
degree of tacit sympathy from 
some of its neighbours. In Jed- 
dah. the Bugshan, Binladin, 
and Afn Mahfbuz families, all 
important figures in Saudi cor- 
porate and financial life, come 
from the Hadramawt 

Saudi Arabia was never 
entirely happy with a united 
Yemen on its southern bonier, 
part of which. In the areas 
around Najran, Gizsn, and a 
large swathe of the coastal 
Hhama plain, was conquered 
by the Saudis in the early 1930s 
- a legacy which has not been 
forgotten by north Yemenis. 

Economic plans on the 
south’s drawing board incl ude 
the establishment in Aden of a 
free zone, upgrading Aden’s 
refinery, modernising the port, 
and exploiting the Hadra- 
mawtis oil resources. Aden was 
reported to have been the pre- 
ferred ter minal in a US-backed 
scheme for vapourised natural 
gas to be pumped from north 
Yemen’s gas fields of the Mar- 
ib/Jawf area. 

If the south is to survive, it 
will need a sustained period of 
political and economic stabil- 
ity, and an economy based this 
time on a free-market rather 
than a Marxist system. With 
the north bent on its military 
destruction, stability seems a 
long way off; but without it the 
south frill not get the foreign 
investments it must have. 


Israeli troops alerted for reprisals Cabinet focuses on house prices 


..i 


By David Horovttz Jn Jerusalem 

Troops in Israel’s south Lebanon security 
zone and along the international border 
were placed on heightened alert yesterday, 
after Lebanese Moslem militants threat- 
ened to avenge the kidnapping by Israel of 
Mnstapha Dirani, leads' of the pro-Iranian 
“Faithful Resistance'' guerrilla movement 

Mr Dirani was seized from his home in. 
Lebanon’s Bekaa Valley early an Saturday 
morning , in what Israel’s army chief of 
staff, Lt-Gen Ehud Barak, described as an 
“impeccably executed" commando opera- 
tion. 

The army’s intelligence chief, 
MtfGen On Saguy, said Mr Dirani had 
“already ' provided some answers to ques^ 
turns we've been asking for a long time"; 


other military sources said that he was 
proving “a tough nut to crack” and that 
his interrogation would continue for sev- 
eral weeks. 

The guerrilla leader, whose movement is 
linked to the pro-Iranian HizboQah group, 
te alleged by Israel to have taken prisoner 
an Israeli air force navigator, Ron Arad, 
who bailed out of his Phantom jet over 
Lebanon in October 1986. The Israelis 
rfahn Mr Dfrani i»w Mr Arad captive for 
two years, then sold him to a contingent of 
Iranian Revolutionary Guards for $300,000 
(£200,000). 

Israel’s Prime Minister, Mr Yitzhak 
Batin, said the Dirani kidnap ^ been 
planned for months and that he hoped the 
Shfa militia “leader would be able to pro- 
vide information on Mr Arad’s where- 


abouts. He added that Israel decided on 
the operation after repeated appeals to 
Syria, via the US, for details of Mr Arad 
had failed to produce results. 

He said Israel did not mfmwi to use Mr 
Dirani as a bargaining chip, having 
learned from experience that trying to 
arrange such details was futile. 

While HlzboHah vowed to “expand the 
scope of fighting* against Israel in 
response , to the kidnapping, ami other 
Mamie mfRhmt sources threa tened “spec- 
tacular retaliation”, Israeli politicians 
from across the spectrum came out over- 
whelmingly in support of the operation. 

• Israeli troops IriTlefl at least png anegari 
Islam in mfHfamt anil cap tur ed two others 
wfahh raiding a house' in'the West Bank 
town of Hebron yesterday. 


By David Horovttz 

Israeli ministers are to hold a second 
cabinet session tomorrow to debate ways 
to slow the rise in house prices, having 
failed to reach any final decisions at a 
long cabinet meeting yesterday. 

With the Gaza-Jericho autonomy deal 
still in its earliest stages, and a threat of 
hostilities on the Lebanese border follow- 
ing the weekend's kidnapping by Israelis 
of an Islamic wtiu mht leader, the schedu- 
ling of a second cabinet session devoted to 
house prices reflects the extent of govern- 
ment concern. 

Gover nm ent figures twdinata that apart- 
ment prices have risen by some 60 per 
tent ii dollar T 'torins over the past four 
years alone. Rear estate rises are the key 


factor in the monthly consumer price 
index - housing accounted for 0.8 points 
of the 2.1 per cent rise in the index for 

A pri l — tmri the w mtt imwl rlnw an far thte 

year have already in effect killed hopes 
tiurt Tgrapl might keep inflation to dnglw 
figures in 1994. 

Flats in Tel Aviv and Jerusalem, where 
demand h highugt are selling for an aver- 
age of $3,500 (£2J00) a square metre. 

What most concerns Prime Minister Yit- 
zhak Rabin’s Labour government is the 
growing anger among both new immi- 
grants and young Israeli families that 
they can no longer reach even the first 

rang On the housing ladder . Mr RaMy: 

fears economic discontent, centred on 
housing coifo, could rebound agatnst'hSm 
at the next elections in two years. 


Unimpre ss ed by the efforts of Ms minis- 
ter of construction, Mr Benjamin Ben-EIL 
ezer, to speed the procedures for freeing 
state land for building, he recently 
appointed an inter-ministerial committee, 
headed by Ms own bureau director-gen- 
eral, Mr SMirnm Sheris, to derise new 
proposals to slow the price rises. 

The cabinet heard the first of these pro- 
posals y es te rday, inclnding plans for gov- 
ernment building projects, for schemes to 
guarantee gove r nment purchase of apart- 
ments that co nt r actors prove twiahie to 
sell pri v ate ly, and for the allocation of 
land for 110,000 apart m en ts over the next 
two years. The Treasury and the Bank of 
brad, however, s tron gly oppose public 
construction and government guarantees 
for private contractors. 





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FINANCIAL TIMES MONDAY MAY 23 


NEWS: INTERNATIONAL 



Little assurance new curbs will work against military junta 

UN tightens Haiti sanctions 


xncu iiuju 1 

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In Washington 


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« • • • 

• • •« •••• •• 

• • • • •• •• 


Tougher international 
economic sanctions went into 
effect against Haiti yesterday 
after leaders of the military 
junta ftfled to leave the coun- 
try by a United Nations dead- 
line of May 21 - 

Bat there was little assur- 
ance the sanctions would be 
more effectively implemented 
than the narrower embargo on 
deliveries of fuel and arms 
over the last seven months. 

Mr Boutros Boutros Ghali, 
UN secretary-general, formally 
notified the UN Security Coun- 
cil on Friday that General 
Raoul Cedras, the military 
commander who ousted Presi- 
dent Jean-Bertrand Aristide in 


1991, had not met the neces- 
sary conditions, triggering a 
broad embargo on shipments 
of everything except food, med- 
icine and cooking gas. 

The existing fuel embargo, 
however, has had little effect 
on the Haitian military - 
although it has raised prices - 
because of a steady flow of con- 
traband petrol across the bor- 
der from the Dominican 
Republic, which shares the 
island of Hispaniola with Haiti. 

US Vice-President A1 Gore 
said yesterday the US was 
hniriing talks wt iii the Domini- 
can Republic on ways of 
improving of 

the sanctions, but declined to 
threaten reprisals if coopera- 
tion does not improve. He 
insisted that it would be “pre- 


mature to discount the effec- 
tiveness of these tough new 
sanctums, but we axe proceed- 
ing with other measures as 
well". 

hi the Dominican Republic, 
the government of 87-year-oH 
President Joaquin Balaguer 
remains to some degree in sus- 
pense after the elections board 
ordered a recount in last 
week's election, responding to 
complaints of fraud made by 
Mr Jose Francisco Pena 
Gomez, the challenger. 

President HU Clinton's Haiti 
policy has continued to suffer 
intense criticism, particularly 
from Vnmum rights advocates 
and black politicians, even 
after the White House shifted 
its policy of retiirntog Haitian 
refugees to their country and 


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Frei delays action 
on power of Chile’s 
military leaders 


Talks to continue on 
coalition for Malawi 


TEl: 071 4934343 

F/1X: 07 1 I 


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OF OXFORD 


THE MATHEMATICS OF 


FINANCIAL 


DERIVATIVES 


- AN APPLIED 


APPROACH 


with Wilmott, 

De Wynne & Hovison 


Chilean President Eduardo 
! Frei has promised to push 
through important amend- 
' merits to the 1980 constitution, 

, inherited from the military 
regime, though he has post- 
poned rivaling with tiie m os t 
controversial issue - the 
TmmnhfiHy of commanders-in- 
rhfef. 

Mr Frei, in a weekend 
address to Congress, said he 
would seek to remove from the 
Senate the eight non-elected 
members appointed by former 
dictator General Augusta Pino- 
chet 

The presence of the desig- 
nated senators makes it diffi- 
cult to force controve r sial leg- 
islation through the 46-member 
body. 

Mr Frei, who assumed office 
in March, will also move to 
chang e the hmnmtnal electoral 

system which guarantees the 
opposition disproportionate 
power in parliament 

However, the president, who 
said the proposed changes 
were not a matter of “imposing 
one’s win over others", avoided 
the issue of his own inability 


to appoint or sack military 
commanders, including Gen 
Pinochet Mr Fred has repeat- 
edly protested that such limits 
on presidential authority are 
incompatible with full democ- 
racy. 

The president, according to a 
follow coalition member, Mr 
Jorge Schaulsohn, did not wish 
to “waste time or congest the 
legislative timetable on consti- 
tutional reforms that we know 
beforehand are going to foil”. 
Mr Frei’s willingness to avoid 
more controversial amend- 
ments improves hlg r-lmTvos of 
pushing through those he has 
proposed. 

The president's emollient 
attitude, however, foils to 
address the current constitu- 
tional im passe ttt which the 
police chief, Gen Rodolfo 
Stange, remains in office in 
spite of government insistence 
that he should go. 

Gen Stange, one of the unre- 
movable commanders-in-chief, 
is being investigated for the 
alleged cover-up of three politi- 
cal murders committed by the 
police. In private, the govern- j 
ment admits It does not know 
how to end the t wift T Hi i a tim J 


Malawi's new president, Mr 
BakHi Moluzi, is due to con- 
tinue talks cm farming a coali- 
tion g overnm ent, with five key 
parliamentary seats still In dis- 
pute, Reuter reports from 
Blantyre. 

Officials of Ur Moluzi ’8 
United Democratic Front 
(UDF), which is just short of a 
majority with 84 seats in the 
177-member parliament, said 
they were awaiting a response 
from a northern-based party cm 
whether it wanted to join in a 
coalition government 

“No talks have been opened 
with Aford (Alliance for 


Democracy]. The position of 
the UDF is tint we have no 
major problem in woririhg with 
Aford if they are witting to 
work with us,” UDF publicity 

rhtef l fjWBiffl flhihtmphq 

AFORD, which won 36 seats 
in last Tuesday’s elections, is 
led by veteran trade unionist 
Chakufwa Chihana, who draws 
support from his home area in 
northern Malawi. Forma: Pres- 
ident Hastings Banda’s Malawi 
Congress party, the sole legal 
party from independence in 
1964 until the first multi-forty 
election last week, took 52 
seats, mainly in central areas. 


Rwanda rebels capture 
army barracks in capital 


Rwandan rebels yesterday 
captured the g nw mnnwit army 
barracks in the c apit a l, Ri g an, 
removing the biggest obstacle 
in their drive to seize power in 
the city, reports Renter from 
Kigali. 

Witnesses *ai d the Kanombe 
barracks, Hk» the nearby air- 
port taken earlier by the 
Rwanda Patriotic Front (EPF) 
rebels, fell without serious 
resistance. 

Asked what was now the 
EPF’s target, a senior officer 


vnf ri- “The city and than the 
country” 

Hundreds of civilians were 
streaming out from districts 
around the barracks to the rel- 
ative safety of the airport, now 
firmly in rebel hands. 

The RPF military leader, 
Maj-Gen Paul Kagame, is cred- 
ited with having single-hand- 
edly rebuilt the rebel army into 
a 14,000-strcmg force when the 
death of its fanner leader Fred 
R wi gyema in 1990 threatened 
to tear the movement apart. 


CONFERENCES & EXHIBITIONS 


MAY 24 26 

RA/FQA GLOBAL MVESTMBfT 

A Rgac MflH flTJMFW r 

appoRRjNnraroRwsmunoNssi 

FUND MANAGERS 
LaMeridton Haul 

Tension finds, corporat e mwb, tndea. 
product designer address whig fames far 
ride management Keynoce speakers: Brim 
Qnum. Bank of England; Gordon Hina, 
General Motors Pension Fond. 

Contact US JoHa Grammy 202-466.54#) 
UK CtaoGne Jones 071 488 4610 
LONDON 


JUNE 13 & 14 

FT NORTH SEA OIL AND GAS 

The conference will review es ph w a tion 
and production “ the main sectors vi the 
North Sea and consider the impact of 
current oil prices on activity in the 
province. Export a p ea l ntm win atao a d dict s 
cniciil ima n it md 

ways of reducing coats; operstion- 

FnCT mrW - Fmancial Time* 

TeL- 081 673 9000 Fax: 081 673 1335 

LONDON 


JUNE 17 

THE LONDON SCHOOL OF 
ECONOMICS 

ia cOeriag a one fay comae entitled Some 
Lessons From Japan designed to 
familiarise British manufacturers with 
methods of subcontracting need in Japan. 
The Coarse is based on a recently 
completed research programme carried 
ool in Japan by Dr (nermann of the LSE. 
Gnnacn LSE Short Conan Office ea 
071 955 7227 

LONDON 


JUNE 2 

DEVELOPING NEW PRODUCTS 
FOR G L OBAL MARKETS.- THE 
OPPORTUNmES 

Audiund one-day conference ei gani ied by 
the Deagi Museum in conjumrion with the 
DTI, wbkfa will tackle the fundamental 
couea at new product development and fa 

ii i ipM if pif»j l jlil ] iii,l e n n ^ ig|ih-iiw, 

Qmtact Conference Secretariat, Northern 

Conference Bureau 

Tel: 0625 502600 Fax: 0625 502900 

BIRMINGHAM 


JUNE 14 

MANAGEMENT BUY-OUTS 

Managemen t bey-oua are es ta bli s hed and 
well recognised transaction*. The 
comprehensive programme of this 
conference. in sssodatinn with Gresham 
Trust, wiU provide an in-depth 
rumin a ti on of MBQs. The emphasis will 
be on practical advice whh rose studies 
from directors who have lod imomMfal 
moagement 

Director C onfe rence s: 071 730 0022 

LONDON 


JUNE 19-23 

EDP AUDITORS ASSOCIATION 
22ND INTERNATIONAL 
CONFERENCE 

Major conference on infor m ati on systems 
auditing, featuring over 50 educational 


JUNE 21-22 

TOWARDS POST OFFICE 
PRIVATISATION OR 
COMMERCIALISATION? 

Major conference aa a rning options open 
k) the British Government as it ix poised 
tt> mate its dedskm on The Post Office. 
Outstanding opportunity to hear key 
European speakers and to learn of 
d lfti i r i, i pnva ta a tinn methods. 

CootacC Wetemnaer and Qty 
Programmes, Jane While 
Td: 071 582 6516 Fhc 071 582 7245 

_ LONDON 


JUNE 23 -JULY 19 
SHARING IN SUCCESS 

Prasbsre/CBI series c o mbinin g saimara 
4t for HR, Bt a fl BW l — ^ Bwm* 

professionals A MD's of private 
c owipanira on tbc benefits of Employee 
Shire QwufciiihrtT- Lcmiocs- MaaKSo: 
York, Glaggow, Bristol. K. Midlands 
Aiipou. IflHltW • 

fMi-' Rid H i a Wyly 

Td 07: 379 7400 Far 071487 3646 

VARIOUS 


Price: £795 pta VAT (EDPAA members) 
£895 pins VAT (nmvmembexa) 
Contact Xadti Butler, hatitate of Physics 
TeL- 071-235 6111 Vxx: 071-259 6002 

LONDON 


JUNE 22 

THE GLOBAL MARKETING 
ENVIRONMENT 

New Opportunities in ibeNew Wodd Older 
Die Henley Centro 's one day oonfemce 
considers the key drivers of cha nge for 
international markets and marketing. 
Particular interest to those developing 


JUNE 3 

ENVIRONMENTAL 
MANAGEMENT SYSTEMS - 

IMPLEMENTING EXPERIENCE* 
LEGAL LIABILITY IMPLICATIONS 
Chaired by John SamboDontei, Department 
of the Environment, Environmental 
Protection & buhatry Division. Speakers 
hem Soon Healthcare, Masons. Nwweat, 
ISO Drafting Committee, Nabarro 
Naihanson, IEA, Transport Dcvclopnteat 
Group and Cameron Markby Hewitt. 
En v i rouiiirm l systems dfcpfay. 

Fax fte a wln sUmdU In da t P y A 
E nv irau n i em Aswdatea for brodnac om 
081 S76 1674 (TeL 081 876 3367) 

LONDON 


Ctet: £350 «- VAT 

Contact: Anna Batman Tel: 071 353 9961 

LONDON 


JUNE 28 

WORLD CLASS MISMAHONAL 
WORKSHOP: SMED - Sat Up 
Reduction 

A crncal snocem factor for Worid Clam 
Mamsfacmra is the capabSty to produce 
vwdety in srraO quantities. Rqtidsetepls 
Uadasaad ifaD Ttrpt 
rorpared to reduce nei-up times throughout 
yoormanu faniln g nprurin n (Ret WCM6.) 
Onetacc Viki Wdhsm 
Wotkl ^ 

Ty.- 07QS 268133 Am 0709 268160 

HAMPSHIRE 


JULY 5 & 7 

AUGNMG CORPORATE ft 
MFORMATION SYSTHB 
PLAIMNG 

How la it to be achieved? The short 
answer is - with difficulty, aa bitter 
fupafciice fans shown. A loeger and more 
cunU inc ti ve ans w er wiU be cflfcred at the 
LSE one-day Seminars. They will be 

Peter Gyngeii who has been both a CEO 
endsn t5 Manager. 

Pumff I mww. , 

Teh 071 955 7968, Ftac 07 1 955 7385 

LONDON 


JULY 12 & 13 

FTMULTMBM-VGKMAND 

REAUIY 

Tins major business forum will farm on 
the key amocs facing one of the fastest 
growing i ndustries, the regulatory and 
legal framework for industry 
dev elo p me nt, fl aa adn f (he multimedia 
fame, amesshtg real badness application 
and potential and the role of strategic 
affiances in resp o n ding to tee developing 

Rnoddlbio 

Tel: 061 673 9000 Fte 081 673 1335 

. LONDON 


SEPTEMBER 27 
CIVIL JUSTICE ON TRIAL 
One-day Conference 
This Im po r tant one day event haa a 
pnsdgioss pod of gmkmn and wlH be 
chaired by The Rr Han Laid Woolf of 
Barnes, Badger Ftenoae, Deiek Whettiey 
QC, Hilary HeUbron OC. For de tails 
contact Letentatioosl Professional . 
Conferences T til 
Tkt 071 233 7733 

LONDON 


EXHIBITION 


JULY 6 

SECOND CITY OF LONDON 
DERIVATIVES CONFERENCE 
Bankers, regulators and users discuss 


Sponsored by CSFI. Tntai Bank Birope. 
Arthur Andccron. FrestafieMs. Lombard 
Risk Systems and Reifa A Notan. 

Detain from: ChyfonnD Ltd 
Tefc 0225 466744 Pax: 0225 442903 

LONDON 


JUNE 15 ft 16 

FT TRANSPORT IN EUROPE 
The meeting will focus on the 
uaptjcadcms of Com m un ity proposals for 
the Trans- European Networks and the 
prospects for public-prime partnerships 
to finance Europe'# transport 

Enquiries: Rnasctal Tfaws, 

Td: 081-673 9000 Fax:081-6731335 

LONDON 


JUNE 20-22 

THE GOVERNMENT OF CUBA 

Cuba opens its doom to hnsiaw men and 
investors with Ibis high level mmrftnhle In 
Havana. Ministers, Baoteis, Executives 
and favestots cover Cubes new potides A 
appomnddes; vital for ctapu t a te 
t mlm. For infon i H iti nn co nt ac t 
Fiona Pink. The Ecooomist Ooofarenoes 
Td: +4471 830 1000 
Fte: 444 71 409 3296 

LONDON 


JUNE 22 

HEADROOM FOR SPECIALIST 
STAFF 

Get the most tan yore apodatisr staff by 
igwa tiflug ihdr expwttae - not promoting 
than ■"*»» aznaitabte imiii^w M «t f«u» 
An Industrial Society conference 


value by giving ’head ro om* to wcbiric al 


Featuring IfT.and Ckthnmce Survey. 

To boo* comect Tet (El-452 1030 

LONDON 


JUNE 29 

INTERNATIONAL WHEAT 
COUNCIL, WORLD GRAIN 
CONFERENCE 1994 

Speakers fan mw* grain importin g and 
exporting countries will explore policy 
e d jn das nm in the posz -Uruguay Round 
trading erodromnem. Promiaeu tradm 
wfll examine cfcaDengea facing the nailing 
and i n ^Lii U. 
fiiwt- taam w a l Wheal 
Tel: 071-513 1122 Fxc 071-7120071 
LONDON 


JULY 6 

INTERNATIONAL AND CROSS 

BORDER PENSIONS 
For companies with International 
employees: backgronnd. main 

international financial centres; trans 
adantic pensions and taxation; taxation; 
analysis of components for cohnsWe 
strategy. Lord Rippou chairs panel of 


JULY 12-13 

LEADING TIE WAY IN 

EURO PE: RESPONDING TO 
CUSTOMER NEEDS IN LOGISTICS 
WANNING 

Cross-bocdei peimjnniliei presented by 
speakas faom fasmnta of Logistics; Kurt 
Salmon; Pedigree Petfoods; Liverpool 
University; Bander Management 
Consultants, USA; I Guidelines; P-H 
Consnlting; Garonor Ingeckrie, France; 
Moret Brest A Young, Holland; 
Anacoop; B nro t nna el; CSC Cranpoter. 
S ci enc es ; The Post Office. 

Contact Unicorn Samfaan. 0895 2S6484 
Pa 0695 813095 

LONDON 


MAY 25-26 

MAULER HALEY 
ROADSHOW ft SEMINAR 

Featuring a sefectfcM of pottabfe (fapbys. 
new exhibition systems and display. 
a c neas o rlea . Sec the boot technology in 
display design. Discuss yonr exhibition 
needs. FREE adnrim l nn. 9sm - 6pm. "A 
Guide to Better EsUbitiqg Seninr” runs. 
ccpcmwtty . Coat £49JS. 

Enquiries; LoataeHodgicaKJenre, ■: 
Mirier Haley ExpoSynems 
TU: 0480 218588 ftx: 477Ca2 

BRADFORD 


distinguished international speakers 
providing expert advice on the latest 


JUNE 7 

mMdALRB 3 OKIMG&AUDtIMQ 

CIB/Tooehe Ross conf e r e nce considers 
on-going reform process and currant 
accounting treatment issues including 
goodwill, property rights ere. Speakers 
include: Sir Sydney Upworth, Ian 

ntisiowe rod Femr GaUsmUi QC 

Comer NKxia Matin. QH Conferences 
Tri: 071 379 7400 Fa: 071 497 3646 
LONDON 


JU NE 8 

INVESTOR RELATIONS: 
Toote&Tipa of TTia Trade 
One-day seminar, Sponsored by Investor 
Relations Society, on all [hat's new and 
catting edge m investor relations. Venue: Le 
AfctidKn. FSccscfiBy. Speafceo. RoOj-Rojce, 
BET. KleinwoR Benson. SG Warburg. 
PiirOky. Lad^tc Commuitiatiuus. 
CanDctiBamAmocbteaSemhaia 
Tefc 071 497 2225 Far 071 497 9295 
LONDON 


JUNE 16 

TIE GOVBVKMBfrS 
DEREGULATION PROGRAMS. 
Second Phase: the Practical 
Impfications for UK Companies 
Spoakoa inefade Michael Hescitmc MP, 
Stapba Docreil MP, MIcted Fotsyth MP. 
Charles Wardle MP, Steren Norris MP, 
fan Spiott MP, Rands Maude, Head of 
Deregulation Task Force. Task Force 
membera and Peter Morgan, Head of loD. 
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Tefc 0276 856966 Fax: 0276 856566 
LONDON 


JUNE 22-23 


JUNE 21 
INDIRECT TAX - 
AN MTEGRATED APPROACH 
Conference on changing UK irafiie c t tax 
systems and implications to business, 
foamring specialist tax planning 


Price: £100 pies VAT 

Contact: Michelle Beard, Erast A Young 

Tel: 071 931 2297 Fax: 071 242 5862 

LONDON 


CON1MUTY GROUP adAvuaf 
Ctarmricaflarts Confere n ce 

Communication links are critical to the 
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LONDON 


JUNE 9-10 

BUSWE5EL PROCESS RE- 

Omtiiaiing a suoaessfal series of sardnats 
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guide b 3Tnsmied with case studies and 
workshops. Course book available. 
Repealed September 19-20. Contact: 
Ridtatd Parris, Varied Systems Intcreede 
Ltd Tel: +44-455-250266 (24 boon) 
Tsx: +44455-890821 
LONDON 


JUNE 16 -JULY 19 
BUILDING GLOBAL 
EXCELLENCE 

CBI/8 OC Seminar Series for Senior 
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tr m nwt rta i rvw (0 nwf (be ■m»in«in , iivwl 

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Cteuacc Georgina Kingaby 

Fax: 071 497 3646 

VARIOUS 


JUNE 21 

-MYTHS AND REALITIES' 

NEW BUSINESS OPPORTUNITIES 
IN INDIA 

The Foremost Coaferesoe ou India pom 
1994 tixSan budget, bringing together a 
high profile delegation of leading 
Government, Legal and Borises experts 
Bom India and Britain. Auspices of the 
DTI 

Carton Corporation 

TeL 081 577 7713 Fax: 081 813 8136 

LONDON 


JUNE 23 

TOTAL INNOVATION 
MANAGEMENT: IDEAS INTO 
ACTION FOR IMPROVED 

PERFORMANCE ft FROnUNUTY 

Innovation manes. Directors know this. 
The question is bow to engineer your 
Otgnmadon far the appropriaa levels Of 
innovation. This coefraenee, chaired by 
Robert Heller is organised by The 
Strategic Planning Sodcty. 

Contact: Jo Mainee, The Strategic 
Ptornng Society Tefc 071 636 7737 
LONDON 


JUNE 29-30 

EUROPEAN CAR INDUSTRY: 

fighting tor Survival - Is Leasing 

the Answer? 

Key officials from ADT, Avis, ALD 
Leasing, B8V Leasing, Dial tela. DeMs. 
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Aasocbtico, General Motors, Immlcaring 
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Volkswagen defcste the above issue. 
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LONDON 


European Study Ccnforescra 

Tefc 071 386 9322 Rne 071 381 8914 

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JULY 7 

HitnjJYiejriAWCOffSWCE 

Issues: Pan-tnne workers; Redun da nc ies 
Direct i ve : Acquired Rights Dnccdve; key 
employ m ent law decisions due faadneaty 
tom appellate ccairts. D feringiHshed rpeaker 
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dm ul opmcnta, offering {natal rotations A 
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Enropete Study Conference 

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LONDON 


JULY 19-14 
CUBIT SERVER TM 
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Keynote and Seminar Chairman: Martia 
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C o ma c t: Unkom So ahm a 
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LONDON 


JUNE 7-9 

RoSPA SAFETY ft HEALTH 
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BmopeU Ingest ammsl Safety A HeaU 
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year. Will provide vital information on 
health and safety legislation aa well as 
products and services which «BI enable 
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INTERNATIONAL 


JULY 4 -8 

THE JTT/KAEEN WORKSHOP 
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techniques, in a real factory- Free video 
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Onct Sarah Baby. Krinm faStaeofBxnpe 
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SOUTH WALES 


JULY 14 

EC COMPETITION LAW 
This one day workshop will analyse the 
basic principles of Artiela 85 (uri 
competitive agree ments) and artiela 86 
(abuse of mutes, power) and iatoflaotaal 
property rigta Interspersed whh practical 
workshop session* on distribution 
agreements and patent licences. 

TeL 061 4458623 Fir 081 446 2051 

LONDON 


JUNE 1-9 

CtBIA ELECTHC POWER 
MDUSTRY FORUM 

At thb conference 20 Chinese power 
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on tiro fast devolopmoats an power 
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day 3 semi-private meetings will be 
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Tel: 3100*5090 Itoe 31-30680915 - 

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JUNE 17 

COMMStCIAL AGENCY - 
Through Ihe Legal Maze 
CB I/Norton Rose bslf-dsy seminar 
eooshfere inrpHcitjoos of changes to the 
law for businesses operating through 
agents and provides guidance oa 
D^BtiBlfab drafting and litigation. 
Contact Sandra Aldred, CBI Cnfereuora 
TefcOn 3797400 Fax: 071 497 3646 
LONDON 


JUNE 21 

UNDERSTANDING THE HEDGE 
FUND RISKS 

This high-tevel seminar will assess dm 
dasgett posed by hedge funds to banks and 
o the r Bnsiufsl cuuntapsrtics. To^dcx robe 
covered mdnde: Ifcdgr fond sftneflns and 
thrir petfotasance; erafasriug hedge funds 

as counterparties; and aspects of risk 
management q fticHlSa 

Coetacc: Altatm E^se, Dow JaaeTdonts 
Tefc 071 832 9532 foe 071 353 2791 
LONDON 


JUNE 23 

TOTAL INNOVATION 
MANAGEMENT: IDEAS INTO 
AC1TON FOR IMPROVED 
PERFORMANCE A PROFITABILITY 
Innovation irattrm, Directors know tUs. 
The question is how to engineer yaw 
or g a wtatm n fat the tfgxopriaie tends of 
innovation. This one-day c o nference, 
chaired by Robert Heller fa bang nm by 
The Strategic Planning Society in 
association with Henley Management 
Come and the lonovilkni Centre Europe. 
Contact: Jo Mainee, The Strategic 
Planning SocadT Tefc 071 6367737 
Fax: 071 323 1692 

LONDON 


JULY5&6 

NCC94 'EMPOWERING THE 
ORGANISATION* - 
The Business of IT 

This conference win foens on practical 
advice on how new and evolving IT 
SOhSktos ere bong ned to develop eflctriw, 
roaHrorid. harne ss strategies. NCC94 is 
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Tefc 061-228-6333 or Fax: 06l-236-«049 
LONDON 


JULY 7 

the ESserriAL spark - 

How Leaders UnJodc Energy 
The first in the 1994 Industrial 
Society /APT Directors' Workshop serin 
to help sonor leaden experiencing change 
identify blockages to corporate energy, 
remove them, and enetgise etgnoMtions. 
fassnmgTaiy Margn, Maa^ugDlroaorof 
Land Rover Vobjctis. To book, contact 
Tefc 021-452 IQ30 

LONDON 


JULY20&21 
FT EUROPEAN 
TELECOMMUNICATIONS 

This Con fe re nc e will taurine the 
topUcskro of the cumeot Cfendl and (be 
potential business opportunities, in the 
indatry dsc lo HwalWarion, pnratbettei. 
onrfetilteB and fas icwMao kt nmUmedb. 
enquiries: P ba nci fl i T hors 
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LONDON 


JUNE2&-27 

A POWBffTJL GLOBAL ALUANCE 
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NtMA lutaraatlonal'B intenjationsl' 
conference featuring tap diroa resporw 
tefevUen exccntives from North Anteta 
and Europe. In-dopUi disauslon to 
regulatory issues and entrant DRTV 
troth, fallowed Iqf sue wmfcMp sesitote - 
Contact: Vivien Wallace 
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•No* sfiGBrtnd whh Nkfacdends holtale .. 
farMarterinx. 

AMSTERDAM 


JULY 12 

PAHT TIME WORKERS - 
FULL TIME PROBLEMS 

This conference focuses ou problems 
feeing employers seeking to otpaiid ifarir 
part time workforce. It offers procrirai 
advice <m and aobstioos for impfcnwiiting 
a part time workers strategy and for 
piarinriiing the efficiency of a part tinw 
workforce. 

For farther mfatmatiqa 

Tefc 061 445 8623 Fuc 061 446 2051 

LONDON 


SEPTEMBER 28/27 
EUROPEAN EQUITIES 

MVESTMafTKANAGEIBfr 

Major international conference on pan 
European investment strategy 
Bawpa a pavat fe adtnv cmngfag Europe, 
latest in equity dntadm, TAA models, 
analysis of the growth of fan fasdmtioaal 
»d inventor ban In Europe and factadfag 
Iticomttryftecsorwoekslnps. 

Contact AfaoqBgK DowJaaesTelcmie 
Tefc07l 8329532 Fte 071 M3 2791 


June 28 & 29 
EUROSECURITY ^ 

IT Security, Industrie! BsptaOIgS «nd 
Fraud Prevention Conference. TV 
i nt enution a i meeting ptroe far ceaqm? 
tteadiveaoomxratowtan'secn ri^A" 
sspccta of IT protection wifl .be erowto 

bywottefenmedapattM'tt’J*"**, 
Saddld Gferitrie de Dferiappanat SX‘ 


fta (+322 51246 S3) 






named Mr William Gray, a 
rejected former congraauym 
to be the US's sew special 
envoy on Haiti. 

But the US won dsnifleant 
eatoemBntftffttsnewpo&y 
towards refugees, which 
involves tearing: their chums 
to asylum at sea, when Mn 
Sadako Ogata, UN High Gam- 
mlsstonBT for Refugees, prom-, 
bad her agency's assistance in 
processing Haitian emigrants. 

The US has chartered a 
Ukrainian cruise ship aa a pro- 
cessing centre at sea. bat ter 
Clinton last weak rated with 
Mr John Major, Uu British 
prime minister, the possibility 
of using some uninhabited 
islands to the Turks and Cai- 
cos archipelago, a British pos- 
session. 


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FINANCIAL TIMES MONDAY MAY 23 1994 


NEWS: UK 


Quest starts 
for Smith’s 
successor 


By Kevin Brown 
and Andrew Adonis 

Mr Gordon Brown, shadow 
chancellor, launched his rfaim 
to the Labour leadership with 
an appeal to traditional social- 
ist values yesterday as the 
shadow cabinet split between 
the three main candidates. 

Mr Tony Blair, shadow home 
secretary, will launch his can- 
didacy in a speech tomorrow, 
as unofficial campaigning 
accelerates following the burial 
of Mr John Smith, former 
leader. 

In a surprise development, 
shadow cabinet support is 
dividing largely between Mr 
Blair and Mr Robin Cook, 
shadow trade and industry sec- 
retary, with Mr Brown third. 

Mr John Prescott, shadow 
employment secretary, has no 
support In the Shadow cabinet, 
although solid backing fur his 
candidacy is emerging amnwg 
trade union leaders. Mr John 
Edmonds, leader of the GMB 
general union, praised Mr 
Brown and Mr Prescott for 
their commitment to Labour’s 
policy of full employment. 

Mrs Margaret Beckett, acting 
Labour leader, also appears to 


be without support Mrs Beck- 
ett has not decided whether to 
run. but is expected to con- 
tinue as deputy leader. 

Shadow ministers are refus- 
ing to endorse candidates pub- 
licly, in line with a shadow 
cabinet ban on campaigning 
until after the European parlia- 
ment elections on June 9. 

The level of support for Mr 
Cook is likely to hamper 
efforts by Mr Blair’s camp to 
persuade him to withdraw 
from the race and offer his sup- 
port to the shadow home secre- 
tary. Mr Cook has not decided 
whether to accept a formal 
nomination for the leadership. 

Labour’s ruling national 
executive committee is expec- 
ted on Wednesday to accept 
formal nominations for a four 
or five-week campaign immedi- 
ately after the European elec- 
tions on June 9. 

Mr Brown, delivering the 
keynote speech at Labour's 
annual Welsh conference in 
Swansea, sought to shore up 
his standing on the left of the 
party with a strong appeal to 
“enduring” socialist values, 
and fierce attacks on the City 
of London, privatisation and 
means-testing for pensions. 



Britain in brief 



\ . j ^ C f r* tg - ’■ _ 



Gordon Brown, one of the three leading candidates in the 
leadership contest, launching his campaign at Labour’s annual 
Welsh conference in Swansea yesterday 


Low level of 
coal subsidy 
attacked 

A coal subsidy scheme, which 
helped the gov er nment 
suppress a backbench revolt 

over ptt closures last year, 
has provided British Coal with 
less than £500,000 from 
hundred of mmying of pounds 
that ministers indicated were 
available. 

The figures wiB be used by 
the Labour Party to support 
claims that the subsidy 
scheme was a cosmetic 
exercise aimed at saving the 
jobs of ministers rather than 
miners. However, the 
department of trade and 
industry said the low subsidy 
level is the result of the weak 
market which prompted it to 
implement pit closures in the 
first place. 

The promise of subsidies 
was a c o rners ton e of a 
government strategy last 
March in which ministers 
“reprieved" 12 pits from 
closure while British Coal 
looked for markets for their 
coaL Most of the reprieved 
pits have since dosed along 
with others which then looked 
safe. However, the strategy 
enabled the government to 
defeat an opposition motion 
over its coal policy. 


Railtrack sale 
planned 

The government plans to 
privatise Railtrack. the railway 
infrastructure company, before 
the next election, probably by 
the end Of the 1995-96 financial 
year. Railtrack's price tag of 
around £3.5bn is significantly 
lower than its current 
valuation of £6.5hn. Ministers 
believe the lower price is more 
realistic because of its “high 
public policy risk”. 

Pledge on 
mail pricing 

The government is to draw-op 
legally binding contracts to 
prevent a privatised Royal 
Blail from introducing 
regional price differentials. 

But the possibility of British 
Telecom introducing regional 
phone pricing has swollen the 
ranks of Tory MPs worried 
that the plan to float 51 per 
cent of the Royal Mail and 
Parcelforce could lead to a 
similar development for mail. 

Dam challenge 

The government is facin g a 
challenge in the High Court 
over its funding of the Pergau 
Dam in Malaysia. 

The World Development 
Movement, a lobby group for 
the Third World, wifi today 
launch an application for a 
judicial review of the decision 
taken by Mr Douglas Hcnd, 
Foreign Secretary in 1991 to 
fund the dflm WDM claims 
that “the purpose for 


allocating the f unds for the 
Pergau Dam project was not 
a purpose permitted by the 
1980 Overseas Development 
and Co-operation Act” The 
act states aid can only be given 
if its main purpose is the 
economic benefit of a country 
or the welfare of its people. 

Mr Hurd has defended his 
decision on the basis of "wider 
considerations". 


MPs hours 
reviewed 

A big reduction in the number 
of hours that parliament sits 
could be implemented within 

months ami d signs that the 
government and opposition 
are set to make progress In 
talks on the issue. Concern 
over HP’s heavy workload 
was highlighted by the recent 
death of Mr John Smith, 
Labour leader. 


Child labour 
allegation 

Most of the UK's local 
education authorities are 
failing in their duty to police 
rhiiri labour and their 
regulatory responsibilities 
should be transferred to 
environmental health 
departments, says a report to 
a conference of the 
international Association of 
Labour Inspection in Tunisia. 

The UK has met with 
resistance in the European 
Union to its attempt to secure 
an opt-out from a European 
directive controlling the 
number of hours children can 
work. 


Polls may flatter Labour, but a landslide is in the making 


The result of the European elections 
is hard to predict 
The low turnout and the likelihood 
of tactical voting present special 
problems to pollsters. There will be 
relatively few surveys during the 
campaign. There may not even be 
any exit polls to tide public curiosity 
over the gap between the vote on 
Thursday June 9 and the count three 
days later when all the other coun- 
tries have cast their ballot 
Conservative prospects are bleak. 
Recent nationwide polls are naming 
about 45 per cent Labour to 25 per 
cent Conservative and 25 pm- cent 
Liberal Democrat. The local elec- 
tions yielded 41 per cent Labour, 27 
per cent Conservative, 27 per cent 


Conservative prospects in the European elections are bleak, writes David Butler 


Liberal Democrat Recent experience 
suggests opinion poll figures may 
flatter Labour. 

Nonetheless, there is no doubt 
that a Labour landslide is in the 
making. But what will happen in the 
Conservative seats of the south of 
England? How far wfil the Liberal 
breakthrough go? In one Westmin- 
ster sweepstake this week a group of 
insiders this week ranged from no 
Conserv ati ve losses to a total wipe- 
out 

Different analyses of the local elec- 
tions and of two opinion polls taken 
just before the death of John Smith. 


the labour opposition leader, give a 
clear range for the likely diririon of 
the newly-redrawn UK Euro seats. 
The Conservatives, who won 32 seats 
in 1989. are forecast to gam a maxi- 
mum of 20 seats thin time a 
minimum of eight. Labour, which 
won 45, is given a maximum of 66 
and a minimum of 52, and the lib- 
eral Democrats a maximum of 14 
and minimum of three, 

But these figures take no account 
of tactical voting. This may operate 
very differently in the Euro constitu- 
encies from the way it operated in 
the local elections or in response to . 


the hypothetical questions of the 
pollsters. 

There are almost 20 seats where 
Labour voters have a Car better 
chance of ousting the Tory MEP If 
they vote Liberal Democrat than if 
they stay loyal to their party. The 
outcome will turn on the success 
achieved by the liberal Democrats 
in educating fliem to this fact over 
the next fortnight 

The Tories have Ieakwl one inter- 
esting figure from their private polls. 
45 per cent of the electorate say they 
are "certain to vote", hi 1989 the 
same poll said 35 per cent and 


proved to be exactly right. But who 
will the 55 per cent of non-voters be? 
If they are a representative sample, 
drawn proportionately from aB par- 
ties, abstention will not matter. But 
it will be a very different story if 
disillusioned Tories go “on strike". 

A 45 per cent turnout, although 
the lowest in Europe, may seem high 
in a country where only 11 per cent 
can name thei r MP, only 27 per rent 
recognise the name of Jacques 
Delors and less than 50 per cent 
rfahn to know of the European par- 
liament. 

Perhaps the most interesting poll 


so for was a community-wide one 
provided by Mori for The European 
newspaper. Only three of the 12 
countries (Belgium. Italy and 
Greece) showed a significant major- 
ity wanting a United States of 
Europe. Denmark (74 per cent to 11 
per cent) and, surprisingly. The 
Netherlands (73 per cent to 21 per 
cent) showed an even greater major- 
ity against the idea than the United 
Kingdom (68 per cent to 17 per cent). 
In no country would a majority vote 
in a referendum for leaving the Com- 
munity although, as export e d , Den- 
mark @3 per cent in. 35 per cent out) 
and Britain (52 per cent in, 36 per 
cent out) emerged as the most scep- 
tical members. 


Tax probe 
into wine 
and diamond 
bonuses 

By Financial Tknes 
Reporter 

An angry Mr Peter Lilley, the 
Social Security Secretary, has 
ordered an investigation into 
allegations that some 
companies are avoiding 
National Insurance contribu- 
tions by paying staff bonuses 
in diamonds or wine and even 
by way of life insurance 
schemes. 

The move comes only seven 
months after Mr Kenneth 
Clarke, chance llor, announced 
in his Budget measures meant 
to prevent employers legally 
avoiding the 10.4 per cent they 
pay in National Insurance on 
staff bonuses. 

In Mr Clarke’s words compa- 
nies had been “rewarding staff 

with gold bullion, coffee beans, 
cowrie shells and other exotic 
payments in kind". 

However, by Insisting 
that National Insurance was 
to be paid on any bonus paid 
in the form of “a traded 
commodity on a recognised 
exchange," Mr Clarke left 
a loophole. There are no 
such exchanges for diamonds 
or wine. 

The Mail on Sunday newspa- 
per drew attention to the issue 
again yesterday and also 
pointed to a new avoidance 
scheme using life insurance In 
lieu of bonuses. 

This involves a company tak- 
ing out life insurance policies 
which are then signed over to 
employees. The company pays 
premiums into the policies and 
the employees cash them in 
after a short time. 

National Insurance avoid- 
ance are particularly 

attractive to City companies 
that pay large annual bonuses. 
The Mail on Sunday claimed 
that 70 per cent of the £500m 
paid in this way by City organ- 
isations this year made use of 
avoidance schemes, thereby 
costing the government 
£38.4m. 

The department of Social 
Security said yesterday: "There 
will be an investigation. 
Clearly, if there are still 
loopholes and significant 
stuns of revenue are being 
lost we will take it very 
seriously." 


THE WEEK AHEAD 


DIVIDEND & INTEREST PAYMENTS 


■ TODAY 
Bmmora ML 276p 
Bren M. 24p 

BrttM*-Bomoo PflCrotoun Syncfcten 4.433p 

BfflMi Moll* Mp 

Cenon S.SH My*. 19*0 VG80.O00 

Da b-BMk Nt* 19*1 ¥666.000 

CUP AmomoMe Rocrt rotai 8e cu k taet ion 

NO. 3 Cfcm A Utp. FWMflflB 034.41 

Da MEaMfflN 199H 05 BSO 

Emms 0 lp 

Export-Import Bar* of Japan 8% GM. Woe 
MO 

Rw Ai m— CM* FW *0.40 

Beta Sm Z*o Sec. FUN 2000 *850500 

Grampian HWff*. 

wu w aNhrcmtaM lt. 2p 

London A St Lawrence Iw. Co. 3.13> 

lSuTosjc Una 0% 1900 YWM.000 
Sauoy Hot*iA35p 
Do H I no 

SundnM (Borough 0Q IH»» ftt =008 13575 
Dim FmMib 53p 

T»kM A Tobago Pop. oQ tsu* Lit 2009 
CB 125 

LbuMFrienrfy lip 
Da B (R— Vlg) tip 


■ TOMORROW 

AM Mdi Bank Undated VM.RmNB. *12052 
DMM 5 BbUtoV Bldg. Soc. Si*. FRN 2005 
€14254 

Brawn Gip. QO0D 

QmedsM Sank mum Senior FRN W5 
*577*3 

Oemuk gangdom bQ FTM 198* Cl 33. 44 
BWOk CMb Ctay T34p 
TeMonoknebalaaM Eneason fi SKM50 
Fu tea bw. Ca OBI FW4 1096 *064.17 
moM Cfemp 03p 


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HUMI ThW Fkvnce (Asia) Rip. to Fhad 

Rata Nta. 3001 &017.40 

MoRal05p 

Moray M. Tat 15p 

M.Y. Was. CLbp 

Muk—f Wootmtaatar Baifc ADR *1,343 
NoOonwklo BUg. Soc. BM 1M5 *0133 
Northern Rack BUg. Soc. FUN 1*94 CI3156 
RoyJ Bark of Canada 9029 

Secua TO. 105p 

ShnB Trend. & Trading Ca 1&Bp 

Stougn Esteem Sp 

Sun— & Vine 15p 


■ WEDNESDAY MAY 2$ 

Aegon FL25S 

Muromum Ga a( America 5OA0 
ikadtod A Bwgtey BMg. Soc. FW4 1990 E131JD 
Bnteh Font* SVS Tie— 20*0 C1JC8B 
Cornp a aoo fi nancero O Uu mone FFr1250 


KWOJp 
Dead Sea Mate MS0164 
Do Been ComoUated MM Linked Unite 
*056*396 
Eaton *030 

Houskig seamOae 6MK oh. 2019 £4.1676 

Men* Lynch A Ca SQ53 

National Wa i tmmaw BM 7H Cm PI C6l25 

Norsk Hydro 1*6150 

Pago (LfefmoQ Gm lip 

Prods— ol Corp. 0.7p 

Top da nmart PKTIO 

TSB GOI Frf. Pig. Rd. PI OMP 


M THURSDAY KAY 3* 
MM FKtrga i-2Sp 
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sooatasrei 


CSFB Flnanoa Old. HVl 20(0 1295* 
Do«>t*n Packaging 2Jp 
BMlOSSp 

Forte 6*% B— C*. Beta. 200* CSSJ5 

aR.fWdgaJ0.4p 

Jacobs Udei U1.4p 

JupttK TyndoA 7p 

KodeMLAp 

Kuonmw Frae A NKiS50 

DaB.Mbfi50 

Liberty &3Sp 

Da NotFVIg. 555p 

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UAw ADR SI JOB 


UK COMPANIES 


MMY 

PANY MEETINGS: 

rty HMgo. Tha Ho—rt HoM, 


i. Place. WXLi OOO 
M (SJ. 5th Fbor. Sown QuW Plaza 183 
■ Wd. Wad Doga E. 1000 
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1250 

Booker, The Berbra-Surganns Hal. M o n h — 6 
Squara.EC.. 350 

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128 King Haraya Road. N.W. 13JW 

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SoOad. Waat Udanda 1150 

BTa Ouean Ektabetti 9 Coraeranee Centro, 

Broad Sntusy. S.W. 1150 

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COMPANY MEETINGS: 

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FINANCIAL TIMES 

10MMM ■ PARIS • FRANKFURT - MEW YORK - TOKYO 


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THE BEST BUSINESS LAW STUDENT 1994 


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Your application form must arrive by 3 1 May 1 994 






FINANCIAL TIMES MONDAY MAY 23 1994 


MANAGEMENT 


Japanese companies 
squeeze their white 
collar workers 

The tradition of jobs for life is forcing Japan's 
bosses to look at novel ways of getting more out 
of their office workers, writes Emiko Terazono 


I n Europe and the US companies sim- 
ply cut staff. But in Japan - 
where the tradition of lifetime 
employment remains deeply 
ingrained - the inexorable global 
trend towards flatter corporate hier- 
archies is posing an awkward chal- 
lenge. 

So far, the restructuring of Japan's busi- 
ness sector has focused mainly on cutting 
production lines and paring manufacturing 
costs. But during the past few months 
attention has switched, as it has elsewhere 
in the world, to the difficult issue of how to 
reduce the many layers of white collar 
workers. 

The methods chosen by the Japanese 
have been necessarily different from those 
employed by western counterparts. 

Some of Japan’s blue chip companies 
have been forced to announce sackings and 
early retirement plans. But the public out- 
cry has been so great that others are now 
trying to find new ways to increase the 
efficiency of their existing white collar staff 
without getting rid of them. 

Some companies, for example, have tried 
to deal with the problem by shifting 
unwanted employees to subsidiaries or to 
smaller client companies. Others, such as 
the leading consumer electronics company 
Sony, are trying to introduce a more Japa- 
nese solution through comprehensive re- 
organisation schemes. 

“For the first time in decades, Japanese 
businesses must rethink their functional 
priorities.'' says Shin taro Hori, director of 
Rain & Company Japan, the management 
consultancy. 

Sony's plan, announced in March, is 
intended to tackle a bureaucracy which 
appears to have been seriously hampering 
the company’s decision making. 

The company has therefore reorganised 
its 27 departments and sales divisions into 
eight internal "companies" and cut the 
number of subdivisions and departments 
from 580 to 450. Sony believes this move 
will help to speed up internal communica- 
tions and avoid duplication of projects in 
separate divisions. 

Sony is typical of Japanese companies 
which concentrated on manufacturing effi- 
ciency while allowing executive grades to 
spiral out of control daring the 
1380s. 

For instance, the consumer electronics 
company’s manufacturing headcount 
increased by just 6 per cent during the eight 
years to 1392, but the ranks of its white 
collar personnel swelled by 139 per cent 
over the same period. Matsushita Electric 
Industrial, another large Japanese con- 
sumer electronics company, cut the size of 
its blue collar workforce by 24 per cent in 
this time, while its white collar staff rose by 
47 per cent 

However, given the continued decline in 


corporate gaming * ; and the of further 
room to cut production costs, companies are 
now finding that their bloated management 
bureaucracies are proving an unacceptable 
burden. The competitive disadvantage was 
illustrated by a Japan Productivity Centre 
survey in 1392, which found that Japanese 
manufacturing companies would have to 
eliminate 39 per cent of their head count to 
reach overall US productivity levels per 
employee. 

Moreover, until recently, Japanese con- 
sumers indirectly subsidised low white col- 
lar productivity through higher prices far 
goods and services. However, the recent 
pressure an prices, arising from the slump 
in consumer confidence mid new attitudes 
among shoppers towards discount retailing, 
have squeezed profit margins, thereby elim- 
inating the "fat" which effectively subsi- 
dised inefficient performance. 

Matsushita, which also implemented its 



corporate reorganisation last February, will 
move 300 administrative staff to its sales 
divisions, and reduce its 48 business divi- 
sions to 10. Susumu Ishihara, director of 
Matsushita, says the layers of administra- 
tive managers had caused the company to 
misread the market and to miss profit 
opportunities. 

To measure its rise in productivity, the 
company has pledged to increase its ratio of 
pretax profits to sales from the current L4 
per cent to 5 per cent over the next three 


years. Similarly, Sony is also pushing its 
managers for more efficient use of c apjfoi- 
“Each company president will be responsi- 
ble for not only the profits and losses, but 
also for the balance sheets of the organisa- 
tion, including the return on equity," says 
Tamotsu Iba, Sony’s executive deputy presi- 
dent who masterminded the company's 
reorganisation plan. 

While some companies are trying to raise 
white collar productivity through structural 
changes, same are placing stricter quality 
requirements on their managers. 

Honda, the automobile maker, recently 
announced that it would place a time limit 
on managerial posts. Starting from June, if 
a manager fails to be promoted within 12 
years, he or she will be forced to a 
iion-managerial post without subordinate 
staff 

The plan baa provoked criticism among 
the Japanese media and business analysts, 
but Honda says that it is trying to provide 
more opportunities for its younger staff and 
to improve the productivity of its 
older managers. According to the company: 
“It’s tough on the older workers but the 
younger employees are welcoming the 
move." 

S purred by this productivity drive, 
more and more Japanese compa- 
nies and employees realise that 
the old definition of office work is 
no longer vaUd. 

Tasks such as w r itin g reports and filling 
forms have been traditionally regarded as 
office work, but the concept of white collar 
workers actually adding value to products 
or services has been absent 
Hori points out that Japan’s business 
leaders have first to define what they mean 
by productivity of office work, set targets 
for Improving it, and try to add value 
through Strategic planning by rnntpanies 
and industries. 

Ultimately, business leaders will need to 
set new ground rules for employees, as the 
traditional social contract breaks down. In 
the past companies guaranteed workers a 
path up the corporate hierarchy in return 
for loyalty and service. In situations where 
"bucho" or division managers find them- 
selves losing their titles and becoming ordi- 
nary staff companies need to map out a 
new direction for them. 

In the meantime, more companies may 
have to face up to the inevitable - the 
reduction of overhead costs, western style. 
While many leading Japanese companies 
will continue to resist the concept of sack- 
ing staff they may not achieve successful 
results without wielding the white collar 
axe. 

“The magnitude of excess Is too large," 
says Hori. “With too much organisational 
slack, bringing in new values is impossible 
to achieve in the short term.” 



A Sony manager’s tale 


S ony’s reorganisation has been good 
news for Yoshihfiro Yanagtmoto, a 42- 
year-old general manager of one of 
the group’s eight new in-house companies. 

The reshuffle has streamlined his respon- 
sibilities, which previously included devel- 
opment and marketing of any sort of prod- 
uct linked to personal information 
hardware from personal computers to 
CD-Rom. “There was never a dear sense of 
direction because everyone was i n volved in 
everything," he says. 

Now he is in charge of developing per- 
sonal communication hardware around 
Magic Cap, a new communication software 
that integrates electronic mail, facsimile, 
telephones and paging systems. The other 
assignments he previously bold have been 
shifted to the In-house Computer Systems 
Business Company. 

Yanagimoto says this has allowed him to 
concentrate on the planning and develop- 
ing of one theme. It has also meant that 
Sony itself is more focused on its plans in 
the next generation information and com- 


munications area. Meanwhile, the creation 
of internal "companies" has shifted power 
to the heads of groups from the central 

ailtninic i railing. 

"We are having to deal less with the 
c o rp o ra t e headquarters since most of the 
decision making is done within the 
[in-house] company," says Yanagimoto. 

The removal of extra administrative lay- 
ers has also meant that decaakms raarie at 
headquarters rather than the individual 
internal companies are processed mnr-h 
more quickly than before. *T was always 
aware of the size of the company getting in 
the way of new business decisions,” he 
says. 

Sony's changes have not worked well for 
everyone. Unlike Ya n agimoto. who has 
retained his old responsibilities in the 
same product area, and looks over the 
same number at subordinate staff, same 
managers have been given completely new 
assignments without staff directly under 
them. “There are some people who are dis- 
couraged with their new mission," he says. 


Weird and crazy world of Tom Peters 



O n my desk Is a photo of 
world famous management 
guru Tom Peters smiling 
broadly in a pair of pink boxer 
shorts. The picture has been taken 
for his forthcoming book Crazy 
Times Call for Crazy Organisations, 
an ambitious work aimed at every- 
one from the chief executive to the 
janitor. 

In an accompanying letter sent by 
Peters to “various friends" in the 
media, he explains that the idea of a 
$15 book for those who cannot 
afford his $2,000 seminars “felt right 
- very, very right". He also warns 
that book is going to make readers 
angry. Before 1 have even opened 
the covers I am a feeling annoyed, 
though not perhaps in the way the 
author intended. 

The title gets on my nerves a lit- 
tle: the picture, a lot Why is it that 
management gurus feel the need to 
grow their hair, wear kipper ties or 
have their pictures taken half 
undressed? Perhaps the sad truth Is 
that most people will not buy 
books about organisational struc- 
tures unless a zany personality is 
thrown in too. 


The thesis by which Peters hopes 
to enrage his audience is that there 
is no future for sane companies in 
this insane world. 

Organisations must go beyond the 
management crazes they are now 
grappling with - re-engineering. 
TQM, empowerment, change - and 
enter an era of revolution and rdn- 
vention. 

He may be quite right but I am 
worried about his premise. Why 
does he think these are the craziest 
times for 200 years? They strike me 
as being sane enough, if sometimes 
a little grim. I'm not sure I like his 
recommendations for Individual 
behaviour either. He urges us to 
behave like entrepreneurs building 
portfolios of gfeOTs and marketing 
our wares. We are also advised to 
use words like “apeshit". “weird", 
and “freaky". 

This sounds like a recipe for Tom 
Peters clones. He certainly has no 
problems when It comes to selling 
his own wares. He has already put 
in a plug for his next book which he 
says will be a “Wit and Wisdom" 
format and should be with us in a 
matter of months. I hate to think 


which item of clothing he will takq 
off to market that one. 


McKinsey, the management consul- 
tancy which prides itself on the 
quality of its analysis, is being 
alarmingly thorough in its latest 
recruitment efforts. It is looking for 
accountants with top degrees, flaw- 
less professional qualifications, and 
up to seven years’ glittering experi- 
ence in the real world. Anyone 
answering the description should 
send in a foil CV including their 
grades in the A-level exams they 
did at school. 

Come off it, McKinsey. Is it really 
relevant what an experienced, top- 
flight accountant was like at 


school? If so why stop at A-levels? 
What about O-tevels? Or those new 
exams that 7-year-olds do? Why not 
find out when they took their first 
steps or counted to 10? 

As I fluffed my own A-levels, it is 
natural that I am a little sceptical. 
But I'm sure Tom Peters would 
agree that what sorts out successful 
people is that they go on learning 
and reinventing th ems elves. 


The issue of oldies in the board- 
room has surfaced again following 
the appointment of 72-year-old Sir 
Michael Palliser to the board of 
Exploration Company of Louisiana. 
Ageist remarks about the choice 
have made some Veds (Very Elderly 


Directors) quite cross. Roland Shaw, 
the 72-year-old chairman of Premier 
Consolidated, wrote an irate letter 
to tire Financial Times pointing out 
that the great Annand Hammer was 
in his nineties when he stepped 
down at Occidental Petroleum. 

Now I am sure that veteran diplo- 
mat Sir Michael will do an excellent 
job helping this little, loss-making 
oil company in its search for the 
black stuff in China. I also agree 
with Shaw that some directors stay 
on the ball tar a long time. I would 
not have chosen Hammer as an 
example, though. His many critics 
would say he was a raging megalo- 
maniac who spent more time fur- 
thering his own reputation than 
that of his company. 

However, as a general rule, 70 
does seem is a bit old for a seat on 
the board. As people get on in years 
they get less willing to embrace 
change, while nortexecs who have 
retired from executive jobs have 
less relevant experience to offer as 
time goes on. 

There is, of course, no point in 
being too dogmatic about it. The 
ever youthful Sir John Harvey 


Jones with his flowing locks (and 
kipper tie) has just reached 70 and 
has said now is the time to stop 
being a non-exec. Meanwhile, Lord 
Weinstock, his exact contemporary 
at GEC, is showing no immediate 
signs of passing on the mantle. 


Mary SptUane, who makes a hand- 
some living telling western busi- 
nessmen whether single or doable 
breasted suits better flatter their 
physiques, is now planning to set 
up in Russia. “The new Russian 
eUte wear shiny suits which don’t 
fit properly. They look very greasy, 
flash - not trustworthy. They need 
a lot of help," she says. 

Same might say that the idiosyn- 
cratic dress sense of Russia's new 
businessmen is not the most press- 
ing of the country’s problems as its 
economy goes into free-fall. Yet 
Splllane is raring to go, and has 
lined up a grant from the Bank of 
Siberia and found a partner who 
used to be the Visa Officer at the 
Russian Embassy hi London. 

Perhaps Peters is right These are 
crazy times, after alL 



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aceimiittnyyotdr'. .^- 
“There aretwp quite dfffereai 

hare to : 

be Napoleon. itoarybody 
ccsKsnfratesmitiBTnifitary 
aspects and forgets that In his sparo 
time he devised thewficte'oftbe 
dvft code- in Fiance. As for a living 1 

Td prefer ^ to be amHxfcyinan, - 
Or womahiham a culture I knew.-, ,y ; 
lfttie about frora a remote part of , : - 
Orfna or Latte America, for . . . 


*/ 














FINANCIAL TIMES MONDAY MAY 23 1994 


WORKING LIFE/SPORT 


HEALTH 


Marks gets a 
measure on stress 

Everywhere you look, someone 
is promising to take your stress 
away. Consultants and hggH h 
centres offs: hypno therapy , 
relaxation tapes or mad baths, hi 
this atmosphere. It is easy for 
companies to asson^ that their 
employees will take care of stress 
on their own time. But when does 
stress become so severe it is 

a company's responsibility to take 

notice? 

“The scenario when 
disappears from work, or when 
the men in white coats show up, 
is an extreme sign that stress has 
become unbearable,” says Paul 
Litchfield, assistant registrar at 
the Faculty for Occupational Health 
in the Royal College of Medicine. 

But stress is s omething that 
mounts, and some companies 
believe that the time to act is long 
before things get bad. Marks and 
Spencer, the UK retailer, hay just 
piloted a “Managing Pressure" 
programme, designed to teach 
employees, from senior 
management through to the shop 
floor, how to cope with an 
“unprecedented" set of pressures 
from inside and outside the job. 

“We thought it would be better 
to get to people in training 
programmes while it was stm 
pressure and not stress,” says Sally 
Young, executive for health and 
welfare at M and S. 

Dr CeUa Palmer, a former 
member of M and S’s head office 
occupational health staff, and Steve 
williams , an or ganisational 
psychologist at Resource Systems 
in Harrogate, Yorkshire, designed 
the programme, which was piloted 
last October among 17 supervisors 
and sales assistants in one of the 
company's Midlands stores. 

palmer and Williams based the 
programme on the Occupational 
Stress Indicator*, a questionnaire 
that gives individuals a 
comprehensive picture of their 
“stress profile". Respondents 
answer 167 questions on job 
satisfaction and personality, such 
as: "Generally and at work, do you 
usually feel relaxed and at ease 
or do you tend to feel restless, tense 
and find it difficult to settle down?” 

Resource Systems produces a 
three-page report on all the sources 
of an individual’s stress. For M 
and S, Williams and Palmer have 
developed a “workbook” which 
would advise employees on how 
to deal with the pressures identified 
by the OSI, and a workshop to 
advise employees on how to cope 
with the issues raised in the OSI 
and the workbook. M and S plans 
to train managers and occupational 
health advisers to facilitate the 
programme. 

The workbook offers some 
familiar stress reduction methods: 
relaxation te chniq ues, physical 
exercise, hobbies, tapes, yoga. It 
also suggests strategies for time 
management, improving 
relationships with colleagues, and 
coping with corporate change. 

Litchfield warns a gains t 
companies using such programmes 
to let them off the hook. “It is very 
easy to concentrate on how stress 
affects the in dividual," he says. 

"But really yon have to go back 
and see how the company 
exacerbates stress. Just telling the 
person on the shop floor to listen 
to some relaxation times is not 
going to address the source of the 
problem." 

Palmer says. In M and S’s 
programme, workshop facilitators 



win find out what employee 
concerns are and feed the 

info rmation up to raanagarngnt. 

hi March _ pmtiri paTihi in the pilo t 

filled in the OSI again. Williams 
found that their job aHafapHnn 
had improved by about 9 per cent 
Now the company has to figure 
out how to evaluate the 
programme’s effectiveness. 
Individual progress can be 
measured by the OSI, but 
measuring the bottom-line return 
on investment for the company 
is mare difficult. 

To date, the company has spent 
£40,000 on developing the 
progra m me and expects to spend 
another £100,000 for a full launch. 

M and S ultimately hopes to 
measure changes in sickness 
absence, staff turnover, accident 
rates, customer satisfaction, and 
employee productivity. But 
W illiams says: “There are not any 
panaceas here. We are not trying 
to remove all stress or pressure. 

The programme has limited 
objectives to help people manage 
pressure. We know there is a 
relationship between pressure and 
productivity so we are hoping that 
these kinds of things will come 
out in the measurement figures 
as we put these programmes into 
more stores.” 

*The Occupational Stress Indicator 
is available firm Resource Systems, 
Clan Court, Claro Road, Harrogate 
HG1 4BA TEL 0423 529529 

By Motoko Rich 


FINANCE 

How to cut that 
car tax burden 

If you are paying more tax than 
last year because of your company 
car, there are ways of reducing 
the burden. 

Under the new car tax system 
introduced in April, employees pay 
tax on 35 per cent of the 
manufacturer's list price of the 
car when new, plus the price of 
any accessaries and value added 
tax. (Drivers with personalised 
number plates can now heave a 
sigh of relief - the Inland Revenue 
recently confirmed that these do 
not qualify as accessories.) 

Buying a second-band car will 
not help reduce the tax bill because 
you will stffl be taxed on its full 
retail price. However, if your 
company car is four or more years 
old at the and of t-h*» tax year, 
list price will be reduced by one 

third. 

The age of the car is measured 
from the date it was first registered, 
so those registered before April 
, 6, 1991 will qualify for the reduction. 
! in 1994-95. 

The tax burden can also be 
brought down for those who are 
able to increase their business 
mileage. Drivers covering 2^00 
- 17,999 business miles win have 
a reduction of one-third on their 
assessment, while those covering 
more than 18,000 will receive a 
discount of two-thirds. 

So, If the car’s list price 
(including VAT, accessories etc) 
is £18,000, you would be taxed on 
35 per cent of this, that is, on £6^00. 
If you drive more than 18,000 miles, 
the tax charge would be on £2400 
and if the car is more than 
four years old, the taxable amount 
would fall to £1,400. 

Another savings tactic is to drive 
a van. Maurice Parry Wingfield, 
tax partner at Touche Ross 
chartered accountant says: “While 
driving a van will not be to 
everyone’s taste, there are many 
lriwis of ‘van* to consider, faHniting 
four-wheel drive pick-ups, which 
•are often used by people as leisure 
vehicles." 

If none of these ideas work, 
probably because your car is a 
perks car with business usage of 
under 2^00 miles, you may be 
mrwirioring Opting for 3 salary 
increase instead of the car. The 
problem is of course that you will 
be taxed at your marginal rate an 
the increased salary. 

However, if you also need a car 
for your private use, the most tax 
efficient method mi ght be to take 

a smaller salar y iT)rp>a gp. mTnhrnpri 

with an interest free loan from your 
employer to buy a car yourself! 

This is bow it might work, if you 
were buying the car from your 
employer, you would have to buy 
it at “market value” to avoid 
further tax. The loan benefit will 
not he taxed so long as you only 
borrow np to £5,000 and you do 
not have any other outstanding 
loans from your employer. 

Andrew Frape, tax partner at 
chartered accountant Wheawill 
& Sudworth, reminds those r unning 
a private car that charging your 
employer business mileage is 
attractive. Under the Inland 
Revenue's Fixed Profit Car Scheme, 
the employer pays tax-free mileage 
allowances to employees for 
business miles they cover with then- 
own car. As long as the amount 
paid does not exceed the set rates, 
under the scheme you will not be 
taxed on the cash received. 

By Scheherazade Daneshkhu 



STYLE 


Wicker world 

On the face of it, it's hard to see 
how the traditional wicker picnic 
hamper keeps going - being as 
it is, bulky, apt to spike the legs 
of the person carrying it no good 
at keeping things cold and not 
especially strong. Yet it’s hard to 
imaging appearing for 
CUyndeboume, Henley, Royal Ascot 
or a punt on the Cam with anything 
other than the iwaffirian* n] ri wicker 
basket our grandfathers used. 

The two most readily available 
ranges come from Antler (the 
suitcase people) and Optima, a 
Sussex-based company. Both can 
be found in John Lewis, Selfridge’s 
and Harrods, and offer an 
assortment of styles and patterns, 
from Optima's Tropicana 
two-person hamper at around £75, 
to Antler's vast Summer Fruits 
model for ei g ht, costing £850. frl 
between he all manner of two, four 
and six-person designs, inrlmting 
whole willow baskets, split willow 
baskets, baskets with flat or trunk 
liria and baker's baskets. The latter 
are basically little Bo Peep 
hampers, with a large carrying 
handle on the top and two hing ed 
flaps on either side. Affected, 
perhaps, but it does mean there’s 
no risk of the lid bunting open 
and, as one Glyndeboume-goer 
put it “Dumping your coronation 
chicken all over the feet of one of 
your directors.” On the debit side, 
the cutlery of the Antler range can 
look utilitarian; likewise the 
tendency of both manufacturers 
is to put in tumblers rather than 
stemmed glasses. 

No questioning the robustness 
of Swaine Adeney’s fitted hamper, 
however. Swaine Adeney, of 
Piccadilly, does a beautifully-made 
hamper for four persons, at £395; 
or for two persons, at £249. For this, 
you get French porcelain plates 
and mugs, good-quality leather 
fittings, and real exclusivity. Yet 
even Swaine Adeney haa dffficnlty 
beating its Piccadilly neighbour, 
Fortnum & Mason. From The 
Romantic, for two persons, at £135, 
to The Pail MaH at £795, Portnum’s 
offer an extravagant variety of 
styles. 


By Charles Jennings 


Soft shoe shuffle 

They sound like lyricist and 
songwriter or a comedy duo. But 
in fact Eddie Haan and Trafion 
Cole were shoemakers from Chicago 
in the 1920s. like Kleenex and 
Hoover, Cole-Haans are almost a 
generic term to Americans. The 
penny and the fa«Mi loafer for 
instance - both very Ivy League, 
very Scott Fitzgerald - are 
traditional Cole-Haans in the US. 
You can almost see Gatsby patting 
on his scotch grain, moccasin 
construction, cushioned heel 
Cole-Haans before t»hiwcmg fr o m 
that incredible shirt collection. 

Today those handsewn moccasins 
would cost him £149 and be could 
have them with or without tassell 
in many ghad^g of bro wn pnd Marie 
leather, as well as in suede. 

At the company headquarters 
in Yarmouth, Maine, craftsmen 
still concentrate on the artisan 


touches of the Cole-Haan brand. 
These include quality of fit, 
hand-burnishing the leather (which 
brings out its character), intricate 
hand-weaving and hand-tooling 
for Western Boots, British Oxfords 
and what they call ria rei c Bucks. 

Launched at Harrods, Cole-Haans 
for men have only been in Europe 
since late last year, although souk 
of the women’s shoes have been 
available earlier. In the US they 
are worn on every ca mp us, in every 
office and, the ever-popular deck 
shoes, in every resort. 

Cole Boons for women at Harrods, 
Liberty, Dickens and Jones, Bruno 
Hagli, Bond Street and BentaUs. 
Kingston. For men at Harrods and 
Kurt Geiger, Jermyn Street 

By Kathy Phillips, Beauty Director 
of Tatler 


READING MATTER 


After The 
Gold Rush 

Stewart Lansley and the Henley 
Centre. Random House, S20. pp2S9 

It is an old cliche that money does 
not make you happy. It is also a 
pressing political reality that 
economic growth has made much 
of the developed world not just 
unhappy, but bitterly divided and 
socially unstable. This is commonly 
Mamgd on a derfina in spiritual 
values, which may be true but is 
of limited use in policy terms. What 
is needed is a more objective look 
at the phenomenon, which may 
give clues on whether it is 
reversible. 

Stewart Langley's After The Gold 
Rush is a fair shot at a daunting 
topic. The anthnr starts with a grim 
picture of a developed world in 

m-igig mramthip impmploymtmt, 

a widening gulf between tiie rich 
and poor, a dprifnmg belief in 
government and the onset of what 
he terms “the politics of exclusion". 

The root cause, Lansley argues, 
is that rising affluence has brought 
with it a change in the nature of 
consumption. People can afford 
the essentials, and concentrate 
instead rm “symbolic goods", SUCh 
as a flash car oar a second home: 
goods whose essential point is what 
they say, not just about those who 
own them but those who do not 

Together with this has come the 
rise of what Lansley terms 
“competitive individualism”, 
whereby most people seek to shake 
off collective responsibilities. This, 
he suggests, ex plains such 
developments as the tell in top tax 
rates across the developed world 
in the past 20 years, and the drop 
in trade union membership. 

So is there a way out? Ultimately, 
says Lansley, that depends on one 
crucial question: whether people 
will reach saturation point in then- 
demand for symbolic goods. If so, 
they can opt for more leisure, 
altruistic concern for others and 
rational use of scarce resources. 

Will that happen? Only perhaps, 
says Lansley. “There is reason to 
believe such a limit exists, but that 
we are not yet close to it." 

By Tony Jackson 


EATING OUT 


Echikatsu: a 
quiet oasis in 
downtown Tokyo 

A compensation of doing business 
in Tokyo is the thrill of discovering 
the many green oases hidden 
between the sprawl of office blocks. 

One of the nicest of these is 
Echikatsu, a cottage restaurant 
endowed with a water garden, in 
Farida, downtown Tokyo, only 15 
minutes tan ride (Y960) from the 
Otemkchi business district 

As you pass Echikatsu’s wooden 
gate and cross its cobbled 
courtyard, the sound of traffic 
recedes and peace descends. A 
kimono-clad waitress ushers you 
to your private tatami-mat room, 
thoughtfully adapted for westerners 
by the addition of a leg pit under 
the table. Sliding paper doors open 
on to a gurgling brook stocked with 
carp, and lined with candle-lit stone 
lanterns and bamboo. Tokyo seems 
miles away. 

Echikatsu’s specialty is 
shabu-shabu (rough translation: 
slosh slosh) or beef teriyaki. They 
both feature thin-sliced beef and 
vegetables cooked at the table. Even 
unadventurous foreigners have 
been known to like these and 
Echikatsu will equally please a 
Japanese guest 

The food is excellent, copioos, 
and healthy. But steer clear of the 
wine list As hr many Tokyo 
restaurants, it is limited and 
expensive. I paid Y3.500 for a bottle 
of Piat d’Or, one of the only two 
white wines on offer. Stick to sake 
(rice wine) or beer. In any case, 
Japanese food was never meant 
to mix with French wine. 
Shabu-shabu for two, plus wine, 
came to just over Y25.000 ($240). 



reasonable for a restaurant of this 
class. 

Echikatsu is suitable for serious 
business discussion in small groups. 
It is upmarket, private, quiet and 
there is lots of room to spread 
papers around on the tatami floor. 
The service is unobtrusively 
attentive. Equally, its charm makes 
Echikatsu good for romance. 

Ask your hotel or secretary to 
book a room faring the garden and 
to get Echikatsu to fax you a map. 

It is well known, but Tokyo taxi 
drivers are terrible navigators. 

Echikatsu is open from 5pm to 
9.30pm. Bookings only. No English 
spoken. It accepts leading credit 
cards. Phone 3811-5293. 

By WUfiam Dawkins in Tokyo 


Picture research on this page by 
Tricia Lee and Suzie Kao 


SPORT; LAURA THOMPSON 

& 


F ootball bas not gone 
away, it has merely gone 
to America. Yet for 
England the season is 
over. Am 1 the only per- 
son to think that this is not a trag- 
edy, not an injustice, but a bless- 
ing? What English football needs 
now is a rest reader pour mieux 
scatter. 

England did not deserve to qual- 
ify for the World Cup. They had the 
ability to do so and they squan- 
dered it. Under Terry Venables they 
have given three performances 
vastly superior to those under Gra- 
ham Taylor, in that the team now 
seems to be playing football rather 
than wasting time in between set 
pieces. But this fragile, if promising, 
renaissance hardly justifies the feri- 
ing that En gland have been done 
out of their rights and that it is. 
somehow, somebody eise’s fault 
that they are stuck at home this 
summer. . , ^ 

Alright, England didn’t get asked 
to the party of the year and then, 
after the invitations were sent out, 
they metamorphosed from physi- 
cally repellent collectors of Dr Who 
memorabilia into Debs' Delight. But 


Blessed 
for the 

at a time when the team is rebuild- 
ing itself it is better, far better, to 
be cool, to be absent, to hint at 
what might have been but probably 
would not have been, to watch poor 
old Ireland huff and puff against the 
runny, ice cream-fluidity of the Ital- 
ians and to be spared the powerful 
embarrassment of ringing a World 
Cup song. 


break 
game 

The season’s song was sung, 
instead, by Manchester United who. 
in a strange way, became the object 
of the focus that is normally con- 
centrated upon a national team. 
Romantics loved them and curmud- 
geons hated them for their careless, 
sporadic superiority. They aroused 
str ong, unifying emotions, even in 
people who supported neither them 
nor their rivals. Almost every event 
of the season was viewed In relation 
to this cue team: Aston Villa did 
not win the Coca Cola Cup, they 
stopped Manchester United winning 
it Blackburn did not nearly win the 
League, they nearly stopped Man- 
chester United winning it Respect 
for the team was often grudging but 
always great; when they achieved 
the double with an FA Cup winning 
performance as cheerless as the sky 
above it the complaints were not 
borne of mere churlishness but of a 
child-like disappointment that on 

Left England’s Darren Anderton 
goes past Lara Bohmen of 
Norway as the two cotmtries 
ptayed out a 0-0 draw at 
Wembley y e st erd a y. This was 
Terry Venables’ thhd game in 
ch a r ge of England. Previously he 
has recorded wins against 
Denmark and Greece 



their glory day, the glory boys had 
played no differently to any other 
team. 

Stilt they have had their effect 
upon English football. The feeling 
that England deserves to be in the 
World Cup finals is not uncon- 
nected to the sense of pride, of 
style, of a story worth following, 
that has been instilled in football by 
United. For too long the sport has 
lacked a team like them: a team 
that transcends the necessary, but 
limiting, traditional allegiances. 
That is what the national team 
should do. Manchester United may 
have helped them to do it 

Of coarse, the glamour players of 
United are the foreigners. Of course 
much of English football is still 
symbolised by Arsenal's Cup Win- 
ners Cup performance against 
Parma: a game in which one 
counted down the minutes instead 
of living through them, and 
watched traffic policemen bar the 
way of Ferraris. But Arsenal still 
won, didn’t they? Manchester 
United still need the stalwart ser- 
vices of Bruce and Pallister and 
luce, don’t they? 

It is typical of the English that 
they should blame somebody else 
for keeping them from the World 
Cup finals. It is also typical that 
this aggressive self-aggrandisement 
should conceal a defensive 
self-doubt and that, deep down, they 
should feel that “somebody else” is 
in fact better than they are. Cer- 
tainly English bombast about its 
football exists alongside a cringing 
obsession with foreign flair. Yet the 
truth is that En glish football has 
qualities of strength and bravery 
that are just as important as the 
more exotic, quicksilver skills. 

Last season showed a willingness, 
on the part of enlightened manag- 
ers, such as Terry Venables and 
Alex Ferguson, to advance their 
game by allowing the traditions of 
grit and flair to draw upon one 
another for sustenance. This augurs 
well for next season, though we 
should remember that greatness 
was promised four years ago when 
the iftnpMsh team returned from the 
World Cup, and that it took less 


Main events 

TODAY; ’ 

2/) (NjS The French 

2'j ( ) fm Open begins its 

M. ' — ' &1. two-week rtm In 
Paris. Steffi &af, 
who has won 

four Straight grand slams and • 
should again sweep through the 
‘ wornen’s singles. Her path is • . 
riper of young chaBengets. 
Jennifer Capriati (t 8) entered 
dreg rahab8ftation test . Week aid - 
even though Monica Seles £0) 
seems to have recovered 
physically from her stab wounds, 
she shows lithe interest in . 
returning to the sport 

SUNDAY: 

Formula One 
motor racing . 
resumes its 
gloomy season 
with the Spanish ' 
Grand Prix at Jarama, after the 
deaths of Ayrton Senna and 
Roland Ratzenbergsr at Imota In 
Italy and Kart Wendflnger’s crash 
in Monte Carlo. The FI teams 
are struggling to modify their 
compScafed cars to meet new 
safety rules by Sunday. The 
comparatively low-tech US . 
indycar teams have no such 
worries as they prepare for the 
main event of ther season. A 
crowd of 400,000 wW gather at 
the Brickyard for the trxSanaprils 
500, one of America’s great 
traditional sports events. 


thaw a year for the usual misery to 
start up again. We should remem- 
ber, too, that the season ended not 
just with the hopeful images of 
Manchester United and England, 
but with Mill wall fans overflowing 
like sewage onto the scene of their 

defeat 

This is the reality which con- 
founds the fantasy football manag- 
ers who spent last season construct- 
ing a perfect future for their sport. 
The beautiful game is still, perhaps, 
a long way away. 



LEGAL NOTICES 


NO 0030)^1994 


IN HIE HIGH COURT OP JUSTICE 
CHANCERY DIVISION 

IN THE MATTER OF 

CHANCELLOR INSURANCE COMPANY LIMITED 


IN THE MATTES OF TBS COMPANIES ACT 1985 
NOTICE IS hfcicusY GIVEN AM by as Olds dated (be 2ftb of Apri 1994 mnde In the above i 


the Coast hm cSrccxd arparete I 


ngi Kite Scheme Ordinal (a dcOMd m the Scheme ol 


Anmgeaml h erei nafter moaned) at dr abane-anacd Company (betdaaftcr called the Company*) 
to be coflincd for the paipnc ot c«*UJertnR tod, if Uuna^M fit, approving (wilfa or aHlhoel 
mnsftffrao op) a Scheme ol Arrangement jao po md to be made b etw een Ac Compeer ead is Scheme 
f W io v, Md ftf mnBdcriag wfan itfaonU he tfag finl qf fhr ( ffifllffty flramn Inre tWWd in 

Scheme «d An upm a) nod that mth Meetings wffl be held m The Chattered bantam: Induce. 3) 
Ahkneoahmy, London EC2V 7HJ an (be 15dtdqr of My 1KM at the respective timet mentioned Wow 
■wte- 

(ljtbe Heeling of Scheme CrodJtoa other due EligiMe American PoUcyturiden (hot including 
i Poatyhohkg trim Scheme 1 lebitirirr ocher dan EQgfcic Qanan) a 1030 ul, and 



: 07] 481 0827)oratTomhe Roes PO 

Home. 8-9 Harding Some. Located BC4A 3AS (tdqhnc: 071 936 3HOOJ or if 

Kingdom a Dclotno * TSwfce 2000-IOJS Duanmir Street 4 

, B7X IM 

rartpridkboOdsy) 




the mid Meetings bM if I 

may be handed » ibr Chebmm m hr Mcctmg as wbich they are id be nied. : 

prosy wffl be accepted ari*fl ID receipi of the odpari within 14 day« after I) 

By the anal Orths Aa Ctomt haa apponrird DavM Llcwflyn I 

ad a> Oohman of ash U dm mid Mediop sad hm « 

to AeConfl. 

Tfcr mid Scheme d Amngrmrrr rrifl tn aubject to foe catocqacal qyewai of he Tftgb Conn ot lomcc. 

DiM iUs 19ih day «f May 1994. 

1 Harwood. 

One. S*. PauTa Ch m e h y a i d 


EC4M8SH 


PERSONAL 


PUBLIC 

SPEAKING 

Training and speech-writing by award 
winning speaker. 

First lesson free. 

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] 

1 




TM 

***** 
prefects hav» 
sawsdYlrgin 
AttanBer ,..' 
Amnjisflim 
thanSOO^OOlrithapast. . 
V»- The British confer now 

: p^ to «xt^ tfae scJwBw. 
C5reen-ctadt^atoodants ; 
wtttotrcaHisofinume _■ 
ffighisurging passengersto . 
rocycte SrHi^rttfepMabtes, 
such as ctqm ariicf 
newspapers, VfrgtiwB; 

donate to local c on rot J nffes . 

andinstitutions, such as 
prisons and youth centres, 
t fi scanJedfeetnatrom 
on-board bandroutesuchu* 
socks and eye-shades. .. 


Indian delays 

TraveUera &> India are/fceiyto : 
suffer defays and ca odate flon ar 
offfightson tnefiao Akflne£ toa r 
w«indoRwsfc.cafrtQr/beca«se. 
of industry aefion by die s \ _• 
&8nefe'f$&& en gj r tofrs, writes • 

StefenVfeertyftoffetf. . 

OcH.- ’r 

' "Thdopqfneere, whaatartsd l 
•ihQir 3 Mnfr«h«il» 4 iNaak ago; - 
&e ifemas^itipitwemente h 
disk pay^^coilCiSbosc^theV 

Theycten they hiavti fefea,.- • 
behevithak'countarparts 
wcrfdng fbrindia’s s 
n»*ly4aunched prfcate aWneto 
Trawfersah* advteedto r.. - x 
Change ttwtrreservtaSoretodie; 
: i^rhf^be«» 6 nas ; fe^i!anaMar ' " 


Ufcttecompetitfctt 
Sraal central and eotdh 
American akftw must feta 
twees to compe te, wfth US 
cartes for Sahara of the 
frigb growth to trawl from the 
4$ to Latto America aid the 
Caribbean, a cc ordi ng to Mr 
Robert 800 th, an aviation 
Consuttaot at the 
.International Abftie Chfaf 
Executive Officer conference 
InFtorida. 

ASances woted hefpsmrf 
aMnes cat costs, wMch he 
f sald were Z per cent higher 
ipw Unw armer rnafor 
com p e lB orv American 


had also to "spend 
eoois money oh pronioSon 
and etetUhg”, he said. 



Buchteostnow 
iwsaftst-Qlass, 
western-run, 
fuxixy hotel, 
fafowinsthe 
opantogthto 
month of the Hotel Sofia!, pet 
of the Ranch cheht 
SHuated to the c^s new Worid 
Trade Centre, the four-star hotel 
has 208 rooms, two restaurants, 
a 9 m and, (ham September, a 
swfrtartne poof and fcfl fences 
oenfia at neighbouring Lake ■ • 
Herastrau 

Stogie rooms stet at $175, 
double rooms at $190. ■ 

Far reservations and further ‘ 
Information, telephone .. 
40-1-2122998, 

fex 40-1-2115688. 




Mahjong ban 

Taiwan^ Cfatoe Afcfewe (GAl), 

tutor praesm about safely 
after to woesi crashes 
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Tehran has launched an 


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land s* Japan's Nagoya 
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to cer% the new Tupofey 
Tu-204 medtaMahgutikSner by 
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ftxtos to repfeoa the agring • 
Tupoter Tu-154 afcfimr. Three 
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passenger wriante of the new 
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Rafe-RcycecfttoUK: 


FINANCIAL. TIMES M ONDAY MAY 23 1 994 

Likely weather in the leadktd 

Moo The Wad 

•*. '^SiWS 

***** 






»-*■«* fo>» 3b » 

# • % 


it 




iieil—S rV •- ‘- ; ap :t 


Visiting many east European cities is a pleasant 
surprise after Russia, says Chrystia Freeland 

No survival kit 
necessary 


. ■ : ■>*, *:■ &. * L- : > ■ • 


j'A 5 . v.‘.y ^ 



AknHapr 

Budapest: the dty combines Prague's architecture with Warsaw’s gritty economic dynamism 


I set off recently for eastern 
Europe with, the pugna- 
cious attitude and sur- 
vival kit - cigarettes, US 
dollars in small, unmar ked 
bills, and snack food - that 
would be necessary for travel- 
ling in the former Soviet 
U nion In the old. wn Tin,||TT1 i R t 
days, eastern Europe was only 
a slightly kinder, gentler ver- 
sion of die Soviet Union, and 
in Russia these days travel 
has. in some respects, become 
more difficult 

But my painstaking prepara- 
tions proved unnecessary. The 
eastern European heartland of 
Poland, the Czech Republic 
and Hungary has successfully 
emerged from the Warsaw 
Pact and now have same erf 
the highest rales of economic 
growth on the continent 
The first pleasant surprise 
was the new Warsaw airport It 
is rfp-an, well-lit and easy to 
pass through. Most Europeans 
and US citizens can enter the 
country without a visa, bat 
even the Greeks, Turks and 
Canadians who do require 
visas can purchase than from 
friendly border guards for £30. 

Visas, like almost everything 
else in Poland, are sold for 
zloty, the national currency, 
which, after its flirtation with, 
hyper-inflation, is on its way to 
stability. Changing money 
straightaway at the airport is a 
better Idea than g* p«**frig to 
pay in dollars. 

The average fare for the half- 
hour ride from the airport to 
the dty is about £15 and Polish 
cabbies are polite, likely to 
speak at least rudimentary 
English, and charge according 
to the meter. It is worthwhile 
chatting to your driver, 
because Warsaw's cityscape - 
the legacy of Poland’s fierce 
resistance to Nazi Germany - 
is unfailingly hlnak. 

The communist-era eyesores, 
however, do offer one benefit: 
unlik e better-preserved east 
European cities, Warsaw is rel- 
atively free of tourists, making 
hotel and restaurant reserva- 
tions easier. The best place to 


stay is the gleaming Marriot 
Hotel, whose shiny towers in 
the center of the dty are stri- 
king evidence of the arrival of 
capitalism in Poland. 

For a more authentically Pol- 
ish experience, have lunch or 
supper at the Belvedere Res- 
taurant, perched on the comer 
of a park - 20 minutes from 
the centre - where, legend has 
it, Polish kings used to retire 
for trysts with their mistresses. 

From Warsaw, It is an hoar’s 
flight to Prague, where the air- 


port, border c ontr ols and taTi 
service are likewise hassle-free. 
The s imilar ities end upon 
arrival in the dty itself Czech 
pragmatism p res e rve d Prague 
from devastation during the 
second world war, and commu- 
nism protected it from the 
excesses of the capitalist devel- 
opers. Prague remains tree of 
the most beautiful cities in 
Europe. 

The Czech capital has 
become a popular destination 
for a nomadic tribe of Ameri- 


can college graduates, who 
spend a year soaking up the 
atmosphere of older civiliza- 
tions and hanging out, before 
joining the real world ctf suits 
and CVs. Czech officials rlaim 
Prague was one of- the most 
visited capital in Jhe continent 
last year. 

For business people, this is a 
drawback. Finding a hotel 
room in the city, especially 
after the summer tourist sea- 
son begins, can be a night- 
mare. Avoid tt by booking 



You don’t have to 
feel in the dark 

Richard Tomkins offers tips on finding your 
way around the confusing New York subway 

named after the avenues they 


roams weQ is advance, espe- 
cially if yon want to stay at the 
magnifident art deco Hotel 
Europa, which is already 
receiving reservations for July. 
As a last resort, hotel booking 
services at the airport can usu- 
ally be adequate. 

I fled the tour groups, easily 
Identified by the brightly col- 
oured umbrellas held by 
their guides, and took to the 
in a car rented from one 
of the half dozen western agen- 
cies with offices in the centre 
of the city. The g ently rolling 
Bohemian countryside, dotted 
with medieval fortresses, is a 
Euro Disney fantasy but with- 
out the crowds. 

Less than 150km south of 
Prague, cm narrow but quiet, 
well-maintained roads, the 
walled town of Cesky Krumlov, 
dominated by a castle on bills 
overlooking the twisting 
Vltava river, makes a particu- 
larly pretty day trip. 

From southern Bohemia, 
Budapest is a bucolic four-hour 
drive (most car-rental agencies 
permit drop-offs in other 
cities). Travel via Austria; the 
roads are better and the bor- 
ders are civflised. Best of all, 
the contrast, or lack of it, 
between the Czech, Austrian 
and Hungarian border towns is 
heartening evidence of how 
quickly eastern Europe is 
catching up with the rest of 
the continent in terms of living 
standards. 

The Hungarian capital itself 
combines Prague’s architec- 
tural charm with Warsaw's 
grittier economic dynamism. 
Do not be put off by the air- 
port, which is slightly drabber 
than those of the other eastern 
Eastern capitals, or the lan- 
guage, whfoh is impenetrable 
to travellers with no know- 
ledge of Finnish or Estonian. 
Just three hoars by train from 
Vienna, Budapest is arguably 
the meet cosmopolitan city in 
eastern Europe, with fine, com- 
fortable hotels — try the Kem- 
pinski an the Pest side of the 
dty - and dozens of lively res- 
taurants and night-clubs. 


R iding the New York 
subway is tantamount 
to signing a suicide 
note, right? If you are 
not shot by a drug-crazed psy- 
chopath, you will surely be 
knifed in a mugging or caught 
in the cross-fire between war- 
ring urban tribes. 

Actually, if that ever was the 
ca & e , thing s have chang ed a 
bit. A sustained anti-crime 
campaig n that began on the 
New York subway in 1980 is 
paying off. The city’s transit 
police say that, of the 1,960 

‘hnimictdflg fhafr frY >K plary in 

New York last year, only eight 
were committed on the subway 
- from which they draw the 
slightly wayward conclusion 
that you are much safer 
below ground than you are 
above it 

Whatever the statistics, visi- 
tors to New York need have no 
hesitation in using the subway 
to get around. Nowadays the 
system is not only safe, but 
after years of heavy invest- 
ment, it has become reason- 
ably reliable. On longer trips 
up and down Manhattan , it is 
much fester than a tan. And at 
a fiat fere of £L25 a trip, it is 

cheap . 

On the other hand, it is not 
one of the world’s most user- 
friendly subways: sign p osting 
is poor and tbe system has sev- 
eral quirks. So, for the novice, 
here are a few tips. 

First, there are no tickets. 
instead, you buy metal tokens 
from booths at the station 
entrances and use them to 
operate turnstiles leading to 
the platforms. There is no dis- 



count of any sort for bulk pur- 
chases. An electronic pre- 
payment card (the Metrocard) 
is being phased in, but it 
does not yet work at all sta- 
tions. 

While at the token booth, be 
sure to pick up a subway map 
because they are scarce on 
platforms and trains. As you 
will see, most of the lines run 
on a north-south avis under- 
neath the big avenues, so the 
syste m is rarely much use for 
cross-town journeys. 

A big source of confusion to 
visitors is tire way the trains 
and Una* are described. Offi- 
cially, the trains carry num- 
bers or letters to tell you 
where they are going (for 
example, the number 1 train or 
tire N train). Bat they are also 


follow (such as the Lexington 
Avenue Express or the Broad- 
way Local). And the lines are 
still widely known by the ini- 
tials of the companies that 
built them - hence, the QtT, 
the BMT and the IND. 

Note that there are two types 
of train: locals, stopping at all 
stations, and expresses, stop- 
ping only at the main ones. 
Different trains often share (he 
same tracks, so it is important 
to cfrfic k the train's mimhcy or 
letter before you get on. ff in 
doubt, ask: once they are con- 
vinced that you are not going 
to kill them. New Yorkers are 
extremely friendly. 

Y ou should feel per- 
fectly safe an the sub- 
way in Manhattan 
throughout the day 
and evening, although, as in 
any big city, it makes sense to 
keep an eye on your personal 
belongings. If for any reason 
you feel apprehensive, you can 
sit next to the conductor’s 
cabin in the centre of the train. 

Finally, one quirk that all 
repressed engine-drivers 
should experience is the car- 
riage configuration that 
enables passengers to stand 
next to the driver’s cab at the 
front of many trains. Top tip is 
to do this an the B train to 
Brooklyn. That way, you can 
play engine-driver as you go 
rattiing over Manhattan Bridge 
and enjoy an excellent view of 
the Manhattan skyline as you 
come back - assuming, of 
course, you can elbow the 
other childre n out of the way. 


Orly offers option 
of convenience 


John Ridding explains why UK 
travellers might want to fly 
to the newly accessible airport 


T he ceasefire in the 
so-called. Battle for 
Orly, brokered last 
weekend after tongh 
negotiati ons b etween the Brit- 
ish and French governments, 
means that UK airlines will 
be able to fly from London 
to tile southern Parts airport 
by the end of June. For poten- 
tial passengers the question 
is: why should they want to 
do so? 

There are several reasons. 
At the top of the list is conve- 
nience for those travelling on 
to other French destinations. 
British Airways estimates that 
about 80 per cent of domestic 
French airline traffic flies in 
and out erf Orly. The opening 
of the airport will avoid the 
need to trek across Paris from 
Roissy-Oiaiies de Goalie air- 
port to make a domestic con- 
nection. 

For many travellers, Orly 
win also represent a more con- 
venient port of access to Paris. 


A shuttle from the airport 
links with the REK, the 
high-speed underground rail- 
way, which whisks passengers 
into central Paris. 

The total journey takes 
about 35 minutes from Les 
Halles or St Michel in the 
heart of the dty, slightly less 
than the Journey from Charles 
de Ganlle airport The more 
southern the destination in 
Paris, the more attractive Orty 
is. 

To start with, the services 
will be timited to three carri- 
ers: British Airways, its 
French affiliate TAT European 
Ai r lines, and Air UK. BA plans 
to operate four return flights 
daily from Loudon Heathrow 
to Orly, in partnership with 
TAT. 

Air UK is planning to oper- 
ate six return flights daily 
between London Stansted and 
Orly, in place of its five daily 
flights to Charles de Gaulle 
airport. 



“We believe that Orly w£Q 
prove more popular than 
Charles de Gaulle because of 
its proximity to the principal 
commercial and residential 
areas of Paris and because 
of its better domestic con- 
nections,** says Mr Andrew 
Gray, Air UK’s managing 
director. 

Other airlines are also plan- 
ning services. Virgin, British 
Midland and Lufthansa have 
expressed interest in operating 
the London-Orly route, 
although they have not yet 
announced any concrete plans. 


Despite the potential advan- 
tages of Orly, however, there 
are some caveats for 
passengers to bear in mind. 
A one-day strike last week 
by Air Inter, the French 
airline that has a monopoly 
on most domestic routes, 
caused the cancellation of vir- 
tually all of its flights result- 
ing in disruption at Oriy air- 
port. 

Unions at Air Inter say they 
plan further industrial action 
in protest against the Hberalis- 
ation of the internal Frtfflch 
airline market 


Terminal A Terminal B 



.Terminal C 




“Change to A? Change to B? 
Change to....” 

“KLM.” 


v. 



TRY THE CONVENIENCE OF SCHIPHOL’S EASY ONE TERMINAL 
TRANSFER WHEN YOU FLY KLM TO THE WORLD. 


For reservations and details on how to join KLM's Flying 
Dutchman Frequent Flyer Programme ring 081 750 9000. The Reliable Airfin fi KLIM 





k: . v 
f”' 

•Sega gam 
tractive 0 

V*i • • . 







11 



FINANCIAL TIMES MONDAY MAY 23 1994 


df* 




% s 

Commercial break-up? 

* k*; Richard Tomkins on advertising prospects in an interactive age 


He 


V . ijl ^ 


T he world's first tele- 
vision advertisement 
appeared on NBC's 
VVNBT channel in 
New York on July 1 , 
1941. It showed a Bulova 
clock ticking, tested 20 sec- 
onds, and cost $9. A little 
more than half a century later, 
television advertising In the US 
te a S30bn-*yaar Industry, and 
It is hard to Imagine (He with- 
out the commercial break. 

Yet that is the prospect that 
haunts Ed Artzt, chairman and 
chief executive of Proctor & 
Gamble, the - US consumer 
products giant At a gathering 
of advertising agency leaders 
in West Virginia this month, 
Artzt shocked his audience by 
asking: "WHat If there Is no 
place for traditional television 
advertising In the new media 
age?" 

For Artzt, the answer is of 
more than academic interest 
Procter & Gamble is not only 
the world’s biggest advertiser, 
but spends nearly 90 per cent 
of its S3bn-a-year advertising 
budget on television commer- 
cials. The loss of such a pow- 
erful promotional tool could 
have unthinkable conse- 
quences for the company. 

But why the alarm? Can 
there reefly be any prospect 
that television advertising is 
going to disappear? 

If media prophets are right 
television is set to change rarf- 
cafly over the next few years. 
Mass broadcasting to a pas- 
sive audience will be replaced 
by hundreds of viewer-con- 
trolled interactive charnels that 
win give people the information 
or entertainment they wait, on 
demand. The danger for adver- 
tisers is that, even supposing 
there is a place for commer- 
cials In this new era, people 
wtU prefer to watch (or Interact 
with) the channels that do not 
show them. 

US advertising agencies 
argue that this is si over-sim- 
plification. Not surprisingly, 
they Pke to see inte r acti v e tele- 
vision as an opportunity rather 
than a threat For example, 
they say, imagine someone 
wanting to buy a new car. The 
viewer of the future might wel- 
come the opportunity to tune 
into a special channel featuring 
nothing but car advertisements 
- particularly if he or she could 
coridudt a dialogue’ with' the 


***** 


■ Vv ^ 

\ 0 

\ 

f 

\ 



screen, asking tor more Infor- 
mation about performance or 
safety features of different 
models. The same could apply 
to household appliances, elec- 
tronic goods, or any other sort 
of purchase where consigners 
want to make an informed 
choice. 

Other advertising opportuni- 
ties would become available 
on channels specialising in 
sports and hobbies. Viewers of 
a golfing channel, for example 
- just like readers of a golfing 
magazine - would welcome 
advertisements telling them 
what products were available 
and where they could buy 
them. Similarly, a fashion 
channel equivalent of Vogue 
magazine could be crammed 
with advertisements for cloth- 
ing and cosmetics. 

This, however, does not 
answer Artzfs question. Where 
are advertisements for Procter 
& Gamble’s products gong to 


appear five years from now? 
Viewers wffl not want to tune 
into a special channel featuring 
interactive advertisements for 
Fairy washing-up liquid; nor 
wffl they expect their golfing 
programmes to be interrupted 
with advertisements for Tide. 

According to Barry Unsky, 
senior vice president for plan- 
ning and business develop- 
ment at the Interpublic group 
of advertising agencies, the 
gloom is overdone. Tree, he 
says, there are Beefy to be a 
lot of pay-per-view channels 
without advertising in the inter- 
active future. But there is no 
evidence to suggest that view- 
ers are prepared to pay signifi- 
cantly more for their entertain- 
ment than they do today, so 
most programming will con- 
tinue to be supported by 
advertisements. 

Prof Nicholas Neg reports, 
director of the Madia Lab at 
Massachusetts Institute of 


Technology, disagrees. Theo- washroom while some of the 
reticaUy, he points out, if man- commercials are playing," says 
ufacturers were no longer pay- Reinhard. "But we’ve always 
big for television advertising, had that problem - how to 
thee- products would become keep viewers engaged.” 
proportionally cheeper, so con- Another possibility ts a return 
sumers would have more to 19508-style advertiser ^ 

money to spend on home -supplied programming, ^ 

entertainment where one company or 

More significantly, Negro- one brand supports an. -entire 
ponta points to a future where programme. Procter A.GarSbfe 
programming is indeed still has been sponsorih^-kfe^me 
supported by advertisements - “soaps" - dragptfey dramas - 
but advertisements aimed In the US skk*£ihe beginning 
directly at the Individual. For of comm^faFTV, which 
example, people using their exptara, tfafr ridme. 
interactive screens to book a . .Evea . ao/^egroponta maav 
safmon-fishing hofiday in Scot- tens tba£ tie cannot imagine 
land might switch on a base- s.any. dbntext where he would 
bafl game the next day to find. : > want to see a Tide commercial 
themselves watching advertise^ .in fo© Interactive world. If he is 
meats for outdoor ctefefog ori^rigHt, the consequences could 
fly-fishing equipment tft -4he 'be devastating for sales of 


habits that every. advertisment 
would be Incfividually tailored 
to meet their wants and needs. 
One commercial might suggest 
you book a table at Lutece for 
your wedding anniversary 
tomorrow; another could rec- 
ommend a Herm&s tie to 
match that shirt you bought 
last week; a third might remind 
you that you usuaBy change 
your car anxmd this time, and 
suggest you look at the new 
Lexus. 

And so, yet again, Artzfs 
question comes bade where 
does that leave Procter & 
Gamble? Or for that matter, 
Coca-Cola, or Colgate-Palmo- 
live, or Kefloggs, or aH those 
other manufacturers of hum- 
drum packaged goods that 
rely so heavily on repetitive 
advertising to support their 
brands? 

Well, you ootid always pay 
people to watch their commer- 
cials, says Keith Reinhard, 
chairman and chief executive 
of the advertising agency DOB 
Needham worldwide. He isn't 
joking. You could have 
machines on top of the televi- 
sion set that would reward 
people for watching advertise- 
ments by printing out money- 
off coupons. Or you could 
offer people a choice of view- 
ing: watch the movie tor $3 
with the commercials or $5 
without them. 

"Maybe people will go to the 
washroom while some of the 
commercials are playing,” says 
Reinhard. "But we’ve always 
had that problem - how to 
keep viewers engaged." 

Another possibility ts a return 
to 19508-style advertiser ^ 
-supplied programming, . 
where one oompany or 
one brand supports an i.«n&*r‘ 
programme. Procter- A. Gairibfe 
has been sponaorih$afaiiHre 
"soepe” - dp^estic/dramaa - 
In the US skkxCAhe beginning 
of comm©^®* TV, which 
explains, fh efr rtama. 

, Evea/So.^egroponte maiv 
tems thai 'tie cannot imagine 


commercial break. 

Over time, interactive televi- 
sion would .bifid . tip - such 
a ccurate p rotf ea ofc irygykfoate 
from their vfewfog and buying 


• Sega games go 
interactive on cable 


• Faxing daily papers 
around the world 


By MJchfyo Nakamoto hi Tokyo 
and Loufee Kehoe te San 
Fran c is c o 

Sega, the Japanese video 
games maker. Is set to launch 
a cable TVgamee-on-demand 
service on a dozen US cable 
networks later this month and 
In Japan a few weeks later. 

In the US. the "Sega 
ChanneT wHI be avaBable to 
almost half of the country’s 

60m cable TV subscribers. A 
Joint venture between Sega 
and two of the largest cable 
companies, TCJ and TTme 
Werner, It represents the cable 
industry's first Interactive 
service. 

Sega said the services would 
begin in Japan fo three regions 
- Tokyo, Nagano, in northern 
Japan and Mle, in the south. 
Subscribers to Tokyo Cable 
Network, LCV In Nagano and 
Cable Television Yokkaichi will 
be able to use the service. 

In Japan, Sega wffl charge 
a monthly fee of Y3.000 ($29) 
which will cover tire cost of 


renting a special cartridge that 
plugs into the Sega video 
game machine, and playing 
as many of the gwnes 
available as many times as 
desired. 

In the US, it says the service 
wffl be priced in fine with 
“premium" cable TV channel 
services, which typically cost 
about $15 per month. 
Compared to the cost of new 
game cartridges, which 
typically seB for about 
$50-560, this may be a bargain 
for video game enthusiasts. 



By Raymond Snoddy 

A rather special edition jCB foe 
Financial Times poppad out ' 
of fax machines W AiwtiaTia 
and New Zealand this weak. 
The first fax efition of foe 
paper is atepog.Ha way to 
Bermuda end. South Mica and 
other places where its 
Int ern ational qfttion still arrives 
late in the.day of after the day 
of pLfoficatiork- 
Whctoeadqy’s four-page fax 
edition,— dfl pink paper - led 
vgth new^of the latest losses 
>titTioyd*s, the London 
; Insurance market, and naturafiy 
* carried the Lex column. There 
was also a fist of all the 
.-Companies mentioned in the 
_lrialn edition, to encourage 
readers to buy the fuH paper. 
-The special edition is free to 
readers - although providers 
such as hotel owners pay a 
fee based on the number of 
-rooms they have. 

- Distribution by cruise lines 
an d arrfin es Is also being 
explored. 


The modest testing of a 
"•faxed FT is the latest sign that, 
. after seven years of trying, 

• Vince Watereon, business 
development cfirector of 
Faxcast, is getting somewhere 
in marrying fax technology and 
the vertical blanking interval 
in television pictures to create 
something new. 

The date carrying capacity 
of the spare lines in the 
television signal, satellite and 
cable as wel as conventional 
TV, is enormous and is much 
cheaper than International 
telephone fines. Add a special 
receiver finked to the fax 
machine and you have a new 
international pubfishing tool. 

Watereon is already running 
trials on fax editions of the 
New York Times and is looking 
at everything from transmitting 
meteorological information to 
credit card validation. 

He has backing of $2 5m 
from Investors ranging from 
the Bank of Bangkok to 
Compagnie General des Eaux 
of Fiance. 


everyday branded goods. 

Negro ponte’s advioe? "I 
think If I was Procter & Gam- 
ble, I'd be. buying billboard 
space," he says. "A lot of It” 


• Sonic 
boost for 
Rocket 

Rocket Science Games has 
moved onto the multimecSa 
scene as one of the most 
promising start-up com parties 
in the growing market for 
interactive computer games, 
writes Louise Kehoe. 

This week the SBIcon VaSey 
company got cash backing 

from Sega Enterprises, the 
Japanese video games 
company. Saga's venture firm 
CSK Vertexes, and 
Bertelsmann Music Group 
(BMG), the German music and 
entertainment groupu Together 
these have inv ente d $12m. 

Rockefs launch team 
exemplifies the trend to splice 
Silicon VaSey with HoSywood. 
The company's game 
developers are drawn partly 
from the computer industry 
and partly from the movie 
business. 

Steven Blank. Rocket 
president and chief executive, 
is quick to point out, however, 
that the much talked about 
notion of blending talent from 

these disparate cultures is 
easier said than done. 

The ‘Hofiywood type’ is 
potentially the kiss of death 
(for an interactive 
entertainment developer), if 
you find the wrong one,” he 
says. "We don't have fancy 
Hofiywood directors or actore- 
The people we have are out 
of the special effects 
business." 

Rocket wifi 


to*® S®" 108 

t:-~ v in tone for 
/Christmas sales this year. 

Its games wffl combine the 
rich graphics of CD-ROM - 
the computer cousin of the 
music CD - with the fast 
action of cartridge video 
games. Blank says. Until now, 
these attributes have been 
mutually exclusive because 
CD-ROMs are relatively stow 
and video game cartridges 
have Bmfted capacity to store 
complex graphic images. 

Rocket has developed 
technology it cafis “Gone 
Science" that speeds ip the 
performance of CD-ROMs by 
organising the layout of data 
on the disk so that the next 
image required in a game can 


be quickly located. 

Unlike most game 
developers. Rocket wffl offer 
games to run both on personal 
computers and on Sega CD 
video game machines. Sales 
of games that play on video 
game machines reached 
$5.3bn last year, white sates 
of computer games were only 
about $800m. so the (foal 
approach is a necessity. Blank 
says. Even before It launches 
its first products, Rocket Is 
winning wide attention. The 
best buzz in Silicon Valley at 
the moment is about Rocket 
Science," says Lee Isgur, a 
multimedia analysts with 
Voipe, Wetty in San Francisco. 

• Drawing 
across the 
phone line 

Researchers are now pouring 
cold water on the idea that 
the principal benefit of 
videophones - telephones 
equipped with screens and 
videocameras - Is the ability 
to see the person at the other 
end of the fine, writes Alan 
Cane. 

Much more important, they 
say, is the capacity to work 
together on the same task - 
a document, say, or a chart 
In other words, the ability to 
share a workspace over the 
telephone line. Development 
engineers at Hewlett Packard, 
the US electronics group, are 
in the latter stages of 
developing a product which 
exploits this fading. 

Called the "destelate", it is 
essentially an interactive fax 
machine, enabling two people 
linked by a telephone line to 
examine, mocOfy and annotate 
the same document 

Each has to have their own 
desksiate. It consists of a flat 
tablet about the size of a desk 
ledger; most of the top surface 
is taken up with a 
high-definition liquid display 
screen. Prototypes at HP's 
Bristol UK research centre 
have large personal computers 
hidden under the desk, to drive 
them, but the aim of the 
development engineers is to 
shrink the electronics Into the 
slate itself. 

An electronic stylus is 
provided to write on the screen 
and the slate is linked to a 
telephone handset. 

Documents, plans, memos and 
so on can be put into the state 
by a variety of means - 
scanning or transmission from 
a conventional fax machine 
or personal computer. 


• Question 
of two-way 
traffic 

Viewers in the UK and the rest 
of Europe who think they can 
do better than television game 
show contestants are about 
to get the chance to prove 
it- and win prizes as wed, 
writes Raymond Snoddy. 

Interactive Network, a 
UK-based company set up 
by Bffl Andrewes, a former 
senior executive of the 
Granada jyoup, plans to 
launch trials in July of what 
it c&Ss Two Way Television. 

Two Way TV pianeto make 
television Interactive by 
piggy-backing on existing 
programmes such as the 
Blockbusters quiz show or live 
spot. A range of Two Way 
TV games can also be loaded 
into the set-top box that 
operates the system. The 
communication fink is not 
provided by cable or 
“superhighways' but, like 
teletext, uses the blank fines 
in the tetovMon picture. 

Interactive Network has 
developed technical concepts 
licenced from the US and 
believes it will be offering the 
first interactive TV of its kind 
in Europe. 

The company has developed 
a simple push button keypad 
and mouse to enable viewers 
to register their answers to 
the questions in a quiz show. 
Scores then go up on the 
screen. 

Famffles can simply play 
against each other or have 
their scores sent automatically 
by freephone to a central 
computer which pick the 
winners. There wffl be top 
prizes of £1,000 to make the 
games interesting. 

The system will be launched 
in the UK later this year or 
early next and there is already 
considerable interests from 
other European countries. 

Prices have not yet been 
fixed but the set-top box and 
four keypads wffl probably cost 
between £160-£180. A monthly 
subscription wffl cost about 
£6, with a complete rental 
package available in the region 
of £12. 

As former chairman of 
Granada Rental, Andrewes 
says he is very aware how 
stowty consumers generally 
take up new technology. This 
is a first Bttie step towards 
Interactive TV.” He has already 
raised £4m for the venture and 
is in the process of raising a 
further £10m. 


Here. 



ImL 



London has its priorities wrong 

Colin Amery says emphasis should I 

development. We be put Oil transport and housing Towe r Ham lets^ CantroUe 




D emocracy has its dan- 
gers when it comes to 
development. We 
learned two weeks ago that the 
entire future of the London 
CrossRall project (a Joint Brit- 
ish Bail/London Transport 
{dan for a tunnel from Pad- 
dtngton. in the west to Liver- 
pool Street in the east) was put 
in jeopardy, perhaps perma- 
nestiy, by MFs voting against 
St in an arcane committee. 

In tfrfai case Parliament has 
not rep res en ted the views of 
those who live and work to. the 
capttaL Michael Cassidy, chair- 
man - of the policy and 
resources committee of th e 
Corporation of Ixmftan. wrote 
test week that the views of the 
City, was not sought by the 
Commons’ committee. The City 
seesGrossRail as a key compo- 
nent in plans for continued 
improvement of the area as a 
centre of European wealth gen- 
eration, 

Mon evidence that both gov- 
ernment is out of touch over 
the Irtmi erf planning, building 
and investment that the major- 
ity vast to see in the capital 
came in a Gallup poll, canu n is- 
sfaned by property consultants 
ft fcbar d ante- ft disclosed that 
more than half the world's 
largest investors believe the 


government is not doing 
unnug fa to support London as a 
financial centre. About SI per 
cent of those interviewed felt 
The ttffiriency of London as a 
city has been impaired because 
of the UK government's unwffl- 
in gnflgs to invest public money 
in its transport system.” 

London is more than its 
transport system. It is its 
architecture and its town plan- 
ning and its social ambi e n c e. 
Yet key decisions, taken to 
mysterious ways, decide major 
aspects of the city's future. As 
a guide to the significance of 
decisions as fundamental as 
CrossRaiL it is worth l ooking 
backwards to see how impor- 
tant decisions have been made 
in the past 

The post-war rebuilding to 
the city to the 1950s and 1960s 
was in a similar style to that to 

bomb damaged German cities 
_ the glass and concrete style 
of the Bauhaus was the archi- 
tectural victor of the war. ft 
inflicted equal pain on both 
sides. The City of London had 
a second major wave of build- 
ing to the 1980s with an. office 
boom which bequeathed the 


curious post modem style - a 
Mint of decorated Bauhaus 
with more marble and granite. 
Barclays Bank's recently com- 
pleted head office probably rep- 
resents its apotheosis. 

This wave had a partially 
hidden agenda. The City was 
bothered by toe sudden growth 
nf T-nmfrin Do cklands and sn in 
response gave developers 
almost free reto to build inside 
toe City's boundaries- It was 
something of a panic reaction, 
which demonstrated the lack 
of much needed collaboration 
between the City and Dock- 
lands. 

London was already much 
too teg and badly serviced. The 
Docklands development was 
largely unnecessary and 
largely happened because busi- 
nesses going to toe en t e rprise 
zone an the Isle of Dogs were 
tempted large tax breaks. 

Docklands is living proof 
that fafesegjbfre planning does 
little for a city. IT a total Lon- 
don view had been taken of the 
area’s role tome was a strong 
argument fa making it a large 
water and landscaped river 
park for toe East End, sur- 


rounded by new houses to 
replace the tower blocks of 
Tower Hamlets. Controlled 
commercial and industrial 
development should have been 
balanced with residential, lei- 
sure and infra stru c tu re uses. 

The devotion of pla nne rs, 
developers and toe rating sys- 
tem to the zoning whole areas 
solely for offices, combtoed 
with a refusal to improve 
transport leads to a grim life to 
working London. Why is it so 
rare for people to live where 
they and others work, in the 
City or the West End? Why is 
it so hard to find in London the 
kind of cultural street life you 
find in New York or Paris? 
Why are architects so frus- 
trated? Because they are being 
asked to design purites offices 
and very little public architec- 
ture or private housing. 

Once a city is agreeable and 
efficient to live to it will 
attract employment London 
has for some time had its prior- 
ities wrong. Nobody needed the 
bankrupt Canary Wharf; no 
one needs the empty offices in 
the City; no one (except Peter 
Palumbo) needs the proposed 
offices at Nal Poultry. Many 
of us to London need better 
public transport and want bet- ! 
ter bousing 




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FINANCIAL TIMES MONDAY MAY 23 1994 


Crescendo for 
Sir George 

Lucy Kellaway explains that the 
opening of Glyndeboume’s new 
opera-house this week is the 
pinnacle of the chairman’s career 

O n May 28 1934 a with the British. Library, still the first place? Sir 
special train left not ready more than three refers to his “venal” m 
London carrying decades after the initial plans as if unaware that the 
a grumbling were drawn. dal Times is sympat] 

group of music My first glimpse of Sir this sort of thing. “I w 


O n May 28 1934 a 
special train left 
London carrying 
a grumbling 
group of music 
critics to a small town in Sus- 
sex. They were off to hear the 
Marriage of Figaro at a new 
theatre built by a rich English 
eccentric in the garden of his 
Elizabethan manor. Their 
expectation of the music was 
low, their resentment at wear- 
ing dinner jackets and travel- 
ling 50 miles was high. 

Yet the following day the 
newspapers carried rave 
notices, and Glyndebomne has 
played to full houses ever 
since. 

This Saturday, 60 years later 
to the day, 1,200 people will 
dress up and malm the same 
journey with gladder hearts. 
They too will hear the Mar- 
riage of Figaro, performed in a 
new theatre built on the same 
ate by the founder's son. Sir 
George Christie. 

His is the first Important 
opera-house to be built In 
Britain i"hi« century, and ha« 
been paid for without a penny 
of taxpayers' money. 

The opening is a business tri- 
umph for Sir George. In 1987 
when he first floated a plan to 
knock down the ramshackle 
old 800-seat building and 
replace it with an expensive 
new one, people thought he 
had lest his mind. 

Yet doggedly, and without a 
hitch, he raised the £33m 
needed, and witnessed the 
completion c£ a apigndid new 
opera house in his back garden 
on time and on budget 
Eat your heart out Sir Alas- 
tair Morton, chairman of Euro- 
tunnel. His project was 
declared open earlier this 
month a year late, and at twice 
the initial cost And that was 
quick and cheap in comparison 


with the British. Library, still 
not ready more than three 
decades after the initial plans 
were drawn. 

My first glimpse of Sir 
George Is an expanse of scarlet 
sock seen through a half open 
door where he is dictating to 
his secretary. He apologises for 
running late, ?nd directs me to 
his study next door. Here 
among the battered leather- 
bound books and good furni- 
ture, a beige pug dog lies on a 
blue pouffe. 

It is hard to believe that a 
few yards away from this pre- 
posterously English domestic 
scene scores of singers' and 
musicians are gn g^g wd in ear- 
nest pursuit of artistic excel; 
lence. 

Likewise it is hard to believe 
that th e genial, gentlemanly 
Sir George, who presents him- 
self in due course, is the execu- 
tive chairman of the only 
opera company in Britain that 
covers its costs without public 
assistance. As he closes the 
door, he sets off the burglar 
qiflrrn “Oh damn," he says, 
and disappears to turn it off 

On returning, he tells me of 
one evening last year, when he 
heard a pair of thieves trying 
to get in through the window. 
He pursued them, giving chase 
in his Mercedes. “Their car 
wasn't all that fast I was Gash- 
ing and peeping, but I couldn’t 
get them to turn round so I 
could get a look at them." 

Despite the red socks and the 
car chase. Sir George is no chip 
off his father's eccentric block. 
While John Christie famously 
had his appendix removed sim- 
ply to keep his young opera 
singer wife company as she 
underwent the same operation, 
his son appears measured and 
sensible. 

Why did he embark cm such 
an ambitious building plan in 


1 express amazement at the 
pulling power of Glynde- 
boorne, and he shrugs. Its 
uniqueness has been a fact of 
life for him since babyhood. He 
a t tribute s it to freedom from 
“the vagaries of government 
funding”, to its season of three 
short summer months, above 
all to tirn high reputation of 
the performances. Only when 
pressed does he add Glynde- 
boume’s snob value to the Dst; 
“the family’s presence unques- 
tionably has an effect-” 


PEOPLE 




V - 




'dm 




the first place? Sir George 
refers to his “venal” motives - 
as if unaware that the Finan- 
cial 110163 is sympathetic to 
nils sort of thing “I wanted to 
make the theatre bigger to 
respond to the audience 
demand to provide additional 
box office and to secure our 
long term future," he says. 

“The funding strategy had 
an element Of 

he continues. Strong-arm tac- 
tics might have been a better 
description- The aim was to get 
most of the money from com- 
panies without granting than 
a larger share of the tickets 
than the 30 per cent or so they 
claimed already. 

hi tiie nicest possible way. 
Sir George told the existing 230 
corporate members that unless 
they could each make him a 
present of up to £90,000 they 
could no longer be in the dub. 
Some grumbled a little, but in 
the end only four friiad to get 
their cheque-books out 
That done, he approached 
the companie s on the waiting 
list for corporate membership. 
Fed up with what promised to 
be a 900-year wait (300 were 
waiting and on average only 
one member dropped out every 
three years) some 70 compa- 
nies came forward, each pay- 
ing up to £120,000 for the privi- 




NATURALLY, WE’RE NOT THE 
ONLY ONES WITH OVER 392 TAKE-OFFS 
AND LANDINGS EVERY DAY. 








It is not only special to the 
audience hut to the singers, 
who readily agree to spend the 
summer singing at Glynde- 
bourne for a fraction of the 
rate they might get elsewhere. 

The successful completion of 
the new building was partly 
down to luck; Sir George raised 
the money in a boom, and built 
the theatre in a recession. Bat 
good timing alone does not 
gg piain how seven consultants 
and 50 subcontractors worked 
together so weH The secret, he 
says, was running the project 
“on a personal-level. It has not 


w sf 




been subject to huge co mmi t- 
tees arid 

Sir George will have been 
running the company from his 
home above the shop for over 
four decades when he reluc- 
tantly steps down six years 
from now. Then he will be 65 
and his second son Augustus, 
who is his chosen heir, will be 
in his mid-30s. “Gus malcpg 
wildlife films, which makes 
him ideally suited for the 
Job." 

Augustus is no worse quali- 
fied than his father was when 
he took ova* at the age of 23. 
Sir George had always known 
he would assume the mantle 
and was brought op to be pas- 
sionate about opera. But at the 
time he was “completely 
green”, and certainly couldn’t 
read a balance sheet Yet soon 
he found hims elf plunged into 
the rude world of commerce. 

Sir George shakes his head 
at the memory of the more 
impulsive business ventures, 
which the sensible son was 
forced to unwind on his 
father’s death. “He owned a 
120-bedroom hotel in north 
Devon, called the Sultan 
Sands. It was a disastrous 
investment" 

It would be wrong to present 
him as merely the business 
behind the music. Although he 
has no training In opera - he’s 
an “enthusiastic amateur", he 
says - be is closely Involved in 


commissioning the works. The 
triumvirate - Sir George, the 
general director, Anthony Whi- 
tworth-Jomes, and the music 
director, Andrew Davis - 
ensure the quality of the per- 
formances. In his younger days 
he used to tour Europe looking 
for singers, but latterly has 
given up his talent scouting 
because he loathes living out 
of a suitcase. Apart from the 
singers, who are on freelance 
contracts, Glyndebourne has a 
permanent staff of about 50, 
many of whom have worked 
there far decades. "I know it 
sounds smug, but we don’t 
have a motivation problem 
here,” says Mark Beddy, the 
finance director. 

Saturday’s opening should 
mark the pinnacle of his 
career, yet Sir George is show- 
ing no sign of nerves. “I'm so 
thrilled with the acoustics. I 
adore the look of the audito- 
rium.” Evidently, he feels it 
will be more than all right on 
the night 

Later, after our interview, I 
bump into him in the staff can- 
teen. He and his wife are 
queueing up for their can el- , 
font chatting and Joking with 
some of the singers. , 

Being chairman of Glynde- 
bouroe must be nice work if 
you can get it. Or, as Sir 
George prefers to think of the 
job: Tt is better than being a 
dentist or a vet” 


t/) 


1 


George Trumbull 
touches down 
in Australia 

The US executive Invasion of 
corporate Australia continues 

with the appointment of 

George Trumbull as the next 
chief executive of Australia’s 
largest investment group, toe 
AMP Society, writes Bruce 
Jacques. 

Trumbull, scheduled to take 
over in September when Ian 
Salmon retires, has been 
recruited from toe CIGNA 
insurance group in the US. 

A former American football 
player, 49-yaar-old ThimbuH 
has a reputation tor toughness 
and change. He’ll need to 
score some early touchdowns 
when he arrives at the Sydney 
headquarters next month. 

Trumbull's appointment 
departs from more than a 
century of promotion from 
within AMP. Perhaps his most 
challenging task wffl be to 
modify the creaky internal 
structures of one of Australia's 
oldest corporate cultures. But 
he is not alone. A number of 
his compatr i o ts , including 
Robert Joss at Westpac, and 
Frank Blount at Telecom, face 
simitar tasks. 

Early items on Trumbull's 
agenda are likely to Include 
whether the Society should 
demutualise in favour of an 
equity-based structure and 
whether it shodd again look 
to banking after reoent 
disastrous fllrtations. 

Trumbult has already spent 
nearly a quarter of a century 
overhauling large parts of the 
CIGNA group. An economist 
with a degree from Dartmouth 
In 1966, he also obtained a 
Masters degree in Business 
Management in 1968 from toe 
Dartmouth School of Business. 

Band has hard 
act to follow at 
Premier Group 

After a long search for a new 
chairman, the Premier 
Group, one of South Africa’s 
largest and most successful 
food and retaMrq) 
corporations has announced 
that Doug Band, currently 
chief executive of media 
group Argus Holdings, wB 
take over from January 1, 
writes Mark Suzman. 

Band w3l be replacing 
current chairman and chief 
executive Peter Wrighfeon, 
who retires at 60. The new 
managing (firactor wiD be 
Gordon Utfam, Premier's 
lo ngstan ding deputy md. 

Wrighton’s departure after 
seven years at the hehn wW 
marie something at a break 
In the South African business 
scene; he wU be a hard act 
to follow. Ha is one of the 


most widely respected '' 

business leaders In toe 
country fay both the 
stockbroking communfty, 
which has watched him had 
Premier to 63 per cent, 
compound growto over the 
past four year*, and by the 
African National Congress 
which has approvingV noted 
Ms enfightenad approach 
on hiring black managers 
and accommodating . 
workers’ demands. 

By contrast; Ma successor 
has, since 1989, been 
running the Argus group 
which recently sold Ra 
newspaper in ter ests to 
Independent Newspapers. 
He wfl( stay on untB the 
restructuring of Argus 
resulting from the sale hi. 
complete white assuming 
the vice-chair of Premier 
from July 1. He has a 
previous association with 
Premier from whan he was 
chief executive of retail and 
musk: group CNA/GaKc, in 
which both Pre mi er and 
Argus have interests. “My 
strength is hi retailing and 
wholesaling. That's what TO 
bring to Premier," he says. 


Domemann 
tipped to lead 
Bertelsmann 

As GVC and Viacom hogged 
the financial headlines with 
their frenzied bidding for 
Paramount last year, 
Bertelsmann, the German 
media group, was winning 
frequent mentions as a 
would-be bidder, writes 
Michael Undemann. 

The group fas made no 
secret of its desks to take a 
stake In Hollywood, and with 
Michael Domemann about to 
take over as head of the 
redesigned entertainments 
division, speculation is rife that 

Bertelsmann may finally step 
out of the sidelines. 

The sums befog paid tor 
Hollywood media properties 
have never fitted into 
O ertaiamann'a conservative, 
family-owned philosophy. 
“TTheyJ are completely absurd ," 
Domemann was quoted as 
saying recently, explaining toe 
group's reluctance to join the 
fight for Hollywood turf. 

But whfle outright purchases 
have not been ruled out, 
Domemann prefers the Idea 
of “partnerships or mergers” 
where Bertelsmann could 
deploy its music and television 
expertise. 

Domemann, whom sources 
tip as the successor to Msk 
Wdesner, chief executive since 
1961, moved into 
entertainment when he took 
over the Bertelsmann Music 
Group in 1987. Before that, 
he had masterminded the 
takeover of DouWeday and 
RCA, the record label, as chief 
strategist at the family-based 
company based in GQtersloh 
where it was founded in 1835. 

The 49-year-old from 
Frankfurt stuefied at the 
Technical University in Berfin 
before joining IBM in 1970. 
After seven years In 
comp u ters, which included 
time at European headquarters 
to Paris, Domemann tasted 
toe waters at BMW before • 
moving to the Boston 
Consulting Group to run the 
Munich office for four years. • 





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Enter a 


man 


a mission 

Antony Thomcroft talks to Lord 
Gowrie, the new chairman of the 
beleaguered Arts Council 




T 


be fifth floor suite at the 
Arts Council from which 
Lord Palumbo, as chair- 
man, watched over four 
fat years of rising mis 
subsidy and one unhappy, final, 
year of strife and stringency. Is 
empty. Gone is his exquisite coflec- 
tum of contemporary art; gone the 
hothouse flowers. The only decora- 
tion now is a photograph of Samuel 
Beckett propped up against the 
wall "Beckett is my hero” says the 
new chairman. Lord Gowrie. 

hi a way, the empty roam says it 
aH There is to be a fresh start; 
nothing can be taken fin* g ran te d; 
the organisation's battered reputa- 
tion, both with government and its 
arts clients, is going to be restored. 
Gowrie sees it as his mfarinn to 
save the Arts CotmtiL "I think min- 
isters would find, life impossible 
without It”, he says. As a former 
arts minister, he should know. 

Lord Palumbo, a diffident, 
reserved man, was disillusioned in 
his final year of office by the fiasco 
over funding cuts for 
orchestras and by the Treasury's 
decision to cut the coundTs grant 
by £S-2xn. Lord Gowrie, 54, is a 
much tougher individual, more 
adept at traversing political and 
artistic minefields. A former chair- 
man of Sotheby's, he is an arts 
junkie, a published poet, and a far- 
mer art dealer. After Eton and 
Oxford (where he acquired Us nick- 
name, Grey, when his abundant 
hair prematurely acquired a silvery 
tinge) he lectured in the US and 
advised an art until a Conservative 
government desperate for young, 
energetic, s up p orter s to do its busi- 
ness in the House of Lards, wooed 
him with the job of arts minister in 
1983. 

He is married to the journalist 
Adelhdd Grftfln von dar Schulen- 
burgaod, though his main home Is 
in Wales, he continues to be a ubiq- 
uitous presence at London first 
nights. He lists book reviewing as 
bis recreation in Who's Who and he 
is a collector with very much the 
same modem tastes as Lord Pal- 
umbo. This passion for modernism 
extends to all the arts. He was 
quick to stand up and applaud at 
Caveat Garden's recent revival of 
Harrison Birtwistle's opera Gawcrin. 
In the current art world feud 
between "brickies” and conserva- 
tives he is proud to be a bricky, 
though an admirer of minimalist 
Donald Judd rather than Tate brick- 
layer Carl Andrfe. And, of course, he 


Is afan of Samuel. Beckett, the liter- 
ary icon of minimalism. 

Cowrie's iwwiwttato objective is 
to persuade the government to 
restore, the cut in subsidy, now 
around £5m in real terms. “The 
base level of subsidy is too low. Just 
as it is hard for a pensioner to save 
a fiver so it is for arts flnnnpawfag 
that are already cut to file bone”. 
To achieve tMa chang e at heart he 
must first restore pride and confi- 
dence in an Arts Council badly 
mauled by Internal rows and a 
recent cost-saving redundancy pro- 
gramme. The new secretary gen- 
eral, Mary Allen, is a Gowrie prote- 
ge and is regarded as a step in the 
right direction: «hw hm the tef fc of 
cutting back on the bureaucracy 
which bedevils the fives of coandl 

dlmfai 

Gowrie has persuaded heritage 
secretary Peter Brooke to appoint 
some real heavyweights to the 
co uncil- new arrivals Trevor Nunn, 
Sir Richard Rodgers and Thelma 
Holt — figures of international stat- 
ure til ths world of theatre, opera 
Afia afchitectitfe - sfaotdd help to 
repair its reputation among the 
malcontents of tire arts world. And 
it wifi he the council, as winch as 
the various specialist internal 
departments, that wifi decide pol- 
icy. 

“A lot of bets are off," says Gow- 
rie. *Tm not bound to anything. 1 
think file Arts Council is like 
Andrew Lloyd Webber's musical 
Sunset Boulevard. It was a good 
show but it needed, and received, 
modification. The council needs 
modification." All those who 
thought that Lord Gowrie would 
quietly accept the recent upheavals 
at the council - the internal reor- 
ganisation; the devolution of clients 
to regional arts boards; the stffibom 
national arts strategy - will be sur- 
prised. "Everything is open”. 

With the council licked into shape 
Gowrie can try to persuade the gov- 
ernment that the arts are one of the 
few British success stories of recent 
years. The arts are very cost effec- 
tive, with a tremendous spill over 
from fiie public to tire commercial - 1 
remember ten years ago going to 
see two young Irish actors at the 
Roundhouse in a play about the 
hung er strikers. One of them was 
Liam Neeson”. 

Given the government’s short 
storied lack of support for a British 
ffhn industry, Neeson, the star of 
Schindler's List, is now lost to Holly- 
wood, and is not perhaps the best 



1 W shelf my Ito at the gowmmwW pr o mi ses Low! Gowrie, pictured— led In his new office 


example of an Arts Council invest- 
ment yielding a profitable harvest. 
But Gowrie reels off some current 
achievements. Lucian Freud is 
probably the best artist in the 
world; Thomas Allen’s recent tri- 
umph as Don Giovanni at La Scala, 
Milan; the I£0 getting four encores 
from the hard-boiled Germans in 
Frankfort; the success of Diana 
Rigg as Medea an Broadway and 
Darcy Bussell with the Royal Ballet, 
in Washington. Lord Gowrie 
believes that the message of British 
artistic acclaim abroad has got 
through to the government, to fire 
media, and to the public. 

T here was some surprise 
that Lord Gowrie, a non-ex- 
ecutive director of Sothe- 
by's and hankers Guinness 
Mahon, was so keen to accept the 
chairmanship of the Arts CoundL 
To many, considering the London 

orchestras ifeiwpift »nJ fli» ensuing 
cries fra: the abolition of the conned, 
it seemed a poisoned chalice. And it 
was, after all, an unpaid post - 
apart from the perks of car, chauf- 
feur and endless free tickets. Gow- 
rie had notoriously resigned from 
the Conservative government in 
1985 because he could not five in 


f/mrinn nn a minister’s salary of 
£33,000. But his desire to became 
chairman of the Aits Council was 
not motivated solely by a dispas- 
sionate concern for the state of the 
arts. There was hm appealing lolli- 
pop: the arrival in the next few 
months of the National Lottery. The 
council will distribute the share 
going to the arts, perhaps £ 100 m a 
year. “It sugars the pill for the 
whole arts community. I lobbied for 
a lottery ten years ago but Lady 
Thatcher disapproved of gambling." 
He behaves file government assur- 
ances that the lottery money, 
designed only for capital projects in 
the arts, wOl not he used as an 
excuse for cuttin g revenue funding. 
He also takes a perhaps over-opti- 
mistic view of the ability of arts 
organisations to raise matching 
money to qualify for a lottery grant. 

But this is one of his hobby 
horses: his ™iti achievement as 
arts minister was the Business 
Sponsorship Incentive Scheme 
whereby the government topped up 
money that arts organisations 
attracted from sponsors by their 
own efforts. As chairman of the Ser- 
pentine Gallery he had little trouble 
raising matching funding to take 
advantage of any grants going. Butt 


the Serpentine, avant-garde and 
with some powe rf ul modem patrons 
of art as supporters, is hardly a 
typical British arts institution. 

Lord Gowrie is firm. “I will shake 
my fist at the government”; hut he 
is also pracfcicaL He has courted Mo 
Mowlam, file shadow heritage secre- 
tary. He gets on well with Peter 
Brooke, who, for no very good rea- 
son, has been tipped to lose his job 
in any reshuffle. Lord Gowrie com- 
ments: "the country needs continu- 
ity in important jobs. At the Serpen- 
tine I had to deal with six different 
ministers”. 

But he is talking equally tough to 
the arts. He has warned companies 
that they must budget this year 
within the subsidy-cutting guide- 
lines laid down by the Heritage 
department He is not a man for the 
barricades. He is also frighteningly 
realistic, a rare quality in the arts 
where being starry eyed and other- 
worldly is almost a qualification for 
a job. 

M his firrt speech as chairman,- to 
a c o n f ere nc e organised by the Insti- 
tute of New International Visual 
Artists, the counril’s most expen- 
sive new project a planned exhibi- 
tion space for multi-cultural art 
Lord Gowrie terrified the audience 


TtowMnpMn 

by painting oat that the council bad 
been generous initially but in the 
current climate, he could not guar- 
antee future funding on such a 
scale. He is also glad-handing less 
glamorous gatiiprfng a, lifcp the asso- 
ciation of district councils. He 
knows that local government 
spends as modi on the arts as the 
Arts CoundL 

It is dear that Lard Gowrie is 
going to throw himself enthusiasti- 
cally at the arts. He hopes to fiir- 
nish his new office by dianning a 
Roger Hilton painting from the Brit- 
ish Council to add to his modest 
collection of sculptures by William 
Turnbull and Julian Sainsbury. He 
wifi be turning up at the council 
five days a week, at least for the 
first few months. After file self-ef- 
facing Lead Palumbo, the arts are in 
for a rude shock. Lord Gowrie is a 
believer. He also sfees himself as a 
player. He has just come back from 
the Cannes film festival, where he 
had a walk on part This week end 
he was off to the Hay-on-Wye festi- 
vaL where he publicly read poetry 
and interviewed RJS. Thomas. Tm 
a participant too l may be only a 
caddy but I will keep on the 
greens.” Rarely has a caddy had so 
Tnnrh influen ce on the g 


■ Over 300 exNblta plot Goethe’s 
intense and WgHy influential - 
ratetionsh^j wth painting and 
sculpture fh»n antiquity, to 
tys own day. Artists 

. Jodudp tepftaefrSt 

■ Qwfl&’Vft-tay world, 

Claude, Mengs, . 

Friedrich, SCWnkot, 

. Tisoftbetn, Constable 
and Turner. To 7 
. August. titeri at-.-. • 

' ScWossraiiseOrtv 

Weimar, 1 ' 

September-30 

October. . 


Opera 

ENO turns 
up the 
power 

This was the most exciting 
performance seen at the London 
Coliseum for many a month. It is 
said file health of an opera com- 
pany should be judged by the 
strength of its revivals. If so. 
English National Opera is in fine 
fettle, If it can bring back a produc- 
tion three years old with as much 
bracing immediacy as Peter Grimes. 

It dates from 1991 , the height of 
“powerhouse” arrogance, when 
every production wore its naked 
light-bulb with pride. Tim Albery’s 
production of Peter Grimes has the 
statutory fight-bulb, but is surviv- 
ing proof of the dynamism that fit 
up the finest work of those years. 
Even if the brufafism of the sets 
seems unnecessarily harsh, all that 
goes on within them is electric, 
music drama with the power 
switched up to maximum. 

Albery treats the opera as a late 
example of expressionism (Berg's 
Wozzeck, a great fofhiwiw> on Brit- 
ten, never seems for away). The 
people of the borough form the 
faceless army of society, deter- 
mined to destroy any individual 
who does not conform. Peter 
Chimes is already unhinged at the 
start and the opera is spent watch- 
ing trim teeter on the edge of the 
diff, ready to foil into a bottomless 
ocean of madness. 

In the title role, PHfip Langridge 
gives one of the essential operatic 
portrayals of today. Shame and 
despair have seeped into every 
mnsde or his body; there are emo- 
tions here Langridge seems to 
drag up from the pit of Grimes’s 
stomach. Each line of the text is 
stamped with individuality and he 
is in good voice. With the conduc- 
tor David Atherton pushing tike 
musk: to the brink, the Impact is 
formidable. 

So far fids is a repeat of the cast 
from 1991. The newcomers this 
time include Janice Cairns, who 
does not find the vocal writing for 
KDen Orfbrd congenial, but gives 
fie character a more determined 
personality than nsnaL Alan Opie 
is sure and steady as the faithful 
sea-dog Balstrode. Among the 
many smaller rales there is not one 
caricature, be it Ann Howard’s 
fearsome Madame of an Auntie, 
Susan Gorton playing Mrs Sedley 
as any nosey Grandma or Alan 
Woodrow's near-hysterical Bob 
Boles. It is good news that the BBC 
is filming the production for future 
broadcast 

There are twelve further perfor- 
mances until June 30. 

• The night before. Curlew River 
was performed in St Paul’s Church 
as part of the BOC Covent Garden 
Festival by Music Theatre Ulster, 
not with anything like the same 
intensity, though the simplicity of 
fids late Britten score was gener- 
ally respected. 

Richard Fairman 



■ BERLIN 

OPERA/DANCE 
Deutsche Opsr Tonight Jesus 
Lopez-Cobos conducts concert 
performance of BottW’s U Pirate, 
wtt cast Jed by Lucia AfibertL 
Tbtnonrow: Peter Schaufuss’ 
pr o du ction of Gteede. Thurs: triple 
fa* of Stravinsky ballets. Wed. Fri: 
Georgs Whyte’s now Dreyfus opera, 
tnyakrfay Jost Meier. Sat Madama 
Sutttyfly with Helen FWd. Sun: 
Lo heh grin with Tina Ktberg, Gwyneth 
Jonefc and James O’Neal (341 024 9) 

atmksoper unter den Unden 

Tonight Rood Jacobs conducts 

~ perform an ce this season erf 
p’s opera sorts Cleopatra e 
r with cast headed by Janet 
,_!» Debora Barones* and 
hDowaon. Tomorrow: B^art 

h*. Thurs, Sac Paul Dessau s 
f Die VerurteRung des LukuIIus, 
~ tfwpdad by Reiner 

Sum Mebtensinger with 
rVcyt Karmen as Sachs (200 
>4494) 

tOper Tomorrow Jochen 

jtara in Harry Kupfef's 

version of Gfodrt Orfoa Thurs: 


La boheme. Fri: Prokofiev’s ballet 
Romeo and JuDeL Sat Cos! fan 
tutta Sim: The Bartered Bride (229 
2555) 

CONCERTS 

PhBharmonie Tonight tomorrow, 
Wed: Pierre Boulez conducts Bertin 
PMharmonlc Oruhesta and Radio 
Chorus In works by Stravinsky and 
Ravel. Thors: Andrei Gavrilov piano 
redtaL Sat Sun: Vladkrdr Ashkenazy 
conducts Berlin Radio Symphony 
Orchest ra in Debussy, Britten mid 
Richard Strauss, with vfolfri soloist 
Ida HaendeL June 3, 4, 5, B, 9, 10: 
James Levine conducts two dffferent 
programmes with the Berfm 
PhBharmonie (2548 8182) 
Scha uapl af i aus Wed: SNomo kfintz 
vio&n recital. Fri: H a nS'Petar Frank 
conducts Weimar StaatskapeKe in 
works by Borodin, Delius, Busoni 
and Strauss, with piano soloist RhSp 
Fowke. Sun: Paata Burchuladze 
song reettai (2090 2156) 

THEATRE 

Bernhard Minettl reads from 
Goethe's Faust Part One tonight 
in the Phflharmonte 
KBmmermus&saaf, and Peter Stein 
reads from Part Ttoo on Wed, Fri 
and Sun at Martin Gropius Bau, 
as part of the Faust cycle organised 
by toe Bertin PhSharmonta Orchestra 
(2548 8132). This week’s repertory, 
at Deutsches Theater includes 
Schnitzfer*s La Bonds directed by 
JOrgen Gosch, and two prexfoctfons 
by Matthias Langhoff - Ostrovsky’s 
The Forest and Hofmannsthal's The 
Tower £844 1225). The popular 
musical revue Das Kffeeen macM 
so gut wie feefri Gerfiusch is enjoying 
another run of performances at 
KJotoes Theater (821 3030) 

• Tickets and information for 
theatre, revues, concerts and 


nightclub shows available from City 
Center Theater und Konzsrtkasse, 
KmfD ra tendsmm 16 (tel 882 6563 
fax 882 6567) and Theaterkasse 
Im Europa-Center (tel 261 7051 fax 
261 9286) 


■ NEW YORK 

THEATRE 

• Passion: Stephen Soncflieim's 
new musical based on lgkx> 
Tarchottfs 1069 novel Fosca about 
a woman's unrequited k>Ve for a 
handsome young army captain 
(Plymouth, 236 West 45th St 239 ’ 
6200). 

• She Loves Me: the 1963 Bock. 
Hamlck and Masteroff musical Is 

a delicate, u n abas h edly simple story 
with all the humanity, integrity and 
charm that Broadway's 
mega-musicals lack (Brooks 
Atidreson, 256 West 47th St 307 
410(9 

• Damn Yankees: toe big musical 

hrt of 1955 Is back. Its jarringly 
updated production masked by the 
sporty energy of the cast and eome 
lively new dance numbers (Marquis, 
Broadway at 45th St, 307 4100) 

• Carousel: Nicholas Hytner's 
bold, beautiful National Theatre 
production from London launches 
Rodgers and Hammerstdn towards 
the 21st century (Vivian Beaumont, 
Lincoln Center, 239 6200) 

•. Three Ted! Women: a moving, 
poetic play which has just won 
Edward Albee a PuBtzer PrtteL Myra 
Carter, Marian Seldss and Jordan 
Baker represent three generations 
of women trying to sort out toes- . 
paste (Promenade, 2162 Broadway 
at 78th St 239 6200) 

• Angels in America: Tory 


KU8hner’8 two-part epic conjures 
a vision of America at the edge of 
disaster. Part one is Millenium 
Approaches, part two Peresbofca, 
played on separate evenings (Walter 
Kerr, 219 West 48to St, 239 6200) 

• Broken &ass: Arthur MUeris 
new play, set In 1938 Brooklyn, 
about a womai who flirts against 
a erfopting aBment whBe her 
husband deals with Ms long-hidden 
shame (Booth, 222 West 45th St, 
239 6200) 

• Four Dogs and a Bone: John 
Patrick Shanke/s satiric comedy 
about movie-making and power 
plays in HoSywood (ljudlle Lortel, • 
121 Christopher St; 924 8782) 

• The Sisters Rosensweig: Wendy 
WasserstBln’a most successful play 
to date, a comedy with serious 
undertones about the reunion In 
London of three American Jewish 
sisters (Ethel Barrymore, 243 West 
47th St, 239 6200) 

• An Inspector CaBs: JJ3. 
Priestley’s 1947 mystery thriBer in 
an award-winning production from 
Britain's National Theatre, directed 
by Stephen Daktry (Royale, 242 
West 45th St 239 6200) 

• Mort Safe’s America: a one-man 
show about the political and social 
power structure In American life 
(Theatre Fax, 424 West 55to St, 

239 6200) 

MUSIG/DANCE 

MetropoEtan Opera American Balat 
Theatre's repertory this week two 
Anthony Tudor ballets and La 
Syipfede. The company’s Spring 
season ends next week with La 
Sylphlde and Giselle. Daily except 
Sun (362 6000) 

State Theater New York City 
Ballet’s Spring season runs daSy 
except Mon till June 26, with 


choreographies by Balanchine, 
Robbins, Martins and Tanner. 
MSdtafl Baryshnikov wffl perform 
Jerome Robbins' A Suite of Dances 
(Bach) on May 27 and 29. Several 
evenings are devoted to The 
Diamond Project, featuring new 
neo-classical baBets by Ulysses ; ; 
Dove, Richard Tanner, Robert " ' 
LaFosse and nine other 
choreographers (870 5570) 

Avery Fisher Hafl This week’s New 
York Philharmonic concerts are 
conducted by the orchestra’s chief 
conductor, Kurt Masur. Tomorrow's 
programme consists of works by 
PaUus, Richard Strauss and 
Brahms. Thurs, Fri, Sat, next -Tues: 
a programme of American 
eccentrics, Including works by Ives 
and Ruggtes (875 5030) 


■ PARIS 

OPERA/DANCE 
This week's performances at the 
Bastille and Palais Gamier are 
threatened by strike action, which 

disrupted fort week’s premiere of 
Tosca at toe BastiDe. Tosca, 
conducted by Spiros Argirfs and 
staged by Wemer Schroeter, is due 
to ran tiH June 17 with changing 
casts including Carol Vaness/Galina 
KaKrena, Plackto DomkjgcV 
Viachestav Pokaov and Alain 
Rxxiary/Sergei Leifericus. 
Wednesday's performance is to 
be t rans mitt e d live to a large screw) 
on the Place de la Bas&Qe. Andr6 
EngeTs 1992 staging of Lady 
Macbeth of Mteensk is revived 
tomorrow for six performances 
conducted by Myung-Whun Chung, 
with a cast headed by Mary-Jane 
Johnson and Jacque TrusseL At 


toe Palais Gamier, the Op6ra Bafiet 
has Rudolf Nureyev’s 1992 staging 
of La Bayadere dafly from tomorrow 
till Sat The production wffl be 
revived for a further series of 
performances at the Bastille at the 
end of June. To find out whether 
performances are going ahead as 
planned, ring 4473 1300 or 4343 
9696. The Bastille box office is 4473 
1399. The Palais Gamier box office 
is 4742 5371. The Opdra-Comlque 
- box office 4286 8883 - has Don 
Pasquale tifl June 4, with a cast 
headed by Gabriel Bacquier and 
Leontina Vaduva. 

CONCERTS 

Salle Pteyel Wed. Thurs: Claus 
Peter FI or conducts Orchestra de 
Paris and Chorus in works by 
Mozart and Mendelssohn. May 31: 
Krystian Zlmerman piano recital 
(4561 0630) 

Chdteiet Fri: Emanuel Ax, Isaac 
Stem, Jaime Laredo and Yo Yo 
Ma play piano quartets by Mozart, 
Faur6 and Dvorak. Sun: Daniel 
Barenboim conducts Chicago 
Symphony Orchestra in works by 
Debussy, Elliott Carter and Brahms 
(4028 2840) 

JAZZ/CABARET 

Memphis blues singer Ann Peebles 
Is in residence this week at Lionel 
Hampton Jazz Club. Music from 
10.30 pm to 2 am (Hotel Meridian 
Paris Etofle, 81 Boulevard Gouvion 
St Cyr, tei 4068 3042) 

• A 24-hour recorded telephone 
guide to Paris entertainments Is 
available in English by dialling 4952 
5356 


ARTS GUIDE 

Monday: Baffin, New Yoric and 
Paris. 

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

Thursday: Italy, Spain, Athens, 
London , Pragu e. 

Friday: ExhUtions Guide. 

European Cable and 
Satellite Business TV 

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


MONDAY 

NBC/Super Channel: 
Reports 1230. 


FT 


TUESDAY 

Buronewa: 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; 











12 


14 


FINANCIAL TIMES MONDAY MAY^23 1994 


Samuel Brittan 


Changing cultures 
of capitalism 



Does culture 
€ determine eco- 

I 'tfjjja nonries or eco- 
- — nomics cul- 
ture? The issue 

has raged fora 
long time. 
Mane and con- 
temporary Chi- 
cago economists are alike on 
the economic side; Max Weber, 
the early 20th century German 
sociologist who wrote about 
Protestantism and the rise of 
capitalism, on the other one. 

Both have now accumulated 
a lot of egg on their faces. 
Attempts to explain the funda- 
mentalist revolution in Iran in 
terms of rational utility max- 
imisation by Iranian citizens 
have, to put it mildly, been 
extremely unconvincing. 

Of course the cultural and 
economic spheres interact. 
Peter Berger, the American 
sociologist, has coined the 
term “economic culture" for 
the resulting product. As he 
explains in an article in the 
McKinsey Quarter ty. the Inter 
action has to be studied in 
careful case studies. 

One reassuring conclusion is 
that comparative cultural 
advantage changes. The Japa- 
nese bent for organisation 
budding may not be such an 
advantage in a post-industrial 
society based on information 
technology. Berger also throws 
much needed doubt on much of 
what is written about the Can- 
fucian element in Asian eco- 
nomic success: ‘Tew Taiwan- 
ese entrepreneurs are steeped 
in the Confudan classics." 

His most stimulating 
remarks are on the US-origi- 
nated counter-culture of the 
late 19606 and early 1370s. Most 
of its members have now 
accepted "the system” but 
have retained some of the 
beliefs and lifestyle of their 
youth. They are to be found 
particularly in communica- 
tions. (Their trademark can be 
veiy simple, such as avoiding 
wearing jacket and trousers of 
the same colour less they be 
accused erf wearing a suit) 

Is this kinder, gentler capi- 
talism doomed to be conquered 
by the uptight varieties? Ber- 
ger wisely leaves open the 
alternative optimistic hypothe- 
sis that the more sensitive 


types of behaviour may have 
an advantage in the emerging 
service economies. 

Just bow diverse the cultural 
forms of capitalism can be is 
Illustrated in a new book of 
essays by American writers 
entitled The Culture of the 
Market. It is a book to dip into 
at leisure and will be most 
instructive if read without too 
relentless an attempt to derive 
lessons from it. 

The essay nearest to the 
present day concerns the 
remarkable vogue of The 
Lonely Crowd published in 1954 
by the American author David 
Riesman, the one sociologist to 
have made the cover of Time 
magazine. By the early 1970s 
more than Lm copies of the 
abridged edition had been 
bought and the book still sells. 

The Time cover has two 
fig ures behind Ries- 


Market societies 
have been, 
associated with 
many different 
patterns of living 


man’s head. The first, "dressed 
in a dark Victorian suit and 
wearing long, bushy 13th cen- 
tury sideburns, seems to stride 
briskly and purposefully away 
from the reader, oblivious to 
all but his quest, a giant gyro- 
scope strapped to his back. The 
second man, dressed in a light 
coloured suit, is a more mod- 
em 20th century man, perhaps 
a salesman, faring in file oppo- 
site direction". 

The outer-directed person 
escaped from the authoritari- 
anism of the 13th century 
home, school or business, only 
to he smothered by the new 
conformism of his peer group. 
THramaw had a lmark of high- 
lighting relevant children’s sto- 
ries such as the young engine 
Tootle, which lands in trouble 
because of its unwillingness to 
"stay on the tracks with the 
other engines". 

Most of the chapters go bark 
however, to earlier periods. 
There is an absorbing essay 
about the painter Edgar 
Degas’s tense relations with 
markets, which not only gave 


him a varying sales outlet but 
were the source of some of his 
most famous pictures, such as 
a New Orleans cotton offira, a 
sulking banker and a galaxy of 
scurrilous stock exchange 
types. The most ambivalent of 
file pictures is Madame's Birth- 
day, in which tactile values’ 
are graphically shown. 

In a very different vein, 
there is an account of the 
American essayist Henry Tho- 
reau’s temporary period as a 
semi-hermit refugee from com- 
mercial life. But so for from 
being any kind of collectivist, 
Thorean was a radical individ- 
ualist in the American mo u ld , 
who could not resist instruct- 
ing bis readers on simple her- 
mitage book-keeping and was 
not above some self-mockery. 

At the opposite cultural 
extreme, Balzac's novel Pere 
Goriot reveals bow for the 
European bourgeois has often 
been from any simple idea of 
utility maximisation: material 
goods are sought as symbols erf 
honour, family dignity and 
snobbish attainment The 
weekly budget of one character 
is exhausted in a vain attempt 
to arrive with dean boots at 
the home of a mfnor aristocrat 
But an antidote to nngfaiig fa fa 
provided in Martin Wiener's 
account of the moralist-disci- 
plinarian criminal policy of 
Victorian En gland which some 
over-promoted British minis- 
ters would like to see restored. 

Anthropological studies have 
shown the most varying pat- 
terns of lfaicgg BK between dif- 
ferent hffHeftf RimUflr ty capli al- 
ist heroes, who wrote their 
autobiographies as moral tales, 
could be anything from stem 
supporters of hierarchical 
order to rebellious hedonists 
and modernisers. 

The main non-materialist 
advantage of modem capital- 
ism is that it is a necessary - 
but for from gnffirtonf - condi- 
tion of an open society in 
which many alternative cul- 
tures can. flourish. 


Peter Berger, The GNP and the 
Gods. McKinsey Quarterly. 
1994, No. 1 

The Culture of the Market, 
edited by TL Haskell A RF 
Teichgraeber HI, Cambridge 
Uni v ers ity Press, £35 


M agnificent Rocky 
Mountain vistas 
dominate the 
view from Jeff 
Thredgoid’s new six-bedroom, 
seven-bathroom home near 
Salt Lake (Sty, -Utah. Walk out 
the front door of the faipncipg , 
pink brick structure, designed 
by Mr Thredgold himself and 
within you ran be hik- 

ing in the foothills of Utah’s 
Wasatch mountain range. 

Less than an hour’s drive 
away lie some of the world's 
leading ski resorts: Park City, 
Deer Valley, Snowbird and 
Alta. “Now this Is living!” 
declares Mr Thredgold, survey- 
ing the Park (Sty ski slopes 
over lunch on a warm, cloud- 
less spring day. 

Mr Thredgold. chief econo- 
mist for KeyCorp, America’s 
Uth largest bank, is part of a 
significant US business and 
social trend: a rapidly growing 
number of American compa- 
nies a nd individual profession- 
als are settling in the Rocky 
Mountain region, attracted by 
its open spaces, low cost of liv- 
ing, and pro-business politics. 

Mr Thredgoid’s company is 
headquartered for off in the 
mstbeit state of Ohio. But 

modern cn wirmrairertinTis mflflTj 
he ran keep in touch from the 
mountains of Utah, where he 
was raised. 

He prefers to live here 
because of its quality of life, 
family and so cial ties, and the 
perspective a western base 
gives his economic analysis. 
He built his dream house for a 
fraction of what it would have 
cost in many large US cities. 

Many newcomers are fleeing 
the onoe golden state of Calif- 
ornia. tired of its deep (though 
now aiding) recession, regula- 
tory red tape, high costs, pollu- 
tion and almost biblical succes- 
sion of recent disasters - race 
riots, earthquakes, and fires. 

They have helped make the 
six states down the spine of the 
Rockies - Montana, Idaho, 

Utah, Wyoming, Qnlnrydn and 
New MOxico - plus Nevada and 
Arizona, the fastest-growing 
US region in recant years, mea- 
sured by job creation. 

Admittedly, this growth is 
from a modest base. The region 
is a vast, sparsely populated 
land, accounting for no more 
than 5 per cent of America’s 
GDP, and encompasses great 
extremes of geography, from 
desert to rolling high plains. 

Ex pansion is also brin g in g 
problems, ranging from social 
tensions between Rocky Moun- 
tain natives and thp newcom- 
ers to long-term questions 
about the sustainability of 
growth and the adequacy of 
water supplies in this largely 
arid region, r - 


Clean air, open spaces and low costs are. drawing 
US professionals west, says Martin Dickson 


Lone eagles nest 
in the Rockies 


For now, however, the 
upturn is welcome in an area 
which has been traditionally 
nn mining , oil, farm- 
ing arid forestry, with an eco- 
nomic history of booms and 
busts tied to commodity cycles. 
In the late 1370s the region's 
main city, Denver, Colorado 
enjoyed spectacular expansion 
cm the back of a global oil cri- 
sis, but as crude prices fell in 
the 1980s. the region missed 
out on the strong growth 
enjoyed by the US as a whole. 

MS Susan Piatt, of the Colo- 
rado state Office of Business 
Development, avoids calling 
the current expansion a boom. 
"It fr y p Pps thing s are out of 
control . . . We like to think its 
healthy growth and its our 
turn, because we were so 
depressed when the rest erf the 
nation was doing so wen.” 

Many of the companies com- 
ing to the Rockies are small - 
the kind of business that Is 
creating most new jobs in the 
US — and many of them are in 

hi gHipphwfling y areas such as 
computing and medicine. For 
example, Boise, the capital of 
Idaho, a state renowned for 
growing potatoes, had the 
greatest job growth of any US 
duty last year (6 per cent) and 
high-technology employment 
there has expanded by more 
than 10 per cent a year for the 
past six years. 

Companies are attracted by 
the region's cbo^p labour (the 
Rockies have among the lowest 
average wages in the US), and 
modest costs for utilities, work- 
ers' benefits, bousing and 
office space. 

They also like the region's 
strong work ethic. Utah, the 
fastest-growing Rocky Moun- 
tain state, with 6 pa- cent job 
growth last year, seems to be 
benefiting in particular from 
the fact that 70 per cent of its 
population belongs to the Mor- 
mon church, based in Salt 
Lake City. Mormons are 
known for strong family values 
and emphasis on education 
and hard work. 

Some companies also hope 
the quality of life in the 
Rockies - with its wide open 
spaces, fresh air, low crime 
rate and small town values - 





rado Rockies now one of Amep. 
lea’s most fashionable ski 
resorts, has a prqiect to build a 

community wide computer net- 
work and improve communica- 
tions with the outside world. 
Locals boast it has the highest 
per capita ownership of per- 
sonal computers in the US. 

But for all its benefits, the 
growth is also bringing prob- 
lems. Many long-time Rocky 
Mountain residents deeply 
resent the newcomers, their 
wealth, cosmopolitan aim, and 
the inflationary impact on 
housing and form land, which 
could create a gulf between 
haves and have-nots. Tensions 
have run particularly high 'in 
some Utah towns between 
straight-laced Mormons and 
free-wheeling Califomiaus. 



will help them attract and keep 
well-educated employees. 

Says Ids DeeDee Corradini, 
Mayor of Salt Lake City : "A 
decade ago. when I talked to 
businesses about moving to an 
area hke this, they wanted to 
know what it meant for them 
financially . Today. fm finding 
more and more asking. “What's 
the quality of life? Will our 
employees and their families 
be happy living there?' " 

The influx of professional 
individuals - such as fund 
managers, lawyers, computer 
experts, managp-mgnt consul- 
tants and writers - stems from 
two main forces. First, a large 
pool of these freelances is 
being created as US corpora- 
tions, struggling to stay com- 
petitive, spin off service func- 
tions to outsiders. 

At the same time, modern 
communications - computer 
mnrtpms, fax machines and sat- 
ellite television - allow profes- 
sionals to live where they 
choose, if it is within striking 


distance of a good airport. 

Mr Philip Burgess, who 
heads the Center for the New 
West, a Denver-based think 
tank, calls the breed "lone 
eagles" - mobile knowledge 
workers who live by their wits. 

"We are in an era of a great 
shift in lifestyle preferences,'’ 
he argues. "More and more 
Americans are leaving big 
cities to pursue a better quality 
of life." This promises to revive 
small towns in a ttract i ve parts 
of the US, recently deemed to 
be dying as Americans moved 
to city suburbs. 

Several Rocky Mountain 
towns have begun wooing 
freelance professionals, know- 
ing they are not only highly 
paid hut tend to gink their 
roots deep into a community. 
Says Mr Burgess: "They will 
serve on the library board and 
perhaps run for the county 
commission, bringing new 
ideas and a fresh perspective.” 

For example, Telhiride, a for- 
mer mining town in the Colo- 


T be big challenge fee- 
ing local politicians, 
says Mr Michael Leav- 
itt, Utah's governor, h 
to balance growth against pres- 
ervation of quality cf fife: "The 
more attractive you are 
the more people want to 
come." 

Utah, for example, has 
become more discriminating 
about the Kinds of business it 
tries to attract A few years 
ago it was happy to take afi 
comers. But Salt Lake City 
recently cold-shouldered a 
company which would have 
brought jobs to the area but 
demanded large water treat- 
ment subsidies. 

Even if quality of life can be 
maintained, there remain big 
question marks ova- long-term 
growth. Industry may become 
less enthusiastic about the 
Rockies when wage rates rise 
closer to the national average. 
And high technology jobs can 
be destroyed by sudden techno- 
logical shifts. California, for Its 
port, is starting to fight back 
against the business exodus, 
for example by simplifying its 
red tape. 

On top of all this, growth 
will eventually bring to the 
Rockies a problem faced by an 
of the arid, w es tern third of fee 
US, but which regional boost 
era like to ignore: a shortage of 
water, pitting state against 
state and former against town- 
dweller. 

Herculean damming and 
water diversion efforts mean 
this may not be a problem for 
20 to 30 years or more. But as 
the late Wallace Stegner, a 
leading novelist and historian 
of the region, pointed out: 
"Sooner or later the west must 
accept the limitations imposed 
by aridity, one of the chief of 
which is restricted human pop- 
ulation .. .Ghost towns and 
dust bowls, like motels, are 
western inventions." 


* . 
< 



LETTERS TO THE EDITOR 


£ 


Number One Southwark Bridge, London SE1 9HL 

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


Empirical 
issue in need 
of research 


From Mr Dan Carry. 

Sir, Does Michael Prowse 
(“Market v state in Education", 
May 18) really think that 
Financial Times readers are 
nnfflraiiiflr with the simple 
textbook theory as to why mar- 
kets work best, so that we need 
a patronising fable about books 
to explain It to us? 

To be able to say, as Prowse 
does, that "greater choice of 
school is indisputably a good 
thing", one must be embracing 
a myriad of assumptions about 
information, externalities, 
economies of scale, income dis- 
tribution. accompanying social 
policies and so on. All of these 
are questionable 

Let’s be frank: most people 
want a good school round the 
corner from their home, not a 
theoretical choice of 100 
schools, especially when the 
transport implications of going 
anywhere but the nearest of 
them rule most out, and when 
the good schools have no space 
and so in reality they choose 
their pupils (and parents) 
rather than the other way 
round. 

So in order to work, the 
choice argument has to riahn 
that, by offering choice and 
competition, not only will the 
average level of education rise, 
but we will not end up with a 
split between geographically 
concentrated good schools and 
rink schools. 

It must also be shown that 
the effort made by schools to 
differentiate their product 
(maybe no more than school 
versions of advertising - a 
largely deadweight cost to the 
economy) and the search costs 
that must be undergone by 
parents are all outweighed by 
the anticipated benefits. 

As in so many other areas, 
these issues must surely be 
empirical ones that should be 
opened up to piloting and 
research - like the OECD 
Study of parental choice of 
schools. 

Simple ideology based on 
hopeful models of how the real 
world works may suit Prowse, 
but should not sway serious 
policy makers. 

Dan Corry, 
editor. New Economy, 

Institute for 
Public Policy Research, 

3M2 Southampton Street, 
London WC2E 7RA 


Dividend payout problem unclear [tie lia! 


From Prof DR Myddetton. 

Sir. Mr Stephen Dorrell is 
reported to have said (in a 
speech to the CBI this week) 
that dividend payouts by Brit- 
ish companies may have 
become too high and too inflex- 
ible (“Dorrell critical of high 
dividends”. May 19). 

According to him, in the 
early 1980s companies were 
distributing between 20 and 25 
per cent of their after-tax earn- 
ings in dividends: but the pay- 
out ratio has risen to more 


than 50 per cent in the early 
1990s. 

There is no virtue in compa- 
nies retaining {unfits if they 
cannot invest the foods profit- 
ably. And the Wilson Commit- 
tee found no evidence that 
medium or large companies 
were prevented from investing 
in profitable projects by any 
lack erf foods. So it is not clear 
that there is any problem. 

Mr Dorrell, being a Treasury 
minister, will be aware that 
the pound has lost more than 


90 per cent of its purchasing 
power over the past 30 yean. 
How have his calculations, 
allowed for the debasement of 
the currency? It does have a 
significant effect on financial 
statements which use money 
8s the unit of account in mea- 
suring “earnings". 
DRMydddtan, 
professor of finance and 


iaudi 


, t 
i l 




accounting. 

Crunfield School af 
Management, Cranfiekt, 
Bedford MK43 QAL 


Russia yet to follow Estonia’s example 


From Prof Steve H Hanke. 

Sir, Tour editorial commen- 
tary "Chernomyrdin sees the 
light” (May 18), attempts to 
portray yet another Russian 
prime minister as an economic 
reformer. You claim that Mr 
Chernomyrdin has taken to 
heart the experience of “the 
former Soviet Baltic states, 
especially Estonia". This asser- 
tion is incorrect 

Estonia's record on inflation 
and growth has surpassed 
other farmer Soviet republics'. 
That is due, in large part, to 
Estonia replacing the rouble 
with the kroon and introduc- 
ing a currency board-like sys- 
tem on June 20 1992. 

Under that system, the kroon 
is backed 100 per cent by for- 
eign reserve currencies and 


gold and is freely convertible 
at a fixed rate of eight kroons 
per D-Mark. The Bank of 
Estonia cannot engage in dis- 
cretionary monetary and/or 
exchange rate policies. It can- 
not finance fiscal deficits. 
Indeed, the bank’s bands are 
tied, so that changes in the 
stock kroons are automatically 
determined by the free flow of 
monetary reserves in and out 
of the bank. 

The Russians, including the 
so-called reformers, have 
always rejected what has 
become the hallmark of Eston- 
ia’s reforms, the currency 
board system. For example, in 
1991 most of the future Russian 
"reformers" attended meetings 
in Paris, ft was there that the 
young forks selected Mr Yegor 


Gaidar to be their leader, ft 
was also there that they were 
introduced to the currency 
board idea. Since then, Rus- 
sians of all stripes bare 
expended considerable effort 
defending the institution of 
central hanking for Russia and 
objecting to the currency board 
alternative. 

If Mr Chernomyrdin is ever 
to be serious about the goal of 
currency stability, he must tie 
the hanifa of the Centr al Bank 
of Russia. To do this he must 
do what Lithuania did on April 
l, when it followed the Esto- 
nian example. 

Steve H Hanke, 

pro fessor of applied economics. 

The Johns Hopkins University, 

Baltimore, 

US 


IV- 

u 


1- “ 




l*. 


Private pay rises knock-on to public sector 


From Mr Chris Trinder. 

Sir, In "Hunt issues fresh 
warning on pay rises" (May 
19), the emphasis was on the 
need for businesses to control 
their wage costs so as to main- 
tain their competitiveness. 

While this is important there 
are wider implications of the 
recent rapid increase in private 
sector pay. One aspect is the 
knock-on effect to future public 
sector pay awards. 

The pay review bodies for 
nurses, armed forces and 
teachers, for example, regu- 
larly refer to “backward" 
looking comparisons with 
earnings in the previous 12 
months in the whole economy 
when they make recommenda- 
tions for the forthcoming year. 
Increases in the current year 
until September will form an 
important part of their consid- 
erations for public service pay 


between April 1995 and March 
1996. Similar arrangements, 
such as interquartile ranges of 
past pay movements, apply in 
the long-term pay agreements 
for civil servants. 

In addition to the institu- 
tional considerations, econo- 
metric analysis for the period 
1963-1983 (which I carried out 
with SGB Henry and N Foster 
and published while at the 
National Institute of Economic 
and Social Research in the 
1980s) “proved" public service 
pay is largely determined by 
earlier developments in the pri- 
vate sector. 

The "lags" were often long 
and also variable, anything 
from three-quarters to three 
years, but in the long run cur- 
rent private sector pay 
increases were the single most 
important determinant of 
future central and local 


government pay levels. 

The significan ce of the* 
Tacts" is that, although the 
government may announce 
public sector pay “restraint 
and implement it for a period 
if pay in other parts of. too 
economy continues to rise at a 
much faster rate, then to 
recruit, retain and motivate 
people of appropriate quality 
for the public services it is nec- 
essary to raise those wage 
rates too. The “funding" HnutJ 
operated by the government 
over the medium term to-thm 
extent restrict the WJbMJ 
and quality of the public so - 
vices available, hut tW 
long-term “price/wages ^ 
outside its control. 

Chris Trinder, 

CIPFA, 

3 Roberts Street 

London 

WC2N6BH 


i*-;: 


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FINANCIAL TIMES MONDAY MAY 71 1994 


FINANCIAL TIMES 

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

Monday May 23 1994 

Mr Clinton’s 
global vision 


A n ambitious £2bn pro- 
posal to build the first 
east-west rail Uni across 
London comes to grief in 
a parliamentary commit- 
tee of just four MPs. Despite the 
backing of not merely the govern- 
ment, but also the opposition 
Labour party and the capital’s busi- 
ness interests, CrossRafl is rejected 
because traffic projections have 
changed since it was planned in the 
late 1980s. 

Cross Rail has, regardless of its 
merits, come to reflect a wider mal- 
aise in Britain's transport policy- 
Many experts, planners and trans- 
port operators, as well as the travel- 
ling public, agree that transport 
planning in the HE is fatting to 
deliver the goods. Criticism has 
come from organisations as diverse 
as the Confederation of British 
Industry, the Royal Institution of 
Chartered Surveyors and the Coun- 
cil for the Preservation of Rural 
England. Many of the objections 
centre cm the perception that the 
government favours the private car 
over public transport 
High-profile public protests 
against a number of road schemas 
have spilled over into violence in 
some More attention- 

grabbing i famm m t reMnnQ are expec- 
ted against a bypass to the east of 
the picturesque Georgian city of 
Bath and against a motorway exten- 
sion through an area of great natu- 
ral beauty south. of Blackburn. 

Mean while, congestion is stifling 
towns and cities while delaying 
commuters on their journey to 
work; cross-country motorways are 
dogged by traffic jams with increas- 
ing frequency, while rail services 
are in the throes of privatisation 
with a stfn uncertain out c ome; Lon- 
don Underground suffers frequent 
breakdowns because of ageing 
equipment; the gove rnment ha< nrt 
back on Its £23hn 10-year roads pro- 
gramme and set more realistic pri- 
orities; and delays on a high-speed 
rah link between London and the 
Channel tunnel mean it will not be 
completed until at i«m* eight years 
after the timnoi itaif hnc opened 
for business. 

Yet across the Channel , French 
passengers enjoy inter-city trains 
travelling at speeds of nearly 
ISOmph; German wnmniiterK travel 
on spanking new underground 
s ystem s; and the Dutch get to work 
on a road network which prorides 

extensively for the cyclist. 

Mnnnting p nhlir 

over transport provision in the UK 
has pushed the Issue to the top of 
tiie political agenda. Tory birck- 
benchers have joined a revolt 

a gain at a pwn gHwnmn for buflding 

trank roads and motorways. 

The main rr ltliriiani! of fho gov- 
ernment’s present transport policy 
are tHat- 

• There is no longterm approach 
to planning transport infrastructure 


No US President has proclaimed now to have realised just how 
more fervently than Mr Bill Clin- damaging would be the conse- 
ton the central importance of guanoes of following its own logfo 

- international economic policy to to its conclusion by refusing to 
his country’s welfare. In an extend MFN. 

- increasingly interdependent global In Japan, co ntinuing po litical 

- economy, his choice of priorities is In stability makes it fafawwirigiy 
correct Yet his administration's doubtful tha* the country’s minor- 

. record in matching words with ity government can deliver macro- 
deeds has been patchy. economic reforms and ma rict-t 

Mr Clinton deserves much credit access measures on the scale 
for steering the Nafta treaty demanded by Washington, even if 
through Congress ami working for it wanted to. Meanwhile, recent 
• the successful completion of the US jitters about an uncontrolled 
Gatt Uruguay Round last year, sh'de in the dollar mean that try- 
■ Since then, however, his policies tog to force up the yen is not an 
have lacked coherent direction - option, 
nowhere more obviously than in 
his dealings with Asia. He 1ms n%a - .. 
vacillated over China, while US Unending countries 
relations with Japan have been As a result President Clinton's 
dominated by a myopic obsession revival of the Super-801 trade 
with its bilateral trade surplus. In mechanism - apparently in an 
both cases, the US stance has been effort to buy time for further faika , 
heavily influenced by narrow, with Japan after February’s hreak- 
sometimes conflicting, domestic down - looks in danger of backfir- ] 
concerns. mg. Mr Clinton must name offend- 

As a consequence, the adminis- mg countries, liable for trade 
tration has seemed not to appreci- sanctions, by September 30. Not to 
; ate fully the bigger national and ' do so would risk accusations at 
global interests at stake, and has home of weakness; doing so would 
sometimes pursued contradictory escalate the confrontation with 
objectives. It has talked enthusias- Japan, without improving the 
tically of its wish to cooperate prospect of winning more conces- 
more closely with the fast-growing rions. Washington’s best hope 
Aslan economies of the Pacific must thus be to stitch some 
rim, while pursuing policies which kind of deal before late September, 
have severely strained declare victory, and move on. 
relations with the region’s two This would also be the most pos- 
iargest and most powerful count- itive outcome - providing it leads 
lies. Washington to place fu t ur e rela- 

There are signs that Washing- tions with Japan on a more ratio- 
ton may now be starting to recog- nal footing. US insistence that its 
nise the drawbacks of its economic growth la seriously 
approach. One is that Mr Clinton threatened by dosed Japanese 
looks increaslng i y likely to renew markets is ovotiowL Even if last 
China’s most favoured nation year's bilater al had been 

trading status in the next few halved entirely through increased 
days, albeit with possible quaUfi- US exports - an Improbable sce- 
cations. At the same time, his narlo - it would have added only 
administration has conspicuously 05 per cent to US gross domestic 
toned down its rhetoric towards product. That hardly seems a 
Japan. US officials have indicated large enough prize to justify the 
that they are rethinking their tao- political effort expended, or the 
tics in an effort to restart negotia- threat US tactics pose to the world 
tions on a “framework" trade trade system, 
agreement with Tokyo, which The most important lesson for 
broke down in February. the US is that the recent problems 

in its dealings with both Japan 
_ and China are, for different rea- 

Modest concessions sons, largely of its own TnaWny ff 

The most pTnncUtto wphmrtt iffl JlMyjnn nrf in hft rpp p afyd Presl- 
in both cases is that US failure to dent flHnfaw needs now to clarify 
think through its policies at the and give real substance to his 
outset has steadily reduced its commitment to international eco- 
avaflable options. Having faQed to nomic policy. America's trade 
extract more than modest cances- partners have every incentive 
sions from Beijing on human to encourage him in that ofajeo- 
rights, Washington appears only tiro. 

The liabilities 
of auditors 


It is more than a Bttle ironic that 
while the senior partners of the 
UK’s accountancy firms are cas- 
ing for a limitation on their liabil- 
ity in lawsuits, the heads of their 
own insolvency practices are busy 
issuing writs against <w? h others’ 
firms for negligent auditing. 

A campaign backed by the larg- 
est accountants in the US and 
Australia has now been imported 
to the UK. It calls for auditors to 
be protected from vexatious legal 
actions by the shareholders and 
purchasers of companies in which 
the accounts turn out to have 
been mlwlMrilng 

The firms dalm that plaintiffs 
seek disproportionate penalties 
from them for the losses caused, 
because their assets and insurance 
policies give them "deep pockets’* 
out of which to pay damages. - 
Those who are responsible for the 
frauds and misstatements, notably 
the directors, tend to escape rela- 
tively unscathed. 

In principle, the argument far 
reform seems sound. It must be 
unreasonable for auditors to be 
held wholly responsible for corpo- 
rate disasters when they have not 
been the direct cause of the prob- 
lems. Their failure to detect or 
highlight shortcomings should 
make them only partly culpable. 

Yet reform would require radi- 
cal chang es in the law, overturn- 
ing the principle of “joint and sev- 
eral liability", so that auditors 
would only be liable to losses In 
proportion to their degree of 
blame. This would dilute plain- 
tiffs 1 rights, anil require the con- 
sideration of the Law Commission, 
which has indicated its lack of 
interest by telling the profession 
that It has no Him to consider the 
issue in the foreseeable future. 

The firms' response has been to 
suggest a flawed alternative: to 
remove section 310 of the 1985 
co mpa nies act - which expressly 
forbids auditors from limiting 
their liability in contract They 
say no such restriction applies to 
other professions, such as solid- 
tors. 

Important safeguards 

Whfle this is true, lawyers have 
not in practice attempted to limit 
their liability in contract. They 
consider that they could still be 
found negligent and sued, making 
any limits imposed in tbe contract 
irrelevant. 


Removing section 310 would 
also eliminate one of the most 
important safeguards which stand 
behind an audit This is the know- 
ledge that, whan a firm gives an 
independent, professional opinion, 
it is putting its reputation, liveli- 
hood and the assets of an its part- 
ners an the Hwe. 

Self-regulation and t ighter stan- 
dards appear to have had some 
limited effect on improving the 
quality of auditing. But the threat 
of KH gaHrm must help to concen- 
trate the rm»»* when it comes to 
making sure that the audited 
accounts show a “true and fair 
view", as the law demands. 

Unique benefit 

Accountants have the unique 
benefit erf a government-guaran- 
teed monopoly of auditing. This is . 
designed to provide reassurance to ! 
shareholders but it also provides 1 
firms with lucrative fees and a 
ready platform to sen other ser- 
vices to companies. 

At the same time, they have 
shown themselves reluctant to go 
to court when sued for audit negli- 
gence. They have chosen instead 
to settle on tbe steps of the court 
rather than have their work scru- 
tinised In public and nm the risk 
of an award against them. These 
settlements are made without 
admission of responsibility, but 
they do not make it easier to 
establish the case for reform. 

The firms and their Insurers 
have also not been above a little 
creative accounting themselves. 
They have chosen to highlight the 
enormous rise in the number of 
legal claims against them, while 
fpfHwff to reveal the far smaller 
size ™d number of awards that 
have actually been made. 

On the rare occasi on s when 
have been contested - such 
as the Caparo, Galoo and Berg 
- the courts have in practice 

demonstrated considerable sympa- 
thy for the profession, tightly 
restricting its duty of care, and 
B miring damages rather than 

awarding disprop or tiona te penal- 
ties against them. 

While accountants refuse to dis- 
close any dgfann of their own prof- 
its and assets, or the extent of 
their professional indemnity 
cover, they will find it hard to 
persuade others that the case for 
reform is as soundly based as they 
claim. 


Every which way 
but the right way 

The UK government has yet to deliver a coherent 
transport policy, says Charles Batchelor 



* — - f *earrfn- 


tore: Last November of all transport 
expenditures tbe roads budget was 
most severely cut Over the long 
term, however, it is public transport 
which has suffered most, critics say. 

John MacGregor, the transport 
secretary, points out that 40 per 
cgft t of bis department’s budget is 
spent an public transport although 
nearly 90 per cent of journeys are 
made by motor car. But overall 
spending on schemes involving all 
forms of transport is set to fall 13 
per cent over the next three years 
to £5.4bn, according to transport 
department forecasts. 

Tbe UK spends less on rail infra- 
structure than any other European 
country except Finland. Germany’s 
superior commitment to rail, by 
contrast, is evidence in its plans to 
invest more in its rail network 
than in roads in the period up 
to 2010. 





W hat does the gov- 
ernment say to 
such criticisms? It 
believes attempts 
to establish an 
integrated plan for transport would 
not succeed, "We don't believe in a 
centralised system which tells peo- 
ple bow to travel,” Mr MacGregor 
said recently. The government is, 
however, bring to create an overall 
framework which meets the needs 
of the economy. 

White it does so, it can draw to Its 
critics' attention a shift In its own 
approach. This change is driven, in 
part, by a growing realisation of the 
environmental impart of an unres- 
trained increase in road traffic. Yet 
any shift is constrained by Its calcu- 
lation that even a 50 per cent 
increase in rail traffic would reduce 
the number of road journeys by 
only 5 per cent 

The gnTOi nmant is increasing fuel 
duties by at least 5 per cent a year 
to meet the Rio targets for CO, 
emissions, implicated in global 
warming. There have also been 
potentially far-reaching changes in 
government planning guidelines, 

flifftnng - thmri one hi MV 1 * raffing 

on local authorities to limit the 
scale of out-of-town commercial 
developments reduce reliance 
on the private car. 

Even more far-reaching are plans 
to introduce tolls on Britain's 
motorways. Indications are that, in 
the early stages, these will be set 
km, but they may still prompt a 
shift towards public transport 
Government rhetoric on public 
transport is also changing. As yet, 
ho w ever, there Is no commitment to 
extra funding. Without such a com- 
mitment, the travelling public and 
much of industry are unlikely to be 
satisfied. They await hard evidence 
of government determination to 
solve chronic transport problems 
and give coherence to planning, 
whose dislocation was so evident in 
the CrossRail debacle. 


projects. As it takes several years to 
plan, prepare and construct a large 
transport ftnk. a short-term o utlook 
can make a nonsense of such a proj- 
ect The reason is that traffic or 
passenger flows are subject to 
change during the p lanning atiri 
construction period. CroesRafl pro- 
vides a Striking erarnplp of this if 
traffic demand Increases during the 
economic recovery there may once 
again be a need for a cross-London 
Tiinlc nwd Hip whole planning proces s 
will have to start again. 

"The British government 

marfifna with its year -by- year 

battles, is fundamentally ill-suited 
to dealing with the timescales 
Intrinsic to transport decisions," 
concluded the authors of Transport 
Potiqf-Mokmg in Britain, a recent 
study by the London School of Eco- 
nomics. Parliament votes funds for 
one year; government departments 
are encouraged to think three years 
ahead; w hile, the electio n timetable 

imposes a four- or five-year time 


frame on thinking. 

Contrast this with the long term 
strategic planning, often becked by 
a guarantee of gover nm ent funds, 
in many other European countries. 
Switzerland ha< embarked (mi a 12- 
year programme, Bahn 2000, to 
upgrade its rail network, while the 
Netherlands has a 15- to 20-year per- 
spective for its Rail 21 project 
• There is little co-ordination of 
road building with public sector 

spending- on rail nr m han Tight rail. 

way systems in the UK Transport 
projects are judged individually, 
largely by their contribution to 
reducing congestion in a specific 
area, says Steer Davies Gleave, 
transport consultants. 

Moreover, says Steer Davies 
Gleave, the way in which the UK 
assesses the merits of different 
farms of transport fand« to favour 
the private car. The government off- 
sets against the cost of a road con- 
struction. project the money value 
erf the time saved by users. But, in 


the case erf public transport pro- 
jects, it does not German and 
French asse s sm e n ts do not reflect 
♦hie bias. 

• Tight control by the Treasury 
adds to the tendency to adopt 
shortterm financial goals on trans- 
port projects. Each rail project 
requires separate Treasury 
approval, whfle schemes in the 10- 
year roadB programme do not 

The injection of more private sec- 
tor finance was seen as a way round 

tough nontmls on pnhHn qimiWwg . 

But this, too, has run into the buff- 
ers of Treasury control. Private sec- 
tor bids to modernise London 
Underground's Northern Line are 
due shortly, but problems have 
arisen over the degree of risk to be 
carried by the private sector. “Gov- 
ernment is discovering, says the 
I£E study, that “yon can either 
have control or majority private 
finance, but you cannot have both.” 

• The government does not spend 
pTHnigh on the transport infrastruo 


Murky outlook for healthcare reform 


L tttio of substance on health- 
care reform will be agreed 
before the mid-term elec- 
tions in November. The 

moat that P regiflgnt TUTl fTHntnn nm 

expect is a flaal with Republicans 
on incremental reforms of the 
health Insurance market, far exam- 
ple legislation to pwn wni! discrimi- 
nation against people with “preex- 
isting” conditions. 

1 received this gloomy assessment 
last week from one of the most 
respected analysts an Capitol HflL 
He spoke, ironically, just as a mile- 
stone of sorts was passed in the 
healthcare saga. Last Wednesday, 
two of the five congressional com- 
mittees with jurisdiction over 
health c are - those headed by Sena- 
tor Edward Kennedy and Mr Dan 
Rostenkowski - finally began seri- 
ous scrutin y of reform proposals. 

On the evidence of tbe stormy 
opening sessions, it would be rash 
to make any pr e diction of the final 
legislative outcome. Republicans 
tabled more than 100 amendments 
to Mr Kennedy’s c ompromise bill 
and d eno u n ced it as a pasteurised 
version at Mr Clinton's “socialised 
medicine”. Yet the mood changed 
the following day when they 
reached a surprising bipartisan 
accord an ways of containing the 
cost of a mhrimum package of bene- 


Ancient Greek 
rituals 

■ Much In need of an international 
image makeover, Greece could have 
made a start by fielding scone bright 
young politicians for nwt month’s 
Euro-elections. 

Instead, prime minister Andreas 
Fapandreou'slist of candidates 
reads like an exercise in personal 
debt repayment Angela Eokkoia, 
Papandreou’s secretary for a couple 
of decades until his new wife 
Dimtira wanted the 

job, is far Instance certain to win 
(me of the 25 seats. 

journalist Yannis Roubatis has 
another safe slot. Once 
Papandreoa’s loyal spokesman, 
Roubatis was caught up In the 
backwash of the Bank of Ckete 
embedement whirii 

toppled the government in 1388, 
and kept him on the sidelines for 
quite same time too. 

The opposition, meanwhile, has 
- made a stab at sprucing up its 
image by indudhig the well -kno wn 
ringer Nana Mmiskouri. Sadly, she 
is so rarely sighted in Athens that 
many G rachs think slw ing ronrii 

ABratas Panagouhas, who is 
coaching the Greek soccer team 
for its first appea ra nce in the World 
Cop fiite summer, is another 

uwngiml choice. 


fits. The fact that Mr Rostenkowski, 
the Democrats’ quarterback in the 
lower house, faces pnggihip indict- 
ment on felony charges only adds to 

tha Tmtyytilnty . 

Nobody doubts the depth of Mr 
CHnton’s co mmitment to healthcare 
reform - the centrepiece of his leg- 
islative agenda. He and the first 
lady have campaigned tirelessly for 
reform. The Democratic party 
enjoys comfortable majorities in 
both houses of Congress. Why, 
th e n, is he faring such an uphill 
battle? 

The answer lies in the nature of 
America's healthcare dilemma. 
Social reforms tend to be popular 
only when most people regard 
themselves as beneficiaries. In the 
late 1940s, Britain’s National Health 
Service was a wild success because 
it greatly improved access to care 
for all but tbe seriously rich - and 
file cost in terms of higher taxation 
was not generally appreciated. In 
the late 1960s, much the same could 
be said of Medicare, the popular US 
public programme that guarantees 
universal access to care for the 
elderly, at highly subsidised rates. 

Now consider the CKntan reform. 
Rather than expanding opportuni- 
ties it is about restraint and redis- 
tribution. Tbe goal is to provide 
coverage for the 15 per cent erf the 



MICHAEL PROWSE 


population presently uninsured 
(inevitably a costly endeavour) 
while reducing the growth of over- 
all healthcare spending — in the pri- 
vate as well as pabHc sector. 

Ratcheting down growth of over- 
all spending, while shifting 
resources to the uninsured, obvi- 
ously requires new constraints an 
the 85 per cent who are insured, 
especially hi their access to expen- 
sive high-tech medicine. Such con- 
straints - however dressed up - are 
unlikaly to be popular, particularly 
when no US politician, least of all 
Mr Clinton, win admit that any sac- 
rifice is required. 

It is thus not surprising that con- 
gressional leaders, reading to opin- 
ion polls, have already scuttled two 


Observer 


of the principal restraints on spend- 
ing proposed by Mr Clinton. Hopes 
of shifting Americans en masse into 
managed care by corralling them in 
mandatory “health alliances”, or 
quasi public sector purchasing co- 
operatives, have been abandoned. 
So, probably, has the White House 
dream of imposing caps on the 
growth of private health insurance 
premiums. Effective cost control 
looks to be a dead letter. 

The remaining question is 
whether Mr Clinto n will succeed in 
guaranteeing universal coverage - 
supposedly Ms nan-negotiable bot- 
tom line. Americans seem unwilling 
to countenance either an overt 
increase in personal taxation or, 
after a decade of red ink, a higher 
budget deficit. The White House 
thus concluded that the only plausi- 
ble route to universal coverage lay 
in hn poring an “employer mandate” 
- a legal requirement that all 
employers must pay the bulk of 
insurance costs for employees. 

Yet this disguised tax is also 
strongly opposed, especially by 
small business, a politically power- 
ful group. It seems draconian to 
impose new burdens on businesses 
just recovering from recession. And 
it is hard to refute the argument 
that higher payroll taxes will 
destroy jobs. Indeed many question 


However, if Greece’s 50 thrashing 
by England at Wembley last week 
is anything to go by, Panagoulias 
might find the bl ig ht li ghts of 
Brussels an attractive proposition 
next season. 


Whale of a story 

■ Good news for whales. A group 
cf Islands in the Caribbean is 

fi ghting ahmrt the cr eation tfa 

whale sanctuary in Antarctica. 
Their input could tip the balance 
at this week's Interna ttnmal 
Whaling COBjffliSSiOD mootin g in 
Mexico. 

Whales are spotted but rarely 
in these waters - and caught still 
more infrequently. But Dominica 
«nd its nei ghbo urs, Grenada, St 
Lucia and St Vincent, have emerged 
as important players in global 
whale politics. Japan, which wants 
commer cial whaling to continue, 
has been jolly generous to the 
islands with the result that they 
have happily toed its hue. 

However, environmental activists 
have been working hard to keep 
tourists from visiting the 
Windwards and the campaign is 
starting to bite. Last week 
Dominica broke ranks aad said 
it would support the sanctuary 
idea. St Luda might follow. 

But the Vincentians are standing 
firm. They obviously just wont 



*Wa were sacked in tripBcate' 

risk missing that very occasional 
whale that swims by. 


Betting bachelors 

■ A veritable connoisseur of 
pockethuming days at the races. 
Observer could tell the University 
of Salford a thing or two about the 
economics of gambling: But the 
dons, whose colleagues in the 
English faculty recently added 
Jackie Collins to the syllabus, seem 
to want input of a rather more 
sophisticated nature. 


Advertising in this week's 
Economist, Salford is looking for 
a director for its new Centre for 
the Study of Gambling and 
C ommercial Gaming. The 
apparently, is to develop a degree 
in "economics with gambling 
studies” as weQ as to research this 
“relatively underdeveloped” by-way 
1 rf thp dismal srimyy 
The fand-raising part, at any rate, 
should be a rinch; the 
vice-chancellor win no doubt be 
hovering by Ms phone on 
Wednesday, ready to offer 
felicitations to whichever 
consortium is named to run the 
National Lottery. 


Munk's new habit 

■ US interior secretary Bruce 
Babbitt should know better than 
to shoot his mouth off in front of 
American Barrick’s Peter Munk 
- a Canadian entrepreneur 
acquiring a reputation as someone 
who sues foreign governments and 
wins. Babbitt was mighty rode 
about him last week. 

It all started after Monk's lawyers 
forced Babbitt's department to hand 
over the deeds to Nevada's 
Goldstrike mine, which sits on 
America’s largest gold deposit 
Babbitt described it as the “biggest 
gold heist since the days of Butch 
Cassidy” and had a mock cheque 


the wisdom of increasing the corpo- 
rate sector's social responsibilities 
at a time when links between 
employers and employees are 
becoming more, rather than less, 
fluid. Yet nobody in Congress has 
devised a plausible alternative 
route to universal insurance cover. 

In gauging Mr Clinton’s chances 
thin year, the best legislative paral- 
lel is perhaps the compendious 1986 
Tax Reform Act At the eleventh 
hour, congressional leaders con- 
founded sceptics by agreeing sweep- 
ing reforms - albeit reforms that 
differed substantially from Presi- 
dent Reagan's original proposals. 

Yet Mr Clinton should not draw 
much comfort from this. Tax 
reform, although highly complex, 
was manageable because lawmak- 
ers could trade concessions (for 
example higher corporate taxes in 
exchange for lowo: personal rates) 
almost at will Healthcare reform is 
more demanding because the com- 
ponent parts must be internally 
consistent Even siting aside politi- 
cal differences. Congress may sim- 
ply lack the technical skill to devise 
a workable r e form erf US healthcare 
— one seventh of the economy — 
before November. Bence the plausi- 
bility of predictions that Mr Chur 
ton, this year, win have to settle for 
modest reforms. 


to $10bn made out to the company 
and signed by the American people. 

Munk admits that th» 1872 mmiwg 
law, which enabled Mb firm to fafap 
gold without paying government 
royalties, is outdated. But he played 
by the rule book and when Babbitt 
tried to block him, Munk took him 
to court and won. 

Describing the deal as a “$10bn 
rip-off” is “emotional nonsense", 
sayB Munk. Even if his Ann earns 
SlObn in revenues over the next 
20 years. Babbitt forgets that $6bn 
will be paid to Monk’s US 
workforce, and another $lbn has 
gone on equipment And then than 
will be the taxes on any pro fi t s . 

A big fan of the legal process, 
Monk spent 15 years chasing the 
Egyptian government for $17^m 
after It let him down on a kmg 
forgotten hotel project 

But even he is unlikely to sue 
for defamation. He’s got what he 
wanted. Moreover, Lloyd Cutter, 
who helped win his case, than 

answered the call to become White 
House special counsel and is thus 
busy with President Clinton’s much 
mare complicated legal affairs. 


Pounding the beat 

■ Pont be fazed If vour Glaswe g i a n 
Mend and creditor asks for Mb 
‘P avar otti' ba ck. He’s just referring 
to the outstanding tenner . 


> 




16 


12 


IVtoDo 


PULP, PAPER & 
PAPERBOARD 


FINANCIAL TIMES 

Monday May 23 1994 


SHEERFRAMEl 

Specified 
Worldwide 


T«l; 0773 8 B 231 1 


Strong growth forecast in North America 

World new car sales 
expected to rise 5.4% 


By Kevin Done, Motor Industry 
Correspondent, in London 

New car sales worldwide axe 
expected to rise by 5.4 per cent 
this year to 3455m, ending three 
years of fairing demand. 

Sales fell last year to a six-year 
low, bat demand is forecast to 
begin a sustained period of 
growth in 1994 and rise to record 
levels throughout the second half 
of the 1990s, according to the lat- 
est study by DRI/McGraw-EBU, 
the London-based automotive 
analysts. 

The short-term recovery is 
being driven chiefly by a strung 
rise in demand in North America, 
where new car sales are forecast 
to increase. by 11 per cent to 
U)4Sm this year, as well by the 
mu tinning ex p an s i on of demand 
in the Asia-Pacific region. 

The study suggests that the 
recession in the new car markets 
of both western Europe and 
Japan has bottomed out and the 
focus for growth is expected to 
switch to those regions next year. 

"The relatively prolonged 
recovery phase in Europe and 
Japan, plus the take-off of devel- 
oping countries particularly in 
Asia, should set the scene for a 
steady improvement towards 
record levels of global car 
demand throughout the mid 
1990s," the study says. 


WOULD CAB SALES FORECAST (OOOat* 



1993 

1994 

1996 

1996 

1997 

WORLD TOTAL 

33,152 

34,945 

36,370 

37,017 

39£68 

West Europe total 

11,460 

11,774 

12,504 

13*44 

14,107 

Germany 

3.194 

3,087 

3,158 

3,305 

3£44 

Italy 

1.890 

1,776 

1,897 

2,064 

2,169 

UK 

1,778 

1.933 

2J0B2 

2.232 

2,307 

Franca 

1,721 

1333 

2,031 

2,150 

2*267 

Spain 

743 

785 

891 

1.021 

1,054 

East Europe** 

1,334 

1,360 

1,472 

1.550 

1,875 

Turkey 

443 

346 

366 

437 

519 

North America total 

9,441 

10,467 

10£40 

9,960 

10,134 

US 

8.702 

9.636 

9,334 

9,003 

9,131 

Japan 

4,199 

4£2Q 

4A10 

4^930 

4,778 

Art! Pacific totatt 

2*44 

3,147 

3£02 

3/816 

4»018 

South Korea 

963 

1072 

1,187 

1,256 

1,315 

China 

430 

481 

618 

758 

791 

Latin America total 

1,889 

1*835 

1,916 

2,062 

2,282 


*1983 actual, 1994-1999 tewttfo. 

"MiOng CunaiuiKatflli ol In d epende nt states. 

IQtdudn Japan. 

Brno* DH Warm Cm kxfcMry 


f ot w et Report - tf** 1804. 


Sales in western Europe are 
likely to rise by 3 per cent or 
more this year to 1177m, as the 
region begins a fragile recovery 
from last year’s precipitous 
decline of 15 per cent, the biggest 
drop since 1945. 

The study says that the recov- 
ery in western Europe is uneven 
- German and Ttaiian car mar- 
kets are expected to continue to 
contract in 1994. The UK recov- 
ery remains strong, however, and 
sales are rising in much of Scan- 
dinavia. 

The recovery will gather pace 


in 1995 as both the German and 
Italian markets emerge from 
recession, and sales in western 
Europe are forecast to rise by 
between 6 per cent and 7 per cent 
in each of the three years from 
1995 to reach a record level of 
145m in 1997. 

While new car sales in Japan 
are forecast to rise by 5 per cent 
next year, 1990’s record of 51m is 
unlikely to be exceeded. 

DM World Cor Industry Fore- 
cast Report Price £3,100. DRIjMc- 
Grato-HiU, 1 Hartfield Road, Lon- 
don SW19 3RD. 


Cyclist rides into Lopez affair 


Continued from Page 1 

store. One former resident in the 
house where the boxes were dis- 
covered (vacated by co-tenants 
Mr Piazza and Mr Alvarez shortly 
before the discovery) said he 
recognised only three. 

There were distorted echoes 
here of VWs of last year 
that “evidence" could have been 
planted, but no more than innu- 
endo. 

The film moved on to a Mr 
Andersson, a Swedish engineer, 
filmed sitting in his car as the 
reporter yelled in German: "Now 
you have another chance to tell 
the truth!” Mr Andersson, the 
man who handed the boxes to the 
police, and who is believed to 
speak only Swedish and E ngl ish, 


reversed away. Although the 
Stem article, the ARD pro- 
gramme and the lawyers’ state- 
ment were clearly linked and co- 
ordinated, they yielded some 
effects which VW might count as 
“positive". 

Most important, the events 
prompted the legal authorities to 
forbid the investigating office to 
issue any further press com- 
ments. An erratic trickle of infor- 
mation from Ms Holland - virtu- 
ally all apparently damaging to 
the VW side - has accelerated 
lately. VW may draw some small 
comfort from having at last man- 
aged to score a few points in the 
media campaign 

But the lawyers' attack on the 
audibility and impartiality of Ms 
Holland, despite the backing 


from the political weight of Mr 
Schitider, who has ambitions to 
be federal chancellor, foundered. 
An the charges were promptly 
and convincingly dismissed by 
her superior, Mr Hans-Christoph 
Schaefer, head of the state of 
Hesse’s prosecution service. 

Following Mr Schaefer’s inter- 
vention, Ms Holland, the charac- 
ter around whom much of the 
action has revolved, is off the 
stage until the denouement The 
question now is whether the pro- 
tagonists have the wfii to con- 
tinue the puhhc hatq e. Neither 
seems to have any inclination to 
be seen to be backing off, but 
both know it is likely to be some 
months yet before Ms Holland 
makes her next and decisive 
pnfranra 


Treuhand promises finance for mill 


Continued from Page l 

According to Eko Stahl officials, 
the collapse of the Riva deal, and 
confusion within the EU on how 
to introduce capacity cuts, 
reduces the chances of finding a 
buyer willing to invest in an inte- 
grated milL 

An integrated steel mill could 
help reduce some of Eko Stahl's 
losses, particularly transport 
costs, according to the Halle 
institute for economic research, 
one of the six think - tanks advis- 
ing the government 

Eko Stahl at present ships its 


slabs for hot rolling to plants in 
western Germany. They are then 
returned to east Germany and 
cold rolled. The Halle Institute 
says each tonne of transported 
steel costs DM100. 

To cut these costs, the Treu- 
hand had intended to integrate 
Eko Stahl’s Ste al malting and its 
steel-processing operations by 
building & new hot rolling iriiii 
The agency has received no tak- 
ers for this plan following the 
collapse of the Riva deal. 

Thyssen, Germany's biggest 
steel manufacturer, which earlier 
led a consortium to buy 50 per 


cent of Eko Stahl's cold-rolling 
miff, closing down the hot-blast 
fornaces. and securing 1,000 jobs 
for the mill’s subsidiaries, still 
sees prospects for a cold-rolling 
mill for Eko StahL But the Treu- 
hand argues this would make 
Eko Stahl dependent on west 
German steel manufacturers, and 
would entail farther job losses. 

The mill employed nearly 
12JXX) people in 1988, and pro- 
duced more than 35m tonnes of 
steel. It has since reduced its 
work force to 3,000, and its 
annual capacity to under lm 
tonnes. 


UK Tories 
attempt to 
patch up 
split on 
Europe 

By Kevin Brown, 

Political Correspondent, 
in London 


UK Conservatives were fighting 
to bridge a renewed split over 
Europe yesterday as the liberal 
Democrats looked to outflank 
the government by pledging to 
hold a referendum an farther 
moves towards European inte- 
gration. 

As campaigning for the June 9 
European parliament elections 
resumed, Mr Douglas Hurd, for- 
eign secretary, appealed to the 
party’s Euro-sceptic wing to 
unite behind the election mani- 
festo to be issued today. 

The manifesto, A Strong 
Britain in a Strong Europe, will 
focus on Euro-sceptic concerns 
such as the preservation of 
Britain’s veto on European ini- 
tiatives on taxation, defence and 

Trying to allay rightwing 
fears, Mr Hard described hims elf 
as a “Euro-realist,” and accused 
the European Commission of 
going “too for into the nooks and 
crannies of all oar lives." 

Mr Hurd’s remarks, delivered 
in a BBC interview, echoed his 
his speech to the Scottish Con- 
servative conference two weeks 
ago. 

The government’s claims that 
Britain is whining the argument 
for a less centralised Union were 
rejected by Sir George Gardiner, 
chairman of the 1992 group of 
rightwing MPs. 

Writing in the Thatch erite 
Way Forward group’s summer 
magazine. Sir George said the 
party’s natural s uppo r ters were 
“totally opposed to being sucked 
by degrees into a federal 
Europe.” 

The Liberal Democrat mani- 
festo, also published today, 
promises to seek “popular 
assent" for “fundamental 
changes” agreed at the European 
Union’s next intergovernmental 
conference in 1996. 

The pledge contrasts sharply 
with Mr John Major’s refusal to 
consider a referendum. 

The manifesto proposes cuts in 
the size of the Commission and 
the Council of Ministers, and a 
stronger European parliament 
elected proportionately to size of 
population. 

It also calls for an extension of 
qualified majority voting in the 
Council, tempered by reforms 
requiring successful proposals to 
attract the support of states rep- 
resenting three-quarters of the 
EXTs population. 

However, the manifesto also 
calls for a federal Europe, an 
independent central bank, and 
progress towards a common for- 
eign and defence policy and a 
European army. 

Labour’s election manifesto, 
which will also be published 
today, will commit the party to 
the social chapter of the Maas- 
tricht treaty and an eventual sin- 
gle European currency. 



FT WEATHER GUIDE 


Europe today 

Active low pressure over central Europe witt 
cause thundery rain In eastern and northern 
France, the Alps and many parts of 
Germany. Thunder showers will also erupt 
over the Iberian peninsula, especially Inland. 
High pressure between Iceland and 
Scotland will keep most of England, 

Scotland and I relax! dry. Another high 
pressure area over south-eastern Europe wfH 
provide abundant sunshine and afternoon 
temperatures above 25C in most parts of 
Italy, Greece and foe Balkans. Northern 
Europe win stay rather cool Most of 
Scandinavia wiB stay dry, except for 
showers In parts of Finland and eastern 
Europe. 

Five-day forecast 

Western Europe will continue unsettled and 
quite cool but south-eastern Europe win stay 
warm and sunny. A depression will stall over 
eastern Europe during foe middle of the 
week causing quite unseated conditions. 
Northern Europe wfll still be influenced by 
high pressure, giving (^seasonably cool 
conditions. Greece and Italy wm be dry and 
sunny. 


TODAY'S TUMPERATUm 



Situation #12 GMT. Temporsturss maximum for dry. Forecasts by Motea Consult of tfw Hetfierfands 



Maximum 

Befflng 

Belfast 

fair 

31 

Caracas 

dandy 

30 

Edkntamh 

Mr 

13 

Madrid 

shower 

22 


CaWhB 

fair 

14 

Cardiff 

cloudy 

18 

Faro 

shower 

22 

Majorca 

Mr 

30 

Abu Dhabi 

sun 

38 

Belgrade 

Berlin 

aw 

34 

Casablanca 

Mr 

22 

nliMlfl 

fair 

24 

Malta 

sun 

32 

Accra 

fluid 

32 

Mr 

23 

Chicago 

Mr 

28 

Geneva 

fair 

23 

Manchester 

cloudy 

16 

Algiers 

Mr 

31 

Bermuda 

showar 

26 

Cologne 

thund 

23 

Gibraltar 

Mr 

25 

Matte 

shower 

33 

Amsterdam 

fair 

IB 

Bogota 

shower 

19 

Dakar 

Mr 

26 

Gtesgow 

Hamtwg 

Mr 

16 

Melbourne 

Mr 

18 

Athens 

sun 

31 

Bombay 

Mr 

33 

DeHaa 

Mr 

31 

Mr 

10 

MnJcoCfty 

ahower 

23 

Atlanta 

sun 

30 

Brussels 

rain 

10 

DeH 

Mr 

42 

Helsinki 

fflfr 

15 

Miami 

ft* 

31 

a Aires 

rain 

17 

Budapest 

sun 

29 

Djakarta 

thund 

32 

Hong Kong 

rain 

31 

Mian 

iek 

28 

a ham 

shower 

18 

CJragen 

cloudy 

17 

Dubai 

sun 

34 

Honolulu 

Mr 

30 

Montreal 

Mr 

19 

Bangkok 

drawer 

34 

Cairo 

HD 

38 

DUbBn 

cloudy 

13 

Istanbul 

sun 

28 

Moscow 

Mr 

14 

Barcelona 

Mr 

26 

Cepe Town 

Mr 

17 

Duhrowrtk 

sun 

31 

Jersey 

Mr 

13 

Munich 

thund 

24 


Latest technology in flying: the A340 


15) Lufthansa 

German Airlines 


Karachi 

Kuwait 

L Angeles 

Las Palmas 

Uma 

Lisbon 

London 

I nx.honrg 

Lyon 

Madalca 


sun 

am 

fair 

fair 

Ur 

Mr 

cloudy 

thund 

Mr 

oft owar 


38 Nairobi 
40 Naples 

21 Nassau 
24 New York 
24 Mob 

10 Nicosia 
10 Oslo 
23 Rads 
27 Form 

22 Prague 


cloudy 

sun 

ft* 

sun 

Mr 

sun 

Mr 

rah 

shower 

shower 


Stockholm 


21 Tokyo 
31 Toronto 
31 Vancouver 
28 Van loo 

23 Vienna 
34 Warsaw 
19 Wmtfngtan 
19 WeSngton 
17 Winnipeg 

24 Zurich 


rain 32 
Mr 
shower 
sun 
Mr 
fair 
rain 
fair 
shower 


10 
22 
28 
21 
22 

31 
17 
24 
20 
21 

32 
28 

sun 22 
fair 20 
Mr 26 
Mr 27 
fair 23 
sun 28 
drzzj is 
Mr 20 
Mr 24 


shower 

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THE LEX COLUMN 

Open options 


Pricing this week's £2bn auction of 
convertible gilts promises to be a 
rbniqfi n g task for even the most bril- 
liant rocket scientist. The three year 
gilt can be converted on four separate 
dates into 9 per cent bonds due in 
2012. It thus effectively includes a 
series of options to buy long-dated 
paper whose value must be factored 
into the auction price. From the Bank 
of England’s perspective this Is a good 
time to be selfing such options, since 
recent cash market volatility has 
made them more expensive. For 
options traders, the challenge lies in 
deciding whether tire price of the gilt 
is such that they can acquire the 
embedded options at a price lower 
than the options market itself would 
charge. 

Market Imperfections mean that 
there is a dhaora of this happening. 
The price of the auction stock will 
ftairf to reflect movements in short- 
dated gilts, whereas the options relate 
to long-dated issues. Indeed any gilt 
market weakness which discourages 
Tnstiintifmal buying at the tima Of the 
auction may only make the convert- 
ible gilt more attractive to options spe- 
cialists. Yet fop difficulty in c aknint - 
Log option values and the deal's 
complex structure makes it hard for 
any participant to know what repre- 
sents value at the end of the day. 

The 2012 issue would have to yield 
less than 7.2 per cent to make conver- 
sion worthwhile at the most distant 
date in February 1996. That compares 
with almost 8 per cent on Friday. Any 
institutions which really believe rates 
will fall that for during the next two 
years would be better off buying lon- 
ger-dated papa 1 now in order to collect 
the fall capital gain. Any which 
believe rates will be higher should buy 
a conventional three-year gilt and 
reinvest the proceeds an maturity. 

Metals 

While financial markets have been 
in turmoil since US interest rates 
started to rise, the bull run In metals 
has continued- After another sharp 
rise this month, copper, aluminium 
and tin have risen by 30 per cent from 
last autumn’s lows. Nickel has risen 
by more. The uncertainty is whether 
this represents a fundamental trend or 
whether the hot money squeezed out 
of bonds and other financial assets h«« 
simply found another temporary 
home. 

Judging when metals are overvalued 
is difficult Production costs should 
determine the price in the long run. 



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but the relationship is subject to wild 
swings through the economic cycle. 
Re-opening production capacity is 
often expensive, so producers do not 
respond, immediat ely to higher prices 
by Increasing supply. When supply 
and demand are In rough balance, 
though, it is unusual to see the price 
of a metal much above its marginal 
cost of production. Copper for one has 
already passed this paint 
The fundamentals are starting to 
look more favourable for most metals. 
Aluminium producers have started to 
cut production to restore market bal- 
ance. Continental European econo- 
mies are recovering foster than had 
been anticipated, which abnuin even- 
tually feed through into higher metals 
consumption. But only in copper have 
stocks fallen significantly from the 
record levels seen at the end of last 
year. Elsewhere the overhang of stock 
shows no sign of abating. Until that 
changes, metals will be vulnerable to 
profit-taking or swings in investment 

fpeftrirffl 

Lloyds/C &G 

Lloyds Rank throws itself an the 
mercy of the courts this week for a 
decision on whether its takeover of 
Cheltenham & Gloucester building 
society can go ahead. Present legisla- 
tion about who can make cash pay- 
ments to building society members 
and in what circumstances is so con- 
fusing that the outcome Is highly 
unpredictable. But it should not be 
assumed that Lloyds could easily get 
round an unfavourable verdict, for 
example by offering preference shares 
instead of ra-fo That would risk fur- 
ther disagreement with the Building 
Societies Commission and another 
court case. Since Lloyds and C&G 
are sure of their case, the chances 


are that they would rather appeal 

ff the verdict goes the other way the 
Commission may feel tempted to 
appeal as well That would at least 
prolong uncertainty over what is actu- 
ally permitted, preventing a rash of j 
similar merger announcements before 
the government can amend relevant 
legislation to make them mare diffi- 
cult The Commission is dearly anx- 
ious to bend over backwards la 
defence of mutual structures, its sug- 
gestion that soctetias should use their 
reserves to pay dividends to members 
would not long ago have been 
regarded as too risky for organisations 
that have no access to outside capital. 

Unless the Lloyds/C&G deal pro- 
ceeds, though, there will be little 
chance of subjecting bunding society 
management s to much outside pres- 
sure. The mutual structure may have 
some value but not if its main purpose 
is 

tition. 

Railtrack 

There are dear attractions for thej 
US government In privatising Bail- j 
track before the next general election. 
Another £3hn or so would help plug 
the Treasury’s funding gap. Moreover, 
mVffltP the Post Office, there would be 
no need for legislation. Railtrack amid 
also appeal to investors and not rim- 
ply those who are railway buffs. The 
company is a utility, which will 
receive its income mainly from track | 
charges paid by the new breed of rail 
franchisees. Railtrack therefore has 
much in common with other transport 
infrastructure suppliers such as BAA 
or Associated British Ports. 

StiB, the timetable looks ambitious.' 
Railtrack has only been formally in 
existence since ApriL Assuming priva- 
tisation in 1996-96, the company would 
be able to show investors only one set 
of annual results. 

Moreover, Railtrack would probably 
not be as low risk an investment as 
other utflittee. Most of the rail franchi- 
sees will be subsidised by the tax- 1 
payer, so Railtrack’s income could be 
vulnerable to a future reduction of 
those subsidies. The political risk is 
also probably somewhat greater than 
with other utilities because the rail' 
regulator is formally required to take 
account of guidance from ministers 
until the end of 1996. The other regula- 
tors are more independent One dan- 
ger is that the Labour Party might win I 
a mid-2996 election and order a cut in 
Railtrack’s charges as a means erf driv- 
ing down fores paid by passengers. 








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FINANCIAL TIMES 

COMPANIES & MARKETS 

©THE FINANCIAL TIMES LIMITED 1994 



Monday May 23 1994 



brother 

TYPEWRITERS 
WORD PROCESSORS 
PRINTERS 
COMPUTERS 
FAX 



MARKETS 


THIS WEEK 


t MARTIN DICKSON; 

GLOBAL INVESTOR 
After a terrifying spring 
roller-coaster ride, can global bond 
and stock markets now look 
forward to an enjoyable early 
summer rally? The Federal 
Reserve’s tightening action last 
week, coupled with a statement 
implying it will not raise rates for some time, has 
prompted a rally In the US stock and bond 
markets, and helped sentiment In Europe. Page 20 

MARTIN WOLF; 

ECONOMIC EYE 

In the case of international trade, people are too 
easily attracted by two false analogies. The most 
malign is the view that trade Is war, while others 
believe trade Is similar to inter-firm competition. 
Page 20 

BONDS; 

The future of Globex, the electronic futures trading 
system, brightened this week when DTB, 

Frankfurt's futures and options exchange, said it 
would be joining. Page 22 

EQUITIES: 

Confident predictions that the US Federal 
Reserve's rate Increases had sat the stage for a 
rally in global bond markets are now carrying the 
health warning; "dollar permitting". Meanwhile Wall 
Street Is looking forward to a week of quiet 
reflection. Page 23 

EMERGING MARKETS: 

A new fond for Oman is about to give international 
equity investors access, for the first time, to the 
oil-rich region of the Persian Gulf. 

In Greece, buying opportunities are expected on 
the Athens stock market this week, with brokers 
predicting a sharp decline in the value of the 
drachma Page 21 

CURRENCIES: 

The Bundesbank has been cutting rates despite 
substantial overshoots in M3, the breed measure of 
money supply which is a leading indicator of future 
inflation. Page 21 

COMMODITIES: 

Representatives of coffee-producing countries 
gather in London today to discuss ways of 
releasing up to 2.5m tegs of beans stored under 
their export retention scheme. Page 20 

UK COMPANIES: 

Ennemix, a small aggregates company, is today 
expected to announce plans for its unusual 
flotation. Page 18 

INTERNATIONAL COMPANIES: 

Japan's petrochemicals companies have been 
plagued by sluggish domestic demand, 
over-capacity, plunging prices and the appreciation 
of the yen. 

Great-West Life, one of Power Corporation of 
Canada’s main subsidiaries, is linking with Axa, a 
leading French insurer, to establish an insurance 
arm in China. Page 19 


STATISTICS 


Base lending rates 29 

Company meetings 7 

Dividend payments — ..... 7 

FT-A Wbftd Indices 20 

FT Guide to currencies ... 21 
Foragr exchanges 29 


London recent issues 28 

London share service 29-31 
Managed fund service 25-20 

Money markets — 29 

New »nt bond issues 22 

Worid stock mkt Indices.. _24 


Singapore Telecom 


rises 19.5% 


By Kferan Cooks 
In Kuala Lumpur 

Singapore Telecom (ST), the 
Island republic's partly privatised 
telecommunications and posts 
company, has announced pre-tax 
profits for the year ending March 
31. 1994, of SSlA5bn (Slbn), a 19.5 
per cent increase. 

Turnover increased 15.6 per 
cent to S$3.l9bn. The gross divi- 
dend was raised to 3 Singapore 
cents from l.? Singapore cents. 


By Alison Smith In London 

Same leading British banks are 
likely to press the government 
not to block agreed cash offers 
for other building societies if the 
Lloyds Bank filRbu ($2.7bn) bid 
for Chelt enham & Gloucester sur- 
vives the legal challenge which 
begins in the High Court tomor- 
row. 

Banks which have expressed 
an interest in acquiring societies 
believe it would be unfair if the 
Lloyds deal was allowed to go 
ahead and ministers then 
changed the law to prevent a 
similar cash bid in future, where 
both organisations wanted to pro- 
ceed. 

C&G and the Building Societies 
Commission, the sector's statu- 
tory regulator, are seeking clarifi- 
cation from the courts about 
whether the transaction is 
allowed by the 1986 legislation 
governing societies. The court 
judgment is expected later this 
week. Approval for the transac- 
tion could spark other bids for 


The government floated about 
ll per cent of ST last October, in 
Singapore's biggest ever privati- 
sation. The company is thg larg- 
est on the Singapore exchange 
with a market capitalisation that 
at one stage stood at SS70bn - 
about 80 per cent of the market 
capitalisation of British Telecom- 
munications. 

ST attributed the strong finan- 
cial performance to economic 
growth in Singapore and its 
region and the introduction of 


societies, leading to a restructur- 
ing of the UK's financial services 
industry. 

The co mmis sion has issued 
guidance casting doubt on 
whether a third party can make 
payments to a society's members, 
and whether relatively new mem- 
bers are entitled to a share of the 
cash. 

But Lloyds and C&G are confi- 
dent of the legality of the offer, 
which would give individuals 
borrowing and investing in the 
society cash payments of up to 
£10,000 for each account. 

The Building Societies Associa- 
tion has already said that if the 
Uoyds/C&G deal proceeds, it will 
call on the government to nhang p 
the law to prevent offers of cash 
to members of less than two 
years’ standing. 

However, potential bidders for 
societies say that the impact on 
future takeovers and mergers 
between societies and other 
organisations should be seen as 
part of the current Treasury 
review of the 1986 act. which 


new services. Singapore's econ- 
omy grew 9J9 per cent in 1993 and 
11 per cent in the first quarter of 
1994. 

The international telephone 
sector was the largest contribu- 
tor to group turnover malting up 
nearly 50 per cent of total reve- 
nues and growing 13 per cent 
over the previous year. Mobile 
communications increased 36 per 
cent making it the fastest grow- 
ing sector of ST's business and 
accounting for 16 per cent of 


was set up as part of the 
government’s deregulation initia- 
tive. 

Mr John Fry, group services 
director at Abbey National said 
it would be inequitable if the gov- 
ernment reinstated the two-year 
restriction and did not at the 
same time look at other aspects 
of the legislation, such as lower- 
ing the high levels of member 
support needed for a merger, and 


overall revenue. There are now 
&2 subscribers for mobile phones 
per 100 inhabitants in Singapore. 

ST’s directors said the group’s 
results exceeded forecasts made 
in a prospectus Issued before last 
year’s flotation. They were confi- 
dent that group turnover would 
continue to grow in tandem with 
the Singapore economy. 

Analysts said that while ST has 
become one of the world leaders 
in introducing new services, its 
future growth was limi ted by the 


increasing the accountability of a 
society’s board to its members. 

The Royal Bank of Scotland, 
which has expressed interest in 
making an offer for a society, 
said it would be “very unusual 
and unfair” If the restriction was 
reinstated after Lloyds bad bene- 
fited. 

Mr Peter Ellwood, TSB chief 
executive, thought the govern- 
ment was unlikely to reinforce 


small size of its domestic market 
Singapore has a population of 
under three million. 

ST has recently been expand- 
ing aggressively overseas and 
joint ventures include projects in 
Japan, the UK, the Philippines 
and Norway. 

Despite its expertise in many 
areas, industry experts stQl ques- 
tion whether ST has the ability 
to compete with the world’s 
larger established telecommuni- 
cations companies. 


the two-year restriction if the 
courts ruled that it did not apply 
in the Uoyds/C&G deal “If the 
deal goes ahead, 1 think it would 
be extremely difficult for other 
such alliances not to go ahead, 
albeit in a slightly different 
form,” he said. He added that the 
deal offered a new approach to 
mergers in which both partners 
retained their Identities and high 
levels of autonomy. 


Bosch- 
Siemens 
looks for 
purchases 

By Andrew Baxter 

Bosch-Si emeus Hausger&te, 
Germany’s largest producer of 
white goods, is seeking acquisi- 
tions in the UK, France and Italy 
to strengthen its position in the 
fiercely-competitive DM45bn 
(S27bn) European market 

The Munich-based concern, 
owned jointly by Bosch, the car 
parts group, and Siemens, the 
electrical and electronics giant 
is Europe’s second biggest pro- 
ducer of white goods with a 15 
per cent market share. Electro- 
lax of Sweden has 22 per cent, 
including AEG Hausgerdte 
which it is buying. 

Dr Herbert Wftrner, president 
and chief executive of Boscb-Sie- 
mens, wanted to raise the 
group's European market share 
to between 18 and 19 per cent 
within five years, through 
organic growth and acquisitions. 

This week, Bosch-Siemens 
announced a sharp fall in group 
pre-tax profits from DM346m to 
DM234. 6m. The 1992 figure 
included a final DM 100m subsidy 
for the company's Berlin wash- 
ing machine plant 

Group sales fell 5 per cent to 
DM6.66bn and net profits 
dropped 35 per cent to DM99.6m. 
Non-German sales, however, 
accounted for only 42 per emit of 
the total and Dr Wdrner said: “I 
think we have to change, we 
must improve our position in the 
other big European countries.” 

Bosch-Siemens has more than 
30 per cent of the German mar- 
ket, Europe's largest, and mar- 
ket leadership in Spain, Austria 
and Greece. 

It is considering forming part- 
nerships with manufacturers in 
the UK, where its Neff and Bosch 
brands have a high reputation. 
Bosch-Siemens is also looking at 
wiafeing acquisitions in Italy. 

Any takeovers by Bosch-Sie- 
mens would continue the process 
of consolidation in the European 
white goods industry. Dr Wdrner 
said companies with sales of 
DML5bn to DM2bn would find it 
difficult to survive on their own. 

Dr Wfirner said the group was 
studying whether to build a 
white goods plant in Russia and 
had signed a letter of intent with 
a Chinese company to produce 
washing machines in China. 

Overall sales and profits bad 
improved in the first four 
months of 1994, he said, due 
mainly to a pick-up in German 
sales and a 30 per cent rise in UK 
sales. 


ARM in chip licensing deal with Samsung 


By Alan Cane bi London 

The UK-designed silicon chip which 
powers Apple's “Newton" electronic note- 
pad seems set to enjoy a vastly bigger 
market as the heart of a wide range of 
consumer and professional products from 
the US and the Pacific Rim. 

Acorn Rise Machines, wtdeh designed 
the chip, says it has licensed its micropro- 
cessor technology to Samsung Electronics 
of South Korea, the world’s seventh larg- 


est semiconductor maker. The value of the 
deal has not been disclosed. It is the sixth 
large licencing deal ARM has struck with 
a large electronics group since it 
announced its microprocessor designs in 
1991 The others are Texas Instruments, 
Cirrus Logic and VLSI of the US, Sharp of 
Japan and GEC Plessey of the UK. VLSI a 
chip designer and maker, bolds a stake in 
ARM along with Acorn Computers, owned 
by Olivetti of Italy. Apple Computers of 
the US and Daiwa Securities of Japan. 


Samsung Electronics, part of the Sam- 
sung trading and manufacturing group, 
intends to use the chips in consumer prod- 
ucts such as mobile fax-phones and In 
professional computer equipment such as 
hard-disk drives and laser-beam printers. 

VLSI and International Business 
Machines plan to use ARM-based chips in 
a new high speed computing technology 
that IBM is attempting to establish as an 
industry standard called Serial Storage 
Architecture. ARM processor circuitry is 


so small it can easily be embedded in the 
silicon chips VLSI is making for IBM. 

ARM said its technology would also be 
used by companies looking at Improving 
smart card security systems. Smart cards, 
used in payment, identification and secu- 
rity systems, are uo larger than a credit 
card but contain a complete microproces- 
sor. The ASM chip is said to have more 
than 100 times the processing power of 
existing smart card chips, making possible 
voice recognition. 


Lloyds’ offer for C&G likely to spark calls for clarification of building society takeovers 

UK banks may 


press government 
on bid policy 



This week; Company news 


CARLTON COMMUNICATIONS 

TV viewers 
predict a solid 
profit of $1 00m 

Wednesday will be a busy day for Mr 
Michael Green, chairman and chief 
executive of Carlton Communications, 
the UK broadcasting and television 
sendees group. 

At 10am. Carlton will hear whether 
its little flutter on the National Lottery 
- it has a stake in one of the eight 
bidders. The Great British Lottery 
Company - has hit the jackpot, or not 

But even if Carlton’s lottery ticket 
is not a winner, it will have some 
decent results to announce for the 
half-year to March. Most Carlton 
watchers are plumping for pre-tax 
results in the region of £65m-C70m 
l898m-3l05m), compared with £55m 
last time. 

If. as seems Likely, the analysts are 
in the correct range it would indicate 
a solid performance for Carlton, 
providing evidence that the climate 
for advertising is improving and that 
Carlton's main businesses around the 
world are pulling out of recession. 

The results will, however, contain, 
only around two months of 
contributions from Central independent 
television, the second largest ITV 
company, which Carlton acquired for 
about £750m at the turn of the year. 

The main financial benefit from the 
government's generous decision to 
allow the two largest ITV companies 
to merge will not be seen until the 
full year. 

The period of consolidation following 
the Central deal is not over. It is 
considered unlikely that Carlton will 
unveil anything spectacular on 

Wednesday. Instead the emphasis will 
be on steady, solid progress. 

Further competition lor Carlton in 
its main UK television markets now 
seems likely. However, the government 
is likely next month lo approve a new 
Channel 5 despite the efforts of the 
ITV companies to head off a potential 
rival by arguing for the merits of digital 

television. 


Carlton Communications 

Share price relative to the 
FT-SE-A Media Sector 



BARLOW 

S African group set for 
first unbundled result 

South African industrial conglomerate 
Barlow, formerly Barlow Rand, releases 
interim results today. These will be 
its first since unbundling its main 
operations late last year. 

C.G. Smith and Reunert, the two 
other big companies created in the 
unbundling, have had a mediocre six 
months, and Barlow's figures also are 
unlikely to be good. 

Analysts say Barlow’s results are 
difficult to forecast. The pro forma 
numbers released after the unbundling 
are no longer a good guide to overall 
performance because of various sales 
during the past six months. 

Of the group’s remaining assets, 
Barlow’s Pretoria Portland Cement 
subsidiary had an excellent first h al f . 
Analysts expect its figures to improve 
still further this year because of the 
boom that is likely to follow the new 
government's reconstruction and 
development programme. 

But the unit’s first-half gains are 
likely to be largely cancelled out by 
the dismal performance of UK 
subsidiary J Bibby and sons, which 
reported pre-tax losses of £ 12.4m 
($18-6m) for the six months to March 
26. The deficit was due to a decision 
to withdraw from the agricultural feeds 
business. Trading In Spain and Portugal 
also remained weak during the period, 
although since February the company 
reported a small Improvement in the 
order book level for new equipment 


OTHER COMPANIES 

Bad debts threaten 
Japanese banks 

Japanese banks are expected on 
Thursday to announce a sharp fall 
in profits for the year to March. This 
follows aggressive write-offs of their 
bad debts through the Co-operative 
Credit Purchasing Company, a bad 
loan purchasing organisation set up 
by the banks last year. 

Brokers James Capel in Tokyo predicts 
that the banks' transfer of bad debts 
to the CCPC wIU total Y2,000bn (*19bnl, 
with a further Yl,000bn written off 
by the banks in straight loan-loss 
provisions. 

■ British Airways: The UK airline 
has a tradition of breaking even in 
Its fourth-quarter, which leaves 
analysts forecasting that full-year 
pre-tax profits wQl be about £300m 
(3450m), against £185m 

However, the tone of today’s statement 
may be more important t han the 
headline profit The stock has been 
weak since iower4ban-expected growth 
In traffic figures for April and there 
are concerns about BA’s troubled 
associate USAir. 

■ Viag: The transport to energy 
conglomerate will present its 1993 
results on Wednesday, with earnings 
expected to be about 20 per cent lower 
than the DM371m (8220m) reported 
for the previous year. 

Analysts said earnings pa- share were 
forecast at about DM16, with the 
dividend likely to remain unchanged 
at DM9. The group recently took over 
Bayemwerk. Germany’s third hugest 
utilities group, and with annual 
turnover of about DM40bn, it is among 


Com pa nies In this Issue 


MoDo 


'Ey shore price (SKr) 
350 



Germany's top 10 companies in sales 
terms. 

■ MoDo: The Swedish pulp and paper 
group will almost certainly return to 
the black when it announces its 
first-quarter figures on Thursday. 
Analysts are expecting profits of up 
to SEMlOm ($40m) after last year’s 
SKrtOOm deficit 

The improvement has been driven 
by higher pulp and fine paper prices, 
a better performance at the company's 
French unit and lower financial costs. 
MoDo has already indicated that it 
expects a 1994 profit of more than 
SKrlhn after last year’s SKi449m 
deficit. 

■ Cable & Wireless: Analysts are 
forecasting annual pre-tax profits of 
more.than £lbn ($L5bn), up 27 per 
cent from 9824m, for the UK telecoms 
group- That would give earnings per 
share of 22.6p, a 16 per cent increase 
on last year (19.4p). 

However, better-than-expected results 
announced last Thursday at Hongkong 
Telecom, C&Ws largest business, may 
make that view somewhat pessimistic. 


Acorn Rise Machines 

17 

Alpine Electronics 

19 

Axa 

19 

BAA 

18 

Bosch-Siemens 

17 

C&G 

17 

CPL 

18 

Ennemix 

18 


Frontier Airings 

19 

GreSt-West Life 

19 

HSBC 

IS 

Hang Sang Bank 

IS 

Lloyds Bank 

17 

Lola 

18 

Mitsubishi Kasai 

19 

Mitsubishi Petrochem 

19 


Mitsui Petrochemical 

19 

Power Corporation 

19 

Prudential 

18 

Ricoh 

19 

Rothmans (MaiaysJal 

19 

Samsung Etedranlcs 

1ft 17 

SeafiefcS 

18 

Shin-Bsu 

19 

Singapore Telecom 

17 



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18 


FINANCIAL TIMES MONDAY MAY 23 1994 


COMPANIES AND FINANCE 


Ennemix takes unusual 
route to stock market 


By Andrew Tayfor, 

Construction Correspondent 


Ennemix, a small east 
Midlands and East Anglian 
aggregates company, is today 
expected to announce plans for 
one of the most unusual flota- 
tions for some time. 

The company, which is seek- 
ing to raise £8.7m for new 
acquisitions and to reduce bor- 
rowings, will offer shares in 
the form of a rights issue to 
existing stockholders of Angle- 
sey, a publicly quoted North 
Wales mining group. 

Anglesey, which needs cash 
to pay for preliminary works, 
is expected to receive about 
£600,000 of the new money. 
Rnmaniy wo old take a 15 per 
cent stake in fhp mining com- 
pany. 

Imperial Metal Company, of 
Canada, which previously has 
provided seed-corn finance for 
Anglesey, would not take up 


its rights but would still be left 
with 50 per cent of the com- 
pany through a debt-for-equity 
swap. 

The scheme, which would 
resolve the problems of a small 
highly-geared aggregates com- 
pany trying to float on its own 
in a difficult stock market and 
raise much needed cash for 
Anglesey, has been organised 
by Gaumess Malum. 

The development of Angle- 
sey, which owns the mining 
rights to I0m-l5m tonnes of 
zinc, lead and copper as well as 
same gold and silver deposits 
in Parys Mountain, north 
Anglesey, has been delayed by 
a fall in base metal prices. 
The company needs to raise 
more funds if it is to contin- 
ue. 

Anglesey, instead of issuing 
more paper, will be asking its 
own shareholders to put up 
this money in return for Rime- 
mtT shares. 


Nash Sells, a venture capital 
company which owns 215 per 
cent of plans to 

raise a further £1.3m 
by placing about half 
its stake with institutions. 

Of the total £10m to be 
raised, about half will be 
offered by way of rights to 
Anglesey shareholders with 
die remainder of the shares to 
be placed. 

The McLeod family, -which 
currently owns 77 per cent of 
Ennemix. will not seD any of 
its shares - reducing its stake 
to about 25 per cent after the 
Issue. About 62 per cent of 
Ennemix shares would be left 
with Institutions or Anglesey 
shareholders. 

Rrmemix, which owns seven 
sand gravel quarries and 
17 concrete plants in the east 
Midlands and East Anglia, is 
forecasting after-tax profits of 
£Llm this year following last 
year’s £L64m lose. 


Pni issues 
sales staff 
statement 


By Anchew Jack 


Prudential Corporation, the 
TIE’S largest life insurer, said 
over the weekend that Laatro, 
the life industry’s self regular 
tory body, bad found training 
and competence of its 9,000 
sales staff “generally satisfac- 
tory". 

The company said that it 
was stffl considering a detailed 
report based on a Lantro 
audit, but that any recommen- 
dations for change were 
“minor". 

Prudential cited from a let- 
ter from the regulator to Mr 
Mick Newmarch, the chief 
executive, that Lautro’s find- 
ings would not have “any seri- 
ous effect” on its sales opera- 
tion. 

The company went to the 
unusual length of issuing a 
statement to the Stock 
Exchange on Friday after its 
share price fell on rumours 
that its sales staff had been 
suspended, following a suspen- 
sion by Norwich Union staff in 
March. 


Lola accelerates growth 
away from the race track 


By John Griffiths 


Lola, the British racing car 
maker, has signed its first 
aerospace engineering con- 
tracts and is embarking on an 
expansion programme 
designed to transform it into a 
public company within the 
next four years. 

Mr EriC Broadley, chairman 
a-nd founder of the Hunting- 
don, Cambridgeshire-based 
company whose single seaters 
have dominated North Amer- 
ica’s most prestigious IndyCar 
champimn shT p for mtich of the 
past decade, has developed a 
strategy to triple the compa- 
ny’s a year turnover and 
take it into mainstream auto- 
motive engineering as well as 
aerospace. 

The company employs 160 at 
its two operating divisions in 
Huntingdon, but this number 
is expected to grow as the 
strategy develops. 

Mr Broadley, who owns 75 
per cent of Lola Cars, said 


expansion outside of motor rac- 
ing would be based on the 
skills in chassi s engineering, 
aerodynamics and composite 
plastics technology that Lola 


has built up over three suc- 
cessful decades of participation 
in most senior categories of 
motor racing except Formula 
One grand prix. 

Lola has signed several aero- 
space engineering contracts, 
faffinrifag the developments of 
parte for British Aerospace and 
Westland, the helicopter con- 
cern recently acquired by 
GEN, the engineering and 
industrial services group. 

Mr Broadley regards aero- 
space as particularly compati- 
ble with the racing car indus- 
try, in which the UK is the 
acknowledged world leader. 

Aerospace requires high 
technology, low-volume pro- 
duction in which fast response 
times during development are 
important - M w hich are fun- 
damental to racing car con- 
cerns because of the very 
nature of competition. 

Much of Lola's expansion 
effort is being directed towards 
the rapidly growing and tech- 
nology hungry Pacific rim 
region. Implicit in that is the 
expectation that Lola will be 
able to stay ahead, in technol- 
ogy terms, of the Asia-Pacific 
“tiger” countries like Korea. 


CPL seeks 

listing 

later 

this month 


By David Blackwell 


Expectations that it can 
continue to spread the sweet 
smell of success have spurred 
CPL, one of only two fragrance 
and flavour manufacturing 
companies in the UK, to seek a 
listing on the London Stock 
Exchange later month. 

The company’s origins go 


back to a firm of north coun- 
try soap makers last century. 

Mr Terry Pickthall, chair- 
man, expMmi that his family 
first became involved with the 
industry by inventing fra- 
grances to disguise the smell 
of soap made foam tallow. 

CPL, itself, was founded by 
Mr Pickthall and his late 
brother in 1971 as Contempo- 
rary Perfumers Limited. It has 
grown into a multi-national 
company with profits last year 
of £l.lm on turnover of 
£l4.7m. 

The company is 57 per cent- 
owned by the family, who 
expect to retain around 40 pm* 
cent after the listing; and 34 
per cent by Ensign Trust It is 
aiming to raise around £5m 
net of expenses through a plac- 
ing with institutions, and is 
expecting a market capitalisa- 


tion of £20m. 

Mr PickthaU dates the com- 
pany’s products are found in 
goods used in most homes. The 
fragrances go into soaps, 
detergents, fabric condition- 
ers, dishwashing liquids, air 
fresheners, shampoo and other 
persona] care products, while 
flavourings are used in almost 
every manufactured food and 
drink. 

The company operates in 
two divisions - fragrance and 
flavouring; which accounts for 
60 per cent of sales and aro- 
matic Ingredients. It employs 
150 people worldwide, includ- 
ing a team of more than 20 
perfumers who operate with 
over 5,000 ingredients. 

“Clearly nature is bountiful 
in supply with a wonderful 
array of substances," said Mr 
Pickthall. “These are supple- 


mented by aromatic chemicals, 
which were originally 
designed to replicate natural 
fragrances, but many of which 
are novel" 

Credit Lyonnais Is sponsor 
to the issue. 


Loss that intensified a war of words 

David Blackwell on Seafield’s battle with dissident shareholders 


JfP 


ill* 


T 


he announcement last 
week of a £24.2m loss on 
turnover of £27.5m In 
1993 by Seafield, the Dublin- 
based transport and distribu- 
tion company, intensified the 
war of words between the man- 
agement dtesideut share- 
holders. 

Shareholders in the troubled 
group have seen its net worth 
foil from £61 .2m in 1989 to 
£U.lm at the end of last 
year. 

The latest losses were “the 
direct result of the ill-con- 
ceived decision to acquire a 
property development com- 
pany near the peak of the prop- 
erty market, a decision taken 
by the board chaired by Mr 
Wilson. " Mr Brian Chilver, the 
chairman, wrote to sharehold- 
ers. 

He was referring to Mr Tony 
Wilson, former executive chair- 
man of the group, and the 1989 
acquisition of Charterhall 
Properties, which was sold late 
last year at a loss. 

Mr Wilson and Mr Robert 
Cosby, a corporate adviser, 
bare been nominated by the 
dissidents to replace as direc- 
tors Mr Cbllver and Mr Rich- 
ard Hayes, who was involved 
in the Charterhall purchase, at 
an pytr anrriinar y mawting tn ho 
held in Dublin an June 10. 

Mr Cosby described last 
week's results as “much worse 
than the requisitioning share- 
holder group had been fear- 
ing." 

Turnover and operating 
profit an continuing operations 


had fallen. "Unlike Mr Chilver, 
this is not what we would 
describe as the road to recov- 


ery.’ 


The dissidents represent 25 A 
per cent of the shares, and 
claim their support is growing. 
Of these the biggest single 
shareholder is Fidex Interna- 
tional Trust, an offshore trust 
with 18-5 per cent It was the 
main shareholder in Charter- 
hall, which was chaired at the 
time by its founder Mr James 
Smith. 

Seafield paid around £7Qm in 


‘We 
long as 


should win as 
there is not 
too much Inertia 
among shareholders 9 


cflgb and shares, partly funded 
by a £58m rights issue at J50p a 
share. On Friday, tire shares 
stood at 12%p. 

Mr Wilson nurses an ambi- 
tion to return to the transport 
and distribution company 
which be built by acquisition 
while executive chairman. He 
claims that he wanted to 

resign «nri a management 

buy-out of the transport group 
when it ventured into the prop- 
erty market, but was urged to 
stay until the Charterhall deal 
was complete. 

The Charterhall purchase, 
according to Mr Wilson, was 
arranged by Mr Dennis Jones, 
the 1980s entrepreneur. Mr 


Jones was a Seafield director 
and large shareholder who at 
the tune was also finance 
director of Hazelwood Foods. 
Mr Hayes assisted Mr Junes, 
Mr Wilson said. 

Seafield paid an arrangement 
fee of more than am to Mr 
Jones, but the company’s audi- 
tors discovered it had not beea 
mentioned in the rights docu- 
mentation. 

Mr Wilson resigned afer the 
purchase and was ultimately 
followed as chairman by Mr 
Chilver, who had been chair- 
man of Laing Properties. Mr 
Chilver, however, would not 
agree to a management 
buy-out of the transport divi- 
sion. 

Mr Wilson remains sore. “Mr 
Chilver likes to present things 
as though I dreamed up the 
whole excursion into property 
- nothing could he further 
from the truth,” he says. 

Mr Chilver, who became 
chairman in July 1990, accepts 
that it is probably true that Mr 
Wilson was not keen on the 
foray into property, but in that 
case he should have resigned 
at once. 

He himself did not realise 
when he joined that the prob- 
lems were quite so severe. The 
group did not have the muscle 
to stay in the property sector 
in a declining market One par- 
ticular gjte in Finchley, north 
London, “must have cost £30m 
in write-offs over the last four 
years." 

He points out that £175m of 
the latest loss represents good- 


will written offonCharterha^ 
The purchase was originally 
based on profits stre am ^ 
assets ~ a move he dismis sal 
as "stupid". 

The way is now clear to 
develop the transport and dfc. 
tribution business, he saya, 
blaming the foil in the dirt- 
Sion's operating profits frtan 
£Um to £804jn> on the Eon- 
' pw« n rece ss ion. 

He regrets the dissident 
move, which came out of the 
blue and led to bnari, a private 
Irish transport company seek- 
tag a listing, to withdraw 
from merger talks last 
week. 

Seafield has survived where 
many property companies did 
not, but it is now rigid back to 
square one. Mr Cosby, who will 
be rhaiitnatt if the 
win, says be joined the fray 
because something had to be 
done to stop the company spi- 
ralling downwards. “They were 
throwing away the sharehold- 
ers’ money." 

He argues that as a transport 
and distribution group, the 
company will be much better 
served by the re-appointment 
of Mr Wilson - “the man 
responsible far successfully 
building up its transport and 
distribution activities." 

Mr Chilver, who argues that 
Seafield has matotateed its rep- 
utation as an efficient fawn, 
port business throughout the 
last four turbulent years, pre- 
dicts: “We should win as tog 
as there is hot too much iner- 
tia among shareholders." 


\ism‘ 
jghnwn* 


In 






BAA interest 
in Australian 
airports 


By Joel K&azo 


BAA, the airports operator, 
said yesterday that it was 
"interested" in bidding for sev- 
eral of Australia's airports, 
particularly the three biggest - 
Sydney, Melbourne and Bris- 
bane. 

Earlier this month, the Aus- 
tralian government signalled 
its intention to privatise the 
Federal Airports Corporation, 
which runs the airports. But a 
decision on the structure of 
the sale and whether foreign 
ownership will be allowed is 
not expected until later this 
year. 


CROSS BORDER MSA DEALS 


BIDDER/INVESTOR 

TARGET 

SECTOR 

VALUE 

COMMBfT 

(PIC (Abu Dhabi) 

OMV (Austria) 

OC & cherrtcais 

£275m 

20K stake 
approved 

US West (U^ 

Thomson Directories (mq 

Telecoms 

£70m 

U5W continues 

UK -development 

Cemex (Mexico) 

Unit of Lafarge Cap0ee 
(France 

Cement 

£S7m 

Buying US .. 

osasts 

Mandere (UK) 

Premier Hokfing 
(Netherlands) 

fV4 n «Li , , Trili-er 

Mining htks 

E38m 

Mandere 

reorganieation 

Karanffic Holdings 
(Switzerland) 

Bisch Mariey (France) 

BUkfrng 

materials 

Cl 9.8m 

Mariey daposai 

Critchtey Group (UK) 

Idento (Germany) 

Cable products 

Eltm 

German 

manufacturing ban 

Nawman Tonka (UK) 

Hartmann-Sanders (US) 

Carpentry 

products 

84.7m 

Cash 

transaction 

Quarto Grotto (UK) 

Front Line Art 

Pubfishing (US) 

Publishing 

£4m 

Rwformance- 
neiatsd price 

British Gas (UK) 

Gas Ventures 

Advisers (US) 

Power 

generation 

n/a 

TaWngSlW 

state 

Merck (Germany) 

Amerpharm 
(Motherlands Antffles) 

Pharmaceuticals 

rJu 

Generic ckugs 
buy . 



Lm » * 
-1^ 






SHANGHAI TYRE & RUBBER CO., LTD. 

Notice Relating to Bonus for 1993 


In the Annual General Meeting of 1993 convened on May 20, 1994, the Company 
passed the "Profit and Bonus Distribution Pian of 1993", and decided to distrSaite 
cash bonus of RMB 1.00 for every 10 shares. 


Cash bonus for holders of B shares and American Depository Receipts (ADR) wil be 
distributed in USD, wtoch shaB be converted at the average exchange rate of the pre- 
vious week. 


This bonus distribution is organised and implemented through the Shanghai 
Securities Exchange by way of transaction of "cash bonus right", and through the cen- 
tra] clearing system of the Shanghai Securities Central Registration and Clearing 
Company. The Shanghai Securities Exchange wiB announce the transaction code 
and transaction time of the ’cash bonus right* of the Company. 


The registration day for the bonus rights of A shares is May 27, and the ex-dhridend 
transaction day is May 30. 


The cum dividend transaction day for B shares and ADR is May 27, the ex-<fividend 
transaction day is May 30. The registration day for the bonus rights of 0 shares is 
June 1, and the registration day for the bonus rights of ADR is June 3. 


Further notice wflj be given on the bonus distribution for corporate shares. 


This bonus distrftKition does not involve any increase, decrease or alteration of the 
shares of the Company. 


Shanghai Tyres and Rubber Co.. Ud. 

May 21, 1994 


4 


FIRST BANGKOK 
CITY BANK LIMITED 

acting by and through its Cayman Islands branch 


US$ 110 , 000,000 

Floating Rate Notes Due November 1993 


In accordance with the provisions of the Floating 
Rate Notes, notice Is hereby given as follows: 


Interest Period : 
Rate of Interest : 


24.05.94 - 25. 1 1.94 
5.5/8% per annum 


Coupon Amount: USD 14,453.13 per Note of 

USD 500.000 each 


Fiscal & Paying Agent 

London Forfaiting Asia f imitwi 



Eurap* regslany raad the Financial 
Haw, add 78* so n s i ter the Ft to he 
moet faportMt w mU k a* wk> 

lflkWffifonlr hi mam 

P— P»* ■— A thd Phia Tim n— : more 

tfedn any at tier (ntnniatienal 


Far an editorial synopsis and 



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PUBLIC NOTICES 


SCOTTISH EQUITABLE POLICYHOLDERS 
TRUST LIMITED 


Notice is hereby given thal the Erst Anneal General Meeting of Qualifying 
Poticy holders of Scottish Equ it a ble Policyholders That Limited win be held at 28 
St Andrew Square, Edinburgh on Tbnrsday 16 Jane 1994 at 130 pm for tbe 
following potposec- 
L To conrider the Company's Report 
Z To approve tbe aggregate onfinary remuneration to be made available to tbe 
Ducous of the Company. 

3. To reappoint the Directors of tbe Company retiring by rotation at tbe Meeting, 
nmnely:- 

(a) The RlHoo Lord Younger of Prestwick KCVOTDDL 

(b) Barry ESeakyCBE BA 
(cl Charles F Sleigh CA 

Any Qualifying Policy bolder who is entitled to attend and vote is entitled to 
appoint another person (who need not be a Qualifying Poticytoobka) as his proxy 
m attend and vote instead of him. A pray ia entitled to vote but is not entitled to 
speak except to demand or Join in demanding a polL Proxy (bans, which can be 
obtained from the Company Secretary (at Ihe following address), most be 
deposited at 28 St Andrew Square, Edinburgh before 230 pa on Tuesday 14 June. 

Every Qualifying Policyholder whose policy, as at the commencement of (be 
Meeting, has been at least one year in force is entitled to attend and vote at tbe 
Meeting. 

’Qualifying Policy hoi deo 1 for tbe purposes of this Meeting comprise any person 
who was a member of Scottish Equitable Life Assurance Society (tbe Sodety) and 
whose policy, having been tran s fe rred Cram the Sociegy to Scottish Equitable pic, is 
still In face at tbe coansencenent of tbe Meeting. 

Any queries in respect of tbe qualification of poticyhokfen to attend and vole at 
(be Meeting should be addressed lo the Company Secretary (at the address 
specified below). 

By Older of tbe Board 
PH Grace 
Managing Director 

28 St Andrew Square, Edinburgh EH2 IYF 


IF YOU GO DOWN TO THE WOODS TODAY 

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SAB 


THE SOUTH AFRICAN BREWERIES LIMITED 


Reg. No. 69/16025/06 

(Incorporated in tbe Republic of South Africa) 
(“the Company") 


Terms of issue of onfinary shares in lieu of the final ordinary cash tfivklend 


Further to the results and dividend announcement pubBshad in the press on 13 May 1994, the Directors haw 
determined the terms of the Issue of now fully paid ordinary shares off 20 cants aach in the Company in Heu of H» 
final cash dividend as follows; 

■forma of the issue 

New fuAy paid onfinary shares in the Company wffl be issued to ordinary shareholders raoMared In lha books 
of the Company at the dose of business on FiridaK 27 May 1994 at a price of R92 per ordinary share In lieu of .ttM 
final cash dividend, on the basts erf 1.2609 ordinary shares for every 100 ordinary shares held, unless an artery 
sha re h ol d er elects in respect of aH or part of a aharehoMng by no later Own 1&00 Friday; 24 <taw 1994 to 
receive tea fttal cash dividend. 

Fractions of ordinary shares win not be issued and shatehokiars wflt receive the cash equivalent of such fractions. 
Listing 

Subject to the approvals of The Johannesburg Stock Exchange ptre JSE”) and the London Stock Exchange 
rtha LSE”). the Oding of ihe new onfinary shares on the JSE and LSEwHI commence on Thursday 30 June 1984. . 


A drearier containing fuB deters ol the share Issue, together with an e l ectio n farm. win be posted to sharahrtdara on 
or about 3 June 1994. Shareholders wishing to elect to receive the final cash (fivfdend wifi be required to return 
their completed election forma to the Company's transfer secretaries, to reach them by no later than 15:00 on. 
Rrtdey, 24 June 1994. 

Fostingof dividend cheques and share certificates 

It Is expected that dividend cheques and share certificates In respect of the new ordinary shares vriB be posted 
to shareholders on or about 30 June 1994. 

A further announcement will be made on or about 29 June 1994 reporting on the number of ordinary sbarehoUera 
who wlH reoefve new ordinary shares or Ihe cash dividend, as the caae may bo. 

By order of the Board 

A OCTonklneon, Group Secretary 2 Jan Smuts Ausnus 

23 May 1994 Johannesburg 2001 




REGAL HOTEL GROUP PLC 

(R*gauredmE*gtamJand Wales fia. 171238) 
PROPOSED ACQUISITIONS 
of 

(fee Ttae Oat BsM, Locator; the HBkrerf Hotel, Wife* 
foe Hall Ganfc Hotel, Daritegtoa sad dm Csrelxisi Bstd, Caribk 


PLACING AND OPEN OF6EK 
by GofeiBcsi Mrim & Cs. United 


of 62&57L4Z8 sew OnSamy Shares 
at It* pence per share 


Stan capW fcSovwg the Rates «sd Ops* Ofiar 
AfhariteS 


I3J1SJMM 


U.75SJH0 tnOrdbitr} shares of 0 each 

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LONDON ECJP3AJ 

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rad a ibe Bernard office of to Cbtnpssjr is fogtad: 

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BanfcAmtfica 
Corporation 
ussswMXMuno 

Hosting Rata Notes 
Due February 1997 
R* the period from May 23. |W4 
to August 23, 1994 die Note wifi 
cany an interest rate of 5% per 
awiuni with an interest amount 
of OS $63889 per US UOjOOO 
principal annum of Noes payable 
on August 23. (994. 


Bafe of Antrim HreSA 8) 


I snifan -ApanBa* 


£200,000,000 

MFC Rnance No. 1 PLC- 

NOTICE OF REDBHPTIOM - 

Series * A’ to *F MertSMe Backed floaOng iteM ItettM 
Due Oil lijliei ’snru _ . 

Notice b hereby given, dim In accordance with Conditions We) efPg 
Prospectus dated 13th October 1988, the Issuer intends to radaeni 
C2.400.000 in aggregate value of the Notes on die respective 
1994 Interest payment dates. . ' _ 

CfTIBAtfO 


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FINANCIAL TIMES MONDAY MAY 23 1994 


19 


COMPANIES AND FINANCE 


Japanese chemical groups hit hard 


By Paul Abraham* in Tokyo 

Basalts from Japan’s largest 
petrochemicals companies for 
the year to March 31 reflect tbe 
crisis facing a sector pla g ue d 
by sluggish domestic deman d, 
overcapacity, plunging prices 
and the appreciation of the 
yen. 

News of the sector’s dire 
trading position follow this 
week's decision by Showa 
Denko to sell its polystyrene 


The company, a marginal 
manufacturer, sold its 30,000 
tonnes a year Kawasaki plant 
to Asahi Chemical, Japan’s 
largest polystyrene manufac- 
turer with capacity of about 
333,000 tonnes a year, equiva- 
lent to about 25 per can cd the 
market. The move was the lab 
est in a series of alliances and 
mergers as the troubled indus- 
try restructures. 

Mitsubishi Petrochemical, 
the country’s biggest plastics 
group, reported a loss of 


YB^abn. (980m) compared with 
pre-tax profits last year of 
YB35bn. ^he group made an 
operating loss of mshn, the 
first smt» 1982. The poor result 
came despite cost-cutting mea- 
sures, lower raw material 
prices, and Y4bn worth of prof- 
its from equity sales. 

Turnover fen 123 per cent 
from Y372bn to Y&zgbn, as 
prices and volumes declined. 
Kamings per share, which 
reached Y523 in 1991. fell to a 
loss per share of Y9.44. The 
group, which is scheduled to 
merge with Mitsubishi Kasei 
on October 1, cut its dividend 
from Y8 per share to Y4. 

Mitsubishi Easel's pre-tax 
profits fell 76.8 per cent from 
Y93bn last year to Y23bn.Ths 
group reported Its first operat- 
ing loss in 40 years at Y467U1, 
and only managed to post posi- 
tive pre-tax results by selling 
715.7bn worth of equities. 
Turnover fell IK per cent, the 
fourth yearly decline, to 
Y696bn. The dividend was 


halved to Y3 per share. 

Mr Morihlsa Tafrano, manag- 
ing director, said the newly 
merged group would generate 
pre-tax profits of YLNm on 
sales of Y855bn during the year 
to March 1995. 

HO predicted petrochemicals 
prices would bottom out dur- 
ing the summer. No rtBrt gfan 
had been made shout the divi- 
dend, bat the new company 
could pass it during the cur- 
rent year, he warned. 

Pre-tax profits at Mitsui Pet- 
rochemical Industries, Japan’s 
biggest polyethylene maker, 
plunged 75 per cent from Y9bn 
to Y2_26bn on sales down 93 
per cent at Y272bn. The com- 
pany blamed poor demand tor 
the slump which offset the 
benefits of cost-catting mea- 
sures. The dividend is 
unchanged at Y6 per share. 
The group forecast pre-tax 
profits for the current year 
marginally up at Y3bn on torn- 
over of Y276hn. 

Shin-Etsu, one of Japan’s 


biggest makers of polyvinyl 

chloride, reported profits down 
26a per cent from Y17.6bn to 
YlSbn. Sales increased 02 per 
cent from Y275bn to Y276bn. 
Net profits fell 26.6 per coat to 
Y7.Q8bn. or Y2L8S per share. 

The group maintained the 
final dividend at Y3.75, m a king 
the fuSryear payout Y73 per 
share. Shtn-Etsu forecast pre- 
tax profits tor the cnrrent year 
of Y153bn on sales of Y277bn. 

The outlook tor the petro- 
chemicals industry remains 
bleak. The imbalance between 
supply anfl riomand for ethyl- 
ene, the basic bmkfing block of 
petrochemicals, is about 23m 
*rnmpq of ethylene and is set to 
deteriorate further this year. 

A massive 700,000-tonne-a- 
year ethylene complex owned 
by M«nnwi Mfbn ri Petrochem- 
ical and Sumitomo Chemical 
comes on stream later this 
year and Mitsubishi Petro- 
chemical is also commission- 
ing a new 300,000- tonne-a-year 
plant this year. 


Advance by 

Rothmans 

Malaysia 

By Kfaran Cooke 
In Kuala Lumpur 

Rothmans (Malaysia) has 
announced pre-tax profits of 
M$4Q2m (USH55m) tor the year 
ending March 31 1994. The fig- 
ure 'represents a 15-7 per cent 
rise over the previous year. 

. Ro thmans ’ Malaysian unit is 
the most profitable segment of 
the British tobacco group’s 
operations in the east Asia 
region. 

Earlier this year Rothmans 
announced plans to merge its 
units in the region to give the 
group the financial muscle to 
Tamu-h a strung gales push in 
fTMrm and Japan. 

However the plans were 
abandoned after shareholders 
in the unit, rt«mfaa*ad ^y the 
Malaysian government’s 
investment company, said that 
a merger could siphon funds 
out of Malaysia and dilute local 
control of the company’s 
operations. 

T u rn ov er at Rothmans (Mal- 
aysia) in 1998-94 increased by 
1&3 per cent to M$133bo. The 
company has recommended a 
final gross dividend of 40 cents 
per share. 


Hang Seng issues HK CDs 


By Louis* Lucas In Hong Kong 

Hang Seng Bank, the Hang 
Kong banking subsidiary of 
HSBC, has tapped the capital 
maAets for up to HK$2bn with 
the launch of the colony's big- 
gest certificate of deposit Issue 
by a domestic bank. 

The three-year floatin g-rate 
CDs, arranged by HSBC Mar- 
kets (formerly Wardley Capi- 
tal). also represent the lowest 
cost of funding yet seen by a 
Hong Kong bank, reflecting 
Hang Seng's solid and cash- 
rich balance sheet It is ini- 
tially seeking HKgUbn, and 
the ah-in borro win g cost tor co- 


managers is around 45 to 50 
basis points above the Hong 
Kong inter-bank offered rate 
(Efibor). 

Hang Seng, although second 
only to Hongkong Bank in size. 
Is the last entrant into the 
market. Last year TT<\agirrmg 
Bank raised gShn through 10- 
year subordinated collared 
floating-rate notes. Bank of 
East Asia and Shanghai Com- 
mercial Bank, both past issu- 
ers, borrowed at some 65 to TO 
basis points over Efibor. 

Mr Chung Ctoun-tung, gen- 
eral manager of Tmnir, said 
it was prompted by a ehang+ng 
attitude and a move to partici- 


pate in all aspects of banking. 
Bang Seng has traditionally 
trod a very conservative path, 
which has been partially 
responsible tor its low loan to 
deposit ratio of 42 per cent 
However, it hi g hli g hts a 
desire to play a role in the colo- 
ny’s infrast r uct u re projects: 
money raised through the CDs 
win put Hang Seng in a better 
position to expkdt these oppor- 
tunities, Mr Chwn g 
The offer, which will be open 
for two weeks, is expected to 
appeal to foreign banks seek- 
ing an exposure to the Hong 
Kong market and, to a lesser 
e xtent, institutional investors. 


Sharp rise in earnings for Ricoh 


By EmHco Tarazono in Tokyo 

Ricoh, the Japanese office 
automation and information 
equipment maker, posted a 
sharp rise in profits thanka to 
cuts in sales costs as a result of 
its restructuring programme. 

The company reported a 253 
per cent rise to unconsolidated 
pre-tax profits for the year to 
March to Y143tm ($14Qm). 

Sales toll 8.4 per cent to 
Y5963hn, but operating profits 
rose by L9 per cent to Y83bn 


and aftertax profits by 443 per 
cart to Y73bn. 

Sales of copier ™*hhiftn fell 
12 per cart to Y3963bn, while 
Information equipment 
declined 153 par cent to 
Yl44.Bbn. Domestic sales 
declined 43 per cent to 
Y4503bn and exports dropped 
19.4 par cart to Y146.6bn. 

For the full year to next 
March, the company expects 
pretax profits to rise by l&l 
per cent to Y16L5bn and sales 
by 83 per cent to Y618bn. . 


• Nikon, the camera and 
semiconductor manufacturing 
equipment maker, returned to 
the black due to a recovery in 
the faffimatf goai semiconduc- 
tor market. 

The company posted profits 
of Yl.lbn, against pre-tax 
losses of Y23bn a year ago, 
and after-tar profits up 139.7 
per cent to Y52fim. Sales fell by 
13 per cent to Y20itm with a 
29.7 per cant fall in cameras 
offset by a 403 per cent rise in 
semiconductor equipment. 


Frontier 
Airlines 
in plan to 
fly again 

By Rfcftard Tomkins 
In New York 

Frontier Airlines looks like 
becoming the first of three 
deftmct TJS atrtines to start fly- 
ing again under plans drawn 
up by Its former managers. 

It is seeking to raise $83m 
net through a public share 
offering with the of 
relaunching air services from 
its farmer base to Denver, Col- 
orado, this summer. 

Last week, another defunct 
carrier, Eastern Airlines, out- 
lined a plan to emerge from 
bankruptcy and restart ser- 
vices using 14 airliners from 
bases In Atlant a, Indianapolis 
and Philadelphia, but it has 
yet to raise the necessary 
tends. 

Meanwhile, a group of inves- 
tors has bought the rights to 
the Pan Am trademarks with 
the aim of resurrecting Pan 
American World Airways. 

The group plans to operate 
the company as an umbrella 
organisation for other carriers 
wanting to use tile Pan Am 
name. The plans, however, are 
still at an early stage. 

Frontier ran into financial 
troubles in the mid-1980s and 
went bankrupt to 1986 after an 
unsuccessful attempt at a res- 
cue by People Express, the no- 
frills carrier. Shortly after- 
wards, People Express suc- 
cumbed to a takeover by Texas 
Air. 

The new Frontier Airlines 
has been formed by the presi- 
dent and other key executives 

of the Old enmpawy. 

The company is offering 
13m ordinary shares at 8435 
each and l.8m redeemable 
warrants at (035 each. Net 
proceeds of the offer will pay 
for the atritoe’s launch and ter 
working capital after the 
start-up. 


Correction 

Greek Banking and 
Finance Survey 

The figures for assets, deposits 
and loam held by Greece’s big- 
gest banks in 1992 in the 
above survey (May 20) should 
have been stated in drachmas 
and not dollars. 


Power Corp and Axa in 
Chinese insurance venture 


By Robert Qbbens in Montreal 

Great-West Life, one of Power 
Corporation of Canada’s key 
subsidiaries, is linking with 
Axa, a French insurer, 
to establish an Insurance arm 
in flhirm 

The Canadian company’s 
move, which could involve 
investment from a Chinese 
partner, follows a Chinese gov- 
ernment policy change allow- 
ing foreign companies tntn the 
financial services sector, 
according to Mr Paul Desmar- 
ais, who controls Power Corp. 

Great-West is one of North 
America’s leading group life 
and health insurers. 

Mr Desmarais, who first 
went to China in 1979 and 
already has several joint 


investments with, nhing inter- 
national Trust & Divestment 
(Cm©, said the government 
has also asked Power Corp to 
plan a cable TV system ter Bet- 
jin& 

Power Corp is negotiating 
with several potential interna- 
tional partners to set the sys- 
tem up, he said, but refused to 
id entify them. 

Power Corp has joint ven- 
tures in China in property, 
electric power and gold explo- 
ration (with American Barrick 
Resources), with international 
and Chinese partners. It 
dropped a pulp and paper pro- 
ject two years ago because 
infras tr uc tu re was lacking. 

Mr Desmarais holds joint 
control of Pargesa in Europe 
with the Belgian Frere family. 


Pargesa controls Petroflna, 
Tractabel and other European 
industrial and communications 
interests- 

Besides Great-West, he con- 
trols Investors Group, Cana- 
da's biggest mutual fund (unit 
trust) distributor, a communi- 
cations group, 18 per cent of 
Southam, Canada's biggest 
newspaper chain, and 1 per 
cent of Time Warner. 

Mr Desmarais, speaking after 
the annual meeting, said 
Power Corp had cash resources 
of nearly US(Zbn and very lit- 
tle debt 

Power Corp’s first-quarter 
profit was C$46-lm (PS$383m). 
. or 36 cents a share, up 55 -per 
cent from a year earlier, on 
revenues of C$1.6bn, little 
(hanged. 


NEWS DIGEST 

Samsung in 

Japanese 

purchase 

Samsung Electronics, South 
Korea’s largest consumer elec- 
tronics company, has bought 
51 par cent of Lux; the Japa- 
nese audio company, from 
Alpine Electronics for Y2bn 
(dan), wri te s John Burton in 

Seoul. 

it is the first time a Korean 
company has taken control of a 
listed Japanese concern. Lux, 
which was established in 1925, 

teaa anwwmta tyd ftwnrial iSW. 
c nlHpa haranag nf ftw hi g h yep 

Under its agreement with 
gamimnp i Alpine Electronics 
also agreed to pay Y23bn of 
Lux's Y2.7bn total debt. 

Samsung said it acquired 
Lux to gain access to advanced 
digital audio technology that 
the Japanese company has 
developed. Lux’s main busi- 
ness Is the production of ampli- 
fier equipment and compo- 
nents, which are sold under 
the name Luxman. 

Portuguese bank 
ahead so far 

Caixa Geral de DepOsftos, Por- 
tugal's largest bank registered 
a 43 per cent increase in net 
income during the first quarter 


of 1994 to Esl0.7bn (8623m), 
compared with Esl03hn during 
the same period last year. 

Net assets grew by 173 per 
cent to Es4,434bn and cash 
flow by 2.8 per cent to 
Es28.6bo, writes Fetor Wise in 
Lisbon. 

CGD, a state-owned bank 
that focuses on mortgage tend- 
ing savings instruments, 
attributed the growth largely 
to an increase in deposits. 

Total deposits rose 13.4 per 
cent to EsSATTbn. over the 12 
nywitba to Mgrrih, Loans grew 
6.6 per cent to Esl304bn. 
House-purchase lending was 
the fastest-growing credit cate- 
gory, rising 9.8 per cent to 
EsL0743bn. 

Shell Canada sells 
mothballed refinery 

Shell Canada, a s ubsidiar y of 
the Royal Dutch Shell group, 
has sold a mothballed refinery 
near Calgary to Aban Loyd 
Chiles Offshore, an oil prod- 
ucts company based in Madras, 
India, writes Bernard Simon in 
Toronto. 

The refinery, which has a 
capacity of 30,000 barrels of oil 
a day, will be dismantled and 
shipped to India over the next 
two years. Terms of the sale 
have not been disclosed. 

The refinery, which is near 
the town of Balzac, Alberta, 
was built in 1982, but has been 
idle for the past two years. It 
was acquired by Shell test year 
as part of its purchase of a- 


west e m Canadian oil produc- 
tion and distribution com- 
pany. 

Shell Canada shipped a simi- 
lar refinery to Qtrfna to 1987. 

Alcan Aluminium 
buys sheet maker 

Alcan Aluminium bought 
Leichtmetallwerk Nachter- 
stedt, an aluminium sheet 
business in former East Ger- 
many, from the Treuhandan- 
stalt for an undisclosed sum. 
writes Robert Gibbena in Mon- 
treal. 

The plant will be restruc- 
tured to make automotive 
ahaat and building »mi indus- 
trial sheet products. 

Xt will become a finishing 
plant for Alcan's joint venture 
rolling wiAIh in West Germany 
and will serve emerging east 
European markets, Alcan said. 

Setback at Toray 

Toray Industries, the leading 
Japanese synthetic fibre 
maker, posted its second con- 
secutive fall to sates and pre- 
tax profits due to pressure 
from low south-east Asian 
imports, writes Emiko Tera- 
zouo to Tokyo. 

For the 12 months to March, 
the company posted a 26.4 per 
cent fall in non-consolidated 
pre-tax profits from the previ- 
ous year to Y353bn on a 83 
per cent decline in sales to 
Y5293bn. Aftertax profits fad 
23J. per cent to Y183bn. • 


Conference - Thursday june 23. 1994 in Paris 


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FINANCIAL TIMES 




FINANCIAL TIMES MONDAY MAY 23 1994 


-/•If 



MARKETS 


THIS WEEK 


Global Investor / Martin Dickson in New York 

The fundamental things apply 


n 


Having 
endured a terri- 
fying spring 
ride on a roller- 
coaster, can 
global bond 
and stock mar- 
kets now look 
forward to an 
enjoyable s ummer rally? 

That might seem overly opti- 
mistic at the start of a week 
when markets an both sides of 
the A tlantic remain jittery, and 
when poor German money sup- 
ply figures could put additional 
pressure on the dollar. A stron- 
ger dollar seems essential for a 
sustained rally in the US bond 
market which in turn is driv- 
ing global sentiment in fixed 
income and equity markets. 

Still, the Federal Reserve’s 
firm tightening action last 
week, coupled with a state- 
ment implying that it will not 
raise rates for some time to 
come, has prompted a modest 
rally in US stocks and bonds 
and gone some way to helping 
sentiment in Europe. 

The rally, and more recent 
tec hnical signs of base-form- 
ing, suggest that markets may 
have come to terms with the 
initial shock of the turn in the 
US interest rate cycle; the 
accompanying liquidity prob- 
lems which exaggerated the 
three-month correction; and 
concern that the Fed was not 
sufficiently tough on inflatiim. 
More fundamental factors may 
now start reasserting them- 
selves. 

The US now faces two cru- 
cial questions: can the dollar 
rally? And is the Fled’s action 
sufficient to slow the economy 
to a more sustainable IL5 to 3 
per cent growth rate, with 
inflation ticking up at 3 to 3.5 
per cent, extending the current 
expansion into 1996-97? 

On both scores, the signals 
are likely to be confused for 
some time. In the short term, 
that may prevent the long 
bond yield getting out of a 
trading range of 7.25 to 7 .50, 


which implies a need for fur- 
ther Fed action later in the 
year to slow growth. But if this 
benign environment does mate- 
rialise, the yield curve could 
flatten dramatically in the sec- 
ond half , with the long hood 
staging a powerful rally to as 
low as 6.5 per cent History, 
after all, suggests that long- 
dated US bonds traditionally 
yield some 3 per cent above the 
rate of Inflation. 

As for the dollar, the mar- 
ket's swing from optimism 
about the currency three 
months ago (Fed tightening 
good) to the current fashion- 
able pessimism (trade and 
money flows bad) may be over- 
done. Figures last week under- 
line that the US trade gap Is 
mainly with Japan, and the 
recent resumption of US-Japa- 
nes e trade talks , and optimistic 
weekend noises about prog- 
ress, might help the dollar in 
the shortterm. Japanese eco- 
nomic recovery, though some 
way off, should ameliorate the 
problem over the longer term. 

If there is a strong second 
half rally in US Treasuries, it 
may be hard for European mar- 
kets to match. Germany and 
the continental block pegged to 
its interest rate structure do 
not look particularly attractive 
on a six-month view, with the 
German economy showing 
signs of recovering more rap- 
idly than expected. 

It is not surprising, then, 
that last week should have 
seen considerable switching 
out of bunds into US Trea- 
suries, gilts and French OATs, 
though the narrowing bund/ 
OATs spread could be reversed 
later in the year as the market 
faces a trade off between 
between heightened political 
risk (the 1995 French Presiden- 
tial election) and continued 
easing by the Bank of France. 

■ US cydicals 

The current stage of the dis- 
jointed global recovery - 


« year Benchmark bond yield* 

'Percent !’ ; 





,j 




Source: Datastmam 


Total retain In food <mNRcy t»; jt/WW 

- K CjtWgB Xmf.QtlSpi ^tmi. 

. . US ■ ■ JBptm jOamm Ftmm -. U 


■Week 

Month 


0-oa . oho ■ 

0.33 0.13 

3vS6 --.a» •. 


Bonds 3-6. year 
week-:- . t-7o : oao 
Mortth • • - \ofls : ‘Tjaar 
■ rear " MO - ?JS& 

,-Bpndef 7-*0 year • ’• ’ . ■ . 

w«*k • : ; zJri ouaa \ 
• Month .- W‘ -SA7C 
• -YW ftg-.IW. 

• ' • * , • 

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■■ ■. Moqm =•.*•, . . 'a4 .. no ■■ 

. Yagr , A4;,l 

. a«aweoaa»^Bof«}» -Lswneii ewew»»r 

vSWf*m im VMS 

strong growth in the US, 
Europe showing the first signs 
of following the American pat- 
tern of an initially tentative 
revival - argues for a strung 
exposure to leading US 
blue-chip cyclical and technol- 
ogy stocks with a worldwide 
spread of Interests and a 
record of big efficiency 
improvements over the past 
few years. If the US really has 
recovered its global competi- 
tive edge, the profitability of 
these companies should power- 
fully reflect this. Now may be a 


am' '.ait - 0.14 aoft , 

OA7 ASfl ". 

6.63 -•v i ae9.-:--,.Tairf J ;.: »ftflp 

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W ■ OS6 r . -£12 

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2ft.S?--: y.78 - 

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'SUB- ' 

mj$- - • 25A'. 42.7 


UwnmncWItoH.l^ffaC 


good time to pick up bargains, 
since cyclical* have suffered 
particularly badly in the mar- 
ket correction of the past few 
months. 

Chrysler, for example, is sell- 
ing on a prospective 1995 price/ 
earnings ratio of just 5, despite 
record first quarter profits and 
last week’s boost to its divi- 
dend. Ford and General Motors 
are an p/e’s of 6. The market is 
worried that the boom in US 
vehicle sales may peak next 
year, though the car compa- 
nies themselves are loo king 





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oafrand la not arallablF m rrali 

m tfar L R hj Uk SwunOo tod 


ED & F MAN INTERNATIONAL LTD 


to 1996-97. 

This could continue to hold 
back Chrysler. which has vir- 
tually no foreign production, 
but Ford and GM will benefit 
strongly from a reviving 
Europe. 

Other cyclical and technol- 
ogy blue-chips with strong 
earnings momentum include 
Caterpillar, shares in which 
have been depressed by a still 
spluttering industrial dispute; 
and AT&T, winner of a huge 
contract last week from Bell 
Atlantic which puts Its hard- 
ware arm in pole position to 
supply America's multi-media 
revolution. 

■ Brazil 

Emerging Latin American 
equity markets have been 
given a modest fillip by the 
Fed's tightening, but last 
week's sharp rise in Brazil was 
due as much to a reappraisal of 
domestic political risk. 

The market has slid over the 
past few mnmtiig an fears that 
left-winger Luiz Inaco Lola da 
Silva will win October’s presi- 
dential election, rather than 
former economics minister 
Femdando Henrique Cardoso, 
who is committed to open the 
economy further and keep a 
cap on inflation. 

Da Silva is way ahead in the 
polls, but the market has been 
buoyed by two events last 
week which should help Car- 
doso narrow the gap : the with- 
drawal from the race of former 
president Jos6 Samey, who 
would have siphoned away 
votes, and passage by congress 
of measures to curb run-away 
inflation, notably the Introduc- 
tion of a new currency on July 
L If thla alashfiH inflation to 

single digits, as- economists 
hope, Cardoso should benefit 

ati this has encouraged ana- 
lyst Tamsrim Hobday of Barings 
to go marginally overweight on 
Brazil in her model portfolio, 
but as points out There’s 
stai huge risk there." 


Economic Eye / Martin Wolf 

Risks in making 
false analogies 


“So let’s start telling the 
truth: competitiveness is a 
meaningless word when 

applied fn national omnfimias 

And the obsession with com- 
petitiveness is both wrong 
and dangerous."* The author 
of the quote, Paul Krugman of 
MIT, is a progenitor of "strate- 
gic trade theory*, sometimes 
used to justify the Clinton 
administration’s intervaxtion- 
1st industrial and trade poli- 
cies. For this reason, his 
robust assault on half-baked 
notions of co m p etitiv eness is 
most welcome. 

In the same article, Prof 
TTr ngman notes that list Mag a. 
ainar and Robert Reich, both 
important members of the 
Clinton administration, once 
argued that “our standard of 
living can only rise if capital 
jawri labour iHi+wwiwg i y flow 
to industries with, high val- 
ue-added per worker”. The 

absurd Im plinatirma of mtih a 

rule of thumh are shown in 
the chart. 

In the case of international 
trade, people are readily 
attracted by two false analo- 
gies. The most malig n is the 
view that trade is war. Larry 
Summers, undersecretary for 
tritematinnal affairs at the US 
treasury, argued last week 
that “some would have the US 
and other industrial democra- 
cies . . . pursue policies 
directed at containing threats 
posed by foreign commercial 
rivals in an effort to preserve 
something called economic 
security. In my view this is a 
profoundly misguided virion. 
Q faffg to recognise the funda- 
mental difference between 
prosperity and power. Power 
can be gained only at some- 
one else’s expense. Prosperity 
pm be shared."** 

The second false analogy is 
the belief that trade is similar 




to inter-firm competition. But 
countries, *mi7fc» ffnrw can- 
not go bantoupt; the bulk, of 
the economic transactions of 
almost all countries are inter- 
nal; 3n d. most important, rela- 
tions between trading part- 
ners are mutually beneficial, 
being mare like those between 
suppliers and their customers 
than among competitors. 

Various mranlng K can s till 
be given to the idea of inter- 
national competition. 

• New, or lower cost, suppli- 
ers of goods and services com- 
petitive with a country's 
exports may emerge, impos- 
ing terms of trade losses 
(reductions in the prices of 
exports relative to imports). 

• Regulatory and fiscal 
regimes may to forced to com- 
pete for Dows of mobile fac- 
tors of production, particu- 
larly capital. - 

• Countries may be sub- 
jected to yardstick competi- 
tion, namely, international 
comparisons of performance. 

• Internationally exposed 
HB gmmtu of an economy may 
fare particularly poorly. 

• The effects of imports an 
wages may look malign. 

None of these is much tike 
inter-firm competition. The 
closest to it is the possible 
effect on. the terms of trade. 
But this, notes Prof Krugman, 
has been insignificant for 
industrial countries . (though 
that has not been true 


COMMODITY MARKET REPORT 


for commodity exporters). , 

The salient feature of the 
last two concerns is what is 
happening to internal relative 

prices. The competitiveness of 
internationally exposed indus- 
tries, for example. Is largely 
determined by the real prod- 
uct wage - the cost of labour, 
adjusted for productivity, rel- 
ative to the price of output 
similar ly, if trade lowers the 
wages of the unskilled, it 
raises those of the skilled. 

Mr Summers asserts that 
“ nQ t withfitamrttng 1 Paul Krug- 
man, competitiveness is 
important. People who talk 
about competitiveness want 
to see America produce more, 
better products at lower cost, 
and sell than into more rap- 
idly growing and more open 
markets. What is wrong with 
that?” Nothing at all is wrong 
with it, except that he is 
talking about overall eco- 
nomic performance. Prof 
Krugman is right to complain 
about this habit of confusing 
performance with competi- 
tiveness. It Is .bad analysis, 
likely also to lead to bad pol- 
icy, with foreigners blamed 
for domestic taobtems. 

Trade liberalisation can 
improve performance, a point 
Prof Krugman should have , 
gwiphaniiwri aii the Mmp , he 
is right to insist that interna- 
tional commerce is quite 
unlike inter-firm competition. 
Analog ie s can ho- hi g hl y mis- 
leading. Phenomena have to 
be analysed, instead, for what 
they are. 

*Paui Krugman^ “Competi- 
tiveness: a Dangerous Obses- 
sion” , Foreign Affairs, March/ 
April 1994. ** Lawrence Sum- 
mers, “Shared Prosperity and 
the New International Eco- 
nomic Order ", speech before the 
Institute of International Eco- 
nomics, May 20 1994. 


•Richard Moonev 


Unloading coffee stocks 


Representatives of coffee- 
producing countries account- 
ing for more than SO per cent 
of world output gather in Lon- 
don today for a twoday meet- 
ing on ways of releasing up to 
2L5m bags (60kg each) of beans 
stored under their export 
retention scheme. 

Last October the producers 
began stockpiling amounts 
equal to 20 per cent of exports 
in an attempt to revive sagging 
prices. Thanks to the price 
surge since then, at first 
encouraged by the scheme but 
subsequently fuelled by a gen- 
uine supply shortage, retention 
has been suspended for both 
the chiefly Latin American 
arabica beans and the coarser 
robustas that mostly come 
from Africa. And last month 
trigger prices were passed for 
the release of retention stocks 
of both types of beans. 


WEEKLY PRICE CHANGES 

Uitaml Change Yaw 



pfloos 

on weak 

“90 

HVi 

Lost 

QoW per tray oz. 

$38430 

+346 

*375.15 

*39060 

$38840 

SHrer per hoy az 

37390p 

+1200 

296 ^Op 

384 40p 

33S40p 

Alimfrilum 99.794 (cosh) 

$13419 

+1ft0 

*11200 

$132640 

*110740 

Copper Grade A (cash] 

52223.5 

+346 

*11840 

£218000 

*173140 

Load (cash) 

$477J 

-45 

$255.76 

$51060 

*4200 

Mcfcel (cotoi) 

$8390.0 

+1000 

$68824 

$8290 

$62100 

Zfrc SHG (cosh) 

$066.0 

+94 

S953J0 

*1014 

*9005 

Tin (cosh) 

$5550.0 

+45U 

$54600 

SSQSOO 

$47304 

Cocoa Futures Jul 

C347 

-10 

BB64 

£368 

£850 

Coffee Futures JU 

$2184 

+227 

*947 

*2247 

$1175 

Suga (LDP Rant 

$293.10 

+070 

$3000 

$2902 

$?«»q 

Barley Futures Sep 

Efl82fi 

+048 

£108.1 

£97X0 

£92.85 

Wheat Futures Jun 

E11425 

+120 

£1306 

£11740 

£87.80 

Cotton Outlook A Index 

8640C 

+070 

5945c 

8O40C 

82.45c 

Wool (64s Super) 

428p 

+6 

3S7p 

428p 

342p 

OO (Brant Bland) 

S16.405X 

+040 

*1042 

*15495 

*13.18 


, p hncata e Cants fa. x .My 


With prices at five-year 
highs the task of agreeing on 
release arrangements will be 
less onerous than it might 
have been, but the producers 
will still be anxious to ensure 
that the process does not dam- 
age the new-found buoyancy. 


The meeting will also allow 
them to assess this year’s price 
rises of 82 per cent for robustas 
and 75 per cent for arabicas. 

On Wednesday the World 
Gold Council, a promotional 
organisation financed by some 
mining companies, will give its 


verdict on international gold 
maiket trends in the first quar- 
ter of 1994. 

Its views are unlikely to be 
much different from those of 
Gold Fields Minerals Services, 
the consultancy organisation, 
which, when launching its 
Influential annual gold market 
survey two weeks ago, 
suggested that the "gold gap” 
- between newly-mined gold 
plus scrap returned to the mar- 
ket on the supply side, and fab- 
rication demand and bar 
hoarding on the other - had 
narrowed from an unprece- 
dented 700 tonnes in the first 
quarter of last year to 300 
tonnes in the first three 
months of 1994. To fill fos* gap 
either gold had to be released 
by holders, particularly the 
central banks that own so 
much of it, or prices must go 
up. 


FT -ACTUARIES WORLD INDICES 


Jointly compoed by The Financial Times Ltd., Goldman, Sachs S Ca end NatWest Sacurittes Lid. in conjunction with the Institute of Actuaries and the Facutiy of Actuaries 
NATIONAL AND 

neeWNAL MARKETS FRBMY MAY JBO 1W* THURSDAY MAY 18 1B94 DOLLAR INDEX 

Round 


REGIONAL MARKETS 
Rgwws hi parentheses 

show number of Bnes 
of stack 


%chg pound 


Local Loaf % Grass 


DOLLAR INDEX 

Year 


Dollar since Stetbrig Yen DM Cunvncychg from Dfv. DaBor Storing Ym DM Currency 52 weak 52 week ago 


31/12/93 

Mac 

Index 

Index 

Index 

31/12/93 

Yield 

5.0 

172.05 

11549 

14947 

16005 

-2.1 

3X2 

-2.7 

17070 

11846 

16*09 

15094 

-74 

146 

08 

17038 

11647 

151.11 

14743 

1.7 

3.73 

-34 

12004 

8032 

112X8 

13140 

04 

247 

08 

251.89 

188.49 

21946 

22*53 

-1.7 

141 

26.8 

153.16 

102X8 

13340 

175-96 

174 

043 

07 

17341 

116.33 

15149 

15040 

-44 

248 

05 

14244 

954S 

12*25 

124-25 

-14 

1,86 

-19X 

387.47 

259.19 

337.75 

39147 

-18.4 

2.72 

2.4 

18846 

12449 

16246 

178X5 

-3.1 

348 

354 

91X9 

6140 

78.75 

10096 

26X 

1X1 

214 

15648 

104.14 

136.70 

10*14 

13X 

077 

-102 

48941 

31447 

40026 

47843 

-224 

1X0 

-134 

202144 

135248 

176142 

748543 

-74 

144 

2.4 

20023 

13344 

17443 

17147 

-24 

347 

2.0 

6844 

4642 

6031 

62.70 

-2J 

3.81 

124 

199.02 

13013 

173X7 

108.10 

64 

1.68 

-40 

348X0 

231.71 

30144 

250-06 

-02 

142 

-OO 

264X1 

17018 

221.76 

27841 

114 

242 

7.0 

14748 

96.52 

12847 

15*50 

2X 

346 

174 

22647 

16089 

198.82 

26076 

7.8 

143 

-03 

156.74 

10445 

13642 

130.05 

-8.7 

1.7G 

-6.7 

-2X 

18942 

18248 

12648 

12140 

165X6 

158.71 

16942 

185X3 

-74 

-2X 

ni w 

248 

2.1 

18843 

11244 

147.16 

16043 

-2.9 

249 

14.7 

211S 

14243 

mu 

21547 

0.7 

138 

154 

16440 

110.04 

14349 

11*48 

84 

148 

9.1 

18015 

111.14 

14442 

13058 

34 

143 

-34 

17079 

11949 

16044 

181,07 

-24 

247 

64 

15342 

10240 

13062 

141,74 

02 

248 

-114 

25047 

10741 

210X1 

22073 

-14.0 

248 

02 

167.10 

111.77 

145.65 

135.85 

3.1 

145 

53 

16945 

11121 

147.53 

147.84 

2.1 

243 

4X 

-1.7 

17050 

10147 

114.11 

12146 

14049 

158.01 

15040 

17840 

1^) 

-34 

241 

242 

43 171.07 114.43 149.12 151X7 1.1 241 


Austnfla(«Q 1TS22 5.0 172.05 11509 148S7 100.05 -2.1 3A2 17428 171 JT 114.65 U&97 159.10 189.15 130.19 13472 

Austrian?) 16004 -2.7 178.78 11020 164.09 15094 -7JB 106 17035 17037 11792 163^7 153.30 19541 140.14 14403 

Belgian (42) 17056 06 173.36 11597 1S1.11 147.53 1.7 3.73 17457 171.55 114JB3 15021 14067 17067 141JE 147.42 

Canada (106) 131.42 -02 129-04 0032 11046 13100 08 067 13092 126.72 8012 112 j0S 13041 14031 12145 12010 

DenrMricpa) 25053 3.8 251.89 18049 21056 224.53 -1.7 LSI 253.89 24044 16088 21829 22053 275.79 20758 221.72 

FMand (23) 15090 26.0 153.16 102^45 13350 17096 170 053 16434 152.34 10102 13032 17SJB8 15072 8SJS4 87.90 

Fhawape) 177.11 0.7 173*1 11033 151*9 15040 -4JJ 2*8 17085 17099 11040 UBL28 157.24 18537 14060 15192 

Germany (58) 145.17 3S 14254 9SJS 12425 12425 -1J 1.86 144.08 142JJ* 95.10 124M8 12448 147.07 10759 110.77 

Hong Kong (56) 39441 -19 A 387.47 259.19 337.75 391.37 -19.4 - 2.72 38465 37021 2S3P3 33099 38159 60658 271.42 289JB 

helm (14) 188.69 2.4 10026 12459 182.36 17045 -3.1 &30 187.90 18481 123.64 161.74 17074 20033 15093 15067 

Italy (80) 93.10 359 91X9 81.20 7075 10896 204 1X1 9410 9252 6190 8097 111X2 97.78 57.63 7262 

Jq»n (469) 15055 219 16698 10414 135.70 10414 13X 077 15799 15476 10393 135X3 10393 18591 12494 14297 

Melsyala (90) 47016 -102 40991 31407 40020 47093 -229 1X0 47083 40095 31397 41091 470.47 62193 31291 34393 

Mexico (IB) 2056.47 -139 202124 135290 170192 746593 -79 1 94 203396 199000 1337.36 174997 738073 2847.06 1431.17 151471 

NethertmpM) 20391 2.4 20023 13394 17453 17197 -2.0 397 205.39 20195 13011 170.74 174.14 207X3 104.14 .16433 

Now Zealand (14) 8990 2.0 6894 4652 6891 62.70 -2.7 3.81 SOU 87.79 4596 5992 62X8 7799 48.57 48.00 

Nonray £23) 202.68 129 19892 133.13 173X7 196-10 69 1.69 20098 18790 13193 17297 19697 20042 15091 ISBjOD 

9nBatxrei44) 352.77 -40 34040 231.71 30194 25096 -02 152 33350 34790 23294 304.10 24099 37692 242X8 25499 

South Africa (59) 25010 -39 254X1 170.18 221.76 27891 119 292 257.84 25392 169.61 22190 27793 28028 17593 20098 

Spri*r> (42) 14999 7.6 14728 9052 12097 15450 2X 398 147.93 145.46 9791 12790 15295 165.79 11033 12021 

Swe den (36) 22072 179 22597 15089 19892 28078 7.6 193 23195 227X8 182.19 199.07 2 8 398 23196 16395 177.16 

Urtttartond (47) 15993 -0L3 156.74 10495 13062 1»JS -07 1.7S 15080 185.90 10430 13043 13031 17066 12297 123.14 

United Kingdom £05) 193.31 -07 18992 12698 185X6 16992 -79 392 19291 18068 126.90 16890 18898 21496 17032 178,10 

USA (519) 18043 -2X 18298 12190 15071 185X3 -2X 298 10092 18291 12290 16898 10082 19P04 17895 184,18 

aiROPE(724) 17194 2.1 18693 11294 147.16 16093 -2.9 299 17193 188.76 112.90 14798 16062 17B9B 14198 14029 

Non*: (115) 217.45 14.7 21052 14293 mil 21037 07 138 21738 213.74 14390 187.03 21027 22000 166.82 16798 

Pacific Baton (750) 16793 189 16490 110.04 14399 11446 69 196 166.19 163X0 10992 14390 113-70 18890 134.78 14796 

Bro-Padto (1474 10921 8.1 108.15 111.14 14493 13268 39 193 16890 1B5X8 11071 144*1 132,16 17078 14196 14622 

Nonh America $25) 182.08 -4L3 17079 11996 160W 181.67 -33 297 18291 178X6 12006 16794 182JB 132.73 175.0T 180.71 

Europe Be. UK (519) 15695 89 15392 10298 13992 141.74 02 298 16699 163X6 10298 13491 14291 157.47 12297 125.12 

Patane&t. Jwpanpsi) 256.18 -119 25057 10791 21041 22073 -14.0 296 252.10 24796 16599 21790 22793 29021 18299 188X2 

Worid Ex US (1657) 170.17 02 187.10 111.77 145.85 133.65 3.1 195 18995 168X2 11193 145.03 135X1 17291 14294. 14791 

Wdrid Et UK (1971) 17297 52 109.25 11391 147.53 147.84 2.1 293 171.01 10093 11398 14792 147X8 17598 18392 15699 

warid Ex. 8a AT. (2117) 173.73 4X 170.58 11411 14899 15090 19 291 17028 17098 11398 1«10 1509Z. 17050 '185.00 16890 

WfacMEx. JafanflTQT) 18481 -1.7 18197 12198 18001 17890 -39 292 18481 181X2 12197 15470 17894 19590 16072 T6&97 

The Worfd Index (217B 17492 43 171.07 114,43 149.12 151X7 1,1 291 173.77 17098 11431 14992 18198 17897 155.17 

Ooprtjtx. me Rnanew nm« Untod OOkfeim seche « Co. and nnwm Saeueire LtoftML 1BB7 

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Oaeriliw eh e n flee dtoMa — h —flag 8CWW4 Dtogdan; Sanooz P£3 BMnalna. Mama dwnaa Caaut Htoanoa to PioridanCotp. (U3AL CmnaBwmt oh e n ase wh eW aut amUMt iwl ■ 

V*H P totoleraBaeBtoito4 Q&indOfBto»ai4.0ei Mm W i rech ei l 9 t eiBieB > Mafi««fc Hi lls 1wcanniiM^KUAP.fw*«)fl» la ifl. 

STOCK INDICES 


nr-SEioo 

FT-SE Md 250 
FT-SE Md 2flO e* JTb 
FT- 6E4 3S0 
FT-SE SnafiCap 


Mtof 20 Hay 19 Ihyia Itey 17 May 18 tae Lew - 

31279 31220 31105 31215 31159 353U 30705 3HB3 0809 FT-SE Baetndc MO 

37149 37135 3711.7 37072 37082 41BU 37009 415Z6 13784 FT-SE Eantelt 200 

3723.9 37215 37219 37100 37100 4M07 37180 <189.7 13783 FT Ontfawy 

1582.4 15606 19799 15802 15772 17783 15847 17703 8645 FT Gto45*CVtflai 


FT-SE SraDCep 182K8 1920331921.12 191797 191020309*96 187473 W8«6 1383.70 FT FM Mead 
FT-SE SftaKW ax (70 160850189890188893 180337 1898J020BU2 102529300072 T383.n FT (Md WtM 


FT-St* «■ Stare 


187088 1571.88 ISOOet 1S71« 15HL74 T70U1 155450 TJW.11 61*1 RMeSMMTQMMMB 


um HOI £fao» {Tn rtni 

wy ao My 19 mnoutof t7 Miy is m law m* um 
145837 1486.18 147899 1*7621 1471 JS 154011 138398 1ML1« BOOM 
147420 148847 148045 KB894 148S91 180X10 144006 1087.10 83802 
24739. 24779 SW49 94808 24829 27130 2*392 2713* 48X 
9592 9594 9024 9429 9*02 10794 9320 127X0 48.18 

11*73 11429 Ilia mS2 11226 13347 11092 0147 snia 

2082 2004 1805 2059 2082 2712 18S9 73*2 439 


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The Emerging Investor / James Whittington 

Arab world opens arms for investment 


For the emerging market 
investor looking for something 
slightly off-beat, a sew country 
fund is due to be launched this 
week which, for the first time, 
will allow foreign equity 
investment in the Gulf. 

The $50m Oryx Fund in 
Oman is jointly managed by 
London-based Blakeney Man- 
agement and the Oman 
National Insurance company 
in Muscat. It will have exclu- 
sive six month access to the 
Muscat securities market, 
which has 62 listed stocks, a 
market capitalisation of some 
$1.5bn and an annual turnover 
of about $200m. 

The fund will be listed in 
both Muscat and London, and 
while 51 per cent of the capital 
will be raised domestically in 
Oman through the Al Ahlia 
Portfolio company, the rest 
will be open to international 
investors through Baring Secu- 
rities in the UK. 

Managers hope eventually to 
see the foreign portion of the 
fund raised and its scope 
expanded to include other mar- 
kets in the region, such as Bah- 
rain. 

The Arab world has been 
largely excluded from the wave 
of foreign funds flowing into 
stock markets of developing 
countries. 

Out of an estimated $S2bn of 
cross border equity flows 
invested in emerging markets 
worldwide in 1993, the small 
bourses of the Middle East, 
north Africa, and the Gulf 
states attracted less than 2 per 


cent, according to Barings, 
compared to more than 38 pdr 
cent invested in Latin America 
and 58 per cent in the Pacific 
Rim. 

This, however, is set to 
change as projects like the 
Oryx Fund put the region 
under increasing scrutiny by 
emerging market investors. 

Spurred by favourable devel- 
opments in the Middle East 
peace process and an increas- 
ing acceptance among Arab 
governments that barriers to 
foreign investment must be 
removed, international securi- 
ties bouses are showing consid- 
erable enthusiasm for the 
region’s prospects. 

The market which has 
attracted most attention so far 
is Morocco. Having co-operated 
closely with the International 
Monetary Fund, the king dom 
is virtually free of its debt bur- 
den and is undergoing rapid 
economic growth accompanied 
by low inflation. 

Last month Solomon 
Brothers Asset Management of 
the US launched the first 
Morocco country fund, worth 
$60m, in conjunction with 
Omnium Nord Africa, the 
Moroccan congtemerate. 

Hie fund is aimed at eq uity 
investments in listed stocks cm 
the Casablanca exchange, 
which baa has a market capi- 
talisation of about $4.4bn, 68 
listed companies, and an aver- 
age monthly turnover of $65m. 
it is well placed to take advan- 
tage of the kingdom's privati- 
sation programme which 


Ten best p eif omiln q s t ocks 


Banco Bradesco (Pfd) 
Petrobras (PH) 

Kordosa 

Telecom Argentina 
UngguJ Indah Corporation 
Banco Galicia 
Banco Frances 
Saria Concordia 
Kafca Farms 
Araauz CeUose (Pfd) 


began last summer and Is by 
far the fastest in the region. 

The government aims to 
divest S2bn worth of state 
assets by the end of 1995, and 
so for all offerings in over 50 
companies have been oversub- 
scribed by both local and Inter- 
national investors. 

Also in north Africa, both 
Tunisia and Egypt are seen as 
offering similar opportunities 
to Morocco with a government 
commitment to IMF-guided lib- 
eralisation policies and a 
desire, albeit cautious, to 
attract foreign capital through 
privatisation. Currently their 
tiny stock markets are at pre- 
emerging; rather than emerg- 
ing stages, with little in the 
way of scrip to be traded. 

Tunisia hag a market capital- 
isation of only £L2bn and 19 
listed companies, while Egypt. 
misleading ly, han 674 stocks of 
which only about 15 are 
actively traded. However, capi- 
tal market reforms have 
recently been put in place in 


Coootrr 

Friday 

don 

Hash oanak gIimbs 
f K 

Brazil 

0.0148 

QA03S 

31.55 

Brazil 

a 0947 

0.0198 

2036 

Tuhay 

0.2085 

0A335 

19.16 

Argentina 

&B126 

1.0370 

1060 

Indonesia 

3.1436 

CL4725 

17.69 

Argentfan 

9.7185 

1.4802 

17.68 

Argentina 

10.5701 

1_5ff»1 

17.33 

Brazfl 

0^393 

0.1223 

17M 

Indonesia 

7.3043 

13600 

1098 

Brazi 

1^183 

02758 

1R79 


Serna Baring SaourUM 

both countries and interna- 
tional investors are waiting in 
anticipation for state assets to 
come up for sale. 

Farther east, one of the most 
sophisticated and tiquld capital 
markets in the region is Jor- 
dan. The Amman financial 
market is attracting a surpris- 
ing level of outside interest 
despite the lack of any firm 
commitme nt from the govern- 
ment towards privatisation. 

It has a strong domestic base 
with about 100,000 local Inves- 
tors, far more th an any other 
market in fta* region, and is 
well regulated- Buoyed by two 
successive years of strong real 
economic growth, sustained 
government commitment to 
IMF reforms and high domestic 
liquidity, the market peaked 
last year and has since levelled 
out Average monthly turnover 
in 1994 is about $60m, com- 
pared to SllQm in 1993. The 
exchange has 100 listed stocks 
mil a market capitalisation of 
some $5JZbtL 


CURRENCY MARKETS 


Elsewhere in the Middle 
East, the equity culture has yet 
to catch on, although it may 
only be a matter of before 
it does so. Syria's government 
has been toying with the idea 
of a stock market as part of its 
self-administered economic 
reforms and a draft bill for its 
establishment is awaiting sub- 
mission to the People’s Assem- 
bly. Hie Palestinians, having 
only been granted limited 
self-rule this month, are now 
talking of establishing a bourse 
in the West Bank; and Leba- 
non’s plans to reopen the Bei- 
rut stock exchange, which was 
closed in 1983 at the peak of its 
civil war, are finally ready for 
implementation. 

The successful f650m Arab- 
only share offering in Solidere, 
the company established to 
rebuild downtown Beirut, has 
created the basis upon which 
the Lebanese government will 
restart what many Interna- 
tional brokers consider likely 
to be the Middle East’s most 
promising market. Andersen 
Consultants in London has 
completed work on creating a 
secondary market in the $L8bn 
company’s shares and official 
trading is due to begin in June. 
Although shares in Solidere 
are closed to non-Arab inves- 
tors, other private companies 
which are expected to come to 
the market will be totally open 
to foreigners. 

In anticipation of this, IFC — 
a Washington-based arm of the 
World Bank - is already 
talking of an investment fund 


Phitio Gawith 


Market watches German money supply 


Foreign exchanges wfl] be focusing this 
week on the release of the April Ger- 
man. M3 figure for an indication, of the 
likely foture path of German, and Euro- 
pean, interest rates. 

Markets were awash last week with 
rumours of another poor figure - M3 
grew by 15.4 per cent in March, way 
beyond the Bundesbank's 2-6 per cent 
target range - which would probably 
slow the pace or monetary easing. 

These fears come in the wake of com- 
ments made last week by Mr Hans Tiet- 
meyer, president of the Bundesbank, 
that recent German rate cuts had 
“cleared the horizon for the next few 
months". 


The market took to mean that 
the central bank will probably slow the 
pace of German rate cuts. German 
rates, which set the level for most Euro- 
pean interest rates, have fallen fairly 
briskly in recent weeks. The repo rate 
is 5.23 per cent, down from 6 per cent 
three months ago. Although the Bund- 
esbank has been fairly cavalier in the 
attention it has recently given to M3, it 
runs the risk of damag in g its credibility 
if it continues to cut-rates against the 
background of ongoing, and substan- 
tial, overshoots in an important mone- 
tary indicator. As a result, there is little 
anticipation of any move in rates at this 
week’s Bundesbank council meeting. 


If the market's suspicions prove cor- 
rect, this is likely to bolster the D-Mark 
and put renewed pressure on the dollar, 
ft may be that the central banks will 
again be called an to support the dollar, 
as they did earlier thin month. Last 
Friday the dollar was slipping back 
towards the levels that prompted the 
previous bout of intervention, despite 
recent favourable moves in German and 
US interest rates. 

US data releases this week include 
April durable goods orders, and the 
revised first quarter GDP figure. These 
are unlikely to have important cur- 
rency implications, as the Fed has 
implied that no rate increases are 


bkety in the near term. 

In Europe attention Is likely to stay 
with Greece where the drachma is 
under speculative attack. Short-term 
interest rates have risen as high as 500 
per cent, as banks have sought to 
defend the currency, but most analysts 
regard devaluation as inevitable. 

hi the UK, the market is likely to 
focus on Friday’s release of the CBI 
monthly trends enquiry. The for- 
ward-looking survey will be inspected 
for any signs of infla tion, which could 
hasten a tight ening of monetary policy. 
This would help sterling, but any rise 
in the UK currency is likely to be 
capped by its ties with the weak dollar. 


FT GUIDE TO WORLD CURRENCIES 


The tabte beta* gkm\heUsst uvatobto ratos at 
'where they 


Mg» fltoro) 

Andorra (Ft Ft) 

(Sd Peootni 
Angrfv (ptoar Ktovual 

ArTOgua (E Carr Q 

Aigrtu (Praol 

MU* (FtoWI 

Auwntfo tAwS) 

AuMrin PcMntf 

A»na (Port Escudo) 

Mwnw WahnraiJ) 

Baltata ffSmr) 

Botoartc ta CSpPoMM) 

BdngkxMan (Tatafl 

Brotndai 

BrfShm (BdftRJ 

PS 

Bonn (CFAF0 

Broreudo (BanratanS) 
Bhutan (Ngtfrun* 

Bata* IBaMoni* 

Botswana (FU4 

tad puwoRrt) 
Bonn) (BnawS) 

ewenu tuwi 

BurWwFaao (CFAFrl 

tana (Kyat) 

Duud tBunmOFrt 

Camboeto (RtaO 

Comoon fCFA Ft) 

Canada (CandanS) 

Canon’ la fcf Prowl 

Cp. Uonlo (CVEacuM 

Coymonla fCIS) 

Coni Mr. tap (CFA Fl} 

Chad CM Fit 

CNM (CMaan Poaq) 

cm (mat 

Coftynbu fColtaao) 
as* (Rout** 

Comorea (CTAFi) 

Const 1 (CM Fi) 

Cost* Wca (Cota* 

ceacaVaro icfafi) 
Croatia Prat 

Cuba tCutwntaa* 

Grpna (Cvpru* Q 

CwEhtap. Vfteun* 
Dmm (Dartafi Krone) 
Ub tap EDpbFit 
P ran Wc n f£Carrtt>5) 

CtanNcan tap IDPwoti 
Bsodnr (Sucre) 

Emm (fovimon El 

EtSrfvadar (Cota* 

Equll Goman JCFA to 

Estonia (Kroon) 

ESsopta fUWJTMiH Bm) 

Fajkurej la F*Q 

fanttb jtanrfi hrorai 

F*ta (Tea 

Finland 04arUia» 

Franco (Fit 

Fl.Cty/MAca ICFAto 

Ft. Guana (Ux-.'l Frt 

Ff P*3*c O (CTP F*l 

OoiMfl (CM Frt 


exchange (rounded) BQafaw tour key cunendu on 
era shown to be otherwise. In some canes market 


Fridq, May 20, . In some ernes the rate is nonML Marimt rates ora the naiga al buying end M Brg Him except 

rates have been calcUatad tram those of toRtpi currencies to which they ve fled. 


WEN 

DC M0> 



1&KLEC 

100.166 

OHTtata 

Gonnony 

VWMh 

35.4018 

Qbtna 

ICad| 

S.4177 

Qtaraltar 

(BfeO 

1*L»t 

Groeoa 

fpmdnmi 

6B381A 

QwaiMnd 

fflantaii KhxNQ 

SJ058 

Ctanada 

(ECanr# 

06605 


mrotaFi) 

1.TC74 

Guam 

(U3^ 

1J321B 

Oaatamala 

P*a» 

11.1438 

Qukiaa 

(to 

1B3JM4 

OUrronDtaaroi rimes 


a«n 

(OJianaMt) 

OBBH 

HaH 

|Oo«ta| 

0J62B 

Rundrom 


13081 

Hong Kong 


300144 

HwiOT 

ffnrtnd 

1J41 

■mm? 

fcetanrt foriandh: Kram) 

1JJ301 

6k&> 

(roan FfcipcM 

641.777 

lutunoita 

(torotaH 

04W23 

30.1903 

tan 

m 

4.43G8 

ktadtap 

itonO 

2.6040 

tand 

IStaM 

1606.42 

to* 

JLto} 

1>B04 

Jamtaa 

(Ironstaan 6} 

52.4553 

Japta 

front 

541.777 

6J7121 

34&072 

Jndroi Uordontan Dtaafl 

Kama 

•enroll 



Korea North 

(Won) 

3377.74 

Korea South 

(KimomSS) 

541.777 

XilMrt 

1JM7 

130-91 

Lorn 

ftoroKW 

820682 

LaMa 

M 

o.raia 

Lebanon 

frobarosaE) 

541.777 

LoaaOio 

dtofci 

541 777 

LtaTOta 


408.728 

Utoe. . . 

(UbtPon Dtaar) 

03345 

UaeMonauki 

(Sottato 

810017 

Lttusnta 

OtaN 

05083 

Uoront»>g 

flj«to 

1BP4CT 
ui m 

Macao 

{pBUa4 


Maduooscar MOFi) 

Mm tarn (tort Eacudoi 
MM Ptoach* 

Malta** 

Mokftwta toN 

I** top (CM R] 

IMtn BMMMLb* 

MartHqua ftnafR) 
MuSorta 

Mutt* PtavFtapw) 
Modes (Modern too* 
Mquatan (Local to 

Monaco French to 

Monger* (AW* 

M um wmt £ CWt S) 
Morocco ftahenf 

MuanUque pMco* 

Non** (8 A Ron* 
Naum la (AuotraemS 
tap* rtapoiaaetaeMl 
NNhwtandi (Glrtdat 
Nlid AnBtes IMUta) 
NonZMand *K S) 
Mcataoua paid CWdotaj 
MgerHaP CCFA Ft) 

Haw* Vtafcaj 

Noway plot Krom* 

Oman (fWOiw*! 


csra 

US • 

MURK 

YEN 



ESTO 

US s 

D-tfOHK 

YEN 




t* ion 






(X toO| 

vunoa 

£4866 

93275 

10403 

60301 

1 

055*1 

108*3 

PaMStan prtttafwe) 

Pnrurna (Botoaii 

402292 

16090 

30410* 

1 

184080 

04074 

204676 

0982* 

1397 A2 

925506 

6E220B 

000757 

Papua Naor Ounaa (Ktaro 

14260 

00*5 

0574 

0409* 

1J» 

06023 

04023 

08374 

PMfluair 

<Gu«n4 

2722.17 

1003 

1095.18 

1735.19 

37X88B 

24082 

151.138 

298463 

Panj 

(Now Sal) 

32952 

£1825 

14257 

£1004 

£7184 

(Mass 

3009 

8.1935 

P«ppi*» 

Focal 

406157 

27.1 

16481 

206803 

4JM7B 

£7073 

10*46 

£0058 

tocokn b 


160 

010623 

04023 

04374 

84884 

50294 

34194 

54177 


zsm 

1.704 

1436 

14309 

1J5090 

1 

00074 

09023 

totanrt 

(ziocyl 

337896 

22300 

13594 

215384 

&B324 

57309 

*481 

50152 

torapN 

Eocudef 

257.195 

17035 

103474 

183444 

1475.71 

070408 

59*011 

9*2074 

Pnnanco 

VS® 

16098 

1 

04074 

04023 

18804JB 

190897 

123222 

132287 

7484.72 

803415 

11660* 

127083 

Qatar 

FW 

55125 

*4511 

£2177 

34139 

18.1B00 

120333 

70003 

110800 

Reuaon ta. da la (F/Fi) 

84994 

54294 

34194 

£4177 

Remanta 

M 

250141 

106045 

10004 

159444 

122020 

80823 

40003 

7.770* 

Rwanda 

FO 

21&20R 

143.198 

08401 

137012 

11.0033 

7.725 

40823 

743<6 




1SL374 

10201 

620090 

no* 

StChrstopNr 

^CtaT^ 

voere 

2J075 

14*45 

24056 

St Hatana 

to 

160 

04023 

04023 

04374 

1074120 

71018 

43.1*8* 

600452 

a Lucta 

(E Carr 8 

46870 

£7075 

14*45 

24050 

47J024 

310099 

1605*7 

301002 

smorre 

(Froncft Ft) 

8.4804 

54294 

34194 

5.4177 

3200.09 

2183.1* 

131302 

2001.70 

stvtacam 

(fCnri) 

46870 

£7075 

1.0448 

£0068 

203000 

174105 

105509 

187844 

Son Marino 

(RafianUnO 

230548 

1500 

•59J2 

152050 

04707 

00117 

0.1083 

03 

Saa Toma 

(Dataal 

303360 

240400 

140188 

2*1417 

1jOW7 

08714 

04070 

08481 

San* Arabia 

ev*t 

56022 

3.7502 

£278 

34091 

40605 

3010 

10319 

£9028 

Senegal 

ICFAFr) 

840640 

562449 

3414*6 

. 5*1.777 

238540 

1500 

850.72 

152068 

Scyc total 

9M»a» 

7.7138 

0-1081 

3.1033 

*417 

604820 

150003 

33L4428 

10301 

200130 

80.1167 

32.1861 

100002 

Swra Loans 

Saw** 

StovaMa 

(Laomi 

m 

tKanaaO 

870450 

£3220 

480589 

5764 

14383 

9a -twin 

350237 

04344 

194600 

554416 

1000* 

31.1430 

10654 

0J88 

0.42*0 

087*7 

Sknrontt 

(rota) 

20145 

133.561 

81.1272 

128030 

ngm 

56061 

340113 

54030 

Sctoman la 

_ n 

4.9157 

32368 

14776 

3.1334 

20730 

10735 

00343 

10219 

Sam Rap 

tStatag) 

300848 

2627-28 

159548 

252840 

02651 

£1599 

10096 

£0740 

SouBi Afcica 

BtaH 

54481c 

34747 

3J9? 

34385 

121097 

808047 

400008 

770733 



74358g 

4426 

£0915 

4.7398 

04508 

0208* 

0.1818 

02072 

Span „ 

Sponkli Porta In 

total 

205371 

138425 

826243 

13041 

100008 

722003 

438050 

60405 

N Africa 

(SpPaaota 

206371 

130423 

624243 

13041 

08629 

006*0 

00431 

05438 

Sri Lbt*b 

9M>o«l 

743593 

40.1040 

204750 

474302 

264477 

10050 

102381 

1822.11 

Sudroitop 

pro) 

S32170 

354*77 

214101 

334221 

05401 

30747 

2032 

36395 

Scdnam 


£7025 

1.7809 

16072 

1.7220 

15098 

1 

00074 

05023 

SwacBrod 

(tao*4 

54481 

34747 

£232 

34005 

04007 

00183 

0.1939 

03004 

Swaden 

ftanal 

114708 

74877 

46S7S 

74703 

£1214 

1405 

08534 

15522 

Swtawtand 

P) 

£1214 

1405 

04534 

14522 

ancon 

447111 

24304 

38802 

Syna 

89 

316370 

20457 

124867 

19.7030 

51.1953 

330825 

205006 

325082 

Taiwan 

» 

404080 

2883 

10207 

25421 

120023 


40000 

7.7016 

Tanzania 

pnatogi 

70447 

604405 

3074 

48746 

278575 

1B4fi.il 

112070 

1775.72 

IMtand 

(Brroq 

386243 

25.1849 

112978 

242378 

267.196 

17035 

103474 

183544 

Togo top 

tCFAto 

818.010 

6624*8 

341448 

541477 

104017 

09291 

4MUW 

00880 

Tanga la 

P»AnBB| 

£0730 

1-3735 

04343 

14219 

30003 

20802 

15727 

24919 

TiMdtaVTabroja 

A 

84T92 

54*72 

06124 

5.7230 

100047 

110502 

80372 

108820 

TunWa 

Pteta 

14*09 

16209 

04197 

04819 

8*90*0 

682049 

*41048 

5*1 J77 

Turiaw 

UM) 

50891.7 

33575.1 

203944 

323124 

05798 

038* 

PrWtSU 

05080 

TUtalQwa 

(US8 

14090 

1 

04074 

n.nwaa 

84884 

56BB4 

3419* 

54177 

Tuvalu (AutMtei )) 

£0730 

14735 

04343 

14219 

185010 

27.1480 

50000 

84894 

04904 

122071 

170790 

30189 

502M 

80204 

740338 

10JX713 

20140 

34194 

34194 

11025 

175800 

31922 

54177 

*4177 

Ugavta ptaaSWntf 

Utantae (KiaUuvnnota> 

UAE prtwm) 

UHtod Kingdom 83 

Unnod 6omw (USD 

1428.19 

190334 

54440 

160 

14038 

9(4422 

131305 

34725 

06823 

1 

573.781 

707940 

£2307 

04023 

04074 

909690 

120420 

30344 

04374 

noroi 

00500 

40878 

401.113 

£7075 

243543 

10*45 

3Bfl npfl 
Z0Q56 

Uogray (Poos Urvewml 

73270 

44534 

£0481 

40709 

158486 

02380 

50117 

8*911 

Vanuatu 

IWu) 

1766*3 

1164 

700221 

110216 

855580 

688804 

3442. IS 

645372 

Vatican 

Otafl 

238548 

1880 

950.72 

1S2O0B 


30747 


35365 

VOOOUllB 

pofevro) 

mooi 

13742 

83.7145 

132437 

56481 

22*2 

Moron 

Pong) 

166066 

100854 

607204 

105724 

£0738 

10735 

08343 

1J219 


(USJ) 

14008 

1 

04074 

04623 

746646 

2-7882 

£7101 

>[0 ftp* 
10407 
1J95 

209906 

1.1217 

10903 

476898 

1.7772 

1.7274 

Virgin irUS 
Woatarn Samoa 

(USS) 

CTtat 

14090 

30243 

1 

£6092 

04074 

14788 

09623 

£5014 

£6727 

1.70* 

1035 

16300 

Vernon flap <4 

vm 

0830*5) 


355240 

56405 

100374 

80*81 

40382 

66801 

Yamen [FUq ofl 

PUlBI) 

04884(9 

04559 

02789 

04388 

84&040 

mm 

3410*8 

541.777 

YUgooUta HmrDtain) 





uttum 

107822 

21085 

7.1282 

13294 

432QB 

216820 

66001 

Zaire Rap 

(tami 

37760 

250609 

151415 

S40694 


Zambia 

(KMCtlQ) 

102043 

070411 

412491 

854441 

05813 

0.38S 

CL233B 

03TO 

ZhTOabwa 

* 

126742 

74972 

*4570 

74064 


f« Lebanon which will be used 
for equity participation in 

email and mpdi nm-fiigpd com- 
panies which will eventually 
be listed. And a n umb er of 
leading international securities 
houses are already positioning 
themselves for business in Bei- 
rut 

In the Gulf, Oman stands 
alone in allowing foreign inves- 
tors access to its stock 
exchange, although Rafrrqm is 
currently looking at ways of 
easing its restrictions. The sub- 
stantial stock market in Saudi 
Arabia, with a capitalisation of 
$5Gbn, along with the United 
Arab Emirates and Kuwait, 
however, remain closed for the 
time being. But many analysts 
believe that depressed oil 
prices, diminishing state reve- 
nues and the need to attract 
foreign capital into non-oil 
industrial ventures will even- 
tually spur an opening up. 

The Wprld Bank forecasts ; 
regional economic growth in 1 
the Arab world over the next 
10 years to be higher than at 
any time since the 1970s oil 
boom. In the period 1994-2003, 
real regional GDP will grow by 
a yearly average of 3.8 per 
cent, compared to only 0.4 per 
rent in the 1980s. Add to th»Q 
the large sums of money held 
by Arabs outside the region 
which wifi be attracted home 
as stock markets develop - 
more than (350bn according to 
one analyst at the XFC - and 
the Arab world looks like an 
emerging market waiting to 
happen. 


News round-up 



■ Greece 

Buying opportunities are 
expected on the Athens stock 
market this week, with brokers 
predicting a sharp decline in 
the value of the drac hma, 
writes Kerin Hope in Athens. 

The index rose slightly on 
Friday as overseas 
institutional investors 
returned to the market amid 
rumours that the currency 
would be devalued. However, 
the index was 23 per cent 
down on the week. The 
government’s attempts to 
offset pressure on the drachma 
by raising interest rates and 
lifting capital controls six 
weeks ahead of the EtTs July 
1 deadline, triggered turmoil 
on Athens fin an efe] markets. 

The drachma dosed the 
week only 1J32 per cent down 
against the D-Mark. But that 
reflected soaring short-term 
interest rates that at one point 
reached 500 per cent 
Foreign institutional investors 
bought Greek blue-chips, and 
export-led companies, 
including textile and cement 
manufacturers. 

■ Strategy 

With the sharp correction in 
emerging markets this year 


investors might wonder if 
there is more bad news to 
come. Foreign & Colonial notes 
that the IFC Latin American 
index is off nearly 30 per cent 
since Its peak in mid-February, 
while Asia was down some 
15 per cent by the end of the 
first quarter. According to 
F & C the apparent hesitation 
by the US Federal Reserve to 
raise short rates more rapidly 
increased uncertainty and 
adversely affected short-term 
liquidity Dows to emerging 
markets. The latest rise in US 
rates should trigger an upturn, 
says F&C. and they forecast 
strong performance over the 
next few months with the 
Latin American markets 
leading the way. 

■ Moldova 

Moldova is to transfer 1,600 
state-owned companies to 
private ownership in auctions 
forming part of a delayed 
privatisation campaign, Reuter 
reports. 

Most small companies will 
be sold by auction but 
investors will also be allowed 
to subscribe in larger groups. 

• Emerging markets coverage 
appears daily on the World 
Stock Markets page. 


Baring Securities emerging markets indices 




Week on week movement 

Month on month movement 

Year to date movement 

Index 

20/5/94 

Actual 

PercerU 

Actual 

Percent 

Actual 

Percent 

world (264) 

Latin America 

_155^7 

7.60 

5.14 

10.50 

7.25 

-13.14 

-7.80 

Argentina (19) 

118.60 

12.70 

11.99 

18.71 

1&73 

3.22 

Z79 

Brazfl (21) 

140.73 

16.73 

13.50 

8.74 

a62 

1.08 

0.77 

Chile (12) 

174.13 

8.78 

5.31 

10.12 

6.17 

2659 

18.02 

Mexico (24) 

141^36 

9.90 

7.53 

19.11 

15.63 

-19.69 

-12.33 

Latin America (76) _ 

>143.02 

12.33 

9.43 

15.92 

12Ji2 

-6.22 

-4.17 

Europe 

Greece (14) 

83^9 

-5.03 

-5.68 

-6.79 

-752 

0.49 

0.59 

Portugal (14) 

116J91 

3.74 

3.31 

-9.78 

-7.72 

4.79 

457 

Turkey (22) 

59.42 

53.45 

2.47 

03S 

434 

038 

-24.0B 

-2854 

-102^9 

-6325 

Asia 

Indonesia (20) 

151.12 

7.21 

5.01 

11^2 

8.10 

-1952 

-11.65 

Korea (23) 

130^5 

-1^4 

-0.B4 

12J37 

11.06 

2055 

18.73 

Malaysia (22) 

211.11 

-153 

-0.72 

1.06 

050 

-4154 

-16.58 

Pakistan (10) 

103.60 

-1^6 

-1.76 

-15.62 

-13.10 

-8.10 

-755 

Philippines (11) 

277.17 

-4.03 

-1.43 

5.61 

2.07 

-45.31 

-14.05 

Thaiand (22) 

221^7 

13.13 

629 

11.64 

553 

-41.58 

-15.78 

Taiwan (3Q 

Asia (138) 

147.77 

.196^3 

-4^3 

0.79 

-2.84 

0.41 

3.37 

6.00 

253 

3.15 

-554 

-25.08 

-3.86 

-11.33 


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DAIMLER-BENZ AKTIENGESELLSCHAFT 

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FINANCIAL TIMES MONDAY MAY 33 1994 


WORLD BOND MARKETS: This Week 


NEW YORK 


The bond markrt looks as if 
it may be in for something it 
has not experienced for a long 
time: a quiet week. 

Last week, the market first 
agonised ova: whether the 
Federal Reserve would pot op 
interest rates, then celebrated 
when the central bank did just 
that By the week’s end, the 
yield on the long bond had 
dropped from 75 per cent to 
below 12 per cent, and the 
mood of the market was 
upbeat There was even talk 
that the 30-year yield might 
dip below 7 per cent within 

a few weeks if recent increases 
in interest rates begin to take 
their toQ on the pace of 
economic activity. 

In contrast this week fomiM 
allow traders’ and investors’ 
nerves to settle. There is little 
tn the way of important 
economic news doe to be 
released until Wednesday, 
when the April durable goods 
report is scheduled for 
publication. Brokerage house 
Donaldson. Lufkin & Jenrette 
forecasts that durable goods 


Patrick Hsrverson n LONDON 


Philip Coggan VI FRANKFURT 


David Walter II TOKYO 



Banchmarityted curve (96J* 
2tVM4— ■ Month ago. <== 



0 IQ ywn 20 30 

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Source: Mwt* Lynch ‘ 


rase 1 per cent last month, 
which, looks strong but is 
unlikely to overly worry the 
market because the data is 
notoriously unreliable. 

The only other release of 
note wiUbe Friday’s update 
of the first-quarter gross 
domestic product estimate. 
GDP was originally estimated 
to have grown by 2.6 per cent 
but a downward revision in 
the number is expected. DLJ 
predicts revised GDP growth 
of 2 per cent 


Gihs have rallied over the past 
couple of weeks, helped by a 
general upturn in the 
: fnter nflti*™! bond marke t 
and there is little on the 
horizon this week to suggest 
a setback is in the offing. 

The central event of the 
week will be the convertible 
auction on Wednesday (see 
article below). According to 
Mr Ian Shepherdson of HSBC 
Greenwell. the issue is likely 
to have some appeal to 
domestic investors. 

There are few important 
economic statistics due, 
although the Confederation, 
of British Industry’s survey, 
published an Friday, may give 

further indication* of ate 

impact of April's tax increases 
on the recovery. 

Last week’s figures provided 
same contradictory evidence 
on Inflation, with the rise in 
average earnings outweighing 
the good news of a fall in. the 
annual rate of underlying 
inflation. 

The market sees the 

earnings figures as an 


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indicator of future inflationary 
problems, while the retail 
prices index merely reflects 
the past 

With little on the domestic 
agenda to affect the market, 
the TnaYn danger may come 
from the US first-quarter gross 
domestic product figures on 
Friday. 

Too strong a GDP number 
would inevitably upset the 
Treasury bond market, with 
fop normal Vnm*k- nn rffepf 
on gilts. 


Investors are Ekdy to return 
from today’s public holiday 
to be confronted with the 
figures for German M3 money 
supply growth in ApriL Due 
early this week, the data couM 

unsettle the market. 

Expectations had been that 
the annualis ed. ggoqnwflTiy 
adjusted rate of growth would 
sink to 13 per cent in April 
after 15.4 per cent in. the 
previous month. 

But an article in last 
Friday’s Frankfurter 
Allgemeine newspaper 
suggested that the figure may 
prove to be above the March 
outcome. 

If this proves to be the case, 
the Bundesbank’s chanoas of 
hitting its 4 to 6 per cent target 
for monetary growth far the 
year as a whole will recede 
still further. And the 
Bundesbank’s new policy - 
introduced this month with 
the half percentage paint cut 
in the discount and Lombard 
rates - of using interest rate 
cuts to reduce MS growth, will 
look more of a gamble than 


Capital & Credit / Graham Bowley 


Revived convertible gilt faces the acid test 


On Wednesday, the Bank of 
England will auction a new 
convertible government bond, 
the first since 1S87. The revival 
of this special breed of gilt has 
proved to be controversial 
Welcomed by some, it has had 
a frosty reception from others, 
who are frustrated by what 
they see as the government’s 
persistent refusal to turn to 
conventional long-dated gilts 
for its funding needs. 

A convertible gilt is a short- 
dated bond which can be 
exchanged for a specified long- 
dated gilt at a fixed price same 
time in the future. Hie conver- 
sion dates occur at six-monthly 
intervals and the terms worsen 
slightly at each date. 

The convertible gilts auc- 
tioned by the Bank of England 
on Wednesday, worth a total of 
£2bn, will have a coupon of 7.0 
per cent, coming to maturity in 
August 1997. Investors will be 
able to convert it into 9.0 per 
cent 2012 bonds, for the first 
time on August 6. 

The attraction of such an 
investment vehicle for lenders 
is that it allows them to partic- 
ipate in more than one area of 
the gilt market. It therefore 


provides a useful hedge when 
yields, particularly at the long 
end, are volatile. 

If, for example, yields fall, 
then investors may exercise 
their option of converting to 
the longer bond and so benefit 
from the rising market; if on 
the other hand yields rise, they 
will be protected by only being 
exposed to the fall in value of 
the short-dated bond. 

This special p roperty of the 
new gilt may be particularly 
attractive to investors now, 
given the recent financial mar- 
ket turbulence. Institutions 
may be worried about commit- 
ting themselves to long gilts 
but are also afraid of missing 
out if bond markets do recover 
sharply once the threat of fur- 
ther rises in US interest rates 
has receded. 

The appeal for the borrower, 
in this case the grw wnmwrt, is 
that it does not have to commit 
itself to the high yields cur- 
rently being seen on long-dated 
gilts. Issuing a bond at such 
yields would cost the govern- 
ment more hi toms of interest 
payments than a short-dated 
gilt 

Bond markets have been 


extremely volatile since Febru- 
ary, when the US Federal 
Reserve raised short-term 
interest rates in a preemptive 
strike on inflation investors 
took fright sensing a turning 
point in world rates, and bond 
prices plummeted. The UK 
market has been one of the 
worst affected: gilts yields have 
climbed 1 V% percentage points 
since February. 

But the Bank of F.ugiami 
believes the bond market reac- 
tion has been exaggerated. It is 
much more optimistic about 
inflation and prefers to wait 
until long-term yields come 
down before issuing long-dated 
gilts. 

Some investors, however, 
doubt whether funding at the 
short-end still has many 
advantages over selling long- 
dated bonds and they foinfc 
such a policy may in fact be 
damaging to the gov e r nm ent’s 
funding programme. 

“The Bank’s policy is distort- 
ing the yield curve," according 
to Mr Minhflfti Saunder s, UK 
economist at American bank 
Salomon Brothers. 

Analysts complain that 
yields an shorbdaied gilts have 


been pushed up so much and 
the yield curve has flattened to 
such an under the sbew 
weight of the Bank’s own fund- 
ing that it is no longer marring 
any dear cost savings by issu- 
ing short-dated rather than 
long-dated bonds. 

They also say that the 
Bank’s policy adds to the 
uncertainty that an investor 
which acts as a 
at the margin. 

“Investors already have to 
predict Inflation and interest 
rates. If on top of that they 
have to guess funding policy as 
wefl, they may just go and bay 
French bands,” said Mr Saun- 
ders. 

Last year banks, building 
societies and overseas inves- 
tors were keen to buy short- 
dated gilts. But tins year many 
of foem have t n r ped to fixed- 
rate mortgages, which in terms 
of exposure to long-term inter- 
est rates are gfrnfiar to a short- 
dated bond. Yet despite the 
dedine in demand, the Bank 
has persisted with its tactic of 
funding at the short end - Gilts, 
analysts say, are felling Into a 
vacuum. 

But officials say this type of 


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Benchmafc yWd owe t*P- 

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-MyiaktemitwM<XXW«*n 
Soutck Marts Lynch 


ever, although of course these 
cuts were too late to influence 

the April data. 

If the M3 data dampens 
investors* enfongjamu for 
bunds, this may be revived 
by a good inflation figure for 
May. 

Due to be announced at the 
end of the week, the figure 
could be down to an. annual 
rate of below 3 per cent at last 
Coupled with a strong D-Mark, 
this could revive hopes of 
farther rate cuts. 


Par cent 
to — ? 

- 


Japanese government bond 
yields, which fell 13 basis 
points last week, are likely 
to Huftiw farther this week 
due to the Bank of Japan's 
continued easy stance on 
short-term money market 
rates. 

The central bank stiU 
remains cautious on the 
economy and the negative 

effects of a higher yen an 

corporate profits. The bank 
said last week that economic 
conditions had stopped 
deteriorating but there was 
no evidence yet of a recovery. 

Such concerns are expected 
to be confirmed this week, 
with industrial production 
figures fa«w«>ring a fall in 
output in April, and pointing 
to a dedine in the second 
quarter. Retail figures 
for April and March household 
Spending are expected to 
confirm that consumer 
confidence remains weak. 

James Capelin Tokyo 
forecasts a 2.5 per cent decline 
in industrial production for 
the first quarto: of the current 


Emiho Tenronn 


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Ctenotrowfcjfiaklttti 

SQffiM— VtodtbJ 
&0 

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aeuMvkMiqM^-i 


calendar year and* L5 per 
cent foil for the April to June 
quarter. 

Although such negative 
sentiment towardathe 
economy has recently been 
factored into bond prices, . 
further evidence of a delayed 
recovery is hkafcr to support - 
confidence among bond market 

Meanwhile the obraumer 
price index to be released 
Friday should reflect subdued 
inflationary pressmes. 


funding suits the government’s 
borrowing needs; issuing lon- 
ger-dated bonds would simply 
commit the government to pay- 
ing hi gher yields and would be 
too expensive. They say, and 
gome C3ty analysts agree, that 
there will be more than 
enough demand for the new 
convertible bond, particularly 
among domestic banks, build- 
ing societies and d o me s ti c fund 

mflnngampnt TngHtnHnns 

Bnt the new convertible 
issue may be a sign fogfr the 
Bank of England is beginn ing 
to find it difficult to attract 
demand for short-dated gflt8. 

Perhaps the biggest problem 
the new issue will face is the 
difficulty investors may have 
in deriding on a price. When 
details of the auction were 
announced last week, they 
were greeted with stunned 
silence as analysts tried to 
make sense of it. “There is no 
other stock lfkw it in the mar- 
ket,” analysts ramplatnad 

Whether the new gilt will 
find favour with the market 
will become apparent on 
Wednesday, although the 
debate it has provoked may 
not gnd there. 


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Republic of Austria 

US$350,000,000 
Floating rate notes 1997 

Notice is hereby given that 
the notes will bear interest 
at 4.625% per annum bom 
23 May 1994 to 23 August 1394. 
interest payble on 23 August 
1994 wiB amount to USS11.82 
per USS1.000 note. US$118.19 
per USS 10.000 note and 
OSS/. 18134 per US$100,000 
note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


BANK OF GREECE 
US$200,000,000 

(with an tnJUaJ tranche of 
USS15a.000.000) 

Floating rate notes 1998 

The notes will bear interest 
at 5.375% per annum tor the 
period 23 May 1994 to 
23 August 1994. Interest 
payable on 23 August 1994 
per USS 1.000,000 note util 
amount to USS! 3.736. 11. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


2000 


21.14 

2042 

2289 

2030 


10 J 7 

ias 3 

22 JB 

2100 


172 * 

41*1 

414 * 

2130 


20.38 

41 J >1 


2200 


2 a*i 

4 TJ 01 

4344 

2330 


reai 

17 J 0 

2003 

2300 


22 M 

13 J 7 

1840 

2330 


1*87 

1120 

1120 

2400 


16.10 

11.16 

11.15 


3 = 

gCTaep 

~~T~j 

W. 1 ■ Bii'.l 




To the Holders of 

SHEARSOI LEHMAN CHO, IRC. 

Series F, Class F-L Floating Rate Bonds 
Due February 20, 2018 

Pursuant lo the Indenture dated as oF February I, 1985 
between Shearson Lehman CMO, Inc. as Issuer and Texas 
Commerce Bank as Trustee, notice is hereby given that the 
interest rate applicable to the above Bonds for the interest 
period May 20, 1994 through AngusL 19, 1994 as deter- 
mined in accordance with the applicable provisions of the 
Indenture, is 5-2500% per annum. Amount of interest 
payable is 23.207486002 per $10,000 principal amount. 


SHEARSOI UNMAI CMO, IRC. 



THE KINGDOM OF 
BELGIUM 

UA $100^0(M»0 
FLOATING RATE BONDS 
DUE NOVEMBER 1996 

In accordance with the provisions 
of the Bonds, notice is hereby 
given that the Rate of Interest for 
the sixteenth In te rest Period tram 
the 23rd May, 1994 to 23rd 
November, 1994 has been fixed 
at 4.8125 per cent per annum. 

Interest payable on each US 
$250,000 on the relevant interest 
dare, 23rd November, 1994 will 
be US $6,149.31. 

SVENSKA 

INTERNATIONAL PLC, 
Agent 


Banque Indosuez 1 
U.S. $125,000,000 | 

Floating Rate I 

Nodes due 1997 ! 

For cfae *ix month* 20th May, 
1994 co 2 1st Nov e m be r , 1994 
the Notes will carry on interest 
rate of 5>S% per annum and 
coupon amount of U.5. $269.79 
perU.S. $10,000 Now. 


■■Banker* Trot 
U Comnuy.Lot 


Company, London Agent Bank 



Continental Bank Corporation 
US$2004MW,0Q0 Floating Rate Notes 
Due 18 August 1998 

Ncaia is hereby given that the rate of fanciest far period 23 May 1994 - 23 August 
1994 has been fixed at 5.123%. The coupon amount foe US$10000 notes is SL30J77 
and for LfSS250^00 notes is S3.2743L 

19 May 1994 By: Co tilinrm al tent NA, Loodon. Agency Deponent 


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International / Conner Middelmann 

PoKtical uncertainty plagues Spain 


A spate of con up Lion scandals 
which cost several Spanish 
government officials their jobs 
and quirked fears of early elec- 
tions recently sent Spanish 
government bonds plummet- 
ing, and white the bond maxket 
is expected to stage a cautious 
recovery in canting months, ft 
is likely to remain plagued by 
continuing political uncer- 
tainty. 

At the height of political tnr- 
moll, the yield on the Spanish 
10-year benchmark bond shot 
up to 9.8 per cent, its spread 
over Germany widening to 
around 310 basis points. And 
although prices stabilised last 
week, with the yield gap nar- 
rowing back to around 290 
basis points, many analysts 
argue that, in the light of the 
country’s positive economic 
f imriampntalfi , further gains 
are likely. 

- Moreover, same of than say 
font Italian bands, winch ral- 
lied sharply after Mr Silvio 
Berlusconi’s victory in the 
recent elections, are now over- 
valued tn relation to Spain. 

“The optimism in Italy haa 
gone too far, just as the pessi- 
mism tn Spain baa been over- 
done,” says Ms Phyllis Reed, 
European bond strategist at 
Barclays de Zoete Wedd. Since 
Italy's elections, “tire political 
risk has shifted from Italy to 
Spain, but some of it has got to 
shift back to Italy”. 

Italy has an entirely new 
political system which has yet 


to be tested, she says. “There is 
still a lot of disagreement 
within the right wing coaHtian 
and we would not rule out 
another general election within 
tiie year,” cautions. 
While Spanish politics are a 
mess, “the most we are talking 
about is an early general elec- 
tion, not (he overhaul of the 
entire system”, she adds. 

However, it is precisely the 
uncertainty of a possi bl e early 
election that could cast a dark 
shadow over Spain’s bond mar- 
ket, warns Mr Giorgio RafladU, 
senior economist at Lehman 
Brothers. Mr Felipe Gonzales' 
government so far has sur- 
vived the scandals, with the 
aid of its 17 Catalan coalition 
partners. Their support would 
crumble if new revelations 
arose that could cause refofrnat 
e m barrassment sns Tn<ni«fa»riai 
resignations, he says. 

“Obviously, no one knows 
when and if that wDl be the 
case, but this very uncertainty 
argues for investor caution 
until tiie government is seen to 
be firmly back in the driving 
seat” Jane 12 win be crunch- 
time for the Spanish govern- 
ment, featuring regional elec- 
tions 1st Andalucia - tradition- 
ally a stronghold of Mr 
Gonzales’ socialist PSOE party 
- and European Parliament 
elections. While tiie PSOE is 
expected to win a majority in 
Andalucia, “a slim victory 
could be seen as a setback", 
says Mr Jos6 Luis Alzola, 


a, " 






. gjqpq fl > m ii te i ’ 




JS K *...yz : ■“ 

vgDw^ fterifa i fcfv -. . : V- . 

southern Europe economist at 
Salomon Brothers. Also, recent 
opinion polls have indicated a 
PSOE defeat in the European 
elections. All this could 
Increase the risk of early gen- 
eral elections later this year, 
even though the current term 
expires only in 1997. 

However, early elections 
could bolster market sentiment 
if the conservative Popular 
Party (FP) won. A PP-led gov- 
ernment would likely empha- 
sise spending restraint and pri- 
vatisations, as well as fostering 
greater labour market flexibil- 
ity and liberalising key ser- 
vices sectors, Mr Alzola says. 

Politics aside, Spain’s funda- 
mentals of slowing inflation, 
continued fiscal consolidation 

and structural reforms warrant 

further gains in the bond mar- 
ket, many say. 


NEW INTERNATIONAL BOND ISSUES 


Mont . 

RL IfaMy 


Far tiie first four months of 
the year, the government’s 
cumulative deficit was 
PtaS99bn - about 20 per cent 
below the figure fin- the same 
period last year - boosted 
largely by a jump in tax reve- 
nues. 

Meanwhile, inflation is at its 
lowest level in years. The core 
rate fell to 4£ per cent In April 
from per cent in March, and 
Is expected to slow to around 4 
per cent by year-end. Last 
week’s approval of the govern- 
ment's labour m axfcet reforms 
will ease wage press ur es per-, 
manently, further reducing 
long-term inflation expecta- 
tions, Mr Alzola says. 

Political problems notwith- 
standing, fundamentals are 
expected to tend the market 
longer-term support, and both 
Mr Alzola and Ms Reed at BZW 
expect the 10-year Borneo spread 
over bunds to narrow towards 
200 basis points by year-end. 

Mr Radaelli, however, says 
long-term exposure to Spanish 
bonds should be avoided ss 
long as political uncertainty 
prevails, wanting that any 
more scandals could send the 
spread over bunds widening 
back beyond 300 basis points 
and the. peseta tumbling. 

• The Kingdom of Spain on 
Friday issued FFrfibn of 6% per 
cent seven-year eurobonds. 
x priced to yield 24 basis points 
over the co r responding French 
government bond. Lead man- 
ager was Crtdit Lyonnais. 


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FINANCIAL TIMES MONDAY MAY 23 1994 


NEW YORK 


EQUITY MARKETS; This Week 


Frank McGuriv 


LONDON 


Terry Byland 


OTHER MARKETS 


Bold strike on 
interest rates 
well received 

Wall Street is looking forward to 
a week of quiet reflection, a welcome 
break from three months of anxious 
anticipation about Using interest 
rates. 

It is ironic, perhaps, but equity 
investors, inherently concerned about 
tighter money, found reassurance 
in the Federal Reserve's 
aggressiveness last week. On 
Tuesday, the central bank decided 
to increase two key short-term rates 
by 50 basis points each. 

Gradualism, it seems, was not to 
the liking of a market which hat**; 
surprises. Instead of fostering a 
measure of predictability, the central 
bank's three previous increases in 
its Fed Funds target - at 25 basis 
points each - served to heighten 
concern about when the next move 
was coming. 

Last week's bold strike - 
accompanied by a statement 
suggesting the Fed had achieved its 
goal of moving to a policy which 
would neither encourage nor 
discourage growth - gives stocks 
some breathing room. Most analysts 
expect share prices to hold fairly 
steady in the next few trading 
sessions, as the market digests a net 
gain of 107 points in the Dow 
industrials on the week. 

“The market is going to move 
sideways - without much direction 
- while waiting to assess the 
situation,” says Peter Cardfllo, bead 
of research at Westfeha Investments 
in New York. 

How stocks will perform after their 
pause is more controversial, however. 
Mr Cardillo sees the market waiting 
until next week's employment data 
before staging any push upward. 

But it is likely that the evidence will 
continue to point to low inflation, 
he says, supporting bond prices and 


pam .Jan«m Industrial Average 

3JB0 ^ 



“setting the stage for a strong 
summer rally that wQl take stocks 
to new highs”. 

While William Raftery. technical 
analyst at Smith Barney Shearson 
in New York, agrees that share prices 
will finish this week with little 
change, he Is decidedly more bearish 
about the intermediate outlook. “Last 
week was a brief rally. Just as in 
a bull market there are pull-backs, 
in bear markets there are corrective 
cycles,” he says. “They look nirg 
for a week, but then they trip you 
up.” Citing underlying technical 
conditions and historical trends, he 
argues that the Dow Jones Industrial 
Average is heading below the 3,400 
level by late summer. 

Mr Gregory Nie at Kemper 
Securities in Chicago, takes a mare 
positive view but remains 
circumspect about a sustained 
upturn. Although the strong 
suggestion by the Fed that it had 
reached a neutral policy has coaxed 
many investors out erf their foxholes, 
Mr Nie says there is still some danger 
of further rate rises tn the near term. 
The continuing rise in commodity 
prices and the persistent weakness 
of the dollar could force yet another 
move to tighter money, despite 
expectations to the contrary. 

He discounts the chances at stocks 
breaking ant of their trading range 
an technical grounds. He says the 
market has moved into an 
“overbought” condition and cash 
reserves remain low. 


Analysts still 
wary of Fed 
‘neutrality’ 

The response from UK stock market 
analysts tn the Federal Reserve’s 
eagerly anticipated rate rises sounded 
somewhat muted by the end of the 
week, particularly when contrasted 
with the applause which preceded 
i the move. 

Confident predictions that the Fed 
had set the stage for a rally in global 
bond markets which would set 
London stocks free to celebrate 
economic recovery are now carrying 
the health warning: “dollar 
permitting”. 

Mr Nicholas Knight of Nomura 
Research, who Is still the most 
bearish of the UK analysts, has told 
chants bluntly tha* the US bond rally 
would not hold and that the dollar’s 
failure was beginning “to look 
te rminal "; this scenario implies 
sharply higher US rates, he warns. 

London markets have shown 
themselves more readily influenced 
than continental European markets 
by developments in the US, and Mr 
tc frig ht remains p essimis tic about 
interest rate trends in the UK “and 
the impact of rising rates on equity 
prices”. 

Nikko Securities rejects the 
assumption that the Fed’s statement 
implies that it has “achieved 
neutrality", and believes the Fed 
remains willing to raise rates further 
if need be. 

The chances of the Footsie climbing 
convincingly away from 3,150 this 
week will depend on the progress 
of the bond markets, and of course, 
the dollar. But since the Fed is 
unlikely to move again, so soon after 
last week's broadside, share prices 
can still respond to good news. 

The broader market remains weak, 
however. The FT-SE Mid 250 Index 
has fallen almost 2 per cent this 
month, contrasting with an 


FT-S&AAB^har*-..-'.. • .. 

t,578 r? — 



admittedly unimpressive 0.3 per cent 
gain in the FT-SE 100 Index. 

Nervousness ahead of the German 
money supply figures may prove 
a distraction for the UK market 
There are plenty of healthy company 
resu lts in the pipeline, with building 
industry groups likely to show the 
beneficial effects of the slide in UK 
interest rates over the past 12 nu mfoR 

The oil share sector continues to 
have a significant im pa ct on market 
trends, if only because of the 
international stance of the blue chip 
stocks and the background of global 
crude oil prices. 

Indeed, oil prices are probably the 
most significant factor in the 
Ente rprise/Lasmo bid situation. But 
excellent first-quarter results from 
BP and some US majors should not 
overshadow the impact of the 24 per 
cent rise in oil prices since the end 
of March. 

The Nat West Securities oil team 
believes the market may now have 
seen the largest part of the 00 price 
recovery and while some further 
increase is likely, emphasis may now 
shift to such other factors as the 
squeeze on downstream margins. 

NatWest says that BP, 
notwithstanding its recent 
outperformance of around 22 per 
cent to the market remains 15 to 
20 per cent below its relative standing 
to Shell in the late 1980s. The 
unexpected increased BP dividend 
wifi emphasise the pressure to switch 
from Shell into BP. 


ZURICH 

Holder b ank holds its press conference 
and analysts' meeting on Wednesday 
at which a breakdown of 1993 results, 
and projections for 1994 will be given. 
A ran erf annual meeting* is 
scheduled for the week, b eginning 
with OerUkan-Bflhrie tomorrow, with 
Ascom, Nestle and Rieter on 
Thursday and Forbo on Friday. A 
CS Holding roadshow will be in 
Edinburgh on Wednesday and in 
Frankfurt on Friday. The Swiss bank 
has expressed an interest in buying 
a 20 to 30 per cent stake in Austria's 
Creditanstalt-Bankverein with an 
option to take control later. 


FRANKFURT 

Among a range of <*r* ynormr data 
due this week are April M3, which 
Nomura forecasts to rise by an 

annnpllged ]&5 per cent, and 

preliminary cost of living figures. 

The Bundesbank meets on Thursday 
but no move on rates is expected 
after the half-point cuts in the 
discount and Lombard rates last time. 
James Capel does, however, expect 
another reduction before the bank's 
summer recess, which begins after 
the July 21 meeting. Full-year figures 
come from Kanfbof, the retailer, and 
Viag on Wednesday. In March viag 
paid DM2Jbn in cash, plus a minority 
blocking stake of 25.1 per cent tn 
the enlarged Viag group, to take full 
control of Bayern werk, Bavaria's 
stateowned electricity utility, in a 
deal described as Germany’s biggest 
privatisation to date. 

AMSTERDAM 

NedDoyd publishes 1994 first-quarter 
figures on Thursday- Hoare Govett 
says that the operating results before 
extraordinary Hems are known to 
show a loss of FI 57m for shipping, 
profits of FI 9m for European 
transport and FI 8m for other 
activities. Over the year, the broker 
expects a strong improvement from 
the shipping side while the transport 
and other activities could be down. 
Overall, operating profit and net 
profit should be up substantially and 
Hoare Govett is forecasting earnings 
per share of FI SS5 for the current 
year and FI 830 for 1995. 

TOKYO 

Investors are continuing to focus 
on the currency market after 
confidence improved last week, as 
domestic institutions gradually 
moved back into the equity market 
However, many investors are still 
waxy over selling with the Nikkei 
index standing between 20,500 and 
21,000, and the upside is expected 

to be limited. 


INDICES AT A GLANCE ' 





' ' * • •' 

pnGw / 

. wwn, ■ 

robrihw.' y. 

• •'Jen'i : Y-lligh.'.- ^ * ■. ' -j " v ' tow - 


High 

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■FT-SE tOO 

5,127^0. 

/*0i- '. 


.1 4# 3,'52O30 ; . 2/2/94 ‘ jyM2£0 

21/5/93 

3,520.30 

2/2/94 -4S/94 ;. 

Dow Jones hid. 

3.76635 

-v 


- r 4a3..:'3vB7a36: •; 31/1794 3,449.93 

6^7/93 

3,978.36. 

31/1/94 >39335, , 

Nikkei ' 

20,342.17 

• 'V>0 A:. 

:■/ 

2^=148,17 3 16,078.71 

.29/11/93 20,677.77 

16/3/94 17^69.74. :'.,.4/a/94 k . 

Dax !' 

2,249.65 . 

' "-0y*'.\ 


2*271.11 ,16/5/94 : 1,603.04 

24/5/93 

2,271.1 1 

IB/5/94 2^.33'- 

CAC 40 

. 2,1564$. 


■■ *17.4 ' .■ 

•.>6.2 2,356^$. .2/2/94 1,83578 

20/5/93 

2,355.93 

2 / 2/94 

Banca Com. ftaL 

776,45 

>4.0 ; 

W£L9: \ 

+2&3 . . 877.17 1Q/5/94 50&01 

16/6/93 

817.17 

l0/5©4 • 58&B5 



23 


RISK AND REWARD 

Globex highlights 
race for lucrative 
after-hours trade 


The latest 
episode in the 
Globex saga 

ha ?* highlighted 

the strong 
belief among 
the world's 
leading fixtures 
exchanges that 
there is 
demand for, and money to be 
made in, after-hours trading. 

The mill ion -dollar question 
is whether Globex will be able 
to secure a significant slice of 
this potentially lucrative mar- 
ket or find itself squeezed out 
by more nimble competitors. 

Although Globex was dealt a 
humiliating blow last week by 
Liffe, London’s financial 
futures and options exchange, 
when it decided against joining 
the system because of the 
restrictive terms which Globex 
had laid down, its future 
brightened considerably a few 
days later when DTB, Frank- 
furt's financial futures and 
options exchange, said it 
intended to join the system. 

DTB is the third exchange to 
join Globex, the electronic 
futures trading system devel- 
oped and operated by Reuters, 
the financial information and 
news group, along with the 
Chicago Mercantile Exchange 
and Mati£ the French futures 
exchange. “The future of 
Globex has cleared up a lot,” 
says a spokeswoman at Matif. 
“There was no clear c ommi t- 
ment before, but now there 
is." 

Now that the uncertainty 
han g in g over the system has 
been dispelled and its config- 
uration has been clarified, one 
would expect Globex to speed 
up DTB’s entry into the sys- 
tem. But DTB still needs to 
si gn a contractual agreement 
with Globex, which could take 
weeks, and then. It could take 
tip to a year for its products to 
be listed mi the system. 

This lack of urgency on 
Globex’s part could play 
directly into the 'hands of other 
exchang es which are consider- 
ing alternative after-hours elec- 
tronic trading systems. 

The Chicago Board of Trade 
(CBoT), which pulled out of 
Globex last month, expects its 


“Project A" electronic trading 
system to start in August Mr 
Patrick Arbor, CBoT chairman, 
says the initial aim of Project 
A is to operate in the afternoon 
after the exchange's morning 
open-outcry session has ended 
and before the evening session 
starts. The system is scheduled 
to start operating through the 
night by the autumn. 

CBoT also has an agreement 
in principle with Bloomberg 
Financial Services which 
would give users with Bloom- 
berg terminals access to its 
products. Since this is a non- 
exclusive pact, CBoT is free to 
find other potential distribu- 
tors of its products. 

There are also indications 
that CBoT and Liffe, which 
already have a close relation- 
ship and similar business strat- 
egies, are exploring ways to 
work together. The chairmen 
of the two exchanges are due 
to meet later this week. 

Mr Daniel Hodson, Liffe chief 
executive, does not rule out 
linkages of some kind between 
the two exchanges, such as 
fungible links between identi- 
cal contracts. “AH these excit- 
ing projects would have been 
off-limits had we joined 
Globex," says Mr Hodson. 

Mr Nick Durlacher, Liffe 
chairman, said last week that 
Liffe’s after-pit trading could 
easily be extended by two 
hours, thus taking it to the end 
of the Chicago morning trading 
session of 2pm Chicago time. 
Liffe may also extend its net- 
work overseas, following the 
successful installation of its 
screens in New York. 

Mr Hodson says that while 
these steps would not pose a 
problem on the technological 
front they could be held up by 
considerations such as market 
supervision and the impact on 
the London Clearing House. 
“But these hurdles are not 
insuperable,” he says. 

But the Matif spokeswoman 
says that the links established 
between three of the world's 
most important exchanges and 
their combined political will 
should ensure a successful 
future for Globex. 

Antonia Sharpe 



THREE MONTH INTERIM 


Inv estor Group including Saab-Scania 

Investor’s ner worth, wirh Saab-Scania at book value, on March 31 amounted 
to SEK 36,056 m. ( Dec. 31, 1993: SEK 37,493 m.), or SEK 1 98 (206) per share.” 
On May 17, its net worth amounted to SEK 38,218 m., or SEK 230 per share. 

The value of Investor’s portfolio of strategic holdings on March 31 was SEK 
26,408 m. (Dec. 31, 1993: SEK 27,964 m.), a decrease of 5 % from the 
beginning of the year.On May 17, its value was SEK 28,570 an increase of 
2% from the beginning of the year. 

The Investor Group's income after financial items amounted to SEK 222 m. 
against a corresponding loss of SEK 559 ra.-in the first quarter of 1993. 

The Group's net debt on March 31 amounted to SEK 5, 194 m. (Dec 31, 1993: 
SEK 4,850 m.) 


Saab-Scania 


Saab-Scania's order bookings rose by 49% compared with the first quarter 
of 1993. 

Saab-Scania's sales during the period amounted to SEK 6,700 (5,600) m. 

Saah-Scania's operating income after depredation amounted to SEK 561 m. 
against a year-earlier loss of SEK 21 m. Income after financial items amounted 
to SEK 44S (-109) m. 

In 1994, a continued improvement in the income trend is expected for 
Saab-Scania. 

„ SEK 4b,*89 m. with Saab-Scania ar an EBIT value, or SEK 258 per share. 


This ,s , summary of Investor’s three month interim report 1994. The complete report am 
hc'I.kaliKd Invcsror AB. S- 103 32 Stockholm. Swakn, telephone .46.8-614 20 00. 


REPORT 

1994 



LLOYD’S 

LLOYD'S OF LONDON 


£900,000,000 

Corporate Capital 


The undersigned acted as advisers to Lloyd's of London 
in structuring the admission of corporate capital 


JPMorgan 



FIRUESfflFBELflBS 


S.GWarburg 


This announcement appears as a matter of record only. 
The Lloyd's of London toga and crest are registered 
December 1993 service marks of the Corporation of Lloyd's. 




24 


FINANCIAL TIMES MONDAY MAY 23 1994 


WORLD STOCK MARKETS 


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~ KOBE 161 +3 18914110 _ 

Kraut 84061' 520 840 518 11 

“ mm 545 4« 558 461 21 

“ KH0 147 -140 161 JO 11*10 _ 
NocMff 16S -10 ITBIBEJOaO 

lalunjT 995 +3 800 873 11 

IjeBht 780 +10 858 

Undo 930d -2 960 

UMH 375 -4 410 

Luttw 10920 +41022020 

~ UWI 10020 +910 210 

— MAN 45410 -10 470 

— MAN Pf 356 +610 387 

463 -448859 

800 -6 822 


— 112 86 31 

168 +3 189 130 01 

1410 —1810 1313 — 

IBS -2 188 125 11 

10220 +10 114 8610 — 

11720 +120 14911110 3.7 



+3 

— 10420 

8110d +20 91 

— SrnBf eou +10 91 

— ariMt 8710 +10 97 

Storf H4 
UMSor I38d . ... 

Vtrd A 4010 +210 8410 

MMA 88-89 


212 12 . 

165 1.1 . 

140 21 Z gWJB 

? A% “ K 

rz — — amen 

-* 122 8*20 11 — CamCN 

-AO 151 122 11 — CrotlC 

31 — MOOS 

67 81 - Md 

Dab* 



SPAIN (May 20 / Pta.) 


OrgMt 

DradBk 


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wd. 


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6.07TJ 

3120 

4310 


+10 0280 
+70 0.700 

+40 3135 WH 
-20 3/400 2.600 01 
+10 4130 3176 4li 


15100 +160 17JD0 HlOO Z4 
8,110 +30 7100 USD 41 

1135 -4JW 700 1Sl4 

- CEPSA 3100 +80 3178 2.410 XI 

— CMU 4100 +100 4170 3100 21 — - 

— Count 11180 +«nz«o ojno il — MuJp. 4.3oo 

- Drgdot 2416 +15 ins 2180 3.7 — DiWM EBO 

1,6 - OOtifflW Bflfl 

23 _ Bm 1.530 



+10 1.420 11OT _ — Mann 587 
+3 810 488 — — — u sag 

-«U«0 no 

+122^ S — — 049 

-10 1.^ W1 — — Mroan 7*5 

+201130 1OT - - MknCC 1.790 
„ 744 563 11 — MnetNB 734 

+101/410 mo — mm. 53* 

+1 534 402 11 — MntmH 1180 

0200 4,160 — - I Su 2130 

+70 5180 4,070 01 - mton uoo 
♦101.1901100 - — MBQte m 
+10 1^0 1.100 ~ _ wes ii4o 
+9 770 500 12 — UbBtCt 472 
- ***** 7m 
+22 575 410 01 — NUUs 621 
-3 408 380 1! — MUM *30 

-8 879 SSfl _ _ MbMotr fiCIE 

— B9B 886 — — MbOt an 
+ 1 5 1 iigi5w »i _ mw era 
— — »»p« iw 

+* 2-112 ~ — MtM 487 

~'SS 5S 14 “ MDflWI 407 
+0 83* 438 — iwm 000 

“12 1-S8 ~ M0Ti9 1AM 
+20 3120 2190 — 401 MMm 1120 
so um hot ii — KS+T »«, 
~ 25 — — mat 782 

“7 «2 337 1! — MbS 344 

BHD 841 _ — imMl m .vm 

as - mn mi 

tS + SS + S ^ - MMlS 416 
—30 ZJdJQ 2JSSQ — *— WfNfc 372 

t.' * EiS 778 

+20 2180 2110 — insnk 887 

382 

2S SS 4 ® — **™ 1.190 

« JK — — MOWl 968 
+20 592 112 — — MmB 110 
+ 1 2.518 < W7 — — MM- 715 
— 1/870 1120 — — tteawf um 
+30 1^1^01 - E^i 2.100 

+20 2120 1120 — MmacAl 558 

-2011101^00 KX 2140 

252 — — MuMm 4100 
800 — _ NBC 1,190 
“1 — — NBKkl 1190 
NQKSp 1190 
NHCSp 512 
274 



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5D*0 

620 

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— MutffiV 3.110 -75 3H7 21« 0 A 


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243 -7 202 SI 0 ... 

620 -4 530OM.50 31 

M —& 888 00S (L3 

40210 -2 400 427 2.0 

— KWE m —3-90 6291*0 430 Z6 

— RWEPI 37110 -1 42* 335 307 

— BlH« 1173 -211201140 01 

— RmriB 348 +X50 372 313 21 

— HhnmPf 23810 +110 2B7 226 XI 

— RsnUt 293 — 313 252 Z4 



+101173 080 

+io sms z*m 

+60 8,100 8,140 XI 
+25 1,100 085 — 
-a 719 410 142 
+05 6,140 3180 31 
+301110 921 — 
+200 7100 4100 XO 
+140 7130 5,400 17 
+120 8^0 4110 11 
+300 11 JW 0,710 11 
+45 4.900 3180 X5 
+13 284 102 — 

+11 866 351 71 

+12 816 BIO SI 
+80 4,460 3100 4! 
+20 2,186 1195 3.2 
+261136 990 11 
+3 730 570 a? 
+50 2100 1,415 111 
+7S 1.7001,160 44 
+6X120 2115 11 
-20 3180 X260 01 


345 - - Mik 
079 ~ — N5K 

897 01 — mu 

Trjso - 895 jjgg 1 

zsss? 


— MhnCm 


_ FudoCrr 


MhnPk 


OAkan 

GnSdfc 


_ UCras 


(May 20 /Kroner) 




— Sum 72210 -^90 79950 881 J . .. 

4210 tm mo ia 




vmi 


VBN 


iSSS 


759 +2 788 SOS 3* 

822 -11 896 778 21 

882 -10 913 066 XI 

110* -211491180X5 

1180 -3*1/4361154 X4 

890d +21102 830 2A 

280 — .403BB.® 340 — — 

^ MB -1 683 537 X6 — 

Bongrn 3133d -46 X790 3J046 X8 — 

MB +3 787 887 21 — 

1120 *3011801,111 xa _ 

074 -18 1.168 03* 31 — 

118X40 -AO 2265013*89 51 — 

._ 188 +20 21 3J0 106.10 — — 

Crtoor 2JM0 +1X1BS1H3X1 — 

Cadm 10110 -450 209 181 41 — 

Orgra 1,480 +17 1170 1121 21 — 

ChibMd 433.10 -750 40* 348 XI — 

CCF 237 -X50 300.93225*0 11 — 

Crfdnf 1,153 -5 1109 1104 41 

CrtyO 554 +4 600 BOO 27 

CHJOCF 420 +1 49B 400 — 

CMU 005 -10 737 649 HI 7 

5 .780 -40 0,100 6120 &7 

772 +0 830 BBO — 

429 +110 43B 381 14 
DM +0 800- 780 21 

2.700 -28 2194 X620 X4 

771 — 780 B38 11 

42710 -.10 43638U0 41 

348 — 392 2E2B — 

908 -41.127 923 3.7 

849 +241188 860 — 

770 +10 800 740 — 

712 -23 830 680 11 

BK X48M — X487 X750 2J 

Eun* 1190 -10 X5091170 X8 

BURSCB 088 -7 702 584 X3 

EurtJU 5X70 +.70 39J9 2X20 XO 

F*B0 150 -110 182 136 &2 

+21 939 890 11 
-140X020 41*1 1! 

+12 57043860 21 
-11X704X092 XT 
-61120 770 11 

-1 646 398 11 

+249350 420 ZB 

-13 680 56* X3 

-« 718 9Z4 _ 

__ -1 1178 831 71 

BS.ro -110 119 8X10X9 
mow 600 -4 570 800 XT 

WHO 086 -4 TOO 300 M 

LVMK 898 +7 934 727 XB 

LffCOP 439 -X80 48110 439 XI 


397 

41* 


54810 +X80 

=t; J 

— WtffiBP 879 

— liFpap 240 



asaa 

| I 


486 


wmm 

AQAB 

1:1 


4flfl 

378 21 

- - 

Asm A 

842 

-4 

080 

540 11 




B43 

-1 

mo 

438 11 


A*»A 

150 

-1 

TOO 

1Z7 

MUM 

A8SS8 

154 

-1 

194 

1*5 mm 



mm 

488 

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543 

400 11 

MM 

AM 

480 

-4 

04? 

405 11 



ms 

41M 

—7 

«m 

282 11 

•— 

Btesa 

388sl 

-1 

387 

200 11 

— 

EMOA 

128*0 

+1.70 

134 

101 XI 

— 

EMtoB 

12BMI 

+275 

134 

101 XI 

— 

CmtxnB 

388nl 

+1*0 

440 

340 11 

— 

HSAA 8 

410*0 

-2 

430 

201 11 


Hartqn 

HndCn 


HtOrad 

HHoM 


rTM.7(May20/lJre) 



— HWtA 

— IncntA 

— knfl 

■— kMS» 

— htdfl 

— MadoB 
mumA 
mnns 

SC&& 

SCAB 

ao=A 

— 8KFB 

— fttfuKA 

— &mm 

— SEBnk 

— Skmfa 

— SoMB 

“ SMA 

“ StartB 

— SnHtnB 


— ORB 

= ea 



RmcLv 908 
AmBri 4150 
SIMM 451 


ffdji 


780 
036 
465 
690 

23? 

femnmq 001 

ImPtnc 


S 100 -30 X405 4,410 21 

*175 +166 5175 3A10 _ 

2130 -aaZ4501J78 1.1 

190 -4 211 70 _ 

28.100 -260 29*502X000 11 
11100 -290 1X460 8,11 0 _ 

2100 -105 X100 11M 11 
X760 ~ 3100 1160 — 

2130 -30 2ASQ 1H& ~ 

-78X0101190 _ 

-20 X820 X140 14 

12100 -69013*00 10200 — 

X146T -15 2AB4 1188 _ 

8130 -130 7130 4,071 11 
4180 -06 4120 2,119 21 

8180 -120 7130 X879 31 
1X300 — IQ T788H 11 AO 3.7 
1799 -421 

48100 —330 

3110 -130 „ .. _ 

27100 -60029,100 iSH 11 
1X680 -2M 14*00 12.100 — 

1X776 -7S 1X100X300 _ 

16160 -M0 17*00 lOJiffl X7 
6143 -105 8140 4171 XI _ “g*? 
18AE0 -1901X800 lilOO ~ 

17.100 — 42D 18JD0 13d0 11 

1/160 -8 1149 870 __ 

2100 -26X1401115 — 

5160 —145 8.100 3110 _ 

2JB96 +46 X3831170 _ 

3o.ro -iDosiisizyno 11 

H20d +1201X180 X288 
0,100 —160 10m 7100 X2 
4,480 -76 6,185 31M 1! 

1103 -25 1188 480 _ 

6140 +5 0160 4186 11 

5.S0B -170 7100 4,1 
4196 -«a 4110 ■ 

1X710 -290 11700 
1X7*0 -2201 
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31100 -4«r 

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+5 898 621 X8 — mw 
+0021001120 _ _ 

928 446 _. ' 

+20 XB80 2100 „ 

_ 709 589 1! 

-1 42B 275 _ 

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*171140 719 „ 

— 1170 BOO _ 

+10 X600 1180 „ 

„ 1,110 841 _ 

+6 740 514 _ 

+3 933 787 
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-2 60S 428 01 ~ 

_ 1130 938 _ — 

+9 830 440 -.— 

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-3 S2S 438 - _ 

+10 im oso __ „ 

-101,1® 796 — — 

-3 650 307 11 — 

-5 910 H79 — — 

+0 940 626 — — 
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38 r - 

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502 ZT — 

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+30 3140X550 - - 
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= E E§ 

+8 060 609 — — Ntttiab 

—20 1,160 626 X7 — 

-8 023 


+so i,iflo uno — 

+7 eii m _ 

-3021902120 _ 

— 7130X880 — 

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-1 782 535 — 

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— XltniABO — 

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— 408 321 _ 

-00 1100 1/00 11 
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fflB'tSis 

4 f 3 a 2 s? = 

+10 601 397 _ 

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-1 673 6S7 — 

+« 700 582 07 

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— 7!B 4S8 _ 

+5 S3S 380 — 

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-8 327 407 — 

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+2 42 , 378 _ 

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+1 008 578 — 

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-101100 B4A — TtaLld 

—4 iuO 790 — — Tonea 
+4O2130UD0 03 — 

-4 782 610 — — 

+20X3491.2*3 X« — ma 
-2 834 485 01 — TtflMIt 

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+8 275 231 — — Toyota] 829 

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+5? IS S ” “ Qtim 1X70 
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♦7 309 299 ww iTS 

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26 +1.10 3X20 1X80 31 — 
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1SJ0 >10 23 1210 214 241 

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3725 +10 99 90 —801 

5X50 +10 77 42 12 83.7 

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1435 CBUSK 
11000 CUMOO 
184231 Cnta« 
128820 CtnOee 

831319 OHPK 
180 CtnTV 
148007 CHfIM 
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200 CHU8 
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■ TOKYO - MOST ACT1W HOCKS: Friday. May 20.1884 


11 z 



Stook* 

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Stocks 

ChM*M 

Cftsngu 


Tradod 

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TMM 

Knees 

on day 

Mppon Steal 

ISAn 

368 

+13 

Kawurold Hsmry 

&3m 

421 

+6 

Kawasaki S»«l 

15.7m 

397 

+9 

Un*#i Heavy 

5.1m 

708 

+14 

Kobo Steel 

S.5m 

299 

+« 

MnBben____ 

4^m 

734 


NKKCorp. 

_ aim 

274 

+8 

hTbiatlMatarW 

asm 

530 

+8 

STomo Metal _____ 

7.4m 

295 

+7 

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a2m 

1.400 

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"2S'S^ 

+70 6*10 4170 03 

:?S 1 ® 1 ® 1 ^ zUSSSb ,J S 

-004,1002100 04012 rOAu* 1X80 
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+80 X240 X4TO _ _ Don M X91 
+10 560 380 0! _ MM X23 
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♦7 888 706 _ _ WW) 313 
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+11 Z16 110 _ — 

+17 X43 112 

*JK 342 2*0 5112* 
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710 -13 9J6 X3U — _ 

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3 +04 X7D 3 00 214 

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INDICES 


US INDICES 


20 


M0 


-188* ■ 


LOW 


20 


Uq 

18 


-9984 • 


Dm 


HBh 


•*d 

ZD 


“9 

18 


18 


1994 


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loa 


Gnsri (2012/77) 

2126X46 21477*0 2096X70 2547040 WZ 

17786*0 SOW 

PCpDir 1978) 

M 

2404*1 Z375.1M 



AKMmfeKVMIQ 

2103* 

2093.7 

2107* 2140*0 3/2 

198010 50 

Marian «i 

437* 

27X3 

430* 

281* 

439.7 

281J 

2881.17 B/2 

1S07J3 2V4 

AiMmgruuaq 

JiMkta 

cn«/ttsmp(vta84) 

103X3 

41027 

10307 

42114 

1041* im» a/z 

420*6 4B60B 2/2 

904*0 50 

41X44 as 

CT&TWkfitaCnl839 
CBS M Shr (End 89 

46MB 3171 
294J0 31/1 

417*0 6/4 
286*0 31/3 

ItMM WBC/1/911 

1076*9 

105111 

107742 12222 1/2 

108688 90 

Cap. 40 (1/7/9Q 

Hanov 

213X40 

2124*3 

2155.10 

209*4 3/2 

291212 SO 

BBJsnnni) 

1538*0 

153X30 

153071 194U5 9/2 

148X30 30/3 

Oata S8M(2nA83) 

1141*2 

1186*5 

1140*4 

TZ1M8 3K 

1872*7 3/1 

Brad 

Boteva (29/1213) 

20317* 

20088* 

17909*20317*0 205 

310680 an 

MattCro (2/1/8$) 
ForttM 

2870*2 285X497 

iMpg^ 

330637 4/1 

290713 90 

MMMkertona 

Qxnpo8SB+ <7075) 

376X51 

429X40 

373033 

429X70 

3721.43 3878*8 18/3 
427X04 40810 230 

3898108 20/4 
4108*0 20/4 

EOA (1977) 

MV0» 


2911 J 

7W13B 

322080 18/2 

2818*0 3/1 

MkBD»(V1/B3) 

CMS 

2SXS7A7 

200081 

3003.75 XUOD 1/2 

1816X7 IflM 

SE5A4-Spore(8W7B 
Souta AMea 

574*0 

576*8 

077.10 

64111 4/1 

82X29 4/4 

PGA Cm (31/1280) 

43191 

caw 

42461 488710 4/2 

308120 4/4 

JSE6DI0 (280/78) 

180X0V 

18860 

177X0 

233110 4/1 

1746*0 14/2 


MdM 


3768*5 37S&S8 373X89 997X38 359X35 

pin) w 

97*4 97*8 97*5 105*1 9643 

(Evil para) 

160X96 181X86 1664*8 188229 1548*2 
pwj (20H) 

181*8 * 184*2 18412 72718 177JB 
P") nafl 

□J tad. DmM Men 378X78 079X92 ) Low 3721*4 OTO712 ) (ThMratlcW) 
OtjTt high 378X10 (3782*8 ) LOW 874017 072X98 ) (Aon**) 


Ham Bondi 
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(3171/943 

18X77 

(1WI0S3) 

188229 

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(31/VBN 


454*2 4 38, 4 )1 463*9 48*1 

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53X7D 531*1 82X14 


m 


43812 

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510*5 

(21/4) 


48X09 

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4112 

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(U1WI) 

12*2 

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10*0 

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(WSJ 

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(MIX) 


QftttmfrgBPTm 37X1B 371*0 374*4 41X79 2/2 
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1432*2 144110 144X14 159528 2/2 
215543 218530 218319 238X83 2/2 


SBF 250 (31/120) 
CAC 40(31/12/87) 


BGAMMCI/lMBJ 

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(Mxoonasnt 


aai ffi 85X98 858*7 ■** 1H 

2<24.1 243X5 2447 2485*0 2/S 

2240*5 2247 JB 22B7.4T 2271.T1 105 

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tajng Kong 

Hdtq SmtiSVTlW 9031*3 0934*8 9470*4 12201*3 4/1 


37X74 3/1 

1821.18 3/1 

1402*0 21/4 
208114 31/3 

77813 20 

2221*0 2fl 
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Madrid SE (3tfl2fflg 


6830LOV B555* BS71* 671080 13« 


048*0 05173 


10 0428 2C 


33X20 334*4 33X78 35X31 31/1 


5448*8 tan 


88X07 84 


30X23 20/4 


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45.19 

48*8 

4S34 

46*6 

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4139 

48*0 

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814 

(1/1074) 

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251*8 

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25673 

207.71 

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243.14 

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287.71 

crawj 

4*6 

(EMMS 

Abmx MM Vri 

43620 

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454*0 

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(22) 

427*0 

(2V4 

487 JB 

mm 

2831 

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MMDMCbp 

■ RATIOS 

72670 

72731 

721*0 

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70551 

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{1«3«4 

5417 

(31/1072) 


AWwnUB M p/2/37) 1531.1 1544* 


987.15 96472 


90X47 185 


8399*4 4/5 


SBC Gened (1/407) 

no 

wwiofr-cnwar 


164X5 100X90 31/1 

140180 31/3 


May 13 

Mays 

Apr 29 

Ysar ago 



Dow Jemw bid. Or. YWd 

2.78 

X77 

X78 

X87 

120X13 142134 31/1 

123K7S 60 


May 18 

May 11 

May 4 

Year ago 

968*5 109X29 31/1 

917*3 W 

S & P And. Ohr. yield 

X48 

XS4 

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f no 



a a p hd. p/e ratio 

24.06 

2X62 

2X99 

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37831 380X7 3807* 4387*0 2S/2 


JdmMIIWB) 487*9 <82.74 477*1 812*9 M 


VI 


454*2 m 


BangK* SET (30M/75 

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Maori Cnp+Iai 196E) 

maan 

MS CWal M p/im»S 


590529 5044*1 590X25 845491 VI 9194*3 1013 

133X19 133442 132547 175323 4fl 110X50 4/4 


■ STAMURD AMD POOR* BOO MMDe pvnnm C500 11me& Max 


GEQOuftVIAn 

My 

Banes Coma OS (1972) 

MB Genrd (4/1/94) 

N5*d22S(1MWO 
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2nd SfiCSni (4/1*^ 


181X13 18H3D 180X54 2082.18 2Qf1 179150 105 


77X45 

1254* 


70450 

1383* 


90X28 817.17 IQS 
1301* 1319*0 IQS 


203*2.17 20221** 2015273 2007777 IBS 

30X37 28X78 298*8 30425 1/3 

164254 163440 1034*9 18027 18/3 

232419 232X22 2320*$ 2533*6 IW 


K*E CWJ4MAG} 1UH-16 1002*8 101X27 01446 5/1 


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1TO68J4 4/1 
28X22 4/1 
1445*7 4/1 
167333 4/1 

89*3 4/4 


H 18227*2888380 13ft 1290X70 24/3 


8301* 619* 01X1 841*0 VZ 081*0 


EuoBack 100(26/1 090 145X87 148X18 147X09 154X19 31/1 138U0 M 

&OTDP-1DOPBW9) 128353 1287.13 1S7413 131111 Z/2 120X49 W 

JCapriOva (31/I2/B8) M 32020 32X57 35X19 VI 29X28 21/3 

XstVI EOdtP/US!) 15X27 15X19 148*0 18272 14ffl 141*6 21/4 

■ CAC-40 STOCK NKHSX WTUBga (MATTR 



Open Satt pries 

Changa 

Wflh 

Low 

EatvoL OponlnL 

Jun 

45&30 

464.B0 

-1JSB 

45446 

453.75 

70.136 

19M78 

Sap 

457,90 

457.15 

-1^ 

45020 

45X20 

3,048 

18,733 

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468*5 

-1*5 

461.00 

458.00 

202 

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Mtaari flgra am lor pravkaa day. 






■ Wf YORK NCntN CTOCKS ■ T W A DW C ACTIVITY 

Fftty 


SUa On Oanoe • Wane Wd 



Opan 

Sen Price Changa 

High 

LOw 

Eat vri. Open tiL 

May 

2164.0 

2155* +49 X) 

2175* 

2148* 

16956 

22.422 

Jun 

2148.0 

2138.0 

2157* 

2134* 

1*77 

36796 

J* 

2146* 

2135* 

2148* 

2146.5 

1 

1*50 

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PIMP Mens 
ATT 


GM SBC 
MHMrt 


Oadad 

xm*oa 

6,196*00 

3*97*00 

priM 

8CM 

53M 

OK 

on day 

+S4 

Now York SE 
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NASDAQ 

May 20 May 19 May IB 
235.160 303*50 337*80 
15040 10200 8.75B 

J9J385JS1 30X400 

3,73X700 

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02% 

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3*07200 

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1.138 

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3*93.100 

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+2 

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680 

656 

530 

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+K 

Ka* Hflha 

29 

38 

38 

2,740005 

60 

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43 

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ad Mbtno - 500 AmW* TiadM. BEL20, HK Oen, MB Gol. 86F230. CAC4Q. Eue Top-100. BSC Omnd; Toranto CompAletrii X 
MMrU «d OAX - d 1 *00i J* OW - 29X7; J8E 2* Monirit - 2840; NYSE M Oonrnn - SO ad Stmtae wd Poort - io. ffi 
Monaari. 4 Tokmb. (e) Oowd 94 Umnatrit. t BSDAX B/larWtm Mac May 20 - 2236*7 -&S2 


Amoco 
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T CoractkXL • CricuaM d 10*0 QMT. • BKAjdng txaxto. t IndutDW. (AM UdMe*. Flaneld ma Tmpcxuun. 

4 The DJ tad. Mac tatamflcri day* Mght aid leu am flu anraou ol ha Mohan and boost prioes reached putno 8» day by each 
Moris Wm 9w Odum do/3 Mote ad tom (tuppM toy T«WoW naM B» Nri*d and Ism xduoa taa On noex taai raachol 
«Artia tat day. flYia B»wb h bradrati am pravtaua dyt). f Subtert ar oflMri leadwtatgn. 


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CCS 5500 
BFR 13300 
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FMKZ200 


ftance 

FFR1040 

Nedierfinda DfL873 

Germany 

DM730 

Norway 

NOK3J22D 

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LIT 600*00 

Portugal 

ESC 60*00 

Luxembourg LFR 13*00 

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PTS 63*00 


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is* : . ■ 

as . ‘ 

fc 

oj ; 
p»‘ , - , 

Ei ‘ • • . ; 

ft • • 
fa :• . 







































































m *t*ipp "'tsssr** 










































































































































































































































































































MONEY MARKET FUNDS 


POUND SPOT FORWARD AGAINST .THEPdEJ.f® 


May 20 

Europe 

Austria 

Baighm 

Danmark 

FMond 

France 

Germany 

Greece 

Ireland 

Italy 

Unemboug 

Netherlands 

Norway 

Portugal 

Spain 

Sweden 

Switzerland 

UK 

Ecu 

SORT 

American 

Argentina 

Brazil 

Canada 


J2?*? Change Btd/offar 
mM~P0wt on day gproad 


DOLLAR SPOT -RORWARO A'GA;i,Nj'ST::THe DOLLAR 


Doy* MU 

Ngh low 


One month Three month* 
We %PA Rate KPA 


One year Bank of 
ReU KPA Ena- ►«*« 


May 90 


mkf-pdtat 


Change BkVoflw 
on day spread 


Day’s mid 
Wgh tow 


One month Three month* One year JP Morgan 
Hula KPA Rate KPA Rate KPA index 


SS Sim u irra u 


Europe 


fDKrt 

(PM) 

(FPr) 

PM) 


9.71 84 
0.1154 

bass* 

£.4859 
<W 375.868 
JQ 1.0197 
<U 2385.49 
[LP'I 51.1568 
2.7882 
10.7822 
(Es) 257.105 
W** 2WJ71 
(SKr) 11.5768 
iSPf) 2.1214 
(El 

- 1.2907 

- 0.830384 


<*=U 

(NKr) 


IfS" ™ ‘ £5 5M “° S1 - Ta * 51-1608 0 l1 51.1508 0l0 506808 05 

■Jg* ^ ■ 21 a78B0 A710 ° 9-7241 -0* 0.7^ “ 

-00443 068 - 280 8.1830 8,1058 

- 0 *" 7 5 41 - 047 15562 6.4041 8X051 -08 8X08 

645 ' 867 2 -5031 04«3 24082 ~Q2 24858 

*0831 237- 100 378859 372.020 - - _ 

10208 10128 1-01-1 -0-4 1.0148 

238423 238824 2381.19 -22 240020 

51.4820 61.1204 51.1508 Ol 51.1508 

2-0079 2.7887 2.7877 02 £7874 


-0X133 204 - 012 
-02128 8B7-BS8 

~?' 042 578 " 865 100533 10.7578 10.7565 0.6 1CL7B91 *03 10^7602 0.0 

“?'«® ZM-irozsajoo zs&i? -45 mm 3s 

208.788 205.270 205,381 *32 208.711 -22 

112233 112680 112883 -32 112288 -12 

2.1333 2.1201 2.1107 02 2.1155 


-a 309 278-463 
-0.017 680 - 855 
-0.0047 201 . 228 


-0.0048 698-815 12977 1X898 1.2019 - 1.1 


02 

- 

- 

1134 

Austria 

CSchJ 

Ol 0 

504808 

05 

11&3 

Belgium 

(BFr) 

-0.7 

9.7486 

-03 

11M 

Denmark 

WW 

- 

- 

- 

81.7 

firtand 

IFM) 

•04 

84744 

0J3 

1002 

Franon 

(FFr) 

0.0 

2.4873 

0.7 

123-7 

Gemtary 

m 

- 

- 

- 

- 

Gmacs 

(») 

-0.4 

1.0158 

-02 

104J 

batand 

m 

-24 

2481.54 

—1.9 

705 

My 

w 

00 

50.8806 

05 

1154 

Luwrmboug 

Ofi) 

Ol 

2.7846 

0.8 

1180 

Neflrarianda 

n 

*03 

10.7802 

0.0 

806 

Norway 

(NKr) 

-42 

- 

- 

- 

Portugal 

(Ea) 

-24 

209.491 

-ZD 

84.7 

Span 

(Pta) 

-1* 

11.7178 

-12 

77.0 

Sweden 

(SKi) 

1.1 

2.0867 

14 

117.5 

Switzerland 

(SFri 

- 

- 

. 

784 

UK 

ffl 

-OB 

1^911 

OO 

~ 

Ecu 



SORT 


'*0.0021 064 - 073 
*45.15 700 - 927 
*0.0041 774- 782 


1P«») 1-5060 

(CO 251839 
ICS) 20783 

Maxk» (New Peso) S.D0B0 -a0038 881 - isn 

Australia (AS) 2.0738 

hong Kong (HM1 11.6883 

IwSa (Rol 47.3824 

J»f»i (Y) 158.883 

Malaysti (M® a 9093 

New Zealand (NZS) 2.5727 

PhUppkwa (Paso) 40.9157 

Saudi Arable (SRI 5.6822 

Singapore (S$l 

S Africa (Com.) (HI 
S AMca (Fin.) (R) 7.435a 

South Korea (Won) 1 215. Da 

Taiwan fTS) 405080 

Thafland (Bt) 38.0243 


1.5113 1,5042 
2526.00 247100 

£0823 2.0890 
5.0251 40991 

1- 6146 1.5072 

2- OB1 1 2.0878 


-*OX»4Z 728-750 
♦0.0159 5SS * 887 
♦0.068 461 - 787 47J5O0O 472880 
-OOB1 7B1 - 965 137.970 158.781 

-0JD028 075 - 111 30209 3.5819 

-0-0009 70S - 748 2.5801 20685 

*0- 0556 783-530 41.1530 406783 
♦0.0077 804 - 839 5.8795 54026 

2-3226 *0.0007 212 - 239 
W481 4010135 455-507 
♦010026 187 - 528 
♦0.68 658- 737 
+0.04 217-042 


2.3304 23157 
5,5658 6.5325 
7S1W 73737 
122030 121436 
403600 40.4217 


♦032a 087 - 418 38.1500 373070 


- 

" 

- 

- 

- 

- 

- 

Argentina 

(PBSO) 

- 

- 

- 

- 

- 

- 

_ 

Brad 

(Ol 

2.0797 

-aa 

£083 

-09 

2.0976 

-09 

87.1 

Canada 

(CS) 

- 

- 

- 

- 

- 

- 


Madia OiftePctei 

15(368 

aa 

1,5077 

06 

1.5053 

03 

05.1 

USA 









pBCfSc/MMcAa Eaet/7 

2X731 

04 

2,0715 

04 

£0705 

OR 


AustraAs 

(An 

11X552 

08 

11.8513 

04 

114783 

-0.1 

- 

Hong Kong 

(HKS 

- 

- 

- 

- 

- 

- 


todta 

Pri 

150.483 

3.1 

150873 

3.1 

151.718 

33 

185.1 

Japan 

(V) 

- 

- 

- 

- 

- 

- 

ra 

Masala 

(MS 

2-572 

03 

2.5756 

-04 

osasi 

-04 

» 

Mew Zeeland 

pen 


- 

• 

- 

- 

- 

ra 

PhOppmea 

(Peed) 


- 

- 

- 

- 

- 

- 

Saud Arabia 

(SR) 


" 

- 

- 

- 

- 

- 

Singapore 

on 


- 

- 

- 

- 

- 

- 

S Africa (Com. 

w 


- 

- 

- 

- 

- 

— 

S Africa (Bn.) 

w 


- 

■ 

- 

- 

- 

- 

South Korea 

(won) 


- 

- 

- 

- 

- 

— 

Taiwan 

on 


- 

- 

• 

- 

- 

- 

Theoend 

(BQ 


115785 
3a MSS 
04355 
53732 
53295 
1.6463 
248.820 
1/1894 
158040 
334826 
14487 
7.1282 
170.350 
136025 
7.687B 
1A051 
1-5083 
1.1898 
1.41831 

0,8981 

1658.18 

1.3768 


-0X6S6 770 
-0.1875 060 
-0043 330 
-00367 702 
-0X353 275 
-0X1096 460 
+2.07 600 
-1-0.0077 684 
-5-5 800 
-0.1875 680 
-am 09 482 
-00376 272 
-05 200 
-0.45 ODD 
-0X217 640 
-0005 048 
♦0002 004 
+0.0058 603 


820 11J8600 

070 34.1440 
380 04881 

5.4256 
5.6705 
486 1.6900 

040 240200 
«B 1.4907 
100 1588X0 
970 34.1440 
18813 
7.1843 
500 171.150 
060 137.100 
7.7098 
1.4145 
102 1.5146 

703 1.1703 


■ 801 
315 


472 

292 


71S 

055 


115760 

335880 

0.4330 

55702 

06265 

1X450 

247.500 

1.4700 

1579.00 

338680 

18461 

7.1260 

170200 

130950 

7.8518 

1AQ45 

1.5072 

1.1822 


- 980 - 981 0.9881 Q.0993 

+27,88 815 - 817 168517 168315 
+0-0000 7H3 - 708 1X775 1.3719 

-0X107 120 - 220 a aopft 3.3120 


1J3736 


1X383 


THOU ntn tor May ID. BWjflor apraoda 
bid are knpled by Ewrant MmP neas. 


+0001 731 - 740 
♦0X1001 248 - 2S3 
+0j0025 875 - 725 
-0.166 870 - 950 
-0.0052 888 - 898 
-00029 030 ■ 050 

- 500 - 500 

- 501 - 504 
+00043 370 - 380 

+0004 740 - 755 
-0.005 150 - 350 
-OSS 00 0 - 100 
-aoi 800 - 600 
-O.D15 QUO - 900 
h tie Date Spar maM 
UK. Ireland A ECU m 


1X1753 1-3704 
7.7253 7.7248 
313725 313876 
104800 103JS70 
2.6997 25730 
1.7068 1.7030 
272800 200000 
3.7504 3.7501 
1jS 412 1.5388 
3.0705 06600 
4.9600 4.8800 
806X00 808.100 
208800 26.7800 
202200 25.1800 
maw only m« bn tf» 
USonanoy. 


11 £87 

-0.8 

113885 

-03 

11.5023 

07 

103.1 

33.9075 

-08 

33.9325 

-03 

333025 

02 

1045 

8.446 

-18 

6X58 

-IX 

8X635 

-04 

103.B 

82777 

-03 

63707 

-03 

63927 

-03 

703 

62087 

-13 

5.6448 

-1.1 

5.8163 

02 

104.4 

1.6477 

-1.1 

1348 

-0.7 

13428 

02 

1042 

250.17 

-63 

251.02 

-05 

26332 

-1.8 

69.5 

1X88 

1.1 

1.4BSS 

1.0 

1X824 

05 

_ 

1684X5 

-3X 

16823 

-02 

18133 

-£1 

701 

338075 

-09 

333325 

-03 

33.8025 

02 

104.5 

1.643 

-OB 

13487 

-OX 

13363 

05 

104.0 

7.1312 

-03 

7.1327 

-03 

7.1082 

03 

95.4 

171.315 

-6.8 

172335 

-6.1 

1773 

-4.1 

92.8 

138X2 

-33 

137.1 

-33 

139 

-22 

800 

7X8B3 

-23 

7.7123 

-23 

7.7728 

-1.4 

805 

1.4053 

-0.1 

1X035 

0.5 

13374 

\2 

1008 

1.5088 

03 

1.6077 

03 

13053 

03 

88.6 

1.1684 

13 

1.1687 

1.1 

1.1715 

-0.1 

- 

1J788 

-1.7 

13814 

-1.4 

1302S 

-15 

808 

3318 

-OX 

33198 

-03 

3.3272 

-OX 

ra 

- 

- 

- 

- 

- 

- 

B9X 

13788 

-43 

1.3778 

-12 

13761 

-02 

68.5 

7.7248 

0.1 

7.7271 

-Ol 

7,7d14 

-02 

- 

31X5 

-3.1 

31385 

-2.9 

- 

- 

- 

103.716 

23 

103^85 

2X 

1003 

2-9 

148.0 

23818 

33 

23783 

1,7 

2.6033 

-08 

ra 

1.7058 

-18 

1.7104 

-13 

1.7321 

-1.7 

- 

37509 

-02 

3- 7529 

-03 

3.7956 

-04 

_ 

13376 

08 

13373 

03 

13393 

-Ol 

ra 

3.6903 

-5.1 

3.7186 

-43 

3.7953 

-32 

- 

43587 

-83 

5.0175 

-75 

te 

- 

_ 

809.05 

-43 

81235 

-S3 

831 7J5 

-3.1 

- 

2835 

-08 

2639 

-03 

- 

- 

- 


252575 -35 20386 -02 25585 -2.7 

pttoee. Fonutari ratoa or* not (Weedy guM k> (he marital 
n ominal man May ig. Bnes evaraga 1980a 100 


JJ>. Meagre ■ 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

May 30 BFr DKr FFr DM 


NKr 


Ea 


Pta 


SKr Sfir 


cs 


Ecu 


Belgium 


Germany 

Ireland 

K»ly 


Norway 

Portugal 

Spam 

Sweden 

Swttzetfamf 

UK 


US 

Japan 

Ecu 

Yon par 1,000: 


(BFr) 100 
(DKr) 52.06 
(FFt) 6020 
(DM) 2056 
PQ 50.45 
(U 2145 
(FO 18.35 
(NKr) 47.56 
(Es) 19.89 
(Pta) 24.91 
(SKr) 44.18 
(SFr) 24.12 
(E) 51.16 
(CS 24-62 
(S) 33.90 
(Y) 3265 
30.83 

Kroner, French 


18X9 

10 

11.43 

3X08 

0582 

0.407 

3.485 

9X130 

3.770 

4.730 

8590 

4561 

9.718 

4576 

0439 


16.61 

8.747 

10 

3410 

8582 

0556 

3.048 


4559 
2569 
2.925 
1 

2452 
0104 
0592 
2310 
0967 
1510 
2147 
1.172 
2486 
1.198 
1547 
15.85 
1528 

Franc. Noire tfa n Kronor, end 


3504 

4.138 

7539 

4.007 

6509 

4.090 

6.632 


6158 5450 

7528 6583 


1.082 

1.044 

1.183 

0.408 

1 

0043 

0364 

0542 

0394 

0494 

0578 

0478 

1414 

0488 

0872 

0467 

0785 


4682 

2456 

2806 

9604 

2352 

100 

6555 

2217 

0275 

1161 

2060 

1124 

2385 

1148 

1501 

15210 

1847 


SmkMi Near par 


5550 

2080 

3580 

1.121 

2750 

0117 

1 

2501 
1484 
1557 
2408 
1514 
2788 
1542 
1548 
17.78 
2160 
10 Upon 


21.03 

11X17 

1258 

4528 

10,61 

0451 

3550 

10 

4.184 

5539 

9292 

5473 

1076 

5.178 

7.131 

6852 

8535 


5027 

284.7 

3024 

1035 

2534 

1078 

H9 » 

2394 

10a 

1255 

2221 

1214 

2574 

1234 

171X4 

1640 

1002 


401.5 

211.4 
241.7 
8282 
2026 
0512 
73.87 
1905 
7946 
TOO 

177.4 

96.04 

205.4 
00.86 
mi 
1310 
160.1 


Rant. Escudo, Ura me Peseta 


2253 

1152 

1343 

4468 

11.42 

0486 

4.154 

10.76 

4502 

5438 

10 

6j 460 
1158 
6573 
7.874 
7345 
8470 
par IDO. 


4.146 1455 4.082 2450 3065 2523 


FIXED INTEREST RATES 


MONEY RATES 

May 20 Over One Three Six 

night month rnthe ntifn 


One tomb. Die. 
year brar. rate 


Repo 


2.183 

1X29 

£138 

1X53 

181X 

1X29 

Belgium 

- 

54 

6* 

544 

5K 

7X0 

4X0 

£.488 

1.177 

£445 

1.77B 

1845 

1X19 

week ago 

5ft 

54 

54 

514 

5ft 

7X0 

4X0 

0853 

0XQ2 

0836 

0607 

63.07 

0X19 

Franco 

54 

58 

54 

Gtt 

5» 

5X0 

- 

£082 

0X88 

£049 

1X88 

154.8 

1X78 

week ego 

5V4 

5» 

6ft 

6V. 

5W 

550 

- 

0089 

0042 

0X87 

0.063 

0574 

0X54 

Germany 

5.28 

5X0 

5X4 

4X8 

4X8 

6X0 

4X0 

0761 

mg 

0745 

0541 

58X4 

0X53 

week ago 

5X0 

5X0 

6X3 

4X6 

4X8 

8X0 

4X0 

1.971 

0829 

1X31 

1X02 

145.7 

1.200 

tatand 

5fl 

5% 

8 

B* 

8ft 

— 

_ 

0825 

0388 

0X08 

0587 

60X6 

0X02 

week ago 

5fl 

5A 

6 

8ft 

6ft 

- 

_ 

1.033 

0487 

1X12 

0736 

7034 

0829 

Italy 

m 

7\ 

7ft 

7H 

7* 

- 

7X0 

1^32 

0884 

1.794 

1X03 

135.4 

1.115 

week ago 

7| 

7* 

78 

78 

7» 

— 

7X0 

1 

0471 

oseo 

0.711 

73X3 

0609 

Netherlands 

5.15 

5.13 

5X8 

6X7 

5X7 

— 

525 

£121 

1 

£078 

1X09 

1508 

1X91 

week ago 

528 

5.13 

5X5 

6X3 

5.02 

- 

525 

1.021 

0481 

1 

0726 

75X6 

0821 

Switzerland 

41 

4V4 

44 

4ft 

4ft 

6X26 

3X0 

1.406 

0.683 

1J77 

1 

103X 

OB56 

week ago 

4* 

4M 

4 

4 

4 

0825 

5X0 

13.53 

0378 

13.25 

0624 

1000. 

UB 

US 

44 

4U 

4H 

48 

5ft 

_ 

3X0 

1.643 

0.775 

1X10 

1.169 

121X 

1 

week ago 

3fl 

414 

48 

Stt 

58 

- 

3X0 







Japan 

Z 

Zi 

2ft 

Zft 

2% 

- 

1.75 







week ago 

24 

24 

2ft 

2ft 

2ft 

- 

1.75 


6.75 

0.78 

5.23 

5.47 

645 

0l2S 

7.65 

&10 


■ D-MARK WITUftgS QMM) DM 125,000 per DM 



Open 

Sett price 

Change 

rifih 

Low 

Estvei 

Open kit 

Jui 

0.6032 

06077 

+0X045 

08081 

06025 

41,688 

116X39 

Sep 

0.6034 

0X071 

+00045 

0.6076 

06034 

2,115 

7X62 

Dec 

- 

08077 

+0X044 

0X077 

08060 

22 

258 


UK INTEREST RATES 


LONDON MONEY RATES 

May 20 Over- 7 days 

right nodes 


■ S LIBOR FT London 


One 

month 


Three 

months 


Sbr 

months 


One 


■ SWISS FRANC nmmgSgMM) SFr 125.000 per SFr 


Jun 

0.7082 

0.7121 

+0.0039 

07130 

0.7070 

14X46 

41.072 

Sep 

07132 

07134 

♦00039 

07140 

07114 

1X41 

2X28 

Dec 

* 

07162 

+0.0038 

" 

" 

5 

340 

■ JAPANESS YEM FUTURK3 PMM) Yen 1£5 pw Y*i 100 




Open 

Sett price 

Change 

HJgh 

Low 

EsLvol 

Open trl 

Jut 

0X609 

0.8822 

♦0X015 

00643 

0X570 

27X60 

50457 

Sep 

0.9844 

OS6&9 

+0X015 

DX70B 

0X644 

2X90 

5X84 

Dec 

" 

0.9781 

+0.0014 

09775 

0X743 

IS 

942 

■ STERUNG FtmiHCS (IMM) £62X00 par £ 




-kin 

1X066 

1.5056 

-00024 

1.5138 

1X028 

8X39 

44.798 

Sep 

1.5066 

1X036 

-00024 

1X118 

1X010 

218 

2X72 

Dec 

- 

1X058 

-00024 

1X100 

1X020 

14 

52 


L,i_ | n-,1, nsjiiP.ita 

ntBroan* owning 

4%-3li 

5-44, 

V. - All 

5A -Sft 

5% -5% 

5ft ■ 5ft 

Storing CDs 

- 


5 -4ft 

5ft-5A 

5%-5la 

5ii-5ft 

Treasury B«b 

- 


4fi-4B 

4% -4 a 



Bank BOs 

- 


4% - 4ft 

4ft - 4% 

5%-5A 

. 

Loc* authority daps. 

*a-4& 

43-4ft 

5-4% 

S%-5 

5A-5A 

5ft - 5A 

Dfeoount Mark* dope 

4% -3% 

4ft - 4ft 

- 

“ 



LK clearing bank base lending rate 5% per cant bum February 8, 1964 

Up to 1 1-3 38 5-9 

month month nvreha months 

9-12 

months 


|,-b a *a,__|i- fe_f_ 

MitnlMiift rBing 

4ft 

«4 

4ft 

Sft 

- 

- 

_ 

woak ago 

<ft 

48 

5ft 

51 

- 

- 

- 

US Defer CDs 

- 4.12 

4X2 

4X2 

5.15 

- 

_ 

_ 

week ago 

- 412 

458 

5.00 

5X1 

- 

- 

- 

SORLMmd Da 

3ft 

4 

4ft 

4ft 

- 

- 

- 

week ago 

3ft 

4 

«ft 

4ft 

- 

- 

- 


SCO [Mad Da add rata* 1 irate 6*; 3 Me £3fc B rttaw CTfc t year Sfl. S UBOR Meibenk (bang 
rate ore eltaM ratoe tor SlOm qaatad 10 dm market by lour ntarencfl bank! ■ Itam eecfl retaking 
day. The banka are: Bantam Trust, Bar* ol Tokyo, Bated*- ml National Wwbib—r. 

Mid ralss ora shoMi lor tiia domaadc Money Rotas, US 5 CO» and SDR LMad DapoPta (Da). 

EURO CURRENCY INTEREST RATES 

May 20 Shun 7 days One Three Ska 


nodes 


month 


months months 


One 

year 


■ PHM-APMJHUk M C/S OPTIONS C31 .250 (cents pw pound) 


Certs al Tex dsp. (£100400) 1>a 4 3\ & 3% 

Cons of T«c dap. unctar CIOOlODO Is 1>|pc. Dopoaka atthtt m an tor caati lipc. 

Am. isndar nos al dtacom 4J430pa ECQD tbcod rata Sttg. Export Fnsnr*. klskeibdsy/kprtZB, 
IBM. Afpsod rslo far period May 2S. IBM to Jun 2S. 1BB4 Sehanas U 8 nr OSflpc. RetarenEe rani lor 
pariodAprl. 19W 10 Apr 2B. 1084. Schemr* IV & V 528Bpc- Finanee Houns Base Bate S«spa tan 
May 1. IBM 

BANK OF ENGLAND TREASURY BILL TENDER 


Btfgtan Ftwc 
Donah Krone 
D-Mark 
Duch Gutidor 
French Franc 


&*b - y* 
5^-512 
sA-M 
54 -si 

5^,-5^ 


SA - 5A 6i« - 

a -5*1 5% 
-54 
54-54 

5\-S*t 


54-64 
51,-5 
5ft - 54 


S >-5ft 

54-54 
-4U 


S: 


Ponuguom Esc. IQlg - 10la 10H - 1Q>* 10V - W« 10^ 




5%-5^i 
5% -5% 
5-4% 
5-4% 

54 - 54 


Strike 

Price 

Jun 

- CALLS - 
J* 

Aug 

Jun 

— PUTS — 
Jui 

Aug 

1.425 

7X0 

7X8 

8X5 

• 

0.08 

030 

1.450 

5.47 

5.66 

6X1 

- 

027 

068 

1-475 

3.12 

3X5 

4.18 

an 

0.74 

1X3 

1X00 

128 

£11 

£70 

0.71 

1X3 

£32 

1X25 

0X1 

1.05 

1.87 

£23 

3X1 

3X8 

1X50 

aoi 

0.45 

0.94 

4.38 

4X9 

6.41 



Hay 20 

»V 13 


May 29 

May 13 

EBe go (Bar 

CSOOm 

£4oom 

Top accepted rate 

4.7430% 

4X533% 

Totf of appKcattma 

C1790n 

£18738 

Ah. rate of iwcatrt 

4.7430% 

4X423% 

Total fltiqcatod 

esoom 

£40003 

Annas Ttrid 

4X010% 

4X020% 

Ltiit accented Hd 

£98X15 

£96.790 

Olter* next enter 

£SD0m 

E400n 

Aktimanl * mil. tewl 

100% 

43% 

Mi accept Hd 182 d«a 

- 

- 


Spatish Peseta 

7%-7A 

7% • 7A 

7%-7fi 

7% -7/. 

7% 

Strafing 

5% -4% 

4ft-4ft 

6A-4ft 

5i-6A 

5% 

Swiss Franc 

4% -4% 

4% -4 

4%-4 

4i-3S 

4A 

Caa Dda- 

5H-5A 

5%-6% 

5%-5% 

8% -6 

e,'. 

USOaOer 

4A-4i 

Th-IM 

4A-4& 

4A-V, 

4% 

ItoBan Ura 

9 - 7% 

7%-7% 

7%-7% 

7% 

Yen 

2% -2i 

8:54 

2A-2& 

24-2% 

2 1 * 

Asian SSng 

3% -3% 

4* -4 b 

4%- 4% 

s& 

Short tern rataa am c* fear tha US OaBar and Yen, othora: 

two day** nadea. 


519-5% 
5% -5% 
4ft -4« 
6-4% 
54-54 
104 - 9& 
711-7% 
5%-6% 
4-3% 
8%-6% 
5%. 5% 
7% -7% 
24 - 2% 
5ft-5ft 


Ptnrktaa day's vol* CsHs 6,431 Puts 7.107 . Prov. dafa opsn ht.Csa8 404.72Ml Pitt «13J3O0 


FT QUBE to WORLD CURRENCIES 

The FT Guide to World Cunwdea 
table can be found on page 2S fet 
todays edttton. 


■ THREE MOimiEIIBOPtMJJUTOMM) 51m poktte of 10096 


■ Petted in Mew Voofc 


May 2D 

— Goa — 

-Pm. dose 

Eapnl 

1X050 

1X075 

loah 

1X041 

1X056 

3 nab 

1X028 

1X054 

fir 

1X000 

1X035 


UK GILTS PRICES 


Asa* 

Notts WBS *t- Oa 


Uot Ofy 
d Sne 


Tress. tOpela. 
£nh i 2>2JIC 19 
Treat ft* 1994$} 
\JseiW5- 


mtoRw 


EttHJpcCss90-» 

10^1956. — 


EtenlNpc 199614 


Tre»tilipr:1097tt — 
Excti I5pc 1997.. 


BlrPClBW 

fiTO r’opc I9IW 

TfBWfr'xBC 1995-00)7 — 


too* 

-5 

1 X00 JaOOrt 

K7TI3 

-2 

1240 Fe22AC2 

ima 

r . _ 

1X00 Myi7Mul7 

Wii 

-.1 

£350 HZSJfS 

9B>« 

at 

214 Myl Nn 

105% 

ai 

£500 JB21 Jy21 

«»9ft 

8.1 

BJO Hy15teil5 

112 % 

0.1 

770 Ja22Jy22 

US)! 

at 

1,150 UySteri 

112 ft 

QJ2 

800 Myi5N*IS 

107/, 

a« 

3,409 Hrl»N,15 

USA 

ox 

1J90 J*2JyS! 

IQ® 

ox 

3.700 M21A1B1 

104% 

ox 

5X50 IA1 Sal 

123ft 

04 

830 AD27 0C27 

107ft 

0.6 

3X» *19*19 

m 

07 

7«a Kb30Se30 

X 

03 

1200 Myl terl 

121 ft* 

05 

970 M|C2Nv22 

taift 

06 

835 IMOSrtO 

"W* 

09 

3B0B My20Ha20 

107% 

OB 

1X00 Jal5Jyl5 


2512M 
17.1 1203 

11.4 1345 
3X12 12M 

25JI271 
15.121254 
8412B8 
16.12 1305 
3L3130B 

6.4 1266 
■4 1240 

10.121302 
17.1 1253 
24.1 1341 
213 1260 
13.121173 
212 - 
2531331 


Mbs 

wn% 

Meat ♦#- 

Am* hhaest 
Era Cm 

Lata Ot 
id the 

TraBll%pc 2001-4 

117* 

1.1 

1X20 1*195019 

10X1290 

Fw*igS<2pe-9M. 

78 

£0 

542 «14Jyl4 

8.121274 

CHm*an8>afx3004_ 

110ft 

1.1 

1412 Ap250c25 

21X1248 

Tims 6ft pc 2004# 

92ft* 

IX 

6XS0 Uy26Nv26 

184 - 

Cure 0% pc 2005 

110ft 

1.1 

4X42 Apiaocis 

14X1347 

Trite TZ%pe 2003-6 

126)1* 

IX 

2X00 My2i SMI 

144 12B& 

7ftpeajaet$— 

90ft 

IX 

3X00 1*8 SeB 

31.1 - 

Bpc3002-e» 

soft 

1.7 

2X00 Ap60c5 

1X1334 

Tnnu llftpc 2003-7 

lag 

t.l 

1150 Ja22 Jy22 

1812 1293 

Tre»8%pe20074* 

IMfi 

£2 

1*97 JaiOJyia 

18121339 

l3%peW-8 

133H 

IX 

1X50 tKOSBX 

17X1301 

TrantexaXHtt: 

108K 

\J 

5X21 Apl30c13 

7X1343 



Open 

Sett price 

Change 

Hloh 

Low 

E5KL vc4 

Open Ira. 

Jun 

95_2fl 

95X7 

- 

96X8 

96X5 

111X56 

388X70 

Sep 

94X2 

94.77 

-0X6 

94.85 

94.74 

217X92 

417,025 

Dec 

94X6 

B4X8 

-0.08 

94X8 

94X4 

246X88 

41 £988 

■ US TREASURY DBX FUTURES (IMM) Sim par 10095 



Jun 

95.67 

95.68 

-am 

95lB7 

95X5 

TX8G 

20.475 

Sep 

95X3 

95X1 

-0X5 

85X3 

85.19 

71448 

11X76 

Dec 

94X7 

94X1 

-aia 

94X7 

94.79 

S19 

7X67 


«n« tna 
hates RUE +4- sat 


rand 

doe 


Last CSy 
id Rm 


-B7-5 


1«Ht 

1074 

10711 


hcv- 

*%*■«•« — 0353) 

2«2pcin (703) 

jijjc'oa 0*«ia44i* 

4%|Kim* — (I35fl 111% 

ZpcOB (005) 172% 

2«^f09 (7*0) IMHri 

2%pcn (7«A 101% 

2%PC13 O0J9 133% 

2'ane‘iB ai. 0 ) 141II 

2%pC20 -BXO) I3S4 

2%ix:7«« (B7 J) 1114 

4%pcTCtt — (135.1) 112C 


1X00 MMSSCIG 
000 A0Z70C27 
15W Mr04S*24 
USD MyzOIMO 
BSD AjCI OcZT 
1350 Ja19Jy19 
1550 1*20 1W0 
1350 Fe23*G3 
2300 FalBAulb 
2/SO ttUbSfS, 20121321 
£400 AnSDcre 1031322 
£000 Ja17 Jf17 13.12 7X9 
1300 JUG 422 16.12 - 


721313 
213 - 

1521316 
1X41317 
224 - 

11121314 
114 1310 
17.1 1319 
1011320 


Aa Open hsanM ig*. ore IW mvk»* day 


BANK RETURN 


FhetaTtnaanyren 

t*cti 13V PC 1999 

Ties lOtjpc 1W9 

tnosEpC 1999 JJ 

Caiutnton 10V pc 1099- 

IrwsRtaRat? W 

SpcaWQtt 

liras UpcOTO.. 

lOocawi 

..._ 

7pc 01 4 

BVkMXC 

Sac 200337 

lOpcaWJ 


117% 

111U* 

KH 

lion* 

99(3* 

123il 

110 a 

S5fl 

95U 

1104 

1004* 

11213 


00 £050 
00 1*K 
DO 5300 
OS 1.790 
0 

ID 5360 
13 £171 

12 4.400 
15 3250 

13 £500 
13 6327 
13 7»0 
T3 £503 


Mr2SS(S6 

MylONvIB 

FnlOAitO 

My22Nv22 

MflSM 
JaMjyl4 
Fe»*C6 
UyetfeC 
ujeme 
M7*C7 
JSIQM1Q 
MB SOB 


114 1308 Traaa8pc2fiOO 

lOQtt 

£7 

3,100 Sb25SB25 

15X1338 

21X1306 lriteGU«pc20ia 

B5JW 

12 

£750 

114 - 

RfJS c#n»9pe 10 20111* — 

ioob 

IX 

4X73 Ja12 Jyl2 

6.12 1245 

9,51147 TriteSK20T2H 

110ft 

1.7 

1150 FaBHuS 

31.121701 

Tie* S%pc 2008-128- 

7812 

£7 

1X00 MriOSBlO 

1X1330 

hes»BBC3J13»* 

100H 

£0 

4060 1*27 SeZ7 

tBX - 

7ftpe 2012-151* 

98% 

1.7 

800 JBZ6JI28 

20.121332 

Traaa8ftpq20i7tt 

108ft 

12 

1950 FB2SAU2S 

1111982 

17X1264 

138ft* 

IX 

1X00 JP12Det2 

851280 


1141288 

22.4 - 

15.4 1242 

35 - 

35.11244 
0121299 
201 1200 
_ . Com 3%pc '61*1. 

21. T 1349 nwjBWOO— 

45 - 0iaiali2%pa 

3T.1 1201 Iraae 2%pc 


4pe. 


— 49% 

4X 

3S9 

Fel ten 

28121231 

— 4411* 

3LB 

1X09 

Jei Oal 

254 1352 

_ 58% 

£0 

119 

Apt Ocl 

23X1343 

— 36% 

4.6 

56 

AtfOcS 

IX 1324 

Sift 

38 

275 5JaApJ|0C 

1X123B 

_ 30% 

10 

475 

AplOci 

21X1315 


Figumg In praentlimw shew RPI bsee hx Indexkig (is 0 
nwnttis prior ba tesu* and have been abated to raOed rebasaig 
al RPI ID 100 bi January 1087. Conmreksi tactor 3345. RPI lor 
September 1 0B3: 141 2 and ter April 1894: 14225. 


Other Fixed Interest 

Mere Dei 1 1 % 2010 — 
MmD0TlO%pc20O9— 

Bites 1T%J* 2012 

Me*Cap0%pc*iO — 

Spc Cap 19BB 

13pC "97-2 

HpteQHbec15pc20l1- 

Uedi i3%pe 2008 

U*Bpaoi3%pcntxL — 

LCCapcTCAA 

MBUdtekr 11%pe2007 . 
MatWr-SpcT — . — 
truth m*e3%pc 2021. 

4%pe£2024 

UHlte SUM 1S%pe 2008 


123H 

1.7 

50 JsaJH 

1.12 - 

116U 

IX 

100 1824 5e?4 

393 - 

123% 

IX 

45 Myi5Hri5 

4-U18S7 

104% 

£5 

m Api oci 

-1455 

102% 

OX 

725 Ja30Jy30 

- - 

112% 

as 

315 Api Ocl 

28X1428 

148 

IX 

40 My31 Be30 

27.10 - 

133ft 

£1 

40 ftil Oci 

3933148 

38% 

-IX 

5 iJaAoJBOc 

IX - 

34 

-£9 

28 iJeJaSeOe 

IX - 

118% 

£4 

6 ACS (tea 

3833Z7S 

69 

IX 

25 MtlSei 

1X3361 

188% 

ox 

60 JKHJySO 

1933465 

130% 

0.4 

SO 

20L7 - 

145 

£1 

50 tari 5ei 

27X - 


BANKING DePAHTMENT 

Wednesday 
May 18. 1984 

Increase or 
decrease tor week 

UtabWtkte 

e 

C 

Capita) 

14^53.000 


Pubic dopoete 

1X40016,144 

■81,185,477 

Bankers depoehs 

1.501.077,540 

-117^84,489 

Reserve and other accounts 

2X72X76.098 

-71v45£5a8 

Asaeta 

5.435^23^82 

-270.022^62 

Govemmerd securities 

1,184.507.429 

+160315,000 

Advance end other acoouda 

1,969X40.143 

-1,517,644.381 

Premise, equipment and other secs 

£g9£999.523 

+1JJ85.148X54 

Notes 

7X95^14 

+£155,138 

Coin 

161X73 

+4X07 

ISSUE DSPAOTMB4T 

5,435X20382 

-£70X22X62 

UahWiu 

Notes In ckcutation 

17.822.404,788 

-32.165.138 

Notes In Benktog Department 

7,595,214 

+£155,138 

Assets 

17X30.000.000 

-30000,000 

Govemmertt debt 

11^)15,100 


Other Goverrtnant securities 

15X11X63.129 

+1X50,540412 

Other Securities 

1,707,421,771 

-1,980.54 £4 12 


17.630000000 

LONDON RECENT ISSUES: EQUITIES 

issue Amt MkL Ctose 

price paid cap 1904 price 

p up (EmJ mgh LOW Stock p +A 


•00000,000 


Not Dhr. 
dhr. cov. 


Gra WE 
ytd net 


• Tar raoc*. ft Tax-toe 


to nai lOirtrim on appacotion. E Auction Paata, ad Ex Andred. Cheng irtcHsneoa nhnri si pouida. wao«y parenroga ctangoa are edeutaud an a ftkiity w Fikfcy bom. 


BASE LENDING RATES 


•v 

Arum & Company .. . 525 

A&od Trua Bare -828 

ABBare - 525 

•Moray Ansbacner . 525 

BankofBamka 526 

Banaj BtbeoVuxaya.- 525 

Bankotcyprus 525 

Bare of inland 525 

Bareoihdia 525 

Bank* Scotland S2S 

Barclay* Bart, 525 

B«€fcolMUE3S 525 

•Bmwn Shipley 6 Co LKL625 
CLBankNedartanO ...525 

C4bantNA _ 525 

Clydoaddie Bank ,525 

Tlte Cooporatn« Bank. 525 

CouBs&Co 525 

CnxSL^CtTOt. 525 

Cvona Popular Bar* . 525 


% 

Duncan lamta - 525 

Exetnr Bank Untied... 626 
Fotondsi 5 Gen Bank _ 6 
•Robert Flerrtng SOo_ 525 

Goobare 525 

•GunwuMdni 525 

Kioto Bonk AG 2uich . 525 

•Hombroe Bank 625 

Hortable S Qen inv Bh. 525 

•Hfl Samuel 625 

G rioaroSCo 525 

hongkeng A £>xtnghaL 6S 
Jk*m Hodgo Bank .... 525 
gt ayret.ine efb 8 Sera 52S 

UoydsBraik — 525 

Mogre* Bank Ud 525 

MtSandBank 525 

-MountBanMng 6 

NdWcsWmjr 5^ 

•Ron Bremen - 525 


Corporation Unled to no 


aberMnginstUion. 8 
Roy* Bko( Scotland -.525 
•M1&1NUH1 Sees. 625 
Standard Chartered .... 525 

7S8 625 

■Unled Bt o> Kumk — 525 
Unky Trust Bank Pic... 52S 

Wtawm Trust — 52S 

WhPemray takaow . — 625 
Yorkshke Bank 625 

• Members of British 
Merchant Banking 8> 
Socurihes Houses 
Assoctetion 

■ biiXimxJraDar 


FT GOLD MINES INDEX 


% dag 


%* 

Hoy MB Cap Sold Gross A 
31/1 WO 10 SDn Hunt yield * 


52 1 

ft* 


Low 


Geld PBmi Mdm (3S) 

183(44 

-13X 

1888X5 45X8 

WOOD 

2X1 

238740 1822X8 

■ Ragfarata tarices 

Africa (16) 

2518X2 

-ZLA 

248048 

12X5 

28X8 

4X2 

3440X0 1902X3 

Amnastan 

2556X1 

-4.1 

ai£i7 

6X8 

14X2 

2X0 

301189 16S3.1B 

Math America pi) 

1681X4 

-8.7 

1816X7 

28X4 

57X2 

087 

2D39A5 1383X0 


CapyrtcH, The Rnantef Tana Unttad 1904. 

Fkuie h brreksta thorn ronbsr of oompwdss. Boats US Dolws. Brea VtteoK 100000 31/t2*£ 
Prada ra nor Qt * d Unas indac May 20c 2062: wooire ctirees: -3A ookis You sea: 1052. r Psttw. 


RIGHTS OFFERS 

lesue Amoteti Late* 
price paid Rerui 18M 
p up dale KfrFi Low Stock 


Cksng *ra- 
pnee 
P _ 


- 

FX. 

1X4 

10 

B AMrust Scot Wrta 

10 


re 

_ 

_ 

_ 

_ 

F.P. 

12X 

140 

125 Capitol 

140 

42 

LN3-3 

IB 

£9 

203 

7250 

F.P. 

185.1 

249 

246 OCC 

248 


LQ34K 

3B 

£7 

12-9 

110 

F.P. 

40X 

115 

110 ORS Draa A Res 

113 

+2 

1MB 

1-1 

3.1 

27-0 

ISO 

FJ>. 

eai 

171 

160 (3TT Bus 

168 


RM3l8 

U 

£8 

13-0 

120 

FX. 

40.7 

138 

122 Go-Ahead 

122 


MN4JQ 

1.6 

4.1 

106 

185 

PP. 

42J 

196 

180 HMrieye 

185 

+2 

W4L7 

22 

£2 

176 

105 

F P. 

57.4 

105 

101 Heafmcal 

104 


WN4.Q 

12 

4A 

UB 

— 

F P. 

- 

96 

92 Mi Btotach 

92 


re 

- 

— 

— 

- 

F.P. 

- 

50 

X Da Warrants 

46 


re 

re 

- 

- 

130 

FP. 

71.7 

136 

122 Keltar 

128 


WN04.7 

22 

3.7 

UB 

180 

FP. 

SB.1 

183 

ISO Lombrad bra. 

180 

+2 

WH7.7 

2-2 

5& 

9j4 

- 

FP. 

3X1 

16% 

15% Mriand Assets 

18% 


- 

- 

- 

- 

- 

FP. 

34X 

15 

13% My Nnda Town 

14%T 


- 

- 

- 

- 

BO 

FP. 

27X 

87 

87 Oxford Motaator 

74 

+6 

- 

re 

- 

- 

- 

FP. 

285.1 

131 

118 Redraw 

12B 


WN2.7 

Z5 

£6 

16,4 

— 

FP. 

8X3 

61 

63 Secrae Retbement 

60 

-1 

- 

re 

— 

- 

_ 

FP. 

294 

133 

127 SpedeBty Shops 

133 


124 

- 

2A 

- 

136 

FP. 

1£6 

281 

168 Staieraeape VR 

237 

+1 

- 

- 

- 

- 

- 

FP. 

BOX 

100 

100 TR Eura Owth C 

100 


- 

- 

- 

- 

100 

FP. 

43X 

95 

91 Templeton Let Am 

95+1% 

- 

- 

- 

- 

- 

FP. 

3X8 

50 

41 DO VUrta 

42 

+1 

- 

re 

- 

- 

too 

FP. 

54A 

103 

99 Undenekied Aets 

102% 

-% 

re 

- 

- 

- 

150 

FP. 

41X 

160 

154 Vynua 

160 


LAM 

22 

3A 

15L5 


_ 

Nl 

_ 

3pm 

ipm 

Abfeua Scotland 

Iftpm 




8 

M 

16/5 

1%pm 

%pm 

ASed fiacBo 

ftpm 




27 

Nl 

Z2JB 

7ftpm 

4%pm 

Babcock Inti 

5pm 

+% 



3 

Nt 

31/5 

llljpm 

8pm 

T&atftenbridgB 

10 1 zpm 

+1% 

FIXED INI 

270 

H 

877 

84 pm 

49pm 

SteB«nc 

60pm 

-3 

ktaUft 

Anuuftf 

55 

M 

- 

1 flpn 

5pm 


5pm 



*W 1 IU1H B 

anM 

500 

M 

28/5 

83pm 

34pm 

Demerit VoSey 

34pm 


pneu 

p 

para 

113% 

Nl 

28/8 

2pm 

1%pm 

Eaglet 

2pm 

■*% 

la 

W 

5 

Nl 

31/5 

%pm 

%pm 

Fdman Udga 

%pm 


. 

FP. 

192 

NB 

1S/6 

27pm 

4pm 

Huntera Anrtey 

4pm 


. 

FP. 

2 

M 

24/5 

%pm 

%pm 

Tamals 

%pm 


. 

FP. 

24 

M 

- 

11pm 

10pm 

Ur* 

11pm 


- 

FP. 


Renun. 

dale 


1094 

HK)h Low Stock 


Closing +or- 
prioe 
E 


00 85 Creston Land 

ICO 102 Fiscal Props. 


Cv. Ln. 

Ln. 2090 


P Pence. 


1l7%p 104p MMG2P CV. PL 

101*2 Ptairtgan 3(4(10 Cv. Bde. 


’103 


88 

102 

lOSp 

101*2 


- 1 % 




w. 



Money Market 
Trust Funds 


boo m CXB Htr 

CAF Moaw PrbnajBreairt Co Ltd 
ttftnrtwyfeol.wSnacwnraiB 0732770114 

CtesmOapl«Fred-.| 427 -I 4W[»-t«X 

DnaatMOwrCIHeaa 427 -I 429 VW 

Dasoaka Onr ez inwsi I *jb7 - I adets-itti 

H» C0D= CliirttH Dooertt Axoent 

: Fara3SM.LmW1 (CZrSAQ 07t-5MiaiB 


CBBtla&CB 
m a** irate ecaoos 
tebtteiibuaalkrrei 

IILMOI aaaUiam ecwsw 

(tea nooteUM up id- I 4900 


£1 100 (-£20,000- 


in-oiint 


uri 

171 

in 

0- 

418 

119 

4J? 

Ob 

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Commodities oo the move - 
Time to speculate? 

Call Philip O'NeiU 

Tfet 071-329 3333 or Fax 071-329 3919 


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NOT rood mat in FuUcrMonay ■ !hc Iconc-clasi/c Inveslmenl IdlTe n-Vr^ 
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7 S-VC'IS'A Slice!. .31C3R. W : ? 7HD. U< To! Lor.do:: 

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A 0 X exchar.gc- rale spociajs:? <or ever 2C years Fo:t: 071 ■•13yA9^. 

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CURR EMA 1 5LX NACKMKNT 
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Objeclive analysis for professional investo© 

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Fiennes House, 32S«uthgate Stftert.lvlndwteS 1 ?^" 
> H3nt$ S023 SEH f u: 0424T74QG J. 














































































































































32 


FINANCIAL TIMES MONDAY MAY 23 1994 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


IBM 

H* lew9tart 

17% M%«B 
IftlLUItaH 
te%57%MP 

nh 524 Am 

J 

13% ii%iSu»h 

31 vhaaut 
" iKM»m 


1U. FT Be EkM 

» % E MM mb In took 

048 03491 SB 144 14% 14% 

018 U 31 OB 13% 13% 13% 

1JB 16 Z3 2119 85% *5% 85% 

284070 55% 54% 65% 
U 5*5 4% 4% 4% 

£00 4X ZS 1507 43% 42$ 43 

07B 08 175181 29% ffl% 2B% 

0SB 4.1 8 550 12% 12% 12% 

22 2 12% 12% 12% 

4 185 28% 28% 28% 

10% 10% 


044 IX 

i mi 


1 

12 9%AOIM! 

11%. ftEjOtita 
9% 8 AOl Itanagd 072 88 iS ft 8% 8$ 

15% 8% Acilflflr 044 4J1 13 103 11% 10$ 10% 
8% 7AOWBKI 5 12 7 07 7 


IM*» 080 U 107 

lACUGUSp 02011.1 268 

IGrtSe 1X9 11X £58 





1XB1U 


ZIAanSt 060 2.1 14 . 

8% 5% Acton 030 44 2 290 8% 

15% 11% AOIWI 114 0071(15% 

18% 1S%AdmiBgrx 048 28 0 293 17% 
G44S%MUkn sun 58 K* 54% 

31% lS%MMe &D0 118 10 482* 29% 

6% 5 Afoot Grp 016 10 8 13 5% 

M 18% Art® he 0.10 08112 55 17% 

57% 40$AegonADRx 28S 04 12 10 

K$49%Mta. 178 iO 81482 

32% 25% Atocz 048 14 14 806 

20% 18% Moral (US 48 12 2064 1 

4 1% Mho me 1 44 

0L92 22 23 1822 43% 42 

030 OX 22 735 38 37% 

44 081 25% 25% 
1X411X12 99 15% 15% 

10956 24% 24% 
8.16 78 3 104 104 

020 18 9 832 18 15% 

035 18 3f 113 18% 19 

020 1.4 579 15% 14% 

020 1.4 13 111 20% 20% 
028 18 13 201 17$017% 

044 18 21 4299 27% 27 

030 18 40 3414 22% 22% 
180 1.7140 979 57% 57% 
080 22 4 157 20 27$ 

180 78 29 19GB 14% 14% 
040 2 7 16 3957 18% 17% 
184 7.7 11 114S 21% 21% 
OIB 18 13 420 17% 18% 
040 1818 838 24% 24% 
7 47 2 1% 

184 8.1 21 399 20% 10% 
019 18 <7 9% 9% 

124 5.4 14 ZT 73 22% 
057 12 7 4887 35% 34% 
088 13 19 999 26% 28% 
19 544 5 4% 

9 878 25% 21% 
180 22 98 1657 72 7) 

46 2981 25% 24% 
098118 342 8% 8% 

025 38 24 7 7% 7 

088 18 0 3020 9 7% 

048 22 14 182 21% 21% 
050 12 2T 1504 51 50% 

024 28 396 9% 9 

010 04 3318322 24% 23% 
280 68 9 3283 30% 30 
032 29 12 6 17% 17 


Of* 


A 


.iftaw 
jStgAktoaM 
28 19% Akgnmc 
18% 14% NrtMH 
24% 21%AkTeb 
IBS? 101AWML16 
18% 13% Mama Air 
21% 17% Atomy tt 
18% 13% Atari 
26% 2D AMDS 
21% 17% Altar A 
30% 25%Ataki 
25% 18% Afcoflx 
58% 49% AfcoEli 
ao% 23%Atortniwi 
22% 14 Mart 

24% 17MeahU« 

28% 20% AkgP 
18% 13 %ABmCW 
25% ZOAIaigatix 
4% 

27% 17% AkeeCep 
10% BAinna 
Z7$Zl%Aldk1rit 
40% 33%Aka«X 
29% 24 AM Op 

5% 4%ABwt» 

27% 21%Aum 
82 84% Aim 
SftaCVAtmCpA 
11% 8% AmGntac 
8% ft AraPnck 
8% ftAraSd 
28% 20% Ancafl fad 
51% 44 AtotaMl 
9% 8% Am MB 
31 20% Am tart* 

35% 29$ Aafimd 
19% 17 V Am BUM M 
25% ^%AaiBuiM 080 17 14 
8 6$ Ain Cap hie x 0X5 02 
20% 17% An Op Bd 1 M 88 31 
23% 19% Am On W 
61 % 42V taCyaax 
37% 27%AmBPw 
33% 2S$Ambpr 
29% 24% AnGanl 
9% 6% Am Gort in 
27% ZftAmHtoPr 

20% 16% AnHcrtVX 066 38 10 107 1 
65% SBVAoMoraex 282 32 11 4557 56 
0.75300 9 90 2 
040 04 16 9290 
. An applnc 1-00 11.4 414 

27% 23$ Amtos 088 32 

34 19AmtasdM 040 10 7 
8% 7% Am Rad E* 044 £8 5 
27% 21 AmStor 048 IX 71374 25 

22% iBAnWtirStt 126 08 80 19 

27 An fate 188 19 -12 109 27% 

182 48 14 9975 40% 

128 15 fi 11 36% 

124 1.7142 5641114% 

120 18 153942058% 
aio 12 8 7 8% 

012 14 58 7 3% 

1.40 45 10 437 31% 

12 1149 3% 

030 05 81 2677 58% 

27 3198 29% 

094 38 23 77 28%-. _ 

1.44 Z8 25 3148 54% 84% 54% 4% 

25%AMPpePIX 167108 3 25%d25% 25% 

23 Anton 17 HI 28 25% 


2% 2% Am Head* 
93% 81% AsttU 
11 % ' 


. W% 
31 21% 21% 21% 
48 7% 7 7 

87 18% 18 18 

1X9 &2 0 6 20% 20% 20% 

185 18 29 1890 052 51% 51% 
2.40 04 14 2889 28% zb% 28% 
180 13 1313878 30% 29% 30% 
1.18 14 22 5105 28% 28% 26% 
077108 497 7% 7 7% 

130 88 9 SIB 26% 25% 29 

J 17 17% 
856 58% 
, 2 % 2 % 
% 02 92% 

... 9 8% 9% 

407 27% 28% 27% 
949 2ft 20 20 

94 7% 


43% 38% Amrtdi 
43*2 35$ tawwtae 
14% 11%AmM* 
57% 50% Anoco 
9% 7 AmpeoRtt 

4% 3% Ann he 
32% 2B$ Aauotdh 
4% 3%Anacanp 
58% 42% Anatonn 
31% 23$Aadog 
29%24%Mignca 
64% 47% 


24% 

19 19 

St St 

38 36% 
14% 14% 

St St 

I£ 

3% 



18% 14% Arthooyta 0.44 38 14 87 14% 414% 14 
35 30AO1CP 182 58 8 719 34% 33% 

29 22% ApndkQrp 028 18 382956 27% 20* 

10% 9% ApKltaF* 073 78 173 0% 

18% 14%APH 29 2021 17% 10^ 

7% 5 fata Mag 1 196 5% 5% 

22% IftAppIPaiAX 012 08 33 28 21 31% 
27% 22%MMfl OIO 04 18 8757 23% 23% 
50% 43% MtaChaad 280 14 20 19 46% 

51% 47 Arran 48P 480 98 9 48% 

6% 4% Anoco 22292 5% 

29 23%AnnnZ1P 110 88 noo 24% 

57% 46% MimSBH 188 24 39 1786 52% 

45% 33$Am»rBac 15 781 30% 

7% 4%Mn&p 2 99 5 

33% 24% Anti tad an 11 13 48S 24% 04% 

27%21%Anreox 040 18 801123 28% 28% 
31% 22% AMd CM X 040 18 10 100 


3% 1$ Aneth 
39% 31% An W I 



180 17 IS 1892 _ 

I Aria PacF 027 18 99 19% 

020 87 T 337 3 

012 03 25 185 u37 

_ 182 13 30413(157% 

JE%7K%«(W\2* 280 U 3 241% 241% 241% 
38% MAtadeGxx 288 19 15 115 35% 35 35% 

9% 8% AMiSto 028 48 6 46 8% 06% 8% 

21% 17%AMcE0r 184 08 10 481 18% 17% 18 

112% 92%AdMlx 150 03 92 4744 103% 102% 1 

ID 4% ABU 1 207 7% 7% 

20% 17% AumBvjx 088 48 8 89 18% 18% 

12% 8% AtakADfl 048 10 4 219 9% 9% 

24% 17% AiiQBt 040 28 24 278 20% 20% 20% 

12% 8% AtBWaFd OIO 18 52 9% 9% 9% 

5% 47$ AoQata 052 18 23 3945 K “ 

20% 14% Aramco 044 28 11 13 15% 15% 

19 14 AH 084 03 3 570 14% 14% 14% 

45 30% Amt 080 18 191017 34 33 

81% 48$ tax** x 180 10 17 2175 59% 59% 

1*%11%AKfcQ*p 11 78 12 12 12 

7% 5%Aito 23 932 6% 6% 0% 






- B - 


38% 34% BCE 
9% 7 BET AM 

3% saxtneo .. 

17% 10% Briar Fan i 048 2.4 
22% 17 Baton 
27% 21% BddorBC 
|B«P 


288 7.7233 1783 
018 18 32 11 
020 53 I 14 



048 23 46 4380 20% 19% 

040 18 21 2D 23 22% 223 
060 28 25 832U30% 30 30% 




008 04 16 182 13 12 

11 1208 7 

188 07 11 2315 22% 31? 

080 18 29 1205 19% 19' 

184 18 11 6842 33% 

10 138 028% 28% 294 

184 13 8 287 24% 24% 24% 

072 15 5 20 II 10% 11 

IX 184 12 7 247 32% 32% 32% 

58 195 1% 1% 1% 

070 1 A 17 121 51% 50% 51 

180 14 9 9969 48% 47% 47% 

588 14 B 87 dBB 67 

27% 22% Wtoto 088 12 11 5828 27% 18% 27% 

49% 48% Bt Botin Px 384 15 9 47 <tf% 47 

29% 26BHANV 1.10 38 5 5899 20% 20% 29% 

50% 47%B*riMmAx 383 08 40 48% 47% 46 

95 BIBMdfAraBx 680 78 7 83% 83 83% 

94% 94% 199 3.4 5 10U 67% 89% 86% 

38% 3OB0hqn 189 38 97 8 33 32% 33 

30% 22% Bond Kb 058 28 20 1048 24% 23% Z4% 

38jC 29% taraa Op 140 38 51 23 38% 36 38 


JS&BS, 


184 38 11 1336 48% 48% 

- 1Q i 4 


$ 


12% 9% Brim 008 05207 4087 
53% 42% Bauadi 0.98 ZO 19 1353 . 

28% 21%BMto 180 48 35 7812 25% 

20$ 23$ Bay ft Gkx 1.46 ao 14 72 24% 

22% U%Bd7r1838 1.72 13 24 21% 

23% 17% BaxB*™* 057 ZB 8 4853 21% 

50 48% MtSPM 283 5.7 2 48% 

27% Baaing* x 084 28 22 SB 31% 31% 31% 

zuBertmulnx 140 1J 19 423 24% 23% 24% 


* 


«% 49% 
24% 29 

24 24% 
20 % 20 % 
21% 21% 


BE OIR 
GUEST. 


J(Xiy©BOTEL 

DUQIANDSABLON 


Wlwn you stay with us in 
BRUSSELS 
.stay in touch - with 
yoor complimentary copy 
of the 


FINANCIAL TIMES 

ftwmwwiuiiWKw 


g 


SIB 

19% 14% Mta 



20% SBC* H PL x 152 M 12 


YHL ft to ton 

Ok % G 10k Mpfe tor ton 

074 18 131401 39% 36% 38% 

039 03 3 47 8% 0% 8% 

2.76 S2 15 4904 54% 53% 53% 

040 25 14 238 18% « 15$ 
in 48 28 7074 80% Stt 80% 

OfiQ U 22 552 50% 49% 49% 

054 22 Z7 1322 63 24 24% 

1 30 7.4 B 59058% 59% 

1.52 4.1 121175 37% 36% 37% 

042 UZ1 180 35% 35 93 

004 43 4 158 fi % jj +A 
048 29 23 379 17% 17% 17% -% 

44 2301840018250 16400 +200 
040 48143 71 8% 8% 

181831 HI 29% 

280 SA 10 25% 28% 

580 05 7 52% E% 

040 21 6ZH5 18% 18% 

140 38 22 113 48% 48% 

31 1774 14 13% 

010 17 a 88 16 15% 

040 1A 66 9GB 29% 28% 

040 £2 18 1429 18 


IS 

34% 30% BREPrap 

sssss. 

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GET YOUR FT DELIVERED TO YOUR HOME OR 
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A subscription hand ddivety is available m the whole of the Grand Duchy of Luxembourg. 

We will deliver your doily copy of the FT to your home or to your office at no extra charge to you. 

If you would like more information about subscribing please call Philippe de Norman 
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< 5 > 





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X 253 6% 5% 5% 

13 457 IB 18% 16 +% 
048 17 106 23% 22% 23% +% 

25518748 16 16% 17% +ft 

OIB 7 14 8% 5 5 

M 115 11% 11% 11% +% 
173430 23% 28 29% -% 

038 13 IX 28 27% 26 
020 14 27 17% 16% 18% -% 
22 IX 4% 4% 4A +d 

028 23 74 24% 23% 24% 

97 354 115%114%115% +% 
052 15 253 15% 15% 15% +% 

14 29 32% 32% 32% 

OM 375154 45% 44% 45% +% 
040 16 X 37 35% 37+1% 

(MwenGp OK 28 TX 22%02S% 22% -% 
Lone stir 2B1T59 8% 0 8%+% 

4617805 X 57 X +2 

LIXty 21003 2% 2% 2% -d 

UfW 035 4 21 X% 31% 32 *% 


N lb 

E Hi ty tor im tog 
| PtataoBx 012 8 384 20% 19% 20% +% 
11 717 7% 7% 7% +% 
QmhnLog 12 32 7% 7d 7% 
QuMorOan 082 73 25 18% 18% 18% +% 
lhal Food x 020 17 002 23% 22% 22% -% 
Ouenban 8817X1 15% IS 15d 

18 90 nftl 12% 12ft +d 
21 2473 32% 31% 31% -% 


OVCNata* 


HU* 


Rmuui 

fleUtoA 


Rap MUb 

flaaittnd 

Reuters 

Raton tec 

Rbarta 

ftoadwS 

rtMgnt 


-R- 

14 536 15% 14% 15% +% 
51014 S% 5% 5% 

3 484 5% 5% 5% -A 
25 X 18% 18% 18% +% 
30 433 32% 31% 32% -% 
18 154 18% 17% 17% ■% 
2 571 4% 03%. 4% +% 
3% 3% 3% J* 
8% 08% 8% +% 
44 43% 48% -A 
6% 8 8 -% 
35 34% 35 +% 


22 


IV 

LOOS 

LDity 

laddm 

Lagarety 

UKgMBc 

Ufa lech 

IMa 

ItegtadA 

Ltote 

LknotaT 

LkateasM 

Lteeamc 


5 

18 268 
£24 152185 
1 213 
0X10 18 

140 23 582 70% 69% X% 

01213 23 8% 6% 8% 

FtefaSttik 05B 3 739 18% 18% 18% -% 

RoflBanttx 015 3 1S20ulB% 18% 16% +% 
RBMSh 020 11 1772 14% 13% 14 +% 

2& 333 £1% 20% 2fi% -1 

ROIIM on 59 8SB 19% 19 IS -% 

mao 052 2D 122 18% 17% 17% -% 

RSRn 04612 24u20% 29 20% +% 

RjwFWj 131578 7% 7% 7% -% 


- s - 

IK 62561 35% 55% 55% 
0X12 8 17% 16% 16% -% 

JSchhibgtA 03D 171146 23% 22 23%+% 

| Ste MadL 71149 26% 2S X -% 
128X9 15% 14% 15% +% 
8 730 7 6% 6% -% 

ISctaCpX 052 71281 16% 16% 16% +J9 


MB On QOS £11X26 £4% 23% 24% +% 
MS Cert 178145 20 19 19% +1 

Mac tax 060 43 X 1462 13% 14 -A 

IK 14 IX 32% 32% 32% 

Itognrotar 141118 31% 30% 31% *% 
ItegoaGroOTB 121054 19% 19 19%+% 
Mai Box 12 135 6% 8 8 -A 

Marcemty 30 21 10% 9% 10% +% 

123806 4% 04% 4% 

0 200 39% 39% 39% 

1 138 2% 2 Tit +i*a 

18 » 8% 8% 8% -A 

044 10 31 10% 10% 10% 

OK 11 712 21% 21% 21% +% 

101114 8% 8 8% +% 

40 363 53% 52% 52% -1% 

0 G5Z 6% 5% 5% -% 

R 044 12 45 18% 16 16 
UcOOrmtc 048 176083 21% 20% £1% -1% 
McCBwC 50 6830 54% 53% 53% +% 

tod hag 01116 A ft A 

OW 15 IX 12%d11% 12% 
MeUteneSxOK 13 337 22% 31% 21% 

024 7 7 5% 5 5% 

Mentor Cp 016 X X 14% 13% 13% 
MerttB 024 21 1800 11% 11 lid 
MtotMLB OK 10 720 19% 19% 19% 
Uaroty B ora 7 287 28% 28% 20% 

IK 11 1954 30% 30% 30% 
152244 16% 15% 15% 
Methods A OK 15 217 15% 14% 14% 

F 02016 611811% 11% 11% 


+% 

-% 


+% 

-A 

+% 

-4 


tantrum 
Cp 


■♦A 

+% 

+% 


-% 
-% 
+% 
-% 

_ .-% 

UebNaffi £003371166 074% 73% 74% +% 
MtereHfc B 233 4 03% 3% -% 

21 1034 28% 27% Z7% -% 

5 417 6% 5% 5% -% 

131173 5% 5% 5% -% 

32181 7 B% S% +% 

2BU932uB0% 97% 97% -% 
42 8460 48% 45% 47% -% 

OX 11 2830 29% 29% 29% -A 

MdaOsto 05D2B 5 32% 32% 32% -% 

H OS IB 1132 25% 24% £«% -% 


IScereM B USD 6% 8 8% 

IK X 4 40 39 « 

I S-gah 1015225 22% 22% 22% 

sacp 012 25 37 20019% 19% 

| Stands B OK I IX 1ft 1% 1ft 
112 TO 18 2B% 26 K 

Saqaent 683481 14% 13% 14% 

Saqaata 28 410 4ft 4% 4% 

Sore Tech M 10 B% 8% 9% 

Santa* 22 X 4% 4% 4% 

18 IX 17% 17% 17% +% 

OM 17 8X 24% 23% 23% -% 

SHLSjtem 3 239 7 6% 7 +% 

Steamnod Z75420lH7% 16% 16ft +1A 

SboaMxP 9 020 10% 10% 10% -% 

Stars On 18 2B8 21% 20% 21% +% 

StenaTtc 2 IX 3% 3% 3% +A 

ShaMI 033 181X1 4T% 41% 41% 
11311 9% 8% 8% 

SBcflUBc OK X 113 10% 10 10% 

Steoffip 301079 10% 10% 10% 

Stepson OX 24 254 10% 019 19 

SOBHd 30 802 22% 21% 22% 

879780 25% 25% 25% 
Software? 1 1022 4% 4% 4% 

soflmr n 83 i<A 14% 14% 

Conoco x OK14 282S 20%d1B% 20 
SB08M 008 1039921119% 19% 19% 
SpiagteA QK 47 6K 22% 21% 22% 


-% 

+% 

-% 

-% 

+% 


+% 

+% 

+% 

-% 

+% 


lamEom 

Mcrgfldx 


IMM U 


- D - 

DSC On 3220061 X 46% X -A 
Omani 01319 £ 79ft 077 79ft 

DtaSwM 9 80 2% 2% 2% 

20 12 6% 8% B% -% 
14 5(7 14% 14% 14% +% 
ItetytaOp 092 11 87 £5% 25% 25% -% 


- J - 

JUSUdi 13 419 11%011% 11% +% 
Junks OK 1ft 118 11% 11 11 -% 

j£M 01024 120 28% 27 28% +1% 
Jotnaai w a 2Si 28% 22% 22% 
JorwK 10 220 13% 13 IS •% 
Jgan Mad 010152277 1Q%01Q% 10% -% 
JotonCpXlKII Sa 24% 24 24 
JSSRn 084 15 458i£5% 24% 24% ■% 
Jtaltt 028 19 273 19 18% 18% -% 
Juetfcl 01610 778 13% 12% 13 4% 


1305 22% 21% 22% +% 
14 7S 11 11 11 

MDMhTef 432295 17% 18% 17% 
Motion Co OK 19 13 7% 7% 7% 
todtoMT OK 19 2X 28% 2B% 27% 

004 1495 34% 34 34% 

Mato UK 004 27 288 38% 35% 36% +% 
Mosonn 004 IBISES 10% 9% 1ft% +% 
MnshwoF OK 22 2 30% 30% 30% -% 

(to Corine 17 2032 15% 14% 14% -A 

MTSSys Q5B 10 214 28% 26% 28% +% 
totaled 12 2291 26 27% 27% +%, 

Mycogtn 4 fix 11% 10% 10% -% 


-N- 

NWRn 018 13 X 30% 30% 30% +% 
Ft** 072 11 250 16% 18 16% +% 

Nat Pizza 12 105 5% C 5% +% 
Iht Const OK X 400 13 12% 12% +% 

MraStmx OK 20 241 13% 13 13% 

10 24 18 17 18% 

HC 046 X 15u57% 57% 57% *% 
17 630 27% 2B% 27 

NaMSan 22T2868 16% 14% 15% +1% 

Hums X 207 7 6% 8% -% 

Ntoiugen 25 3 7% 7% 7% 

togn 027 19 61 18% 17% 18% 

WkC But OX 23 114 2D% 20 20% +% 

few Image 7 927 10% 9% 9% -% 
MntgeNU 3317171 40 43% 44% -1% 

HewprtCp 00412 10 5% 5% 5% -% 
NdUdDri 211794 7 6% 6% -% 

OK 25 31 56% 55% 56% +1 

040 25 2930 43% 43 43% +% 

12 6 18% 15% 18 -% 

4 Z4 5% 4% 4% 


St JudeMd OX 11 1713 27 28% 28% 
StPaUBc 03010 465 21% 20% 21% 

StegBf 1 101 2% 02A 2% +A 

Steptas X 5167 30% 29 29ft +d 

State Sir 096173719 X 41% 41% -% 
SMI MOO 11 5B1 16% 16% 15% 
MRetfax 0K14 456 21% 2121%+% 
Steal Tee OK 18 X 17 16% 17 +% 
Stek&USA OK 2 5121110% 9% 10% +% 
SUM IX 7 20% 20% 20% +% 

Started 1.10 12 X 20% 20 20% -% 

ISbudDy 22 ns 11% 10% 1(81 A 

sngfcer 028 21 1702 27% 28% 27 -% 
I StaanD 22 812 15 14% 15 +% 
SunttanoB OX 25 67 22% 22 22% +% 
StnanltBcxOB* 14 255 22 21% 22+% 

EuereKTe 34 418 28 25% 25% -% 

Sun Sprat 14 33 5% 05% 5% 

SuMc 111X09 21% 21 21% ■% 

SwttTka 20 1X10% 28% 20% -% 

Symetee SBioso 50% 48% 50% +% 

^finanlic X 494 14% 14% 14% +% 

Syntax OK 18 154 lft% 1818% 4% 
Synerem 67 X 3% 3% 3% -% 
4i»9to 31844 10% 10 10A -A 

Sgnefc S81B7lBf*% 10% 14% 43,^ 

Sgnapta 188292 20% 19% 20 

SysbnSoft 012 15 5B5 13% 13 13% -% 
Symantec 321464 20% 19% 19% -% 
Syatemad 24 858 5% 5% 5% +% 


T-C6»9e 

TjnwePr 

TBCty 


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-% 


+% 

+% 


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Hvttairrt OK 14 784 41% 41 41% +% 


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Now! 


NSC Cop 


OOnrteys 

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OflWaelg 


151958 14% 14% 14% 
19410786 18 17% 17% 

28 999 31% 30% 31 

10 7 4 4 4 


- o - 

a 35 18 17% 17% 


+% 

■ft 


-T- 

7 832 4% 4 4%+% 

OS 182188 29% 29% 29% +% 
17 104 12% 12% 12ft 
TEA CXto 044 23 533 20% 19% 1B% 
Tadtote 121013 16% 17% 18% 
Tteauah OK 14 34 56% 53% 53% 
TUotec 2 18 9% 9 9% 

Total Sys 8 820 ul 4% 14 14% 

TdeComoA 2781X13 19% 19% 19% 

718074 5% 4% 4% -% 
5376861174% 70% 73% +2% 
Totality 101 382007 18 15% 15% +% 

TtoraToc 70 138 8% 6% 8% +A 
TlMRrtOR gOZ7 23 Z7X 23% 23 23% -% 

Tbreecon 3715272 54ft 52 53% 

TJM 022 341817 23 22% 22% 

TUMMtd 2 3M 4% 3% 4 

Tokyo Mte 037 X 37 64% 84% 84% 

Toe temi 00 285 13% 12% 13% 
ToppiOo 0X331 815 8% 6% 6% 
TRBtter 41542 6% 7% 7% 

10 8 11 10% 10% 
Trento* too 11 152 41% 40% 40% 

Ttaw 9 IX 9 2% 3 

Trintte X 202 9% 6% 8% 

TnewiBWJ u» TO iw 19% 19% 19% 

TOng lab 020 121450 7% 06% 7 

TVaRtt OK 172876 22% 21% 21% -A 


-% 

-% 

-% 

+% 

-% 

4% 


161102 21% 20 TO,’. 

15 03 14% 14% 14% 
OgMbav M 0® 8 10 25 a 25 

OMoCa IK 5 613 29% 2B% 28% -% 

OHtoteX U6 11 B7Q 35% 35% 35% -% 

OMNaX OS2 16 24 36% 036 X -% 

OBbanctop IK 7 9X 31% 30% 80% -% 

One Price 14 10 16% 10% 18% 

OptiertR 20 69.22% 21% 22 

OrateaS 4617501 32% 31% 31% +% 

Orb Senes 54 706 21% 29% 21% +% 

Ortnbcti 090 24 155 0% 6% 8% -% 

OroMSepp 9 34 13% 12% 13% +% 

OregodM 031 10 K 5% 4% 5% +% 

Map 3 255 3% 02% 2% 

tyhkBAx 041 X 443 13012% 12% -% 

OtotashT 050 11 32 11% 10% 11% 

OOOTbIx 172 13 41 30% 30 30 -% 


- P - Q - 

IK 13 326 50% 49% 50 

PacOwhp 082 13 130 13%013% 13% 
macro X 132 14 168 22%d21% 21% -1% 
PateflCre 22 397 55% 54 64 -1% 

349099 30% 29% 29% -% 
PWto 024 X 257 34% 33% 34 +% 
PaycoAre 21 197 9% 06% 8% -% 
Rwlaes 050 44 TO 10% 9% 10% +% 
PawTrty B 12 14% 14% 14% +% 
rtmVkg 150 23 18 33% 32 32% 

Penayh £20 18 264 30% 29% 29% 

072 15 479 35% 34% 35 ■% 

Ptoieclil 15 99 6% 5% 5% -A 

PenMBtLxDD 20 30 19% 19 18 -1% 

Faop Bug IK 17 9 57% 57 57% -% 

Peoples H 034 13 3336013% 13% 13% +% 
Petetthe 1.12 TO 77 36% 35 » ■% 
21 230 7% 6% 7 +% 

Ftaeoaai 76 1333 5% 9 5A +A 

OX 4H00 11% 11% 11% 
Rhumbs 25 SX.12% 11% 12A +A 
44 107 17% 17 17% 
Pbnw€p 080 27 528 41 40% 40% -% 
RonacW OK 253451 36% 35% 36% +% 
“ ~ OW 14 101 3ft 24% 2S +% 

Ponra Fed 5 S 8% 9 8 

17 41 0% 6% 8% -% 

PnaUb 006 3 15* 6% 6% 6% -% 
31 IS 25 24% 24% 

hAM 2117087 14% 13% 14A +ft 

Pride Put X 138 5% 5 6% -% 

W"WS 18 47 9% B 9% +% 

PlMOpi 02422 » 25% 25 76 -% 


-u- 

| USHBw OK 14WM 39% 38% 39% +% 
2 «2 5% 5% 5% 
UHes&s UO TO 112 16015% w +% 
USTrt 200 11 a 50% 50% 80% +% 

Unfed St 0X11 196 12% 12% 12% +£ 

UtehO OK 21 6 U27 27 Z7 *% 

(WriDX IK 21 510 38% 39 39% +% 

USBencp OK 1010452 26% 25% 28ft +H 
US Energy 28 17 4% 4ft 4ft +& 

USTCwp 112 10 78 14% 13% 14A A 
(Aahlied 12 122 7% 7% 7% 
UUTekre 10 K 45% 44% 44% 

Mx 16 12 5% 5% 5% 


- V - 

Vaimrat DO 31 in 14% 13% 14% 

VngriCel K 456 34*4 33% 33% -% 

Vtotfana 181090 17% 16% 16% -% 

Hcor X 288 26% S% 25% -% 

VkupM 9 308 1S%014% 15% 
VtotoXc 281795 21% 20% 2Q% -% 

VLSTBCb 31 3858 14% 13A 14A +A 

Wmo 084 18 52 in 09% 100 -% 


- w- 

Wraner EnxaiO 20 51 26% 26% 26% -% 
77 135 4% 4A 4% +A 
tosbUhOBaK 76856 19% 19% 19% *A 
HWkFMSL OX 9 558 22% 22 22 -% 

WteWteA 022 9 250 23 22% 22% -% 

tana PM 024 17 219 27% 20% 27% +% 
TMMO 2K 15 117 40% 30% 40% +% 

20 0« 4% 3% 3% -% 

072 11 1042 K 29% 29?| +A 
5 473 12 11% 11% A 

1 698 TO 15% 15% 

15 130 3% 3 3 -% 

OK 228113 48 44% 45% +% 

TOwsSonama n28M 35% 33% 33% -1% 

tofahasL OK 12 in 14% 14% 14% 
Vflhtyt OX 25 1383 20 19 19% +% 
WP&oty OC3 22 567 3ft 3% 3% -A 
WWMfrGXQX 41912 0% B% 8% 


-X- Y-Z- 

|»BC » 5283 40% 38% 39% -1 A 
XonaCDTO 2 3« 3% 3% 3A +A 
ftfcte 094 2811X 19% 18% ig% +% 
« SO 309 4% 4% 4A Z£ 
|2tortMi 112 9 1251140% 36 40% +£5 


Wert One 
taPub 


ta SW A 
(Mratta 


t 




34 FINANCIAL TIMES MONDAY MAY 23 1994 


FT GUIDE TO THE WEEK 



23 


MONDAY 

Germany elects president 

The federal 
assembly, com- 
posed half of 
members of 
the federal 
parliament 

(the Bundestag) 
and half of 
deputies from 
the 12 state 
parliaments 
(Landtage) 
convenes in 
Berlin to choose Germany’s next state 
president Hie quest for a successor 
to the distinguished Richard van Weiz- 
sficker (above) looks set to go through 
three fUU rounds of voting. 

Roman Herzog, president of the con- 
* stitutional court is Chancellor Kohl’s 
choice, and the man most likely to 
succeed But Johannes Rau, the Social 
Democrats' nominee, is the popular 
choice, and could yet give him a run 
for his money. 

Nigerian democracy! Local polling 
begins in Nigeria to elect 270 delegates 
to the national constitutional confer- 
ence, due on June 27. 

Campaigners for democracy have 
denounced the conference as a sham, 
as a ban on all political parties and 
associations is in force until 1995. Large 
parts of southern Nigeria are expected 
to boycott the polls and the conference. 

UK economy: The deficit with 
non-European Union countries is expec- 
ted to have widened slightly to £700m 
in April, from £675x0 in March. 

While the UK’s trade deficit has been 
broadly stable in money terms over 
the past few months, the trend of 
import and export volumes has deterio- 
rated. Some analysts see that as a wor- 
rying sign, although doubts r emain 
over the accuracy of the figures, partic- 
ularly the price/volume split 

Crimea: Victor Chernomyrdin, the 
R ussian prime minister, meets Ukrai- 
nian counterpart. Yefim Zvyagflsky, 
in Moscow to discuss the worsening 
situation in Crimea. Hie Crimean par- 
liament voted on Friday for virtual 
independence from Ukraine. 

Douglas Hurd, UK foreign secretary, 
is also in Moscow to meet Mr Cherno- 
myrdin and Russian president Boris 
Yeltsin. 

Romania issues a 10,000 lei (US$6) 
banknote after three years of triple 
digit inflation. Before the end of com- 
munism in 1989, the largest denomina- 
tion banknote was 100 leL 

Tennis: The French Open begins 
at Stade Roland Garros in Paris (to 
June 5). 

Holidays: Austria. Belgium, Denmark, 
France, Germany, Hungary, Luxem- 
bourg. Netherlands, Norway, Sweden, 
Switzerland (Whit Monday). Canada 
(Victory Day). Egypt, Jordan, Kuwait 
Pakistan, Saudi Arabia, Syria, (Eid 
al-Adha). Morocco and Turkey. 


24 


TUESDAY 


Russia outlines Nato policy 

General Pavel Grachev, Russia’s 
defence minister, visits Nato headquar- 
ters in Brussels. He will give a speech 
which is expected to present Russia’s 
new military doctrine and lay out the 
terms on which his country wants 
to cooperate with Nato in such areas 
as peace-keeping and the ^rrhangw 
of know-how. 

Baltic Council foreign ministers 
gather fora twoday meeting is the 
Estonian capital, Tallinn. Worsening 
relations between Estonia and Russia 
will be on the agenda. Hie ministers 
will also discuss Joint initiatives includ- 
ing the sooalled “Eurofaculty”, the 
Riga-based university specialising in 
law and economics, and the Via Baltica 
motorway to link Helsinki and Warsaw. 

The Council, set up in 1992, includes 
Germany. Denmark, Sweden, Finland, 
Norway, Poland, Russia. Lithuania, 
Latvia. Estonia and the European Com- 
mission. 

So util African president Nelson 
Mandela makes a state of the nation 
speech to a joint session of the two 
houses in the new all-race parliament 
Following a cabinet meeting on Mon- 
day he is due to set out plans for spend- 
ing on reconstruction and development 

EU fraud: Jo Carey, a former official 
in the UK Treasury who worked for 
nine years at European Court of Audi- 
tors. the EU’s financial watchdog, is 
quizzed at Westminster by the House 
of Lards European Affair s Committee 
on the extent of EU fraud. 

UK competitiveness: Plans to 
privatise the Civil Aviation Authority’s 
air traffic control services are expected 
to feature in a government white paper 
on competitiveness out today. 

BBC strike: A series of twice-weekly 
strikes by journalists and technicians 
starting today could hit the pro- 
grammes of both BBC World Service 
Radio and World Service Television 
as well as live programmes in the UK. 
The stoppages could last for 24 hours 
- or 10 minutes. 

The immediate cause of the dispute 
is plans for performance-related pay 
and for different rates of overtime pay 
and allowances in different parts of 
the Corporation. 

Chelsea Rawer Show: 

The Royal Hor- 
ticultural Soci- 
ety’s annual 
bash opens 
to members, 
after a royal 
gala opening 
on Monday. 
Open to non- 
members from 
Thursday.lt 
finishes on 
Friday. 

Holidays: Ecuador (Independence 
Day). Jordan, Pakistan, Saudi Arabia, 
Syria (Bid al Adha). Thailand, Turkey. 


25 


WEDNESDAY 

Greenspan on derivatives 

Alan Greenspan, chai rm a n of the US 
Federal Reserve, and Arthur Levitt, 
chairman of the Securities and 
EvehflTig P Commission, today give 
evidence to a Congressional hearing 
about the impact of derivatives on 

fingpiriaT 

Last week, regulation of derivatives 
(financial instruments such as swaps 
and options) was criticised in a report 
to Congress from the General Account- 
ing Office. The report said that inade- 
quate regulation posed a threat to the 
US and international ftnanria] system. 

Argentina's constituent assembly 
convenes to begin re w rit in g the coun- 
try’s constitution. The main aim is 
to lift the 1853 constitution’s ban on 
successive presidential terms, allowing 
President Carlos Menem (below) to 
stand for re-election next year. 

An agreement 
that Mr 

Menem’s Peron- 
ist party signed 
with ex-presi- 
dent Raul 
Alfonsfn’s oppo- 
sition Radical 
party last 
December 
ensures that 
this and other 
reforms 

stT pngtVifmirtg thft legisla ture ftT> d j fldt . 
tiary will be passed by a big majority. 

Energy ministers from the 
European Union meet in Brussels to 
ritepnVg the direction of energy policy. 
They will discuss energy liberalisation 
and the introduction of competition 
into the supply of electricity. 

Nato defence ministers consider the 
future of the alliance against a back- 
ground of uncertainty over its post-cold 
war role. There are differences over 
Nato’s role in Bosnia, and over how 
far it should go in extending security 
guarantees to former members of the 
Warsaw Pact 

Labour's National Executive 
Committee meets in London to decide 

the timing of the laader shi p ranfggt 
following the death of John Smith 

The Tokyo Stock Ex chan ge holds 
a general meeting to elect Mitsuhide 
Yamaguchi, ex-president of the Export- 
Import Bank of Japan as president 

UK National Lottery: Hie winner 
of the contest to run a lottery that 
could have revenues of £3bn-£4bn 
within the next few years will be 
announced. Bids were accepted from 
eight consortia for the private sector 
lottery, designed to raise money for 
the arts, charities, a millenninm fund, 
thfl national heritage ami sport. 

FT Surv ey s Ireland and Tennessee. 

Holidays India (Bombay only), 
Indones i a, Jordan (Independence Day), 
Malaysia, Saudi Arabia, Singapore. 

Sri Lanka, Zimbabwe. 


26 


THURSDAY 


Quest for a stable Europe 

Foreign ministers from most European 
countries, the US and Russia are expec- 
ted in Paris for the fonnal opening 
by France's prime minister Edouard 
Ballad ur of “the conference on Euro- 
pean stability" (to May 27). Mr Balladur 
proposed the idea a year ago as a 
means of trying to prevent ra second 
Yugoslavia” in other parts uf central 
and eastern Europe. The aim of the 

conference, chaired by the EU presi- 
dency, is for countries to reach accords 
of “good neighbouriiness”, 
frontier and minority differences. 

Finns into Europe: Two decisions 
affecting Finland’s hopes of joining 
the EU next January win be taken 
today. The government will set a date 
for a referendum on EU membership, 
and fl gmriq on how to mmpgngnitt the 
country’s agriculture and food indus- 
tries for adjusting to EU price levels. 

The poll is likely to be in October 
before similar votes in Sweden and 
Norway. This would secure the voting 
sequence seen as the best way of bring- 
ing all three Nordic states into the 
EU. Support for membership is stron- 
gest in Finland and weakest in Norway. 

Russia’s, foreign minister Victor 
Chernomyrdin begins a trip to Beijing 
(to May 29) to dismiss trade and secu- 
rity issues, including North Korea’s 
reluctance to allow international 
inspections of its flnpiea r facilities. 

The Bundesbank covncIP* last 
meeting, on May H, saw a cut of half 
a percentage point in the key Lombard 
and disofwmt- rates, to 4-5 and fi per 
cent respectively. As a result, traders 
are not expecting today's meeting to 
lead to a rate change, especially after 
Hans Hetmeyer, the Bundesbank presi- 
dent, said last week that “as far as 
central bank interest rates are con- 
cerned, the horizon has now been 
cleared for a fairly long time”. 

Saleroom: Sotheby's auction of 
musical manuscripts mntaing a greet 
rarity, a small calf bound volume con- 
taining the only keyboard nude sur- 
viving in the hand of Henry Purcell, 
the late 17th century English composer. 
Found last year in another ai\ctirwi 
house in a bundle of moste, it is consid- 
ered to be tiie greatest British musical 
discovery of recent years. 

Among the 
21 pieces are 
hitherto 
unknown works 
and Sotheby's 
anticipates 
bids around 
£300,000. Purcell 
is one of the 
few British 
composers 
with an interna- 
tional reputa- 
tion, and attributed music of this early 
date is extremely rare. 

FT Survey*; International Capital I 
Markets and BrazlL 








FRIDAY 

Solzhenitsyn returns home 

Alexander Solzhenitsyn, Russia's 
greatest living writer, returns home 
after 20 years in ffik 
The 75-year-old Nobel laureate will 
fly to Vladivostok from Alaska and 
then travel across Russia to reacquaint 
himself with his fwimpinnH 

Fed chairman Alan Greenspan 
testifies on monetary policy before 

a fion gTwmrinrpal hearing 

The same morning the US Commerce 
Department releases preliminary GDP 
figures for the first quarter. Little 
nhang p js gqtfdnH from its initial esti- 
mates of ZA per cent 

The Kekfamran, Japan’s Federation 
of Economic Organisations, holds a 
general meeting to elect Shoichiro 
Toy oda, chairman of Toyota, as its 
np w chairman. 

Bath Music festival begins (to June 
12). The theme “Ancient Echoes” links 
modern music with music of the past. 
Henryk Gorecki and Michael Nyman 
are the featured 20th-century compos- 
ers. 

FT Surveys: Relocation in the UK. 
Holi da y*: Sri Lanka. 


28-29 


WEEKEND 

Hungary goes to the polls 

The second and decisive round of 
Hungary’s parliamentary elections 
takes place on Sunday. The Hungarian 
Socialist Party, successor to the com- 
munist regime, took a commanding - 
lead in the first round and is poised 
to win an absolute majority. 


vote in the first round 

of presidential elections on Sunday. 

If no candidate wins a majority, there 
will be a run-off mi June 19. Opinion 
polls put the Liberal Ernesto Samper 
and the Conservative Andres Pastrana 
very dose, with the other candidates 
trailing far behind. 

CUyndeboume Opera House, near 
Lewes in Sussex, re-opens on Saturday 
in its new £33m auditorium with a 
performance of Mozart’s Le Nozze di 
Figaro, the opera with which it was 
launched 80 years ago. 

Motor racing: The Spanish Grand 
Prix takes place in Barcelona, while 
the fndianapnife 500, part of the Indy car 
World Series, is run in Indianapolis, 
Indiana. 


Compiled by Patrick StHes and lan 
Eotdsuorth. Fax: (+44) (0)71 873 3194 




.tsv'j . r 


:s B i 'i 


- "• 1 


ECONOMIC DIARY 


Other economic news 




Statistics to be released this week 

- ' /' - 

* *\ . 

Wednesday: The governor of 
the Bank of England. Eddie 
George, gives evidence on the 
Bank and the UK economy to 
the Treasury select committee. 

UK gross domestic product 
figures are expected to confirm 
an earlier estimate that the 

Dv 

nafeewd 

Court* 

Seaaorte 

StutMfa 

Forecast . 

ftatae. 

■ Acta* 

o* ■ 

. Refereed Orentiy 

State* 

rweoret ;• • 

•ijrefere;. *•: 
■; a ctod ■ 

MCR 

UK 

Nan EC trade fed Apri 

• -£700m . 

-£675m ' 

Dtatag Wa week... . 

"" • 

-.- ~ •• * • . 

. * . . ■ • . • * 

May 23 

Italy 

CR OSes** • 

4%. .*•' 

496 

Germany 

Mar trade hd . 

OM7te- - 


Weds 

US 

Apr durable goods orders 

.196 .. 

‘ 08% 

Germany- 

Mercimnt account 

OM-tbn 

■•'•D»*8bir ./• 

May 25 

us 

Apr durable goods sMpmants 


• 0.7% 

Germany 

MS Apr {Horn 04 base) 

'*34% 

. ia4%; ' 

economy grew by 0.7 per cent 


US 

Apr existing tocnarmles 

- 

. ..JMJOflm • 

Germany 

May COL". Baden Wbatt 

- . . -• 


in the first quarter. 

The National Institute of 
Economic and Social Research 


Fr 

Apr household oanstruedarr 

059* ‘ 

07%. . 

Germany 

May COL- North FUndW 

- ’ -J 

'■ 3% ■ • '.L 


UK. 

MarGOP revised** 

1X8% 

06% 

Germany 

May COL* North WneM 

■ ' .*< „ .' 


publishes its latest economic 
forecast. 

Friday: Hie Confederation of 


Aus 

Prtv cap expenditure (Qt) 

S% 

• 3% • 

Germany* 

May CpL** KBsee . 


- 32% ' 

Thor 

US 

tattfal deku We May 21 

- 

367.000 

Germany 

May C0t- Bavaria 

. . • 

. &S96.. •• ' 

British Industry's monthly 
industrial trends survey will 
provide further evidence of the 

May 20 

US 

State benefits We May 14 


2-7m 

Germany • 

Mey COL* Bavaria * 


. A3% •• ' 


US 

Ml We May 18 

- • 

$32 bn 

’ .Germany 

May COL national (praflmtaaryf 

3% * 

'..32% .V 

strength of the (JK recovery. 
One key indicator will be 
domestic orders, which may 


US 

M2 We May 18 

- ‘ . 

S8.71* 

Goman 

May COL national {prefiffltaatyy - 

tX2% * * 

txa%. 


US 

M3 We May 16 

- 

S2.1bn 

Germany 

Apr ICON censtruaSon.cfenBte 

- ' - 

88 * V 

have been affected by April’s 
tax increases, but analysts will 
also scrutinise the balance of 


Jap 

Mar cons apandtag** 

- 

-1X596 

'Germany 

tFOjbustesedtmto 

_ 

854% 


Jap 

Mar workers’ spending** 

- 

-1.6% 

Germany 

Apr Imp prices . 

- 

. -ae% 

companies which intend to 
raise prices. Previous surveys 
have shown little sign of infla- 


Jap 

Mar workers’ teams 


-1.196 

fcfiy 

Apr bei of payment * 

t-tfitn • 

n 

Frf 

US 

Q1 GDP prefimtery 

2.5% 

2j6% 

Italy 

Apr official reserves 

L92JSD 

i92m. 

tionary pressure. 

Japanese inflation has been 
phenomenally low for some 
time, but Morgan Grenfell is 
expecting the Tokyo May data 
to disappoint, with the annual 
rate moving up to 1.2 per cent 
The market consensus, how- 
ever, is 0.8 per cent both for 

May 27 

US 

Q1 pest-tax profits 

- 

75% 

Italy ' 

Apr M2~ 

7.3% 

7.1% 


US 

May Michigan 

- 

91.5 

Italy 

Apr bank tantfng 

-1.4% 

-G236 / 


ua 

Apr exp price index 


02% 

Bdgkjrn 

May OPT* 

2-496 , 

44% 


us 

Apr tap price index 

- 

oxm • 

Denmotc 

Apr OPT 

1-796 

t.7% ■ .y 


Jap 

May CPI -Tokyo” 

08% 

' 08% 

Norway 

May unemployment rate 

s.i%- 

5.1% 


Jap 

Apr CPI - national** 

1X8% . . , . 

- 1J3% . . ' ' 

. Swiss 

May CfTRjdraT; . 

09« " • 

• 196 

the May Tokyo figure and for 
the April whole nation infla- 
tion rate. 


Jap 

Apr rates sales 

'-£2% 

-3% 

Roland 

Apr bade bat 

FB^bo • 

Ft2,7bs ’ 


Can 

Apr tad prod prioe Index 

05% _ • 

• 0 A% 

-month onmonth, "year, on year Statistics, ccurteyMMS MamaBonaL 


ACROSS 

l Order about a quarter after 
last month (6) 

4 Standing order (6) 
s Returned books to teacher 
taking diner’s order? (7) 

9 Order book (7) 

11 Order uniform - it's needed 
by July 4th (IQ) 

12 Result of putting notes in 
order? ft) 

13 Order to cricketers to con- 
tinue supplying staff? (5) 

14 May result in an incorrect 
order in writing (S) 

16 It’s usually suspended, always 
in date order fS) 

18 Order from magistrates may 
find you here! (5) 

20 Order cordial? (4) 

21 Order which made Terry 
faint, perhaps (10) 

23 Team needs vehicle - order It 
from the bar (7) 

24 They order him to “go to 
blazes’! (7) 

25 Order Sally to stop everyone 
leaving (6) 

26 Business order prepared 
before the meeting? (6) 


DOWN 

1 Push right inside a seedy club 
(5) 

2 Leading commentator right to 
quote ruined game (7) 

3 Coach and first eleven In 
scrap when going by rail (9) 

5 Small people drive off from 
here to New York (5) 

6 Plays with present - a top toy 
- inside (7) 

7 Still boused in filthy places 
for a time (9) 

10 Which protects people from 
unpleasant blows? (9) 

13 See if a bit off gladdens! (9) 

15 Hiding underground gets in 
before midnight (9) 

17 The Parisian sends bust 
round, unbroken (7) 

19 Sailors left advance payment 
on top or light case (7) 

21 Behind RAF mess Is Griffin’s 
skeleton (5) 

22 A regiment takes it up with a 
crown (5) 



MONDAY PRIZE CROSSWORD 

No. 8,460 Set by GRIFFIN 

A prize of a PwHkan New Classic 390 Ed on tain pen for the first correct 
solution opened and five runner-up prizes of £35 Paftkan vouchers will be 
awarded. Solutions by Thursday June 2, marked Monday Crossword 8,460 
On the envelope, to the Financial Times, 1 Southwark Bridge. London SEl 
9HL. Solution on Monday June 6. 

Name — — — .. ... 

Address. — — — 


Winners 8,448 

P. Bush, Saffron Walden. 
Essex 

M. Brittenden, London W2 
P.GJd. Dunn, Bulls Green, 
Herts 

B.R. Lawrence, Frette nham 
Norfolk 

Mrs J.A. Nock. Quinton, Bir- 
mingham 

D. Parsons. Cyncoed. Cardiff 


Solution 8,448 


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Of broking and jobbing the Peiikan's fond. 

See how sweetly he puts your word onto bond- 


JOTTER PAP]