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FINANCIAL TIMES 


Europe's Business Newsoaoer 


TUESDAY MAY 24 1994 


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“SEST" Ukraine and Russia fail to agree on Crimea 

GfsfA A||fcil*|||4fiAC by JO Batiiay In Kiev and John Lloyd mean parliament as a direct duBn ge to ■ — 11 — 1 constitution, creating a Crimean citizen- armoured personnel carriers 1 

w in (Moscow its sovereignty over the p enin su l a. Inching towards the chasm In ship and deriding to conduct relations sent to a position near the Crin 


China's senior vice-pre- 
mier in charge of the 
economy, Zhu Rongji 
(left), has signalled 
an easing of tight restric- 
tions on lending to 
ailing state enterprises 
and has appealed for 
greater efforts to 
Increase grain and 
cotton production. 

Hrw remarks, published 
an the front pages 
oE China's m ain newspapers. Indicate growing 
official anxiety over labour unrest In cash-starved 
state factories and reflect worries about a serious 
shortfall in cotton production accompanied by 
signs of growing ag it ation, among peasants. Page 16 

Yeltsin acts to revive reform: Russian 
president Boris Yeltsin, seeking to revive economic 
reform, scrapped quotas and licences for oil and 
gas exports from July l and offered a three-year 
tax holiday to foreign Investors in the rnamTfartirr . 
ingr sector. Page 16 

British Airways reported a 63 per cent rise 
in pre-tax profits to more than £30Gm ($45Qm) 
for the year to March, hut warned it might have 
to make provisions on a £275£m investment in 
US Air, its troubled US partner. Page 17; Lex. 

Page 16; The USAir shadow. Page 27 

Hopes rise to US Japan tirade talks; US 

and Japanese officials went into their fifth day 
Of tradg talfca in Washington amid PTpw»fa+innc 
that they were headed towards agreement an 
at least some of their disputes. Page 16; Japanese 
buying more foreign cars. Page 6 

Attack pr o mpt s Ulster security rev ie w: 

Britain and the Irish Republic are to review secu- 
rity co-operation after a failed weekend bomb 
attack in Dublin rlafnmd hy unionis t pa rawHHten- y 
grouping, the Ulster Volunteer Force. Page 7 

Boeing, world’s largest manufacturer of 
commercial aircraft, forecast demand for new 
airliners worth $S80hn in the next 20 years to 
meet the growth in air travel and the need of 
airlines to replace older jets. Page 6 

Nintendo profits fall: Weak consumer spending 
and the sharp appreciation of the yen ended the 
spectacular rise of Nintendo, Japanese video 
games mak er, which repdrted-d'flhalp 'drop in • 
sales and pretax profits. Page 17 

Call to Improve aid pr op — i An 

evaluation of international aid by London-based 
charity Actionaid has sharply criticised tied aid 
and says only 6.5 per cent of aid is spent on meeting 
the needs of the poorest Page 4 

Hungary's Matav float Mocked: Deutsche 
Telekom and Ameritecb, the German and US 
telecoms companies, hove blocked the Hungarian 
govern m ent's plans to float national telecoms 
utility Matav on the Budapest stodonaikeL Page 17 

UN to monitor Haiti sanctions: A team 
of United Nations observers has arrived in the 
Dominican Republic to monitor the country's 
adherence to tighter economic sanctions against 
neighbouring Haiti. Page 5 

Congress to debate Bosnia arms ban: 

The House of Representatives today debates a 
resolution requiring the US to stop enforcing 
the United Nations arms embargo against former 
Yugoslavia and to supply weapons to the Bosnian 
Moslem government Page 5 

Gr ee ce to partasH stats t e l eco mm Greece’s 
socialist government announced the partial privati- 
sation of state tetecoimnunfortions company 
OTE in a move apparently aimed at restoring 
confidence to local financial markets. Page 1 

OB export* cut UK deficit: A jump in oil 
exports helped narrow the UK’s visible trade 
deficit with countries outside the European Union 
to £56&n ($849m) in April, compared with £686m 
in March. Page 8 

nrvamnr to hmil Australian obdosMob: 

Australia's opposition Liberal party voted to replace 
leader John Hewson, who led the party to a surprise 
defeat in last year’s elections, with shadow trea- 
surer Alexander Downer. Page 4 

Thai tunnel theft: Thieves in Bangkok made 
off with 2LSm baht ($100,000) from a branch of 
the Thai Military bank after crawling 600 metres 
along a drainpipe from the Chao Phraya river 
and then taking at least a week to diga lS metre 
tunnel Into the bank’s vault. 


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by JIB Barclay in Kiev and John Lloyd 

In Moscow 

Tal k s between the Russian and 
Ukrainian prime ministers yesterday 
felled to resolve the growing crisis in the 
Ukrainian region of Crimea, but were 
due to resume today with the partkrfpa- 
tion of a senior official from Crimea 
itseK. 

The talks in Moscow,' prompted by 
fears that Constitutional raa/te 

the Crimean regional parUamant last 
week could draw Russia and Ukraine 
into conflict, had apparently mad* little 
headway. Ukraine sees growing seces- 
sionist sentiment in the pro-Russian Cri- 


mean parliament as a direct rfmiigngp to 
its sovereignty over the peninsula. 

Mr Mykhalo Mykhalchenko. domestic 
policy adviser to the Ukrainian presi- 
dent Mr Leonid Kravchuk, said last 
night that there was' no possibility that 
the Ukrainian gnuy^ rpment would agree 
even to a federal arrangement with Cri- 
mea, let alone a near-independent status 

“We are not a federal state like Russia 
- we are a unitary state. We do not sign 
treaties with our regions,” Mr Mykhal- 
c heokp arid 

However, there was a concession to 
Crimea's status implicit in its rncTn^pp 
in today's folks. Mr Yevgeny Saburov, 
thp Crimean vice-president and a former 


Inching towards the chasm In 
Crimea Pag* 3 

Editorial Comment Page 15 

Russian finance minister and govern- 
ment adviser was called to Moscow last 
night. 

The move appeared to show the rela- 
tive weakness of Ukraine in the talks, 
which are ^Homp f-m g to settle the own- 
ership of the Crimea-based Black Sea 
naval fleet The agenda includes eco- 
nomic cooperation between Crimea and, 
Russia, and also Crimea’s decision last ‘ 
Friday to adopt a virtually independent 


constitution, creating a Crimean arisen- 
ship and deriding to conduct relations 
with Kiev by treaty. 

Mr Douglas Hurd, the British foreign 
secretary, who is in Moscow for ta lks 
with the country’s leaders, said last 
night he had been assured by Mr Andrei 
Kozyrev, his Russian counterpart, that 
Crimea’s s ta tus as part of Ukraine was 
not in doubt 

“We also said that this shrmlri be han- 
dled in accordance with the principles of 
the Conference of Security and Coopera- 
tion in Europe, of which we are all mem- 
bers - awl that riiic would exclude the 
use of force," Mr Hurd said. 

A report that some 20 Ukrainian 


armoured personnel carriers had been 
sent to a position, near the Crimean capi- 
tal of Simferopol was confirmed yester- 
day by the Crimean authorities - 
though they said it was a “normal" 
movement of armour. 

At the name time, a spokesman for the 
extreme Ukrainian nationalist UNA- 
Unso group in Lviv, in western Ukraine, 
said that some 200 volunteers were 
being despatched to Crimea to help 
secure it as part of Ukraine. 

Negotiations will start today in Kiev 
between senior parliamentarians from 
Crimea and their opposite numbers in 
the Ukrainian parliament, the prospects 
for agreement are poor. 


Boost for 
Kohl as 


wins 


By Quentin Peel bi Baffin 

lift* Raman Herzog, president of 
the German constitutional court, 
was yesterday elected as the next 
president of Germany, in spite of 

a split within tile Tanks of the 

ruling coalition. 

After three rounds of voting in 
the l,320etrong federal assembly, 
Mr Herzog, 60, the country’s most 
senior judge and a member of 
Chancellor Helmut Kohl’s Chris- 
tian Democratic Union, emerged 
with a dear victory over . Mr 
Johannes Rail, the Socid Demo- ~ 
crat prime minister of tire state 
Of North KHngJ W^HB fphalht 

The final count of 666 votes to 
605 in the German Reichstag 
building in Berlin cleared the 
way for Mr Herzog to succeed 
President Richard von Weiz- 
sScker in the largely ceremonial, 
but very visible and symbolic 
post of head of state on July L 

His victoy will give an impor- 
tant boost to the electoral hopes 
of Mr Kohl’s CDU, and the Bavar- 
ia-based Christian Social Union, 
its conservative aster party, for 
the coining European and 
national elections, a s well as 14 
other state ami local polls. 

However, it only came about 
after a split within the ranks of 
the Free Democratic party, the 
minority liberal party in toe rul- 
ing coalition, which saw two- 
thirds of the party voting to- Mr 
Herzog, and one-third for Mr Rau. 

Mr Herzog, a Bavarian Protes- 
tant with a reputation as an inde- 
pendently minded conservative, 
both as a constitutional, lawyer 
and former interior minister, 
gave a tearful acceptance speech 


alter his election as the first Ger- 
man president to be elected in a 
united federal assembly. 

-We never thnn ght that g pcb a 
mnrnmt would have Fioon possi- 
ble again in our lives,” he said, 
reminding his audience that 

German judge who defies the 
laws of politics .... -~.Page 2 

when toe last west German presi- 
dent was elected in Berlin, in 
I960; the Eq#. German- commu- 
nist government closed &e bon 
der in protest 

He appealed to both east and 
west Germans to overcome the 
barriers between than in the pro- 1 
Cess Of TTmfirfltimv 

"I will do everything possible: 
to be the federal president of all' 
Germans," he said. "There , are 
many barriers in our state and 
our society which we must over- 
come. But there is an enormous 
amount In common which binds 
us afl." 

He called on west Germans to 
make further material sacrifices 
for the sake of unification, saying 
they amounted to “co mp ens at ion 
for the injustice of world history” 
which left Germany divided at 
the river Elbe. 

The final outcome of the vote 
was not in doubt once the divi- 
sion in toe ranks of the FDP 
became clear. The 109-strong 
party group split 69 to 40 in 
favour of Mr Herzog. The CD U/ 
CSU candidate had a clear lead in 
an three rounds of voting, but 
lacked the absolute majority 
needed to be elected in the first 
two rounds. 





V 


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some offfoe thousands of corpses, whfeh ha?fr floated downriver into Lake Victoria from the killing fields in 
Local rarirfwite claim as many as w bodies an hour are washing up on Ugandan shores* pr o m p ti ng the country’s 
yesterday for international help to pull the corpses out. hm*- 


Sandoz to buy Gerber for $3.7bn 


By lan Rodger In Zorich and 
Richard Tomldns In New York 

Gerber Products, by far the 
biggest maker of baby food in the 
US, announced yestoday that it 
bad agreed to a $3.7bn cash bid 
from Sandoz, the Swiss pharma- 
ceuticals and chemicals group. 

The price offered - equivalent 
to $53 per Gerber share, more 
than 50 per cent above the level 
at which the stock closed on Fri- 
day - surprised Wall Street ana- 
lysts and appeared to be pitched 
at a level intended to ward off 
other bidders. 

It also brought excitement to 
the US food manufacturing sec- 
tor, recently depressed over the 
sales outlook for higher-priced 
branded goods. Shares of other 
food companies such as Hersbey 
Foods, CPC International and 


Quaker Oats rose sharply. Ger- 
ber’s shares were up $15% at 
$50% on the New York Stock 
Exchange at midday. 

Sandoz’s bid comes only three 
weeks after its Basle-baaed neigh- 
bour, Roche, offered a similarly 
stylish $5.Sbn in cash to Syntax, 
a US pharmaceuticals group. 
Both Swiss groups have strong 
net cash positions. 

Gerber's sales have been flat in 


recent years, reflecting a decline 
in US birth rates, to Alfred Pier- 
gallini, Gerber’s chairman and 
chief executive, said the board 
had agreed to the merger because 
the company’s best source , of 
future sales growth lay overseas. 

For Gerber to exploit the inter- 
national prospects alone would 
require heavy investment over 
many years, to PiergaEini said, 
hut joining with Sandoz would 


provide Gerber with ready-made 
distribution, rhamteh fn most big 
international markets. 

Sandoz already has a large 
nutrition business, built around 
OvaWne and Isostar drinks, vari- 
ous health foods and clinical 

Continued on Page 16 
Lex, Page 16 
Grown-up step into baby food 
market. Page 17 


Fox’s $500m TV deal boosts 
challenge to main networks 


SMhMiaRIttB Monollontf 


By Patrick Harverson 
in New York 

Mr Rupert Murdoch's plan to 
challenge the supremacy of the 
big three US television networks 
took another step forward yester- 
day. 

His Fox television unit 

amraunrerf an alliaiw with the 
entertainment group New World 
Communications that will pro- 
vide Fox with up to 12 new local 
television stations across the US. 

Mr Murdoch trumpeted the 
deal as the “greatest realignment 
of television station affiliations in 
the 60-year history of American 
broadtasting". It involves Fox 
investing $50Qm in New World in 
return for a stake of 20-25 per 
cent hi New World and an agree- 
ment that as many as 12 New 
World stations wiQ change their 
affiliations to Fox from ABC, CBS 
or NBC. 

Although Fox already has rela- 
tionships with television stations 
in the cities where the New 


BwpT Now* 


World affiliates operate, it said 
the 12 New World stations all had 
larger shares of their local mar- 
kets. Once tin deal is completed. 
Fax will have 184 affiliate sta- 
tions in the US. la comparison, 
the established networks, ABC, 
CBS and NBC, each have more 
than 200 affiliates. 

Undo' the agreement, Fax will 
work alongside New World devel- 
oping syndicated programmes to 
both group’s affiliates and prime- 
time television series and movies 
for toe Fox network. The deal is 
the latest development in Mr 
Murdoch’s long-running battle to 
build Fox into a nationwide net- 
work capable of competing with 
ABC, CBS and NBC. 

When he set up Fax in 1987 
a lwnidftiT of sta- 

tions, industry observers doubted 
whether it would ever seriously 
challenge the established net- 
wO^ks. But since then, it has 
expanded rapidly, and claims 
coverage of 95 per cent of the 
total watimifli television market. 


Although Fox’s ratings share of 
the n a ti o n al market began to 
decline in 1992, it has continued 
to pursue growth opportunities. 

It scored a notable coup last 
December when it outbid two of 
the three networks to win the 
rights to broadcast the National 
Football Conference of American 
football, the country’s most popu- 
lar televised sport 

Fox’s victory was not only a 
blow to CBS, which had previ- 
ously broadcast NFC games, and 
the other networks, but the four- 
year $Lftm deal ensured it would 
be in a stranger position to com- 
pete with two new national net- 
works being planned by Para- 
mount Communications, which 
was recently bought by Viacom, 
and by Time Warner. 

The news of the deal with Fox 
lifted New World Communica- 
tions’s stock $ltf to $10% on the 
Nasdaq stock market. Shares in 
News Corporation, Fox's parent, 
rose to $52% on the New York 
Stock Exchange. 


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If mvnre LIMITED 1994 No 32,374 Week No 21 LONDON ■ PARIS ■ FRANKFURT ■ NEW YORK ■ TOKYO 



v 














FINANCIAL TIMES TUESDAY MAY 24 1994 


NEWS: EUROPE 


German judge who defies the laws of politics 


Mr Roman Herzog, who last night 
emerged victorious as Germany’s 
new federal president, is a man of 
sin prising contrasts. 

For a start, as president of the 
constitutional court in Karls- 
ruhe -and therefore the country's 
most senior judge - he is neither 
ponderous nor humourless. 
Although he sometimes looks 
alarmingly fierce in bis photo- 
graphs, he Is noted far more for his 
homely wisecracks and capacity fbr 
self-mockery. 

He came to the court from Baden- 
Wurttemberg, where he had enjoyed 
the reputation of a hardline conser- 
vative as minis ter of the interior 
- and promptly put his signature on 
a string of liberal constitutional 
judgments. 

He is in many ways a typical bluff 
Bavarian, born in the heart of the 
fiercely independent “free state” at 
Landsbut 59 years ago. Tet he 
belongs to the minority Protestant 


President Roman Herzog is both a hardliner and a liberal, writes Quentin Peel 


church there, not the dominant 
Roman Catholic majority. 

ffis southern German style could 
hardly have made him more of a 
contrast to Ids principal opponent 
in the presidential race, Mr Johan- 
nes Ban, the former Social Demo- 
cratic party (SPD) leader and popu- 
list premier of the state of North 
Rhine- Westphalia. For all his popu- 
lar touch, the latter tends to be a 
lofty moralist, a protestant 
preacher. As for Mr Herzog, ter all 
his lofty legal position, he tends to 
present bfrnseTf as one of the tads, 
as capable of falling by the wayside 
as any fellow citizen. 

ffis tastes appear to be thoroughly 
popular. He allowed himself to be 
photographed in Hid Zeitung, Hie 
mass circulation newspaper, doing 
file washing up (he does not own a 
dishwasher). Yet he is both a classi- 


cal scholar who can converse in 
Latin, and an exper t in early Medi- 
eval history. 

His nomination as presidential 
candidate by Chancellor Helmut 
Kohl’s Christian Democratic Oman, 
and its Bavarian sister party, the 
Christian Social Union, could 
scarcely have been less fortunate, or 
more bungled. 

Mr Kohl’s first attempt was to 
promote an east German candidate, 
the unfortunate Mr Steffen Heit- 
maxm, the justice minister of Sax- 
ony , who proceeded to demonstrate 
such political naivete and latent 
conservatism that be frightened off 
many of bis potential supporters. 
Only when he was forced to with- 
draw did the CSD put fo r w ard Mr 
Herzog - without apparently con- 
sulting Mr KohL The result was con- 
tinuing confusion in the ranks of 


the coalition, before the judge was 
finally confirmed as a common 

Through all of this, Mr Herzog 
appeared unperturbed. Like Mr 
Kohl himself, he does not aeon, to 
need to be loved. But he was also 
perfectly dear that he was only pre- 
pared to stand if he bad solid back- 
ing from his supporters. 

He began his career as a lecturer 
in const itutional law at the Free 
Univ e rs i ty in Bertin, where he was a 
professor during the turbulent years 
around the 1968 student revolt He 
was certainly no r wrtnfi anary. He 
proved his credentials as 

co-author of the standard commen- 
tar y on the German rntre f ftnffon i. 

Mr Herzog fled Berlin ter the cal- 
mer waters of the college 

of administration in Speyer, ft was 
there that he first came to the atten- 


tion of Mr Kohl, who was teen state 
premier of the Rhineland-Palatf- 
nate, and appointed fids earthy but 
competent profe s s or as his perma- 
nent representative in Bonn in 1973. 
From there it was a natural progres- 
sion to becoming a tell minister in 
ndkhbonring Badm-Wftrttembag. 

When he was nominated in IMS 
to become a member of die constitu- 
tional court, the liberals were 
alarmed and the conservatives 
delighted- He bad gained his hard- 
line r e p utati on as state interior 
minister by ordering demonstrators 
(against the deployment of US Per- 
shing missiles) to pay for the cost of 
policing their own demonstrations, 
and ordering the police to use CS 
gas. Yet he proved a s ur prisingly 
liberal judge, in a series of dedsions 
on tee rights of tenants, artistic 
freedom, and even the right to dem- 


onstrate. As the conservative Frank- 
furter ADgemeine Zettimg wrote dis- 
approvingly, the reputation of his 
court has become almost 
“progressive" 

As a federal president, Mr Herzog 
will undoubtedly create his own 
style. The Bavarian touch is 
unlikely to go down quite as easily 
In the international com mun ity as 
tee aristocratic elegance of Presi- 
dent Richard von WeizsScker. 

Hie greatest challenge he faces is 
to make president not just 

of the west Germans, in whose tra- 
ditions and constitution he is so 
dearly expert, but also of the unset 
tied easterners. 

But even if his election was the 
product of a typical bout of party- 
political ha g glin g , his career sug- 
gests tha t he will not be answerable 
to anyone. He will bring the inde- 
pendence of the constitutional court 
to the federal presidency, with a 
touch of tee common man. 


Financial Times Correspondents in Italy, the Netherlands and Britain follow 
the fortunes of three candidates seeking election to the European parliament 

General in the van of Forza attack 



As befits a 
military man, 
General Luigi 
C aliga ris 
began his cam- 
paign for the 
European par- 
liamentary 
elections by 
studying a map 
of his constitu- 
ency. Heading 
the Forza Italia 
EUROPEAN list in. a con- 
ELECTIONS stituency cov- 
J™ 98 ** 12 ering the 
whole of northeast Italy, he 
needed to base hims elf some- 
where with easy access to 
places as far apart as Bologna 
and Trieste, writes Robert 
Graham in Rome. 

He has ended up renting 
offices outside Mestre in a 
flashy business park half 
empty because of the reces- 
sion. Mestre, the depressing 
industrial adjunct of Venice, 
has the great advantage of 


being criss-crossed by a net- 
work of motorways. 

“We have to cover an enor- 
mous area, nearly a quarter 
the size of Italy; and we are 
without the help of national 
television, " says the 62-year-old 
general turned military analyst 
and commentator. 

In a week he reckons to have 
driven almost 4,000km, grab- 
bing little food and even less 
sleep. “If I wasn’t trained as a 
soldier and didn’t keep fit, 1 
don’t know how I'd cope," he 
says. 

He has barely recovered 
from campaigning in the 
March general elections in 
which he was the most spectac- 
ular casualty among the Forza 
Italia candidates. Having cast 
himself as a fixture defence or 
foreign minister, Gen Caligaris 
failed to be elected- But, as a 
consolation, he bag been made 
standard-bearer in these elec- 
tions for Mr Silvio Berlusconi, 
the prime minister. 


His campaign has been put 
together at high speed in mid- 
May helped by three full-time 
staff (one provided by Forza 
Italia from Rome), and a hand- 
ful of volunteers tndnilmg Ins 
picture, restorer wife. He reck- 
ons to spend about L200m 
(£83,000) on the campaign part 
supplied by Forza Italia and 
the rest wwrfng from friends — 
often in kind, like a campaign 
car. The biggest cost Is cam- 
paign slots on local television, 
the most effective means of 
getting his message across. 

hi such a diffuse constitu- 
ency, the g ener al admits it is 
hard to give a focus to the. cam- 
paign especially when voters 
are apathetic in the wake of 
the general elections. 

“There is too much toing and 
froing,” he says, citing the 
frustration of driving a 400km 
round-trip for a poorly, 
attended 40-minute meeting. 
But he is buoyed up by the 
support he finds for Forza 


Italia. “They’ve seen us win- 
ning and ever y o n e now wants 
to jump on the bandwagon." he 

Forza Italia's success under 
ffrw mmUd of Mr Berlusconi is 
not without its problems. The 
movement encouraged people 
to form their own support 
dubs in the run-up to the gen- 
eral elections, and these 
remain autonomous, little co- 
ordinated and often rivals. 
Indeed, a new political organi- 
sation directed from Rome is 
being built parallel to the 
dubs. More than 2,000 people 
applied to be Forza Italia can- 
didates in the European elec- 
tions. and of the 16 selected in 
the general's constituency, 
none have had previous politi- 
cal experience or dose /foaling 
with Brussels. 

“Explaining the real nature 
of the EU is not easy in Italy 
because Europe has been taken 
so much for granted. This is 
the first time I think any elec- 


tion here has begun to ques- 
tion the nature of our Europe,” 
says Gen Caligaris. He dffwiay 
being a Euro-sceptic, but 
equally he is not a Euro-enthu- 
siast. a Boro-questioner wight 
be a more apposite label for 

hhrt at|d Forza Haifa 

"I do not see a strong com- 
mon desire for tiw Union — 

UK is too sceptical; Italy is 
always too rhetorical; the Ger- 
mans and French are too 
exclusive. ... In going forward, 
we have to strike a compro- 
mise between full sovereignly 
and loss of sovereignty. The 
most Important thing is to be 
clear what part of our sover- 
eignty is worth losing.” 

Perhaps more important, the 
general believes Italy has 
failed to exert suffidcst weight 
in European institutions. “Italy 
has lost its influence," he 
bemoans. He is determined to 
use Forza Italia's presence at 
Strasbourg to remedy this. 



Luigi Caligaris: standard bearer in these elections for Prime 
Mfateter Sflvto Berlusconi /w«MMaod 


Dutchman speaks out 
for a federal Europe 


Mr Laurens Jan Brinkhorst 
looks set to bring a reformist 
and unasham edly federalist 
Dutch voice to the European 
parliament, writes Ronald van 
de Krol in Amsterdam, 

Director-general of the Euro- 
pean Commission's environ- 
ment department for the past 
seven years, Mr Brinkhorst 
says he wants to swap his 
executive role for a frontline 
place in what he describes as 
“the battle far Europe”. 

He is campaigning as No 2 
on the party list for D66, a left- 
of-centre Dutch party that was 
one of the main victors of the 
general election three weeks 
ago. 

If elected, Mr Brinkhorst 
says he will stand up for a 
“transparent, democratic 
Europe" withstanding the ten- 
dency for “the nation state [to 
he] on the rise again" 

Before his stint as one of the 
most influential civil servants 
in Brussels, Mr Brinkhorst was 
the BlTs ambassador to Japan. 
At the start of his career, he 


taught European law at Dutch 
universities before being 
elected to the Dutch parlia- 
ment in the mid-1970s. 

He now says he wants to 
serve in the Strasbourg assem- 
bly as a means of propounding 
ideas an the fixture of Europe. 

He argues that Europe is 
incapable of dealing with such 
cross-border issues as immigra- 
tion and drugs, as well as the 
war in Bosnia, because it is 
stOl structured too much along 
T prtiopai He ^ no objec- 
tions to being described as a 
“federalist". Bat he adds: 
“That does not mean that I 
want a centralised state with 
centralised authority.” 

He has a good chance of 
playing a high-profile role in 
the next parliament. D66, 
founded in 1966 as a party dedi- 
cated to reforming politics, 
doubled Its seats in the Dutch 
parliament to 24 in the May 
general election, giving it more 
than one-sixth of all seats. If 
the same voting pattern holds 
true for the European election. 


D06 may win five out of the 
Netherlands’ 31 European 


Mr Brinkhorst believes the 
European parliament's agenda 
can be too broad. “I think the 
parliament would do well to 
concentrate on a few plain 
themes." One of these, in his 
view, is deepening the Euro- 
pean Union rather than simply 
enlarging it to admit new 
members. Another priority is 
Integrating national and Euro- 
pean paWtiefl- 

In line with D66’s reformist 
policies, the party has pro- 
posed in the Netherlands that 
MEPs he given the right to 
speak, though not to vote, 
when European affairs are dis- 
cussed in committee stage in 
the Dutch parliament. 

This would help the national 
parliament get a grip on what 
is happening at the European 
leveL But Mr Brinkhorst is 
well aware that the proposal is 
co n troversial “Some MPs defi- 
nitely see it as an assault on 

their prerogatives. 



Bavarian woman aims to 
win the heart of England 


Laurens Jan Brinkhorst: 
wants a place in the front line 


It may seem an impossible 
task. But a 38-year-old farm- 
er's daughter from Bavaria 
could be about to pull off one 
of the shock victories in 
Britain’s Euro-elections, writes 
James Blitz. 

Ms Gisela Gschaider, repre- 
senting Labour in the seat of 
Worcestershire and Warwick- 
shire, has taken advantage of 
a new Europ e an law snowing 
EU nati onals to stand in any 
Union countiy. 

The law has triggered a 
flurry of such candidates: in 
Germany a Dutch woman is 
standing ter the Social Demo- 
crats and in Italy a Belgian 
man is standing for the Radi- 
cal party. But while some of 
Hi Btn candidates may be no- 
bopers, MS Gschaider, a viva- 
cious woman with a strong 
German accent, thinks she' 
may be in with a chance of 
taking fids newly created West 
Midlands seat. 

“Two years ago it would 
have been unthinkable that 
labour could win in such a 


traditionally Conservative 
region like fids,” tee says. 
"But the Tories are doing so 
badly in opinion polls that a 
Labour victory Is a real possi- 
bility.” 

Although she has lived in 
fiie UK with her English hns- 
band for 20 years, Ms Gschaid- 
er*s origins have triggered 
controversy in an area that is 
the essence of “middle 
England”. Mr John Corrie, the 
Conservative candidate, has 
openly doubted whether peo- 
ple would want to elect a Ger- 
man as their HEP. He said he 
hoped his Labour rival would 
enjoy “a short sojourn in fids 
beautiful heart of England - 
until Jane 9". 

Gisela, as tile local press call 
her, is not perturbed. While 
not emphasising her national- 
ity in the campaign, she still' 
thinks that her background 
would make her a particularly 
affective MEP. 

“People do not always 
understand that yon cannot 
approach European politics 


from a purely national point of 
view,” she says. “The politics 
of Brussels have a supra-na- 
tional flavour, and countries 
are discredited if they just see 
every issue from their own 
point of view.” 

Lock is certainly on her side 
in tins campaign. She is stand- 
ing Cor a party deeply commit- 
ted to European integration; 
the British Conservatives, who 
are sharply divided over 
Europe, would find it modi 
more difficult to put forward 
such a candidate in a marginal 
seat. Nor do local people seem 
swayed by the anti-German 
jingoism fashionable in 
Britain's tabloid press. 

But if Ms Gschaider is to 
win it will ultimately depend 
on whether the Labour party 
can repeat nationally the 
strong performance it showed 
in recent local elections. For 
the moment, its campaign 
managers in the West Mid- 
lands believe that the Bavar- 
ian candidate is not losing the 
party any votes. 


t tne start ot ms career, ne true tor me European election, tnexr prerogatives. wants a piace m me aunt rme Lanaur coma win m sucn a approacn European politics party any votes. 

Portuguese seek a scapegoat for the broken promises 

I ^ for the European elec- Peter Wise reports on a country grown disillusioned with the idea of European integration 


T he campaign to Portugal 
for the European elec- 
tions reflects a consider- 
able cooling of the country's 
enthusiasm for Europe after 
almost two years of recession. 

Defence of national interests 
is the dominant note to the 
campaigns of both the govern- 
ing Social Democrats (PSD) 
and the opposition Socialists 
(PS). Two smaller groups, the 
right-wing CDS-PP and the 
communist coalition, CDU, 
come dose to calling for Portu- 
gal to quit the European Union 
altogether. 

As real wages decline and 
unemployment grows, the Por- 
tuguese are counting the cost 
of integration into a commu- 


nity they previously saw as a 
source of nothing but prosper- 
ity. “Europe has lost its glitter 
here,” says a European diplo- 
mat to Lisbon. “People have 
grown mare inward-looking as 
a result of the recession and 
political parties are adopting a 
more protectionist stance.” 

President M&rio Soares, a 
Socialist, expressed the grow- 
ing scepticism at a recent con- 
gress of government oppo- 
nents, where he questioned 
how wisely EU funds were 
being spent and what would 
happen when the Bow stopped. 
Agriculture and industry were 


suffering severely from the 
effects of the single market, he 
said, threatening to leave only 
services as a competitive sec- 
tor. “Are we to become the 
waiters of Europe?” Mr Soares 
asked. 

Early campaigning has been 
focused on the rural interior, 
where the single market and 
the implementation of tee Effis 
common agricultural policy 
have cruelly exposed the back- 
wardness of Portuguese fann- 
ing. Mr Antonio Campos, the 
PS spokesman on agriculture 
a pd a randiriafo in tee elec- 
tions, says Portuguese farmers’ 


earnings have fallen 40 per 
cent over the past three years 
to near subsistence levels. 

Farming is a sector with a 
political resonance to Portugal 
beyond its economic weight 
and Mr Anlbal Cavaco Silva, 
the prime minister, last week 
removed Mr Arlindo Conha 
from bis post as agriculture 
minister so he could run for 
the European parliament Both 
main parties advocate preserv- 
ing Portuguese agriculture 
against what is portrayed as 
tee cold logic of a European 
Commission intent on convert- 
ing the country's farms into 


forests. Both the centre- right 
PSD and the centre-left PS 
have similarly recast other 
European policies in a more 
nationalistic light to keeping 
with tiie public mood. In fact, 
the electorate may find it diffi- 
cult to distinguish between tee 
two parties’ proposals. 

D espite apprehension 
over the consequences 
of European integra- 
tion, most Portuguese remain 
pro-European. They blame 
their own government more 
than Brussels for their current 
ills and tee vote on June 12 


will be more a verdict on Mr 
Cavaco Silva's domestic perfor- 
mance than a judgment on 
European policy. 

In this context, the vote is a 
bigger test for the PS than the 
PSD. 

Recession has produced 
mounting dissatisfaction with 
Mr Cavaco Silva, who has been 
in office since 1985, and the PS 
are currently ahead in the 
opinion polls with 39.4 per cent 
of the vote, compared with 2&2 
per cent for the PSD. 

But a hard-hitting, anti-gov- 
ernment speech from Mr 
Soares at the opposition con- 


gress, “Portugal: What 
future?”, has backfired on the 
PS by undermining the posi- 
tion of its leader, Mr Antonio 
Guterres, and reigniting old 
rivalries within the party. 

Discord over selecting candi- 
dates for the European elec- 
tions has further detracted 
from tee Socialists’ credibility. 
If Mr Guterres fails to deliver a 
convincing victory on June 12 
Iris leadership is likely to be 
challenged in a disruption teat 
could have serious conse- 
quences for the PS in the 
run-up to the next general elec- 
tion in October 1985. 


Athens to sell off 25% of Greek telecoms company 


By Kerin Hope 
in Athens 

Greece’s Socialist government 
yesterday announced the partial pri- 
vatisation of OTE, the state telecom- 
munications company. The move 
appeared to be aimed at restoring 
confidence to local financial markets 
after a week of steady pressure on 
the drachma. 

The government hopes the flota- 
tion of 25 per cent of the company on 
the Athens stock exchange, planned 
for October, will realise at least 
Dr250bn (£674m), with overseas 


investors likely to take np about half 
the issue. 

At least 60 per cent of tends raised 
will go towards covering a revenue 
shortfall in this year’s budget, esti- 
mated at Dr450bn-Dr500bn. The 
remainder will be used to improve 
OTE’s ageing fixed-wire network. 

The timing of the announcement 
reflects government anxiety over the 
continuing currency crisis, despite 
official statements to soothe fears of 
a devaluation. It had not been due 
until the government had persuaded 
the OTE union to give the partial 
privatisation Its full backing. 


While the union now accepts the 
flotation in principle, it is still 
demanding that most of the tends 
raised be reinvested in the company, 
“not poured into tee black hole in 

the budget”, as one p rominent mem- 
ber said yesterday. 

Mr Yannos Papantoniou, economy 
minister, said Credit Suisse First 
Boston and J-Henry Schroder Wagg 
would be reappointed as global coor- 
dinators for the issue, while 
National Bank of Greece, the coun- 
try’s largest state-controlled 
bank, would handle the domestic 
tranche. 


The two inter national i n vestment 
banks had advised the previous Con- 
servative government last year on 
the disposal of 49 per cent of OTE 
through the sale of a strategic stake 
to an international telecommunica- 
tions operator, to be fallowed by a 
flotation. But the agreement was 
suspended when the Socialists came 
to power last October, promising to 
halt privatisation. 

However, the need both to reduce 
a soaring public sector deficit 
and raise funds for long-overdue 
modernisation of state corpor- 
ations forced the government to 


reverse its policy two months ago. 

With privatisation now high on 
the agenda, the government Is also 
considering a partial flotation this 
year of the state-controlled corpora- 
tion which controls the country's 
two largest oil refineries. 

Pressure on the Greek currency 
eased yesterday, although dealers 
said a holiday on German financial 
markets was responsible rather than 
the government’s announcement on 
OTE. 

Short-term interest rates declined 
from last week’s levels of more than 
200 per cent, but the one-month 


offered rate remained at over 140 per 
cent The drachma improved yester- 
day against the US dollar, rJiwfa c at 
Dr245.l. against Di 247.4 on Friday. 

Economists said that before inter- 
est rates could start to coma down 
the government would have to dem- 
onstrate a firmer commitment to fis- 
cal reform, by trimming spending 
and curbing tax evasion. 

However, Mr Alexandres Papado- 
poulos, the finance minister, said 
yesterday that at present he had “no 
plans to introduce supplementary 
budgetary measures". 


Russia to 
explain 
defence 
doctrine 
to Nato 


By Bruce Clark, Defence 
Correspondent 

Nato defence ministers wilt 
today hear out the co-operation 
ideas of General Pavel 
Grachev, their Russian 
counterpart, amid charges 
from a prestigious think-tank 
that the alliance is mistakenly 
appearing to pander to 
Moscow. 

The general will lay out 
Russia’s military doctrine, 
which has been published only 
in part, and explain Moscow's 
terms for a more elaborate 
form of co-operation than the 
Nato-designed Partnership for 
Peace programme. 

Nato has made clear that 
whatever other arrangements 
it makes with Moscow, Russia 
must sign the same basic 
documents as tee 18 countries 
which already adhere to the 
PFP. 

However, Moscow has 
baulked at the idea of bring 
treated in toe same way as ito 
former “satellites” in the 
Warsaw pact 

It remains to be seen 
whether Moscow's, latest 
formula -a special Russta- 
Nato protoad either “within" 
PFP or in addition to it 
- provides the basis for a 
compromise. 

The International Institute 
for Strategic Studies alleged 
yesterday that Nato had - 
already made mistakes in its 
treatment of its erstwhile 
adversaries. 

In its annual strategic 
survey, the think-tank said 
Nato had clumsily given the 
impression that its refusal to 
grant early entry to Poland, 
Hungary and the Czech 
Republic had been motivated 
by reluctance to upset Russia. 

“It was one firing to agree 
teat Russia . . . should have its 
views considered. It was 
another to make it appear that 
the west feared the strong 
objections expected from 
Moscow on this question," the 
survey said.^ 

i Ta let it appear that the 
Russians exercised a veto over 
Nato’s non-existent desire to 
take these (central European] 
countries into the fold was a 
mistake that should not be 
made again," it added. 

Diplomats expect the 
strongest pressure for a 
compromise with Russia at 
today's meeting to come from 
Germany, which is i«yn to find 
a way cd consolidating its ties 
with both Moscow and its 
former allies without upsetting 
riffier side. 

Nato officials have 
discouraged suggestions of a 
“special . relationship” with 
Moscow and specifically ruled 
out the idea of a Russian veto 
over Nato policy in eastern 
Europe - although that seems 
to be exactly what Moscow 
wants. 

Mr John Chipman, the HSS 
director, said Nato was too 
concerned with shoring up its 
own institutional prestige as 
opposed to addressing real 
problems. 

An example of this was the 
argument used in justifying 
the alliance’s air strikes 
against tee Bosnian. Serbs: the - 
raids, executed with only 
partial success, had been 
presented as “necessary to 
preserve the reputation of 
Nato". 

Mr Chipman said that Nato 
should. abandon . the 
“romantic” notion that lt cooM 
solve a wide range of security 
tasks and concentrate instead 
an the role it could perform 1 
providing a “cheap, efficient 
bureaucracy" to manage its 
members' forces. 

Strategic Survey, by the 
International Institute far 
Strategic Studies: 256 pages, 


in London. $35.00 in Norik 
America. 


THE FINANCIAL TIMES 
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ISSN: ISSN U4&47S3. 

No 67308 D. 

DENMARK - __ 

Ruandal Item fScaodmata) tid, Vk*na 
dafted JOA. DK-ilM CoMtevoK- Tde- 


FINANCIAL TIMES TUESDAY MAY 24 1994 


NEWS: EUROPE 


EUROPEAN NEWS DIGEST 

Poland in debt 
buy-back offer 

Poland has offered to buy back part of its R3ta (£&6bn) debt 
at a price of between 41 US cents and 38 US cents to the dollar 
in a financing plan sent oat to western commercial hmiw at 
the weekend. 

Hie buy-back offer covering 5 per cent of the amount owed 
is to be presented to holders of Polish debt at meetings in 
Frankfurt, Paris, London and New York beginning at the end 
of this month and Poland expects to have answers from its 
creditors by June 29. The framework for the proposals was 
negotiated last March In an agreement winch foresaw an 
overall reduction, in the debt amounting to between 42 per cent 
and 45 per cent The proposals sent out see Poland par 

and discount bonds mid include provisions for the boy as 
well as opening the way for debtfor-eqnity swaps. 

The proposals have the tacit backing of the hanks which 
negotiated the agreement The price of Palish debt reached 
39.5 emits to the dollar on the news of the proposals, up from 
37 cents at the end of last week. The price of Polish debt went 
as high as 52 cents early this year. Mr Grzegorz Kninrilm 
Poland's new finance minister, said in a newspaper int e r view 
yesterday that he intended to follow up the debt redaction 
deal ex pecte d to be completed this autumn with •'bold" propos- 
als cm swapping the remaining Polish debt for equity in state 
sector enterprises. Christopher BobmsJci, Warsaw. 

Bosnian Serbs remain defiant 

Bosnian Serb leaders yesterday failed to honour their pledge 
to withdraw some 150 Serb fighters from the UN’s Mrm exclu- 
sion zone around Gorazde, the south-eastern Mofoyn enclave. 
Despite this breach of the U&hrofeered agreement, Bosnian 


Serb leaders matched their defiance on the battlefield with 
anoth e r diplomatic offensive, saying that XJN sancti on s Trmst 
be lifted before they would rejoin peace taifca mi Bosnia. 

The Moslem-led Bosnian government lias refused to return 
to the bargaining table before its Serb foes withdraw from the 
Gorazde exclusion zone. According to Major Rob Anmnk, UN 
spok e sman in Sarajevo, Serb forces yesterday even improved 
their positions within the exclusion zone. Renewed Serb 
demands for the lifting of sanctions made the prospects for an 
all-party meeting even bleaker. Mr Alaksa Baba, the foreign 
minister of the self-styled Serb state, yesterday said: "We will 
seek equal conditions. All kinds of pressures must be removed, 
tririruthtg the lifting of sanctions.’* 

In Paris, Bosnian President Alija Izetbegovic foiled yester- 
day to win unqualified support from-representatives of French 
political parties for an end to the arms embargo which he says 
ties bis government’s hands. Laura Silber, Belgrade. 

DS vote, page 5 

Portugal’s spy chief quits in row 

The head of Portugal’s main intelligence service, the SIS, 
resigned after it emerged his agents illegally reported on 
politicians and investigated corruption on the island of 
Madeira, the government said yesterday. The interior minis- 
ter, Mr gawn ei Dfos Loureiro, also that the head of STS 
operations in the autonomous island off the coast of Morocco 
had also been sacked. Mr Dias Loureiro told a news conference 
that an inquiry by a parliamentary commission showed the 
SIS in Madeira, had become involved in activities beyond its 
charter. Mr Dias Loureiro said the of S TS, Mr Ramiro 
Ladeiro Monteiro, had resigned in the light of these findings, 
even though he was not directly responsible for the illegal 
activities in Madeira. Mr Jo2o EvangQista, the head of SIS 
operations in Madeira, had been yarfreri, he adifo d. Portugal 
has been swept by rumours of spying since police found a 
hidden microphone in the office afMr Jos£ Cunha Rodrigues, 
the chief state prosecutor in Lisbon. Mr Dias Loureiro said' 
police were still investigating that incident Batter, Lisbon. 

Swiss scientists reject EU ties 

Five Swiss Nobel prize-winning scientists have urged the 
Swiss government to reduce its contributions to European 
Union research projects, which they consider politically moti- 
vated and a waste of money. The demand, in an open letter, 
could hardly come at a worse time for Berne, which is desper- 
ately trying to restart negotiations with the EU on reciprocal 
airline rights among other delicate issues. The Swiss parlia- 
ment Is to debate a SFr554m (£25&£m) contribution to EU 
research, some of it for a new three-year programme, later this 
week. “We view the planned joining of this new EU research 
programme as primarily politically motivated." the scientists 
said. Mr Richard Erast, Nobel laureate for chemistry in 1991 
for his work on magnetic nuclear resonance and one of the 
signatories of the letter, was quoted as saying that Brussels- 
led research programmes were often amateurish and suffered 
from excessive administration costs. Jan Badger , Zurich 

Slovaks form left alliance 

One of Slovakia's main opposition parties, the Party of the 
Democratic Left (SDL), moved yesterday to broaden its elec- 
toral appeal ahead of elections due in September by forming a 
left-wing alliance with three smaller parties. The SDL, which 
has 28 seats in the current parliament, is joining forces with 
the Green party, the Social Democratic party and the Slovak 
Farmers' Movement, and has pledged to make reviving the 
ailing Slovak anus industry a central part of its election 
campaign. Mr Peter Weiss, SDL chairman, said cuts in arms 
production since 1989 bad contributed to Slovakia's growing 
unemployment rate. The country was one of toe largest pro- 
ducers of weapons for the Warsaw pact countries before 1988. 
Mr Weiss said the new political alliance favoured maintaining 
Slovakia's conversion to a market economy but not one “that 
will ruin the environment or m a k e the average individual 
suffer". Reuter, Bratislava 

ECONOMIC WATCH 


Italian inflation disappoints 


totyrtert to ttow 

Annual % change in CPt 

7 A 





Italian financial markets 
reacted badly yesterday to 
preliminary figures which 
indicated that inflation was 
sot coming down as quickly 
as expected. Preliminary fig- 
ures for May, based on date 
collected from nine Italian 
cities, indicated that retail 
prices would show an 
increase of 0.4 per cent for 
this month, compared with 
the previous year, giving an 
annual inflation rate of 4.1 
per cent The data, prepared 
by toe municipality of Bolo- 
gna, is normally confirmed by 
the state statistical institute 
after the end of the month. 


» 83 04 

feuM&etoatmp njartfcMetfmrfa 

ioonomic analysts had expected the April increase of 0.3 per 
ent to be confirmed, which would have suggested an aonoal 
Nation rate of 4 per cent EqmtyinvKtot^p^riwabo^toe 
tock market since the election of a nght-wingpyvenane^te 
fcaly in March, used the news as an excuse to take profits 

esterday morning Andrew BUL fflton. 

I Figures issued by the Bank of Italy revealed that the public 
ectordeficdt narrowed to mj to : first three 

tnnthf of the year, compared with L50fll0bn m the first 

carter of 1983. , _ _ 

l Italy’s industrial wholesale sales index rose a real 7JS per 

ent in January from a year earlier, the gate Srmared 
nstitqte, Istat. said yesterday. The January^^ecom^ed 
rfth a 5,7 per **«*■ year-on-year increase m December MS3. 

I The Spanish insurance sector’s combined 



isuranee. 


Inching towards the chasm in Crimea 

John Lloyd on the historical and political forces at play in rising tension between Russia and Ukraine 


W hen Nikita Khrush- 
chev handed Crimea 
to Ukraine in 1954 
to commemorate Kussian- 
Ukxsdxrian friendship it was in 
the goQd old days when the 
Soviet party leader could sim- 
ply decree the nationality of 
millions in a grandiose gesture.. 
Like much else in Soviet times, 
the consequences must now be 
dealt with. 

The danger in the rising ten- 
son in toe Crimean peninarta 
is that it is a straggle not just 
over the control of territory 
but also over the fate of a 
heavily armed fleet; that Rus- 
sia and Ukraine are proud, jeal- 
ous and unused to treating 
each other as equals; that Its 
aggravation is at least in pert 
in the political interests of 
their leaders; and that it is a 
classic struggle between the 
principles of sovereignty and 
toe will of the people. 

Mr Khrushchev’s transfer of 
CMmea freon Russia soon after 
he moved from the position of 
first secretory of the Ukrainian 
Communist Party to general 
secretary of the C ommunis t 
Party of the Soviet Union was 
- Russians say - always 
resented, though it appears the 
majority of toe peninsula's 
2.7m people voted for the inde- 
pendence of Ukraine in 199L 
probably under the tm pwwrinn 
that life would be bettor. 


• : ^ Cif ; . 

^t783c'A» prtfqJttfRttsN* Ruswahexperoicn to 
•; -the south, Cwto ri net he greet smashes .the 
- ccfctreged bythftTotara.Vid _ 

.- annexes ftepenteito,. 

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By 1992, however, the Rus- 
sian majority appeared to have 
swung away from their new 
“nation”. The Crimean 
supreme - soviet, to general 
acclaim, passed a constitution 
for Crimea which declared that 
its government enjoyed all sov- 
ereign rights except those they 
voluntarily delegated to 
Ukraine. 

But under pressure from 
Kiev the deputies suspended 
the law -until, last Friday 

When the new parliament, with 
a militant majority in favour of 
union with Russia, unfroze it 
to cries from Kiev that this 


mpflnt de facto mHnprautenrfl- 
Cximea is the base of the 
Black Sea Fleet and the presi- 
dents of Russia and Ukraine 
have signally to agree, 
over the past two years, either 
to share it or allow one or the 
other to command it. It 
remains in a limbo, under Rus- 
sian control, situated an Ukrai- 
nian territory, largely in the 
port of Sevastopol 
The election early this year 
of the pro-unity Mr Tori Mesh- 
kov as president of Crimea and 
of a parliament also committed 
to union with Russia has been 
foDowed by the signing of eco- 


nomic agreements between Cri- 
mea and the governments of 
both Moscow and Russia. In 
the past two weeks, reports of 
Ukrainian forces bring moved 
into the area have been rou- 
tinely relayed from both the 
fleet and foe Crimean authori- 
ties, and routinely denied by 
Ukraine. Over the weekend it 
was the turn of Ukraine to 
claim that the fleet awnmarwi 
hail n umul in tank- afid missfie 

In both Moscow and Kiev, 
the politics speak to confronta- 
tion. Presidential elections are 
due in Ukraine next month. 


but Mr Leonid Kravchuk, the 
present incumbent, wants to 
delay them: a declaration of a 
state of emergency and a tough 
line on Crimea would do him 
HO harm and rnl ght push back 
elections by general consent. 

In Russia, things are in some 
respects worse. Last weekend, 
two different political organisa- 
tions held congresses. One was 
the Russian Freedom Party of 
former vice president Alexan- 
der Rutskoi, who used the 

event officially ft) la unch frig 
daim on the presidency with 
the promise that he would 
again extend Russia to the bor- 
ders of the former Soviet 
Union. 

The other was a gathering of 
communist groups, including 
the dominant Russian Commu- 
nist party: they, too, pledged to 
restore toe imperial scope of 
tiie former Union. Both opposi- 
tion groups chose this platform 
because they believe it popu- 
lar: opinion polls show they 
have a point (though they do 
not show what Russians would 
put up with to achieve it). 

It is clear, however -from 
polling and anecdotal evidence 
-that Crimea occupies a spe- 
cial spot in the hearts of most 
Russians. Its beauty and cli- 
mate (which made it the most 
popular resort area in the for- 
mer Soviet Union); its literary 
(Chekhov lived there) and his- 


torical (Catherine the Great 
took it from the Turks) associa- 
tions; and its Russian majority 
- all combine to make it incon- 
ceivable that it could be other 
than Russian. 

In the increasingly heated 
climate which surrounds dis- 
cussion. of the former Soviet 
Union - in particular those 
parts outside Russia in which 
Russians are numerous - Cri- 
mea at present takes pride of 
place. 

It can become an opposition- 
ist cause over which Mr Yelt- 
sin and the government cannot 
afford to appear weak but 
which they do not wish to see 
boil over. Mr Andrei Kozyrev, 
t he Russian foreign minister, 
told Mr Douglas Hurd, his Brit- 
ish opposite number visiting 
Moscow yesterday, that -ac- 
cording to Mr Hurd- "Crimea 
IS part of TTlfrato p mitl that its 
sovereignty is not in question". 

At the same time, however, 
Mr Kozyrev has also said that 
the wishes of its people must 
be respected. Both Mr Vitaly 
Churkin, the Russian special 
envoy to the former Yugo- 
slavia and Mr Sergei Shakhrai, 
the deputy prime minister, 
used the Yugoslav analogy as 
something of a threat 

Though all sides profess to 
be aware of what is at stake, 
they nevertheless Inch closer 
tO foe chacm 


ACES (Aerolineas 

Air New Zealand 

Baltic International 

Country Connection 

Hell Air Monaco 

Lufthansa German 

Prospair Air Charier 

Taino Airlines 

Centrales de Colombia) 

Air Niagara 

Airlines 

Airlines 

Helicopter Shuttle 

Airlines 

Proteus 

Taiwan Airlines 

Action Airlines 

Air Nippon 

Bangkok Airways 

Crane Air 

Heli-lnter 

Luxair 

Provincial Airways 

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ADA-Air 

Air Niugint 

B.A.S.E. Business 

Croatia Airlines 

Helijet Airways 

Maersk Air 

Ptarmigan Airways 

Tamair 

Adria Airways 

Air Nordic Sweden 

Airlines 

Crossair 

Beilkopterservice 

Makung Airlines 

Qantas Airways 

TAME 

Aer Arann Teo 

Air North 

Baxter Aviation 

Crown Airways 

Hem us Air 

Malaysia Airlines 

Qwestalr 

Tanana Air Service 

Aer Lingus 

Air Nova 

Bearskin Lake Air - 

CU 8 ANA 

Hex’Air 

MALEV 

Redwing Airways 

TAP Air Portugal 

Aero Asia 

Air Ontario 

Service 

Cyprus Airways 

Holmstroem Air 

Mali Tinbouctou Air 

Reeve Aleutian Airways 

Taquan Air Service 

Aero California 

Air Pacific 

Belavia 

Cyprus Turkish Airlines 

Hong Kong Dragon 

Service 

Region Air 

TAROM 

Aerocanbe 

Air Rarotonga 

Bel lair 

Czechoslovak Airlines 

Airlines 

Malmo AviatiorVCity Air 

Regional Airlines 

TA.T. European Airlines 

Aerochago Airlines - 

Air Rwanda 

Bemtdji Airlines 

Oaalio Airlines 

Horizon Air 

Scandanavia 

Reno Air 

Tatonduk Flying Service 

Aero Costa Rica Acort 

Air Saint-Martin 

Bering Air 

Dehair 

Horizon Airways 

Mandate Airlines 

Rheinland Air Services 

Tatra Air 

Aeruftot-Russiwi 

Air Sask Aviation 

Berliner Special Flug 

Delta Air Lines 

IBERIA 

Mandarin Airlines 

Rheinbltlug Seewald 

Teddy Air 

International Airlines 

Air Satellite 

Big Sky Airlines 

Deutsche BA 

Icetandair 

Manx Airlines 

Gese! Ischaft 

Thai Airways 

Aerolineas Argentines 

Air Senegal 

Biman Bangladesh 

Luftfa hrtgesei Ischaft 

lliamna Air Taxi 

Maricair Express 

Riga Airlines 

Therem Airways 

Aerolineas Dominica nas 

Air Seychelles 

Airlines 

Dom inair 

Indian Airlines 

Markair 

Rio-Sul Services Aereos 

Time Air 

Aeromexlco (Aerovias 

Air Sinai 

Blackhawk Airways 

Domiriteana de Aviadon 

Intercontinental de 

Martinair Holland 

Regional 

Tower Air 

de Mexico) 

Airspeed Aviation 

Bopair 

Dorado Air 

Aviacion 

Maya Airways 

Ross Aviation 

Ttensaero 

Aeromantefrey 

Air St. Barlbeiemy 

Bouraq Indonesia . 
Airlines * 1 

Dragonair 

international Flying 

MBA 

Rottnest Airbus 

Trans Air Cambodia 

Aeropelican Air Services 

AlrStord *! 

Druk-Air 

Services 

Meridiana 

Royal Air Maroc 

Trans Asia Airways 

Aeropertas 

Air SL Pierre 

Braathens SAF.E. 

Dynamic Air 

Intefot Airways 

Merpati Nusantara 

Royal Brunei Airlines 

Trensavia Airlines 

Aero peru 

Air. SL Thomas 

Airtransport 

Eagle European Airways'- 

Irttburtrans 

Airlines 

Royal Jordanian 

Transbrssil 

Aero postal 

Air Sunshine 

Branson Airlines 

Eastair (Iceland) &• 

Ir^oAir 

Mesa Airlines 

Royal Nepal Airlines 

Trans Jamaica Airlines 

Aerosur 

Air Tahiti 

Brasil Central Linha 

Eastland Mr 

island Air 

Mesaba Airlines 

Royal Swazi National 

Transkei Airways 

Aerot ran sport es Mas de 

Air Tanzania 

Aerea Regional 

Eastwest Airlines (Aus.) 

Island Airlines 

Metavia Airlines 

Airways 

Translift Airways 

Carga 

Air Transport Pyrenees 

Brit Air 

East West Airlines (Ind.) 

island Express 

Metro Airlines 

Royal Ton^n Airlines 

Trans North Aviation 

African West Air 

Air Tun gam 

Bntannia Airways 

Ecuato Gulneana de 

Island Hoppers 

MEXiCANA 

Ryanair 

Transport Air Centre 

Aigle Azur 

Air UK 

British Airways 

Aviacion 

Islands Aviation 

MIAT- Mongolian Airlines 

Ryan Air (Alaska) 

Transposes Aereos 

AlrAfrique 

Air Ukraine 

British. International - 

ECUATORIANA ’ _ 

Islena Airlines ^ 

. . MiddfeEa^ Airlines - . 

. Sabair. Airlines 

Neuquen del Estado- 

Air Aigerie <C 6 rripagnl 6 ' ' 

" AirVSnfiatu " 

• Helicopters'' ’ 

Egyptair r ' ‘ • "* ■ 

Isles Of Sc illy Sky bus 

Midway Airlines 

Sabena Belgium World 

Transpories Aereos da 

Nationate de Transports) 

Air Vegas 

British Midland 

Elf Air 

Istanbul Airlines 

Midway Connection 

Airlines 

Guine-Bissau 

Air Alliance 

Air Vitkoviee 

British World Airlines 

Emirates 

Japan Air Commuter 

Midwest Express 

Sabourin Lake Airways 

Transpories Aereos de 

Air Alma 

Airways International 

Business Air 

Empire Airlines 

Japan Airlines 

Airlines 

SAETA 

Cabo Verde 

Air Alpha 

Air Zaire 

Business Express 

Ensor Air 

Japan Air System 

Missionary Aviation 

SAHSA 

Transpories Aereos 

Air Aruba 

Air Atlantic g M 

Air Atlantlque W 

Air Austral • 

Air Baffin ^ i 

Air B.C. M J J 

Air BeJgiu ^ 

Air Zimbabwe 

Air 2000 ^ 

Aklak Air w 

BWIA international 

Equatorial lematio rial 
Alrfine^V Sao Tome 

Japan Asia Airways 
Japan Trartsocfln Air 
Jersey Europ^V 

Fellowship 

Modlluft 

Monarch Airlines 

SAL Saxonia Airlines 

SAM ^ 

Samoa Aviation K 

Regional^ 

Trans StajVAiriinEs 

Airborne of Sweden 

Air Botnia 

Alitalia 

Cape Air 

Euroflignt Sweden 

Europe Aaro Service 

Karo puches Ajrl ines 
Karair oy 

Nantucket Airlines 

SAo (Scandinavian 
Airlines) 

Trinidad & Tobago Air 
Services 

Air Botswana • __ 

Air Burkina 

Air Burundi M K 
Air CaledonieX^M^ 

Air Caribbean 

Air Chathams 

Air China M 

Air Co mo res -M • 

Air Corbie re m t 

Air Creebec ■ ✓‘"“j 
Air Dotomiti T 

Air Engiadina ' 

Alkan Air 

Allegheney ajfunuter 

Alpine Aviation 

Alsair 

-Democratic 

Ansett Australia 

Cape Smythe Air Service 
Care Airlines 

Carnival Air Lines 

CC Air rWay * 

Central American 
Airlines^ 

Central lAjntam Air 

'JeBm 

Chicago Express 

Eurowings NFD RFG 

/ 

pPl 

FIJI Air Services 

Kendell Airlines 
Kenmore Air 

Kenn Borek M 

Airlines ^ 

KLM City Hopper 
KLM-Royal Dutch 
Airlines 

Kymair 

Naske Air 

| Natfhal Airlines (Chile) 
f Nynal Airlines (S_A_) 

rNew York Helicopter 
Corporation 

Nortandair 

SATA Air Acores 

SATENA ^ 

Saudia M K 

il fp 

Servicio Aereo Leo 

Lopez 

Serviclos Aereos Litoral 
Servivensa 

mmei 

Shorouk Air 

Tropical Sea Air 

Uganda Airlines 

Ukraine International 

Arrlinti 

Unitair J 
dynitedMirlines 

Airways 

Vaidnciana de Avtacion 


AIRES 

Air Excel Netherlands 
Air Express 
Air Facilities 
Air France 
Air Gabon 
Air Gambia 
Air Guadeloupe 
Alr-lndla 
Air Inter 
Air Ivoire 
Air Jamaica 
Air Kangaroo Island 
Airkenya Aviation 
Air Kilroe 
Air Koryo 


Arnett New Zealand 
AOM French Airlines. . 
Aquatic Airways 
Arctic Circle Air Service 
Arcus Air Logistic 
Ariana Afghan Airlines 
Aries Del Sur 
Arizona Airways 
Arizona Pacific Airlines 
Arkia Israeli Airlines 
Asians Airlines 
Athabaska Airways 
ATI-Aero Transport! 
Italian) 

Atlantic Air Transport 
Atlantic Airways, Faroe 


Airlines 
China Airlines 
China Eastern Airlines 
China General Aviation 
Corporation 
China Northern Airlines 
China Northwest 
Airlines 

China Southern Airlines 
China Southwest 
Airlines 

China Xinhua Airlines 
Cimber Air 
CityFtyer Express 
Coast Air 

Coastal Air Transport 


Right West Airlines 
Flitestar 
Florida Gulf 
Flying Enterprise 
Forest Airline 
40-Mile Air 
Freedom Air 
Fhesenflug 

Frontier Flying Service 
Gambia Airways 
Garuda Indonesia 
Gawne Airlines 
G 8 Airways 
Ghana Airways 
Gill Aviation 
Golden Air Flyg 


LAB 

L-A.B. Flying Service 
Labrador Airways 
LACSA 
LADE 

Ladeco Airlines 
Ladeco 
Laker Airways 
LAM-Unhas Aeraas de 
Mocambkjue 
Lan-Chile 
Lao Aviation 
LAP (tineas Aemas 
Para quay as) 

LARA (Lineas Aemas 
Prrvadas Argentines) 


Norontair 

North American Airlines 
North Coast Aviation 
Northeast Express 
Northwest Airlines 
Northwest Territorial 
Airways 

North Wright Air 
Nyge-Aero 
O'Connor Airlines 
Olson Air Service 
Ot-T-Qstfriesische 
Luftransport 
Olympic Airways 
Oman Air 
Ontario Express 


ShuswBp Flight Center 
Sichuan Airlines 
Sierra National Airlines 
Silk Air 
Simpson Air 
Singapore Airlines 
Skagway Air Service 
Skycraft Air Transport 
Skynet Airways 
Skyport Pty 
Sky Service 
Skyways AB 
Skywest Airlines (U.S.) 
Skywest Airlines (Aus.) 
Skywings 
Solomon Airlines 


Valuejet Airlines 
VARIG-Brazilian Airlines 
Nfeyudoot 

Vlacao AArea sao Paulo 
VIASA 

Vieques Air Link 
Vietnam Airlines 
Virgin Atlantic Airways 
Vision Airways 
Viva Air 
VLM 

Voyageur Airways 
Wagltsla Air 
Wairarapa Airlines 
Walkers International 
Warbelow’s Air Ventures 


Airt^A. 

Islands 

Coast to Coast Airlines 

Goldfields Air Services 

Larrys Flying Service 

Orbi Georgian Airways 

South African Airways 

Waterwings Airways 

Air Lanka 

Atlantic Coast Airlines 

Colgan Air 

Gonini Air Service 

Las Vegas Airlines 

Orient Air 

South Central Air 

Wfestair Commuter 

Air Liberie 

Atlantic Southeast 

Columbia Pacific 

GoBa Shuttle Express 

Latvian Airlines 

Oxley Airlines 

Southeast Airlines 

Airlines 

Airline Lithuania 

Airlines 

Airlines 

GP Express Airlines 

Lauda Air 

Pacific Airlines 

Southeast European 

West Air Sweden 

Airlines of Carriacou 

ATS Vulcan 

Comair 

Grand Airways 

Lesotho Airways 

Pacific Coastal Airlines 

Airlines 

Western Airlines 

Airlines of Tasmania 

Augusta Airways 

Commercial Airways 

Great Barrier Airlines 

Letaba Airways 

Pacific Express Airlines 

Southern Air 

West isle Air 

Airlink 

Aurigny Air Services 

Compagnie Aerienne 

Great China Airlines 

LGW 

Pacific Island Aviation 

Southwest Airlines 

Whyalla Airlines 

Air Littoral 

. A us- Air 

Corse Meditemanee 

Great Lakes Aviation 

Luftfa hrtgeseJ Ischaft 

Pakistan International 

Spirit Airlines 

Wlderoe’s Flyveselskap 

Air Madagascar 

Austral 

Compagnie 

Gronlandsfty 

Walter 

Airlines 

Spurwing Air 

Wilderness Airline 

Air Malawi 

Australia Asia Airline 

Aeronautique 

Guinee Airlines 

UAT 

Pahtanaf Linhas Aereas 

Stablechance 

Windward Islands 

Air Malta 

Austrian Airlines 

Europeenne 

Gulf Air Company 

Liberty Airlines 

Papillon Airways 

Stateswest Airlines 

Airways International 

Air Manitoba 

Austrian Air Services 

Com pan fa de Aviacion 

Gulfstream International 

Lina Congo 

Paradise island Airlines 

Suckling Airways 

Wings of Alaska 

Air Margarita 

AVENSA 

Faucett 

Airlines 

Lincoln Airlines 

Pem-Air 

Sudan Airways 

Wright Air Service 

Air Maroochy Airlines ■ 

AVIACO 

Condor Flugdienst 

Guyana Airways 

Link Airways 

Penair 

Sunaire Express OY 

Xiamen Airlines 

Air Marshall Islands 

AV1ACSA 

Connectair Charters 

Hageland Aviation 

Lithuanian Airlines 

Perimeter Airlines 

Sun-Air of Scandinavia 

Company 

Air Martinique 

Avta Express 

Conquest Airlines 

- Services 

Loganatr 

Philippine Airlines 

Sunflower Airlines 

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Air Mauritanie 

AVIAN CA 

Contact Air 

Hainan Airlines 

Loken Aviation 

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Air Mauritius 

Avianova 

Conti -Flug 

Haines Airways 

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PLUNA 

Surinam Airways 

Yemenia-Yemen Airways 

Air Midwest 

AV1ATECA 

Continental Airlines 

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SWISSAIR 

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Air Moldova 

A wood Air 

Continental 

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lOT-ffoftsh Airlines 

Portugal!* 

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Air Molokai 

Azerbaijan Hava Yoilari 

Micronesiainc. 

Hanna's Air Saitspring 

Love Air 

Prairie Flying Service 

. TAAG-/\ngoIa Airlines ' 

Yute Air Alaska 

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CO PA (Compania 

Harbor Airlines 

LT.U. International 

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Panamena de Aviacion) 

Harbour Air 

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Private Jet 

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Balkan-Bulgarian 

Corporate Airlines 

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THE FINEST IN THE SKY. 



4 


m 


FINANCIAL TIMES TUESDAY MAY 24 1994 


NEWS: INTERNATIONAL 


Japanese cut 
investment 
flows abroad 


By EmBco Terazono in Tokyo 

Japan's role as a supplier of 
international capital is waning 
as domestic institutions have 
pared down overseas invest- 
ment and fond flows from the 
US have risen sharply, accord- 
ing to a report by the Bank of 
Japan, the country’s central 
bank. 

While Japanese financial 
institutions were leading pro- 
viders of capital during the 
late 1980s, this has chang ed 
because of the hurst of the eco- 
nomic “bubble 1 ’ in 1990. And 
although Japanese investors 
again turned buyers of over- 
seas securities last year, the 
recent rise in US interest rates 
has prompted a sell-off. 

The report provides some 
explanation of the strength in 
the yen. Part of the recent 
upward pressure on the yen 
has come from the decline in 
Japanese demand for dollars 
and the rise in demand for yen. 
According to the Bank of 
Japan, overseas investment in 
the Tokyo stock market 
totalled a record $34.5bn 
(£2SL9bn) during the first quar- 
ter of this year. 


Chinese newspaper 
calls for free courts 


China’s top legal newspaper 
yesterday called for Judicial 
independence, saying Commu- 
nist party officials still tipped 
the scales of justice. Reuter 
reports from Beijing. 

The Legal Daily's front-page 
editorial said free courts were 
essential to developing a mar- 
ket economy. “The courts have 
become administrative tools of 
the government" the editorial 
quoted one unnamed court offi- 
cial as saying. “Judicial rights 
and adminis trative rights are 
combined into one and used 
against those under govern- 
ment supervision. What kind 


of appeal can they mate?” 

The newspaper's editorial 
contradicted usual Communist 
rhetoric that China’s courts 
and judicial organs operate 
completely independently from 
the party and government 

While Beijing has sought to 
strengthen its legal system by 
issuing new laws, approving 
law offices and improving edu- 
cation, it has not addressed the 
question of whether or not the 
courts are impartial. Many Chi- 
nese assume they are not and 
are run instead an a system of 
favours rigged to benefit those 
in power. 


Chamber opposes Patten 


By Louise Lucas in Hong Kong 

The Hong Kong General 
Chamber of Commerce, which 
boasts 3.550 corporate members 
and which has been seen as 
adopting an increasingly pro- 
Beijing slant, has told the gov- 
ernment it opposes a key plank 
of the constitutional reform 
hill of Governor Chris Fatten. 

The bill, the second stage of 
which was submitted to the 
Legislative Council on March 
9, aims to broaden the fran- 
chise by creating nine new 

N Korea 
‘replaced 
fuel rods’ 

South Korea said yesterday 
North Korea might have 
already replaced up to IS per 
cent of fuel rods at a nuclear 
reactor without supervision by 
international inspectors, Reu- 
ter reports from SeouL 

“The exchange oF fuel rods at 
the 5MW reactor In Yongbyon 
is believed to have been 10 to 
15 per cent complete so far," 
Yonhap news agency quoted 
Mr Lee Hong-koo, unification 
minister, telling parliament 

The agency said there were a 
total of 8,100 uranium fuel rods 
at the reactor, which could 
hold vital evidence on whether 
Pyongyang has developed a 
nuclear bomb as suspected by 
some western governments 
and intelligence agencies. 

A team of nuclear inspectors 
from the International Atomic 
Energy Agency (IAEA) is due 
to arrive in the North today for 
talks on the refuelling. 

Mr Kim Dai-ho. a former offi- 
cial at North Korea’s Yong- 
byon reprocessing plant, told 
the Japanese daily Yomiuri 
Shimbun the North had 
secretly extracted 12kg of plu- 
tonium from spent fuel in 1988 
despite its public denials. 

North Korea, which denies 
trying to develop such weap- 
ons. Insists the only plutonium 
it ever produced at Yongbyon 
was “a tiny amount" reluc- 
tantly owned up to in 1992. 

Vietnamese 
output up 12.1% 

Vietnam’s industrial output 
increased by 12.1 per cent in 
the first four months of 1994 
over the same period last year, 
and prospects for food produc- 
tion and inflation levels are 
good, the government said yes- 
terday, Reuter reports from 
Hanoi 


“jumbo" electorates and replac- 
ing corporate with individual 
voting in the functional con- 
stituencies, which represent 
business and professional 
groups. 

The chamber, which now 
holds a seat in LegCo and thus 
has a vested interest in pres- 
erving the status quo, churns 
the new functional constituen- 
cies should retain the essential 
features - to represent specific 
sectoral interests with a lim- 
ited electorate - of the existing 
21 functional constituencies. 


Finance minister expects revival of customs revenues 

Lower Indian budget deficits forecast 


During the late 1980s, Japa- 
nese investment in overseas 
assets fritd mting securities and 
property prompted a large cap- 
ital outflow. Between 1985 and 
1989, annual net outflow of 
long-term capital averaged 
$110bn. However, this has 
since fallen sharply and in 1992 
Japan saw a total $28J>bn out- 
flow in long-term capital and 
an outflow of $78.3bn last 
year. 

Securities investment by 
Japanese investors last year 
rose 50 per cent from the previ- 
ous year to $51.6bn because of 
the rally in US and European 
stock and band markets. Inves- 
tors bought a net $2L9bn in US 
securities, up 2J5 times from 
the previous year, and $17.4bn 
in German securities, up 2.1 
times. Net purchases of French 
securities rose five times 
to (lObn. but buying of UK 
securities fell 1.8 per cent to 
$16.8bn. 

Downward pressure on the 
dollar has stemmed from US 
overseas investments. The 
report says overseas securities 
investment by US investors 
last year totalled L5 times that 
of Japan’s at $125.4bn. 


By Alexander NicoH, 

Asia Editor 

India's budget deficit, which 
sharply exceeded its target in 
the last fiscal year, is on 
course for steady reduction 
over the next few years, Mr 
Manmbhan Singh, fi nan ce min- 
ister, said yesterday. 

Mr Singh told a meeting of 
finance and business execu- 
tives in London that last year's 
overshoot - to more than 7 per 
cent of gross domestic product, 
compared with a 4.7 per cent 
target - had been partly 
caused by unexpectedly low 


receipts from import duties. 

Customs duties account for 
about 40 par cent of govern- 
ment revenues. 

Cuts in import duty rates 
had not produced a sufficient 
rise in Import volumes to com- 
pensate for the revenue lost 
But Mr Singh expected reve- 
nues to bounce back this year. 
The budget deficit should drop 
by about l per cent of gross 
domestic’ product each year, 
bringing it down to 3 per cent 
in three to four years, he said. 

The rise in inflation, which 
has recently beat nudging into 
double figures, was a tempo- 


rary phenomenon, he said. The 
rate should drop back down 
when this year’s crops come in. 

Economic growth should be 
at a minimum of 5 per cent 
year at much higher 
rates in the later half of the 
ripc a d*. he said. 

Mr Singh restated the gov- 
ernment’s commitment to 
reform of the economy, saying 
that "any impression that we 
have lost our enthusiasm or 
slowed down would be errone- 
ous”. 

By correctly sequencing 
reforms, he said, “we have 
avoided the aberrations which 


have proved the undoing of the 
reform process in many other 
developing countries”. Infla- 
tion had come down and out- 
put had continued to grow as 
the reforms were put in place. 

Meanwhile, a broad consen- 
sus of support for economic 
reform bad developed through- 
out the country so that reform 
was now irreversible, he said. 

Although enough political 
support had not yet developed 
far foil-scale privatisation, the 
government had opened up vir- 
tually all sectors to private 
competition, so the public 
sector's share of the 


economy was bound to shrink. 
Stefan Wagstyl adds from New 
Delhi: Prime Minister P.V. 
Narasimha Sao yesterday 
urged foreign companies to 
Invest in India, saying: “It is a 
free market now. There are no 
shackles anywhere. Invest in 
anything in India.” 

Mr Bao was speaking at a 
power industry conference, 
attended by Indian and foreign 
businessmen. It was his first 
meeting with a business audi- 
ence since returning from a 
trip to the US, where invest- 
ment promotion topped his 




Alexander Downer (left), new leader of Australia’s opposition Liberal party, talks to the press in Canberra yesterday as his deputy Peter Costello listens am 

AUSTRALIAN OPPOSITION PICKS YOUTHFUL LEADERSHIP 


By Nikki Tait In Sydney 

The Australian Liberal p&ty, the main 
federal opposition party, yesterday 
voted for a change of leader, with Mr 
Alexander Downer replacing Mr John 
Hewson. Mr Peter Costello, joining 
Mr Downer on a joint “youth” ticket, 
will act as Mr Downeris deputy. 

The change was achieved at a 


laminate party meeting in Canberra 
called by Mr Hewson to face up to 
the challenge. Mr Downer won 43 votes 
against Mr Hawsm's 36. The build-up 
to his overthrow began with the 
opposition's surprise loss in elections 
just over a year ago to Mr Paul 
Keating’s incumbent Labor party. 
Although Mr Hewson’s fortunes 
revived last summer when the 


government's budget was stalled in 
parliament for two months, his opinion 
poll rating then dropped very sharply. 

Mr Downer, aged 42, comes from 
an Adelaide establishment family 
which has been involved in federal 
politics for several generations. His 
father was immigration minister in 
the Henries government Such a 
background has often been viewed 


as a liability hot Mr Downer has 
attempted to combat this image 
- partly through astute handling of 
the shadow treasurer’s job, and partly 
by consdons efforts to portray a 
down-to-earth, family image. . 

Mr Costello, six years younger than 
Mr Downer, Is a Melbourne lawyer 
who has been in federal politics for 
only fear years. 


Hebron observers left watching from their window 

Julian Ozanne reports on an Israeli cuifew that shut the international force of 1 17 inside its compound 

A Norwegian member of the : between Hebron’s 110.000 Arab resi- agreement specified that observers cheque by Denmark, Norway a 

international observer force The Bank of Israel, the country’s dents and militant Jewish settlers would be denied entry to any ana Italy. 

in Hebron pointed to the central bank, announced yesterday after the February 25 Hebron mosque which Israel declared a closed mfli- The compound, which has been c 


A Norwegian member of the 
international observer force 
in Hebron pointed to the 
stretch of tarmac outside the force’s 
compound: “We are not allowed to 
move beyond that point. We can't 
patrol the town. We don’t know what 
is going on beyond our front door.” 

As he spoke last week, the West 
Bank flashpoint of Arab-Jewish vio- 
lence was under a 24-hour military 
curfew. Israeli soldiers were conduct- 
ing house-to-house searches looking 
for Palestinian guerrillas who killed 
two Israelis in revenge for an attack 
on Palestinians the day before. 

Israel has since lifted the cuifew 
but the incident has left doubts 
among Palestinians about the credi- 
bility of the observer force which was 
deployed two weeks ago. 

“This was the most significant test 
so for of the force but they did noth- 
ing." said Mr Awny Sugbyer, deputy 
mayor of Hebron. “The Israelis made 


The Bank of Israel, the country’s 
central bank, announced yesterday 
it would raise interest rates by half 
a point in the hope this would help 1 
the fight against inflation, Reuter 
reports from Jerusalem. The rate 
on its daily monetary tender to 
commercial banks would rise from 
Thursday to a minimum HL8 per 
cent, up from a minimum 10.3 per 
dint It was the setbnd such rate 
rise this month. 

the whole area a closed military zone 
and the observers were not even 
allowed to enter any of the places of 
violence. 

“People feel angry and sad about 
the force. There were high expecta- 
tions when they first came here bat 
now people say they can’t do any- 
thing to protect Palestinians." 

The observer force has a three- 
month mission to reduce tension 


between Hebron’s 110.000 Arab resi- 
dents and militant Jewish settlers 
after the February 25 Hebron mosque 
massacre of 30 Palestinians. 

They were deployed in the wake of 
a United Nations Security Council 
resolution and weeks of difficult nego- 
tiations between Israel and the Pales- 
tine Liberation Organisation. After 
fierce arguments about the size of the 
force and whether its members should 
be armed, the two sides eventually 
agreed to a .160-strong force from 
Italy. Denmark and Norway, of whom 
60 should carry arms “for their per- 
sonal protection". 

The force quickly ran into prob- 
lems. First it was unable to recruit 
enough suitable people and settled for 
117. Second, despite the hard PLO bar- 
gaining for light weapons, the observ- 
ers derided against bring armed. This 
left the force under the protection of 
the Israeli army. 

Last, a clause in the lsraebPLO 


agreement specified that observers 
would be denied entry to any area 
which Israel declared a closed mfli. 
tary zone. 

Israel’s declaration of the whole of 
Hebron as a dosed zone “was a funny 
interpretation of the agreement that 
we did not expect”, said Mr Bjarno 
Sorenson, spokesman for the force. He 
said (he force had filed a complaint 
but could do little else. In response to 
Palestinian criticism that the force 
had been unable to prevent Israeli 
soldiers and settlers wounding 19 Pal- 
estinians last Monday and bad been 
denied access to the site, Mr Sorenson 
said: 'People here want us to be a 
shield but the word protection for us 
means to report an impartial view of 
what is going on here." 

Criticism Is also emerging about the 
financing of the force. One observer 
said it had no fixed budget but had 
been told to spend as much money as 
possible and had been given a blank 


Report criticises assistance ‘tied’ to purchases from donor countries 

Call to improve aid programmes 


By Mchari Holman, 

Africa EcStor 

An independent evaluation of 
international aid published 
yesterday sharply criticises 
tied aid, expresses concern that 
donors are failing to merit com- 
mitments to increase assis- 
tance, and says only 6.5 per 
cent of aid is spent on meeting 
the needs of the poorest 
Official development assis- 
tance (ODA) worth $80.4bn 
(£40bn) represented just over a 
third of the net flow of 
resources from the countries of 
the Development Assistance 
Committee (DAC) to develop- 
ing countries in 1992, said the 
report. The Reality of Aid. Aid 
flows were critical in sub- 
Saharan Africa, where aid 


averages more than 13 per cent 
of gross national product 

The study, published by the 
London-based charily Action- 
aid, was edited by Develop- 
ment Initiatives, an indepen- 
dent consultancy specialising 
in aid and development policy. 

The era of slowly growing 
aid is coming to an end, says 
the report with the increase in 
real terms In aid from DAC 
donors of only. 0.5 per cent 
between. 1991 and 1992. 

The share of humanitarian 
relief and peacekeeping has 
gone up from 13 per cent in 
1988 to more than 7 per cent in 
1991. 

Business interests . are 
becoming more assertive and 
their influence in the shape of 
aid and the countries it goes to 


appears to be increasing. This 
is not being matched by any 
coherent attempt to serve the 
needs of the poor. 

However, the report notes 
that DAC measures introduced 
in 1992 to Improve the q uality 
of tied aid “appear to be 
increasing accountability and 
having some impact”. 

Around SISbn each year has 
been tied to the purchase of 
goods and services from indi- 
vidual DAC members, says the 
report In 1991 this rose to 
nearly $l8bn. 

“This results in developing 
countries paying above the 
market rate," says the report, 
adding that estimates vary 
between 10 and 20 per cent. 

“This excess price is a direct 
subsidy to exporters in OECD 


countries amounting to more 
than S2bn a year - nearly 4 per 
cent of DAC aid." 

The volume of untied aid is 
unduly inflated by relief for 
bad debts arising out of export 
credit agreements which have 
originated from export promo- 
tion for domestic indurtry - 
SLSbn in 1991 or 12 per cent of 
total ODA 

The aid available for sustain- 
able development is bring bit 
by a combination of declining 
public expenditure budgets in 
the OECD and the increasing 
use of ODA to meet costs for- 
merly borne by other govern- 
ment departments, The costs of 
asylum seekers and forgive- 
ness for bad debts arising from 
commercial export credits 
accounted for 5 per cent of 


nddafd * 

M % Of fateS otfkisj 'aidj JQet ' ' 

NewZMfand t ■■ ... | 

'• Portugal ■ j 

iwh-rf**!* i, i :. . -j 

Nonway HK v 


SimdttT 

■ os 

Canada 

Germany 

UK 

ftartce 

Austria 

FMaprf 


cheque by Denmark, Norway and 
Italy. 

The compound, which has been off- 
limits to outsiders, is reportedly 
stacked full of new computers, fax 
machi ne s and furniture and the force 
Is lavishly equipped with Israeli 
radios, mobile telephones and rented 
cars. According to the agreement, all 
equipment bought fry the force wffl.be 
handed over to the FLO once the mis- 
sion is completed. 

The real problem remains the con- 
flict between Palestinians and mili- 
tant Jewish, settlers in Hebron, a town 
sacred to both Moslem and Jew. 
“There is a contradiction between set- 
tlements in the town and peace. 
Together they are impossible,” said 
Mr Khaled Osaily, a local busines s- 
man. “The force dearly can do noth- 
ing about that. For us Palestinians 
the worst thing is that by bring here 
maybe they will legitimise Hi p pres- 
ence of the settlers .” 


•i vf- 

•r ,s iv 



ttafr 

Austmfla 


SaBCa: Mtotf • . 

total ODA in 1992, It says. 

Public suport still far out- 
strips criticism of aid and its 
effectiveness, the report adds, 
“and the universal picture of 
rid fatigue is not home out by 
opinion prills which continue 


'■■JW. i' » 


to show that public support is 
founded on humanitarian con- 
cern". 

The RaoSty^ Aid 94. Action- 
aid, Btmtiyn Bouse, Antooau, 
London N19 SPG. Tel (071) 
281-4101 fax 281-5146 


Nigerian 
election 
attracts 
few voters 

By Paul Adam to Ugoa 

A partial boycott and 
widespread public apathy fed" 
to a low turnout yesterday fa 
Nigerian elections lor delegates 
to next month's constitutional 
conference, which is to be the 
basis of the military govern- 
ment's political programme. 

It followed the annulment of 
a presidential election last 
June after it had become deer 
that Mr Moshood Ablola, a 
businessman from 'the 
south-west, bad won. 

Political parties and associa- 
tions have been banned 
Gen Sani Abaeha became head 
of state last November and so 
campaigning by contestants 
was allowed before yesterday's 
vote. Mr Ken Saro-Wlwa, a 
well-known political activist fa 
Fort Harcourt, was stopped 
from holding a pre-election 
rally and was arrested at tbs 
weekend. The 270 elected dele- 
gates to the constitutional ecu. 
ference will be joined by to 
government nominees. 

Those who voted said that 
unless they took part they 
could not influence the consti- 
tutional conference. But sailor 
politicians around Nigeria say 
there is no need for the confer- 
ence because Nigeria's political 
problems lies not with the con. 
stitotion but the military elite 
who obstruct it The Campaign 
for Democracy has called the 
conference a ruse to buy time 
for a regime which lacks direct 
tion. 

Other critics of the confer- 
ence say it will be subordinate 
to the will of the military 
regime, that the government 
has not stated how long it 
intends to stay in power and 
that the absence of any elec- 
toral law and lack of prepara-, 
tions for polling make the poiB- , 
ing invalid. 

In the Yorafaa homeland at 
Mr Abiola in the south-west, a 
coalition of politicians led by 
two former state governors 
told its members not to stand 
as delegates for the conference, 
and called for a poll boycott 
Elsewhere two powerfi 
groups have boycotted ft 
whole process: leaders of tt 
large flaw tribe in the soutl 
east and a powerful alliance < 
retired military officers froi 
the central region. 

All Nigerians over 18 yeai 
were entitled to vote by ope 
ballot at more than 100,00 
polling stations in Nigeria, t 
choose five candidates for ead 
of 6,000 wards. No official fig 
ores are yet available but b 
Lagos and the capital, Abuja 
the turnout seemed as low a 
20 per cent and many voter, 
admitted they were not certau 
what they were voting for. 

Mr Bernard Mbah, who is tin 
national organiser of the polls 
told reporters in Abuja that the 
polling was “impressive". 

UN envoy 
calls off 
Kigali visit 

Mr Iqbal Riza, a United 
Nations special envoy, 
yesterday called off a trip to 
the Rwandan capital Kigali, 
saying warring parties could 
not guarantee his safety. 
Reuter reports from Mnfindi, 
Rwanda. 

“Both sides seem to have 
difficulty in securing our 
security. So we cannot go 
along the route into Kigali,” he 
told reporters before driving 
back into Uganda. He said he 
hoped to try and fly into Kigali 
from Uganda today. 

Mr Riza was to have 
travelled from northern 
Rwanda by road to Kigali to 
meet the government aide after 
talks with rebels on ending 
seven weeks of violence m 
Rwanda in which an estimated 
half a milium people have died. 

• Fighting appeared to have 
resumed in Kigali in earnest 
after combatants agreed a 
truce to allow the envoy to 
visit 

The talks with the rebels 
failed to agree on the key iss« 
of foe number of UN troops 
needed in Rwanda. Mr Ri* 8 
said he had no mandate to 
alter the UN force figure of UP 
to 5,500 authorised by the 
Security Council lust week- 
The Rwanda Patriotic From 
(RPF) rebels insist on at most 
2 ^00. 

A rebel spokesman said the 
RPF turned down Mr Rh» * 
appeal that It enter talks wwj 
the interim government, whioi 
took over after President 
Juvenal Habyartmana was 
killed along with his BuruMJ 
counterpart in a rocket 
on their aircraft on April 6- 
That tragedy sparked t&e 
current massacres In Rwanaa 
blamed largely on Mr 
Habyarimana’s troops 
militias from his majonry 
Hutu tribe. 


>ii(i 


0 


I A 


-\lr* FINANCIAL TIMES TUESDAY MAY ick^ 

e|^ 

House urged 
> ■%> to end Bosnia 
arms ban 


NEWS: THE AMERICAS 


By George Graham 
fn Washington 

Th$ House of Representatives 
today debates a resolution 
requiring the US .to stop enfor- 
cing the United Nations arms 
embargo against the former 
Yugoslavia and to supply 
weapons to the Bosnian Mos- 
lem government. 

The debate comes two weeks 
after the Senate voted to 
require the administration to 
breach the arms embargo, and 
a House vote could further 
complicate the White House's 
efforts to avoid getting dragged 
into the Bosnian war. 

President Bill Clinton has 
said he favours lifting the arms 
embargo on Bosnia-Hercego- 
vioa but does not want to act 
unffateraHy, in fortanm of the 
wishes of the European coun- 
tries which ™akft up the bulb, 
of the UN peacekeeping force 
in Bosnia. 

Mr William Perry, the 
defence secretary, has been 
leading the drive to block the 
measure, warning members 
that lifting the embargo would 
probably lead to the with- 
drawal of UN forces from Bos- 
nia and threaten supplies to 
Sarajevo atih other citie s held 


Court rejects base 
closure challenge 


The US Supreme Court 
yesterday rejected a challenge 
to the complex procedure for 
agreeing military base clo- 
sures, saying it had no author- 
ity to review the president's 
decision on the tease, writes 
George Graham. 

The challenge, brought by 
Senator Arten Specter of Penn- 
sylvania, threatened to upset 
the iMiwte huav flndng im»h- 
anism, under which the 
defence secretary presents 
recommendations for the do- 
sure of military bases to an 


independent commission, 
which holds public hearings 
and then draws up its own Hst 
That list is then sent to the 
president, who may reject it in 
its entirety but not pick and 
choose among its recommen- 
dations. 

Congress, too, may reject the 
whole Usi, but again, may not 
pick and choose. 

The whole procedure was 
designed to stop members of 
Congress UnAfag the closure 
of mffitaiy bases within their 
dist r i cts. 


North-east limps behind rest of Brazil 

Poor government puts the brakes on development, writes Angus Foster 


by the Bosnian government. 

“The US might have no 
choice but to intervene mas- 
sively in the conflict or acqui- 
esce in a humanitarian and 
political disaster,” Mr Perry 
cautioned. 

The resolution, sponsored by 
Congressman Frank McClos- 
key of Indiana and Congress - 
man Benjamin Oilman of New 
York, requires the president to 
‘'terminate the US arms 
embargo of the gover nm ent of 
Bosnia and Hercegovina upon 
receipt from that government 
of a request tor assistance in 
exercising its right of self-de- 
fence." It directs the president 
to provide “appropriate mili - 
tary assistance" and enthorisea 
the transfer of up to $200m 
(£138m) of military, equipment 
and training services to the 
Bosnian government 

Congressman Lee Hamilt on 
of Indiana, chairman of the 
House foreign affairs commit- 
tee, win propose a substitute 
version which would direct the 
president to consider lifting 
the aims embargo, but would 
not require him to act unilater- 
ally. The tougher McCloskey- ■ 
Gilman version, however, is 
believed to have attracted con- 
siderable support. 


S itting amid peetthg paint 
and regular power cuts, 
the secretary of health 
for Brazil's north-eastern state 
of MaranMo Is remarkably 
good humoured. Mr Marival 
Pinherio Lobto even laughs 
I when asked how many people 
! work under him. “It’s too 
| disorganised to know. And peo- 
1 pie often get moved around 
, each month for political rea- 
sons "he says. 

Mr Lobfio is one of many 
frustrated but largely power- 
less giw anment nffiriak in the 
north east, a poor and 
extremely underdeveloped 
region. Social indicators in the 
region contrast sharply with 
Brazil's rich south. 
North-easterners are likely to 
live 10 years less than the 00- 
year average in the southern 
state of Sin Paulo. 

The illiteracy rate of 43 per 
cent is more than twice the 
national average. Of the 42m 
people in the region, lm have 
no qn ri a farther nm 

sur v ive on the minimum sal- 
ary of about $65 a month. Dis- 
eases such as cholera mid lep- 
rosy, mice on the wane, are 
increasing in several states. 
“These diseases are not really 
health issues, but signs of pov- 
erty," according to Mr Lobfio. 


The north-east's backward- 
ness stems from a mixture of 
bad government, both at local 
and national level, and corrup- 
tion. But the problems are 
hard to tackle because of an 
ingrained aversion to change 
and the lack of education 
Some states, notably Ceara; are 
trying to reform but it will 
take years to solve even basic 
problems like education and 
health. 

The difficulty lies in the 
political system. Most states 
are controlled by a handful of 
ruling families who share the 
p ol iti ca l gpri economic spoils to 
maiTitaiw power and prevent 
modernisation In Marnrihfln 
for .example, former president 
Josfi Sarnay controls the larg- 
est TV broadcaster and the 
Tn»to newspaper, Hfc daughter 
Roseana is expected to win the 
race for governor in October. 

Mr Gastfio Dias Vieira, a 
local politician critical of the 
ruling classes says at t e m p ts to 
TnrvWrrteg the have felled 
b ecaus e of n** elite’s grip mi 
power. Two enmpaniga. mining 
group Vale do Bio Doce and 
aluminium producer Alcoa, 
recently invested about $4bn in 
the local economy. But the 
government, mctoaii of using 
the revenues from these invest- 


ments to improve education or 
attack hunger, spent it instead 
on construction projects to 
b ene fi t their political backers. 
Including the construction 
companies themselves. 

The elite's grip on power is 
reinforced by the region’s 
backward education standards 
and a patron-client tradition 
stemming from nearly 400 
years of a slave-based econ- 
omy. In rural areas of gnTr i <> 
states, more than half the pop- 
ulation is illiterate, la states 
like Alagoas, whence Mr Fern- 
ando Conor rose to the presi- 
dency before resigning amid 
corruption charges, there have 
been comphrinta of wnqnaKffod 
people being given jobs as 
teachers in return for votes. 

Mr Marip a Work- 

ers party politician in Cearfi 
state, says: “Voters here don’t 
want to know your record but 
whether you pan help Hum get 
a job. It makes buying votes 
very easy." 

Despite ingrained forces 
against change, there Is a 
small but growing list of states 
nr>d qtiea fr ryn good 

government and reduced levels 
of corruption. Slowly, change 
is coming from individual 
members of the elites, often 
educated abroad, who are pro- 


p j - .L " £:.V >0..f ■ 

c,±: * 



pared to fight for change. 

In Cearfi, still one of the 
poorest states in the 
north-east, an enlightened 
businessman won the post of 
governor in 1987 and decided to 
frafeo on the ruling class. One of 
kfir Tasso Jereissati's first ads 
was to dismiss 48,000 "teach- 
ers" who had been recruited in 
just one week before a previ- 


UN to monitor Haiti sanctions 
efforts by Dominican Republic 


ous campaign. 

“People said I would never 
win another election because 
they thought politicians 
needed to control all the jobs 
to be strong. But you need to 
confron t this," he says. 

Cearfi was one of the first 
states to balance its budget 
and has enjoyed economic 
growth above the national 


SALEROOM 


average. The state’s reputation 
for dean government is also 
attracting multilateral agen- 
cies such as die World Bank, 
which are often reluctant to 
lmri to other nearby states. 

In S2o Lids, the capital of 
Maranhfio, attempts are also 
undor way to dislodge the 
elites. Mayoress Conceic&o 
Andrade, of the Brazilian 
Socialist party, inherited a gov- 
ernment which employed one 
in four of its population and 
spent 96 per cent of its tax rev- 
enues on salaries. She has cut 
the payroll by a fifth and intro- 
duced the strange -hi Brazil- 
ian terms - concept of fiscal 
thrift. “We never spend all we 
collect from taxes. Instead, we 
hold back a bit for invest- 
ment,” she says. 

But even the mayoress is 
pessimistic about the pace of 
reform in the north-east espe- 
cially in the rural areas, where 
poor levels of education and 
resistance to change are a 
brake to reform. And It Is still 
extre m ely rare for individuals 
or groups to join together as 
citizens or trade unions and 
riamand change. “Most people 
are hungry a lot of the time. 
It’s difficult for people like that 
to feel like citizens and 
demand their rights,” she says. 


By Canute James In Kingston 

A team of United Nations 
observers has arrived in the 
DcanmicaxL Republic to monitor 
the country’s adherence to 
tighter economic sanctions 
a gains t neighbouring Ha iti 
which, went into force at the 
weekend. 

Their arrival coincides with 
reports that the US wifi con- 
sider iwpKing trade penalties 
on the Dominican Republic if 
the government foils to curb 
smug gling across tire border in 
violation of the 'sanctions. 

Increasing numbers of mail 
boats have been moving a 
range of goods, especially fuel. 


along the coast from the 
Dominican Republic to Haiti, 
evading detection by ships pol- 
icing the .embargo. The US is 
the TVwnfnirfln Republic's main 
trading partner, «nH the Carib- 
bean nation benefits from 
duty-free access to the US mar- 
ket for a wide range of prod- 
ucts. 

The willingness and ability 
of the Dominican go ve rn m ent 
to tighten sanctions has been 
af ferirf by political nnnfhgifm 
A recount win begin tomorrow 
of votes cast in last week's 
presidential elections, amid 
repeated diaimg t hat extensive 
fraud had favoured Mr Joaquin 
Balagner, the inc u mbent 


“With the remfttgeri political 
Situation here, and fh** pnlHiml 

tension generated by the presi- 
dential aiariinw, no t many peo- 
ple expect the g nw m ingnl: to 
be able to pay wwii attention 
to the border," said a diplomat 
in Santo Domingo. 

President Balagner has pub- 
licly questioned the naaflilnpgH 
of the sanc tions a gainst Haiti , 
and is known to be for from 
enthusiastic about the return 
of Mr Jeen-Bertrand Aristide, 
Haiti’s exiled president, whose 
reinstatement is being 
demanded by the United 
Nations. 

Mr Josfi Francisco' Pefia 
Gbmez, Mr Balaguerr' s mam 


challenger in the rare for the 

presidency, haa amt nfTImala 

from his social democrat 
Dominican Revolutionary 
party to seek support for his 

rlafmc that he WSS Hwiiwl vic- 
tory through irragntari ti e s per- 
petrated by Mr Balagner’s con- 
servative Social Christian 
Reform party. 

With 97 per cent of the votes 
declared by the Elections 
Board, Mr Balagner led by 
about 30,000. 

Mr Pefia Gfimez, backed by 
foreign observers, claims that 
most Of tbfi estimated 200,000 
people who could not vote last 
week were Revolutionary party 
supporters. • 


Cherry auction 
fetches $13.7m 


By Antony Thomcroft 

Furniture and works of art collected by the late Wendell Cherry, 
cofounder of Humana, one of the world's largest providers of 
healthcare services, realised $l&ftn <£9.1m) at Sotheby’s New 
York auction house at the weekend. 

The sale was a great success, and was almost 95 per cent sold 
by value. The top price, $2.2m, was paid for an elaborate desk, 
mounted by a dock, confidently attributed to Boulle, the leading 
French furnit ure maker of the early 18th century. It was part of 
the grandiose furnishings of Cherry's 5th Avenue apartment 
A 17th century Florentine hronze of Hercules wrestling with a 
buD, attributed to Tacca and once owned by King Louis XIV, sold, 
above estimate, at $L43m, while a George n giltwood 12-light 
chandelier, attributed to Mathias Lock, fetched $827,500. 

hi contrast Sotheby's auction of Old Masters had a mixed 
response, ft totalled $13J45m., but was less than 60 per cent sold 
by vahm 


[ \ iiM 

Ullls 

Kigali's 


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6 


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-•-» 



FINANCIAL TIMES TUESDAY MAY 24 1994 


IP> 

el 


NEWS: WORLD TRADE 


Need for $980bn of new airliners seen 


By Pau( Betts, 

Aerospace Correspondent 

Boeing, the world’s largest 
manufacturer of commercial 
aircraft, yesterday forecast 
demand for new airliners 
worth $880bn In the nest 20 
years to meet the growth in air 
travel and the need by airlines 
to replace older jets. 

its annual civil aircraft 
market outlook, the US manu- 
facturer said that S73Ibn worth 
of new aircraft would be 


needed to accommodate future 
air traffic growth and $249hn 
would be required to replace 
older aircraft 

The relatively optimistic 
forecast also notes that the 
civil aircraft market is 
becoming increasingly compet- 
itive. 

"There are only 600 airlines 
in the world. Only 125 of those 
airlines buy new airplanes. 
And the largest airiines buy 
60 per cent of all new commer- 
cial airplanes," said Mr Rich- 


ard James, Boeing’s vice presi- 
dent of marketing. 

“In such a concentrated mar- 
ket, you can’t afford to miss a 
single strategic sale." 

Althqugh the market contin- 
ued to' suffer from tfae ff tour- 
year-kmg slump in civil air- 
craft demand caused by airline 
losses, the economic recession 
and the impact of the Gulf 
war, Mr James said the second 
half of the 1990s looked 
more promising for the 
industry. 


“The recovery is already well 
under way in the US, and the 
widely held expectation is that 
Europe is in the road to recov- 
ery," he said. 

He added that while the Jap- 
anese economy was still strag- 
gling, the rest of Asia was 
experiencing robust growth. 

Boeing expects the biggest 
growth in air travel to come 
from the Asian markets during 
the nert 20 years. 

Overall, Boeing is forecast- 
ing passenger air travel growth 


of around 5 2 per cent a year 
over the next 20 years. 

International traffic is also 
expected to continue providing 
a greater share of overall world 
air transport. It accounted for 
44 per cent of all revenue pas- 
senger miles 20 years ago and 
the figure now is nearly half 
Boeing expects it to account 
for 54 per cent of all travel in 
20 years time, with domestic 
t ra ffi c making up the other 46 

percent 

Although Boeing said it was 


difficult to predict how many 
older 70- to 170-seat aircraft 
would be retired in the next 
two years, it predicted t hat 
about 1,200 would have to be 
retired by 1999 because they 
would be more than 30 years 
(rid. 

By the year 2000, the number 
of total replacement aircraft 
would probably rise to 3,000 
because of airlines' need to 
comply with stricter noise reg- 
ulations from the beginning of 
the next ce nt ur y 


Mahathir 
urges new 
MFN for 
China 


By Kieran Cooke bi 
Kuala Lumpur 

Dr Mahathir Mohamad, 
Malaysia’s prime minister, 
has made a strong appeal 
for the US to renew 
China’s most favoured nation 



Mahathir Mniuumirf: “Pacific 
nations must not quarrel" 

(MEN) trading status. 

Addressing more than 1,000 
representatives of businesses 
in & e Asia-Pacific region. Dr 
Mahathir said nations of the 
Pacific must not quarrel and 
fight 

“Our Pacific Era will be 
stillborn If we divide the 
Pacific, if we create discrimi- 
natory trading blocs, if we 
draw a line down the Pacific, 
if we are unwilling to extend 
to each other the normal rules 
and regulations - like most 
favoured nation status - that 
are norms between trading 
economies,” said Dr Mahathir. 

In recent weeks Dr Mahathir 
has had talks with both presi- 
dent Bill Clinton and with Chi- 
na’s leaders. 

“Now China needs the world 
Just as much as the world 
needs China," said Dr 
Mahathir. 

"That’s a great departure 
from the old days when China 
regarded itself as the centre of 
the world.” 

Dr Mahathir also said that 
Malaysia was keen to see both 
Vietnam and Cambodia join 
the Association of South-East 
Asian Nations (Asean) as soon 
as possible. 


Japanese buying more foreign cars 

Michiyo Nakamoto reports on changes in taste and value-for-money marketing 


T he streets of OtemacM, 
Tokyo’s business dis- 
trict where leading Jap- 
anese companies are based, is 
something of a showroom of 
the chosen cars of Japan’s cor- 
porate establishment. 

Recently, a larger number of 
foreign cars, from Volvo 
estates to flarfiilac Sevflles, can 
be spotted among the foyotas 
and NIssans that have long 
dominated Otemachi's ave- 
nues. 

Imported cars are enjoying 
an unprecedented surge of 
interest in the Japanese mar- 
ket, which has often been crit- 
icised as unreceptive to foreign 

vehicles. 

While domestic car makers 
continue to suffer weak 
demand, with registrations 
down nearly 4 per cent to L5m 
unite in the first four months 
of 1994, imported passenger car 
registrations rose 28 per cent 
year-on-year to 78525 units. 

In the fiscal year between 
April 1993 and March this 
year, imported vehicles saw 
registrations increase 14 per 
cent to a record of over 217,774, 
according to the Japan Auto- 
mobile Importers’ Association. 


Imported passenger cars rose 
10 per cent to 206,633 in the 
same period. 

That record compares with a 
drop in demand of 7 per cent to 
6.4m for vehicles manufactured 
in Japan and a 6 per cent 
dAffiirw m domestically made 
cars to 4J5m units 

The pwraaqfog globalisation 
of the &otor industry add the 
need to. cultivate global mar- 
kets is fmifing more foreign car 
makers keen to expand in 
Japan. 

Opel, the German car rnakw 
owned by GM, sold 17,000 cars 
in the first year of a distribu- 
tion deal with Yanase, Japan's 
largest foreign car importer 
and retailer. Volvo, the Swed- 
ish maker, carried out 
an active marketing ramp ai gn 
in Japan and saw record regis- 
trations last year. 

fllnhaliaitinn has als o meant 

that car makers, tnrindfng the 
Japanese, are making rtiffipront 
cars in different countries. 

Honda, for example, only 
manufactures the Accord 
Wagon and Coupe in the US, 
where those two models were 
developed, and imports them 
into Japan. The popularity of 


Honda’s US-made m odel s has 
made the company, with 27,245 
registrations, the second- 
largest car importer in 1993 
after Mercedes-Benz, which 
had 29,693 cars registered. 

The yen’s strength against 

leading CUtTencieS ha«t a7«n 

been a boost to imports, mak- 
ing them- far more affordable. 
Rover, the UK-based car 
maker, for evarnpip reduced its 
Japanese prices last year by an 
average 13 per cent to reflect 
the yen's rise. “The prices of 
our cars are not that different 
any more from thnqp of domes- 
tic cars." says a Rover repre- 
sentative. 

The general suspicion of the 
quality jmd reliability of for- 
eign cars that pervaded Japa- 
nese consumer attitudes for 
decades is also gradually being 
replaced by interest in the dif- 
ferent styles that foreign cars 
offer. 

“As the generation changes, 
consum p ti o n patterns are freer 
than fa the past and the atti- 
tude toward foreign products 
has changed," says Mr Shop 
Sugimoto, a director of Yanase. 
“The nationality of foreign 
products no longer has that 


Trronfr influence,” he points out. 

Japanese consumers have 
long been crmcgrtra^ about the 
lack of service and mainte- 
nance facilities for imported 
cars. But more foreign car 
makers are following the lead 
of fh*» most successful German 
motor companies in Japan and 
addressing such gn u ca -n t. 

In addition, foreign car mak- 
ers are adjusting their market- 
tog strategies to the growing 
mood in Japan that favours 
value far money rather than 
luxury, and with the help of 
the yen’s appreciation have 
offered value-for-money pack- 
ages and low interest loans. 

Earlier this year Volvo 
offered loans at jus* 3 per cent 
while BMW. the German car 
maker. launched a p m grnn m ia 
tfrat offers free maintenance 
for three years at a moderate 
price. 

Even luxury car makers 
which have long guarded then- 
image of exclusivity have 
moved to accommodate the 
growing quest for value for 
money. BMW reduced prices 
last autumn by up to 7 per cent 
and Mercedes-Benz lowered its 
loan rates. 


Japan's passenger car imports: growing popularity 


Growth, 1993 On 1992 
% 


France 



, Franoe': 


• r 00 — 


Germany 

vnourtts 

mo 




Sous* Japan Autacofcte tofntos Attodtefen 


1992 S3 


1992. 93 


UK 

1.000 units 

inn 

Sweden 

fjOQQtmBs 

*nr» i 

US 

1,000 unite' 


tw IW ■ — ■ — — ” — 

Tt’ 7C TC _ 

Id — 

SO ■ — > - t * -■ 

IW 

Cft -1 

— 



WU j 

pi* 

"5 S 


: - m M 

■ .••"•-1992 


, ^ 

■ •A ' " 



Slow but steady changes in 
Japanese industry practices 
and government regulations, 
which have been criticised as 
hindering market access, are 
also taking place to the Nretj t 
of imported cars. 

Tokyo Nissan, a dealer affili- 
ated with the car maker, has 
started to sell Ford cars, for 
example, in a move that is 
unusual in Japan where most 
dealers are to one manu- 
facturer. 

Meanwhile, in its deregula- 
tion package to be finalised 
next month the government 
has proposed adjusting Japa- 
nese standards and testing 
methods to international levels 
and easing the process of 
acquiring official approval for 
imported cars, two factors 
which have been cited as 
obstacles to greater imports. 

"The consumer attitude is 
ffhangfng - but in addition the 
total environment will support 
growth in imparts,” says Mr 
Sie gfried Richter, president of 
BMW Japan. Mr Rich ter is cer- 
tain that "efforts for deregula- 
tion will, of course, support 
both physical and mental open- 
ness". 


Total 
1,000 units 


200 



1992 93 




China seeks 
end to barter 
with Russia 


flbinn and Russia will hold a 
round of high-level trade talks 
this week, with Beijing hoping 
to phase out barter trade in 
favour of cash exchanges, the 
official flhma Daily said yester- 
day, Reuter reports from Bek- 
Jfag- 

The Sino-Russian Joint Com- 
mission on Economic, Trade 
and Technical Co-operation 
meeting, which begins today 
win be cochaired by Chinese 
Vice Premier Li Lanqing and 
Russian Deputy Prime Minister 

Alexander Shokbin. 

The three-day talks occur as 
Rtirerftm prime minister Victor 
Chernomyrdin prepares for his 
first state visit to Beijing from 
May 26 to 29. 

The China Daily quoted for- 
eign trade officials as saying 
that one of the primary goals 
of this commission meeting 
would be to stress Beijing's 
desire to see barter trade grad- 
ually phased out along the bor- 
der in favour of cash.. 

While up to 35 per cent of 
Sino-Russian trade is now con- 


Poland acts on 
copyright abuse 


Poland cracked down on 
copyright abuse yesterday by 
implementing a law intended 
to video aTid music piracy 
and strengthen intellectual 
prope r ty rights, Renterreports 
from Warsaw. 

The law, passed by parlia- 
ment in February and taking 
effect after a three-month 
grace period, is intended to ext 
piracy which costs the state 
treasury millions of dollars a 
year, and bring Polish laws in 
line with international nanus. 

Polish artists welcomed the 
new law but said its efficacy 
would largely depend on how 
well it was enforced. 

The new legislation replaces 
a weak and outdated 1952 copy- 
right law under which the 
police's ability to make arrests 
was limited. A part of the Jaw 
governing computer piracy 


Thai government warned on underground railway cost 


By W3Ham Banes In Bangkok 

Tanayong, the Bangkok-based 
property developer, has warned the 
Thai government that moving its 
planned' 23km elevated railway 
underground will be expensive, dis- 
ruptive and throw its scheme three 
years behind schedule. * 

The Thai cabinet last week 
strongly requested contractors for 
all three overhead rail projects to 
consider moving underground 


within the 25 sq km of the city cen- 
tre. This followed growing public 
concern that an obtrusive infrastruc- 
ture spaghetti would wreck the envi- 
ronment and exacerbate the already 
appalling traffic jams. 

The government has promised to 
defray the extra costs of going 
mfflerground- But it wQl not force 
Tanayong, nor the Hang Kong group 
Hopewell Holdings, which plans an 
ambitious 60km network, even par- 
tially underground because 30-year 


build-and-operate franchises have 
already been signed. The property 
company Bangkok Land is still nego- 
tiating for the franchise to a third 
railway. 

Mr Kasame Chatikavanij, chair- 
man of Tanayong's wholly owned 
subsidiary, Bangkok Transit System 
Corporation, said subterranean rail- 
ways were two or three times mare 
expensive than their elevated equiv- 
alents; certainly much more than 
the 30 per cent premium frequently 


quoted in the local press. 

He challenged anyone able to 
build an underground at no more 
than a 30 per cent premium - $26m a 
kilom etre - to identify themselves. 
“BTSC," he said, “is ready to sign a 
contract with them.” 

Mr Colin Weir, Hopewell’s 
operations manager in Bangkok, 
said the government may not have 
“thought through” the im plications 
of trying to run any of its planned 
elevated “sandwich” of roads, rail- 


ways and property underground. 

“If they want the whole thing 
underground fin the city centre), 
then that is a huge thing they are 
asking for," he said. 

Tanayong has so far failed to 
reach agreement with its “preferred 
contractor" - a consortium led by 
the Anglo-French group GEC Als- 
thom and the Bangkok developer 
Italian-Thai - probably perhaps 
because it is difficult to show how tt 
can generate sufficient revenues 


from a privately run railway alone. 

Mr Bob Kevorkian, managing 
director of Metro 2000, a consortium 
led by Germany’s KdUpp W nTrmann , 
winch has campaigned fin: an under- 
ground as “file only real solution," 
yesterday reiterated that “wa stand 
firm -we can bnfld an underground 
for a total cost, excluding financing, 
of Btl.Sbn ($60m) per kilometre. 
That’s not so very different from 
BTSCs figures of BtLOSbu for costs 
excluding financing." 


B(‘\oncl those nagging tears nr , tv lie the <m.su er... 


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Trade IguH are given In batons of European aasney into (Ecu). The Ecu emhenge rate show* the number of notional curancy units per Ecu. 17* nomtorf aflactfve erchonge nl» 
Is an Index with 1085=100. 


■ UNITED STATES 


■ JAPAN 


1985 

Beorc 

279A 

MS 

tndi 

-1742 

—1622 

Ea 

Ml 

07623 

100.0 

bearti 

2302 

VkMr 

762 

tan 

642 

•Mrcei 

18050 

1000 

EUM* 

2427 

VMb to 

bMM 

3X2 

Cuiet 

21.7 

EM 

raw 

22200 

aW 

100JJ 

1988 

2309 

-1402 

-152.7 

09836 

802 

211.1 

962 

862 

16011 

1244 

2403 

63 3 

403 

21273 

10X8 

1987 

2202 

-131.8 

-1452 

1.1541 

702 

1972 

801 

752 

10558 

1332 

2543 

56.6 

392 

zam 

1163 

1988 

Z7ZS 

-1002 

-10T£ 

1.1833 

66.0 

2192 

807 

662 

15121 

1472 

2725 

8 IS 

42 a 

22739 

114.6 

1989 

3302 

-892 

9 

1.1017 

B&A 

2452 

705 

52.4 

15127 

1412 

3T03 

6X3 

623 

20681 

113.S 

1990 

3000 

-703 

-72.1 

12745 

65.1 

2202 

501 

203 

18324 

1262 

3244 

512 

388 

22637 

119.1 

1991 

3406 

-63^ 

-07 

12391 

842 

247.4 

63.1 

822 

168.44 

137.0 

327.4 

112 

-15.7 

22480 

117.7 

1982 

3456 

-64.1 

-512 

12357 

622 

2542 

101.7 

902 

16425 

1422 

3302 

.162 

-17J3 

22187. 

1212 

1988 

3975 

-008 

-903 

1.1706 

66.8 

300.0 

1202 

1112 

13021 

1732 

3102 

209 

-102 

12337 

134JB 

2nd qtr.1999 

903 

-25.4 

-22.6 

12069 

B42 

704 

285 

202 

132.76 

172.4 

75.1 

72 

-3.1 

18530 

1342 

Snlqtr.1993 

99.7 

-272 

-245 

1.1443 

66A 

79.1 

302 

282 

12029 

183.7 

708 

Ol 

-07 

18180 

1232 

4th qtr.1983 - 

107J 

-2A5 

-27.7 

1.1388 

ao4 

752 

30 3 

262 

12320 

1602 

81.7 

11.7 

-32 

18191 

1242 

lot qtr.1994 

107.1 

-28.7 


1.1244 

882 

802 

32.7 

28 2 

12025 

1825 




18370 

1222 

April 1993 

31.5 

-03 

rua. 

12214 

842 

242 

lOI 

92 

137.17 

1672 

25.4 

22 

-25 

18489 

1255 

May 

320 

-08 

na. 

12161 

002 

205 

04 

04 

134.15 

1712 

242 

22 

-12 

18548 

1241 

Jura 

31 a 

-102 

xa. 

1.1633 

842 

252 

8.1 

72 

12097 

1782 

25.1 

22 

07 

18689 

1222 

July 

327 

-92 

fun. 

1.1349 

652 

207 

112 

9.7 

12224 

181.1 

241 

22 

-40 

18483- 

1222 

August 

33a 

-09 

rua. 

1.1251 

65.7 

205 

102 

Ol 

116.79 

1682 

285 

2.1 

-S.0 

18081 

1232 

StpWdw 

332 

-9.1 

- no 

1.1728 

8*2 

262 

10.7 

04 

12323 

181.8 

209 

15 

-1.0 

15896 

126.1 

October 

34.8 

-9.4 

oa. 

1.1697 

655 

245 

95 

85 

124.03 

1804 

274 

42 

-12 

18995 

1242 

November 

35.7 

-OS 

rua. 

1.1282 

682 

202 

09 

82 

12126 

1812 

27 A 

42 

02 

18182 

1245 

December 

37A 

-05 

rua 

1.1287 

672 

25.7 

108 

92 

12322 

1782 

209 

35 

-12 

18306 

1207 

Januaey 1994 

352 

-8.1 

rut 

1.1138 

675 

27,0 

11A 

10L1 

124.03 

1772 

201 

3.4 

-12 

18416 

1222 

February 

34.1 

-107 

rua. 

1.1184 

W.7 

208 

112 

92 

118.77 

1652 

274 

3.1 

-25 

18397 

1212 

March 

37.7 

-09 

rua 

1.1410 

601 

27.1 

lOI 

8.7 

12004 

1852 




18299 

1232 


■ FRANCE 


■ ITALY 


■ UNITED KINGDOM 




VUU 

CfcraflC 

Era 

Wtfn 


VUft 

CUM 

Era 

Bhcte 




'In 

mum 


Beam 

Wuet 

■ccaett 

■ifrUii 

B^i 

iMm 

torch 

M 

tone 

bSTCH 

tm 

nTC 


tote 

MMt ' 


nbM» 

-ie» 

1985 

1304 

-3.6 

-02 

6.7942 

1008 

103.7 

-168 

-5A 

14438 

1008 

132A 

-5.7 

35 

05890 

10 M 


127.1 

oa 

50 

6-7948 

1025 

9 OA 

-25 

-1.4 

14619 

101.4 

1065 

-142 

-19 

05708 

919 

1967 

1203 

-45 

-3.7 

09285 

1038 

100.7 

-75 

- 2.1 

14943 

1015 

1128 

-184 

- -7.1 

-0J047 

. : SOI 


1418 

-38 

-3.4 

7.0354 

1005 

1065 

-88 

-88 

15365 

975 

1209 

-328 

-259 

06643 

853 


1628 


-3.6 

7.0169 

905 

127.8 

-119 

-178 

15093 

985 

1379 

-36.7 

-335 

0.6728 

924 


1701 

-72 

-72 

68202 

1045 

1335 

-9.3 

-18.0 

16232 

1005 

1425 

-288 


0.7150 

- «u 


1704 

-42 

-48 

68843 

102.7 

137.0 

-105 

-17.7 

15313 

989 

147.7 

-147 

-109 

07002 

B 1 J 


1825 

48 

28 

85420 

1000 

1378 

-88 

-206 

15915 

95.7 

1465 

-185 

-135 

0.7353 

8 W 


177.T 

125 

88 

68281 

1003 

1438 

17.7 

62 

1836.7 

79.6 

1558 

-179 

-140 

0.7730 

802 

2nd qtr.1993 

443 

32 

1.4 

88118 

100.7 

385 

38 

1.7 

18143 

iil 

37.7 

-42 

-45 

07882 

802 


44.7 

04 

35 

08508 

1004 

34 2 

6.1 

3 2 

1813.0 

795 

408 

-45 


07805 

819 

4tf» qtr.1993 

45.8 

48 

35 

06431 

1075 

40.4 

68 

38 

18785 

779 

407 

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ducted on a cash baste, the 
rest involves the physical 
transfer of barter goods. 

“Two-way trade should 
mainly be done through cash 
exchanges," Mr Geog Xunca], 
deputy director general of the 
European department at the 
trade ministry told the China 
Daily. 

“Both sides should push 
their large companies to the 
forefront of trade and invest- 
ment activities," ha said. “In so 
doing, the potential for further 
growth of two-way trade can 
be tawed." 

Sino-Russian trade was val- 
ued at about $7.7bn last year, 
an increase of 31 par cent over 
according, to nffirfai fly. 

ures. 

The joint commission meet- 
ing wiS also diyraa? broaden- 
ing technical co-operation, 
with China eager to tap Rus- 
sian expertise in such fields as 
aviation, space technology, toe 
chemical industry and 
building. 


went into effect immediately 
after it was passed In Febru- 
ary. 

The weakness of the old law 
helped music, video and com- 
puter piracy flourish after com- 
munist rule ended in 1988, 
flooding the streets with hawk- 
ers of cheap cassettes. 

It was also a discouragement 
for so me fo reign investors. 

The IFPI estimated that the 
state treasury lost a minimum 
of $25m in 1991 and probably 
modi more in 1992 to musk 
pirates alone and official pro- 
ducers lost three times as 
much. Computer software is 
dominated by pirated pro- 
grammes. 

Those losses should be 
quickly reduced, experts say, 
and prices of official recordings 
are not expected to rise much 
as a result of the new law. 


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PM vows to defend 
veto over Europe 


He added: ‘‘Conservative pol- 
icy will always be governed - 
first, last and always - by coal 
calculation of Britain’s 


NEWS; UK 

Security review 
amid fears of 
loyalist violence 



Dick Spring (left) and Sir Patrick May hew at the re-opening of the Erne Waterway which connects 
Lough Erne in the North with the River Shannon in file south. Restoration has cost £30m now* «•** 


By PhBlp Stephens, 

PoBUcE EdRor 

Prime minister John Major last 
Jdgbt put preservation of 
Britain's national veto at the 
teart of the Conservative cam- 
paign for the European elec- 
tions as opposition parties said 
the June 9 poll would be a ref- 
erendum on his leadership 

The launch of the three main 
parties’ European manifestos 
saw the political truce which 
followed the death of Mr John 
Smith disintegrate into a furi- 
ous row over over how nmrh 
power each was ready to cede 
to Brussels. 

Mrs Margaret Beckett, the 
Labour leader, and Mr Paddy 
Ashdown, the Liberal Demo- 
crat leader, said voters would 
have the opportunity to pass 
Judgement on Che govern- 
ment's ’’dismal" record. 

But at rally last night in 
Bristol, Mr Major launched a 
bitter attack on his opponents' 
European, policies: “The other 
parties believe in a federal 
European state... they would 
put oar national veto at risk.” 

Using language calculated to 
appeal to Euro-sceptics, the 
prime minister insisted the 
Tories were alone in offering 
an absolute commitment to 
preserve the national veto. 


national interests". 

Earlier, Mr Major had n y n p d 
a plea to disgruntled Tory sup- 
porters not to protest at the 
govenupoifs domestic policies 
by staying at home on June 9, 
insisting: "Ibis election is not 
some trivial opinion poll". 

The prime minister’s t o** 
suggested that a carefully- 
crafted manifesto commitment 
to a positive approach to 
Europe would be a cco mp anied 
on the campaign trail by a 

much tougher wn pliawn rm thp 

d e fence of British sovereignty. 

Mrs Beckett flatly rejected 
the charge that Labour would 
give up the national veto in 
areas such as defence, foreign 
and taxation policy. But Mr 
Ashdown conceded that the 
Liberal Democrats’ c ommi t- 
ment to closer Integra ti on did 
imply an end to the veto far 
most decisions. - 

With all three parties sens- 
ing the national mood favours 
sceptical rather than enthusi- 
astic Burpp eanian, the Liberal 
Democrats hedged their com- 
mitment to a federal Europe 
with, a promise of a referendum 
on the next stage of integra- 
tion. 


Mr Major dismissed the 
arguing the 1996 intergovern- 
mental conference would not 
lead to any further si gnificant 
shift in sovereignty from 
Britain to the EU. 

to an effort to prevent 
renewed unrest among the 
Euro-sceptics on the Tory 
backbenches, the prime minis- 
ter said there was no prospect 
in the foreseeable future of a 

single European currency. 

But Mrs Beckett revealed a 
significant shift in her parly's 
policy by leaving open the pos- 
sibility it might back the idea 
erf a plebiscite cm the outcome 
of the 1996 conference. 

The Conservative manifesto 
as expected attacked the 
alleged plans of fire opposition 
parties to support a European 
superstate. 

As Mr Tfa m u rf h fftarfr w, the 
chancellor, dismissed the possi- 
bility of an early return by 
sterling to the European 
exchange rate mechanism. Mr 
Major denied there were divT 
slabs within the cabinet over 
the government’s platform. 

Labour end the Liberal Dem- 
ocrats insisted in their mani- 
festos that Cons e rvative divi- 
sions and the opt-outs from the 
social chapter and a single cur- 
rency had left B ritain power- 
less o n Hi* biHoHtipc of Europe. 


By Thu Coons In Dublin 

Britain and the Irish Republic 
are to review security co- 
operation following the failed 
bomb attack in Dublin at the 
weekend, responsibility for 
which has b«m claimed by the 
Loyalist paramilitary grouping - 
the Ulster Volunteer Force. 

Northern Ireland secretary 
Sir Patrick May hew and Mr 
Dick Spring, the Irish forag e 
mtiristPT , atte n d ing the formal 
reopening Of the Shannon-Erne 
waterway on the Northern 
Ireland border yesterday, used 
the occasion to review security 
and the latest progress of their 
g rfiy p mmpTTta’ current push for 
a Northern Ireland sett! ament 
in file fight of Britain's reply 
last week to questions posed 
by Sinn Fein - the IRA’s politi- 
cal wing - about the five- 
month-old Downing Street 
peace declaration. 

Mr Spring said: “We are 
going to maintain the highest 
level of security possible both 
North and South to ensure that 
we contain any threats of 
aggresskm or violence. And we 
are going to pursue our politi- 
cal efforts to restart political 
tatkg and make progress”. 


Ms Maire Geoghegan-Qninn, 
the Irish justice minister, said 
"every possible precaution’’ 
was already being taken to pre- 
vent such attacks in the 
Republic - the Irish govern- 
ment had been warned some 
months ago by the RUC Chief 
constable Sir Hush Annesley 
that ”it was a question of when 
not if* such an might 

take place. 

“A ring of steel” along the 
border would not be sufficient 
to stop determined bombers 
she said. Security cooperation 
between police forces in both 
parts of Ireland “has never 
been higher th^n it is now”. 

Ms Geoghegan-Qmnn said 
there was concern about possi- 
ble follow-up »Ha>rVn after the 
Dublin bomb and a review of 

security was under way. 

Mr James Molyneaux, lea d er 
of the Ulster Unionist Party, 
yesterday blamed “ambiguity 
and uncertainty” by *"Ka Brit- 
ish government over Northern 
Ireland's constitutional posi- 
tion for encouraging Loyalist 
paramilitaries “to achieve a 
balance of terror”. 

Nonetheless he said he had 
been encouraged by reports 
that the combined leadership 


of the Loyalist paramilitaries 
are planning to meet this week 
to consider his recent mil (tor a 
ceasefire. The government’s 
recent detailed clarification of 
the Downing Street declaration 

tO Sin" ff fa'n, bad ftlflrifipri 

issues for the Loyalists be said. 

The Rev Roy Magee, a Pres- 
byterian minis t er, m et leaders 
of the UVF and UFF in Belfast 


yesterday and said he did not 
believe the Dublin attack was 
the start of a ongoing cam- 
paign south of the border, but 
a “warning toot”. 

He said the lack of an IRA 
response to the joint declara- 
tion meant the Loyalist para- 
militaries still considered 
themselves in a “state of war” 
but that whether the IRA 


respond or not, the Loyalists 
are showing they also have to 
be dealt with. 

One man died after being 
shot in a Belfast shopping 
street yesterday, <md two other 
people were injured in an 
explosion near a city-centre 
office used by Sinn F6in 
members of Belfast City 
Council. 


Late payments hit 
UK record level 


By Jenny Lueeby 

Late payments due to UK 
companies have reached an 
all-time high, posing “a serious 
threat" to otherwise healthy 
businesses, Trade Indemnity, 
Britain's hugest credit insurer, 
said yesterday. 

Companies were waiting on 
average for a record £145,000 in 
long overdue payments from 
their customers in the first 
quarter of this year, up from 
£116,000 in the same period of 
1993, Trade In demnit y said. 

Its survey showed that 18 per 
cent of invoices were “long 
overdue” - unpaid 80 days 
after their doe date. The aver- 
age bQl is paid 22 days beyond 
due date. Smaller companies 
had to wait longer still - 38 
days beyond due date - for 
payment 

The engineering sector 
reported an average of 25 per 
cent of invoices still o utstmd.- 
ing 30 days beyond their due 


date. But an isolated area cf 
improvement came in pay- 
ments to exp o rters. 8 per cent 
of whom, reported that they 
were paid on time in the first 
quarter as against none in the 
previous quarter. 

The figures win give ammu- 
nition to calls for trade credi- 
tors to be granted a statutory 
right to claim interest an over- 
due debts. At least 34 countries 
have such measures or have 
agreed to introduce them. 

Mr ifonwtft'K riartp, chancel- 
lor, said in the Budget that the 
government was considering 

le gislation on the issue. 

Of 822 companies surveyed 
by Trade Indemnity, only 2 per 
cent reported that all pay- 
ments due to fiiam had been 
an time, lending weight 
to claims by tire Forum for Pri- 
vate Businesses, a small busi- 
ness lobby group, that compa- 
nies are stalling on invoice 
payments in order to gain free 
credit. 


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8 


FINANCIAL TIMES TUESDAY MAY 24 1994 


NEWS: UK 


Oil sales help close 
non-EU trade gap 


gy Ph JUp Coggan, 

Economics Correspondent 

A jump in oil exports helped 
the UK’s visible trade deficit 
with countries outside the 
European Union to narrow to 
£666m. in April, compared with 
£686m in March, according to 
figures published by the Cen- 
tral Statistical Office yester- 
day. 

Increased North Sea oil pro- 
duction helped produce a £S5m 
surplus on the oft account, the 
highest surplus since May 1988. 
Oil exports in the three months 
to April were 33 per cent 
higher than in the previous 
three months. 

If oil and erratic items such 
as precious stones are 
excluded, the visible trade defi- 
cit in April was £88fim, virtu- 
ally unchanged from the £690m 
recorded In February and 
March. 

In value terms, exports rose 
3.6 per cent between March 
and April, while imports 


increased by just 1 per cent 
The CSO's estimate of the 
trend is that the value of both 
exports and imports is growing 
by 'A per cent per month. 

In volume terms, exports 
were 55 per cent higher In the 
three months to April than in 
the previous three months, 
while imports fell by % per 
cent 

But if oil and erratics are 
excluded, the pattern is much 
less favourable; export vol- 
umes were L5 per cent higher 
in the three months to April 
than in the previous three 
months, while import volumes 
were 1 per cent higher over the 
same period. 

Apart from oil, there has 
been strong growth In exports 
of food, beverage and tobacco 
and of semi-manufactures. 
However, imports of finished 
manufactures continue to grow 
more strongly than exports, in 
volume terms. 

There is some sign in the fig- 
ures that the rate of increase 


in export prices is slowing. 
Export prices in the three 
months to April were just L5 
per cent higher than in the pre- 
vious three months, while 
import prices rose by 45 per 
cent “This is encouraging” 
said Mr Jonathan Loynes, an 
analyst at Midland Global Mar- 
kets “and suggests UK export- 
ers have finally realised they 
were losing competitiveness in 
pursuit of higher prices and 
margins. 

However, UBS, the securities 
house which has issued dire 
warnings about the UK’s trade 
prospects, is still pessimistic 
about the outlook. “The 
non-EU trade deficit appears to 
have stabilised in recent 
months” said Mr John Mar- 
sland, UK economist 

“Export volumes are proving 
to be more buoyant, we also 
expect a significant deteriora- 
tion in the import MIL Surging 
domestic demand should ulti- 
mately inflate the trade 
he said." 


Consumers more upbeat 
on economy, poll shows 


By Peter Norman, 

Economi c s Ecfitor 

April’s tax rises appear to 
losing their power to shock, 
with Britain’s consumers less 
pessimistic about their own 
finances and the nation’s eco- 
nomic prospects, a survey from 
Gallup indicated yesterday. 

The survey, conducted this 
month on behalf of the Euro- 
pean Commission, found a 

marked iferfma to the nrnnher 

of people predicting a worsen- 
ing of Hiair ffrn>n«»K over the 
next 12 months compared with 
April’s survey when the assess- 
ment of household finances 
appeared dose to historic lows. 
Similarly, people were less 
worried about the UK’s general 
economic situation. 

The May results were still 


negative and pointed to a 
“rather bearish view of the eco- 
nomic situation in general”, 
said Gallup. But the showed “a 
welcome reversal of the very 
rapid decline in confidence 
that has been witnessed since 
the beginning of the year". 

Gallup said its poll of 1,991 
adults between May 5 and 17 
showed that 17 per cent expec- 
ted their hmimlinlri finanroo to 

improve while 39 per cent pre- 
dicted a deterioration. The 
resulting balance of ™nm 22 
was “a cause for concern” but 
an improvement on hnianrpB of 
minus 30 per cent in April and 
minus 25 per cent in Marph 

The survey found that 27 per 
cent of people polled thought 
the economy would improve 
while 37 per cent took the 
opposite view. The balance of 


minus 10 per cent was much 
smaller than last month’s 
minus 22 per «*nt balance. 

Less than half the survey 
sample - 45 per cent - expec- 
ted unemployment to rise over 
the next 12 months, al tho ugh 
only 19 per cent expected a faH 
A fifth of those polled expected 
price rises to accelerate against 
19 per cent expecting a slow- 
down in inflation, 

• Nearly 40 per cent of British 
businesses polled by Trade 
Indemnity, the credit insurer, 
were operating at between 75 
and 99 per cent of their opti- 
mum rate in the first quarter 
of 1994, the company said yes- 
terday. Only 3 per cent were 
operating at leas than so per 
cent of optimum, while 22 per 
cent were at optimum and 6 
per cant "overstretched". 



Help for Ike’s D-Day flag 


A £10,000 appeal has been 
launched to pay for the 
conservation of the Stars and 
Stripes flag used by D-Day 
Allied commander General 
Dwight D. Eisenhower which 
now hangs in Salisbury 
CaihedraL 

Ike’s personal flag was 
donated to the cathedra] by 
the US Armed Forces in 1944 
and it has hung there next to 
the colours of the British 
commander, Field-Marshal 
Bernard Montgomery. 


Restorers say time and the 
environment have tefcwn their 
tofi on the fragile silk flag, 
which has had to be removed 
from display for extensive 
restoration work. 

In this case, specialist textile 
conserva to r s from the Carpet 
Conservation Workshop in 
Salisbury face the added 
problem that the Bag is to be 
returned to an uncontrolled 
environment and further 
deterioration is likely If it 
remains untreated. 


A te m porary display of the 
flag is being prepared and 
lectures on its history wffl be 
given at the cathedral by US 
textile expert Sharon Manitta 
- pictured above with 
Jonathan Tetley - during the 
fundraising period. 

After the war. General 
Eisenhower served as 
commander in chief of Nato 
and toot as 33rd president of 
the United States, between 
1953 and 1961. He died in 1969. 

PtologNptE Itarar HvnpMw 


City dials outside lines to cheaper telecoms 


Andrew Adonis on how BT is looking over its shoulder at a new rival 


I f the City of London is a 
tore taste of things to come 
in telecoms, British Tele- 
communications should be 
worried. One of the st ronger 
rivals threatening the huge 
organisation in the Square 
Mile has been operating for 
only a few months and has 
fewer than 50 employees. 

Tomorrow MFS, a US carrier 
providing services in 23 US 
cities, launches the City’s 
fourth telecoms network; and 
about a dozen other operators 
are offering competing services 
over leased lines. 

In the UK as a whole, BT 
still carries nearly 90 per cent 
of telecoms traffic, despite the 
abolition of its monopoly in 
1981 In the US, American Tele- 
phone & Telegraph, the 
long-distance carrier, which 
had its stranglehold over the 
US market broken In the same 
year, has been pushed down to 
well muter 70 per cent of its 
market. 

However, in the City of Lon- 
don it is the competitors to BT 


which boast about 70 per cent 
of the total market for tele- 
coms services. Mr Michael 
Hepher, managing director of 
BT. concedes that BT has lost 
“more than half” of City busi- 
ness; most analysts put the fig- 
ure far hi g her . Nearly an of 
that has gone to Mercury. 

A strict contrast with the US 
is problematic, since local tele- 
phony in the US is mostly in 
the hands of the “Baby Bells” 
- the seven regional Bell com- 
panies created by the 1984 
break-up of AT&T - which are 
subject to varying degrees of 
competition in their city busi- 
ness districts. In some cities - 
including New York, where 
MFS is a significant force - the 
Baby Bells are on the defen- 
sive, but few if any have 
received the kind of battering 
BT has experienced in the 
Square Mile. 

Competitive pressures are 
weaker still in mainland 


Europe. State operators’ 
monopolies are still largely 
intact but are coming under 
pressure from operators 
exploiting EU liberalisation 
rules, but nowhere else are 
rivals allowed to provide pub- 
lic infrastructure as in the UK 

The attraction of the City of 
London is obvious: its concen- 
tration of large corporate 
users, with multi-million 
pound telecoms bills and tele- 
coms managers eager to grasp 
new opportunities. 

Mercury, the first rival to BT 
esta b lis h ed ten years ago, has 
the lion’s share of City busi- 
ness, built up over a decade of 
under-cutting BT G riffs by ten 
per cent or more with special 
discounts for volnme custom- 
ers. Ironically, Mercury may be 
the victim of its own success. 
“For us the first move was the 
most difficult to contemplate.” 
says the telecoms manager of 
one of the (Sty’s leading banks. 


"But Mercury taught us two 
lesson: first, to keep short con- 
tracts; and second, that you 
can cope with more than one 
carrier fairly easily, providing 
they are competent” The bank 
in question now has four sup- 
pliers: BT, Mercury, Colt - a 
US company serving only the 
City, which has its own 37km 
fibre network which is being 
expanded fast - and World- 
corn, another US company, 
which re-eells time on national 
and International Unas leased 
from other operators. 

WorldCom and Colt have 
developed strong City reputa- 
tions - over two years in the 
first case and in just a matter 
of months Colt which operates 
only in the City. Both are prod- 
ucts of the liberalisation of 
telecommunications carried 
through by the government 
three years ago, when the post- 
privatisation duopoly of BT 
and Mercury was broken. 


Both also give the he to the 
idea that a modem telecoms 
company needs a cast of thou- 
sands to be plausible. Colt has 
fewer than 50 staff, mostly on 
the marketing and account 
management g»de It has con- 
tracted out the laying of its 

fibre network. 

"We may seem small," says 
Mr Paul Chisholm, Coifs man- 
aging director. “But because 
we are focused on the City 
market, we can give more indi- 
vidual attention to customers 
than they get from BT and 
Mercury." 

Not all the new operators are 
competing against each other. 
Colt, for instance, is concerned 
only with carrying local traffic 
and its capacity is being leased 
by long-distance and interna- 
tional resellers such as World- 
corn and Esprit, which want a 
local network to connect to 
their customers and say they 
get a quicker and cheaper ser- 


vice from Colt than from BT. 
Colt is also in talks with Ener- 
gis - a new long-distance car- 
rier which is erecting its own 
local network on National Grid 
pylons - about providing “last 
mile” connections. 

BT ami Mercury are fighting 
hard to retain and increase 
their City business. Most of 
BTs traffic from the City now 
goes through one of the compa- 
ny’s five discount schemes for 
large users, offering savings of 
up to 16 per emit off standard 
tariffs for the largest cust- 
omers. 

BT, the underdog, has also 
set up “Win Back" teams tar- 
getting lost corporate clients. It 
claims to have recouped about 
£2QQm of business from Mer- 
cury, with Citibank, the Pru- 
dential and National Power 
among them. 

“The discounts are likely to 
increase for large users,” says 
Brs Mr Hepher of Win Back's 
future strategy. Music to the 
ears of the City's telecoms 
managers. 


Britain in brief 

BsSnlS& 

No right to 
say “no” to 
Sunday work 

British workers have no 
protection under European 
law against bring forced to 
work on Sundays, the 
Employment Appeals Tribunal 
ruled yesterday. 

Dismissing the appeal of 
a shapworker sacked for 
refusing to work on a Sunday, 
Mr Justice Mummery, tribunal 
president, said there was no 
mention in European law of 
a right to say no to Sunday 
work. The decision will stand 
as a precedent unless 
overturned by the Court of 
AppeaL 

The case was supported by 

Keep Sunday Special, the 
lobby group campaigning 
against deregulation of the 
Sunday trading laws. Last 
night it said it was uncertain 
whether it could afford to 
appeal further. 


Power price 
cut sought 

The biggest companies in 
En gland and Wales are hoping 
for a reduction in electricity 
prices after senior power 
industry executives agreed 
to back a campaign to allow 
electricity to be bought and 
sold outride the wholesale 
trading pool 

Companies such as Imperial 
Chemical Industries have long 
complained that by being 
forced to trade through the 
pool rather than conclude 
simpler bilateral agreements 
with electricity generators 
they have paid higher prices 
for power than are justified. 

The power industry has been 
sceptical of pool bypass 
arrangements, arguing they 
could lead to companies 
trading outside the pool 
avoiding paying a share of 
costs needed to run the 
electricity system. 


Trade minister 
visits Malaysia 

Speculation is growing that 

a Will |-nyy pdal Malay dun Kan 

on giving government 
contracts to British companies 
might be lifted soon following 
a surprise visit by Mr Richard 
Needham, trade minister. 

Mr Needham arrived 
yesterday and was scheduled 
to have a meeting with Dr 
Mahathir Mohamad, the 
Malaysian prime minister. 

Mr Needham said he was 
carrying a letter from Mr John 
Major to Dr Mahathir and said 
he hoped the ban would he 
lifted soon. Malaysia imposed 
its ban at the end of February 
following critical comments 
about the government in the 
British press. 


Motor trade 
links with BT 

British Telecom and two retail 
motor-trade associations have 
joined fences to create what 
they hope will become an 


electronic data interchange 
“highway” for the industry. 

The project, which links BT 
with the Retan Motor Industry 
Federation - which represents 
most sections of the retail 
motor trade including about 
7,000 franchised car dealers 
- and the Automotive 
Distribution Federation, is 
aimed at allowing low-cost 
communications and the 
undertaking of a wide range 
of transactions between an 
parties involved In selling, 

financing and m aintamfag 

motor vehicles. 


More EC cash 
for universities 

Research tending from the 
EC to UK universities rose by 
32 par cent last year, hot 
universities said extra, 
research Income would not 
address central problems, 
which involve capital and pay. 

Research grants income 
from UK industry rose by only 
l per cent, which universities 
attributed to the recession, 
but income from this source 
still accounted for more than 
10 per cent of all research 
(hading, at fl22.4m, out of 
ELloebn. 


Accountancy 

appointment 

Robson Rhodes, the UK’s 
fifteenth largest accountancy 
firm, has appointed a 
b usinessman as chief operating 
officer. 

Mr Peter Turnbull, Conner 
managing director of Lex 
Sendee, the UK’s hugest car 
distribution and learing group, 
win act as operational head 
of the firm. The move Is a 
highly unusual example of the 
appointment of an outsider 
to help twflnag g the running 
of a professional practice. 

A number accountancy Onus 
have hired specialist outriders 
over the last few years, but 
few have made app oin tments 
at such a senior level. 


Farm subsidies 
under attack 

Arable fanners in England 
are receiving £759m a year 
in subsidies from taxpayers 
which bring virtually no 
environmental benefits, the 
Council for the Protection of 
Rural England said yester- 
day. 

By contrasVthe council 
said, schemes which 
encouraged Rn gHxh farmers 
bo adopt environmentally 
friendly practices received just 
£27. lm in the last 
year. 


Ferry operator 
cuts fares 

Stena Sealink, one of the two 
main operators on short sea 
routes, last night announced 
20 per emit cuts in juices of 
services to Frimce. 

SeaHnk’s move was in 
response to the decision by 
P&O European Ferries last 
month to offer a 10 per cent 
reduction on its Dover Calais 
services. 

Eurotunnel last night 
dismissed any price war as 
“a matter between the ferries” 
but price cuts represent an 
Increased threat to the 

g iahflity nf tha (Dianna! trmnel, 

currently engaged in a £1.5bn 
fund-raising. 


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FINANCIAL TIMES TUESDAY MAY 24 1994 


9 






# 




« 




1 


TECHNOLOGY 


A 


- & regional bank m 
Moscow, a woman of 84 - 
old enough to remember 
the last tsar — is eraminr 


— o — > j-muv uuu. aoe approacnes 
fjparotger who, with charm and 
Wtience, explains what ft is. She 
then guides the woman through the 
Process of withdrawing at the 

counter and shows her the gjeam- 
ine ATM /intomiiriA i_« 7 


in the comer. 

Thi s ve rsatile machine puts west- 


on 

^^oics, and a choice of ton g™>pt»« 
to interrogate users, it zips out bon- 
Jfes of roubles at the touch of a few 
buttons. Pot security reasons, its 
s cr een can only be read from the 
appro priate angle fay me user at a 
tune: bystanders and others to the 
queue cannot peek Unlike more 
eid eny western counterparts, the 
cash withdrawn will be reflected 
immediately in the balance shown 
on the next balance inquiry. 

At the counter, people request 
various transactions using their 
eastwards, keying a secret Personal 
Ident ification Number into a big 
keypad. This summons a database 
record which appears immediately 
an the cashier’s screen b ehind the 
counter. The cashier checks the 
tr an sa c tio n , matching the signature 
on the printout slip with a facsimile 
on her scree n. She approves it with 
one keystroke, and out comes the 
cash, delivered through an auto- 
matic chute: ready counted, in the 
requested denominations. 

This is banking in real-time. As 
with the ATM, the withdrawal wffl 
show immediately on the account 
balance. Supporting this sophisti- 
cated service is a roomful of PCS 
and a tiny boot ctf hard disks, known 
as Bald (Redundant Ar ray of Inex- 
pensive Disks). The Raid boxes, 
manufactured by US storage spe- 
cialist necropolis, replace the racks 
of paper files wbfoh were previously 
the Moscow Savings Bank’s only 
customer records. 

AH this suggests that Russia 
might actually be ahead c£ the west 
in some banking services. Agrees 
Add site in technology terms, and 
with very little to spend, it has leap- 
frogged its more privileged counter- 
parts in the west by rtmnhig real- 
time banking an a network of per- 
sonal computers. 

This branch of the Moscow 
Savings Bank was automated by 
Intermicro Business Systems. This 
Russian-grown systems integrator 
has built up remarkable 
in banking solutions over the last 
few years. 

The background to Russian bank- 
ing is explained by Leonid Zabezh- 
msky, IBS's director of banking. 
"There is a traditional philosophy 
that it is best to save. Enterprises 
and factories paid salaries through 
the bank, and they managed all 
pensions. Tnfiatfim was unheard of 


au.iAi.Jicy UUl ELI 1VJ-U31UW Udll UC CL -U-UALC7 LCU 

experience than in the west, reports Claire Gooding 

Russian 1 
jumps the queue 



Ahead of the ernes Russian customers am being served real-time banting on a network of personal computers 


and bankru pt cy unthinkable. 

Tn any new suburb, the first 
bufiding was the bakery. Next camp 
the laundry, the school, the nurs- 
ery, and then the honk: it was an 
integral part of common life." 

The' average customer is not yet 
used to a "choice’’ of bank, and sim- 
ply goes to the local brand*, as does 
everyone else in the suburb. This 
branch of the Moscow Savings Bank 
is one of 40 in toe regum, employing 
2,000 staff and running 500,000 
accounts each, which in turn win 
support between 20 and 40 sub- 
brandies (780 in aQ). hi Moscow's 35 
boroughs hve 15m people: everyone 
has an account. The brandies 
answer to a regional head bank, of 
which there are 87 (including Kiev 
and St Patershnrg ) at national ImmT 

Unwieldy paper systems are diffi- 
cult and expensive to service and do 
not allow the user to visit any other 
branch. Like paper-based nnWHrai 
records at a surgery, they belong in 
one place, and stay there. Their - 
effect is easy to see at an old-style 
branch of the same bank, where 
customers queue repeatedly for dif- 
ferent stages of the transaction. 

In the last three years, banks 


have become anxious to an+wr the 
20th century, says Zabezhinsky. 
"Five. years ago, the first commer- 
cial banks started to grow. Eventu- 
ally, ah the people bfta ding thorn 
are bankers not by education, but 
by m en t ality, in the last two years 
banks have grown from 12 to 1,000. 

"Today the situatio n is to 

the west: stringent competition 
using the highest technology. We're 
Tiring cards with magnetic -riripa, 
some smartcards with amharidpri 


SOFTWARE 

AT WORK 


chips and the customer’s picture 
and si gn a t u r e on the fr ont. We have 
grasped this technology at the 
wiomant of fts birth.”. . 

Because the customer belongs to 
the branch, rather than the bank, ft 
made mare sense for the Moscow 
Savings Bank to start locally, auto- 
mating from the bottom up, ndher 
than the top down. Tn effect, with 
no centralised technology, it’s only 
possible to have a client of the sub- 


branch, not of the entire bank,” 
explains Zabezhinsky. 

Tt was very hard to change the 
mentality. We see ourselves as busi- 
ness people first and technologists 
second, whereas many of oar pro- 
grammers » tm share the old sepa- 
ratist IT mentality.” 

In fnaVing such & leap from the 
old to the new, hanir net 
on problems of change manage- 
ment. The old woman probably 
could not have chosen a better per- 
son to approach than Helen Taga- 
nova, Tnanagnr of the automation 
dep ar tment -Sh e has great sympa- 
thy for end-users but also a firm 
grasp of the new real-time way of 
hanking . 

"Our bank doesn't look like most 
in Moscow. We would never have 
this system today without our man- 
ager, who really drove the project 
Practically all the managers of sub- 
branches were replaced by people 
who shared the vision.” 

The IBS Solution was rhnsan as 
the only “self-supporting" system 
that could grow as banking 
changed, rather than reflecting out- 
dated techniques adapted fr om the 
west There were some traqmatic 


sta ff ph a Tig as and training was long 
and thorough for bank staff "Our 
task was to work out the technol- 
ogy,” says Taganova. 

Tt is working wen, but we have 
had many changes in implementa- 
tion- Hie sys te m checks itself daily, 
and fulfils all routine standing 
orders and so on. Audit trails are 
bufit in. But sometimes a special 
request <wm« up from a dlmi of 
one of the sub-branches. This has 
concentrated our attention on spe- 
cial needs. We have created a large 
menu, and it’s easy to add new 
options. 

t raw say that the ■drift*? in this 
department are highly developed 
wwnwg h to solve any twmWwg prob- 
lem. If we understand the problem, 
we can find a solution: we're not 
afraid of any application task,” says 
Taganova. 

The ATMs provide a good exam- 
ple of forward planning. ‘'Currently, 
there are only 10 ATM •bankomats*, 
and all of t hfffn are because 

we had to be sure of reliability and 
acceptance teats. But eventually 
they will be everywhere, not just in 
bants.” 

There is a Novell network of 
around 50 PCs farida Aoph branch, 
connected to sub-branches, all of 
which have their own local area 
network. For the head office, the 
paperwork produced by the com- 
puter has to comply with the old- 
style paper systems. Nevertheless 
easing levels have faUwr in auto- 
mated branches, especially in 
checking and auditing. Errors are 
rare, and a mere three accountants 
now oversee 18 sub-branches. 
Checking for accuracy and logic is 
done by two people instead of 18. 

Telecommunications are the 
rogue factor in building such net- 
works. They are patchy in Russia: 
telephone exchanges can date any- 
where from the 1940s, so IBS sup- 
plies its own channels. 

PawTrs in toe UK COUld Tnakw a lot 
more use of Raid technology in 
counteracting fraud, for such pro- 
cess-heavy tasks as fingerprinting, 
a ccording to Trevor Duplock, man- 
aging director of necropolis UK, 
which supplies IBS with. Raid tech- 
nology. 

Anatoly Karachinsky, IBS’s 
founder, saw hank untnmatin n a s a 
window of opportunity seven years 
ago, a nd Hnn wimte sure IBS is able 
to support every area. This means 
not just tying ti ytw the pigments 
of the hardware system but in some 
cases providing the networking and 
telecommunications. Analyst 
Esther Dyson, president of EDven- 
ture, a venture capital investor in 
B qgfam computer markets, sees IBS 
as of the few ftn«rian computer 
companies that might set its rights 
beyond Rimwia. "Karachinsky is a 
remarkable en trepreneur,” «ha says. 
TBS could help make the East 
become part of a wider world.” 


Technically Speaking 

High price to pay 
for games at work 

By Tom Foremski 



A survey 

■PPTC= conducted last 
year by the US 
mapiThie Informa- 
tion Week found 

W that 90 per cent of 
the executives 
questioned said computer games 
were available in their office. 
Sixty per cent said they were 
played several times weekly 
within their company. 

California-based accountancy 
company SBT estimates that US 
businesses lose as much as SlOQbn 
(£67hn) a year in non-work related 
use of computers. 

Clearly, computer games should 
not be played for fun at work. 
There are enough problems over 
determining what productivity 
benefits work-related computer 
use delivers. 

While business applications are 
often described by their creators 
as “productivity packages”, com- 
puter games could just as easily 
be described as productivity kflj- 
ers. Yet the same leading vendors 
of business software often distrib- 
ute games with their software. 
The most popular game in US 
offices is the card game Solitaire, 
distributed free with the Microsoft 
Windows user interface. And US 
software mail order companies 
sometimes package special pro- 
motional that include busi- 
ness software with free games. 

Games are also clogging the 
Internet international network, 
ham p ering its Use for w«mn«w‘a| 
purposes. The culprit seems to be 
Netrek, a space exploration game 
that involves two twwn« of eight 
players exploring a computer-gen- 
erated universe and interacting 
with each other. It is designed to 
be played on networks and players 
say the game is addictive - so 
much so that at least one US com- 
pany is trying to work out a way 
of rh^r gin g the public to play it. 

Computer game developers are 
well aware that many people play 
their games in the offi ce As a 
result, several games have a fea- 
ture that fiashM a dummy spread- 
sheet an to the computer display 
at a touch of .a button; this is 
useful for when the boss walks by. 

However, certain games can be 
beneficial if used to educate staff 


and allow companies to explore 
iWfermi business cenarios. Calif- 
ornia-based Maxis, best known for 
its Sim sates of computer games, 
uses its game software technology 
to create applications that model 
business operations. It has devel- 
oped a package for Pacific Gas and 
Electric, called SimPower, that 
allows management to simulate 
the impact of their derisions on 
power consumption. 

Banning computer games from 
work altogether would be difficult 

But several large corporations in 
the US such as Sears Roebuck, 
Coca-Cola Foods and Ford Motor 
already have restrictions on game 
playing. Ford uses special soft- 
ware that scans worker's com- 
puter systems to make sure there 
are no games. 

However, some smaller compa- 
nies, especially in the US, approve 
of game playing as long as it is out 
In the open. Those which actually 


Computer 
players oi 
experience high 
stress levels 
during play 


encourage game playing at work - 
mostly In the US - have proper- 
budgets for game purchasing: At 
some companies, staff at all levels 
will play games against each other 
while connected to the office net- 
work. This is said to encourage an 
esprit de corps. Even so, its value 
in Increasing company productiv- 
ity is still questionable. 

Anyone who has played com- 
puter games knows how easy it is 
to lose an hour or more without 
realising it. 

So while a policy to ban com- 
puter games at work will certainly 
be unpopular, ft may be a neces- 
sary step. If staff want to relax, a 
short walk outside will certainly 
be more beneficial 

Studies have shown that com- 
puter game players often experi- 
ence high stress levels dining 
play. And now that computers are 
so cheap, there are plenty of 
opportunities for playing the 
games at home 


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FINANCIAL TIMES TUESDAY MAY 24 1994 


MANAGEMENT: THE GROWING BUSINESS 


A novel financing deal helped in 
the rescue of Standard Platforms 


The view from 


Unusual means 


to a happy end 





Bournemouth 


Last week the 
London stock 
markfct witnessed 
one of its more 
tmnsnal corporate 
rescues. Standard 
Platforms, a 
supplier of optical 
imaging systems, raised £450.000 
through a share issue mafln 
necessary by a disastrous 

expansion into the US. 

It was not the size of the issue 
that was unusual, although 
raising such a small amount 
would tend to be too small to 

justify the corporate finance fee. 

Nor was the reason for the 
rescue abnormal - the US has 
been a graveyard for many UK 
companies which have thought 
North America was like their 
home market, only bigger. 

What distinguished the deal 
was that 30 private individuals 
subscribed an average £17,000 
in a rare, if not unique, example 
of a business angel rescue. 

To make the deal fly, DM, the 
corporate finance company that 
brought the investors together, 
took its fee in shares. And 31, 
the investment capital supplier, 
agreed to convert £300,000 of loan 
stock in to e qui ty. 

Standard Platforms bad enjoyed 
a short and eve n tfu l public 
existence. With the £L6m raised 
when it came to the Unlisted 
Securities Market in 1990, it had 
tried to push into the US with 
a new product 

In the UK it bad established 
a sound customer base supplying 
bespoke systems to enable the 
tikes of DHL and Secnricor to 
store and retrieve optically the 
records of thousands of 
docu m ent s they receive daily. 

In the US the company had 
hoped to produce an off-the-shelf 
version of the software it could 
sell to hospitals and clinics. Sales 
never materialised as expected, 
losses mounted and file US 
subsidiary was sold. 

The shares were suspended in 
March 1994 at 36p, valuing the 
group at £Ltin, when at their 
peak they had traded at over 
200p. In the 18 months to 
September 1993 Standard 
Platforms had made a pretax 


loss of £l.lui and had net 
liabilities of £574,000. 

“The company was not exactly 
thriving but it was not bleeding." 
says Peter Dicks, who has joined 
as non-executive chairman. "It 
was dead in fine water, not 
sinking," says John Incledon. 
chairman of IDJ and the largest 
new investor in Standard 
Platforms. 

To sell the refinancing to new 
investors IDJ needed a manager 
respected in the field. They found 
Iain Bowles who was, until the 
week before last, sales and 
marketing director for the 
European operation of Fujitsu, 
the second largest computer 
company in the world. 

It then needed to convince 3i 
to convert Its debt into e quity, 
a move the institution agreed 
to make if DM could get file share 
issue fully underwr itte n by 
business angels- 

“Getting tiie money was 
relatively simple," says Peter 
Dicks, non-executive chahman. 
IDJ went on a series of roadshows 
and sent 55 people an information 


IDJ took a week to put the 
underwriting in place - all 30 
investors were required to sign 
a "hold harmless" letter saying 
effectively that they were aw ar e 
their shareholding might prove 
to be valueless. It pulled off what 
Dicks calls a "typical US-style 
wipe-out financing” that diluted 
gristing shareholders to a 22 per 
oast stake but left the 
reconstructed balance sheet with 
net cash of over £ 200 , 000 . 

Could such an angel-backed 
financing be repeated? First, the 
group organising such an 
underwriting needs a well-heeled 
list of investors who have 
invested in private companies 
and know they may be saying 
goodbye to their capital for along 
time, if not for ever. 

Of equal importance is the need 
to bring in good management 
without which no investors would 
have been tempted, hi the case 
of Standard Platforms, it remains 
for Bowles to justify that faith 
in his abilities. 



Former Midland Bank chief Sir Brian Pearse talks to 
Richard Gourlay about lending to small companies 


E arlier this month Sir Brian 
Pearse spent an uncomfort- 
able few hours in Bourne- 
mouth, southern England. 
Speaking to an invited audience of 
250 businessmen. Sir Brian was 
shocked to hear that antagonism 
towards the banks was quite so pro- 
nounced. 

"I thought things were getting 
better but I am beginning to won- 
der,” says the man who retired as 
chief executive of Midland Bank, 
the UK high street bank, in March. 
"The strength of antihank feeling 
was quite strong. The relationship 
is still disappointingly adversarial.” 

This continuing tension, between 
hanks and their customers is some- 
thing Sir Brian believes has to be 
addressed if Britain’s unemploy- 
ment problem is to be tankiafl- 
Siqaiinr businesses, which will be 
creating the jobs in fixture, cannot 
do without the hanks. And the 
banks, which he says have probably 
only broken even servicing smaller 
companies over the last 10 years, 
have to find a way to make fids 
business profitable. 

Sir Brian, who is sometimes seen 
as a traditionalist, believes this 
cause will be best served by better 
implementation of old-fashioned 
hanking principles - getting closer 
to customers, understanding their 
businesses, plans and management. 
But he says there is also a place 


Sk Brian Pearce, now retired, at the MkBand Bank bead office la London 


for banks to look at other sources of 
Income - such as taking equity 
stakes or equity options in custom- 
ers' businesses as part of a normal 
banking relationship. 

Sr Brian's desire "to do some- 
thing about unemployment” was 
one reason he has just accepted the 
post of chairman of file Housing 
Corporation. The largest govern- 
ment quango, the corporation 
supervises the non-profit-making 
hooting associations which own 
and manage 700,000 rented 
hrmf pa 

But he has long believed that 
girmllpr companies should play a 
central role in creating jobs. 

He became particularly alarmed 
by the way relationships were 
developing between the banks, 
cmaVTpr businesses and the govern- 
ment at the end of 1992. It was a 
time when banks were being 
accused of benefiting most from 
base rate cuts. “The prime minister 
even said in a GuQdball speech that 
he just hoped an interest rate cut 
would get passed on to the custom- 
ers,” Sir Brian says. 

Until last week’s Bournemouth 
meeting. Sir Brian thought things 
had been improving. The govern- 
ment, he says, had largely delivered 
what it promised, improving the 
loan guarantee scheme, replacing 
the Business Expansion Scheme 
and taking some action on late pay- 


H ow close are we to the day 
when banks regularly take 
equity stakes in the busi- 
nesses to which they 
lend? 

Among the UK high street hanks, 
Midland is one of the closest to 
making such a move part of every 
day banking. 

Among others, only Royal Bank 
of Scotland is developing equity 
products along similar lines 
through Its specialised lending ser- 
vices division. 

Midland’s starting point is the 
recognition that the returns banks 
have made from smaller businesses 
have been poor. 

Too often banks have been lend- 


Small steps to an equity stake 


ing what is effectively risk capital 
but have only earned a debt 
return. 

"The boards of all the banks 
must be very disa pp oi n ted by the 
returns they have made from this 
sector over the whole business 
cycle,” says David McMeekin, cor- 
porate finance director of Midland 
Bank. 

Midland's response is modest but 
a pointer to where small business 
hanking may be going 
• At the smallest level. Midland is 
developing a product that would 
allow business hanking managers 
to make relatively small but unse- 
cured loans to well-managed com- 
panies with inadequate security 


but robust cash flows. The bank 
would take equity options or a 
form of "phantom options" - 
instruments that carry rights to 
some op-side reward - which the 
owner-managers will be encour- 
aged to buy back from the bank. 
Midland accepts that it will need to 
Continue tr aining hanke rs to recog- 
nise when equity could be useful 
and relevant 

• Since 1990 Midland, in common 
with some other banks, has 
adopted just approach for big- 
ger custom os with the same char- 
acteristics. For private rrnnpanigs 
and smaller quoted companies, the 
bank win consider taking equity 
options. With middle-sized family 


controlled companies, where a float 
is unlikely, it will consider lending 
unsecured but will take phantom 
options. 

• Nearer to conventional venture 
capital but targeted at companies 
requiring as little as £5,000- 
£150,000, there are 10 indepen- 
dently managed Midland Enter- 
prise Funds. An llth office is to 
open in Wales on June 21. They 
look at start-up and early-stage 
finance. To cut the setup costs. 
Midland has introduced standar- 
dised documents. By many 
accounts this Is proving a labour- 
intensive slog. 


meat of debts. 

From the other tide of the fence, 
hanks were encouraging businesses 
to recognise they were too depen- 
dent on overdrafts and Should look 
at longer term forms of finance. 

Ho accepts that the banks have 
made mistakes. They should, for 
example, never have moved deci- 
sion makers to big banking centres 
from the field, where they could 
maintain strong links with their 
customers. Midland is now revers- 
ing this and has put 206 senior head 
office bankas back Into the field 
after retraining because, as Sr 
Brian says, "some have lost the 
ability to lend”. 

But Sr Brian believes the people 
who run smaller businesses are 
partly to blame for poor relation- 
ships with the banks. There Is, for 
example, a "startling lack of train- 
ing" among businessmen and 
women. 

He compares the ease with which 
people can set np in business in 
Britain with, the German experi- 
ence, where overall training levels 
are monitored and approved by 
local chambers of c omm erce “Far 
too many people have gone into 
business who should not have gone 
into business,” he says. 

Too many businesses are under- 
capitalised, he says. And too many 
businessmen are unrealistic about 
what they should pay the hank* for 
overdrafts, a farm of finance which 
is often effectively risk capital Too 
many businessmen "expect equity 
on debt prices and quite cheap debt 
prices”, he says. "Customers don't 
think: *how much of my own money 
can I get Into my own business’, 
but, *how much can I borrow', a 
startling difference with Germany.” 

Sir Brian is not overiy-enthusias- 
tic about banks t aking equity 
stakes in their customer’s business, 
but believes there is a case for tak- 
ing options and "phantom options” 
- instruments that allow the hank a 
share of any uptide in the business 
in addition to their regular loan 
margin. 

"Options and phantom shares 
allow you to lend slightly more gen- 
erously,” he says. They also mean 
bankers would have to become 
more involved in the way the busi- 
nesses was running. 


BUSINESS OPPORTUNITIES 


BUSINESSES WANTED 


READBtS ME RECOUMBOED TO SfflC APPROPRIATE PROFESSIONAL ADVICE BEFORE BflERMG MIO OOHRM0I15 




Selling your Business? 


We have the skills and experience to achieve the best price for your 
business and structure the deal to achieve maximum tax efficiency. 
If you are considering a sale and your turnover exceeds £lm, 
we would like to talk to yon. 

Our charges are based largely on results, so you have little to lose. 
Far a confidential discussion without commitment please contact 
Lance Blaclutone or Gary Moxley at: 


Recently established Food Manufacturing Company with excel! cut 
clientele portfolio seeks additional investment which will be 
supported by Directors Personal Guarantees and adequate "Deed" 
security. 



Any agreement reached to be finalised through solicitors to the 
entire satisfaction of both parties. 


Blackstone I'ladot'inc Frank* (.iiartticcl Accountant* 

Franks 26-34 Old Struct. London LC.‘I\ VIII. 


Tel: 071 250 3.100 Fax: 071 250 I4(>2 


For further details contact Mr. Keith Webster (Solicitor), 
KX. Webster & Co., 

Omega Court. 368 Cemetery Road, Sheffield Sll 8 FT 
(TeL 0742/669071) or (Fax 0742/664870) 


Fully furnished offices 
Trafalgar Square 


CHANNEL 

ISLANDS 




Offshore Company Formation 
and Administration. 

Also Liberia. 

Panama & B VI etc 
Total offshore facilities 
and services. 


Secretarial vrvicea - Conference Politics 

Photocopier, Fax, W.P. ■ Flexible Lease Terms 

Personal Telephone Answering * Immediately Available 

Tel: 071 872 5959 


For ectrib and a p po ia t mrat write 
Croy T<wt Hit. Behnont Ruksb, 
M Bdnoot Rd. St Heifer. Jersey, Ci 
Tet OS34 78774. Fax 0534 35401 
71* 4192227 COFORM C 


Your Partner in over 80 International BuMoess Locations 


DON’T MISS THE BOAT IN CARDIFF BAY 

Two billion pounds worth of construction projects starting now. 
We are an overworked plant hire company with 50 units on hire to 
every local authority and to major Construction Co in a 30 mile 
radius of Cardiff. We have the contacts. We have the know how. We 
have 20 yrs experience. We need a professional with capital of up 
to 2 million to invest in Europe’s most existing development area. 
Write to Bax B2872, Financial Times, 

One Southwark Bridge, London SEJ 9JBL 


COMPUTER GAME 
[SOFTWARE AND HARDWARE 
DIRECT FROM JAPAN 


CAN SOTLYAU. SYSTEM CMSSfOC 

SOTEK FAMtCOM, GAMS BOY. 
GAME (ZAB, MEGA DRIVE, MEGA- 
CD. GENESIS. SNES AND NEO GEO. 
LARGE VARIETY at CHEAP PRICES 
AN) PROMPT DELIVERY. 


PiSAmowTOcr: 
KCaX.Lm.lWva.Jafn 
TcbSU 38459*91 Pm SO 3845 9747 




Additional Investment Capital sought or would consider outright safe, 
fdyffle location on the waterside. Units modestly priced with 
considerable scope for further development 


FUNDS AVAILABLE 
TO PURCHASE 

* Letters of Credit 

* Bank Gimxaniees 


1 Other Acceptable Co On] era! 

* Backed by Private Investors 
THRU MAJOR DOT. BANKS 
CAPITAL SUPPORT CORP. 
US(7I*)757-ItnO» fee (7M)7S7-I2» 


Principals only. Write to: Box B2863, Financial Tunes, 
One Southwark Bridge, London SE1 9HL 


SMALL INVESTMENT 
COMPANY 


OWNING A HIGH 
YIELDING 


COMMERCIAL 

PROPERTY 


Wishes to exchange die above for 
quoted shares in a U JL Property 
Company or similar Pic. 


A Private 

Property development amo 
Investment Company 

operating throughout the United 
Kingdom and Europe is nnaested 
in discussing with private investors 
or investment companies its future 

expansion plans. 

Joint venture Of alternative 
investment proposals would be 
considered. 


LONDON 

REGISTERED 

AUDITOR 

quality practice fees over 

£220,000 seels merger. 
Please sod detaik in Box B2897, 
fiirrecul Tutt*. Ooe Soutbwacfc 
Bridge, London SE1 9HL 


CONFIRMABLE DRAFTS 
BACKED BY CASH 

★ Issued in Your Name 

★ ConfimKri by Mqor lari Banks 
to Provo AvaUabfficy of Fonda 

★ Backed by Private Investors 

CAPITAL SUPPORT CORP 

US. (7141 757-1DT0 • Fax (714) 757-1270 


indie 
Jto 
& 


Rctpured by Holding Compan y seeking djvcswficariow. 

Niche market p r efer red. 
Ideal opportunity for either owner reMre m enl orgnory 
div es tm en t- Controlling ini treat required. 
Erosung management coottmzirj. Ifdeared by vendor, 
i Plerse reply roGcny BoOa.Toodtic Ron & Co, 

^ Abbey House. 74 Mosley Sneet, 



■ ■’ >v ■■ V 


Manchester M602AT. 


Tel: 061 ZZS *456. Pax; 061 238 2021. 


Royal Naval Hospital 


Stonehouse • Plymouth 


A Substantial Collection of Historic Bin dints Within a 
Selfcontained Site on the edge of Plymouth City Centre. 


COMPUTER SERVICES 
CONTRACT BASED 
WANTED 

A major Computer Services Group 
wishes K> acquire coronet bases. 

If you are int erested please reply to : 
Box B3787. Financial Times, One 
Sontfawait Bridge, London SE1 9HL 


Fully quoted UK financial services group seeks 
emerging CTAs or their principal traders to augment 
its own CIA subsidiary with over USSlOOm under 
management Correspondents should be capable of 
bringing managed funds as well as trading skills. 


Write to Box B2828, Financial Times, 
One Southwark Bridge, London SE1 9HL 


24 ACRES 


Knight Frank 
Li] & Kutlev 


071-629 8171 
0392 433033 


FREEHOLD 
FOR SALE 
BY PRIVATE 
TREATY 


HOTELS & LICENSED PREMISES 


Financial Advisors 

US. TekcantnmnJcation company 
reeking financial agents in Europe. Asia 
and Middle East poly to offer a unique 

high yicM (insured) p r o g r am. 

ExcoDeoi 

If Interesed please call David or Seare 
Td USA: 301-897-0163 or 
Fax USA: 301-097-8469 


CAPITAL AVAILABLE FOR 
GOLF PROJECTS 


Our client has substantial equity funds for investment in up and 
running or nearly built golf courses. Joint venture deals would be 
considered. Driving range sites in urban locations would also be of 
Interest. Geographic profs a me England and Wales only. 


Please write to: ftmoefl Kerr 

John Ashworth, PanneUKarr Forster Associates, fosfa; . 

New Garden House, 78 Hatton Garden, London EClN 8JA ^ oa * 8 




Company building "New Design” 
20M luxury European waterway 
barge requires 1 or 2 investors 
to finance fining -our of 
pm production modd. 

Total finance required £60^)00 
For detidb Paa 0273 779007 


Established 
Property Investment 
Company 


PRIVATE 

GROUP 


VAT RECLAIM IN 
EUROPE/UK 
•Deadflne 30th June 94 for 
Y/E 1603*0000 of Ebb bo 
rscfevnsd. 
Ca9*Euuzone‘ 


Tet (+44) 81 211 7100 
Fax (+44) 81 21171 10 


Write toBosB2S74, 
Fhumdal Times, One StAi &mu k 
Bridge Lo*do* S£1 9HZ, 


Write in lira first instance- to: 
Bax IWwy w«iirt»i Tiw 
One Soabwttle Brijge, Loadoa SE1 9HL 


Company with large number 
of new products for the 
consumer market seeks funding 
to market and lannrfi theso 
products for the international 
market. Loan/equity 

arrangements wanted. 


Hcmsc lend detail w BOK 
Ksueial Tinea. 

nteSrtmfcBrifec.tMtanSEl *0. 


HEALTH SCREENING! 
CORPORATE HEALTHCARE 

Successful healthcare company 

yririidiy in hi-iMi ap i pg ul i ijj amt 

cotpoT ir c/ omipanon al heaftbcarc ia 
inttRited in dtba porebaaiag or taking ■ 
share In borinere or practices focussing 
on there deb. Flexible approach to 
smctaingamiigeoient. Responses 
treated jn ui. lw l imBHpMi 
Write IK Box Btsu, Ftmadal Tnacx, 
Ore Soudnraifc Bridge, London SEI 9HL 


PRODUCT INNOVATION 
& DEVELOPMENT 
P mftjaiu nal En gineer s wtfuaccBcal 
trade raaxd in product jnsivikm and 
development offer RAD or advisory 
services on negotiable basis. 

Mwga/aapiwdon proposals Co nsi d ere d. 

Write to Bos B3899, Rnandai runes. 
One Somhwnt Bridge. London SHI 9HL 


(mainly industrial) with active 
hands-on management seeb 
to increase critical mass by 
corporate acquisitions 
(portfolio with value between 
flOm and £J5m) 
for paper with merinim term aim 
of realisation by flotation. 


Based in Midlands/South seeks 
to acquire companies 
nationwide operating in sectors 
of SPECIALIST RETAILING, ' 
FOOTWEAR MANUFACTURING 
AND IMPORTING. 

Funds of up to £3 million 
available. Absolute 
confidentiality assured. 


DEVON - SOUTH HAMS 


KlipkrM|i 10 nOw, Sslooabo Hnurj 2 miloa along tha Coastal Path. 

The Gera Rock Hotel occupying a spectacular ooastal position. adJoWng 
National Trust and Heritage coast land; potential for use as holiday 
a cc omm odation (adrfretto planning). 

6 Principal Reception Rooms, Kitchen and Domestic Offices, 9 Sett 
Contained Fiats. 9 Bedrooms with Ensuite Shower or Bathrooms, 
8 further Bedrooms, Sauna Solarium, Stafl Acc om m od ation. 

8 seu Comatad Ftete in separate Bock, 8 CdBsgas. 


Gardens wflh 9wimming tool. Tennis Court. Direct access over Coastal Pstfi 
to Beech. 


About 4% Acres. FREEHOLD FOR . SALE 
SOLE AGENTS: EGEHTON LTD, 127 MOUNT STREET, 

LONDON W1Y5HA 
0714930675 


OFFICE EQUIPMENT 


OFFICE FURNITURE 


Write to: BZ8S7. HnancU Ttra. 

One Souffnwtc Bridge, tendon SE19HL 


CONSUMER STATIONERY 
PRODUCT SALES PROVEN. 


Substartiel InrMduaVCanpany 
recMred Wttend resources for further 
serious devel o pment in mqascpe. 


Principals tmty. Brief t&nRs ia 
confidence ft? Box B2870, Financial 
Times, One Sentinvark Bridge, 
London SEI 9HL 


LEGAL 

NOTICES 


Telephone 0932 228889 

Rax; 0932 254731 


ESTABLISHED YACHT 
BROKER (20 years) 

seeks additional boat stock 
finance: fully secured. 

Gall Cart 0784 477577 f7days) 


COMMERCIAL FINANCE 
Ventura Capital available from 
£250,000 upwards. Sensible 
Rates. Sensible Fees. Broker 
enquiries welcome. 


Our client wishes to 
acquire a company with 
unused capital 
allowances or excess 
management charges. 


Anglo American ventures IhL 
Tet (0924) 201395, Fax (0824) 201377 


Write to Box B2873, 
Rnandai Times, One Southward 
Bridge. London SEI 9HL 


riuousajoriw 

la tbe Ulgb Coon of Jonfcc 

CbrecoyDinaae 

Mt, fegbm ButUej 

V TUBMATnot rw roxstuk wuc 

AND 

B9 THU MATTER OF THE 
COMPANIES ACT INS 
NOTICE 19 HTPOY CIVUN -U ite Oidn of 
Ac Bfefa Cbct m tenet |< Huay DifUoaj 
dred iltb Mbj I'M Lomifaufle tec mtecuui of 
Ac Abic pw«inin Brrnon o: dm rvnnpay fim 
£5,297,150 to £4 .£24, L53 m nefatcred By ter 
n di Wr ct rte ap —r BoalMiMa] 199*. 
DBktl24teMir l*M 
NtenoNte^. 

SOSbtehBiSbccf 
Laadea W1X5FL 
Tet 07 L 491 9933 
Ret LA/JME/RUW4 
Softdson tolbe 


Wc have available high quality executive and system range 
- conference and receptions. 

Large choice of veneers:fWalaut ( Rosewood. Ash etc.) 
with discount of up to 

40% from RJLP. » 

London Showroom for viewing 
Full camcad planning services if required. 

Please contact: UNEABURO LTD 

0992503313 


SELL OLE 




Quality Ra\<;f_soi 'Svstkm' Ovncr Lvrnh i hi 
.MIT. LION £'s WORTH OF STOCK Ml s I l.o 


Less than y 3 of normal cost ■ 

Air- cxsaitiYp dusking, operational work-stations, storage, exec & 
opcra;?r st.i-g. conference, iioard room tables & »*«■«) modular 
divider screno. Many other quality items. 

081-549 9339 


w 




4 


























V 


FINANCIAL TIMES TUESDAY MAY 24 1994 


11 


BUSINESSES FOR SALE 


PRESS AGENCY 


I^mdoo based, Supplying information and images to world’s media. 
Access to major events. Historic photo archive. T/0 £500,000. 


London 5E19HL 


BUSINESS SERVICES 


VANGUARD BUSINESS CONSULTANTS LTD 

We*d*i*# companies In the following areas 

RAISINQ CORPORATE FINANCE •ltd VENTURE CAPITAL 
COMMERCIAL MORTOAQKS 

O Company restructuring, corporate recovery and business plans 
Q Invoice discounting & factoring 

O Easing pressure from banks and banking introductions 

o Sales, acquisitions a mergers 
O Accounting and computer systems 
O Strategic tax planning and mitigation 

12 HARLEY STREET, W1 1EB 
Tel: 071-637 5505 Fax; 071-436 8954 


LI QUIDA TIONS & 
RECEIVERSHIPS 
THE PAGE 1 Report 

IklkklUamBSIadaiMCMain 
IlH kw PW to UqBkWoBfKouvcaMp 
SVBRY wmK + ALL WINDING UP 
IWTHOHS* dBm of AUCTIONS * 
BOMNBSSas woe SAUL The arri Bl ui . 

Kponof iriUad. If job ua acrien atm 


itoAtotowectoiawi.ce 

TBE race 1 KEPORT 

awwbtopfaadclto; 

■Wt (MT03713M, Pta (M7Q 371438 


YOUR PERSONAL VOCHMA. * fit Sac 
dbereot 24 hra meMsglng. wwtiMda. 
TCT-UC, Tot: 40-89-959940 Fdc 49-89- 

ssnsos 

TRAFALGAR SQUARE • Your buNnas* 
sddto arw dadtood toohomi Drw In 
Unto. Parts, Bafln. Rariftb* Madrid and 
80 otfwr top location, wortdetda. CaU 
Hague on 071 8723500. 


BUSINESS 
SOLUTIONS 

and Project services. Realise 
poor business objectives with our 
foil time MBA team 
CaU Christopher Mason on 
Tet 071 359 2369 Ra; 071 226 96 11 

FINANCIAL ADVISER, 
FCA 

yi* help you develop your 
business/profftabiPty. 
From 1 day a month. 

Tel: 071-2S 2337 


COMPANY NOTICE 


Notice to the holdeis of 
English China Clays pic 
£40,000,000 

pet cent. Convertible Bonds Due 2003 
(“2003 Bonds*) 

Pursuant to Condition 7 of the terms and conditions of the 2003 Bonds, 
notice fa hereby given that foe conversion price of foe 2003 Bonds win be 
adjusted, as a result of a capital distribution on the ordinary shares in 
English China days pic satisfied by tbe allotment and issue of CAMAS ptc 
shares to the ordinary jtfHrratmktef* of R ngHuh Orim flay, pli^ w 

1. The adjusted conversion price will 375p per ordinary share of 25p each. 

2. Tbe adjusted conversion price takes effect on tbe first day of dealings fa 
CAMAS pic shares, expected to be 1st June, 1994. The adjustment is 
subject to tbe approval of tbe capital distribution by Pn gtikh rhina 
days pic shareholders. 

English China Clays pic 
1015 Arlington Business Park; Thesis, 

Reading, RQ74SA 
23rd May, 1994 


Wi 1. 1. 1 A N i 

HILLARY 


NORTH EAST ENGLAND 

EXISTING HOTEL 
AND GOLF RESORT 

140 BED HOTEL WITH SUBSTANTIAL CONFERENCE, 
BANQUETING AND IBSURE FACILITIES 

18 HOLE CHAMPIONSHIP GOLF COURSE IN 
MATURE WOOOAND SETIMG 

9 RQ GOLD AWARD BMESHARE LODGES 
LODGE & 8 DORM1 STUDIOS 

PUNNING PERMISSION FOR ADDITIONAL 18 
HOtEGOIF COURSE AND 61 RESORT PROPSOTES 

OFFERS IN THE REGION OF 
£4 MHUON FRE&KHD 

BROCHURE FROM SOLE SB1MG AGB4T& 

WfiUAM HILARY IBSURE A H0TB5 
123 CANNON STREET, LONDON EC4N SAX 

TEL 071 623 3233 FAX: 071 929 0681 


LEISURE & HOTELS 


FOR SALE 


Wed established company wtth first class reputation and client 
base. Turnover approaching £2m with excellent prospects for 
additional growth. 

Operating from self-contained freehold premises of 
approximately 25,000 sq. ft Ideally situated with excellent 
Motorway connections. . 

Offers invited from principals only. 

Repfiesto: 

Box B2866, Financial Times. 

One Southward Bridge, London SE1 9HL 


We are in contact with a substantial number of mqjor PLC'a in 
mergers and acquisitions who are constantly looking to acquire 
sound WMipi»ni«a 

We would be pleased to bear from controlling directors or principals 
of fnmpiKilM wishing to sell with turnover £Vi ™Hi«n .mi 

pre-tax profits £50k with no tipper limit 

Tor farther AetaBopieesatoepboneMaHt Dana AJ1A. 
mO(M3l41NortaNMUNN 


SURVEYORS 

Commercial property s u r v eyors with rating and 
project management expertise Central London location. 
Revenues SBOO.OOO. Profitable. 

Write to Box B2S7S, financial Times, 

On* Southwark Bridge, London SEX 9HL 


TWO FAST -0 H O W I NQ PROFITABLE 
BUSINESS NEWSLETTERS for Mia. 
Blue chip subscriber lists. Contact: 
Box B2889, Rnaoctel Times, One 
Soutwaric Bridge, London SE1 9HL 

100* UVE BUSINESSES FOR SALE 
and stosafeMtlifcrTntfWy 071 asaiias 
Roc 071 70S 3484 


CONTRACTS & TENDERS 





PAKISTAN 


PETROLEUM 


LIMITED 

s 


Financial Services 
Business 

The owner of this long 
wtaMMied quality Midlands 
b ased finn is cooridering 
retirement and is looking for 
s sui table purchaser. 
Ibmover of £350k pa 
generating a profit before 
tax and owners income 
in excess of £200k. 
Pdoripais only apply to: 
Naonm Holm, The Old Rectory 
Coupe, Efok, Won* WR6 6NG 


i i ibiwf-tb.ii iwrti .was wa wa— awsaase wvsrrs- 

COMPRESSOR MANUFACTURERS 
FOR WELL-HEAD NATURAL GAS 
COMPRESSION FACILITY 

Pakistan Petroleum Limited (PPL) invites applications from reputable manufacturers of centrifugal gas 
compressors to prequalify for the supply of a major equipment package. 

The scope of supplies will indude three natural gas compressor trains for parallel operation. Each 
compressor train wiR comprise high pressure rarflafly split multistage barrel typecompressorto API 61 7, 
driver and ancilaries. The driverwill be variable speed electricmator (approximate rating 2000 KW) with 
electronically controlled variable frequency system supplied in a modular substation. 

This is a critical wefr-head compression application cal Eng for a high level of availabffity/rejiabifty with 
a design life requirement of 30 years. 

The compressor manufacturer wffl be the prime vendor responsible for the entire scope of supply 
Including testing and wifl also provide supervision during installation and commissioning at site. 
Summarized process specifications are as follows: 


Process Gas 
Discharge Pressure 
Suction Pressure 

Suction Temperature 
Mass Flow Rate 
[each compressor) 


Sweet naturd gas having 94 mol % Methane and 1 ^5 mol % Carbon Dioxide. 
80 bar abs 

WiR continuously decline from about 60 bar abs to about 15 bar abs over the 
design Bfe of the facility. 

65 Deg C max 

40,000 Nm3/hr untH the suction pressure declines to about 39 bar abs. For 
further decline in the suction pressure the mass flow rate will be limited to that 
achievable with the maximum site-rated power of the driver. 

Fo prequalify for tendering it is essential that: 

i) The manufacturer shall be able to offer suitable equipment meeting Ihe spedfreations appearing 
above, and the equipment so offered shall be validly similar in power rating, speed, discharge 
pressure, mechanical design, materials and rertor dynamics to aft least three units previously 

produced by Ihe vendor alt he proposed manufacturing plant, each having a satisfactory operating 
experience of at lead 3 years. Equipment manufactured under licence, shall in addition, have the 
licensor's written guarantee. 

,) Tbe manufacturer must have prior experience of acting as a prime vendor for equipment supply 
for projects of similar nature and magnitude. 

) The manufacturer must have experience of supplying equipment for operation in remote semi- 
desert sites in Middle East/Far East countries and must be fuRy aware of operating/environmental 
conditions at such sites. 

) The manufacturer must demonstrate his ability to provide a continuing after sales service and 
spares to the buyer. 

} The abiftyfexperience to closely coordinate and liaise with a UK based contractor during the 
engineering and testingfcommissfonlng phases must be demonstrated. 

'reauafification documents shall be completed by prospective tenderers and the information so 
rovlcted will be used to determine which manufacturers wflf be invited to tender ferthe package, 
he Prequafification documents can be collected by bona fide compressor manufacturers or their 
ecfficalty authorized agent before 1600 hrs on 31st May, 1994 from: 

Materials and Purchasing Manager 
Pakistan Petroleum Limited 
P1DC House, 4th Floor, 

Dr. Ziauddin Ahmed Road, 

Karachi, Pakistan. 

Tet 92 21 5683853-57 (5 lines ) 

Fax: 92 21 5680005 and 92 21 5682125 
OR 

Resident Representative 
Pakistan Petroleum Limned 
House No. 12, F-8/3, 

Street No. 72, 

■ Islamabad. Pakistan. 

Tel: 92 51 250870 and 92 51 851091 

, cotnptetwJ 92 ’roquatfleation document am required to be submitted before 1600 hrs 
16th June, 1994 at either of above addresses. 


1) 


2) 


LEASE FOR SALE 
NEWPORT GWENT 
V* mile from town centre. 
5 acre main road. Site with 
58,000 square feet 
Buildings. Very low rent 
also adjoining 1 acre 
freehold for sale, if reqd. 

Tel 0873-830264 
Fix 0873 831718 


BUYING • SELLING 
A BUSINESS? 


Network 

write ntwwk centra lor 

t tor safe 

Ito newist ktarosa ol KoogRtMs, 

OOOcfens. bWimsMM. braWn and 

company owners «tw as seano or 

buytng Ootossas be 


WMaMrtorfcM 

071434 0992 

B Sfe— W8 to Will. LWfei SmTTPE 


FOR SALE 

Snuk Commny w Wssr Yoasam 
Long established family owned 
oewsagentfiobacconisB operating 
from prime leas e h o l d tocptioos 
throughout West Vodshirc. 
Hanover in excess of JE4 mQtion. 

Write to Box H2829, Handel Times. 
One Soufawsdc Bridge, 
LoodoaSEl 9HL 


MIDLANDS MOTOR 
DEALERSHIP 

Representing bating franchise 
Approx £10 miSon annual sales 
Becetenttown locaSon 

Principal® only 

Reply to Bax B2875, Handel Time*. 
Otoe Soutbwscfc Bridge. Looctoo SE1 9BL 


For Sale 

PRECAST CONCRETE 
CO. IN PORTUGAL 

Nr. Coimbra, 10 min from 
m'way 28,000m a with 
1,000 rrf covered. £285,000 
Fac (351-1) 7970051 


FOR SALE 

High Tec Secdritt 
L ocative tetsS company issenatianaS 


cfiemelo ktechol d. Idcretf berimes 
foaoxes/fiaiggs. Stock at valoatiofi. 
Write to Box B26QS, FinaacfanSmcs, 
OoeSowhwarit Bridge, 
Loudon SHI 9HL 


For Sale 

Pet Product Company 




Our dient, an international group, is seeking 

tn dispose of Ac above non core activity as 

part of a mtionalisaaoQ process. 

■ Youag company with tremendous 
potential 

■ Projected turnover c£Q.lM rising to 

£0-25M noct year 

■ High profile brand name focused on 
heahheare products 

■ Newly created distribution channels 

■ European expansion planned 

■ Profitable established mail order 
division 

The business would be suitable for an 

orga ni sation with the right infrastructure 

or looking for a fast entry into the 

industry. 

For further details, contact Anuj Chande, 

Partner, Grant Thomton,Gtant Thornton 

House, Melton Street, Euston Square, 

London NW12EP. 

Tet 071-383 5100. Fax: 081-566 4995. 
Principals Only 

Grant Thon 




i 



W, 

>V 

if ^ 

b-t 



Blaidwood Limited 
trading as 

“ZEN” CHINESE 
RESTAURANTS 

ihe Joint Administrative Receivers offer for sale four 
prestige restaurants, searing modem Cantonese 
Chinese cuisine. - 

t/o 

£m 

Zen Chelsea, Soane Avenue. SW3 1 .25 

Zen W3. 83-84 Hampstead High Street, NW3 1.2 
Now & Zen, 4a Upper St. Martin's Lane WC2 1.1 
Zen Central. 20 Queen Street; Mayfair Wl 1.8 

&35 

For further Information please contact 
Nell Cooper or Nigel Ruddock 

ROBSON RHODES RSM 


•MteVBAlHMM 


( Xwriuml iVtuuntniito 


156 CSy Road, London EC1V2NU 
Telephone: 071-865 2363 Fax:071-2534629 
Telex: 885734 

Regfetered to cony on audft woric and outtxxfeed to cany on 
irwwtment busfoen by theinsWuto aC cnartersd Accountants 
in England and Watos 


CHESHAM. 

BECAUSE YOU ONLY SELL 
YOUR BUSINESS ONCE. 

And you want the right buyer. With 
confidential briefs from hundreds of 
acquisitive public company chairmen 
who are looking to buy successful, 
private companies worth £500,000 to 
£25 million, we ought to be able to help. 

So if you're thinking of selling your 


to arrange a confidential 



CHESHAM 

AMALGAMATIONS 

The first name in merger broking. 


Chesham House, 2 Bentinck Street, London W1M5EN. 
Telephone: 071-935 2748 


Touche _ For Sale Upon the InatnictfaMU of 

The Fixed Charge Receiver Mr N G Atkinson 

RUSS HILL HOTEL 

near Gatwick, Surrey 




■m Oose to Gatwick Airport 
mm 152 en suite mostly air-conditioned bedrooms 
rnm Approximately 9 acre elevated rural location 
mm 9 Conference Rooms (665) 

— « Leisure Centre with pool 
m Bar and Restaurant 
* Parking (233) 

£2.5 million Freehold 

Ref. 20/209 

For forther details’ contact 
Gerard Nolan or Paul Newman 


CHRISTIE & C2 


2 Yoric Street 
London, WlA IBP 

Tel: 071 486 4231 Pax: 071 935 4032 


GREEK EXPORTS S.A. 

ANNOUNCEMENT OF A PUBLIC AUCTION 

Greek Exports SiA, established in Athens at 17 pBnepfefbniou Street and legally represented, in as capacity as Liquidator, following Decision No. 538/1992 of trie 
Pfrasus Court of Apperi and in accordance with article 46a of Law 1892ft 900, as supplemented by article 14 of Law 200Qft 991 , and In confutation with article 23 
of Law 2196/1 984 and trie order dated 7/4/1994 of the undersecretaries of France and Industry. 

announces 

a pubic international action lor the highest bidder, wtih sea l ed , bfncfrig offers for trie purchase, in toto, of tin assets of Neorlon Shipyards Syros SA eat aMa had at 
Ermoupols, Syros, 1 Neodou Street, which to under special Bqukfation and which wto henceforth be referred to as the Company*. 

ActMUee and brief de scri ption of the Company 

The Company to engaged maMy in the repair, conversio n and bulding of ships as we* as various todustrial constructions (railway cam. wind generator bases, 
eto.). Trie Company's productive hatatiattons are at ErmoupoBs, Syros on a satfownad plot of land abou 27 stre mm a s (1 stremma « 1000m 1 ) in area and on an 
area of about 33 strerrmas released for Ihe Compan/a use by the stela The Company also owns, besides Its tnataUerions, other plots of land totalling about 50 
strommas on trie island of Syros. It also owns 388 thousandttis of a plot of 505.68m 1 in Pfreeus (67 Aid AOaodl) on which a muttipie-storied bukflng has been 
erected and In which the Compary owns an area of 1 ,582.71 m* In fiie buldng. 

K Is to be noted that in accordance with article 23 of Law 219Qft 994, out of the total assets of the Company to be sold, tin foSowing are axoeptad: 

a) ThebuQdfogaftheakllazarattoMwttvatotela(eaa(3/xra.1Siif and bukfings totalling 968.SnV(OU Prison buSdtog) hi the Lazarettadstrict of the Uuiticlpafey 
of Ermoupols. 

b) The ruined bufcfng and plot of land tataHng about 2 ^ 6 B 0 n^, the former cartridge factory, opposite the VaidaMon. wttMn the Munidpafity at ErnnupoUs. 

d) The oMVefcssrapordM factory tobMngtoout 5 B bern m as In which the CompanyfoWdricet^ Consumer Cooperative Is horaed. also within the Munlcipeflty of 
Ermoupols. 

The above-mentioned propertiee^.b) and ^ ate e x cepted from the Company's eeeets for safe. aB they are to be transtoned to the local authorities of the Mend of 
Syros. 

d) The Boeing dock "AVUS* (see dataSs on page 19 of the Offering Memorandum). 

Also, as analysed and esphtina d in the Offering Memorandum, the highest bidder must dearly waive his rights, in the sale c on tra ct , to a special claim panting 
before the American law courts and included to the Company's balance sheet of 3lft2ft992 under dents and erectors' Bttgation accounts, against the owning 
co m pany of the mAt EAGLE. 

Two floating docks are in operation at the shipyards which can take ships up to 75,000 and 40,000 dwt respectively, equipped wlh two KHm cranes and one 10- 
ton and one 18-ton crane respedtaiy. Piers are walable for ships up to IffoOOOdwt: for repabBouteUediydock. 'These piers ere netved by 4tramnrg cranes 
wRh capacities up to 40 tons. For the dspasol of stops, the Company operates the stops barge LANADO II. There to also 8 200-ton floating cram. 

The shipyard has five tugboats and a anal rxwtxship used for tran s porting sandblasting equipment and targe objects. Thanks to the suitable efflmste. internal 
sandblasting is also carried out with modem equipment 

Terms of Die Auction 

1 . Parties Interested in tatting part tntha auction are tovled to receive from the Uqiridatortho Offering Memorandum and the draft Letter of Guarantee to order to 
submit a sealed, btodng offer to the Ermottoofis, tatsnd of Syros notary pude appointed to the Auction, Bed Aamani, 7 Mhrapditi Antonlou Pott Street, tsL 
430-281-27201. up to 1800 hours on Thursday I 6 O 1 June 1994. 

Bids must be submitted to person or by a tegaly authorised rapreeeritetfae. 

BUs submitted beyond the time DmB w3f not be accepted or taken Wo consideration. 

2. The bids wS be unseated before the ftbwo-mertioned notary at 1000 hours on Friday 17th June 1094 wfth trie Liquidator to attendance. Bidders who have 
submktod their offers within the prescribed time flm* can stso attend. 

a The seated, binding offers shad clearly state the offered price and the method of payment for the purchase, to toto, of the Company's assets and shaft be 
accompanied, on penally of nuffiflestion of the offer, by a Latter of Guarantee from a bank tegafty operating to Qrsace to the amourt of two minded and fifty 
nritoon (fcachmas (Dra. 250.000,000} or la equivalent to US dollars. 

4 . The Company's assets and al fixed and droiaftog property, ctatow, trademarks. Wes. rights, etc. are to be add and transferred *as It. where is* and, more 
spectffcaly, in their actual and legal concfttio n aid focation on the date an which tin sale contract to signed, rsgardtess of whether tin Company's shipyard is 
operating or not 

& The Liquid a tor, ihe Company and the creditors representing 51% of the total ctotois against the Company (Law 1892/90 article 46 a. para. 1 as to force), ahaB 
bear no labBty tor any legal or actual defects or for any deficiency In the particulars of the effects for sate or rights, nor for their tocomiMe or faulty description 
in the Offering Memorandum and In any correspondence, in the event of toconstetencies, entries In the Company's boohs, as they aland on the date of 
signature of the sale contract, shati prevafc 

a Prospective buyers, here in after referred to as “guyere", shea be obftged, on their awn resporefoBty end due care, and by their own means and at their own 
a^renses, to tospect the abfoct of the sale and form their own Judgement end declare in their bids that they are tuty aware of the actual and legal eorafition of 
the asstos for 8 ateL The Buyers are hereby reminded that, to accordance wffh the prowsfons of Law 1892/90 erticto 46a. para 4 as in force, hmtog agreed to 
writing to maintain corttdenttaKy. they are entitled to have access to any toftxmation ttiBy may require concerning the Conpany for sale. 

7. The essential criteria for evaluating the offers by the Liquidator, among others, shaft be the amount of the offered price, the assurance of as many as possible 
lob posWons. the btwtoessptens of prospective buyers end Bwli u a d l w u iWnaas. 

& The offers must not oorsain terms on which their b to dtogness Is dependent nor must Itwra be any vagueness concemtog the ottered price and its method of 
payment or my other matter ot I mport an ce to ihe sate. The liquidator and the undersecretaries of Finance and fodutoty have the right, at thetr tooons t estabie 
discretion, to refota offers which contain terms and condBons, Irrespective of whether these offers contain a higher p rice t ha n that of other bidders. 

9. The bids must contain e commitment by the buyers that the Company shaft conttoue to operate as a shipyard tor at least six fS) years aid that they shaft 
transfer tovnedtately. without anything to return, at teest ftve pa cad (B%) of the shores to the workers, as unseated by their union andfor the local autiiortlBS 
of the island of Syroa. 

10 . The highest bidder shaft be deemed the one whose offer was evaluated by the UquUtoor and judged by the undersecretaries of Finance aid industry to be In 
the best Interests of the credlora and for the national economy at targe. 

11. to the evert that the party to whom the assets for sale hare been adfudbaiad does not appear to sign the sate contract vrftHn twenty ( 20 ) days from being 
Invited to do so and tofts to abide by the other obftgations acctutog from the present announcement then the abova mentioned guarantee of two hundred end 
Sfty m®on drachmas (Drs. 250,000,000) Is forfeited to trie Liquidator in compensation for expenses Of any kind, tima sport, and any actual or hypothetical loss 
sustained, wife no obftgation on toe UquMatort part to famish any spedEe proof or deem that trie amount has been forfeited to him as a penalty douse, and 
coftect it from the guarantor bank. 

Letters of guarantee accompanying the offers shaft be returned to alt participants except the highest bidder immediately altar the ratification by the 
under se cretaries of Ftoance and Industry of the adjudication to the highest Didder. 

12. The Liquidator Shaft not be tiabte to parttdpents in tire auction ehtiar wflh respect to the evaluation report or tor tts selection of the highest bidder and neither 
w* he be Babte to them for the cancsSailon of Ihe auction to tin event that its outcome b considered to be unsatisfactory by the Liquidator or by the 
undersecretaries of Rnance and Industry. 

is. Partidpants in toe auction do not accMnr any right, ctatoi or demand feom the present announesmam or from toeir participation in the auction, against trie 
Liquidator, for any cause or reesoa 

14. Transfer expenses of the assets for sale (taxes, stomp duly, notarial and mortgagors fees, rights and other expenses tor drawing up topopapNcal diagrams 
as re qu ired by Law 651/77, etc) are to be boms by the Buyer. 

faM ras ta d parties should apply for further informatio n to foe head cSoe of toe Bquldsfing company GREEK EXPORTS SA, 17 Panepbttoitou Street. 1st Floor 
Athens, aeece. tei. 430-1-324^111 tolls 


B U SINESSES FOR SALE 


A p pea r cv a yTbcaby.Pitosy scdSwanfaj. 

Por farther toforsmrinn or to sdmtsc is ihkvccriwi phase cwtat 
iULqnsoB 07IS73 4790 or Mebafe Miles oe 07! 87} 3308 or Fkx: 071 873 3064 


All Advertisement bookings are accepted subject to oar 

current Ttnns and CbntfiUons, copies ofwfaki are ovaDabls by writing 
to 11 k Advertfeemeitt Production Dirrotoc, The Financial Times. 
Ok Soothwaric Bridge, Loodon SE1 9HL 
Tet OH 873 3223 Fax: 071 8733064 























12 


FINANCIAL TIMES TUESDAY MAY 24 1994 


BUSINESS AND THE LAW 


Ruling on car 
quotas queried 



A European 
Commission deci- 
sion not to investi- 
gate a complaint 
by consumers 
against an agree- 
ment restricting 
imports of Japa- 
nese cars into the 
UK was overturned last week by 

the European Court of First 

Instance. 


EUROPEAN 

COURT 


The complaint concerned an 
agreement between the British 
Society of Motor Manufacturers 
and Traders (SMMT) and the 
Japan Automobile Manufacturers 
Association (JAMA) restricting 
the export of Japanese cars to the 
UK to 11 per cent of the total 
annual UK car sales. 

The European Consumers Asso- 
ciation (BEUC) and the National 
Consumer Council (NCC) argued 
tire agreement was contrary to the 
Rome treaty's ban on restrictive 
agreements. They also alleged 
restrictions on access to the mar- 
ket resulting from the agreement 
constituted an unlawful abuse of a 
dominant position by SMMT. 

The Commission took tha view 
that there was not a sufficient 
Community interest in opening a 
formal Investigation procedure 
since the agreement would be ter 
urinat ed soon by the EC/Japan 
consensus on car exports. Under 
this, the EC committed itself to 
ahnlteTiing natfnnal restrictions of 
any kind by January 1 1933, while 
Japan accepted a transitional 
period until December 31 1999 to 
facilitate the adjustment of Com- 
munity manufacturers to ade- 
quate international competitive- 


ness. 


The Court treated the Commis- 
sion's letter to the consumer 
groups as a definitive rejection of 
their complaints. The Commis- 
sion’s letter stated three grounds. 
Each justified the way the Com- 
misaion exercised its discretion on 
competition complaints as recog- 
nised by the CFI in the Automec n 
case (T-24/90). 

The CK confirmed the Commis- 
sion was not bound to investigate 
a formal competition complaint 
But it reiterated the Commission 
was obliged to consider carefully 
the factual and legal issues 
brought to its attention by a com- 
plainant, to assess whether those 
issues indicated conduct liahio to 
distort competition within the 
common market and affect trade 
between member states. 


Where the Commission rejected 
a complaint without an investiga- 
tion, the purpose of judicial 
review by the CFI was to ensure 
that the challenged decision was 
based on a correct assessment of 
the facts and was not invalidated 
by any error of law, manifest error 
of assessment, or abuse of power. 

The court held aE three grounds 
invalid. The first and main ground 
was undermined by a manifest 
error of assessment The main rea- 
son given for not investigating the 
past and present SMMT-JAMA 
arrangements was that there was 
no reason to doubt that the 
arrangements would gnd by Jan- 
uary 1 1993 because of the com- 
mercial consensus on car exports. 

None of the documentary evi- 
dence relied on by the Commis- 
sion established *hii« would neces- 
sarily happen, to particular, the 
Commission failed to explain Why 
the transitional regime to Decem- 
ber 31 1999 would be based on any- 
thing Other than toe fl gregmAnt. It 
was not impossible, therefore, that 
the arrangements for implement- 
ing the transitional regime were 
incompatible with EC competition 
law. 

The second ground was wrong 
in law. The Commission wrongly 
treated the agreement as if it were 
a national measure of commercial 
policy by relying on its past 
approval by the UK, when it 
merely involved private economic 
operators. The fact that the agree- 
ment was known, permitted or 
even encouraged by national 
authorities did not exclude the 
competition rules. 

The Commission’s third ground 
for rejecting the complaint, 
namely that fixe alleged infringe- 
ment did not significantly affect 
trade between member countries, 
was also wrong in law and insuffi- 
ciently reasoned. 

It could not be justified solely by 
asserting that the TnfrTngcm^rrrt- 
did not primarily concern trade 
between member countries. The 
CFI considered the arrangements, 
by their very nature, were liable 
to impair the functioning of the 
common market and the natural 
movement of trade because they 
restricted imports into the Com- 
munity and affected the entire ter- 
ritory of a member country. 

T-87192. BEUC and NCC v Com- 
mission, CFI 2GH, May 18 1994. 

BRICK COURT CHAMBERS, 
BRUSSELS 


The Inland Revenue has its eye on partners who plan to exploit tax changes, 


T ough measures against tax 
avoidance, designed to 
limit tjie scope for the UK’s 
9m self-employed people to 
exploit changes in personal taxa- 
tion, have been outlined by the 
Inland Revenue. 

Many acco un tants had described 
the changes in personal taxation for 
the self-employed, announced in the 
1994 Finance BUI, as a significant, 
one-off, tax-planning opportunity 
for UK partnerships. The bill covers 
the introduction of self-assessment, 
the changeover from feiT afm n 
an a preceding-year basis to a cur- 
rent-year bads from the 1997-98 tax 
year. 

But the Inland Revenue's 
»BinfamfCTwnt hug fhift oppor- 
tunity less a ttracti v e. 

Mis Denise Catierall, a tax part- 
ner of accountants Coopers & 
Lybrand, hari gain t-faat transitional 
rules, while the changes were being 
introduced, would enable partner- 
ships to plan their tax payments. 
For partnerships in CTiyfrmrA on. 
April 5 this year, 1996-97 win be a 
transitional year. Under the transi- 
tional provisions, tax {aid in 1996-97 
wffl.be a 12 months* average of the 
tax payable on the profits arising in 
the two years to April 5 1996. 

Thus for a partnership with a 
year end of April 30, the relevant 
accounts on which tax win be 
assessed for the transitional year 
198697 will be for the periods May 1 
1994 to April 30 1995 and May 1 1995 
to April 30 1996. Tax will be payable 
on 12/24ths, or half, of those results. 

To talo* advantage of the transi- 
tional rules, partnerships anticipat- 
ing any large or unusual items of 
income were advised to try to 
ensure payment would be made 
rfnring the transitional 


Measure for measure 


DOEStHE II^O&UCTO'i OF Dffir-CoU£CT7N5 

ferrets' CbN&rmrre A change of 


BUSINESS 'PROCEDURE iLIRBiETBTRJa^ER 
/,NTI 7W-AVOIPANCE RULES PAWNER? 





as It would effectively be 
for tax averaging purposes. 
Equally, large one-off items of 
expenditure, such as reftahishment 
or redundancy costs, ought to be 
kept out of the assessment period, 
because a firm would effectively get 
tax relief cm only half 

Some partnerships may have 
already followed this advice. Firms 
with 1993-94 financial year ends 
which have passed may have 
brought forward exceptional items 
of expenditure into the 1993-94 tax 
year or delayed receipt of excep- 
tional income to place it in the 
1994-95 tax year. Partnerships which 
have not yet reached their financial 
year end could still take advantage 
of the tax-planning opportunity. 

But their efforts may have been 
in vain. When details of the new 
system were announced, the Inland 
Revenue also made it dear that it 
would bring forward a narrowly tar- 
geted anti-avoidance measure. 
Details of how this will work in 
practice will not be known until 
7 TPT* year’s ffnann* bin is published, 
but the Revenue has now published 
gcddefines. 

The Revenue identifies four “trig- 
gers'’ which may bring the anti- 
avoidance rales into play. Two of 
t frprn — transactions with pers/ms 
with whom the taxpayer has a fam- 
ily or proprietorial link, and 
arrangements with unconnected 
persons which are whoBy or partly 
reciprocal or self-cancelling - are 
fairly straightforward. But the 
other two - a change or modifica- 
tion of an accou ntin g policy, and 


any changes in business behaviour 
- could present problems. 

Mrs Catierall says, as presently 
envisaged, the last trigger is very 
widely dra wn. It appears to mean 
that any change in a settled prac- 
tice of a partnership in relation to 
the liming of thing s yprh aS the 
invoicing of customers and the col- 
lection of debts, or the purchase of 
goods and services, the incurring of 
business expenses and the settle- 
ment of debts, could trigger the 
anti-avoidance rules. 

This could catch a law firm 
which, in an effort to become more 
efficient, decides to speed 19 its bal- 


ing procedures. “The last trigger 
effectively gives the Revenue wide- 
reaching powers to allege that 
higher profits in the affected transi- 
tional periods constitute avoidance 
of tax,” she says. 

There are defences to a charge of 
tax avoidance, but they are nar- 
rowly drawn mid the onus win be 
an the taxpayer to prove the Reve- 
nue does not have a case. 

Once tiie Revenue has challenged 
a change in accounting policy or 
business behaviour, it will be satis- 
fied that avoidance has not taken 
place only if the tax p aye r can show: 
• that obtaining a tax advantage 



Waste of an opportunity 

The UK stance on market dominance has come in for criticism 

that included an agreement to Last year’s MMC report found 

serious breaches by PDM of the 


L ast summer the UK govern- 
ment baiked away from mak- 
ing radical changes to the 
rules on abuses of market power by 

dominant wnwpanips , Jtg flarM/if t 

to do little more than tinker with 
the present regime was a victory 
for the Confederation of British 
Industry and the industry lobby 
which had opposed the prospect of 
heavy fines for practices such as 
deliberately pricing goods too 
cheaply or refusing to supply cer- 
tain outlets. 

Not all companies woe pleased, 
however - particularly those oper- 
ating in a market dominated by one 
organisation. They feared that the 
government’s decision would send 
the wro ng m essages. 

In the UK’s animal waste market, 
for instance, such fears are strong. 
Last week three wnnii indepe ndent 
companies wait to the Office of 
Fair Trading to protest at the lack 
of action on recommendations 


made last July by the Monopolies 
and Mergers Commission to curb 
abuses of market power by Prosper 
de Mulder (PDM), the UK’s leading 
nrrhrrai waste rendering company. 

Last year’s MMC inquiry marked 
the fl i h - d ttm» in a decade tiwt the 
UK competition authorities had 
probed the animal waste trade. 

In 1985, the MMC found that 
POSTs strategy of growth by acqui- 
sition had been harmful to abat- 
toirs (the main source of read meat 
waste), and that PDM had used its 
market power to respond aggres- 
sively to competitors seeking to 
capture its raw material sources. It 
found PDBTs pricing policy was 
d«»irigned to exploit or maintain its 
monopoly. PDM gave undertakings 


notify the OFT before it bought any 
further animal waste companies. 

hi 1991, PDM*s purchase of the 
animal waste interests of Croda 
was referred to the MMC. The com- 
mission found the merger would 
have an adverse effect on competi- 
tion, but cleared it on the grounds 
that Croda was a declining compet- 
itive force and the deal would 
improve PDM*s efficiency. 

By autumn 1992, when the indus- 
try was again refereed to the MMC, 
PDM had bought several small ani- 
mal waste collection businesses 
without notifying the OFT, and 
mothballed the waste rendering 
plant at Market Harborougb, 
Leicestershire, bought from Croda. 


1986 undertakings and widespread 
discriminatory prietng. The MMC 
recommended feat PDM should be 
required to publish weekly a repre- 
sentative sample of prices and 
charges from October, dispose of Us 
Market Bar borough plant within 
six months, and be prohibited from 
mgMitg farther acquisitions with- 
out OFT approval, and that the 
1986 undertakings be tightened. 

Ten months later, PDM Is not 
publishing weekly prices and has 
not disposed of the Market Harbor- 
ough plant The three companies 
that complained to the OFT last 
week say competition in fee indus- 
try could be wiped out 


warns Robert Rice 


was not the main benefit, or one of 
the main benefits, ejected to arise 

from the ehRtt gp ; 

• or that the change was unite-, 
taken sotety fur bona fide ccamner- 
dal reasons. 

Obtaining a tax advantage wtu 
not be regarded as a bona fide com. 
modal reason. However, as obtain- 
tog a tax advantage is always Uktiy 
to be at the back of fee mind of the 
well-advised taxpayer as "one of the 
main benefits” arising from a 
change of business behaviour, it 
wRl not be easy to satisfy either of 
these defences, Mrs Catterall says. 


B ut the real sting of the 
anti-avoidance proposals la 
in the taO. If the taxpayer 
tries but fails to convince 
the Revenue that one of tin 
defences is satisfied, the penalise 
are heavy. 

Where, for example, it is shown 
that profits have been moved into 
the transitional period, then these 
profits will be taxed in fell Cat 40 
per cent in the case of a higher rate 
taxpayer) in addition to being taxed 
as part of the averaged profits for 
the two years to 1996. 

In other words, the profits caught 
by fee anti-avoidance rules will 
effectively be taxed one and & half 
times, or at an equivalent rate of 60 
percent 

There is time to try to persuade 
the Revenue to water down fee pest 
aides before the finance bill is pub- 
lished early next year. In the mean- 
time. wife further guidance from 
the Revenue as to how the anti- 
avoidance rules will work in prac- 
tice unlikely, partnerships still con- 
templating taking advantage of the 
tax-planning opportunity must 
tread carefully. 




.jsair ' 


The OFT’s official response is 1 ' 
that consultations with PDM are 

and that “thaw is no # |! - 
reason to suspect that consultation r -. ( 
should not be concluded satisfacto- 
rily". JPDM said yesterday it could * 
not comment, as the matter was j ' 
under discussion wife the OFT. But 
it denied it was in any way requn- 
stole for the delay In implementing 
the MMCS recommendations. 

Wherever the blame Bes, compe- 
tition lawyers say the failure of the 
authorities to ensure e ffecti ve can- 1 
petition to the animal waste indus- 
try nndertfaes the weakness of the 
UK system for tackling anti-cam- : - 
petitive behaviour by dominant 
c o mp anies. As one lawyer dose to 
tine case says: “It’s a classic exam- 
pie of why the government was 
wrong in rgectfng a tougher law p 
on abuse of market power." y-- 

Robert Rice f y- 



hold among H the world leaders 
m Electromechanicx, cre- 
ating specific responses to the 
problems posed by economic 
development in the Sectors of 
Industry , Power and Trans- 
portation. Our strength in 
these fields, together with our 
operational flexibility and our 
commitment to research, as- 
sure Jot us in the future as well, 
the conquest of new spaces and 
the creation of products and 
services still ever more ad- 
vanced and personalized. 

lG F? O U P 


Is it possible to control each of 
the 1,800 trains moving every- 
day over a 20,000 mile net 
work of rails crossing 18 
states, while seated in the sta- 
tion at Jacksonville, Florida? 
Today it is, thanks to techno- 
logy- from Anscddo , Is it pos- 
sible to reproduce thermo- 
nuclear fusion as it occurs on the 
sun? Today, res. The latest 
generation of Toiamaks are 
also equipped with Ansaldo 
technology. Technology irhich 
has taken us to the place we 
F I N M E C 


INNOVATION. 

OR OUR DIFFERENCE 
BETWEEN THE IHP0SSIBL1 
1ND THE POSSIBLE. 


EMUS] 


IIPVITST f 0 VII TIUSFQITITIBI 

c A N I c A I R 1 


PEOPLE 

David Gelber joins the ‘enemy* 


Derivatives broker Intercapital 
has always had the reputation 
of throwing i ro me of the best 
parties In the business. David 
Gelber, at that time chief oper- 
ating officer of Midland (Unhat 
Markets, walked into last 
year’s thrash, which b«d the 
Wild West as its theme, to find 
a poster on the walk “Grisly 
Gelber - wanted for cutting 
brokerage". 

Gelber, 45, acknowledges the 
irony that he, once the scourge 
of the brokerage business 
because of his attempts to 
force down commission levels, 
shou ld be joining tha "enemy". 
He has just been appointed 
group managing director of 
Intercapital, reporting to chair- 
man and founder Michael 
Spencer. 

A veteran of Citibank and 
Chemical, and Hong Kong 


Bank before its merger with 
Midland, Gelber left Midland 
Global Markets in April. "My 
first love is derivatives," says 
Gelber, who, despite his mana- 
gerial role at Midland, is basi- 
cally a trader through and 
through, and sees himself as 
one of fee pioneers of the 
swaps market Tve had it with 
huge organisations." 

When Midland and Hong 
Kang Bank merged, he says he 
accepted the chief opmating 
officer slot because it was “a 
big position. I guess I had mare 
grey hairs than most people. 
Someone needed to do the job." 
But after a while he appears to 
have fallen out with Guy 
H eal d , a colleague from Chemi- 
cal days, and now brad of Mid- 
land Global Markets. “One 
grows apart - like a marriage," 
is all Gelber will say. 


He admits that die Intercapi- 
tal job came as rather a bolt 
from the blue. But the entre- 
preneurial challenge fits the 
bill. He points out that he has 
always been attracted to a vari- 
ety of growing businesses; he 
was, for instance, a founder 
director of Cafe Flo, fee Lon- 
don brasserie chain. 

“Inter capital has crown 
beyond anyone's expectations," 
Gelber says, explaining fee 
need for the new position at 
the 6-year-old company. 
Between its offices in London, 
New York and Tokyo, it now 
employs mare than 200 people. 
"I was brought in to lend some 
management expertise to a 
growing organisation.” 

Asked whether he had 
injected capital into the ven- 
ture, Gelber refused to com- 
ment 


David Cairns 
to leave 
Accounting 
Standards 

David Cairns Is to retire as 
secretary general of the Inter- 
national Accounting Standards 
Committee next March, after 
ten years in the job. 

His departure, which came 
as a surprise to many within 
the accounting world, will 
coincide wife a period of greet 
change for the organisation. 

Cairns, 47, said yesterday 
that he had decided he wanted 
to try a different job after a 
decade and to leave while he 
was still enjoying his work. 

He said he had no specific 
plans on what he would be 
doing next, although he hoped 
to use fee skills gained in 
International accounting, per- 
haps as a consultant to a firm 
or multinational company. 

By the time of his departure, 
the committee will have com- 
pleted both a restructuring and 
its comparability and improve- 
ments project which was 
designed to reduce the number 
of alternative types of financial 
reporting. 

■ Writ de Jong has been 
promoted to md of Van Meer 
James Capel, JAMES CAPEL 
HOLDINGS' Dutch subsidiary 
in succession to Jonathan 
Qwes who had been interim 
md. 

■ Nick Barton, formerly a 
director of NatWest Markets’ 
corporate finance, has been 


appointed a director in SWISS 
BANK Corporation’s mergers 
and acquisition division. 

■ Rahman Jnhamhahi former 

director of corporate finance at 
Swiss Bank Corporation, has 
been appointed head of 
structured finance at CREDIT 
SUISSE. 

■ Edward Lester, for m er head 
of corporate finance at 
Forward Trust Group, part of 
HSBC, has been appointed 
chief executive of 
NOTABILITY FINANCE. 

■ Peter d'Anger has been 
appointed a director of 
SECCOMBE MARSHALL & 
CAMPION. 

■ Nicholas Kart and Victoria 
KiHay have been appointed 
directors of CDC 
INVESTMENT 
MANAGEMENT; they move 
from Brown Brothers 
Harriman Investment 
Management and IDS 
International, respectively. 

■ Teresa Keyes (below), a 
senior vice-president of The 
NORTHERN TRUST Company, 
has been appointed manager of 
global custody operations in 
London. 



No Rathbones 
left on 

Rathbone board 

Management giumg Mt after the 
Rathbone Brothers agm hare 
left fee private client and 
asset management group wife 
a new post of managing direc- 
tor and without a Rathbone on 

tiie board. 

Roy Morris, 52, who has 
been managing director of the 

group’s Liverpool operation, 
becomes group managing 
director, to a separate move, 
Sebastian Rathbone, 61, has 
resigned from his post as vice- 
chairman of tiie group, though 
he will remain a non-executive 
director of the main trading 
subsidiary which deals wife 
investment banking and fond 

management. 

Morris says his new role 
would involve spending more 
time in the London office, but 
reflected the importance of the 
Liverpool operation, which 
contributed more than half the 
group's profits last year. 

One of his tasks, he said, 
would be to achieve more inte- 
gration between fee two UK 
offices. He joined Rathbones 
37 years ago and has been 
based in Liverpool ever since; 
he is “looking forward to 
expanding my horizons”, 

Rathbones* yet-to-be-ap- 
pointed vice-chairman will 
probably be nonexecutive. As 
for keeping tiie family connec- 
tion, Morris commented: 
“We're looking to have 
younger Rathbones in the 
group in the near fixture.” 




Non-executive 

directors 


r-.or 



Baroness O'Cathain (above), 
I of t he Barbican Centre, 
BET. 

Sir Derek Hornby, chairman 
the British Overseas Trade 

ard, at AMP ASSET 
VNAGEMENT; Eric LyaH 
s retired. 

W UHmih Miaw an Aahtnm 
SOUTHERN BUSINESS " 


Peter Wood, chief executive 
B3Hs and E v er a rd, at 
AHAM GROUP. 
ran cauhb, finance director 
30C, at OWNERS ABROAD, 
imw Ferguson, former bred: 
xjxparate communications;. 
Id and former chair of the 
isory committee on 
rerttafng to tiie government,'.' 
CAPITAL RADIO; Cob .- 
oham and David ' 

toe-Ffinch have resigned. 

lavidCaHear, group fliwnc a 
jctor and deputy chief - 
cutive of Jeyes, at DAIA! j. 
BCTRIC INTERNATIONAL 
lobby McAIpine has retired 
a ALFRED McALPINE. 
)avM Price, deputy; 

innan of Mercury Asset 

oagement, Beatrice 

lippe, md of Pan-Holding 

and councillor of the 
nch American Chamber . 
Jommerce in New Yak* 

I Ed Wallis, chief executive 
towerGen, at MERCURY_ 
&OPEAN PRIVATISATION 
1ST. 

bias Smith, chairman of - 
A and former chairman of ' 
al Box, as chairman of /; 


ivid Whitaker, chairman ~ 
emyss Development and v 
er swiinr partner of ECffit . . 

ting’s Edinburgh office, 7 
ICURTTIES TRUST GF . a< 
ELAND. 

ven Duncan as deputy 
man at NEW LONDON 7 


dsay Kfadtinfay. retired, 
or of Rowntree, as_ * 
nan-elect of BRADFORD 
GLEY Building Society. 

jover on the retirement 
iaM Hanson next AjsiL 


& 


r - 

!?- 

•v _ 

tsc : 


Kin • 

ft' 

fev 

ra-v 


SlV 


M'. 










»rt 


v 


FINANCIAL TIMES TUESDAY MAY 24 1994 


ARTS 


* , 


■* 

‘-t£ 
’ ” *'dS 
•art - 



T o enter the exhibition. 
Ideas & Attitudes, at Man- 
chester's Comerhouse, is 
to go back in time. The 
work may have come from 
the tar-away-and-long-ago of Spain in 
the 1970s and General Franco's dedfa- 
mg years, yet how familiar it an 
seems, and how comfortably oUtfash- 
ioned. Switch a few names, Rn g K« fr 
for Spanish - Keith Arnatt, John KQ.< 
liard, Tony Carter, Stuart Brisley, 
Rita Donagh or Michael Ctotig-Martto 
for Josefina Bfiralfes, Antoni Mimta- 
das, Caries Pujol, Jordi Benito, Pere 
Noguera or Beset Rossell - and would 
we notice a difference? Not much. 

. Those were the days, as though 
Dada and Surrealism had yet to be 
dreamt of, Duchamp yet to zip the 
bowl from the lavatory wall. Ideas & 
Attitudes catches exactly (he lost, ear- 
nest innocence of the ttrnpq for the 
I dea w as most certainly the thing. Art 
assuredly had to be about something, 
that wonderfully empty phrase still 
the mantra of the more advanced of 
Our art schools. 

It was all so simple. Take an idea. 

Master 

of 

mystery 

Alastair Macaulay 
reports on the final 
week of the Dublin 
Pinter festival 


Self-indulgent attitudes 

William Packer finds Spanish conceptualism in Manchester all too familiar 


any idea, and strike an attitude about 
it, and the form, the realisation, 
would look alter itself. Thus at last 
was the tyranny of technique broken. 
All one needed' were a few snaps for 
illustration, or some plastic bags to 
fill with naitclippings or pubic hair, 
or, as we have here, rubber bands, 
tooth-picks, post-cards, postage 
stamps . . . (Eugenia BalceZIs). 

Or what about putting some notices 
in the papers, to see what response 
we get (Grup de TrebaH)? Or filling in 
a map with mud (Pere Nognera)? Or 
throwing oneself against a brick wan 
and bouncing off again, with photo- 
graphs to prove it (Jordi Benito)? Or 
floating the letters SCULPTURA in a 
tank of water (Damien, I wnan Fran- 
cesc Torres)? 

A number of the ideas are bright 
enough. Josefina Miraries, who sol- 
emnly shows standing thigh- 

high in the earth, or firming by sim- 
ple stages into a woman of straw, has 
also made herself a pair of shoes that 
prints her name as she walks along. 
Fran cesc Abad goes through bis 
‘‘Actions with Air, Fire and Water" 


with dead-pan simplicity, breathing 
into a glass, fighting a cigarette, hav- 
ing a drink. Jordi Faldo's stone has a 
hjmdlA by which to. pick it up, his 
bread a hinge fay which to break it 
“What goes through the head?” asks 
Jordi Cerda, with headshots to show 
us, and a motor-bike, a rubber glove, 
a basket, the Tower of Pisa, varioasly 
sprouting from his cranium. Ferran 
Garcia Sevilla has a rubber stamp 
which reads “Art Es Just Un MoT. 
Indeed it is. 

- In. the lower gallery, Catalonia 
'Incognita is a small show of conven- 
tional mnriorn porntiTtg and sculpture 
from around tie city of Girona. Only 
when we read in the publicity that 
“perhaps (its) most fas cinating aspect 
is its faith to traditional disciplines; 
painting, thawing and sculpture", do 
the eyebrows rise a notch or two. 

There are several rather good 
abstract paintings that are yet redo- 
lent of landscape, and among the 
sculpture a piece cast in aluminium, 
by Sen Cabanyes, that besides being 
deeply in Moore’s debt, was clearly 
modelled in the old way. But as for 


traditi o n, .of drawing there is nothing 
at all, u nle ss some linear-gestures in a 
few paintings count as drawing. And 
while the thick impssto surfaces of 
Patxe are entirely acceptable, and 
Montserrat Costa's thinnur washes 
rather lovely and effective, such 
works are traditional only in the 
sense that the paint is still hang laid 
an a flat surface, and with some mm. 

petsnee. Reference to the external and 

visible world? The critical mpacuring 
of the thing seen against the mark 
made, and the mark made against the 
mark intended? Forget it. 

For the. mark made we go an to 
Antoni Tapies at the City Art Gal- 
leries, and a show of his Profound 
Certainties of 199L And of criti- 
cal self-measurement there is nothing , 
but only self-indulgence. It is sad to 
have to say as much, for Tapies 
remains a serious and stgwffifsmt art- 
ist on the strength his work of the 
1950s and 80s. bleak and physical 
abstraction, heavy with ambiguous 
symbolism. 

All we have now, it seems, are these 
vacuous graphic exercises on 


Y ou might that think that a 
“Pinter Festival” was a con- 
tradiction in terms... And 
you would be wrong. The 
festival of six Pinter plays that Dub- 
lin's Gate Theatre has just pres- 
ented was full of laughter, mystery, 
emotion, and, above, all, humanity. 
There is talk of another, larger, Pin- 
ter festival at the Gate in the 
future; and it is obvious that 
England should have one too. All 
six Gate stagings are first-class and 
would adorn the London stage. 

One reason that a Pinter Festival 
is timely is that, with last yen's 
Moonlight, we have stopped talking 
of Pinto the playwright to the past 
tense (as we were doing at the time 
of his 60th birthday. celebrations to 
1990)." the 'Dublin Festival ended 
with MoonftgW (performances con- 
tinue this week). Watching it again 
was a pleasure, not least because it 
was often the most hilarious play of 
tire festival, to it Pinto is dearly 
altering new terrain; with the fam- 
ily divided into three separate stage 
areas, with death treated from two 
contrasting angles (the daughter's 
in the past, the father’s approach- 
ing) and with the very intense irony 
of much, of the talk. Possibly Pinter 
has pared too much away from 
Moontight, it does not gather in 
impact dr significance as do his 
greatest plays do. But its tragicomic 
amUvatance is masterly. 

That Pinter Is a master becomes 
obvious with a festival of his work. 
How often he deals to mystery! - 
and leaves us like detectives. We 
are- ghmged straight into bewil- 
dering scenes whose impart is never 
fully dear, but his language is so 
haunting, and his characters so toll 
of fading, that it becomes impor- 
tant to work out the play’s hidden 
implications. 

Landscape 0968) was to me the 
greatest revelation of the festivaL 
Seldom if ever performed since it 
was played by Peggy Ashcroft 
(Beth's original interpreter), it 
shows a couple locked into a painful 



unstretebed and grubby sheets of syn- 
thetic fabric, curling off the wall. 
Even these evince still a certain nat- 
ural painterly delicacy and an edu- 
cated hand, but such qualities, alone 
and unwitting, are not eno ng h. The 
mystery is only bow it is that an 
artist of such proven quality should 
now imagine his every move, his 
every gesture, take it or leave it, to be 
fraught with significance. Bis dealers 
and curators, perhaps, have told him 
so. 

Ideas & Attitudes: Cafetfaii Conceo- 
teal Art 1969-1981; Gornerhouse, 70 
Oxford Street, Manchester until June 
5, supported by the Gcneralitat de 
Catalonia, The Henry Moore Founda- 
tion. Visiting Arts and the Arts Coun- 
cil. Catalonia Incognita: contempo- 
rary painting & sculpture from 
Girona; until June 5, supported by 
the Gcneralitat de Catalonia. Copee, 
the Ajuutameutade Ghana and Visit- 
ing Arts. Antoni Tapies: Profound 
Certainties; Manchester City Art Gal- 
leries, Mosley Street until July 3; sup- 
ported by Manchester Airport. 




TtaspalT by Josep Domenech 


Ian Holm and Penelope Wilton in "Moonlight* 


dichotomy. He, faring her and often 
talking to her but never hearing 
her, talks of mundane matters to 
the present and recent past She, 
facing away, hearing him (proba- 
bly), but speaking as if to her own 
bred, reflects only of long ago sen- 
sual experience. 

to several ways. Landscape was a 
turning-point to Pinter’s art: it 
turned away from the menace 
which often enters into his earlier 
work, introduced a new lyricism - 
and it showed a new kind of femi- 
nism to his writing. Beth is so 
much more lyrical, tactile and imag- 
inative t ha n Duff; and her thoughts 
elude him. 

Pinter himself directed Land- 
scape; Penelope Wilton and Ian 
Holm played Duff and Beth. Sub- 
limely eloquent performances, to 
which the least nuance took on a 


wealth of meaning. He spends 
almost toe whole play seated to pro- 
file; at the end, he sits there locked 
to a spasm of rage that gradually 
becomes suffbsed by anguish. She 
looks out front, calmly, as if 
through the window whose shadow 
we see an. her. Sometimes her eye- 
lids beat through the pauses as it 
she is close to tears; once she gazes 
firmly out without blinking, and we 
sense time differently, arid know 
how different an em otion is now in 
her heart 

She speaks in utter quiet, and the 
beauty of her diction - pellucid 
without elaboration - turns every 
line into poetry. The play's most 
famine Hka is her ending “Oh my 
true love I said”, but Wilton makes 
equally telling effect to talking of 
the nature of shadow. As she 
speaks, so softly, “Shadow is depri- 


vation of light . . . Sometimes the 
cause of the shadow cannot be 
found", she lets the foil metaphori- 
cal sense aF her lines strike home. A 
most beautiful performance. 

In Moonlight, Holm repeats the 
marvellously scathing, ironic, pan- 
icky performance of the dying /tody 
with which last year he returned to 
the stage. Wilton, excellent as his 
wife Bel, is slightly warmer than 
the original Bel, Anna Massey. 
Karel Reisz, directing, achieves 
many fresh nuances between the 
characters; but there are connec- 
tions and undertones to this play 
that still have yet to emerge. It. 
takes a long time for a Pinter play 
to disclose all its meanings. Which 
is a sure sign of mastery. 

Moonlight continues at the Gate 
Theatre until May 28 


Ballet/ Clement Crisi 


T he brand new Brussels 
Arts Festival is much con- 
cerned with new theatre 
and new dance. Or new-ish, 
one must say, given that its choreo- 
graphic coup is a creation from the 
75 year old Merce Cunningham. 
Ocean, whose first performance I 
saw last Wednesday, is the realisa- 
tion of a work planned by Canning- 
ham and bis long-time associate, 
the composer John Cage. 

Conceived a year before Cage’s 
death to 1992, Ocean is a 90 minute 
piece whose structure had fasci- 
nated Cage and Cunningham: 
in a circular arena, surrounded by 
its audience who are in turn sur- 
rounded by musicians whose 
sounds wash - ocean-like - over 
public and performers. 

What better inraiA thm for this 
experiment than Brussels’ Cirque 
Royal? It is a «*Hng exactly seated 
to the Cumringham/Cage dpmanrte 
It is, .even so, an inimical spot Alps 
have dreamed of being as steep and 
unyielding as its seating, and 90 
minutes spent to this vertiginous 
Little-ease are no inducement to 
sympathy with what is going on 
below. 


Cimningham’s ‘Ocean’ 


The event was certainly curious 
because of the forces involved and 
their deployment, but 1 cannot, 
hand on heart, declare them to have 
been of much interest The sound- 
track combined 112 musicians skied 
on the outer rim of the Cirque’s top 
seating, playing a score by Andrew 
Culver, its droning ostinato inter- 
spersed with recordings of whales, 
dolphins and other denizens of the 
deep, who contribute the whistling s 
and borborygmi of what must be 
marine gastroenteritis of a particu- 
larly virulent kind. Down below, on 
the central area of the Cirque, Cun- 
ningham’s dancers meet up with 
the score to the usual d6gag6 fash- 
ion. (We have learned to view Cun- 
ningham’s titles as mere conve- 
niences rather than as guides to 
anything that happens.) 

Aleatory procedures, the I dung, 
and chanm to all its unpredictabil- 
ity - though with Cunningham 
rhanra jg the ODE predictable fact — 
shape the dance. There are intermi- 
nable notes to the programme-book 
to justify and extol the style, hut 
What it amnmifca to is that C unning - 
ham armed nowadays with comput- 
er-generated ideas, will fill the 


arena with arbitrary motion. In 
1967, the Cage/Cunningham Roara- 
torio was very similarly shown at 
the Albert Hall as part of a memora- 
ble From: the dance was cogent in 
effect, exhilarating. Movement blos- 
somed in this setting, as it often has 
to Cunningham’s Events, where 
choreography is given to unex- 
pected combination. 

Ocean, in which 15 dancers come 
and go in various groupings, vari- 
ously costumed and lit, seemed to 
me diffuse, arid, formulaic. 1 sus- 
pect that it will benefit from the 
focus and direction given by a pro- 
scenium, and its performers will 
then look less blank. Yet viewed 
from above - and it surely matters 
not where you see it from if Cun- 
ningham's rule applies to audience 
as well as to dance - it lacked even 
the stimulation may get from 

watching a crowd. Red digital 
clocks at the dancers’ entry-points 
martrpfl the of 90 rnitaw 

How slowly time passes when the 
avant-garde is having fun. 

Ocean will be shown at the Holland 
Festival from June 27 - SO at the 
Muztektheater, Amsterdam. 


Concerts/Paul Driver 


T he response to the first, on 
Saturday, of the two con- 
certs of tiie London Stofo- 
nietta’s "Response Week- 
end” at the Barbican was 
lamentable: a trickle of regulars at 
the back of the hall. Conductor 
Elgar Howarth played without fire; 
the overly spacious acoustic left the 
more delicate, single-note moments 
to Conlon Nancarrow’s Piece No. 2 
for Chamber Orchestra (1966) sound- 
ing lost and remote, though a fair 
impression of its pofyrhytiunic com- 
plexities and plucky ahmjatiop of 
jazz was n onet h eless conveyed. 

Jazz influence - the underlying 
theme of the weekend, whose extra- 
mural events included a concert of 
student jazz pieces played by Stofo- 
n ie tt a members in the foyer - was 
overt in Mark-Anihony Turnage’a 
Kai of I960. This is a sort of pocket 
requiem for solo cello (Christopher 
van Kampen) and an ensemble per- 
meated by the svelte and mournful 
times of muted trumpets and long- 
ing melodies for saxophone, with 
bass guitar and drum ktt to add 


Sinfonietta Response Weekend 


plenty of stomp and violence. But 
an early work, Etwas ruhiger im 
Ausdruck (1967), by Franco Dona- 
tom, scored for the instrumental 
quintet of Schoenberg’s Pierrot 
Luntare and derived (we were told) 
from one bar of a Schoenberg piano 
piece (Op.23, No.2), was, though 
skittish, almost the opposite of jazz: 
studiously quiet, fragmentary, glis- 
tening phrases circling round and 
round; while The City of Threads 
(1994), for 10 players, commissioned 
from the Dane Anders Nordentoft 
was a chaste, attractive and brief 
display of melody. Hans-JGrgen von 
Bose’s Scene (1991) for large ensem- 
ble and two synthesisers, on the 
other hand, was long and turgid. 

Sunday evening’s concert - also 
under Howarth - was better 
attended and had a mare cohesive 
and interesting pro gramme , 
embracing a wacky piece, Marching 
to a Different Song (1991), by Jona- 
than Lloyd; the electrifying simula- 
tion of advanced jazz afforded by a 
more recent Donatoni work. Hot 
(1989), and featuring John Hade’s 


saxophone; a rare and quaint Sinfo- 
metia (1928) by the American exper- 
imentalist Henry Cowell; and the 
senior Dane Per Norgard’s colourful 
but meandering Night Symphonies, 
Day Breaks of 1992. 

Nanearrow - a firing link (bom 
1912) between the ragtime send-ups 
of Charles Ives and the metrical 
abstractionism of Elliott Carter - 
was farther represented by No. 7 of 
his Sixty Studies for Player Piano 
and by its deft chamber orchestra- 
tion by tiie late Yvar MikhashofL 
The main point of there extraordi- 
nary studies, composed directly on 
to punched piano rolls, is to render 
different speeds and rhythms at 
once to a way that is dazzlingfy 
unplayable by hands on a keyboard; 
but an ensemble can, just, manage 
the music. Mikhashnffs favouring 
of pungent timbres such as ampli- 
fied harpsichord does much to bring 
oat the intricately interwoven 
strands; but it was only after hear- 
ing the original roll, as realised on 
the pianola by Rex Lawson, that 
one had to gasp “MasterpieceT. 


iiwEwknmw 


m AMSTERDAM 

Concertgebouw Tomorrow: Paul 
Freeman conducts Berlin Symphony 
Orchestra in a Beethoven ^ _ 
programme, with piano sototet Derek 
Han. Thurs: Emanuel Ax. Isaac 
Stem, Jaime Laredo and Yo Yo 
Ma ptay piano quartets. Frr. Gkfon 
Kroner la vtoHn soloist with 
Schoenberg Ensemble. Sat. next 
Tubs: James DePrtest conducts 
Netherlands Philharmonic Orchestra 
in works by Chopin, Diepenfcrock 
and Stravinsky, with piano soloist 
Beta Davidovich. Sun: Berlin 
Symphony Orchestra plays 

Beethoven. Next Mom Theodor 

Gusotabauer conducts Strasbourg 
PNfagjaortte Orchestra in Ravel 
and BMoz (ticket reservations 

020-6^8345) 

Maiskfhaatar Next Mon, Tues: 
fttes£aiantea present two 

choraoffaphles by BAatoce Massm, 

musk: by Handel. LiUfy and 
54 55) 

■ BASLE 

Stadtoastoo Tomorrow, Thurs: Horst 


Stein conducts Basle Symphony 
Orchestra and Chorus in 
Beethoven's Ninth Symphony, with 
soloists Julia Varady, Reinhfld 
Runkel, Peter Sefffert and Alfred 
Muff (061 -272. 1176) 

■ BRUSSELS 

palais des Beaux Arts Tonight 
Augustin Dumay, accompanied by 
Maria Joao Pires, plays violin 
sonatas by Brahms. Frfc Otaf 
Henzofd conducts Belgian National 
Orchestra in works by Bertkxz, 
Schumann and Mendelssohn, with 
piano sototet Frangofe-Rend 
Duchabta. Next Tues: Mischa Maisky 
and Martha Argerfch (02-507 820 0) 
Monnaie Sum Laurence Dale song 
recital (02 -218 1211) 

■ GENEVA 

Victoria Hal Thurs: Jesus Lopez 
Cobos conducts Orchestra de la 
Suisse Romande in works by 
Bernstein and Fafla, wRh mezzo 
Alicia Nate and pianist David Lively. 
Fri: Ptnchas Steinberg conducts 
Berne Symphony Orchestra in works 
by Walton, Bgar and Prokofiev, 
with cello soloist David Geringss 

(022-31 1 2511) 

ThAitre de Carouge ComeiBes 
Lb Cid, directed by Simon Erne, 
flips daily accept Mon tffl June 7 

(022-343 43 43) 

■ THE HAGUE 

Or Anton PMUpszaal Thurs: Gabor 
Otvfts conducts Buenos Aires 

Ph3harmonic Orchestra in works 
by Girtneo, SibeOus and Prokofiev, 

with violin sototet SadoaVereen. 

Sat Otto Kettlng conducts Hague 


Philharmonic Orchestra in Henze, 
Debussy, Ravel and Ketting. Sun 
afternoon: Pavel Kogan conducts 
Radio Symphony Orchest r a in. 
Dvorak, Kox and Shostakovich, with 
saxophone soloist John-Edward 
Kelly. Next Tues: Strasbourg 
Phftharmortc Orchestra (070-360 
9810) 

■ UTRECHT 

Vredenbury Tomorrow: Gabor 
OtvSs conducts Buenos Aires 
Phfl harmonic Orchestra in works 
by Gfanneo, Sbeflua aid Prokofiev, 
with violin sototet Saskia Vieraen. 
Sat Ion Marin conducts Radio 
Philharmonic Orchestra in Ravel, 
Dohnarryi and Tchaikovsky, with 
cello sototet Pieter Wispeiwey. Sun 
afternoon, next Mon evening: James 
DePrtest conducts Netherlands 
Ph&armonic Orchestra In Chopin, 
Drepenbrock and Stravinsky, with 
piano sototet Befia Davidovich. Sun 
evening: Theodor GuscHbauer 
conducts Strasbourg Philharmonic 
Orchestra in Ravel and Berlioz, with 
piano sdotet Guillermo Gonzalez 
(030-314544) 

■ VIENNA 

OPERA 

St aa teoper Tonight Prokofiev's 
ballet Romeo and Juliet Tomorrow: 
Don Giovanni with James Morris 
and Marie McLaughlin. Thurs, Mon: 
Dor ffiegende Hollander. Fit* Andrea 
Chenier, with Eva Marion, Giuseppe 
Giacomini and Piero Cappucc&L 
Sat ballet mixed bffl. Sun: Alda with 
Aprils WHo and Peter Dvorsky 
(514442955) 

Theater an der Wen Thurs, Sat, 
More Ctaurfo Abtado conducts 


revival of Jonathan Miner's 1991 
Vienna Festival production of La 
nozze di Figaro, with cast headed 
by Ruggero Raknoncfl, Lucto Gallo, 
Cecilia Gasdia and Barbara Bonney 
(586 1676) 

CONCERTS 

Musikverein Tonight Sherrill Mifaries 
song recital. Tomorrow: Daniel 
Barenboim conducts Chicago 
Symphony Orchestra in works by 
Debussy, Richard Strauss and 
Stravinsky. Tonight, Son (Brahms 
SaaJ): Siegfried Jerusalem song 
recitaL Thins: Haydn’s Th e Creatio n. 
Fri evening, Sun morning: Riccardo. 
Muti conducts Vienna Philharmonic 
Orchestra and Arnold Schoenberg 
Chorus in Bach’s B minor Mass. 

Sat Marjana Lipovsek song recital. 
Sun evening: Maurizio PoJfini piano 
recital. More Andres Schrff and 
friends play Schubert piano trios 
(505 819 0) 

Ko nz e rt haua Tomorrow; Elisabeth 
Laonskaja piano recitaL Fri: Gary 
Bertinj conducts Vienna Symphony 
Orchestra in works by Schubert 
and Mahler, with mezzo sototet 
Christa Ludwig (712 1211) 

THEATRE 

Ibsen's Hedda Gabtor can be seen 
tonight and tomorrow at the 
Vdkstheater in a production from 
the Berlin Schaubuhne directed by 
Andrea Breth (586 1676). On Thurs, 
Fri and Sat at Haile G 
Muaeumsquartier, Swansea's 
Volcano Theatre presents an 
EngBsh-language production based 
on Shakespeare's sonnets (586 
1675). Repertory afthe Bixgtheater 
indudes Brecht's The Caucasian 
Chalk Circle directed by Ruth . 
Berghaus (51444 2959). Theater 


an der Josefstadt has John 
Osborne’s The Entertainer (402 
5127) 

■ WASHINGTON 

musk; 

• Pinchas Zukerman is conductor 
and viofin soloist tonight in an 
all-Dvorak prograrmre with National 
Symphony Orchestra at Kennedy 
Center Concert Hall (202-467 4600) 

• David Ztoman conducts 
Baltimore Symphony Orc he stra on 
Thurs and Fri at Baltimore’s Joseph 
Meyerhoff Symphony Han, in a 
programme consisting of 
Shostakovich's First CeBo Concerto 
(Lynn Harrell) and Bgar’s Second 
Symphony (410-783 8000) 

THEATRE 

• King Lean a Washington 
Shakespeare Theater production. 

In repertory tin July 2 with Beckett's 
Waiting for Godot (703-739 9886) 

• The Misanthrope: Moliere’s 
comedy Is transposed to Hollywood 
to thte Roundhouse Theater 
production. TDI June 5 (301-933 
1644) 

• Ghosts: Ibsen’s play about 
socid and religious hypocrisy. Till 
June 6 at Center Stage (410-685 
3200) 

• The Revengers Comedies: Alan 
Ayckbourn’s two-part play, directed 
by Douglas Wager at Arena Stage. 
TTU June 12 (202-468 3300) 

• A Room of One's Own: Been 
Atkins in her celebrated portrait 
of Virginia Woolf. TW June 19 at 
Arena Stage (202-488 3300) 

• The Baltimore Waltz: the 1992 
Obie Award winner by Paula Vogel 
takes us on a fanny and touching 
tour of Europe with an afitog man 


and his resourceful sister. TrH June 
12 at Studio Theater (202-332 3300) 
• Hofn'Cole: a Cole Porter 
musical revue comprising more than 
50 great songs by the master of 
American popular music. TB May 
29 at Otoey Theater (301-924 3400) 

■ ZURICH 

OPERA 

The main event at the Opemhaus 
this week is the first night on Sat 
of a new production of Offenbach’s 
La Belle Hfitone, conducted by 
Nikolaus Harnoncourt and staged 
by Hemut Lohner, with a cast 
including Vesseiina Kasarova and 
Deon van der Waft. Repertory also 
includes Don Carlo with Agnes 
Baltsa and Nicolai Ghiaurov, and 
a mixed btfl of choreographies by 
Bienert, Ek and Van Manen. Gdsta 
Wlnbergh gives a song recital next 
Mon. Highlights in early June include 
Fedora with Baltsa and Carreras 
and a song recital by Hermann Prey 
(01-262 0909) 

CONCERTS 

Tonight's recital by Wihan Quartet 
at the TonhaUe includes string 
quartets by Mozart and Dvorak. 
Tomorrow's celebrity concert 
features Isaac Stem, Jaime Laredo, 
Yo Yo Ma and Emanuel Ax in piano 
quartets by Faur6, Schumann and 
Brahms. On Thurs and Firi, Robert 
Spano conducts the TonhaUe 
Orchestra in works by Dvorak and 
Beethoven, with cello soloist 
Thomas Grossenbacher. On Fri at 
Theater 11, Howard Griffiths 
conducts the Zurich Chamber 
Orchestra in Henze, Haydn and 
Tchaikovsky, with cello sototet 
Andrzej Bauer (01-261 1600) 


ARTS GUIDE 

Monday: Berfin, New York and 
Paris. 

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

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 
(Central European Time) 
MONDAY TO FRIDAY 
NBC/Super Channeb FT Busi- 
ness Today 1330; FT Business 
Tonight 1730. 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Eranews: 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/$uper Channel: FT 
Reports 2230 

Sky News: FT Reports 0430. 
1730; 








14 


FINANCIAL TIMES TUESDAY MAY 24 1994 



M ilan knows all 
about operatic 
coincidence. But 
even at La 

the city’s world-famous opera 
house, the Milanese have 
rarely been asked to believe in 
a combination of political, eco- 
nomic and athletic good for- 
tune as extravagant as that 
achieved by their city over the 
past three months. 

The first act of this drama 
reached its climax last Wednes- 
day night as AC Milan, Italy's 
most successful soccer team, 
h umiliated the Spanish cham- 
pions Barcelona in the Euro- 
pean Cup final. Somehow it 
Sfwmpri only right that Milan 
should sane the decisive sec- 
ond goal moments before Mr 
Silvio Berlusconi, the team's 
owner and Italy's new prime 
minister, won a crucial vote of 
confidence in the senate. 

It is the rise to power of Mr 
Berlusconi, Milan-born media 
ma gnate , that has led the press 
to dub his home town the unof- 
ficial capital of Italy’s second 
republic. This is quite a trans- 
formation for a city which was 
notorious only two years ago 
as the hub of the country's 
Tangentopoli (‘bribes ville’) 
a candai - the nationwide net- 
work of bribes and political 
favours which muterminerf the 
old political regime. 

Milan is certainly well-repre- 
sented In the political life of 
the new Italy. Forza Italia, Mr 
Berlusconi's four-month-old 
political movement, was con- 
ceived in Milan and the feder- 
alist Northern League, one of 
its two main government part- 
ners, has its headquarters 
there. The interior minister 
and the speakers and deputy 
speakers of both chambers of 

the Italian par liamen t are alsn 
Milanese. 

Mr Marco Formentini, a 
senior League politician and 
the city's mayor for the past 
year, says Milan is now reap- 
ing the fruit of a decade of 
struggle, particularly by his 
own movement. The League 
pressed for an end to the old 
centralised and corrupt politi- 
cal regime. The process was 
then “accelerated”, Mr For- 
mentinl claims, by Mr Berlus- 
coni’s decision to enter politics 
earlie r this year. 

Now in power nationally, the 
League’s separatist strategy - 
which would have made Milan 
capital of the “Republic of the 
North” - seems to have been 
toned down. Mr Formentini 
now talks about the possibility 
of greater autonomy for other 
I talian cities, be they in the 
north, centre or south. But he 
adds: “Milan will be the benefi- 
ciary of these changes, because 
we have always been a city 


Bella figura 
of the north 

Berlusconi’s home city of Milan 
is centre-stage, says Andrew Hill 



with enormous potential, 
crushed under the weight of 
central state control." 

Economic recovery may help 
realise that potential, the 
northern city’s business lead- 
ers claim. Since the March 
election, the number of shares 
traded on the Milan stock 
exchange has occasionally 
exceeded that of Wall Street 
Mr Michele Porcelli, general 
manager of Assolombarda, the 
federation of Milanese compa- 
nies, says his members have 
noted a gradual upturn over 
the past four months, but 
remain cautious. He interprets 
this as a welcome sign that the 
short-lived boom of the early 
19S0s will not be repeated. 
“The downturn has changed 
the lifestyle [of the MDanesel," 
he says, adding that good eco- 
nomic news for the city would 
also be good for the country. 

As for the corruption scan- 
dal, the city's shame has 
turned into pride in its magis- 
trates, who are tracking down 
and prosecuting the corrupters 
and the corrupted. The charis- 
matic courtroom performance 
of Mr Antonio Di Pietro as 
prosecutor in the first big Tan- 
gentopoH trial which finished 
in Milan three weeks ago, was 
watched by millions on 


national television. “Milan is 
proud to be the centre of the 
moni pulite [clean hands} 
investigations,” beams Mr For- 
meutrni. The mayor has also 
demonstrated his pride in the 
political prominence of his fel- 
low citizens; he put up posters 
around the city welcoming the 
election of Milanese speakers 
in the two chambers of parlia- 
ment last mnnth 

B ut there are plenty in 
Milan who dislike the 
fact that the city is 
identifying itself with 
the right-wing naHnnnl govern- 
ment On April 25, 300,000 peo- 
ple took to Milan's streets to 
commemorate the liberation of 
Italy from fascism in 1945. The 
demonstration was dominated 
by the defeated left Mr Alex 
Iriondo, Milan secretary of the 
opposition Democratic Party of 
the Left (PDS), is critical of the 
city's council and the new gov- 
ernment which he believes 
could hdld back reco v er y .. “The 
relaunch of the city doesn't 
depend on our citizens holding 
high offices of state," he says. 

Indeed the legacy of the 
Milanese former prime minis- 
ter, Mr Bettino Craxi, who is 
faring corruption charges, sug- 
gests that occupying high 


office can create even deeper 
problems. The former socialist 
leader's network of political 
patronage is held responsible 
by many. Milanese for hamper- 
ing the city's economic and 
political development over the 
past decade. Ironically, Mr Ber- 
lusconi thrived under this 
environment, when he was 
building his Fin invest empire 
in Milan during the 1980s. 

Mr Berlusconi may now be 
prepared to reward the city 
with real institutional power to 
add to its economic and. finan- 
cial importance and reinforce 
top politicians’ sentimental 
links with the city. For exam- 
ple, last week Mr Vito Gnutti, 
industry minister, fuelled spec- 
ulation that parts of the bud- 
get, industry and finance min- 
istries mi g h t decamp to Milan. 

That would fit in with the 
hopes of some respected Milan- 
ese commentators, who have 
long urged the government to 
move certain institutions - for 
example, the Consob financial 
watchdog or even the central 
bank - to the Lombard capital. 
Such moves would underpin 
rather than undermine 
national identity, according to 
Professor Mario Monti, rector 
of the private Bocconi Univer- 
sity. “It would be easier to 
keep national unity if we could 
avoid a Rome-centred concept, 
which generates so much anti- 
Roman sentiment throughout 
the country,” he says. 

But Mr Attflio Ventura, pres- 
ident of the Milan stock 
exchange, believes changes in 
the institutional balance of 
power are unnecessary. The 
feet that the central bank and 
Consob are in Rome has little 
impact on Mian's position as 
the dominant finanriai centre, 
he paints out Mr Sandro Moli- 
nari , chairman of Milan-fr flS fld 
Carlplo, one of Italy’s biggest 
banks, is similarly sceptical 
claiming that an institutional 
reshuffle is unlikely- “Milan is 
the central motor of the econ- 
omy, and Rome is the motor of 
political life,” be adds. 

If Mr Gnutti’s hints are ful- 
filled, other Italian cities and 
regions may ai«tn start demand- 
ing a slice of the institutional 
cake. But for the time being 
the question of Milanese pre- 
eminence does not seem to 
worry the rest of Italy. Milan’s 
pretentions are watched with a 
certain disdainful amusement 
by Romans, traditionally dis- 
missive of their stress-prone 
northern compatriots. The rest 
of the country may simply be 
waiting to see if Milan’s luck 
holds: as opera lovers know, 
the coincidence by which our 
hero receives riches in act one 
is often offset by a blow of fete 
before the final curtain. 


Quite simply 
the Royal Oak. 


M 

iUDEMAKS PlGUCT 

The master watch maker. 


For iiiliMiintinn and laulonuc. pkstM.- tvriiu nr 
Amt-man. Htfuct Sc Ctv- S.A., l>ia Lc Rrovac*. SuntTcriand. 
Tvl it 21 HIS K>M fax II 1 1 ffrM \£ |-» 



Joe Rogaly 


The only game in town 



Of the three 
political games 
in play la 
Britain the 
most important 
is the contest 
for the succes- 
sion to Mr 
John Smith. 
Next, a long way behind, 
comes the struggle by the 
prime minis ter to avoid a chal- 
lenge to his leadership of the 
Conservative party. We must 
tune in to that ancient soap, 
although it is r unning out of 
plausible plot lines. Third, as 
si gnifican t as an afterthought, 
we have the elections to the 
European Parliament 
It is not wholly parochial to 
picture this summer's political 
goings-on in so Anglo-centric a 
manner. The victory or defeat 
of Labour in a British general 
election in 1996 or 1997 may be 
of greater importance in the 
counsels of the European 
Union in the subsequent years 
than the precise party balance 
after next month's low-key 
contest On present form, the 
Conservatives will before long 
find themselves havering 
between a European strategy 
that is merely obstructive of 
further development and one 
that nears the brink of advoca- 
ting withdrawal from the EU. 
Labour is subject to all the 
doubts about continental 
involvement inherent in the 
British character, but It would 
at least start with harmonious 
intent. 

This puts the summer games 
in perspective. The question 
before the voters on June 9 is 
merely whether the Strasbourg 
assembly is to be predomi- 
nantly socialist. It was put 
with particular force by the 
Conservatives yesterday. Ho 
hum. The forthcoming poll wifi 
determine the answer on the 
basis of national votes which 
are heavily influenced by the 
popularity or otherwise of 
national governments. That is 
the nub of what Labour and 


derided interest in the outcome 
of such a contest The contrast 
would be less sharply drawn if 
the opposing party leaders 
were, say, Mr Robin Cook and 
Mr John Major. Vet the prime 
minister will doubtless con- 
tinue to be pushed in a Portillo 
direction by the chauvinistic 
wing of his party. We may be 
sure that Mr Cook would try 
bis best to be a good European. 
What matters in either case is 
the nature of the party behind 
the leader. 

This is why the previously 
entrancing political mystery - 
will Mr Major last and who 
will succeed him? - has 

become stale. It 

does not like. It _ _ . * is evident that 

will be asked to Labour must SHOW the problem is 
approve the j+e colours. tiie Conserve- 
new comm is- / , tive party, not 

sion before it unreconstructed its leader. Tory 
takes office in or modernised as divisions are 
January. These , li vii stultifying 

powers are of tufiy IU8y DC. U1S1T Britain's gov- 
great potential should be put to eniment They 

importance, ... ._x i can only be 

but the parlia- the test in internal healed by a 
mentis tradi- electoral en mh at period of reflec- 
tion is consen- tion, or angry 

sual, not argument, an 


the Liberal Democrats had to 
say yesterday. So what rise is 
new? Most European socialist 
parties are expected to do well 
the British Labour party best 
of aH A beneficiary of the first- 
past-the-post voting system. It 
may be the largest single 
grouping. No one expects the 
Tory contingent to increase; 
the only Question is the num- 
ber by which it will fell 
It is a minor question. The 
Strasbourg parliament is still a 
remote body whose effective- 
ness has yet to be demon- 
strated. The Maastricht treaty 
gives it powers to negotiate 
amendments to legislation, or 
block bills it ! 


adversarial It huffed and puf- 
fed before approving the recent 
admission of new members, 
but it did not blow the house 
down. 

What really matters is 
whether Labour wins the nest 
general election. As Europeans 
know from bitter experience, 
in a Europe of nations a nega- 
tive stance adopted by the gov- 
ernment of one of the larger 
member states can block or at 
least slow down future devel- 
opment Whether this is benefi- 
cial or not depends upon how 
you regard the evolution of the 
European enterprise. The prop- 
osition I am advancing would 
be most starkly apparent if, 
say. Labour was led by Mr 
Tony Blair and the Tories by 
Mr Michael Portillo - the mod- 
mate Europhile vs the immod- 
erate Europhobe. 

The EU would have a 


exercise best undertaken in 
opposition. Even yesterday’s 
manifesto, so seamless in 
appearance, was fought over to 
the comma, passionately, with 
all hatreds showing: The pri- 
mary purpose of its text, I am 
assured, is to keep the cabinet 
in one piece. If it wins votes, 
that win be a surprising bonus. 
It might, if incipient Euroscep- 
ticism begins to outweigh the 
anger many detached Tories 
feel about their usual party. 

The big question is, what is 
to become of Labour? If it 
returns to its old form, Mr 
Major may yet enjoy more 
years in office than most peo- 
ple now envisage. If it seizes its 
chance, the Tory era that 
began in 1979 will end. Some of 
us regard Mr Blair as the most 
convincing representative of 
what a wholly reformed, late- 
20th century party of the cen- 


tre-left should be. We should 
not be carried away by this. 
There has been talk of skimp, 
ing on the cumbersome proce- 
dures for the selection of a new 

leader. If members of parH* 
meat nominated oriyonecaiv 
didate, there would be no need 
for the constituency parties 
and trade unkm members to 
exercise their ane-memberau. 
vote muscle. 

That would be a 
The Labour party needs to 
show its colours, unrecon- 
structed or modernised as they 
may be. Mr Blair should be put 
to the test In internal electoral 
combat He has his first chat y, 
this morning: when he is due 
to make a speech. He could 
fluff It by taking as his text 
the list dr itomaiyfc; Jjy 
Mr John Edmonds, leader of 
the GMB union, on Sunday. 
Some of the Edmonds propos- 
als. such as the promotion of 
full employment, constitute 
traditional goals for a Labour 
leader. That Is beside the point. 
Mr Edmonds, once the darling 
of the modernisers, is becom- 
ing a walking disserrice to ti» 
Labour party. He appears to 
hanker after the status of a 
1960s union boss. A victory 
won by public pandering to 
one of such precisions would 
not be a prize worth having. 

The great game of the 
moment is exq uisitely compli- 
cated. Politicians win favour In 
the rid Labour party by sound- 
ing Neanderthal or nostalgi- 
cally socialist Mr Gordon 
Brown attempted both noises 
at the weekend. A campaign 
tike that could produce a 
leader of the opposition des- 
tined to stay In that post until 
succeeded by another leader of 
the opposition. Alternatively, 
Mr Blair or another of his (Qc, 
if there is one. might risk afl. 
He or she might toy to cany 
the party into the changes it 
has to make to achieve victory 
whore it counts - at the next 
general election. That would 
make a difference. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

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


Not fair on 
efficiency 

From Mr Michael R Hoffman. 

Sir, With reference to your 
article, "Ofwat outlines flow of 
price increases” (May 20), I do 
not accept your comment 
“unimpressive performance on 
efficiency” so far as Thames 
Water is concerned. 

Statistics produced by Ofwat 
on cost per unit of service pro- 
vided to customers confirm 
Thames Water as the best of 
the big 10 water and sewerage 
companies. 

It is total costs that matter 
since this is what concerns 
customers, that is the bill that 
they receive. This point has 
been confirmed to Thames 
Water on several occasions by 
Ofwat Drawing conclusions on 
company efficiency from an 
analysis of operating costs only 
is positively misleading. 

I am proud that in 1994, yet 
again, Thames Water custom- 
ers have the lowest combined 
water and sewerage bill. 

M R Hoffman, 
deputy chairman and 
group chief executive, 

Thames Water. 

14 Cavendish Place. 

London W1M9DJ 


Recoveries 

From Mr Keith Flett 
Sir, While I do not doubt 
your front page story, "Retail 
sales defy tax increases" (May 
20), that high street spending is 
holding up despite tax rises, it 
surely says something about 
the nature of a two-year-old 
economic recovery if the ques- 
tion of whether it is actually 
happening or not is still head- 
line news. 

Keith Flett, 

38 MitcMey Road, 

Tottenham. London N17 9HG 


Right route to employee shares 


From Mr Malcolm Htaiston. 

Sir, Vishvas Kanji told only 
part of the story when he 
noted that the number of 
employee share ownership 
plans (Esops) drawn up in the 
UK under the 1989 legislation, 
could he counted on the fingers 
of one band (Letters, May 18). 

There are currently well in 
excess of 60 companies with 
Esops which make use of case 
law to achieve tax efficiency. 
This figure excludes companies 
which had Esops but have 
floated or bought out and thus 
made thousands of pounds for 


employees. Yorkshire Rider is 
a good example of the latter 
.case. Workers at the bus com- 
pany have received an average 
of £6,000 for shares they 
received for free. 

The success of British Esops 
can be seen from the feet that 
a party of Russian business 
people arrived in Britain at the 
beginning of last week in order 
to learn what rote Esops can 
play to the Russian privatisa- 
tion programme. 

Furthermore, this year’s 
finance Act relaxed some key 
restrictions on setting up an 


Bulgaria - the worst starting point 


From Mr Martin Zatmov. 

Sir, Your article on Bulgaria 
(“Bulgarian capitalism boosts 
ex-communists”, May 10} states 
that it is difficult to come 
across dynamic professional 
Bulgarians without a commu- 
nist background. This is hardly 
surprising in a country that 
had more than lm communist 
party members only a few 
years ago. 

It is also true that foreigners 
regard the Bulgarian commer- 
cial environment as hostile and 
the local business community 
as unreliable. 

The two business “scams” 
you have described, however. 


are hardly particular to Bul- 
garia. “Overcharging and buy- 
tog cheaply from state compa- 
nies” is a worldwide 
phenomenon and one of the 
strongest arguments for priva- 
tisation, while minimising tax 
exposure to a country with an 
underdeveloped tax regime is 
obviously easier than in the 
west, where it is called tax 
optimisation and is the special- 
ity of an army of consultants. 

Your story would have 
gained in credibility if the 
name of the principal protago- 
nist had not been mistakenly 
given as Ivan, not Ilya. This is 
rather like a Bulgarian daily 


publishing an article -on 
“Tony” Rowland. 

The disappearance di most 
foreign markets, the large for- 
eign debt and the unfavourable 
(both to terms of access and 
resources) geographical post* 
tion are significantly more 
important and explain much 
better the diffic ulties of privati- 
sation and the low level of for- 
eign investment John Wfitua. - 
head of the World Bank fid* 
sion in Sofia, calls tins the- 
worst starting print of all &L 
countries in eastern Europe-. . 
Martin Zaimov, 

20m des Terries, 

75017 Paris, France 


Pensions ingenuity already displayed 


From Mr Philip WarlaruL 
Sir, It does not require, as 
you state in your leading 
article, “Revisionism on pen- 
sions'' (May 17), ingenuity from 
the City “to reduce the capital 
market threat to the value of 
the [defined contribution! 
pension on the date of retire- 
ment". 


That ingenuity has already 
been displayed by the produc- 
tion of equity-based annuities. 
What is required is a swift 
decision by the Inland Revenue 
to allow pensioners to benefit 
immediately, 

to the longer term the 
requirement to liquidate a per- 
sonal pension and buy an 


annuity should be remaviuL 
and replaced by dmple rates : 
on the withdrawal of 
and capital from the fond- : 
Philip Warland, v 
director general 
Association of Unit ■ Trusts; ■ 
and timestment Funds, ^ 
65 Kinasuxo/. - 

£andmWC2B STD - 


Union financially viable and aiming to strengthen organisation ■ 


jrfc 

kid 1 


l . 


Esop using the 1988 legislation. 
Although the statutory Esopis 
still not perfect, these changes 
mean that this route to 
employee share ownership can 
no longer be ignored. 

The Esop Centre win con- 
tinue its successful Lobbying 
for changes to Esop law until 
Britain mirrors the US, where 
there are more than 10,000 
companies with Esops. 
Malcolm Hurbton, 
chairman. 

The Esop Centre. 

2 Ridgmount Street, 

London WClE 7AA 


From Mr John Sheldon . 

Sir, Robert Taylor’s apoca- 
lyptic vision of my union’s 
finances ("Civil service union 
in cash crisis”. May 17) is mis- 
leading and partial in Us pre- 
sentation of the Tacts. 
Although, there were no factual 
inaccuracies in the article, it 
felled to paint the foil picture. 

Far from "only" a quarter of 
our members having re-author- 
ised their subscription deduc- 
tions, it is more appropriate to 
say that “already" a quarter 
have done so. Even though the 
first forms only went to 
branches six weeks ago, 
sign-up rates are already hit- 
ting 49 per cent (Scottish 
Office), 45 per cent (Home 
Office), 44 per cent (Land Reg- 
istry) and 38 per cent (Cus- 
toms). 

Second, we have not blamed 
payroll and personnel manag- 
ers for delays. They have been 


very helpful and co-operative. 
Delays In agreeing the mechan- 
ics of the operation may or 
may not be politically inspired, 
but are certainly the result of 
decisions taken at a much 
higher level - Treasury and 
Department of Employment 
ministers. 

Thirl no mention is made 
that we project a surplus of 
£100,000 for 1994 and a sub- 
scription income of £l0.4m. 

Fourth, highlighting the 
response among our members 
in Employment illustrates lit 
tie, as the forms were only sent 
out just before our conference 
a fortnight ago, and we would 
not expect any completed 
returns until 14-21 days after 
dispatch. The overall response 
is good and getting better - to 
such an extent that extra staff 
are being drafted to to open 
the post. More than 2.000 
forms were processed on 


one day alone recently. 

Fifth, a misleading impres- 
sion is provided by selective 
quotation from our financial 
report. We have total assets of 
£&2m, of which £&n are fixed 
assets. “Lack of liquid assets" 
refers only to cash in hand or 
in bank accounts. 

Sixth, reference to confer- 
ence decisions are Irrelevant, 
as our 1994 estimates are not 
based on possible savings from 
conference proposals. 

Seventh, we are one of the 
few unions actually to have 
increased membership over the 
last year - a very encouraging 
base for the check-off cam- 
paign. Surely this is relevant 

Unions are not savings 
accounts but organisations 
that collectively represent 
workers' interests. Our finan- 
cial health Is important and is 
taken seriously, but It is only a 
means to an end, and not the 


4 

9 -• 


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aver 


end in itself. Our 

increase is a result- ri ,5^^ 
paigning on issues of dffwfjF 
e vance to our members /-PW,' 
jobs and quality ofserricte 
We are financially 
will show that IBs# 
cal fund ballots, the unjwj, 
will turn a tegfetattes 
into a means of strari*® 
ening our organisation W 
Increasing our 
Finally, the articfe‘fl®**5, 
on the day that *£*"2? ' 
partners in a new uBwtf?- 
ERSF, debated margtt‘ y ” g =; 
conference. ■ Despite e&PJv.- 
ated reports of our.ffflftWgkO: a 
demise, they voted fomoteffi yM 
ward with us towards tiC ,;, M 
fol new public serriflbMBw®* i! 
John Sheldon. * 

general secretary, '• 

National Union of 

Public Servants, r^'rr.' 

124/130 Southwark Street, --£r 
London SEl QTU 


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FINANCIAL TIMES TUESDAY MAY 24 1994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071407 5700 

Tuesday May 24 1994 


British parties 
and Europe 


"This is not some, trivial opinion 
poll” said Mr John. Major yester- 
day, launching his party's mani- 
festo for the European elections 
on June 9. 

He is right The European Par- 
liament, especially once the entry 
into force of the Maastricht treaty 
last November, is in a position to 
exert significant influence cm the 
destinies of the European Union if 
It finds the sense of purpose -to do 
so. It does not have the full pow- 
ers to grant or withhold taxation, 
or to pass legislation, that are tra- 
ditionally those of parliaments in 
sovereign states; and, largely for 
that reason, there is no European 
executive which depends on a dis- 
ciplined majority in the parlia- 
ment to carry on its business.. 

But, precisely for that reason, 
individual MEPs have greater free- 
dom. than most of their national 
counterparts, and those who are 
prepared to work can have a great 
deal of influence on the detail of 
European law. Under Maastricht 
their influence on other aspects of 
EU policy, such as foreign rela- 
tions, should be expected to grow 
as well 

Yet none of the manifesto* pub- 
lished in the UK yestmday focuses 
primarily an the role of the parlia- 
ment or an how the candidates of 
the parties concerned would speak 
and vote if they were elected to it 
All three of the main British par- 
ties behave as if this were in fact a 
mammoth opinion poR The Con- 
servatives defend their record as a 
government in upholding British 
interests in Europe. Labour and 
the Liberal Democrats Mum the 
Conservatives for everything that 
is wrong in Britain today - 
whether or not there is a Euro- 
pean connection - and attempt to 
seduce the voter by promising to 
behave differently if and when 
they gain power at Westminster. 

Direct experience 

About the specific role of the 
parliament they have rather little 
- in the Liberal Democrat case, 
almost nothing - to say. The Lib- 
eral Democrats may be partly 
excusedby the fact that up to now . 
the majorltarian electoral system, 
which Britain alone uses for these 
elections, has denied them any 
direct experience of EP member- 
ship. Still, since they alone are 
prepared to advocate “a federal 
Europe”, one might have expected 
them to present themselves as 


members of a Europe- wide move- 
ment with a single programme. 

This they foil conspicuously to 
do, perhaps because on many 
social and economic issues conti- 
nental liberals are closer to Brit 
ish conservatives, while British 
liberals are closer to continental 
socialists. The Conservatives, too. 
have problems in this area. You 
will search their manifesto in vain 
for a reference to the European 
People's party, the alliance of 
Christian Democrat parties to 
whose parliamentary group the 
Conservative MEPs have belonged 
- since 1992. Only the Labour party 
can proudly proclaim its intention 
of "co-operating with our allies 
across the continent'* to press for 
a list of economic objectives. 

Socialist group 

That list deserves some atten- 
tion, because the socialist group, 
already the largest, is the one 
most likely to find itself in or 
close to a majority after the elec- 
tions. Ironically this outcome is 
made much more likely by the 
British electoral system, which 
the Conservative government has 
instated on retaining. The main 
argument for this system - that it 
tends to produce a stable govern- 
ing majority - has no relevance to 
this election. All it achieves in 
this context is todistort the over- 
all political composition of the 
parliament by exaggerating the 
SWingS Of the British panrinlnm 

(usually against the party in 
power at Westminster). 

This phenomenon will be partic- 
ularly imfrirtaiiiate in the present 
instance, if it helps the Labour 
party and its continental allies to 
im pQuM their s ganilfl nn the EU. 
The list of objectives may sound 
benign, bat its main premise is 
thqt public spending at European 
level can and should be used to 
“promote", “boost” or “generate” 
new jobs. It also includes “an 
industrial policy”, and “the effec- 
tive ap plication of regulations in 
all countries in order to ensure 
that industry is not disadvantaged 
by unfair competition”. 

Thf flppiMenWow of philoso- 
phy across the EU could virtually 
be guaranteed to ensure that 
Europe as a whole remains a high- 
cost, over-regulated region, whose 
enterprises would indeed be “dis- 
advantaged” in competition with 
those from other parts of the 
world. 


On the brink 
over Crimea 


With its vote for de facto 
independence on Friday, the Cri- 
mean government raised the 
stakes in Europe's most dangerous 
political game. The alarming pos- 
sibility is that the local power 
struggle in Crimea could drag 
Ukraine and Russia into all-out 
war. 

Kiev has consistently valued an 
Increasingly threadbare sover- 
eignty over the more painstaking 
process of economic transforma- 
tion. For the Ukrainian govern- 
ment, Crimea is more a symbol 
than a piece of territory to which 
it has any strong attachment for 
its own sake, but that is precisely 
why Crimea’s declaration of sover- 
eignty last week provoked such a 
hostile reaction in Kiev. Ukraine 
has been tolerant of the pro-Rus- 
sian Crimean government's 
demand for local self-rule over the 
past few months, but has drawn a 
line at outright secession. Kiev’s 
disastrously ineffective leaders 
believe, probably correctly, that 
Ukraine might collapse altogether, 
if Crimea were to be allowed to 
soccd&* 

For Moscow, the escalating ten- 
sions on the Black Sea peninsula 
pose different problems. Ukrainian 
leaders complain that Russians 
have never fully accepted their 
nation’s Independent existence. 
That is quite true, but the Krem- 
lin’s current leadership does at 
least appear content to wait for 
Ukraine's disintegration. Even 
though President Boris Yeltsin 
has acted with commendable 
restraint over Crimea, he faces a 
powerful hard-line lobby, inside 
and outside bis own government. 

Russian role 

If Crimea's war of words were to 
degenerate into a fight, it would 
be poli tically difficult for Russia to 
remain on the side-lines. Worse 
still, perceived success in Crimea 
could embolden Russian, national- 
ists to gather tends from other 
republics, such as Kazakhstan and 
the Baltics. 

But the real gunpowder, both 
literally and figuratively, is on the 
contested peninsula itself. Both 
Ukraine, with its security forces 
and national guard, gx»d Russia, 
which effectively controls the 
Blade Sea Fleet, have a military 
presence in Crimea. The man who 
has recently appeared determined 
to ignite the explosion is Mr Yuri 


Meshkov, the maverick president 
of Crimea. 

Mr Meshkov, elected in January, 
appeared initially p l acated by a 
deal with Kiev that gave Crimea 
independence In everything but 
name. Over the past week, how- 
ever, Mr Meshkov has been push- 
ing further. The danger is that 
Kiev’s adamant insistence mi sov- 
ereignty and territorial integrity 
will be forced into a collision with 
the pressure on the government in 
Moscow to champion ethnic Rus- 
sians beyond its borders. 

West's response 

Sow should the west respond? 
The first step, which is to recog- 
nise that Crimea Is not a minor 
local irritant, has been taken. 
Beyond that, the best the west, 
and most of all the US, can do is 
serve as honest broker. With the 
help of western mediation, Kiev 
and Moscow might be able to 
negotiate a joint sovereignty 
arrangement, which would allow 
iKcT^nfams to feel they have not 
surrendered their territory, while 
giving Crimeans the connection 
with Russia that they apparently 
want. 

Simply lecturing Russia on the 
inviolability of Ukraine's borders 
- a particularly touchy issue, 
because Ukraine's renunciation of 
its nuclear weapons was made in 
return for a Russian pledge to 
respect Ukrainian territory - will 
not be enough. Russia exerts con- 
siderable influence on the Cri- 
mean pfiwrmngnt MOSCOW should 
be asked to urge caution on its 
kinsmen and be warned that a 
war between Ukraine and Russia 
would western assist ance to 
either country, including member- 
ship of the Partnership for Peace, 
impossible. 

The Ukrainian government is 
seriously at fault, not so much in 
its handling of the Crimean issue 
as in its egregious m i sh a n d li n g of 
the economy. Kiev can have little 
hope of fimaing on to rel u ctant 
territories, so long as the economy 
continues its collapse. Terrified as 
it is of a Bosnia writ’ large, the 
west is ready to help Ukraine in 
substantial ways. But first, the 
Uk rainians must show that they 
want not only to keep ttidr flag 
and their borders, but to begin the 
reforms tbrtjurt might make Cri- 
means tolerate remaining Ukrai- 
nian citizens. 


13 


R arely can the UK's 
industrial shortcomings 
have come under such 
scrutiny. Today, six 
months of analysis and 
debate culminates In the publica- 
tion of the government’s white 
paper on competitiveness. 

It follows a multitude of other 
reports on how to sharpen economic 
performance from government 
departments, the Labour party, two 
parliamentary select committees, 

COlintlesS thln)c4an^i and amrigm- 

ics, and most employers’ associa- 
tions. 

Various factors help to explain 
the timing of rtiic stock-taking, the 
most important being the continu- 
ing long-term weakness of UK eco- 
nomic performance. The improve- 
ments in the 1980s in industrial 
relations, productivity growth and 
manufacturing exports helped to 
narrow the performance gap with 
several of the UK’s closest economic 
rivals such as France and Germany. 
Bat after a long recession the gap 
still looks stubbornly wide from 
manufacturing productivity to 
income per head (see Charts). 

The reports may also express a 
deeper change of mood among busi- 
ness leaders and policy makers. Mr 
Ken Mayhew, a forme - economist at 
the now defonct research body, the 
National Economic Development 
Office, says: “When 1 joined Nedo in 
196ft most leading business people I 

md thnn ght we had mwbH the 
UK’s economic problems. 

“When I left in 1991 it was quite 
different The recession came as a 
deep shock to many people, but on 
top of that it appeared that sacking 
workers and improving productivity 
M been the easy part, and that 
moving cm from there was much 
more difficult." 

Many of the analysts concentrate 
on apparent failures in external eco- 
nomic performance - such as trade 
and the value of sterling - which 
they fear could deteriorate further 
in the face of increasing competi- 
tion from developing countries. 
They point to the forced exit of the 
UK from the European exchange 
rate mflAhantem in 1992 and the 
UK's persistent current account def- 
icit ev en during recession. 

Much of the evidence comes from 
the pro-man ufac tu ri ng lobby which 
has been given a new lease of life to 
the post-Thatcher era. This has 
been underscored by the arrival of 
Mr Michael Hpaaltjna a s Depart- 
ment of Trade and Industiy secre- 
tary, and by the perception that the 
manufacturing sector Is now too 
small to sustain a strong recovery. 

It Is the pflrfjrrnnannp of manufac- 
turing and services and the growth 
rate of overall productivity which is 

th» Irp y rigtarmhuint nf natinnal ww 

nomic welfare. Performance in 
world markets is only part of the 
picture, says Professor Paul Krug- 
wum of the Massachusetts Institute 
of Technology. 

. But the growth in UK living stan- 
dards has been “disappointing”, 
accor din g to the government, with 
tee country slipping to 18th place in 
gross domestic product per head 
among the mam industrial coun- 
tries. And the UK had a misery 
index (annual unemployment and 
inflation rates combined) which was 
second only to Italy in the Cfroap of 
Seven main industrial nations over 
tee period 1971 to 1992. 

The individuals and committees 
seeking to diagnose and reverse 
these trends are easy to mods with 
tfaeir grandiose ambitions and long 
wish-lists. But it is not enough to 
dismiss them by saying that compa- 
nies and not countries compete, 
says Dr Ann Robinson of the free- 
market Institute of Directors. “The 
national framework of laws and reg- 
ulations is important in helping or 
hindering companies,” she says. 

Farther, the mawnw in. which the 
problems are being discussed pro- 
vides some grounds for optimism. 
“There is a consensus about the 
nature of the problems which would 
have been unthinkable even a few 
years ago ” says Sir Geoffrey Owen, 
a director of the London School of 
Economics' Centre for Economic 
Performance and a former editor of 
the Financial Times. 

There is widespread concern 
about education and vocational 
training; about the relationship 


Third way to the 
top of the pile 

David Goodhart weighs the debate on 
UK competitiveness in the light of 
disparate global economic models 



between finanrw and business and 
tiie “shrat-tenmam" tins is «f»i d to 
generate; about the failure of inno 
vation; ami about the lack of a layer 
of thriving medium-sized businesses 
comparable with those in Germany. 

There is also a long-standing 
belief that “change happens less 
easily in the UK in compar able 
countries, because we are less well 
structured”, as Mr Geoff Robinson, 
an IBM executive and former 
adviser at the DTI, puts iL 

These “decline of Britain” thanes 
generate a sense of d&& vu. But 
there Is a hard-headed tone and an 
attention to detail which would not 
have been apparent 10 years ago. 

The variety of academic, govern- 
ment and business reports acknowl- 
edge strengths where they exist - 
in pharmaceuticals and financial 
services, for example - and puzzle 
over the “long tall” problem: if 
same companies can do It, why do 
so many fail? The old industrial pol- 
icy agenda of g o ver n ment support 
for in d ustry and “picking winners" 
is noticeable by its absence. The 
Labour party document scarcely 
iTij »n ti< m s the unions, much to the 
rViagrip of uninii leaders. 

There is even agreement on 
the measures required to create 
mare of the bi g h-p urffwirumpo com- 
panies of which the UK has too few. 
Several reports recommend reforms 
to the tax system to encourage 
more investment and t raining . Ti es s 
straightforwardly, there is broad 
interest in establishing a more sup- 
portive financial framework for 
large companies by making con- 
tested takeovers more difficult and 
dividend payments more closely 
aligned with profitability. 

For «m«iw com panies, there is a 
lobby for tee creation of a develop- 
ment bank able to provide long- 
tom loans to growing businesses at 
subsidised rates. There is also Inter- 
est in fostering more co r po rate col- 
laboration an technology transfer. 

But behind this apparent consen- 
sus, a scarcely articulated argument 
is being conducted over the hind of 
economic model to which Britain 
should aspire. The battle is between 
those who think -that many-' of tiie - 
problems are endemic and can be 
solved only through a regulatory 
and institutional overhaul, and 
those who believe that the aviating 
liberal system, buttressed by power- 
fid anti-monopoly laws, needs no 
more than discreet policy reforms 
and intelligent exhortation. 

Informing many of the supporters 
of overhaul are the Germanic and 
Japanese models of “organised” 


capitalism. These are said to com- 
prise corporate institutions which 
enhance wealth creation through 
fostering stable, long-term relation- 
ships between key economic groups. 

Liberal critics regard these corpo- 
rate rules - such as life-time 
employment and company cross- 
ownership in Japan, or compulsory 
worker consultation in Germany - 
as belonging to an earlier corporate 
1st era. That approach, now under 
threat in the latter two countries, is 
one from which Britain is fortunate 
to be free, they add. K they have a 
model It is the fre e-market US, 
which still has the highest average 
productivity (and GDP per head) in 
the world and is the world leader In 
high-technology industries. 

The Labour party is happy to 
embrace the Germanic “stake- 
holder” company mndai t in which 
workers influence 


and financiers and suppliers are 
locked in. “We want to reform the 
architecture of our company struc- 
tures to encourage committed own- 
ers,” says Mr Robin Cook, Labour’s 
trade and industry spokesman. 

The Royal Society for the Encour- 
agement of Arts, Manufactures and 
Commerce, in its a recent report an 
reforming the UK company. Tomor- 
row’s Company, also embraces the 
stakeholder approach, but without 
proposing new regulation. “There’s 
a lot of nervousness about taking 
the regulatory path," says Mr Neil 
Hartley, the society's research head. 

The trade and industry select 
committee is similarly sympathetic 
to “committed” capitalimn but it is 
wary about institutional reform and 
explicitly rejects the German-style 
supervisory board. “Lessons learnt 
overseas cannot usually be trans- 
ferred to the UK," says the select 



committee's report But where other 
countries have “competitive advan- 
tage". for example in relationships 
with fjnanrial institutions, the UK 
must replicate them in its own way. 

Mr Hesettine takes a tantalisingiy 
ambiguous position, in this debate, 
to his 1987 book. What There's a 
WiE, he praises German institutions 
such as employee representation on 
supervisory boards. He also backs a 
system of compulsory-membership 
employer organisations such as 
ebanfoexs of commerce, which help 
to ensure that almost all employers 
train to a high standard. 

But in office this agenda has been 
scarcely visible. His main accom- 
plishment has been to deliver a 
reorganisation of government sup- 
port for industry both at regional 
and Whitehall level 
Judging by the time of the DTTs 
own contributions to the trade and 
industry select committee, and the 
deregulatory agenda of the Conser- 
vative party, today's white paper 
will not return to the themes of 
When There's a WiU. indeed, few 
new initiatives are expected. 

A t least for public con- 
sumption, the DTI 
admits of no widespread 
problems except in edu- 
cation and training. Mr 
Bob Dobbie, head of the new com- 
petitiveness division set up by Mr 
Hesettine in 1992, says that “there Is 
no conclusive evidence that sbort- 
tennism is a general problem”; and 
he denies there is a “financing gap” 
for small business. 

The government, and observers 
such as Mr Dobbie, believe that as 
far as there is a short-termism prob- 
lem, it is one of business judgment 
rather than market structure. The 
only role for government is to 
ensure better information flows. 
The market, the government might 
add, is correcting itself; financial 
institutions are taking a more 
active interest in the companies 
they own. Even Hanson, the con- 
glomerate often accused of ruthless 
short-termism, has decided to 
lengthen its target payback period 
on investments. 

But to economists such as Mr 
Ewart Keep and Mr Ken Mayhew, 
thin minimalist policy contradicts 
the government’s objectives. They 
told the select committee: “On the 
nnp hand ministers and civil ser- 
vants have painted the vision of a 
high-wage, high-tech, high-skill 
future . . . the only one that 
advanced flnnnnmip* wm sustain in 
tiie long run. On the other hand 
actual policy has sought to empha- 
sise low wage costs and a deregu- 
lated labour market" 

If there is a tension here, it does 
not adversely affect high-technology 
sectors of the US economy, for 
example. It is, in any case, a tension 
In many analyses of competitive- 
ness, mrhidmg that by Mr Jacques 
Defers, president of the European 
Commission, entitled Growth, Com- 
petitiveness and Employment. 

Management theorists such as 
Professor John Kay also seem 
unsure which side of the argument 
they are on. Prof Kay talked to the 
select committee about creating 
high-trust, high-commitment rela- 
tionships within companies. But 
under questioning he said that 
countries should play to their conk 
petit ! vb strengths which, in the case 
of Britain, may mean nurturing US- 
style high flexibility and tow cost 
Even Labour-sympathising aca- 
demics, such as Mr David Sosklce, 
have concluded the UK will not be 
able to create the conditions for a 
h igh-s ki ll manufacturing economy. 
Policy should concentrate instead 
on copying US mass higher educa- 
tion to equip young people for the 
high value-added end of the service 
industries on which most national 
wealth wifi depend 
Mr Keith Hampson, a leading 
member of the trade said industry 
select committee and a confidant of 
Mr Hesettine, believes that the Ger- 
man-Japanese and the US models 
are converging. He also believes 
that the UK can forge a coherent 
“middle way” between them, and 
(hat the country's low-cost, deregu- 
latory attractions “give us a breath- 
ing space to get our act together”. 
Today's white paper will be the tes- 
tament of that British way. 


Observer 


Running out 
of energy 

■ Whatever happened to John 
Moore, or Lord Moore of Lower 
Marsh, to give him his proper title? 
He maintains such a tow profile 
these days that Ws hard to betteve 
that only seven years ago be was 
being canvassed as a future prime 
minister cf Britain. 

Take the growing row about the 
financing of the new Energy Saving 
Trust, which he chairs. R is a 
central plank of the government's 
energy efficiency wunp ai g n but 
its vaiy survival is already being 
threatened by dare Spottiswoode, 
director-general of Ofgas, the gas 
regulator. 

Without her backing, the trust 
can raise only a small fraction of 
the £40Qm a year it needs to spend 
to meet government targets. 
However, In this increastegiy 
heated debate, it is the trust’s 
capable but Hint* known chief 
executive, Eoin Lees, who has been 
left to fight its corner. 

Lord Moore's recant public 

p mnmn«*ptn<mN he^p jfmjted 

to a short introduction to the trust's 
latest annual report, which talk ed 
cf “an encouraging start”. Hte 
deeper views of the trust's 
predicament are hard to establish 
since he doesn’t seen to like being 
quizzed by the press. 

His jsenritivity to press comment, 
dating back to his unlucky time 
as secretary of state for social 


security, may explain his shyness. 
But at this vulnerable stage in the 
trust’s fortunes, it surely needs 
a chairman who is more 
preoccupied with, saving energy 
than his face. 


Bright spark 

■ E v er wondered what's happening 
behind the scenes when the voice 
on the phone says: “I cant seem 
to find you on my screen ... how 
are you spelling that?” 

Well, so has Eastern Electricity. 
After months of “mtmsivB 
investigations”, the company has 
finally discovered why its 
“corporate data artwork” (CDN) 
kept felling without warning, and 
then mysteriously righting itself. 

In a memo to staff, chief executive 
John Devaney says that CDN 
“outrages” have cost 18,000 hours 
In lost production effort, not to 

mention the inconvenience to 

customers. 

“Specialised equipment” 
eventually pinpointed the problem 
-to a single PC at head office on 
to which a multi-user computer 
game had been loaded... . 


Educated guess 

■ No secret that John Patten's 
job at the Department for Education 
is one of the least secure in the 
cabinet Perhaps a bit more 
surprising is toe press of hopefuls 
jockeying to succeed him. 





tirt only p refcH K Sn fl to be u liip in 
front of the tally- he’s boycotting the 
Euro elections’ 

In addition to the likes of Michael 
Portillo, Steven Dorrell and Virginia 
Bcttomley, ft emerges that social 
security secretary peter Lflley, the 
ex-Cfreenwell's oil analyst, also 
fancies exchanging the 
neverending headaches of the Child 
Support Agency for worries about 
a different feert of youngsters’ 
development. 

IJHey has been surprisingly 
successful over the past two years, 
but with more cuts expected in 
hJs £80bn budget it may be time 
to get out whfie he is still ahead. 

A suspiciously large chunk of his 
recent Spectator torture was 
devoted to the subject of education. 


However, while Ufiey is regarded 
as one of the most intellectually 
able in tha catenet, tin* prime 
minister winy disinclined to 

make changes in an area as 
sensitive as social security just 
at the moment And would it be 
a promotion for Mm anyway? 


It's a striae 

■ Bet Alexander Downer, the new 
leader of Australia's opposition, 
didn't get bullied in Britain in the 
same way as he does in Australia. 
His dad was Australian high 
nfmmifaainnpr in Tonrin n hetwSSD 
1964 and 1972 and young Downer 
went to school in Oxford and got 
his degree in politics at Newcastle. 
His nn wiring in Australia call Mm 
Shirley Temple because of his black 
curls, and there has long been a 
joke that when his family’s home 
was in the Canberra suburb of 
Downer, they lived at the posher 
end - Upper Downer. 


Bad survey 

■ Sir James Blyth, chief executive 
of Boots, doesn't seem too keen 
on chartered su r v e y ors. 

Why was it, he asked a property 
conference yesterday , that thfi 
surveyor employed by Boots had 
to be trained from first principles 
in almost every area of c ommercial 
fife from the rudiments of 
marketing to constructing a 
business plan? And why was it. 


he continued, that while so many 
Boots managers work in jobs 
remote from their professional 
training, all the surveyors in the 
company are in positions directly 
associated with property? Surely, 
he argued, surveyors should be 
capabtetf pursuing broader 
business careers. 

Could this view have anything 
to do with the fact that Boots’ 
outgoing chair m an . Sir Christopher 
Benson, is a well-known chartered 
surveyor? 


Whisky sour 

■ Everyone knows Whisky 
deserves more attention than Soda, 
so Chris Patten’s Norfolk terrier 
decided to take matters into its 
own paws. Still smarting from the 
star treatment accorded to fellow 
pooch Soda when it went awol 
nearly two years ago, Whisky 
decided to bite back. Unfortunately, 
sinking your teeth into a 21-year-old 
wo rkman has consequences in 
Hong Kong, even if you chew bones 
with the governor nightly. Whisky 
was unceremoniously carted off 
to the official dog kennels for 
observation - a risky way to gain 
attention in a place where canine 
criminals have been known to incur 
the death sentence. 


Nuncupate 

■ Are you allowed to kiss a nun? 
Yes, hut don’t get into the habit 


i 




\ 


-J 



FINANCIAL TIMES 

Tuesday May 24 1994 


ORR & BOSS 


V' 


lnfern.ition.il (.’on -lilt. infs 
help von profit from 

VVASTL MINIMISATION 
Tel: 07 S -240 2044 




Worries grow over unrest in plants and on farms 

Zhu signals easing of 
credit to state factories 


By Tony Walker m Beipng 


Mr Zhu Rongji, China’s senior 
vice-premier in charge of the 
economy, has signalled an 
of tight restrictions on lending to 
ailing state enterprises and has 
appealed for greater efforts to 
increase grain and cotton produc- 
tion. 

Mr Zhu's remarks, published 
on the front pages of main Chi- 
nese newspapers yesterday, indi- 
cate growing official anxiety over 
labour unrest in cash-starved 
state factories, and reflect wor- 
ries about a serious sho rtfall in 
cotton production accompanied 
by signs of growing agitation 

among p oasanfa 

In the past two weeks, Mr fflni 
has addressed two economic 
forums attended by provincial 
leaders from China’s central »nA 
southern provinces. At both, he 
called on economic departments 
and banks to “help" faffing enter- 
prises. 

He said government bodies 
including financial ins titutions 
should “malm surveys and help 
enterprises to resume production 
and get out of these predica- 
ments”. 

The State Statistical Bureau 
reported that in the first quarter 


nearly half the state enterprises 
lost money. Some estimates put 
“triangular debt” - enterprises 
owing money to each other for 
raw materia ls and fVnfqTied prod- 
ucts - at Yn30Gbn ($35bn). 

Mr Zhn, who is also governor 
of the People’s Bank of China, 
the central bank, has been under 
pressure from the powerful state 
enterprise lobby to ease credit 
restrictions to save state-run fac- 
tories from bankr u p tcy and avert 
thousands of job losses. 

His appeal to officials to “frilly 
arouse” farmers' enthusiasm for 
cotton production reflects deep- 
ening government concern over 
sharp rises in the cotton price. 
The textile industry is one of the 
country’s biggest employers, and 
factories are facing difficulties in 
securing supplies. Some have had 
to stop production. 

Mr Zhn , who hag made curtail- 
falg inflation a main priority, has 
been insisting on continued tight 
credit policies. But banking sta- 
tistics for April show an Increase 
in state enterprises' funds, indic- 
ating that an easing of restric- 
tions is already taking place. 

Western economists in Beijing 
say the government is likely to 
continne to be selective in pro- 
viding credit They contrast the 


latest remtirmc pacing with *ha 
panicky steps taken last Septem- 
ber and October to provide addi- 
tional money to lossmaking 
enterprises. 

The April and March inflation 
figures, slightly down on the rate 
of growth registered in the first 
two months of the year suggest 
that the government may have 
some scope for a limited relax- 
ation of credit 

Mr Zhu’s call for an improve- 
ment in handling what be called 
“relations between reform, devel- 
opment and stability” coincides 
with official alarm about growing 
unrest among peasants, whose 
ret urns from their tiny plots are 
being squeezed by higher produc- 
tion costs. 

Farmers are also angry about a 
widening gap between country 
and city, inland and coastal 
regions. Inflation has also been 
rising faster in rural areas than 
in the city, according to the state 
statistical bureau. 

Mr Ren Jianxin, a senior party 
official, was quoted at the week- 
end in the People's Daily, the 
Communist party newspaper, as 
saying at a meeting on rural 
instability that the “security 
management situation remains 
extremely grim”. 


Japan and 
US edge 
towards 
agreement 
on trade 


By Mfcteyo NaJcamoto 
In Tokyo aid Nancy Dunne 
hi Washington 


Yeltsin acts to stimulate 
Russia’s economic reform 


By Leyfa Boulton In Moscow 


Mr Boris Yeltsin, the Russian 
president, seeking t» revive eco- 
nomic reform, yesterday 
scrapped quotas and licences far 
oil and gas exports from July 1 
and offered a three-year tax holi- 
day to foreign investors in the 
tuanufa du h ng sector. 

Six decrees issuedyesterday are 
a bid to push the government of 
prime minister Victor Cherno- 
myrdin into resuming the more 
active economic reform in evi- 
dence until last winter - in part 
by not waiting for parliament to 
pass the relevant legislation. 

The decrees fit with the views 
of Mr Chernomyrdin and many 
pa rliamentarians who want mea- 
sures to stimulate economic 
growth and restore discipline 
among state-owned enterprises. 

The scrapping of quotas and 
licences for almost all exports 
means Russia ha s finally lifted 
antiquated controls on its lucra- 
tive energy exports. 


The quotas and licences have 
stimulated massive corruption 
and have served as an indirect 
control on domestic energy prices 
by regulating quantities available 
on domestic markets. 

However, Mr Alexander Liv- 
shits, head of the president's 
group of economic experts, said 
this decree would not signifi- 
cantly increase hard currency 
exports because export taxes 
remained high and pipeline 
capacity is still restricted. 

It is unclear how the decree's 
scrapping of all exemptions on 
export taxes - with several 
exceptions- would affect tax 
breaks promised to foreign oil 
companies. 

In an effort to stimulate eco- 
nomic growth and reduce tax 
evasion, Mr Yeltsin instructed 
the government to submit to par- 
liament by September 16 legisla- 
tion lowering companies' overall 
tax burden by 10-20 per cent He 
also decreed a three-year exemp- 
tion from profit tax for all manu- 


facturing ventures registered 
since January with at least 30 per 
cent foreign ownership and glQm 
investment - as long as they stay 
in business for at least five years. 

Another decree sought to 
restore genuine state control, 
i ncludin g the power to digmim 
dishonest and incompetent direc- 
tors, over enterprises theoreti- 
cally owned by the state but in 
reality free to do what they want 

Mr Livshits said a priority of 
this decree was to stem theft of 
state property fay directors of 
enterprises 

Professor Yevgeny Yasta, head 
of the president’s analytical 
group, said the decree would 
affect several defence plants and 
inefficient factories. 

Mr Yeltsin issued instructions 
to reduce enterprises’ debt to one 
another and the state trea- 
sury.The decree allows the gov- 
ernment to start bankruptcy pro- 
ceedings against companies 
which are more than three 
months late paying tax. 


Gerber agrees to $3.7bn bid by Sandoz 


Continued from Page 1 


nutrition products and a small 
baby food line. However, only 14 
per cent of the nutrition divi- 
sion’s SFrl.7bn sales last year 
were in North America, whereas 
nearly 90 per cent of Mfobig an- 


based Gerber's $1.2bn sales were 
in Us home continent 
Mr Marc Mo ret, chairma n of 
Sandoz, said Gerber’s excellent 
image and exceptional market 
strength in North America “give 
os a strong base in child nutri- 
tion on which we will expand 


internationally”. Gerber is under- 
stood to have been actively seek- 
ing a suitor for several months. 
Nestle, the Swiss foods group, 
had earlier been a strongly tipped 
bidder, and Hershey Foods of the 
US had been mentioned as a pos- 
sible candidate. 


US and Japanese officials went 
into their fifth day of trade feflfcg 
in Washington yesterday amid 
expect a tions that they woe edg- 
ing towards agreement in some 
of their disputes. 

Tokyo’s ministry of finance 
unexpectedly sent to Washington 
an official responsible for bilat- 
eral negotiations cm opening up 
Japan's insurance market - Mr 
Bfsnke Sakakflmra, vicechief of 
the International Financial 
Bureau - left in an apparent 
move to push the talks fo r ward . 

There were also indications 
that the US had softened its 
stance, although Mr Mickey Kan- 
tor, the US trade representative, 
denied that Washington was in 
retrea t from its original inten- 
tion to negotiate agreements 
seeking objective criteria to mea- 
sure market access. 

But Mr Alan Tonelson, 
research director of the Eco- 
nomic Strategy Institute, which 
has dose ties with the adminis- 
tration, said: “My impression is 
we are really backing off.” 

He said Blfr Kantor might have 
lost control of the negotiations 
to the State Department, where 
there is concern that US-Japan 
trade disputes are threatening 
the broader relationship and the 
administration's Asia trade pol- 
icy. 

That created the impression in 
Washington that the negotiators 
were ready to “harvest the 
gains” of previous talks and 
reach deals on those sectors the 
Japanese government can most 
influence: government procure- 
ment of medical equipment and 
telecommunications and insur- 
ance liberalisation. Vehicles and 
vehicle parts could be set aside. 

Mr Tsutomu Hata, the prime 
minister, summoned his chief 
cabinet secretary, Mr Hiroshi 
Kumagai, who was until recently 
trade minister, as well as offi- 
cials from the key ministries of 
trade, foreign affairs and 
finance, to his official residence 
to discuss how the talks could be 
taken forward before the Group 
of Seven meeting in July. 

He told the bureaucrats to try 
to ensure success for yesterday’s 
negotiations on the groundwork 
far resuming the talks. 

“We are negotiating very 
extensively. The talks are at a 
very delicate stage now," Mr 
Hata told a group of reporters. 

Japanese officials played down 
speculation in the press that a 
breakthrough might be possible 
because of a softer US stance, 
but were clearly doing their best 
to keep the momentum going. 

“There are talks scheduled this 
week on global cooperation, so 
officials are scheduled to be in 
Washington anyway," one for- 
eign ministry official said. The 
hope, he said, was that the unof- 
ficial talkie be made official. 


FT WEATHER GUIDE 


Europe today 




A complex low pressure area wM Influence 
central and parts of western Europe. The east 
of the Netherlands, eastern Belgium and 
France, Luxemburg, Germany, Poland, the 
Czech republic, Slovakia and the Alps will 
have outbreaks of rain and afternoon 
temperatures of 1 8C-22C. South-east Europe 
will have abundant sun and tropical 
temperatures- A blunder shows- will develop 
over northern Italy but southern regions wil 

have a lot of sun. The western Netherlands, 

Belgium and France and southern England w9 
have sunny spells. The rest of the British Isles 
wfll be rainy. South-west Europe wffl have 
frequent sunny intervals. Southern Scandinavia 
wfll have cloud, sun and a few showers. 









HIGH 






Five-day forecast 

South-west Europe will remain sunny and dry. 
The south-east wffl have a lot of sun and 
above normal temperatures. Showers wfll 
linger over Poland, Germany, the Czech 
republic and Slovakia. North-west Europe will 
have sunny speHa tomorrow, but rein will move 
In from Tlimday. Conditions will improve over 
the British Isles towards the aid of the week. 
Southern Scandnavia wib have frequent aurviy 
spells and Just an odd shower. 


-X-'' 






4\ \\ > ,vi-w -Xi/. -Vlv 


- y..Z'i »«,•:* • . • , 


; : Warn front Celia front JiLA. Wind spaad to KPH "'O'. 


Situation at 13 GMT, Tom&nhirBs maximum iar day. F omcoa i a by Melao Consutt of Urn NafujIarKis 



Maximum 

BefrO 

Belfast 

aun 

29 

Cerecw 

fair 


Cdwus 

rain 

16 

Cardtff 

shower 

Abu Dhobi 
Accra 

aun 

shower 

sr 

28 

Belgrade 

Batin 

sun 

rafai 

36 

21 

Casablanca 

Chicago 

doudy 

ahewrer 

Algiers 

aun 

30 

Bermuda 

cloudy 

2S 

Cologne 

rain 

Amsterdam 

fair 

17 

Bogota 

cloudy 

18 

Dakar 

fair 

Athena 

Ml 

33 

Bombay 

sun 

35 

Donna 

fair 

Atlanta 

sun 

32 

Brussels 

thund 

20 

DeM 

fair 

B. Aires 

ft* 

19 

Budapest 

Mr 

30 

Djakarta 

far 

BJiam 

shower 

IS 

CJtagen 

doudy 

17 

Dubai 

sun 


shower 

34 

Cairo 

sun 

35 

Dublin 

rain 

Barcelona 

thund 

25 

Cape Town 

fter 

18 

□ufcravrflc 

sun 


Latest technology in flying: the A340 


Lufthansa 

German Airlines 


29 Ednbugh 
18 Faro 
23 Frankfut 

26 Genovs 
20 GftxaHar 

27 Glasgow 

32 Hamburg 
43 Helsinki 
32 Hongkong 
38 HonoUu 
14 Istanbul 
32 Jereay 
Karachi 
Kuwait 
L. Angeles 
LasPabnn 
Lima 
Lisbon 
London 
LuxJbowg 
Lyon 
Madeira 


14 Madrid 
22 Majorca 
20 Marta 

19 Manchester 
28 Mania 

14 Mai bourne 
18 Mexico City 

15 Mart 
32 MBan 
24 Montreal 

20 Moscow 
12 Munich 
36 Nairobi 
40 Naples 

22 Ng wy ai 

24 New York 

23 Moa 

21 Nicosia 
18 Odo 
IS Paris 

22 Perth 
22 Prague 


fair 

25 

Rangoon 

doudy 

32 

thuid 

29 

Reykjavik 

fair 

11 

sun 

34 

Rio 

doudy 

28 

ahower 

15 

Rome 

Mr 

27 

cloudy 

doudy 

33 

3. Frsco 

Sun 

22 

20 

Seoul 

fair 

2S 

fair 

34 

Sfrigapore 

shower 

31 

fair 

31 

Stockholm 

far 

18 

fair 

28 

Strasbourg 

raki 

20 

cloudy 

18 

Sydney 

fair 

24 

rain 

18 

Tangier 

doudy 

20 

rain 

20 

Tal Aviv 

fab- 

33 

Mr 

24 

Tokyo 

fair 

26 

sun 

31 

Toronto 

ahower 

21 

shower 

26 

Vancouver 

fab 

23 

fair 

23 

Venice 

shower 

28 

Mr 

25 

VMM 

ahower 

28 

am 

33 

Warsaw 

ahower 

21 

shower 

18 

Washington 

fefr 

22 

fair 

21 

WsBngton 

doudy 

12 

Mr 

18 

Winnipeg 

fab 

17 

rah 

19 

Zurich 

thund 

IB 



THE LEX COLUMN 


BA’s American dream 






British Airways’ acknowledgment that 
it may have to write down its £275m 
investment in USAir is welcome. Pros- 
pects for the troubled US carrier look 
bleak. It wonld take monumental 
efforts to achieve the Slfan a year in 
cost savings that USAir management 
has set its sights on. Chapter 11 is a 
real possibility. BA’s preference divi- 
dends are vulnerable. 

Bu t all this Is not disastrous. For a 
start, the benefits from the partner- 
ship with USAir - through code-shar- 
ing, merged frequent flyer pro- 
grammes and cost savings - should 
continue even if the US carrier 
for bankruptcy. These benefits, expec- 
ted by BA to reach £70m this year, 
dwarf the Eifim th e company receives 
from its preference shares. Chapter U 
might even present BA with the 
opportunity to increase its stake in 
USAir cm the cheap, while simulta- 
neously avoidtag many of the regula- 
tory hassles the company has hitherto 
experienced in its US expansion strat- 
egy. The Qtaton administration could 
find it harder to turn down BA if it 
was rescuing a bankrupt company. 

Meanwhile, the rest of BA's business 
performs strongly. Pre-tax profits of 
£30 lm in 1993-94 contrast sharply with 
the red ink staining most rivals' 
accounts. In the current year, traffic 
will continue to grow as the airline 
market's recovery gathers pace, 
though prices win be held back by 
continuing overcapacity in the indus- 
try. The nwmagimwpni; is ai.<n maintain- 
ing pressure an costs, with another 
£150m in cuts promised thin year. 

In the longer run, BA'S rantingntal 
European operations should add to 
earnings. Deutsche BA and TAT will 
soon move into profit And much as 
BA screams blue murder about state 
aid to rival European airlines, it seems 
likely that one way or annthar the 
British carrier wfll come out of the 
row with increased market share. 


FT' SE Index: 3108.4 (-18.9) 


British Airways 


Shore pries retettvw to the 
FT-S&AAR-Sharai Index 
140 



tenses the actnnsztfon seems thin on 
Industrial logic. Saadoz’s own nutri- 
tion business sells to heaitty 

conscious adults through specialist 
health food stores, while Gerber sells 
baby food through supermarkets. So 
there seems little scope for pumping 
Gerber products down Sandoz distri- 
bution channels or vice versa. 

It may be possible to add value by , 
capitalising on Gerber’s strong brand 
name. Sandoz products may gain 
wider acceptance lu the US if 
rebranded with the Gerber logo. But 
all this will not be easy. Given that 
the purchase price of almost 30 times 
1993-94 earnings is hardly cheap. 


:.,rd 


Ladbroke 


ally r an - than perhaps the earnings 
stream is not worth so much after alL 
Crocbfords, which has a concentration 
of big spending customers, trades an a 
historic multiple of less than 10. Even 
after yesterday's fall Ladbroke 's multi- 
ple is in the mid-20s. 

It would help if Ladbroke were to 
break down the contribution from 
credit betting to its operating profits. 
The danger is that investors wfll con- 
dude that it is bigger than it really is. 
It seems unlikely that credit betting 
normally contributes more than 10 per 
cent If so, it is big enough to produce 
the occasional short-term glitch, 
which is only conspicuous now 
because p rogres s elsewhere, in hotels 
for example, remains pedestrian. 

That does not warrant a wholesale 
re-rating of the shares. Rather it is the 
realisation that Ladbroke’s new man- 
agement cannot transform the com- 
pany overnight which ought to justify 
yesterday’s sharp correction. The 
shares are now back where they were 
in early May. The run they had 
enjoyed looked odd for a company 
whose newly-cut dividend is still 
barely covered by adjusted earning s. 




ri ■ 


Gratifying though the improvement 
in Ladbroke's disclosure is, it obvi- 
ously has not improved enough. Oth- 
erwise the market would have been 
less confused by the disconcerting 
news on credit betting in yesterday’s 
trading statement. At first glance, the 
8 pa* cent fall in the shares suggests a 
need to reassess the quality of Lad- 
broke’s earnings from betting. If a few 
high spenders can more than wipe out 
tiie increase in profits from retail bet- 
ting during the first four months of a 
year - when the Grand National actu- 


Sandoz/Gerber 


A strong currency, cheap money 
and virtually non-existent gearing 
have made foreign acquisitions irre- 
sistible to the Swiss. Sandoz’s $3.7bn 
agreed purchase of US baby food man- 
ufacturer Gerber is only the latest 
example. This month has also seen 
fellow pharmaceuticals group Roche 
bid $5-3tm for Syntax as well as for- 
eign moves by Nestle and Holderbank. 

Though Gerber may not look expen- 
sive when viewed through Swiss 


Exco 

Exco’s management most be hoping 
that its second coming as a quoted .. 

company will be less hair-raising than r * i 
the first Having been swallowed up 
by British & Commonwealth in 1988, 
the money broker was left in limbo 
when B&C collapsed. While the ques- 
tion of ownership was partially 
resolved by a placing of shares with . , 
institutions two years ago, B&C'g 
adminis trators are keen to cash in 
their remaining chips. Since Exco 
increased earnings by more than half 
last year, the timing for a flotation 
looks auspicious. 

Investors will have to decide 
whether the company is being offered " " 
at a cyclical profits peak or near the 
start of a prolonged recovery. Exco - 
delivered steady growth through the 
1980s. but that was an era erf expan- 
sion. Growth opportunities are now n •-* 
less obvious. While money market . 
turnover should continue to grow, 
commissions are being squeezed. Yet 
Exco’s spread across time zones and 
financial markets should help iron out 
the worst of the volatility in earnings. 

If management can keep a grip on 

costs, there most be a fair chance that 3*s» ' ■ 

profits will rise from here. 

Without much segmental informa- 
tion or an idea of what dividend Exco 
will pay, valuation is difficult Assum- 
ing the company will use Its string _ .. 
cash flow to support a decent yield, Xi *" se ‘ ■ 
though, a multiple erf at least 10 times 
last year's earning s or a market value 
a shade more than £2G0m would look 
fair value. «.• 

Caledonia Investments, the Cayzer > 
family vehicle which sold out of B&C j \ 
while the going was good, would then 
again, have shown impeccable timing. 

The 27 per cent stake it bought from . 

the administrators two years ago 

would have trebled in value. , s-.., 




iK i*"sei 






TUB 


***** 


Ministry of Transport, 
Communications and Water Management, 
Republic of Hungary 


m a v p 


The Go-Ahead Group PLC 


Hill Samuel is advising the 
Hungarian Government on the 
tendering for the concession related 
to the M3/M30 Toll Motorway Project 


Hill Samuel advised on and 
sponsored the flotation 


MEPINV 

Guaranteed by MEPC pic 


EUROFIMR 


LuxFr 1 billion 


US$48 million 
Currency Equivalent 




Public Issue and Currency Swap 
April 1994 


Ten Year Private Placement 
March 1994 


Doing what we do best. 


V -- 


♦ 

Hill Samuel 



HiU Samuel Bank Limited • 100 Wood Street - London EC2P 2AJ 
A member of the Securities St Futuna Authority • A member of the TSB Group 


fester 












17 


THE CHOICE 
OF MILLIONS. 

SSPerkins 

Diesel engines from 5*1500 bhp. 
Pcridn» Group HeadquHten.Td: 0733 67474. 
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FINANCIAL TIMES 



COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED 1994 


Tuesday May 24 1994 


Useful GEM 0-5 


"Lifts Your 
Questions Answered" 
free from Stannah. 

For information 

'phone 021-359*5860' and quote FT5 


IN BRIEF 


Enichem creates 
a record loss 

Enichem, the chemicals subsidiary of Italy’s 
state-controlled Eni group, announced a record 
loss for 1993, after deliberately taking into account 
heavy extraordinary charges to prepare for a 
four-year restructuring programme. Page IS 

Phannacta ripe for sale 

Eight years ago the prospect of Mr Jan EKberg 
steering one of the world’s top 20 pharmaceuticals 
c ompa n i es through Sweden’s largest privatisation, 
seemed remote. The Pharmacia chief executive 
was more concerned with saving his loss-making 
Nordic-orientated company from extinction. Bat 
the company survived. Page 18 

A surprise at BP Canada 

Jim Buckee’s career has taken some surprising 
turns since he arrived in Calgary in September 
1991 as president of British Petroleum's Canadian 
subsidiary. Page 19 

YPF goes for a shake-up 

YPF, Argentina's privatised oil company, is to 
transform its domestic operations and a 
cautious expansion into neighbouring markets 
with a SlOOm a month investment programme. 

Page 20 

Bonds fall on Bundesbank repo rts 

European government bonds fell sharply on reports 
of comments made by Bundesbank President 
Hans Tietmeyer, which were taken to mean that 
there would be no more official German interest 
rate cuts in the near future. Page 22 

Tokyo OTC surges 

Since the beginning of this year, Japan's over-the- 
counter stock market has gained 2&1 percent 
on prospects of high growth against an 18.4 per 
cent rise in the Nikkei 225. Back Page 

Fall In high roBors hits Ladbroke 

The number of big bets by high rollers on credit 
with Ladbroke fell in the first few months of 
the year, hitting profits in. the betting and gaming 
division. Mr John Jackson, chairman, told the 
annual general meeting group profits were “cur- 
rently below last year’s leveL" Page 24 


National Homo Loans back In 

National Home Loans, the UK centralised mortgage 
lender, announced it would resume residential 
mortgage lending after a three year absence, 
following its return to profitability. Page 24 

Bettofware rises 3% 

Betterware, the UK direct home shopping group, 
yesterday reported a 3 per cent increase in faH 
year pre-tax profits held back by lower interest 
receipts and the absence of a large exceptional 
gain. Page 24 


Shares izt Domino Piiuthig Sciences, the UK printer 
maker, rose 27p to 517p following a sharp advance 
at the interim stage. Page 25 

Success behind a Senior move 

Flexible couplings and expansion joints may 
sound unglamorons, hot these products have 
transformed the strategy and prospects of Senior, 
the UK engineering group. Page 26 

A good mfac at Kenwood 

Higher sales, continued cost control and improved 
results from overseas subsidiaries were behind 
a 145 per cent rise in annual profits at Kenwood 
Appliances, the UK household appliance maker 
which was floated to June 1992. Pi*e 27 


Companies bn this 


Air Gram 

27 Komatsu 

21 

Atolon 

24 Kunlck 

24 

Ameritech 

17 Kyocam 

21 

Ayala 

21 Ladbroko 

24 

BAT 

18 MY HofcBngs 

24 

BKVWoh 

17 Matav 

17 

Bartow 

20 Mitsubishi Estate 

21 

Betterware 

24 -Mitsui Fudasan 

21 

British Airways 

27, 17 Murray Acorn That 

25 

British Biotech 

24 National Home Loans 

24 

CSFB 

19 New World 

1 

CSR 

21 Nintendo 

17 

Caltis Inti 

25 Pharmacia 

18 

CaWcGoU 

27 Hacal Bectrortcs 

27 

DB Group 

21 Richards 

28 

Denials (S) 

24 Rothmans Holdhgs 

20 

DeafarcSns 

19 Sandoz 

17.1 

Deutsche TMeKom 

17 Scottish Racfio 

24 

Domino Printing 

25 Sartor Engineering 

28 

Eagle Star Insurance 

18 Salon Healthcare 

26 

Eagle Trust 

24 SWnwratra Computer 

20 

Enichem 

18 State Bank NSW 

21 

Exco 

18 The Limited 

19 

Fox 

1 Tokyu Land 

21 

Frost 

24 Tops Estates 

24 

Gerber 

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Pre-tax profits up 63% M Return of business traffic N Further gains expected i EbUCf’S 


BA surges but warns on US Air 


By Paul Batts, 

Aerospace Correspondent 

British Airways yesterday reported a GS 
per cent rise in pre-tax profits to more 
than £300m ($450m) for the year to March, 
but warned it may have to make provi- 
sions on a £275 Jm investment in US Air, 
its troubled US partner. 

The fixture of BA's 24A per cent stake in 
US Air remains the biggest cloud over the 
UK carrier’s short-term prospects. 

Sir CoHn Marshall, BA’S chairman said 
USAir’s future hinged on efforts to negoti- 
ate concessions from its labour force. If 
these negotiations were not successful, BA 
directors believed a provision for perma- 
nent diminutio n in the book value of the 


investment would he necessary. 

Sr Colin described the airiine’s overall 
performance as a “significant improve- 
ment'* jn a higWy competitive market He 
added that BA expected to show a “further 
recovery in eannngs" this year. 

Annual pre-tax profits totalled £30im, 
compared with £X8Sm in 1892-93. In the last 
quarter, BA made a Elm pre-tax profit, 
turning round a £82m loss, with operating 
profits amounting to £&5m against a 
loss. 

Sir Colin said BA’s performance con- 
trasted with the rest of the airline indus- 
try, which last year lost $4J.bn (£2.7bn) on 
international sched uled services. 

BA’s progress reflected its cost-cutting 
drive, increased revenues and a 6 per cent 


recovery in first and business class traffic. 
Turnover rose 13.2 per cent to £6.3bn, 
while operating profits increased 60 per 
cent to £496m. 

BA carried 30.6m passengers last year, 
up A9 per cent Gains were made across all 
its routes, with European services show- 
ing a £ffim operating profit; the Americas 
Pi*aftm- Africa, the Middle East and Indian 
sub-continent yw rir n ; and the Far East arid 
Australasia £95m. 

However, disruption caused by the Irish 
Republican Army terrorist attacks on 
Heathrow airport in March cost the airline 
about £10m. 

While BA was concentrating an reaping 
the benefits of its global alliances, only 
Qa^ fax, the Australian aiding, was mak- 


ing any money. Mr Robert Ayling, BA’s 
manag ing director, said improvements 
were expected at the French affiliate TAT, 
following the launch of a restructuring 
and job cutting programme, and at the 
German affiliate Deutsche BA. Both had 
been “disappointing” last year. 

Overall, losses from associates declined 
by to £iim last year. The losses at 
TAT and Deutsche BA were offset by BA's 
share of profits from Qantas and by pre- 
ferred dividends from USAir amounting to 
£ZGm. 

Annual eannngs per share totalled 
3L3p, against 23Jp. The board is recom- 
mending a final dividend of 7B2p, giving a 
total of U-lOp, up 93 per cent. 

T-gy. Page 17; The USAir shadow. Page 27 


Investors 
block 
float of 
Matav 


Ely Nicholas Denton 
In Budapest 

Deutsche Telekom and 
Amerttech, the German and US 
telecoms companies, have 
blocked tite Hungarian govern- 
ment's plans to float Matav, the 

natinnal faTawmit Utility, On the 
Budapest stock market 

Hungary’s state holding com- 
pany, AV RT, sold 30 per cent of 
Matav to Deutsche Telekom and 
Ameritech in December, to east- 
ern Europe’s largest single priva- 
tisation. 

The AV ST,, with its residual 
shareholding of 67 per cent, 
hoped to sell a Anther tranche of 
shares to the Hungarian public 

this a utmn n. 

The public offering was to 
have been the centrepiece of toe 
conservative government's mass 
privatisation programme. Its 
delay is another severe blow to 
the scheme. 

Under local law, approval from 
shareholders with at least 75 per 
cent of the capital is required 
before a listing can be sought, so 
toe foreign groups have been 
able to block an immediate float 

A Matav c o mmi ttee investiga- 
ting possible timing for the float 
is to recommend hold- 

ing off until 1995 or even 1996. 

Deutsche Telekom and Ameri- 
tech believe Matav should go to 
toe stock market once their 
revamp of the utility becomes 
visible to the market Matav, 
which is at the start of a $4bn 
investment programme, last 
week reported after-tax profits of 
Ftl.Sbn (616m) for 1993 and 
expects only to break even tiris 
year. 

Moreover, an early flotation of 
Matav, one of Hungary’s largest 
companies, runs the risk of over- 
whelming the Budapest stock 
exchange, the least active of tire 
three main east European 
bourses. 

Deutsche Telekom and Ameri- 
tech fear a public offering tins 
autumn could only succeed if it 
were priced below the level 
inves to rs paid at the end of last 
yean $875m far a 30 per cent 

While it would be toe AV RT 
that bears the direct loss, US reg- 
ulations would force Ameritech 
to value its investment at the 
prevailing market price and 
make a writeoff. 

Deutsche Telekom and Ameri- 
tech have tittle incentive to use a 
premature flotation to increase 
their shareholdings, because 
their consortium has effective 
control of Matav’ s operating 
committee and day-to-day man- 
agement 

The Matav case exemplifies toe 
difficulties inherent to the Hun- 
garian authorities’ efforts to 
combine toe sale of controlling 
stakes to state companies to 
industry investors with later 
public offerings of its residual 

ffhnrphnhWng S. 


Sandoz sees its purchase of Gerber as a chance to balance its 
pharmaceuticals activities, write Ian Rodger and Richard Tomkins 


Executives of Sandoz, toe Swiss 
pharmaceuticals »t> 4 chemicals 
group, were at pains yesterday to 
emphasise that splashing out 
$3.7bn for a baby foods company 
did not mean that they were 
downgrading their commitment 
to drugs. Tf a good opportunity 
to take over a pharma company 
came along, we would do that 
too,” it said. 

But Sandoz’s purchase of Ger- 
ber Food Products suggests it is 
not as confident as its Basie 
neighbour Roche in the future of 
the increasingly turbulent phar- 
maceuticals business. Roche 
made a $53bn offer for Syntax, & 
US drugs company, three weeks 
ago, and Mr Fritz Gerber, Roche 
chairman, reaffirmed Us convic- 
tion that the research-based phar- 
maceuticals business would con- 
tinue to offer excellent profit 
potential 

By contrast, Mr Marc Moret, 

Sanring rh airman, spoke of “ach- 
ieving a better balance of our 
activities,’ 1 at his group’s annual 
meeting three weeks ago . 

Sandoz officials pointed out 
yesterday that the nutrition busi- 
ness, in contrast with drugs, was 
not capital intensive and was free 
from the sharp cyclical swings of 
the group’s existing agricultural 
and industrial chemic als busi- 
nesses. 

Assuming the acquisition goes 
through, the drugs arm’s share of 

Saiwin7 splps wiU darling from 49 

to 44 per cent, while nutrition’s 
share will rise from II to 20 per 
cent, surpassing the industrial 
chemicals division to make it the 
group's second largest division. 

The nutrition business includes 
special diets and feeding systems 
for the iD and the aged, perfor- 
mance foods and — 
drinks for ath- 
letes, and baby 
foods. Each 
product line has 
its own manu- 
facturing pro- 
cess and is 
likely to go 
through a differ- 
ent distribution 
channel. The 
only common factor is the per- 
ception of quality that enables 
suppliers to charge high prices. 
“Hie important thing Is to be in 
segments where you do not have 
to compete with the food giants.” 
says Mr Raymond Bren, Sandoz 
finance director. 

Sandoz got into nutrition in 
1967 with the acquisition of Wan- 
der, toe maker of Ovahine. 
Today, about 40 per cent of the 
division's sales come from clini- 
cal nutrition and health foods, 22 
per cent from Ovaltme and other 
food drinks, 26 per cent from 
baked goods and 5 per cent from 
sports drinks. 

Until last year, it looked as if 
the group was going to concen- 
trate on the high specification 
“nutriceutical” sectors, taking 
advantage of its pharmaceutical 
research a nd development skills. 
However, it then moved to bufld 
up consumer products, acquiring 
the Dutch Reforms group, Hol- 
land's largest producer of rice 
crackers and other cereal prod- 
ucts a nd an importer of dried 


A grown-up step into 
the baby food market 


Hew they - measure up 


Pretax profits 





tBnasafea totafc $&53hrt - 


Construction & anw tr omeot (8%) 


Pharmaceuticals (4996) 

T\ 

Chemicals (16%) 


Seeds 7%) 

xsZ 

Nutrition (iiM) ' 



aaaarfostoi 

Food 8 baby care 


CbBtKu'a warn g2*> 


Other (7%) '• 

XJ 


19PI 


1992 


The deal gives 
Sandoz a strong 
US platform for 
its nutrition 
prodnets 


of Fl42.4m ($23m). Sandoz also 
entered into a joint venture with 
Gazzoni, an Italian producer of 
h e ahh foods with annual sales 
equivalent to SFrlSOm (9128m). 

The Gerber takeover would be 
a giant step further in this direc- 
tion, providing Sandoz with a 
strong US platform for its own 
nutrition prod- 
ucts. However, 
as with Roche’s 
bid for Syntex, 
questions will be 
asked about the 
53 per ceit pre- 
mium over mar- 
ket value being 
offered. 

Gerber com- 
mands more 
than 70 per cent of toe US baby 
food market and usually achieves 
a very high return on its capitaL 
Recenfly, however, it has been 
struggling to maintain sales. Yes- 
terday it reported a decline in 
turnover from $L27bn to $L17bn 
for the year to March. Net profits 
fell from t!32&n to SLlSBm. 

The company's main difficulty 
has been a decline in toe number 
of American babies. Gerber has 
attempted to counter the impact 
of this tread by introducing prod- 
ucts such as foods that bridge the 
gap between infant gruel and 
grown-up food. Its Gerber Gradu- 
ates, introduced in 1991. are 
groaU mic ro wave itiahes such as 
chicken stew with noodles. 

It has also tried to target 
groups with higher birth rates. 
The Tropical line, for example - 
made with fruits such as papayas 
and mangoes — is aimed at His- 
panics, who also tend to buy 
more ready-made baby food than 
ot h er groups. 

Neither effort, however, has 
enjoyed much success and Ger- 


1903 


ties for US market share with its 
two main competitors, Ralston 
Purina’s Beech-Nut division and 
KJ. Heinz, leading to price cuts 
and higher marketing costs. 

To analysts like Mr Les Pugh 
of Salomon Brothers, toe Wall 
Street securities house, it has 
long seemed that Gerber’s best 
opportunities for growth lay in 
developing countries where birth 
rates are still high. 

Gerber itself has belatedly real- 
ised this and now sells its prod- 


ucts in at least 30 countries. But 
it has also concluded that it 
would take many years to build 
up an adequate international dis- 
tribution infrastructure. 

Both Gerber and Sandoz hope 
that the Swiss company will be 
able to provide that infrastruc- 
ture quickly, and so restore 
growth. 

But existing suppliers in those 
markets, such as Nestle, are 
unlikely to give up their posi- 
tions easily. 


BK Vision 
slips into 
the red 

By Ian Rodger hi Zurich 

BK Vision, the Investment fund 
controlled by Mr Mar tin Eb Deris 
BZ g rou p, tumbled into 

a SFrSO.lm (f2l.42m) loss in toe 
first four months of 1994 com- 
pared with a SFr9-9m profit to 
the same period last year. 

The loss was mainly due to a 
severe tmuround in the food’s 
trading performance from a 
SFr 40.4m profit to a SFr3.9m 
loss. 

The fund sold all of its sham 
in CS Holding, the financial 
group built around Credit Suisse, 
during the period, apparently at 
a loss. 

The CS Holding stake, consist- 
ing of 350,000 bearer shares, was 
acqnired last November in 
exchange for shares to CS sub- 
sidiary Leu Holding. 

Its market value was SFr258m 
at the end of 1993, but the CS 
share price fell 18 per cent in the 
first four months of 1994. 

Mr Ebner, BK chairman, sig- 
nalled in January that the fund 
would run down its CS holding. 
“The tasks of an owner share- 
holder cannot be credibly per- 
formed at two big Swiss hanks 
simultaneously,” he said in Us 
interim statement 

BK Vision is the largest single 
shareholder in Union Bonk of 
Switzerland with 5.6 per cent of 
toe capital worth SFrl.95bn at 
toe end of April. 

The CS sale left BK Vision's 
SFr2-5bn portfolio at the end of 
April bbldtog securities of only 
two financial companies, UBS 
and Zurich Insurance. 

The other factor to the fond’s 
loss was a SFr20-lm charge for 
aaminfa fa ntinn- Substantially all 
of this was a performance- 
related fee payable to BZ Trust, 
toe fund's manager, for the 
fourth quarter of 1993. 

These fees have been spectacu- 
larly high in the past year or so, 
reaching SFr250m to 1993. 

However, since the end of Jan- 
uary, the share price and net 
asset value (NAV) of BK Vision 
have been declining. 

Mr Ebner pointed out that they 
were now substantially below 
the thresh old va lue of SFr 1,758 
tut which future fees would be 
calculated. 

This means that no fees are 
likely to be payable for some 
time. 

A formula provides that fees 
are paid only if the lower of tire 
share price or NAV rises by more 
than 6 per cent in a quarter. Any 
declines must be recuperated (to 
the threshold value) before 
growth is calculated. 


fruits and nuts, with sales ber has had to contend with bat- 


Yen’s strength saps Nintendo 


By McMyo Nakantoto hi Tokyo 

Weak consumer spending and the 
sharp appreciation of the yen 
brought an abrupt end to the 
spectacular rise of Nintendo, toe 
Japanese video g a m e s maker, 
which yesterday reported a sharp 
drop to sales and pretax profits. 
Consolidated sales fell 24 per 

cent in the year to March 1994, to 

Y485.6bu (54-7bn) from Y634.7bn. 
Pre-tax profits plunged 44 per 
cent to YSZBbn, compared with 
YmSbn. 

This is the first drop in sales 
and pre-tax profits suffered by 
Nintendo since 1990 when it 
reported lower results because of 
a change In its year-end. Last 
year, Nintendo’s pre-tax profits 


overtook those of Matsushita, a 
company several times its size. 

Part of Nintendo’s difficulty 
last year stemmed from its heavy 
reliance on one product - video 
games - at a time when its main 
market to Japan was depressed 
and fierce competition life 
diffic ult to Europe and the US. 

Nintendo Is also heavily depen- 
dant on exports, but toe yen’s 
sharp rise against foreign curren- 
cies has cut deeply into repatri- 
ated profils. 

Mr Hiroshi Yamauchl, presi- 
dent, said that the yen’s strength 
had been so damaging on over- 
seas business that zt would be 
nice to be able to pull out of all 
foreign markets. 

Nintendo’s parent sales fell 17 


per cent to Y467.1bn with pre-tax 
profits falling 30 per cent to 
Yllilbn. 

The company forecasts that 
parent sales will fan again this 
year to Y410bn and pre-tax prof- 
its will rise to Y123bn, but it 
expects after-tax profits to 
decline to Y62hn from YBSbn. 

The company faces growing 
competition from consumer elec- 
tronics manufacturers which are 
moving into the video games 
market amid m»r-b fanfare. Mat- 
sushita has launched a multi- 
media games machine which has 
attracted solid sales on the 
strength of its superior graphics, 
while Sony is scheduled to 
launch an advanced video games 
machine later this year. 


Thit OHHOHHcrmmf appears as a matter of record only. 


upturn 



BRITISH BUS 

P L C 

&65 million 

ACQUISITION FINANCE 


£35 millio n 
EQUITY 

Provided equally by 


CHARTERHOUSE 


CINVen 


£30 million 
SENIOR DEBT 

Provided by 




BANK OF BOSTON 

Special Industries Group 


Advisers to British Bus PLC 
Robson Rhodes 
Wilsons 

Dibb Lupton Broomhead 


Advisers to equity providers 

Allen & Overy 

Coopers & Lybrand 


Lawyers to debt provider 
Taylor Joyns on Garrett 


onwtoa- fliW opM Uf Ct pitot Vti CtSVn arr m rmtrr. #000. 







18 


FINANCIAL TIMES TUESDAY MAY 24 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Enichem posts record net 
loss after heavy charges 


By Andrew Hffl in Milan 


Enichem, the chemicals 
subsidiary of Italy's state- 
controlled Eni group, yester- 
day announced a record net 
loss for 1933, after deliberately 
taking into account heavy 
extraordinary charges to pre- 
pare for a four-year restructur- 
ing programme. 

In 1993, the group lost 
L2,668bn ($l-7bn) - even higher 
than the L2,20Qbn loss Eni- 
chem itself predicted last 
November - compared with 
Ll, 560 b n in 1992. Charges relat- 
ing to research and plant main- 
tenance, the reduction of fixed 
costs, die closure of the least- 
efficient factories, and redun- 
dancies amounted to L1.013bn. 


Enichem forecast a "drastic 
reduction of losses for 1994”, 
and said it could begin to 
break even in 1995 or 1996. 
Much depends on the health of 
the core markets of base chem- 
icals, polyethylene and elasto- 
mers, which win be left over 
once asset sales are completed. 

To help Enichem through 
the worst, its parent company 
is expected to back a large cap- 
ital increase - possibly as 
much as L3,0Q0bn - at a share- 
holder assembly at the end of 
next month. Any such cash 
injection wQt be carefully ana- 
lysed by the European Com- 
mission for possible state aids. 

Enichem 's revenue fell to 
Ll0,643bn in 1993, although 
that figure was roughly in line 


with 1992 when adjusted for 
disposals. 

The group has already 
embarked on a four-year pro- 
gramme of restructuring and 
l£500bn of asset sales in an 
attempt to bring down its debt 
Net financial debt stood at 
L8,2S2bn at the end of last 
year, compared with L7,391bn 
a year earlier. The company 
said it wanted to bring debt 
down to around L5 or L6 times 
shareholders’ funds. 

Servicing the debt cost Eni- 
chem L805bn last year, 
although that was L8Shn less 
than in 1992. Even before 
financial charges, the operat- 
ing loss was 86 per cent higher 
than in 1992 at L572bn com- 
pared with L30Sbn. 


BAT reshapes Eagle Star 


By Richard Lap per in London 


BAT Industries, the 
Anglo-American tobacco and 
insurance company, yesterday 
announced the departure of Mr 
John Bishop as rihatrmart of its 
Eagle Star Insurance subsid- 
iary, in a management reor- 
ganisation which signals a 
shift in approach to the 
increasingly competitive gen- 
eral and life insurance mar - 
bets. 

Mr Stephen Melcher, cur- 
rently chairman of Eagle Star 
Life, becomes chief executive 
of Eagle Star, taking control of 
life and general insurance. 

Alongside other wmrmgimnpn t 
changes, the aim is to 


strengthen the Eagle Star 
“brand’ 1 , increase control over 
distribution and raise the pro- 
file of Far East operations. 

Mr George Greener, chair- 
man of Eagle Star, said cus- 
tomers were looking for a pow- 
erful brand to meet all their 
insurance needs. 

Mr Paul Swinbum, director 
of corporate communications, 
said : "We went down the road 
of trying to build different 
companies. There is a sense in 
which these companies need 
some sense of independence, 
but frankly it had gone too far. 
People picked up the ball and 
ran off the field with it" 

The company said it aimed 
to tighten links with intermedi- 


aries who sell its products, 
increasing speculation that 
BAT may soon take over a 
building society. 

It will also give a higher pro- 
file to its telephone car insur- 
ance operation. Eagle Star 
Direct 

Mr Greener said the restruct- 
uring recognised growing simi- 
larities between businesses in 
the EU, and developments by 
the company in fast growing 
Far East insurance markets. 

Mr Pierre Chartrand is to 
became managing director of 
the Far East life and general 
business. Mr Clive Coates, 
finance director, becomes dep- 
uty chairman, and rihairmnn of 
the South African subsidiary. 


Exco float value soars to £200m 


By Simon Davies in London 


Exco, the fixed-income and 
money-broking aim of British 
& Commonwealth Holdings, is 
to return to the stock market 
almost eight years after it was 
bought by the finance group 
which collapsed in 1990. 

Exco is expected to carry a 
stock-market value of more 
than £200m ($300m), enahKng 
B&CTs administrators to raise 
at least £80m freon the flota- 
tion. This compares with the 
£7Sm value attached to the 
business in June 1992, when 60 


per cent was sold to institu- 
tions and senior staff after flo- 
tation plans were scrapped. 

One analyst said: "The big 
profits have already been made 
by the investors who bought in 
daring 1992.” But the company 
argues that a push into emerg- 
ing markets, combined with 
new products, should enhance 
profitability. 

Exco profits have surged in 
the past two years, spurred by 
increased activity in the 
foreign exchange and debt 
markets in which it operates. 
Profits increased 52 per 


cent to £4L5m in 1993. 

Subject to pricing, B&C wifi, 
sell its entire 40 per cent hold- 
ing. Other shareholders - 
senior employees own 15 per 
cent and Caledonia Invest- 
ments owns 27.4 per cent - 
have yet to decide. 

Exco operates a 24-hour 
global business, with offices in 
Tokyo. London and New York. 

Money-broking operations, 
which include spot foreign 
exchange, money markets and 
derivatives, all increased prof- 
its last year. 

Lex, Page 16 


Poland may 
revise bank 


disposal 


programme 


By Christopher Bobirwki 
in Warsaw 


Mr Grzegorz Kolodko, 
Poland’s new finance minister, 
has suggested that the govern- 
ment's bank disposals pro- 
gramme could be revised. 

"The first question which we 
wifi be answering by the end 
of next month will be whether 
we consolidate the state-owned 
hanks or privatise them," he 
said in a new sp aper interview. 

The finance ministry has 
beat planning to sell several 
more state-owned banks, 
including the Krakow-based 

Bank Przemyslowo Bandlowy 
(BPH) which was due for pri- 
vatisation by the middle of 
this year. It then planned to 
consider merging the remain- 
ing state banks, either with 
those already privatised or 
with each other, before 
privatisation. 

Mr Kolodko suggested the 
BPH, one of Poland’s largest 
banks, could be merged with 
others before being offered for 
sale. 

Meanwhile, Mr Jaxrusz 
Quandt, head of the BPH, is 
pressing for the bank to be pri- 
vatised through a share sale to 
investors. This would avoid 
the need for a strategic inves- 
tor as recommended by OS 
First Boston, which has been 
ad vising on the disposaL 

So far, two banks have been 
sold: the Poznan-based Wielko- 
polski Bank Kredytowy, in 
which the European Bank for 
Reconstruction and Develop- 
ment has a 28.5 per cent share; 
and Bank Slaski, where ING of 
the Netherlands owns 25J per 
emit of the equity. 

The state-owned Bank 
Gdansk is thought to be next 
in line for privatisation after 
the BPH. 

Mr Kolodko also suggested 
that PZU, the state-owned 
insurer which controls half of 
the country’s insurance mar- 
ket and reported a 325bn zloty 
(¥9.6m) net profit last year, 
should be broken up. lUs goes 
against the views of Mr 
Roman Fulneczek, chairman, 
who says PZU should be kept 
together and privatised 
through the sale of shares to 
local investors, management 
and. employees. 


Pharmacia ripe for state sell-off 


The Swedish drug group is in form, writes Christopher Brown-Humes 


S teering one of the world’s 
top 20 pharmaceuticals 
wwnpflniw; through Swe- 
den's largest privatisation 
would have seemed a remote 
prospect indeed to Mr Jan 
Ekberg eight years ago. The 
Pharmacia chief executive was 
more concerned with saving 
his loss-making Nordic-orien- 
tated company from extinction. 

The company survived, 
thanks to restructuring and a 
spectacular acquisition pro- 
gramme which has taken 
annual sales to SKr27bn 
($3.5bn) in 1993 from SKrl^bn 
in 1986. "This company has 
dose more deals than some 
merchant banks," jokes one 
observer. The result is that the 
group has become the true 
multinational of Mr Ekberg's 
aspirations, ranking as Swe- 
den’s fiflh-biggesfc company by 
market capitalisation. 

The SKrlQbn privatisation 
gets under way today with the 
launch of the prospectus. The 
state plans to sell up to 62J2m 
A shares in the group - 47.4 
per cent of the votes - to retail 
investors and international 
institutions. It wifi, however, 
bang on to a 10.1 per cent vot- 
ing stake to ensure ownership 
stability and prevent a hostile 
takeover. This is an important 
consideration, given that Phar- 
macy's second-largest share- 
holder, the vehicle group 
Volvo, plans to sell its 28 per 
cent stake in 1996. 

In terms of sales, Pharmacia 
is even bigger than. Astra, Swe- 
den’s high-flying drugs com- 
pany, although the two compa- 
nies are very different Astra 
has achieved its growth organi- 


cally, whereas Pharmacia has 
depended heavily on acquisi- 
tions. While Astra's fortunes 
have soared on the bade of sev- 
eral blockbusters, Pharmacia 
has relied on dominant market 
positions in niche areas. 

This d ominance is reflected 
in the feet that in no fewer 
than five areas - cataract sur- 
gery, allergies, growth hor- 
mones, nutrition and smoking 
cessation - the group has the 
leading world position. 

Because of this profile. Mr 
Ekberg does not appear unduly 
worried about the company’s 
exposure to government efforts 
to reduce healthcare spending. 
Its broad product spread less- 
ens the impact of a dampdown 
in any particular area. How- 
ever, it also benefits by having 
a relatively high exposure to 
the hospital sector, rather than 
the retail market where many 
of the cuts have been focused. 



Jan Ekberg: group not looking 
for a blockbuster product 


A good example is Italy, 
Pharmacia's third- 
largest market Phar- 
maceuticals sales there are 
estimated to have fallen by 
around 20 per cent in the first 
quarter - yet Pharmacia's 
sales were down just 1 per 
cent 

Following its extensive 
acquisition programme, cul- 
minating last year in the 
$1.3bn purchase of the Italian 
pharmaceuticals group Farmi- 
talia Carlo Erba (Flee), Phar- 
ma cia’s immediate focus is 
cost-cutting. It ahns to achieve 
annual savings of SKrl2tm by 
1996 as part of a drive to lift Its 
operating margin, to 20 per 
cent from 13J5 per cent at the 


rad of last year. Hie group has 
already merged its marketing 
companies with Rice’s: now the 
main task is to reduce produc- 
tion capacity, spread over 46 
plants in 15 countries, by as 
much as 50 per cent over the 
next five years. 

Cost-cutting was the main 
reason for the company’s unex- 
pectedly -strong first-quarter 
performance. The operating 
margin rose to 16 per cent, 
despite a sluggish 3 per cent 
increase in volumes and lower 
sales of the company's two 
main drugs, Genotropln 
(growth hormones) and Healon 
(cataract surgery). 

Longer-term, Mr Ekberg’s 
target is to grow at least as 
fast as the market. For this , be 
is pinning his hopes on a much 


Halifax shows interest in a society merger 


By ABson Smith in London 


Halifax, the UK's largest 
building society, yesterday 
expressed an interest in merg- 
ing with another society, in a 
further sign of the growing 
pressure for a restructuring of 
the financial sendees industry. 

Mr Jon Foulds, chairman, 
said Halifax wanted to be able 
to play its foil part in the "rad- 
ical rationalisation” of the 
mortgage lending industry. 
"This could include a merger 
with another society.” he told 
Halifax’s animal general meet- 


ing. With assets of £67bn 
(JlOO.Sbn), Halifax is already 
almost twice the size of the 
next largest society, Nation- 
wide. 

In 1993 it made about 18 per 
cent of total net advances in 
the UK mortgage market Only 
Abbey National, a former soci- 
ety which is now a bank, lent 
on a Similar scale. 

Mr David Gilchrist Halifax 
corporate development man- 
ager, said the society had 
wanted to correct the impres- 
sion that it was “standing 
aloof” from possible mergers. 


Halifax would be interested in 
a merger which increased its 
mortgage market share. 

In fids context he made it 
clear that one of the changes 
Halifax was seeking from the 
current Treasury review of 
building society legislation was 
a relaxation of the strict rules 
on the bonus payments that 
can be made from reserves in a 
merger between two societies. 

The Halifax declaration 
introduces further speculation 
into the societies sector, which 
has been galvanised by Lloyds 
Bank’s £l.8bn cash offer 


for Cheltenham & Gloucester, 
the sixth largest society. 

If the Lloyds bid overcomes 
the legal challenge which 
begins today in the High 
Court, then tt is likely to act as 
the trigger for other banks 
which have said they would 
, like to buy societies to press 
ahead with making offers. 

Mr John Wrigtesworth, soci- 
eties analyst at stockbrokers 
UBS, said the most attractive 
candidates for Halifax were 
likely to be Yorkshire, Bir- 
mingham Midshires, Coventry, 
Derbyshire and Northern Rock. 


■L:l 


greater presence in the us 
market, which accounts for 
just H per cent of sales, and on 
a range of products in the com- 
pany's RAD pipeline. The US 
effort will be assisted in late 
1995, when the group will be 
free to market Genotropln, a 
drug jointly developed with 
Geneutach, for the first tin y* 

Pharmacia's R&D pipeline 
indudes seven drugs in phase 
ffl of clinical trials and six in 
phase H The most proajbdng 
Of the farmer group are Latan- 
oprost (for the eye disorder 
glaucoma), Eltanolone (an 
anaesthetic), Factor VIII (a 
blood-clotting agent) and 
Cabergollne (for Parkinson's 
Disease.) Each of the drugs is 
expected to have annual sales 
of at test SKiSOOm, 

Some analysts grumble that 
Pharmacia hasn't got a WOtoo- 
dollar blockbuster up its 
sleeve. *WU never get one. 
We’re not -even aiming far 
■one,*’ says Mr Ekberg only 
half-jokfngly. It is part of the 
niche strategy that foe group 
avoids overdependence on one 
or two drugs. 

The danger is that as compe- 
tition intensifies in the big 
therapeutical areas, some of 
the world's leading drugs 
groups will begin to target the 
niche areas in which Pharma* 
da operates. Mr Ekberg, how- 
ever, does not seem to be wor- 
ried by this. . . 

"These fairly limited areas 
might not be of core interest 
for the big companies. If you 
are a company with sales of 
SKrSObn looking to grow by 
five to ID per cent, you must go 
for huge market areas.” 


W , 

fi 




sfli 


j$ian 


n>lt’ !’ 


This announcement appeal* as a matter of record only; 


May 1994 


INVESTCORP S.A. 


US$ 300,000,000 

Eurodollar Term Facility 


Arrangers/Smior Lead Managers 


Al Bank A I Saudi Ai Fransi 
The Bank of Tokyo, Ltd. 
Burgan Bank S.A.K. -Kuwait 
Chemical Bank 
Deutsche Bank Group 
The Saudi British Bank 
Society Generate 


The Arab Investment Company SAA. 
Bankers Trust International PLC 
Chase Investment Bank Limited 
Credit Suisse 
NatWest Capital Markets Limited 
Saudi National Commercial Bank, OBU-Bahmin 

WestLB Group 


Senior Lead Monagere 


Bank of Bahrain and Kuwait B.S.C. 
Banque Paribas 


The Bank of Kuwait and the Middle East K.S.C- 


Co Lead Managers 


Bank Austria Aktiengesellschaft, Wien 
Kredietbank International Group 


Bank erf Scotland 
Lloyds Bank Pic 


Managers 


Via Banque 


WbstlandAJtrecht Hypotheekbank N.V. 


Co Managers 


Arab Bank pic 

Bayerische Vereinsbank Aktiengesellschaft 
Daiwa Europe Bank pic 
Grindlays Bahrain Bank B.S.C. (c) 

Misr International Bank SAE (MIBank) 
Norddeutsche Landes bank Luxembourg S.A. 


Banque et Caisse d'Epargne de I’Etat, Luxembourg 

Bikuben 

Emirates Bank International Limited Dubai 
Malayan Banking Berhad 
Nomura Investment Banking (Middle East) E.C. Bahrain 


Participants 


Hua Nan Commercial Bank, Ltd. New Agency 
Kleinwort Benson Limited 
Arab American Bank 


The Commercial Bank of Qatar Ltd. (Q.S.C.) 
Okasan International (Middle East) EC. 
Ghiao Tung Bank Europe N.V. 


Agent 


The Chase Manhattan Bank, NA. 


Providers o< Funds 


Al Bank Al SautSAl Fransi • The Arab Investment Company SAA * "The Bank of Tokyo, Ltd. Bahrain Office • Bankers Trust 
Company • Burgan Banks A K. Kuwait • The Chase Manhattan Bank, NA • Chemical Bank Bahrain Branch • Credit 
Suisse • Deutsche Bank Group • National Westminster Bank Pic • The Saudi British Bank • Saucfl National Commercial Bank, 
OBU- Bahrain • Sotitete G6n6rale • Westdeutschel^ndesbank Girozerrtrale London Branch * Bank of Bahrain and Kuwait B.S.C. 
The Bank of Kuwait and the Middle East K.S.C. • Banque Paribas • Bank Austria Aktiengesellschaft, Wfen • Bank of Scotland 
KB Luxembourg Finance Dublin • Lloyds Bank Pic • Via Banque • Westtend/Utrecht Hypotheekbank N.V. • Arab Bank pic, 
OBU -Bah rain • Banque et Caisse d'Epargne del'Etat Luxembourg • Bayerische Vereinsbank Aktiengesellschaft • Bikuben 
Daiwa Europe Bank pic ♦ Emirates Bank International Limited Dubai * Grindlays Bahrain Bank B.S.C. (c) • Malayan Banking 
Berhad • Mfcr International Bank SAE (MIBank) • Nomura Investment Banking (fcfiddle East) EC, Bahrain • Norddeutsche 
Landesbank Luxembourg S A • Hua Nan Commercial Bank, Ltd. New York Agency * The Commercial Bank of Qatar Lid. (Q.S.C.) 
Ktemwort Benson Limited • Okasan International (MWcfle East) 6.C. • Arab American Bar* ■ ChiaoTbng Bank Europe N.V. 



We helped Zoe beat 
a brain tumour twice. 


Now we need your help to 
continue the fight for thousands of others . 


When Zoe was just 17 months old, 
her parents received the dreadful news that 
their little girl had a malignant brain tumour 
and needed radiotherapy. Zoe won her fight 
and lived quite happily until she was 12. 


scientists are fighting over 200 forms of 
cancer. Thousands of children like Zoe are 
relying on their help. And yours. 


Please make a donation today and 
help thousands more people win llte 
cancer. 


Unfortunately that was when the cancer 
returned. The situation was made even n — _ mmm mm mm mm mm mm mm mm 
more serious because Zoe had already • Qjyg fNSOplG With C3HC0f " 
received the maximum dosage of 1 8 

radiotherapy when treated as a baby. 

Again, Zoe beat the disease thanks to a 
pioneering new treatment supported by 
the Imperial Cancer Research Fund. 


wire peupic wiui cancer : 

I a fighting chance ■ 


1 


Over 90p in every £1 donated rms directly into our viol research 
I would like m make a donation of £ 


1 


| {Cheques payable wi Imperial Cancer Research Fund] 

Or charge £ to my .^caWVWAmeVDin«»A^hwity Card No; 


I 


Today the cure rate for childhood cancers 
is over 50%. Very encouraging when you 
realise that just 25 years ago, around 90% 
of children with cancer died. 


I 


-LJ-J I I . 

I Expiry Oaw ( Signature 


i r n i i i~m 


1 


Mr/Mre/MWMa 


Address 


Yet despite the importance of our work, 
we rely almost entirely on voluntary 
contributions. Right now our doctors and 


Postcode 


Imperial dancer 


Research Fund 

HapJknd CNtty KM. 00BKH 


Please return your 
donation tot 

imperial Cancer 
R (Match Fuad 
FREEPOST (WCKKtfl) 
London WC2A3BR. 


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twice- 


Berlin, Bonn, Budapest, Chemnitz, Dresden, Dussddorf, Erfurt, Essen, Frankfurt, Hamburg, Hong Kong, Johannesburg, Leipzig, 
London, Luxembourg, Milan, New York, Nuremberg, Paris, Prague, Singapore, Stuttgart, Tokyo, Toronto, Vienna, Warsaw, Zurich. 


r Highlights of the 1993 business year: 
— DM 260.2 bn consolidated balance 
sheet (+21.5%) 

DM 87.4 bn securitized liabilities 
(+15.2%) 

DM 156.0 bn total lending volume (+19.0%) 
X — DM 143.0 bn total deposits (+26.7%) 

— DM 9-0 bn own funds (+58.4%) 

X — DM 214.5 m additions to reserves 
f - 7% dividend. 

Bayerische Landesbank, Brienner Strasse 20, D-80333 Munchen. 


Bayerische Landesbank 


This naomcaaest appear) mi a matter of record cobr 


Eridania Beghin-Say 




ERIDANIA BEGHIN-SAY 

FF 1,500,000,000 
6.50 per cent. Bonds dne 2002 

Issue Price: 100*33 per cent. 


Sociftd Gdndrale 

Paribas Capital Markets 


Cabsc des ZMpdtset Consignations 


Braque SsnPaolo 

BNP Capital Markets Limited 

J.P. Morgan * G* SLA. 

Bases CoauMRUe ItaBaaa 
B m pH da Loan* 

Banqie Indosnex 

Basque Worms 

ctcruk 

CjTfl Ahm GmHoo 
Rabobask Ncderiand 


is Deutsche Bank France SNC 

Basque S.G. Wariwrg 
Credit Lyonais 
Morgan StndqrSA. 

Baaqae Brasdka Lambert &A. 
Bang— Fr aoft to e ds Co— gee BaMttear 
Buim Nwti France 

Crime Ctatrak dea Basques FopaUra 
CNtit Apkaie 
Samel MoatatH & Co. Iinritad 


Man* 1994 


■ 'H 


FINANCIAJL TIMES TUESDAY MAY 24 1994 

The Limited may 
expand Bath & 
Bodyworks unit 


INTERNATIONAL COMPANIES AND FINANCE 


Talisman Energy discovers independence pays off 

The Canadian oil company has concentrated on its upstream activities, reports Bernard Simon 


The Limited, the US stores 
group, is considering interna- 
tional expansion of its fast- 
growing Bath & Bodyworks 
division, with stores to open 
overseas, possibly within the 
next year, AP-DJ reports from 
Columbus, Ohio. 

Mr Leslie Wexner, cfo ah-niftn 

and chief executive, said after 
the annual meeting that the 
company also planned to add a 
net 400 new stores In 1994 
across the various divisions. 

The group, however, will 
continue to reduce the total 
number of stares in scone edits 
biggest divisions, such as Ler- 
nsr New York, and its flagship 
Limited Stores. 

It plans to add more th an ioo 
Structure menswear stores and 
more than 100 Bath & Body- 
works stores, as well as adding 
more Victoria’s Secrets stores. 

The Limited, Limited Inc’s 
large but troubled ladies cloth- 
ing retailer, will reduce its 
total stores by 40 during 1994, 
the company added. 

Mir Michael Weiss, vice-chair- 
man Of Limited lm* f ha« tplreq 


personal control of The lim- 
ited Stares, and said the com- 
pany was redefining its cus- 
tomer. “We've defined it more 
closely for the woman who 
wants fashion but isn’t trendy 
and is concerned about price." 

limited, which has success- 
fully launched spin-off cata- 


Victoria’s Secrets swimsuit cat- 
alogue, said this autumn it 
would "test” a catalogue tor its 
Structure menswear stores. 

By the end of 1994, Limited 
will be operating more than 
5,000 stores, including Henri 
Bendel, Lane Bryant and 
Express stores: 

Mr Wexner said that white 
the company had been and 
remained cautious about inter- 
national expansion, he believed 
some of thftfr brands t»*h inter- 
national potential 

The possible International 
expansion of Bath & Body- 
works has been under study by 
the company for the past year 
and the company could wia^R 
announcements cm expansions 
within the next month. 


CSFB buys stake in 
Russian oil producer 


J im Buckee’s career has 
taken some surprising 
turns since he arrived to 
Calgary to September 1991 as 
president of British Petro- 
leum's Canadian subsidiary. 
Mr Buckee’s job was to get rid 
of BP Canada's mtemg inter- 
ests and narrow its focus to the 
upstream business of oil and 
gas exploration, and produc- 
tion. ; 

Less than a year after his 
arrival the UK-based oft and 
gas group decided to spin off 
its 57 per cent stake in BP Can- 
ada to public Investors. One 
condition of the deal, however! 
was that Mr Buckee, after 15 
years service with BP, would 
remain to Calgary at the helm 
of the newly independent com- 
pany, which was renamed Tap 
icnwin Energy. 

. Mr Buckee, who has a doc- 
torate in astrophysics from 
Oxford, has stuck to bis origi- 
nal mandate of confining the 
company to upstream activi- 
ties. 

At the same time, he has 
spearheaded a spectacular 
burst .of growth, which culmi- 
nated in Talisman's proposal 
this week to pay about C$1 .81m 
(USSLShn) to and shares 
for Bow Valley Energy, also 

Desjardins- 

Laurentian 


based in Calgary. British Gas, 
which owns 53 per cent of Bow 
Valley's shares, has approved 
♦ha deal 

Tim Bow Valley acquisition 
will catapult Talisman into the 
top ranks of the world's purely 
upstream energy companies. It 
is now tome than treble the 
size - measured by oil and gas 
output - of the old BP Canada. 

Operating cashflows soared 
by 88 per cent to the first quar- 
ter to C$£L5m, dne to last 
year’s purchase of Encor, 
another western Canadian oil 
and gas producer, as well as 
higher gas prices and a weaker 
flarwiHmi dollar. 

First-quarter earnings 
climbed by almost 70 per cent 
to CSX 3. 3m, with revenues 
more than doubling to C$UQql 

Bow Valley and Talisman 
together produced a total of 
500m cubic feet of gas a day 
last year. Their combined oil 
output was 53,000 barrels a 
day. 

These figures mfl rise sub- 
stantially this year, as produc- 
tion. rises from the North Sea 
East Brae field, in which Bow 
Valley has a 1&3 per cent inter- 
est. Its share of production 
from Bast Brae will rise to 
about 14,000 barrels of liquids 


prcrtictionjharmbpBrday TXXtej 


; - -^uuuwiui» vawra&poruBy uuunp 

600 ; i iii « ii n» . ; ' . ' . ‘--'i- *n ' • 'l '..".‘60 - T. ■ __ 

•• : ... D .. - 




■ 'tjJEUMmUE 4 .yA' g’J a Jl — h u , „i. 


plus 38m cubic ft of gas a day 
by the mid of the year. 

Mr Buckee has no qualms 
about Talisman’s rapid growth 
at a time when many inte- 
grated oil and gas producers 
are shedding assets. "Inv esto r s 
prefer a purer play than the 
integrated companies can pro- 
vide,” he says, adding that 'toy 
expertise is in upstream only. I 
dent wish to fiddle tor things 
that I don't understand”. . 

Mir Craig Langpap, energy 
analyst at Nesbitt Thomson to 
Calgary, describes Talisman's 


TTiflnagemBn t as “very astute 

and very HWneH to finding ofl 
and gas”. It has succeeded in 
fully replacing its liquids and 
natural gas production with 
new reserves tor the past three 
years to a row. 


ccordtag to Mr Lang- 
pap, the Bow Valley 


benefits. First, it will boost Tal- 
isman’s exposure to oft, giving 
it a roughly 60-50 balance 
between oft. and gas. Second, 
Bow Valley’s properties are 


concentrated to the North Sea 
and two areas of Alberta. Talis- 
man expects that by combining 
the two companies, it will save 
C(10-CSL5in ft year to operating 
costs. 

Mr Buckee says Talisman 
will continue to stick mainly to 
gas exploration to western 
Canada and to oil to other 
parts of the world. Capital 
spending this year (excluding 
Bow Valley) is expected to 
reach C*225m, about 50 per 
cent higher than 1993. 

According to T alisman ’s lat- 
est annual report, “even to the 
event that lower oil prices per- 
sist for a substantial part of 
1994, we intend to maintain an 
aggressive capital investment 
programme". 

But Mr Buckee eschews any- 
thing too adventurous. Tm 
not to the elephant hunting 
business and I don't particu- 
larly like deep water,” he says. 
*T want relatively proven but 
less mature basins." 

The gas exploration pro- 
gramme is especially geared 
towards deep and relatively 
unexplored reservoirs to west- 
ern Canada, centred on the 
Rockies foothills in north-east 
British Columbia. 

Offshore oil activities have 


so far focused on Cuba and 
Algeria. But the Bow Valley 
acquisition will broaden Talis- 
man’s reach to the North Sea 
and Indonesia. Bow Valley and 
its partners are working out 
marketing arrangements for a 
sizeable gas field to the Corri- 
dor area of South Sumatra, 
from which the Canadian com- 
pany’s share would reach 100m 
cubic ft per day. 


U nder the terms of the 
Bow Valley deal Brit 
ish Gas will acquire 
enough Talisman shares to 
mflfrp it the Qnpflifln compa- 
ny's biggest single p*«»T*hni<igr 
with a stake of between 8 per 
cent and 16 per cent But Brit- 
ish Gas will not seek board 
representation, and it will 
come as no surprise if it 
also puts flwqw shares on the 
block in the not-too-distant 
future. 

After spending the fiist 20 
years of bis career with big 
integrated oil companies, Mr 
Buckee clearly relishes Ills 
independence. “Control blocks 
are often seen as security, but 
patently to the case of BP Can- 
ada and Bow Valley, they’ve 
been completely the opposite,” 
he observes. 


■*«»vk*ty nw 


CS First Boston, the only 
western institution with a Rus- 
sian securities licence, has 
bought 2A7 per cent of Lukoil 
Russia’s biggest oil producer, 
Reuter reports from Moscow. 

Bank gM the stake 

was bought at a nationwide 
auction to April when Lukoil 
offered 7.42 per cent of its 
shares to the public in 
exchange for privatisation 
vouchers, 

The Lukoil conglomerate, 
based to Western Siberia, con- 
sists Of three oil production 
enterprises which together 
account tor about 15 per emit 
of total Russian crude output 

It also has two oil refineries 
to Perm and Volgograd, mar- 


keting outlets, banking and 
other financial units and is 
talking to a number of foreign 
ofl firms including Italy's Agip 
to set up ofl production ven- 
tures abroad. 

The 45 per cent state-owned 

entnpany has anrmrpy « ^ | plane 

to sell more shares for cash at 
investment -tenders later thin 
year. Foreign investors can 
hold no more than 15 par cent 
of shares to big Russian ofi 
companies 

CSFB has already bought 
shares to over 30 Russian com- 
panies, bank officials say. They 
estimate that the- bank has 
invested more than f&QQm in 
Russia’s gm urg in g equities and 
debt markets so for this year. 


New role for Oporto SE 


By Peter Wise In Uabon 

The Oporto Stock Exchange is 
to ctose' on June 1 before 
reopening to January as a 
national fixtures and options 
market,- officials said. The Lis- 
bon Stock Exchange will take 
oyer eR Portugal’s spot market 
trading from the same date. 

The decision follows a pro- 
posal made in February by Por- 
tugal's stock exchange com- 
mission (CMVM) to replace the 
spot market to Oporto with a 
derivatives exchange and 
develop a national spot market 
to Lisbon. 

Oporto and Lisbon currently 
act as separate trading floors 
for a national spot market on 
which 118 shares and bonds 
are listed. A total of 12 shares 
and bonds listed only on Opor- 


to’s second market foe smaller 
companies wffl be transferred 
to Lisbon. 

The Lisbon stock exchange 
wfil pay Oporto Es2.4hn (?14m) 
over three years as compensa- 
tion far tiie Joss of the spot 
market. The CMVM proposal 
was made to end what it con- 
siders unnecessary rivalry 
between the two exchanges far 
the same small spot market 

Analysts said a futures and 
options market was needed to 
increase the liquidity and 
efficiency of Portugal’s 
capital markets and improve 
conditions for corporate financ- 
ing. 

The measure follows the 
announcement of a radical 
reform package for the bond 
market which is due to take 
effect on June 23. 


By Robert Gtobens In Montreal 

Desjardins Laurentian 
Financial, the fttMynrfg) ser- 
vices group controlled by the 
Desjardins credit union move- 
ment, reported first-quarter 
profits of Cf&2m (DSS6.66m) 
or 18 cents a share, after a 
Cf9-5m reorganisation c ha rge, 
on revenues of C$983m~ 

It was the first r e portin g 
period since the December 
1993 takeover of the Lauren- 
tian Group by DesJardins to 
form a financial services and 
banking group with corporate 
assets of CfSSm. 

Desjardins Laprentian, with 
Cf22bn assets, brings together 
life insurance, general insur- 
ance, trust operations, invest- 
ment banking and consumer 
banking with subsidiaries to 
•Canada, the PS and Britain. It 
is 7.7 percent bald by La Vio- 
tofcre of France qnd its shares 
are publicly traded in Toronto 
and Montreal 

Imperial Life, one of its big- 
gest units, earned C$50,000 to 
tiie first quarter after a 
C$2£m special charge by tts 
British subsidiary, 'fids com- 
pares with C$5.6m a year ear- 
lier. Performance was also 
affected by the north Ameri- 
can p ro p er ty market collapse, 
but overall Canadian and US 
operations were still profit- 
able. 

■ Desjardins Laurentian will 
set aside C$40m this year to 
cover reorganisation costs. 
“The full benefits will bo felt 
in 1996,” said Mr Humberto 
Santos, president 

Two life units may be 
merged but asset sales ore 1 
unlikely, he added. 


BALANCE SHEET REFLECTS 
STRONG PERFORMANCE. 




20 


FINANCIAL TIMES TUESDAY MAY 24 1994 



Soci&e Anflnyme 

Registered Office: 33, rue dn Prince Albert. IwIIea (Brussels] 
Brussels Hade Register No. 5554 


Since the quorum required try law was not reacted at the 
Extra ordin ary General M&corag of 17th May 1994, that meeting 
was not in 2 position to pass the naohitkms put an its agenda. 

As a result a new Extraoniiaaiy General Meeting shall be convened, 
which shall pass tbe relevant rcsohrtitms irrespective of the mi niter 
of shares represented. It will be fceld inunediately prior to 
the Ordinaiy General Meeting of 6th June 1994. 


Shareholders are hereby invited to attmri; 


1. The second Extraordinary General Meeting which 
will be held, on Monday 6th June 1994 at 9.30 a.m., 
44, me dn Prince Albert at TwTIaw (Brussels) 
to transact the following tmsiness: 

Agenda 

. Special reports: 

1. from the Board of Directors and the Rrteraal Auditor in acorn* 
dance with article GO of the Belgian Company 1 Law: 


2. from the Board of Directors on the following proposed ahaatuos 
to the articles of association. 


EL Alterations to the following provisions of the articles of association: 

1. Composition of the Executive Committee (artidel9) 

2. Other alterations to the articles of association; 

Legal status of type C shares (artides 7 aid 9), authorized capital 
* (article 10fe), appointment of Directors (article 15) .Board tfeffis- 
eration [article 21], attendance at general meetings (articles 34, 
37 and 38]. 


2. Tbe Ordinary General Meeting winch be held an 
Monday 6th Jmte 1994, following the dose 
of the Extraordinary General Meeting, 
to transact the following business: 


Agenda 


1. Reports of the Board of Directors on the operations of the financial 
year 1993, reports of the External Auditor 


2. Apprmml of flu» Artnruil Art' j OTiit K finrrtu- financial ywnr 1003 - TSwfri- 

bntion of net earnings mA decla ration nf Ah nrUmA 


3. Discharge to be given to the Directors and to the External Anri ft nr 
for their acts ifciring the fiwmcmi year 

4. Board of Directors 

a. Decrease in the number of Directors from sixteen to fifteen. 

b. Appointment of three Directors to replace Messrs. Clandc Lontrel, 
Jean-Jacqpes \&n de Berg and Andre Ganshof van der Meersch, 
who terminate their term of office and, being eligible, have offer- 
ed themselves for re-election for a new term of six years, 

5 . Rutmui Auditor : 

Appointment of a substitute External Auditor to replace Me Dirk 
Smets. who has decided not to apply for re-appointment 

6. Other business. 


Tbe Board of Directors hereby informs the holders of bearer shares 
that the following formalities most be observed in order to attend these 
meetings. 

• Thty are asked to lodge their shares temporarily and to have them 
deposited at the Beggtaed Office of o u r ca npaiy or at]. Saury Sdxodar 
Wagg & Co Ltd-, by Friday 3rd June 1994 at the latest 

The hank mentioned ahtnreTflaiillmiijetltn rlp«rign*t«* nHi»r «»«tgK- 

Ushments where Sohay shares may also be lodged Talidbf. The hat 
of these establishments win be published in due time through the 
bank. 


Proxies must readiom Registered Office by Friday 3rd June 1994 
at the latest. 

& 


It ss recalled thaLmcanfarmity with Article 7B of the Belgian Company 
Lan^ any shareholder is entitled to obtain free of charge, on production 
of his share, a copy of the animal accounts, of the reports or the Board 
of Directors and of the External Auditor; 


Hw spedal report bum the Board of Directors, referred to in item L 2 
of the agenda for the Extraordinary General Meeting, is available at out 
Registered Office and at the bank named above far the lodging of 
shares. Persons , viho win preside evidence of thar capacity of holders 
of bearer shares, will thus be entitled to examine the report and ask far 
a free copy. 

Debenture holders, wishing to attend these meetings, are asked to 
comply with the same farmalitiea as those imposed an sharcboldera. 


The Board of Directors 


INTERNATIONAL COMPANIES AND FINANCE 


Rothmans 
registers 
A$60.9m 
capital return 


By Bruce Jacques 
In Sydney 


Rothmans Holdings, tbe 
Australian cigarette group 50 
per cent owned by Rothmans 
international, announced a 
A$60J9m (US$44.3m) capital 
return following a rise tn earn- 
ings for the year to last March. 

Net profit jumped 82 per cent 
to AJ73.7m from A$405m on a 
5 per cent sales rise to 
A5L56bn from AS1.48bn, and 
the annual dividend is be 
raised to 40 cents a share from 
33 cents. 

The improved bottom line 
mainly reflected a rfaan siat^ 
on abnonnals, following a 
A$29.9m abnormal loss the pre- 
vious year. Profit before 
charges was almost static at 
Asmara. 

The latest result excluded a 
A$12.6m extraordinary loss on 
withdrawal of opaatums from 
the Philippines. 

Directors said the decision to 
make a capital return, which 
will halve the par value of the 
company's shares to 50 cents, 
reflected three main factors: 
the Philippines closure, high 
cash balances and low interest 
rates. Net cash held jumped by 
AJ67m to A$186.5m in the year. 

Directors said future earn- 
ings would not be affected by 
the capital return. But earn- 
ings would be boosted follow- 
ing removal of the Philippines 
operations, which lost ASlAlm 
in the latest year, compared to 
an A££L5m loss previously. 
The company would continue 
its concentration on operating 
efficiencies to help offset 
new tobacco marketing restric- 
tions. 

The result followed tax pro- 
vision ofA454Am (A$53-5m pre- 
viously) and depreciation 
A$29.5m (AS3Q.9m). Interest 
expense feu foam ASUAm to 
AHSm. 


Billion-doUar changes for YPF 

The oil group is undergoing a transformation, writes John Barham 


Y PF. Argentina's priva- 
tised oil company, is to 
transform its domestic 
operations and back a cautious 
expansion into neighbouring 
markets with a SlOQra a month 
investment programme. 

The expansion of exploration 
and production and the 
revamping of its retail busi- 
ness is the company's largest 
investment programme, and 
tbe most evident sign of YP!F*s 
transformation from a corrupt, 
money-losing state corporation, 
to a profit-oriented, private 
company. 

Mr Jose Estenssoro, YPF’s 
president, says he now has 
“one firm commitment: profits. 
Our Investors have become tbe 
most important part of onr cor- 
porate life”. 

He claims YPFs investment 
plans are proof that this is no 
cheap corporate hype. More 
than $ihn is budgeted for nayf. 
year and a further SI bn in 1996. 

Argentina's biggest company 
is now 20 per cent owned by 
the federal government, with 
the rest held by the employees 
and provincial governments. 
The go ve rnment, which once 
owned the company outright, 
sold 45 per cent last June in a 
$3.Q4bn local and international 
Initial public offe ring . 

Last year, YPF raised profits 
176 per cent to 5706m, despite 
lower oil prices and an 
increase of just 2 per cent in 
sales to $3A6bn. However, prof- 
its and revenues both declined 
in the first quarter as odl prices 
continued failing 
YPF is to sink 720 new pro- 
duction wells this year, at a 
cost of 5700m. Mr Estenssoro 
wants to raise output by one- 
fifth to 450,000 barrels per day 
by the end of 1995, and then 
maintain production, at this 
level. “Argentina’s wells are 
small producers, so [we need to 
do] a lot of drilling," he says. 

Mr Estenssoro wants to 
maintain YPF’s oE reserves at 
the equivalent of 10 years’ pro- 
duction through a big explore- 



Raising output at YPF means increasing drilling substantially 


tion effort. This year YPF is 
spending $300m to drill 180 
exploration wells as part of a 
$3bn. 10-year exploration pro- 
gramme. 

Argentina is self-sufficient in 
oil, although it does not come 
cktse the volumes of Mexico or 
Venezuela, Latin America’s big 
oil producers. But it does have 
considerable potential: Mr 
Estenssoro says only five of its 

19 Identtfipri niU waring hacmq 

have been explored and are in 
production. 

Tbe country does have much 
more natural gas than ofl. YPF 
and joint-venture partners 
Ampolex of Australia and 
Petrobras of Brazil are invest- 
ing 5250m over four years to 
explore a potentially giant gas 
field in north western Argen- 
tina. 

Mr Estenssoro is spending a 
further 5250m this year to 
upgrade YPFs downstream 
business, where profitability is 
low. In August 1990, when he 
took over at YPF, the down- 
stream business lost 5400m. It 


is now returning 5 per cent on 
assets, and Mr Estenssoro 
wants to double profitability 
by next year. In comparison, 
the upstream production busi- 
ness returns about 20 per cent 
a year. 

YPF has also started a 
5500m, five-year project to 
bring its operations - particu- 
larly its refineries - into line 
with world environmental 
standards. 

Finally, YPF is spending 
5300m between 199396 to reno- 
vate its retail network. The 
company has 2,800 petrol sta- 
tions, many more than its com- 
petitors, but its stations are a 
b yword for bad service. 

YPF is financing the invest- 
ment programme with a mix of 
bank borrowing, retained earn- 
ings and overseas bond sales. 
Mr Estenssoro announced ear- 
lier this year a 5350m Yankee 
bond issue and a 5500m medi- 
um-term note issue. 

Analysts praise the company 
for reducing production and 
administrative costs to com- 


pensate for falling oil prices. 
Same, however, criticise Mr 
Estenssoro for sot hedging oil 
prices and thus exposing YPFs 
growing exports to dwindling 
prices. 

Mr Estenssoro has continued 
cutting the work force - which 
stood at 5U300 when he took 
over and now numbers only 
6,500 - loafing to growing criti- 
cism from the unions. How- 
ever, many former employees 
still work for the company as 
subcontractors, often on exces- 
sively generous terms, say 
some analysts. 

Competitors and economists 
aicn prtmpiajq that YPF abuses 
its dominant market position. 
It produces over half Argen- 
tina’s oil, has over half its refi- 
nery capacity and controls half 
the retail market 

Mr Estens soro rejects accu- 
sations that YPF plays dirty. 
"The market works, it is very 
competitive and if YPF did not 
exist, or was not as big as it is, 
its market would be split 
among the multinational," he 


YPF, which has always 
focused on Its domestic mar- 
ket, is gradually expanding 

into neighbouring countries. It 
has just opened a 270-mfle pipe- 
line over the Andes to Chile, 
allowing it to raise exports by 
$3Q0m a year. 


M r Estenssoro says: 
“We are looking to 
our neighbours as a 
natural place to expand.” He 
has started small exploration 
projects in Bolivia, Uruguay 
and Paraguay and is negotia- 
ting exploration contracts in 
Chile and Peru. YPF may bid 
for the Peruvian and Bolivian 
state oil companies when they 
are ottered for privatisation. 

it seems appropriate that 
YPF, the world's first state oil 
company and Latin America's 
first privatised oil company, 
should make a stab at becom- 
ing tiie region’s first private oil 
multinational. 


NEWS DIGEST 


Shinawatra 
posts sharp 
rise at Bt712m 


Shinawatra Computer and 
Communications, the parent 
company of the Thai communi- 
cations and broadcasting group 
controlled by Mr Thaksin Shin- 
awatra, yesterday reported 
sharply higher net profits for 
the first qua rter of the current 
year, writes William Barnes in 
Bangkok. 

Unconsolidated net profits 
were BtTULtim ($2&29m) in the 
three months to end-Marcb, 


compared with Bt276.4m a year 
earlier. Earnings per share 
rose to Bt7.29 from B&94. Con- 
solidated profits for the quar- 
ter were Bt722m; no compara- 
ble figure was provided for last 
year. 

The sale of a 17.5 per cent 
stake in International Engi- 
neering to its communications 
rival UCOM produced profits of 
Bt290m. 

S hina watra 's profits were 
also lifted by a successful pro- 
motional campaign by its 60 
per cant-owned subsidiary. 
Advanced Mo Services, which 
already accounts for half the 
country’s lucrative portable 
telephone and pager market 
Advanced's consolidated quar- 
terly profits climbed 150 per 


cent to Bt383-72m from Btl53m 
a year ago . 

Investment analysts gener- 
ally think that Mr Thaksin’s 
decision to step back from 
operational control of his busi- 
nesses recently to enter poli- 
tics has had little effect on the 
direction of the ambitious 
group because “he's essentially 
stm in charge”. 

Brokers generally reckon 
that the Shinawatra parent 
company will report profits of 
around Btliftm this year. 


Indian power 
generator ahead 


CESC, the RP Goehka group 
company with exclusive power 


generation and distribution 
rights for the city of Calcutta, 
reported a 73 per cent increase 
in net profits to Rs423m 
(513.77m) for the year to March 
31 after a strong second 
half, writes Kunal Bose in Cal- 
cutta. 

The utility, which raised 
power generation by 5 per 
cent to 4.2bn units during 
the year, recorded a 16.4 per 
cent increase in sales to 
Rs8.42bn. 

Earnings per share rose by 
nearly 72 per cent to Rsl4.Q9. 

' CESC haul recently made a 
successful issue of global 
depositary receipts represented 
by shares and warrants of 
5125m. 

The proceeds of the issue 


will be utilised to part finance 
the 500 MW coal-fired power 
complex being set up by CESC 
at Budge Budge, 25km from 
Calcutta 


SNC-Lavalin sale 


SNC-LavaHn, Canada’s biggest 
engineering and construction 
group, has sold Ginge-Kerr, the 
fire protection equipment 
maker, to Unitor of Norway, 
the leading marine service 
company writes Robert 
Gibbens in Montreal. 

The price of the deal was not 
disclosed. 

Ginge-Kerr operates subsid- 
iaries in Britain, Norway and 
Denmark, and had 1993 sales of 
C526m (US51A8m). 


Barlow 
posts 6% 
rise to 
R273m 


By Mark Suzman 
tn Jo han nesb u rg 



Barlow, the South African 
conglomerate formed last year 
after the restructuring of 
South Africa's Barlow Rand 
group, reported a 6 per 
cent rise in operating profit 
before interest to R273m 
(574m), from a pro forma total 
of R256m for the same period 
last year. 

After-tax profit, which 
includes R2Sm abnormal profit 
from the sale of the group's 
investment in Randgold and 
Exploration and R68m in 
investment income, rose 
40 per cent to R194m from 
R139m. 

However, this did not 
include an extraordinary loss 
of R62m resulting largely from 
the sale of -the agricultural 
interests of lossmaking subsid- 
iary Finanzauto, the Spanish 
Caterpillar dealer, for.Ris&n, 
which was taken below the 
line in accordance with the 
company’s accounting proce- 
dure. 

The higher overall earnings 
were the result of improved 
operating margins and the 
group's strong cash position, 
which helped reduce the Inter- 
est bill by 36 per cent to R63m, 
while increasing investment 
income by 30 per cant 

Turnover, which was dis- 
torted by some asset sales dur- 
ing the six months, rose 5 per 
cent to R&l3bn from R5£6tm 
and a dividend of 18 cents was 
declared- 

Mr Warren CZewlow, chair- 
man, said that it was Barlow's 
aim to have three times cover 
for its future dividends. 

As expected, the largest con- 
tributor to earnings was Pre- 
toria Portland Cement which 
was responsible for 37 per cent 
of taxed profit Other compa- 
nies in the industrial division, 
encompassing Barlow’s wholly- 
owned subsidiaries, also per- 
formed well. Paint manufac- 
turer Plascon and Barlows 
Equipment, which benefited 
from improved mine and con- 
struction demand for mat-bin. 
ery, both showed strong 
growth. 

Barlow said second-half 
results were likely to be “at 
least equal” to those for the 
first six months. In the longer 
term Mr Clewlcm was confi- 
dent the South African econ- 
omy had begun to improve and 
that the company would be 
able to take particular advan- 
tage of the new government's 
planned reconstruction and 
development programme. 

“Barlow is well positioned to 
meet the demand expected,” 
Mr Ctewiow said. 






harp 


ivola i< 




This announcement appears as a matter of record only. 


$170,000,000 



CASTLE HARLAIV PARTNERS II, Ii.R 


in partnership with management has acquired 


TRUCK C OMPONENT S EVC 


The undersigned initiated the acquisition, assisted in arranging financing, 
and acted as financial advisor to Castle Harlan Partners II, L.P. 


CASTLE HARLAN, INC. 


May 24, 1994 


Hew York 


U.S. $150,000,000 

First Bank System, Inc. 


Floating Rate Subordinated 
Capital Notes Due 1996 


Interest Rate 

5%% per annum 

Interest Period 

24th May 1994 

24th August 1994 

Interest Amount per 
U.S. $50000 No® due 
24th August 1994 

U.S. $67083 


CS First Boston 

Agent 


h : t.\ ’](./’ 


The Property Finance Sourcebook 1994 

The alrimwa Property France D ir ectory showing exactly who is lending what 
in property today. Complete with lending criteria and contacts. Absolutely 
indispensable for anyone interested m UK property. Call 071 495 1720. 



The (nearlal tool fa, tba mma Inmn, 


Market-Eye 


Equity and 
Options Price- 


London ctockkxchancue 


071 329 82 S2 


Signal 


O t3o» software npp i ca d n n a © 

O AT DATA FROM *10 A DAY O 
O SlgatU SOFTWARE GUIDE © 
CW LOOdon 44 + (01 71 231 3558 
for your gulch and Signal price tet. 


Continental 
(Bermuda) Limited 
US 5250 JNNMKM 

Floating Rate Notes 
doe 2006 


Guaranteed by 
Hungarian Foreign 
Trade Bank Ltd 


Notice b hereby given thar as at the 
valuation dale 10th May 1994, the 
value of (he ztau-c oup ou obligations 
(or iriercss id 

obligations of tbe United Stains of 
America was US *103,420400.00. 
and die value of tbe Ganpany's reserve 
fond was US $62,048^69.40. The 
aggregate value of the Noteholders 
security was thus 66.19 percent of 
the principal amount of Notes 
outstanding at the valuation dtv 
The detenainalKxi aod publication of 
these figures is solely for the 
convenience and information of the 
Noteholders and shall not be binding 
for any purpose oo the Trustee or the 
Reserve Fund Manager or the 
Reserve Rond Reporting Agent nor 
utMtlt h be Wb« gs - H I KU-» 1 ‘* atil H* 
oo the part of the Company, the 
Valuation Agent, the Guarantee, the 
Trustee, the Reserve Fond Manager 
or the Reserve Fuad Reporting 
Agent to buy, sell or hold 
investments similar to the zero- 
conpon obligations of tbe United 
Stales of America or the Reserve 
rUJ Investments. 

Valuation Agent 

Giro Credit Sank AktiengeseOEchafi 
dei 



INS Stney vlbtn overview of 


analysis «f the ■eonomle end 
HW e ri ahaetlea. tegritwr ma to 
depth cmansat on key areas neh 
as Rnsele'e Eeonomj, Foreign 
Investment, Trade, The Energy 


la riwttia fa ttta teatoa. 


Mns Otdovyntenta on 
Tefc ♦O08B 243 1957 
Patricia Sorridga on 
Teh *44 71873 3438 
FWC *44 73. 873 3438 


FT Snrvoys 


Deutsche Bank 



We are pleased to announce that, 
as of 23rd May 1994, 
Deutsche Bank AG London 
is a member of 
CHAPS and Town Clearing. 


Deutsche Bank AG London 
6-8 Bishopsgate, London EC2P 2AT 
Telephone: 071-971 7000 
Fax: 071-971 7465 


Deutsche Bank AG In a member of Ttw London Swdi Exchange and The Securities and Futurna Authority 


SOdETE GENERALE 
FRF 500.000,000 
9125 % 

BONDS DUE 1999 


with coupon 
reinvestment op 1 


option 

Common Code ; 3133S91 
Sicovam Code : 14474 


According to the terms 
and conaitiornofthe 


Bonds, notice is 
hereby given 


. i that 494 

supplementary Bonds 
have been created 


upon exchange against 
Cou ' 


_upons on account of 
payment of interest 


New total nominal 
amount outstanding 

FRF643^(o^OOO 


SOCIETY GENERALE 
GROUP 

15 -W M l8^ ,n8r 


U.S. $250,000,000 



BANK OF BOSTON 
CORPORATION 

Subordinated 

Floating Rate Notes Due 2001 

Issued 10th February 1986 


Interest Rata 
Interest Period 


interest Amount per 
U.S.S50000 Note due 
24th August 1994 


5% per annum 
24th May 1984 
24th August 1994 


U.S.S638J39 


CS Fi&st Boston 

Agent 


*4' ii([ N 

i«ir . 

^uarrer 


.-'-iv 


■Vh. 






FINANCIAL TIMES TUESDAY MAY 24 1994 


INTE RNATIONAL COMPANIES AND FINANCE 


21 


Komatsu plunges 55% in 
worst showing ~ 


By Garand Bator 
fo Tokyo 

Sluggish growth worldwide 
saw a slump In consolidated 
profits at Komatsu, the world’s 
second largest manufacturer of 
construction machine ry in the 
year to the end of March. 

The group’s pre-tax profits 
fell by -55 per cent to Y13£bn 
($t3228m), the worst perfor- 
mance in a decade. Turnover 
was down by 2L8 per cent at 
Y845Sbn. The parent compa- 
ny’s profits dropped by 28 per 
cant at YULSbn on sales lower 
by <L6 per cent 

The company said the year 
had been marked by a contin- 
ued sharp decline in domestic 
demand for building equip- 
ment, its principal activity, as 


private sector investment 
remained flat. Despite the 
growth in new public works 
projects, a full recovery in pub- 
lic sector demand had been 
held back by start-up delays. 
Domestic sales overall declined 
by L8 per cent. 

Overseas, sales to the US and 
south-east Asia were buoyant, 
despite the sharp appreciation 
In the yen. But in the already 
weakened European markets, 
the strong currency bad signif- 
icantly affected demand 
total overseas sales fall by 3.1 
per cent 

Non-core activities produced 
mixed results.. Civil engineer- 
ing contracts were up slightly 
on 1933 and sales of electronics 
products rose almost 7 per 
cent But industrial machinery 


sales, buffeted by weak domes- 
tic demand and the strong yen, 
M 22 per cent 

The company reaffirmed its 
commitment to long-term 
growth on a global scale. For 
Komatsu, as for many other 
Japanese manufacturers, this 
means a significant reorganisa- 
tion of its global operations to 
help it reduce the adverse 
impact of the strong c urren cy. 

The group is now accelerat- 
ing the Shift of some man\ ifat». 
taring plants abroad and 
increasing overseas out-sourc- 
ing of its domestic activities. 

Komatsu said that it expec- 
ted the effects of the restruct- 
uring combined with gradual 
recovery in its major markets 
to produce a recovery in the 
next year. 


Japanese real estate groups 
dip sharply at pre-tax level 


By Paid Abrahams 
in Tokyo 

Mitsubishi Estate, one of 
Japan’s leading real estate 
groups, posted a 32a per emit 
fall in - pre-tax profits to 
Y47.4bn ($451,423x0, on turn- 
over which increased by 26JL 
per cent to Y440bn. Post-tax 
profits rose 3.4 per cent to 
YS8.3bn. The dividend was 
maintained at YB par share. 

Brokers Baring Securities 
said the second half of the year 
had been much weaker for Mit- 
subishi than the first six 
months and that there was tit- 
tle sign of a turnaround. Mitsu- 
bishi predicted pretax profits 
for foe current year down at 
Y35bn on . sales of Y420bn, 
below analysts expectations. 

Mitsui Fudasan, Japan’s big- 


gest real estate developer, 
reported pre-tax profits down 
3&2 per cent at Yl&4bn, on 
turnover down 52 per cent at 
Y795bn. The company said it 
would maintain the dividend at 
Y9 per share, even though the 
business outlook looked 
severe, with the possibility of 
hi gh er interest rates and over- 
supply in the condominiums 
market. It predicted pre-tax 
profits would fall to Y12bn dur- 
ing the year to March 31 1995 
on safes of YT30hn.. 

Tokyo Land, the property 
developer, posted pretax prof- 
its down 16.6 per cent at 
Y55bn, following a collapse of 
its b uilding leasing operations, 
according to foe company. This 
was tire third year profits had 
fallen, said Mr Kyuichiro 
Kinoshita, vice-president The 


group also sustained Losses on 
its golf course and leisure 
activities, together with a 
sharp decline in foreign 
exchange profits, he said. 
Turnover increased 3.5 per 
cent to Y266bn. The dividend 
was maintained at Y5 per 
share. 

The group warned mari ne 
would come under pressure 
during the present financial 
year because of competition in 
the housing market and a dete- 
rioration In the building leas- 
ing business. The company 
said it would sell a building in 
SMbuya, Tokyo for YlOhn to 
its do-it-yourself subsidiary 
Tokyu Hands. 

Pretax profits would foil to 
Y&3hn on sales of Y280bn dur- 
ing the current year, the grotq> 
predicted. 


Toyota tops corporate earners 


By McMyo Nakamoto 
In Tokyo 

Toyota Motor has emerged as 
Japan's number one corporate 
earner last year for the first 
time in three years, acconfing 
to a report by Tefitaku Bata 
Bank, a private research cant- . 
pany. 

Toyota was followed by 
Sanwa Bank and NTT, the tete- 
amununications company, for 
the calendar year 1993. 
Declared earnings are based on 
after-tax profits adjusted to 
meet tax regulations. 

Toyota’s return to the top 
spot came in spite of a 27 per 
cent foil in declared earnings 
for the car company last year 
to Y296bn (R819m). “We did 
not have a particularly good 
year. But other companies suf- 


fered even more,'* Toyota com- 
mented. 

The earnings league table 
compiled by Teikoku Data 
Bank shows that foe fortunes 
of companies within ' the same 
industries were widely diver- 
gent last yean . . ■* . 

Sanwa Bsjik, for example, 
climbed to second position 
from sixth' place in 1992 while 
mtaiihishi Bank rose to sev- 
enth place from tenth last 
year. Sanwa declared earnings 
last year of Y262bn which was 
19.5 per cent up on 1992. 

However, three other banks 
- Sumitomo, Daiichi Kangyo 
and Tokai - which had been 
among the top 10 in 1992, tum- 
bled below the tenth spot, leav- 
ing Sanwa, Mitsubishi and Fuji 
Bmik, at ninth place. 

likewise, in the car sector. 


Toyota may have regained 
its top status but Nissan, 
which reported a pre-tax loss 
of Y2&2bn last year, was not 
even in the running while 
Honda fell from 53rd to 89th 
place. 

■Among notable changes in 
foe rankings, Mitsubishi Heavy 
Industries emerged in fifth 
place, returning to the top 10 
for the first tfane in 19 years. 
The shipbuilding and heavy 
machinery company saw a 
firm rise in ft wmlng q due to 
strong demand for its motors 
and ships. 

Nintendo, the video games 
maker, rose to number six 
from 12th place in 1992 while 
Matsushita, under pressure 
from a slump in the consumer 
electronics market, fell from 
seventh to nth place. 


Share sale lifts 
Ayala 90% 

In first quarter 

for Jose Gatang 
InManfla 

Ayala, the property-based 
Philippine conglomerate, has 
reported consolidated net prof- 
its for this year’s first quarter 
of 752.6m pesos, an increase of 
90 per cent on the year-ego fig- 
ure. 

One-time gains, mostly from 
sales of some holdings in prop- 
erty affiliate Ayala Land, were 
behind much of the profits rise, 
said Mr Jaime Zobel de Ayala, 
company chairman and presi- 
dent The shares sale, accord- 
ing to Mr Zobel, followed 
strong demand for an offering 
made by the property-develop- 
ment subsidiary at an interna- 
tional roadshow this year. 


Heineken venture shows 
NZ$98m nine-month loss 


By Terry HaH 
in Woffington 

DB Group, the New Zealand 
concern controlled by a joint 
venture of Heineken and Sing- 
apore Breweries, yesterday 
reported a loss of NZ$98.1m 
(US$57.57m) after abnormal* 
for the nine months to March 
3L This included a loss on the 
sale of Australian pub fo am 
Austotel of NZ$86.7m. 

Austotel, which was sold to 
Brierley Investments, was part 
of a deal which saw Brierley 
sell its 27 per cent sharehold- 
ing in DB Group to Asia Pacific 
Breweries, the holding com- 
pany for Heineken' of the 
Netherlands and Singapore 
Breweries. 

DB Group Is now managed 


by Heineken. 

DB Gfroup reported operating 
profits before ahnormals 24 per 
cent higher at NZ$l7^m over 
the year-ago figure. Sales fell 5 
per cent to NZ$559-8m. 

Directors said after the sale 
of Austotel and various New 
Zealand hotels and taverns, net 
debt fell from NZ$158.9m to 
NZ$29.4m at March 3L 

fn flrirfitinn the directors ba d 
provided a further NZ$23.4m 
for costs involved in quitting 
other hotels and liquor outlets. 
They said they remained con- 
vinced that the strategy of sell- 
ing non-performing assets was 
“the proper approach" to take. 

They planned to sell all com- 
pany-owned hotels by Decem- 
ber 81- 

No dividend is planned. 


Double 
listing lifts 
Kyocera 
results 


By Emfko Terazono 
in Tokyo 

Kyocera, the -Japanese manu- 
facturer of ceramic semicon- 
ductor components, posted a 
sharp rise in consolidated 

profits due to the listing of 
two subsidiaries, DDL the tele- 
communications company, and 
Taito, the video games maker. 

The company saw a 39 per 
cent rise in group pretax prof- 
its to Y68.4bn (|65l.42m) for 
the year to last March due to 
profits of Y14.3bn from the 
two companies’ listing and 
Y7.5bn from share sales. 

However, eost-entting helped 
the mainline business and 
operating profits rose Y10.5 
per cent on a 0.9 per cent 
decline in sales to Y427.7bn. 
After-tax profits rose 53.7 per 
cent to Y3&8bn. 

Earnings of its ceramic semi- 
conductor parts division rose 
9.9 per cent to Y44.7bn, but 
electronic equipment profits 
fell 22.1 per cent to Y3.4bn. 
The optical precision equip- 
ment division returned to the 
black, with earnings of Y2.4hn 
against a loss of Y673m a year 


On a non-conaoUdated basis, 
Kyocera posted a 7.8 per cent 
foil in pre-tax profits to 
Y35.1bn due to a foil in inter- 
est income. Sales were flat at 
Y300.6bn but after-tax profits 
rose 10 per cent thanks to 
income from share sales. 

For the current year to next 
March, the c o mp a ny forecasts 
a 20 per cent unconsolidated 
pretax rise to Y42.lbn on a 8.9 
per cent rise in sales to 
Y327.5fan- 


State Bank 
of NSW back 
in the black 

By Bruce Jacques 
In Sydney 

State Bank of New Sooth 
Wales, the regional Australian 
bank, returned to the black in 
the six months to March after 
large reductions in doubtful 
debt charges and aimonnals. 

The bank, owned by the New 
South Wales government but 
earmarked far sale to the pri- 
vate sector later this year, 
turned a A$89.6m (0S$64.4m) 
loss into a A$ld.7m net profit 
on static <giaating income of 
A$314Am. 

Before taxes and charges, 
earnings eased 9 per cent from 
A$8&5m to A$81.7m. Doubtful 
debt charges fell 53 per cent 
from A$l 09.8m to A$57.7m and 
total problem loans were down 
10.4 per cent from A$L2bn to 
AS964JtoL 

Tax took Afl0.3m against a 
Af28.6m credit previously. 

The New South Wales gov- 
ernment said recently that 
only one contender, believed 
to be Colonial Mutual, the 
Australian investment group, 
remained interested in buying 
the bank. Sale legislation is 
scheduled for this September. 


Property sell-off 

CSB, toe Australian sugar and 
building products group, has 
announced plans to sell 31 sur- 
plus properties with an esti- 
mated value of more than 
A$50m (US$35 -9m) through a 
sealed bid tender process, 
writes Bruce Jacques. 

CSB directors said the prop- 
erties, to be sold through 
Kennedy-Wflson International, 
ranged from A|100,000 for a 
small light industrial develop- 
ment in South Australia to 
more than Ag2Qm for a large 
site in Coomera, Queensland. 


MEDIOBANCA 

1ANCA Dl CREDITO FINANZIARIO S.p.A. 

HEAP OH-tCE. VIA HL0DRAMMATICI 10. MILAN. ITALY 
PA1XM1P SHARE CAPITAL: UT. 476 BILLION; RESERVES LIT. JJ JJ.7 BILLION 

Notice of Ordinary and Extraordinary General Meeting 

Notice is hereby given that an Ordinary and Extraordinary 
Genera! Meeting of Mediobanca will be held at the Company’s 
Head Office in via Filodrammarici io, Milan, Italy, at £ 0.00 
a-m. on 13 th June 1994 in the first instance, and any adjourn- 
ment thereto at the same rime and place on 14 th June > 994 , » 
transact the following business: 

Ofoaary Uunncss 
likak* of Direaan. 

Extraordinary Uuoncu 

.1 Pfpovl to iotrmc rtf Compcn fs 
jm pormph of Attick 4441 tf the IWIm Civil Cede. mfittoua. 

^ fiom fcft. 47 * Who* n> Lh. 57 * Who* ky 

pmr oj not kn Hm U- VS* P" • 

htJ^o l*. & Mlio* mop 

pntt of not kts the* iJt. VJ" potthonubt mmtrdfit foam oj u* 
' Woman open exenuhtg »*f Wan m. 

4) PropaoJ to W A, nth 4 of At Book's Artkki *f to pttk offm. 

U»*> Article « oTMedMwraii *■**» ° r 

lew five to. prior m 131b June WW loded lb“ *■» 
p«,-. Mol Ofco. M, Itaod. Orike of 
torn* di Roitu, Credito leiluno or at Monftr Tiioli Vp- - P" . 

rag'd!* at) jhaH be ofokd w ** “**"’« 0,1 P Ksattjaua ot “ 
fonmwn ticket. 

p.p. the Board of Diiwtora 
the Managing Director 



Christiania Bank og Kreditkas&e 

(iRcarpamud in tht Kingdom ef Nomay vah Ematd tiahtSty) 

os.il oo.ooo.ooo 

Floating Kate Senior Notea Due May 1995 
(of which US. $75, 000,000 hat bom issmd as initial Tranches) 
Notice is hereby given that die Rate of Interest has been fixed at 
10 JSX, and that die interest payable on the relevant Interest Payment 
Dote November 25. 1^4 against Coupon Ncl T9 m respect of 
LtSJl 0,000 nominal of the Notes w31 ba lS$539^8 andunrespeet 
of US525O000 fxxninoi at the Notes will be US$13,489.58. 


CfTTBANCO 



The Financial TTows reaches 75 * of the Pratestonel Investmem 
Comnxirfty In Europe, more than any other European publication, end 
36% of the Professions] Investment Commonfty in tote.* 


rfffDi 


i {Hong Kong} 
Tefc ( 832 ) BB 8 2853 
F«c ( 862 } 537 1211 


TBMHMtey(teteOn) 
T<* (71)973 4110 

Rw ( 73)0733505 


FT Surveys 


Tin Hart (Nor Vorfg 
Wttiia) 752450 d 
Roc ( 212 ) 319 070 * 


.WodMUcMEM 


Af or ftese seartfge AartvhMteolt ihb admtisnmentarpnais as a natter of fBcodonp. 

$500,000,000 

. Transamerica Finance Corporation 

$300,000,000 

6.80% Senior Notes due March 15, 1999 


$ 200 , 000,000 

7.50% Senior Notes due March 15, 2004 


Goldman, Sachs & Co. 


Morgan Stanley & Co. 

Incorporated 


May 1994 


Transamerica Corporation 


has acquired 


the assets of the 

Container Division of Tlphook pic 


from 


Tiphook pic 


The undersigned acted as financial advisor to 
Transamerica Corporation in this transaction. 


Goldman, Sachs & Co. 

New York London Tokyo 

Beijing Boston Chicago Dallas Frankfurt Hong Kong Houston 
Los Angeles Memphis Miami Milan Montreal Moscow Osaka Paris 
Philadelphia San Francisco Singapore Sydney Toronto Vancouver Zurich 

May 1994 



U^. $10,000,000 
The Chase 
Manhattan 
Corporation 

Floating Rate Ofl-Unked 
Notes due 1994 

For he final interest period from 
May 24, 1994 to November 25. 
1994 ttw Merest rats has been 
ctetemfinad at 5-875% per 
annum. The amount payable on 
toe relevant Merest payment 
date, November 25. 1994. w» be 
US. $301.91 per U.S. $10,000 
principal amount 
By: TIm Own Mantwttan Saak, NA. 
CWcutarion Agent ^ 

May 24. 1894 


Rdudaiy issue by 

Kredtetbonfc S A Lurembourgeoise 
tolund a toamutoemadeby itu 

Istituto per lo Svfluppo 
Economico deO ’Italia 

Meridkmale 
ECU 100,000,000 
Roaring Ram Notes Due 1895 

w r»w &0875* 

x> SUhlfcyW 


- eat MOWOONcaiki. 
MKDHurWI BCUV 1 V 3 B 


CS HnrBwTOH 
Agon 


Union Bank of Switzerland 
Finance N.V. 

LLS. $150,000,000 
Ctau an need Flotfing Rate 
Notes 4oc 1996 

In acoocdaocc with the provisions of 
the News, notice is hereby given 
that the Rate of Interest for the 
ttueemonth period begumipg 22nd . 
August, 1994 has been fixed at 
S.625% per annum. 

Union Bank ef Switzerland 
Lendoa Brandi Agent Bank 
tttfaMar.PM 


URWEST 

liquid Yield Option Notes™ Due 2011 

- Notice of Purchase Date - 

- Securities to be Purchased at the Option of the Holder - 

Pursuant to the terms of an indenture datod as oGune l, 1 99 1 between U S WEST. me. (ihe^ "CompanjO and 
Nonwest Bank Minnesota. National Association, as Trustee^ the Company heiefcy glues notice that, at the option 
oTany Holder, the Company win purchase its liquid Yield Option Notes™ due 201 1 (the "Securitiesl held iystidi 
Holder as of June 25, 1994 at a price of $29584 (breach $1,000 Principal Amount of Securities at Maturity. A 
Holder intending to have the Company purchase Securities must complete and defiver a Purchase Notice Form 
to a Paying Agem/Converaon Agen; at one of the addresses listed betow, no later than jtme 27, 1994. a 
P urchase Notice Fonn must Include (I) the certificate number(s) of the Securities which the Holder wffl deliver to 
be purchased, (2) the portion of the Principal Amount at Maturity ofthe Seasides which the Holder wffl deliver to 
be purchased, which portion must be $1000 ex an integral multipie thereoC and p) a statement that such 
Securities shall be purchased pursuant to (he terms and conditions specified in paragraph 6 of die Securities. A 
Paying Agem/COnversion Agent wffl provide a Purchase Nodoe Form to any Holder upon request A Holder must 
surrender Securities to a Paying Agent/Con wrsion Agent fisted below in order to cofect payment. The purchase 
price far any Securities as to which a Purchase Notice Form has been defr/ered to a Paying Agenl/Conversion 
Agent and not withdrawn wfll be paid to the q?pGcabIe Holder on the business day loDowing the later of June 25, 
1994 or the date on which the Holder surrenders the Securities to a Paying Agent/Can version Agent Far 
purposes hereof "business day" means each day ofthe year on which banking institutions arc not required or 
authorized to dose where the appBcaWe Paying Agent/Conversion Agents located. 


Banqneln ffTnalktn al e hLux g nboorgSA 
69, Route cfEsch 
L-29S3 Uousnboarg 


Barclays Bank Pic 

BGSS Depository Services 
168 Fendnsch street 
London, FC3P3HP 


The Securities are convertible in to shares of company common stock at a conversion rate of 6.14 shares 
per $1,000 Principal Amount at Maturity. Securities as to which a Purchase Notice Form has been delivered toa 
Paying Agent/Conversion Agenr may be converted only if the applicable Purchase Notice FOrm is withdrawn in 
accordance with, the terms of the IndentiBU. 

a Holder who delivers a Purchase Notice Form and surrenders applicable Securities to a paying 
Agpnt/Cornwsion Agent shafl be entitled to payment for such Securities asdescribedabowt and such payment 
shall be made in immaliaidy available Itinds by certified or bank cashier's check or wire transfer. Securities so 
surrendered to the Paying Agent/Cbnverckjn Agent must conform in aO respects to the description thereof hj the 
related Purchase Notice Form. 

A Purchase Notice Barm may be wfodrawn by means ofa written notice of withdrawal defivered to the 
Paying Agent/ Conversion Agent to which such Purchase Notice Form was delivered In accordance with the 
terras of Aeimfcntue at any time prior to June 25, 1994. Any such notice tit withdrawal should spedly fl) fl* 
certificate numberfs} of the Securities in respect of which sudi notice of withdrawal Hbtingsubmftted! (2) the 
Principal Amount at Maturity of the Securities with respect to which such notice of withdrawal is being 
submitted, and (3) the Principal Amount at Maturity, if any, of Such Securities which remains subject to the 
original Purchase Notice Form, which must be in $1 ,000 or integral multiples thereof and which has been or will 
be delivered for purchase by the Gomparty. 


J.T. Anderson 
Treasurer 


Way 24, 1994 


“marieoaik of Mfrrtl Lynch *Ca. lot 




22 


FINANCIAL TIMES TUESDAY MAY 24 1994 


INTERNATIONAL CAPITAL MARKETS 


Heavy selling after German rate comments 


Low foreign take-up 
in Hungarian bond 


By Conner Mkkteimann and 
Graham Bowiey in London and 
Frank McGurfy In New York 

European government bonds 
fell sharply on wire reports of 
comments made by Bundes- 
bank President Hans Tiet- 
meyer, which were taken to 
mpffn that there would be no 

more official German interest 
rate cuts in the near future. 

Although most continental 
European markets were closed 
for Whit Monday, London- 
traded futures contracts fell 
steeply - albeit on thin vol- 
ume. Weaker US Treasuries 
put a further damper on Euro- 
pean bond markets. 

According to one news 
agency, Tietmeyer told a press 
conference in Helsinki that 
"we are not following a step- 
by-step cut in interest rates for 
the time being”. He was also 
reported as saying that signs 
are increasing that the western 
German recession has come to 
an end and the economic 
recovery has begun. 

This triggered heavy London 
selling across the German 


By Peter John 

Only a smattering of new 
issues emerged in the euro- 
bond market yesterday as con- 
tinental markets were dosed, 
and attention was focused on 
forthcoming offerings. 


INTERNATIONAL 

BONDS 


Among yesterday’s issues, 
Long Term Credit Bank of 
Japan raised $75m through a 
three-tranche offering of 10- 
year floating rates while Finn- 
ish Export Credit raised Y5bn 
of three-year paper. 

However, market talk cen- 
tred on a mooted launch from 
Canada Mortgage and Housing 


yield curve. At the short end, 
the March three-money inter- 
est rate future slid by 0.30 
point to 9151, implying three- 
month rates of 5.49 per cent by 
mid-March, well above the cur- 
rent 5.13 per cent three-month 
D-Mark deposit rate. At the 
long sid, the June Bund future 
fell by 0.96 point to 9150. 

“The short end has over- 
reacted," said Mr John Hall, 
European economist at Swiss 
Bank Corp. “Even if official 
rates are not cut soon, this still 
leaves room for the repo rate 
to fall” That currently stands 
at SJ23 per cent, still well above 
the 4£ per cent discount rate 
which acts as a floor to money 
market rates. 

He still expects another dis- 
count rate cut, but even if that 
does not happen, the Bundes- 
bank “can still lower the repo 
rate to around 4.75 per cent" 
before the end of the cycla. 

All eyes are now on tomor- 
row's repo allocation. “People 
will watch it for an indication 
of where German monetary 
policy is going." said Mr Tor- 
sten Bflhler, bond analyst at 


Corp (CMHQ. Syndicate man- 
agers said the government- 
owned issuer was likely to 
offer around $lbn of d*^Jt 

The move was flagged when 
CMHC last came to the Twaricpt 
in November to raise $lbn 
through five-year global bonds 
yielding 15 basis points over 
Canadian government bonds. It 
said tb»n that the offering was 
designed to establish, a bench- 
mark for its initiative to lend 
to social housing and that it 
planned to raise C$2bn a year 
over the next five years. 

There was also speculation 
that KfW, Germany’s recon- 
struction bank, was consider- 
ing a $30Gm dragon band. In 
addition, the placing by the 
Taiwanese company, CMC, of a 
$160m convertible eurobond 


UBS. A small cut could rein- 
force fears that the easing 
cycle Is coming to an end, he 
said. 

Bad M3 money supply num- 
bers could prompt further sell- 
ing, he CAM Although a figure 
close to last month's 15.4 per 
cent rate appears to be dis- 


GOVERNMENT 

BONDS 


counted, it could reinforce the 
market's negative sentiment, 
traders said. 

■ Europe’s few other active 
markets also took a blow from 
the German sell-off. UK gov- 
ernment bonds fell sharply, 
also depressed by concern over 
the inflationary impact of ris- 
ing commodity prices. In late 
trading, the UK long gilt future 
was down almost one point at 

105*. 

Analysts said the most 
important event for guts this 
week is likely to be Wednes- 
day's auction by the Bank of 
England of the new convertible 


offering on Friday - which was 
oversubscribed and trading at 
104 yesterday against an issue 
price of par - raised specula- 
tion that It would pave the way 
for a 3900m to 31bn offering 
from Formosa Plastics. 


gilt They said interest for the 
new bond was growing as 
investors begin to take up 
more of a defensive position 
after the recent rally In gilts, 
which was particularly marked 
at the long end, by «u- itching 
from longer to shorter-dated 
bonds. 

■ Italian bonds posted partic- 
ularly large losses, with the 

June bond future on Liffe fall- 
ing by 1.40 point to 111.22. 
Spanish bonds outperformed 
them significantly, with the 
June contract shedding only 
064 point on the day to dose at 
9077. 

■ US Treasury bonds retreated 
in light trading yesterday 
morning as traders adjusted 
their positions ahead of this 
week’s auctions. 

By 1pm, the benchmark 30- 
year government band was ft 
lower at 86*. with the yield 
rising to 7.381 per cent At the 
short end, the two-year note 
was down * to 99*. to yield 
5.862 per cent 

With no fresh economic news 


Nevertheless, dealers said 
the performance of recent 
issues showed the market was 
vulnerable. They reported the 
yield spread on the Kingdom of 
Siam's FFrfflm issue af seven- 
year eurobonds had widened to 


released, the market was focus- 
ing on the Treasury's sale this 
afternoon of JlTbn in new two- 
year notes, followed by the 
issuance of SUbn in five-year 
securities tomorrow. The last 
Treasury auctions had gener- 
ated disappointing demand, 
and many traders were seeking 
to protect against the possibil- 
ity of continued difficulty in 
absorbing the fresh supply. 

Meanwhile, concern over a 
weak dollar receded. The US 
currency was holding steady 
against the D-Mark and the 
yen, amid guarded optimism 
over progress in US trade nego- 
tiations with Japan. By con- 
trast, commodify prices were 
showing flwnthw sharp rise on 
the day, in keeping with a 
recent trend that has unsettled 
the inflation-sensitive long 
bond. 

The next significant eco- 
nomic news is due out tomor- 
row. The Commerce Depart- 
ment wiTl armmmr-g April dafa> 

on durable goods orders, with 
the market bracing far a l per 
cent increase, following a 
March rise of OJ per cent 


30 basis points yesterday from 
24 basis points at the launch 
on Friday, and the Republic of 
Finland’s FFrLQbn of 10-year 
debt launched a week ago was 
yielding 36 basis points against 
a launch spread of 32. 


Premier 
$500m deal 
for Hellenic 
Republic 

By Comer MkMMmarai 

Greece is returning to the 
syndicated loans market for 
the first time in four years 
with a 3500m syndicated loan - 
the country's first under Its 
new sovereign name, the Hel- 
lenic Republic. 

Although Greece is still dis- 
cussing the terms with a num- 
ber of banks, early Indications 
point to a five-year deal with a 
three-year grace period, at a 
price of around 110 to 112 
basis points above the London 
interbank offered rate (Libor). 

Senior Grade officials are in 
London this week to discuss 
the loan, details of which are 
expected to be announced 
within the next week. The deal 
should be launched in June. 

Mitsubishi Bank and Nat- 
West are tipped as the arrang- 
ers. The underwriting group is 
likely to Include 10 to 15 
hanks, with each expected to 
take on an underwriting com- 
mitment of up to 350m. 

Despite the economic prob- 
lems currently plaguing 
Greece, it should still be able 
to take advantage of the nar- 
rowing of spreads in the syndi- 
cated loans market 

“Many banks are now hun- 
gry for zero-weighted assets - 
this represents a good source 
of funding for ns,” said Mr 
Spyros Papanicolaou, head of 
the international banking 
department at the Bank of 
Greece. 

• Telecom Corporation of 
New Zealand is launching a 
3150m syndicated loan via 
arranger Lloyds Bank Capital 
Markets. The five-year deal 
pays a margin of 17.5 basis 
points over Libor, a facility fee 
of 1Z5 basis points per annum 
and a five basis point utilisa- 
tion fee where utilisation 
exceeds 50 percent 


By Wchotaa Deaton 
hi Budapest 

Foreign investors have taken 
up less than 1 per cent of east- 
on Europe’s first domestic-cur- 
rency s tat e bond, a Hungarian 
government issue aimed at 
international institutions. 

Three-year government 
bonds worth FtlSbn were put 
on sale but foreign buyers 
accounted for Just Ftl04m of 
demand. Total subscriptions 
amounted to Ft&75bn, includ- 
ing applications by Hungarian 
state-owned institutions. 

Giro Credit Budapest, the 
global adviser, said it expected 
foreign investors to enter the 
secondary market and main- 
tained that the issue had suc- 
cessfully opened the interna- 
tional market in “paprika 
bonds''. 

Other brokers said that the 
Issue had fallen woefully short 
of expectations and privately 
described the sale to foreigners 
as a “flop". 

US investors in particular 
have been alarmed by the 
resurgence of the Hungarian 
Socialist Party, the former 
communists, and the prospect 


Euroclear sets 
up D anish link 

Growing international interest 
in Danish bonds and equities 
has prompted Euroclear, the 
international clearing and set- 
tlement house, to set up a 
direct link with Vaerdipapir- 
centralen, Denmark's central 
securities depository and set- 
tlement system, writes 
Antonia Sharpe. 

The link, which should 
improve efficiency hi the set- 
tlement of cross-border trades 
in Danish securities, is expec- 
ted to be operational in early 
July. It is the first step to a 
two-way exchange of data. 


of their return to office after 
the second and decisive round 
of voting on Sunday. 

At all events, the paprika 
bond's aggressive & per cent 
coupon has proved insufficient 
to offset fears of a devaluation 
by the next government 

Last year the National Bank 
of Hungary, the central bank 
which up to now has had sole 
responsibility for nearly all 
global borrowing, sold Siam 
worth of bonds In dollars, 
D-marks, yen and other denom- 
inations to nmicft Hungary one 
of the most active interna- 
tional sovereign borrowers. ■ 

The central bank opposed 
the issue of a forint bond say- 
ing that it would lead to cur- 
rency speculation. Prior to this 
issue It blocked the issue of 
international certificates ttf the 
bond, insisting that trading 
imIcb place in Hungary. 

The National Bank also 
changed Hungary’s currency 
basket, giving it a 70 per emit 
Ecu and 30 per cent dofiarcom- 
ponent and increased Its repo 
interest rate. These moves 
were instrumental In upsetting 
investors' calculations, traders 
say. 


Enskilda in 
Asian venture 

Enskilda Corporate, the 
merchant lanMny division of 
Sweden's Skandinaviska 
wwsMifla Bukin, has set np a 
partnership with Crosby. 
Financial Holdings, an inde- 
pendent Asian merchant bank- 
ing firm, to provide Asian 
investment advice and services 
in Sweden, Norway and Fin- 
land, writes Antonia Sharpe. 

Under the arrangements, 
Enskilda will assume exclu- 
sive responsibility for dis- 
tributing Crosby’s equity 
research in Sweden, Norway 
end Finland. 


Quiet eurobond day puts focus on future issues 


NEW INTERNATIONAL BOND ISSUES 


Borrower 

US DOLLARS 

Amount 

m. 

Coupon 

% 

Price 

Mahaity 

Foes 

% 

Spread 

bp 

Book namer 

LTCawtt 

50 

(a) 

101.6 

JUIL20O4 

2 

. 

LTCB ML 

LTCBOW 

10 

M 

1012 

JUO2004 

2 

. 

LTca mu. 

LTCBtcft 

15 

to 

101.6 

JU12004 

2 

- 

LTC8 ML 

YEN 

FtelUl Expert Credited) 

Sbn 

to 

100 

Jun. 1997 

uneflse L 

- 

Morgan Stanley 


Hnal terra and nan-catofato unless stated Tha yMd spread (over relevant government bond) at launch la suppled by the lead 
m anager . *Prtvnto p la cemen t fConuerUtte. $Wtti eqity warrants, Tfloatfng mta nets. VSeirf-BfWrt coupon, ft fixed m-offer price; 
teas are shown at the re-offer MwL a) Tranche A. Cslatte on mass at par. 6-month Libor * OlSOH unffl 15556 and fixed 986 
thereafter, b) Tranche B. CoUHe on 15539 at par. 6-month Ubor + 050*6 untl 155.99, fixed 9554 thereafter, cj Tranche G Calotte 
on 15557 el per. G-manth Ltoor + OAOM untl 15.637, fixed 95% thereafter. <$ Cafirta on 20.635 & 20536 at par. 2.7% tom 
20.6.94 to 20&95. 2-9% from 20.6-35 to 20.696. 312% tom 20.6.96 to 20647. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS Italy 



Coupon 

Red 

□ate 

Pries 

Day's 

chreiga 

YMd 

Week 

to* 

Month 

aoo 

■ NOTIONAL ITALIAN OWT. BOND (BTP» FUTURES 
(UFF$* Ura 200m lOOtha of 100% 



Australia 

9200 

06/03 

1052200 

-1.180 

857 

852 

8.19 

Open Sait price Change 

«9h 

Low 

Eat ad 

Open bit 

Belgium 

7250 

044)4 

- 

- 

- 

7M1 

729 

Jun 11228 11122 -1.10 

11220 

111.17 

31017 

00434 

Canada* 

Danmark 

6.600 

7.000 

06/04 

12AM 

— 

: 

_ 

858 

726 

ai2 

728 

Sep 111.70 110.75 -129 

111.70 

110:77 

857 

11090 

France btan 

aooo 

05/98 

- 

~ 

- 

8.12 

628 






CAT 

5^00 

04/04 

- 

- 

- 

626 

626 

■ ITALIAN GOVT. BOND {BTR FUTURES OPTIONS flJFFEJ Ura200m lOOtha of 100% 

Germany 

6.760 

OGAM 

— 


— 

628 

8.83 






Italy 

0500 

01/04 

962700 

-0.730 

825t 

B.07 

825 

Shfce — — — CALLS 



PUTB - 


Japan - No 119 

4,200 

0090 

106.7580 

+0.040 

32S 

3.16 

320 

Price Sep Deo 


Sep 


Oec 

No 157 

4500 

06/03 

1060750 

-0220 

a75 

326 

328 

11060 224 * 328 


129 


3.03 

Nsttwlands 

5-750 

01/04 

- 

- 

- 

528 

021 

11100 1.98 324 


223 


329 

Spain 

KL500 

10/03 

1065000 

-0.050 

9M1 

921 

926 

11100 124 SUM 


249 


320 

UK GBts 

6.000 

08m 

83-18 

-1002 

753 

722 

7.61 

ESL «WL tool (to 20B0 Puts 4Ba ftwtaus dwt open taL. Crte IM03 Puts 870* 



8.750 

11AM 

BI-IO 

-23/32 

75fl 

823 

723 







9000 

1QAJ8 

108-00 

-25/32 

aos 

8.15 

728 






USTraettury * 

5-875 

02AM 

91-08 

-22/32 

7.16 

724 

623 







62S0 

08/23 

88-12 

-28/32 

759 

724 

722 






ECU (French GovtJ 

8-000 

04AM 

912700 

+0.030 

7.18 

724 

728 

Spain 






FT-ACTUAMES FIXED INTEREST INDICES 

Price Indices Mon Day's Frt Accrued xd nty. —bow coopon yMd— -MerSuon coupon ytoM — — Wflh core*» yMd — 

UK fats May 23 change % May 20 Interest ytd May 23 May 20 Yr. ago May 23 May 20 Yh ago May 23 MaygO Yr. ago 


1 Up to 5 yarn p&) 

2 5-15 yen (24) 

3 Ower 15 years {8) 

4 ftradeantattes (6) 

5 AH stocks (8Z) 

htdex-Ortwd 

12328 

145.19 

10424 

18722 

142.45 

-028 

-020 

-020 

-051 

-0.40 

123.78 

14522 

10522 

18820 

14322 

223 

224 

222 

029 

2.19 

454 

552 

426 

0.12 

452 

5yra 

15 ^s 

20 yn 
kmtt 

727 721 7.15 

725 720 820 

7.95 758 8J2B 

7.90 720 8.64 

— toBttei B% — 

May 23 Mey 20 Yr. 

7.78 

825 

825 

7.71 759 750 750 

727 858 857 859 

757 828 851 8.18 

— — Irriteflan 10%—— 

NW 23 May 20 Yr. ago 

751 

8.73 

8.78 

6 Up to 5 years (2) 

18656 

+021 

16624 

a 70 

223 

up to 5 yra 

326 325 321 

224 223 254 


7 Owr 5 yen (11 j 

177.48 

-024 

17721 

t.12 — 

- 129- 

Over 5 yra 

323 3.61 327 

3.44 542 358 


8 AB stocks (13) 

17727 

-021 

17724 

127 

1.77 













8 year yMd 

IS year yMd 25 year yMd 

Debentwres and Loane 







May 23 May 20 Yr. apo 

May 23 May 20 Yr. ago May 23 May ZO 

Yr. ago 

9 Doha 4 Loons (76J 

13329 

-023 

133.74 

123 

422 


9.10 828 821 

928 

823 857 823 828 

952 


«mgt gam redemptai ytafc le are etewn above. Coupon Bands Low 0K-7W4; Machine 8K-10KH: High: ivh and rear, t Hat yMd. yM Yaw to data. 


London doaaifl, -Now VWc n*t-day Ytafctc Local naM owwaid. 

t Grooa flnctutflng wwiMcftig tax ot 12J par cant payable by noreeMdenM 

PrfcoK US. UK to 32nd*. ohai ki dodmaJ Bowrer MMS MonaAaM 

US INTEREST BATES 


LmcMrae Treasury 88s and 8ood Ytofcte 



s 

One motel 

— an 

Tvia jmr 

5jn 

Mateua 


42B 

nraiwr 

IK 

Fadfreeh at MenreiUan-. 


— . lie 

a w 

758 


■ NOTIONAL SPANWH BOND RJTWEB (MEPQ 



Open 

Sett price 

Change 

Mtfi 

Low 

Eat vol 

Open InL 

Jun 

B7.18 

9077 

•054 

8757 

96.75 

30582 

118297 

Sep 

98.70 

96.10 

-029 

96.72 

98.62 

4531 

10212 

UK 









■ NOTIONAL UK QB.T FUTUHEB {UFFg* 650,000 32ndB Ofl 00% 


FT FIXED INTEREST INDICES GILT EDGED ACTMTV INDICES 

May 23 May 20 May 19 May 18 May 17 Yr ago Htff low May 20 May 13 May 16 May 17 May 16 • 

QovL Secs. (UK) 9554 9552 95.94 95L24 94.78 34.80 107X4 8120 OK Edged bargatoa S7.7 111.4 1093 904 902 

Rxed tatereat 114J50 114.73 11439 11323 11252 111.36 133*7 11092' S-dqr awarega 100.7 98J9 92.0 833 B89 

* (or 1904. QovammarX Seoutdaa M0b tence contAotare 1ZT-40 (W3B, km 48.18 (371/74- Rued Meat Mpi etoct companion: 13387 C71/UV4 . low 9038 (W7S . Barit 100: Ooveremant Seeattas 1 VW ' 
as red Haad Harare 1828. SE octhtey More labored IBM 


BOND FUTURES AND OPTIONS 


Franc* 

M NOTIONAL FTTENCH BOND FUTURES (MATff) May 20 



Open 

Sen pricei 

Change 

High 

Low 

ESL VOL 

Open InL 

Jun 

12258 

12128 

-0.84 

12258 

12122 

248.786 

106558 

Sap 

12158 

12054 

-0.62 

12158 

120.08 

12218 

21284 

Deo 

120.40 

119.72 

-020 

12042 

11858 

4515 

6,139 


■ LONG THUt FRENCH BOND OPTIONS (MAT1R May 20 


Strto 

Price 

Jut 

- CALLS — 
Sep 

Dec 

Jim 

— PUTS — 
Sep 

Deo 

119 

. 

. 

. 

051 

1.10 

- 

120 

1.08 

- 

- 

0.08 

120 

- 

121 

053 

124 

. 

05S 

150 

- 

122 

054 

1.10 

- 

056 

- 

- 

12S 

aoo 

054 

- 

1.47 

- 

- 


Eat. vol tore), Cate 27.358 Pure iejO« . Pnwtaue day-a opre H. Cato B12J07 Pure 3505+6. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFg- DM250,000 TOOtha of 100% 

Open Sea price Chstge High Low Eat vol Open to. 
Jun 9630 94.68 -0.78 85.45 94.45 79405 163094 

Sap 94.84 94.21 -0.79 9434 9431 2192 27060 

■ BUHO FUTURES OPTIONS {M»^ OM2S0300 points o« 100% 

Strike CAIX8 PUTS 


Price 

Jun 

Jtt 

Aug 

Sep 

Jun 

Jul 

Aug 

Sep 

94S0 

0.18 

0.72 

151 

15S 

0 

151 

150 

1.64 

9600 

0 

0.40 

050 

151 

052 

158 

129 

1.80 

BOBO 

O 

052 

052 

0.79 

052 

1.81 

151 

258 


Eat voL total, Cm 12131 Pito 18100. Prevtaua Oey'» opre inu CM* 336188 Pula 298T0B 

■ NOTIONAL MEDIUM TERM BERMAN QOVT. BOND 

(BOBLJflJFFty DM250,000 IQOthe of 100% 


Open Sett price Orange Ugh Low Eat vol Openlnt 

Jun 10004 98.60 -061 100.06 10004 239 1320 


Open Sett price Change high Low EaL vol Open to 
I Jun 106-00 105-15 -0-22 106-05 10WB <7184 ' 119613 

Sep 105-01 104-14 -0-21 105-03 104-15 2508 2541 

■ LONO CULT FUTURES OPTIONS QJFFQ £80300 64tha of 100% 


Strike ■■ CALLS — ■ — PUTS 


Price 

Jun 

Sep 

Jill 

Sep 

108 

0-30 

1-80 

0 

2-32 

108 

0 

1-32 

0-34 

304 

107 

a 

1-10 

1-34 

3-40 


Eat toL total. Can* B+8+ Puta 70SL Piretore day's opre H. Cato 116844 Pure 78000 


Ecu 

■ ECU BOND FUTURES (MATIF) May 20 

Open Sett price Change High Lour Eat. voL Open to 
Jun 8920 88.58 -058 8920 8364 960 10566 


US 

■ U8 TREASURY BOND FUTURES (CHT) SlOgOOO 32ndm of 100% 



Open 

Latest 

Change 

Hgh 

Law 

EaL uoL 

Open InL 

Jun 

104-30 

104-18 

-0-16 

104-31 

104-15 

888500 

389512 

Sep 

104-04 

103-19 

-0-18 

104-04 

103-18 

11,187 


Dec 

103-08 

102-30 

-0-18 

103-06 

102-29 

404 

34580 


Japan 

■ NOTIONAL LONG TERM JAPANESE QOVT. BOND FUTURES 

OJffg VI 00m loothe of 100% 

Open Cfosa Change Ugh Low EaL vol Open to 
Jun 11330 - - 113-30 113X6 364 0 

Sop 112-51 . - 112-68 11232 2067 0 

* UFFE ere uea a traded on APT. M Opre Herat toe. are far prevtaua day. 


| UK GILTS PRICES 1 

_ YMd — —1094 — 

Itotn M Rad MeeE+or- Mgh Lore 

— Yield— _ 198+ _ 

IWat H Red Price E + or- Mgh Low 

-Wd-. —1991 — 

Hotel (II (!) Price E +or- Mgh tew 


aomr to* m v Rn itart) 


ThBS.T0pcin.189*tt__ 

caaiztoeisM 

Treat Spcl BN#- 

129G1B3S 

BHhttEHKHB 

UHtOClBSS 

Thn 124tpc II 
:19M. 


I4peii 

iSpQ 


199B#. 


BchlSVpc iMfitt — 
QraanbuiOK iw_ 
Tteai3^|KlW# — 

Eto llrtioc 1397 

Treat H| pc 1887# 

EnlilSpB 1887 

BtosIflM 

ItoinuelflBfi#™- 

UMIMMINHB#- 

14PCW-1 

ThMlPtflCte# 

aaitoim 

TteMO^eifiW# 


FhaltRtoaTian 

Btfiameim— - 1041 

TreailOijIKlWB M 

met 6pe 1890# Mi 

CrewatHi TDMpe 1999^. 688 

TMRigWW 

apeaDoo# ua 

Treanspcaoo - — . ion 

lOpczmn b .08 

tec vi#—. — - TM 

tesW* 736 

9Vpo2oo, am 

to t o wn — - — uz 

1 Ope 350^1- BBS 



ureii-gadNi-*^.- 

T00 FMhgB’aK'BM 

0UMntoV2iK2DM~ 

2' Treat flLpc2KK# 

'Stv Ba ** l »peaas 

“'2 IteslJItfC 2003-8 — 
tMA 7^4# M0t># 

'via toanww — 

HU Treat 11 Id* 2003-7 

1127. Tiwb fl>2sc 2007# — 
1PU 131MB 1W, 


a* 

462 

UB 

737 



827 11M| 
765 7GB 
6.13 IttVl 
7J3 91JW 
812 108^ 
849 12G 

80S 87H 
816 W, 
843 120d 
80* IQSfi 
847 13?* 
80* IWi 



814 109ft 
am MIM 
816 mg 


-a wu 

-ft Kft 

■a i25ft 

-ti 1EH 
-fl 1281a 
-fi l«ft 
-4l 112U 

-a itn 

Jl 138ft 
-it 119ft 

-fl isia 



Treat 6pc 2009 

651 

653 

m 

-% 

I15ft 

Trees 8 IMpO 2010 

756 

759 

«ft* 

41 

99ft 

Can Bpclii MU H — 

us 

352 

109% 

-fl 

126ft 

TWreBpc 2012ft 

U3 

852 

18BA 

-% 

127% 

TNti6%peao8-ito- 

754 

7.77 

7M 

HJ 

93% 

TtaaitoSOlW 

756 

757 

1<B% 

Hi 

11^ 

7%pc 2D13-16R 

759 

757 

96% 

-% 

114% 

Treat Wtpc 201 

107 

7.06 

tOBU 

-fi 

128% 

Eah12w13-17-_ 

8J9 

H6137ft>8 

-il 

189% 




" 49% 

- 44*d 

- »u 

-% 

39% 

94ft 

71 

'9 toiJs 

egt Can 3‘ipe '61 

7.80 

959 

-% 

-A 

107% itoto'flflBt.— . - 

U2 

- tot 

■* 



851 

- 30U 


37% 


117fi 

ima 

139ft 

w* 


9BU 

Bill 

10512 

1UH 

75i» 

98% 

94ft 

104ft 


«1« 

87H 

34% 

29% 

2QI 


241 8GB 199% 

2.71 346 1071! 

106 847 16 
816 848 164% 

812 344 T11U 
336 UO 171% 

838 100 1S5ft 

140 800 181ft 
146 183 132% 

848 166 141ft 
104 868 130% 

804 106 112% 

856 870 112% .. 

ft a tpactoitoredampMan rata on projected Mattel of fl) 10% 
and B) 5%. M Hgurea In pa ren tewte thaw HP1 bate tar 
tndaalng Oa 8 mortha prior to Itaua) and have bten adjusted fa 
raOact rabatoo of FWI ts 100 In January 1987. Ctemeretan tolar 
8948 HPI lor Soptenbor 1988 1*1 J and tor Aprt 1004; 144 a. 

Other Nad Intorast 


2%zPC T71 . 

2%peH3_ 

4%peW#™fll5fl 

S w 

ate— 4704 

!WH P*4 

2%00'13 «4 

2%pe*1B 414 

2%pe , 20 





111ft 


K M 


PtoBtflr- 


>il 

JHL 


Mtan0a*11%2010._ 

WatDwlO%is200e_ 

B1n11%pc2012" 


to coi 

i*wm 

HjmOflOaelEpcKhl. 

LMhl3%peaD06 

Uraraod J%pokre± 

IXC3pc , 20«t 

Mototell%jica007_ 
IfctWfr.apef- 
'Mklitf " 
4%«ia 

iwiiDNMi«%pcanB 


853 

141 

123% 

-A 

14U 

120ft 

852 

958 

851 

198 

110% 

121 

i 

13ft 

142 

112H 

119% 

113 

178 



S 

116% 

103% 

101 

10ft 

1156 

- 

112% 

5 

lift 

108% 

mi2 

929 

148% 

« 

144% 

10.11 

— 


-% 

ias 

953 

- 


-4 

44% 

33% 

958 

170 

114 

93% 

118% 

3 

A 

26% 

114% 

453 

7J1 

88% 

*% 

78 

87% 

— 

430 



16ft 

m 

— 

450 

190% 


14ft 

A 

1154 

- 

144% 

-% 

188% 


* Ttp 1 aneta tt Tha-lnre to narwaddawa on i 


, E Medan hate, ad Ex Mdwd, CMng mW-prtcae n dream kt pButda. 


FT/ISMA INTERNATIONAL BOND SERVICE 


LUed are to Uaat htameBond bends tevHch Ihoe b rei adequtte aeconday rarML LBtat 
BU Otfcr Cfcfi. YMd 


jatoa at 7199 pm on Mey23 

Bht OOtr Ctag. YMd 


lerered 6M Ofhr Otg. VWd 


U8L DOUAR SlRMBHTS 


NbatAntoa 9% 95 , 
iB% 00 . 


Ba« of Tokyo 6% 98- 

Bdc9n9%86 

8PCE7%97 

MkhQaeOZI 

Creeds 9 66 . 


Cheung tag Rn 6% 98 

Ota 8% 04 

Could BoRps 8 98 

Cwa Ranter 9% 88 — 

Dmaric5%9B 

BCSC8%98 

SC 8% 88 

SB 7% 06- 

EB0 1 4 97 - 


Bee d* Francs 9 9B_ 

BtaamS%B6 

Bt-knBankJtpan802 . 
Export aw Corp 9% B8 . 
Untold 7% 67 . 


Aitti Bgxtd 9% 95 — 
Post Motor Qodt 0% 96 . 
Gen Bee Chptof 9% 96 . 
BM4C9%M. 


hd Bk Japui Fh 7\ 97 . 
Inter Amr Car 7% 86 _ 

to 8% S3. 


JtpatDw5<6% 01 — 
KatoBeeParlOSB- 
Krea Bee Poear 6% 03 . 

Lrcamaw 


UtoM*Bte7%02_ 

rAppwiOnda(TO%B5. 

Nore^7%B7 

Ontota7%09 . 


OMrKonMbenkBfeOI , 

Pakn-Cnda 7% BO 

Irtl 



Swddi&portrtBB — 

Tokyo acPow ra% 96. 

TtoftMotarAOB-^ 
lUtoHttokrn7%az^ 

Wat! Be* B% 99 



DG/T30C ttWK SnVUQKII 

ton 8% 24 

QwBfcneto 7%C3_ 

Dtnttofc 0% 9B __ 

Ospb Fhtnoe 8% 03 . 
OMtheOiRnTiate . 

BC3C 8% 90 

eb: 6% oo 
SI 6% 00 — 
fttad7%00. 
to 7% 98 — 

Nomw8%«. 

0tota6%04. 

Spdn7% 03 - 
fiaadaiBW- 


.MOO 

92 

82% 

-% 

7.77 

— 800 

10ft 

raft 

-% 

8j03 

-400 

TOO 

raft 

-% 

7.M 

- M0 

Mft 

104 


637 

_ 260 

M9% 

MB% 

-% 

858 

-ISO 

102% 

raft 

-% 

662 

1600 

10% 

ii 

-% 

846 

MOD 

104% 

10ft 

-% 

in 

-SM 

90% 

91% 

-% 

1T7 

1000 

68% 

8ft 

-% 

850 

_ 100 

103% 

103% 

-% 

855 

-300 

raft 

Mft 

-H 

7.12 

MOO 

97 

97% 

-% 

857 

,183 

103% 

104% 

-% 

650 

_ wo 

Mft 

104 


632 

-290 

Mft 

Mft 

-% 

831 

1000 

W7% 

Mft 

-% 

851 

-200 

108% 

107% 

-% 

858 

-M0 

raft 

raft 

-% 

655 

,500 

raft 

103 

-% 

755 

„ ISO 

Mft 

TO 

-% 

7JH 

-200 

raft 

103% 

-% 

855 

-200 

104% 

raft 

-% 

112 

1500 

97% 

97% 

-% 

7.22 

-300 

106% 

10ft 

-% 

841 

-200 

raft 

104% 

-% 

8l75 

-200 

raft 

10ft 


179 

-200 

102% 

raft 

-% 

840 

3500 

6ft 

aft 

-% 

an 

-500 

US 

10ft 

-% 

759 

-360 

Mft 

10ft 

-% 

623 

MOD 

87% 

Bft 

-% 

834 

-200 

Mft 

«B% 

-% 

175 

MOO 

97% 

67% 

-% 

751 

-160 

raft 

104% 


820 

1000 

101% 

raft 

-% 

061 

3000 

8ft 

9ft 

-% 

750 

-200 

raft 

108% 

-% 

758 

-200 

101% 

MB% 

-% 

642 

MOO 

80 

99% 

ft 

7J0 

-ISO 

«B% 

10ft 

-% 

757 

.200 

106% 

Mft 

-% 

753 

.160 

M8 

raft 

ft 

173 

200 

107% 

Mft 

ft 

UB 

.GOO 

M* 

104% 

ft 

566 

.ISO 

50ft 

100% 

ft 

106 

1600 

97% 

97% 

ft 

757 

.200 

103% 

»4% 

ft 

6J66 

200C 

98% 

eft 

ft 

653 

700 

108% 

104 

ft 

626 

.300 

104% 

101% 

ft 

661 

200 

Mft 

104% 

ft 

646 

1600 

66% 

06% 

ft 

078 

3000 

K% 

aft 

ft 

746 

1500 

108% 

«*% 

ft 

756 

1600 

10ft 

Mft 

ft 

860 

aooo 

87% 

90 

754 

2000 

191% 

Mft 

ft 

ea 

aooo 

100% 

100% 


181 

1600 

90% 

9ft 

ft 

187 

aooo 

101% 

Mft 

ft 

721 

.700 

raft 


ft 

175 

2909 

toft 

101 


661 

1600 

aft 

MO 

ft 

060 

3000 

104% 

104% 

ft 

on 

GOOD 

103% 

103% 


010 

1600 

Mft 

10ft 


190 

1600 

94% 

9*% 


753 

4000 

101% 

101% 

ft 

753 

am 

108% 

10ft 

ft 

656 


IHad Kingdom 7% 97 

— ssco 

M3% 

103% 

ft 

557 

Abbey Nad Tmiury 803 £ 

1000 

Vtahaagm M B) 7 03 — 
MxktBnk015 

WaMBmk5%03 

WeridBenkSVaO 

— TOO 

— 2000 
— 3000 
— 1290 

98% 

24% 

94% 

112% 

M0% 

Si 

112% 

ft 

ft 

ft 

753 

071 

869 

Bsn 

Alenee Lake 11% 97 £ 

BWl Lml 8% 23 £ 

Deamk6%98£ 

BB1097C 

TO 

150 

.800 

.837 


9M8B nUNC STHN0H18 
Adm Bar BaftS 10 -™-_ 

ton 4% oo 

GouidBrapa4%S6 

Dmaifc4%9i 

BB6%04 . 


-mo 103% 

WOO 99% 
W1 
99 


.250 


BacdsFianea7%06 . 
FHBnd7%n. 


Hywto Motor Ai 8% 87 . 

tcatoxt7%00 

Metre 8% 01 

On*»8%CB 

OuehaeHydraSOB 

3NCF70* 

WtofcfBadtSOS 

Worfd8trfr70f 


.1000 
-300 108% 
-MO 111 
-300 109% 
.100 107 

.MO 110% 
.240 106% 
.400 103% 
-MO 96 
-480 111% 
.150 100 

.600 110% 


YEN 8IMIIQHTS 

Begun 6 99 

BBS% 00 

Brand 6% 98 

to rimer Do< 7% 00 . 

to3%oi 


JepenDerBk590 — 
Japan DwBk6% 01 . 
MpponTdTdfl% 99 . 
Nawv5%97 

sncfAoo 

fipeti5%02 

Sweden 4% 86 

Wald Bank 6% 02 — 


- 79000 106% 
.100000 112% 

- 50000 108% 

- 3000 0 U7% 
. 300000 fB% 


. 100000 106% 
.120000 114% 
-50000 108% 
.160000 106 


30000 114% 
.1X000 108% 


.180000 104% 
.230000 108% 


oust smusKis 
UY, 


.600 


Qre4nreoeLux9%99LR «00 

WaUBatBUU* 1000 

Bu* Veer Ntd Btoi 7% 02 n - 1000 
EnagfeBdwr8%9BR 600 


MtottfttMneaKABBCS. 
MQasdeM%B6CS_ 
MehCdUrt*1096Ct_ 
BBIdfQBC). 


BE*RsnB%9SC3- 

an BicCtttno flees. 

WW hr Fh 10 01 Cl 

N9PQnTiTM10%89CI. 
Ctofaaaact 


.EDO 104% 
.19 107 

.500 104 

.130 107 

-27C 104% 
.303 103% 
.400 105% 
.200 M6% 
1600 94% 


CrfitbHjirt 10% 88 d _~™_fiOQ 106% 

Qttottr«iMtlO%»CS_19 1«% 

(UnoRorlO% flSCS^. 200 106% 

Belgium 9% 96 Ecu 1260 104% 

Cand BtepaflOl Ecu 1MQ 109% 

Cart Lyoitoi 006 Ecu 125 103% 

EBMWEh 1128 108% 

FamdHStt1fl%fl6&ai 500 100% 

MyiftOOBai 1000 


to*) 8 88 ECU' 


.1000 




UNMNnodomtfitn Ecu-^STa 1M% 

4DCM89AS 100 1(B% 

BP%ntdca12%HAS MO 107% 

COtim8cto#Mi13%B9A$ _ MO 120% 
BtoXrfhMl2%66AI_ M 7S 106 
IUtealdtOnato1866AS u .100 M6% 

NSWThMMtrZBDOSOAS 1000 10% 

R4 1 Bade 7% 03 AS 128 90% 

ShtotQMIYt9 02AS_18Q 96% 
U*«WAuteJBl2flaAa_1» 111% 


104% 

89% 

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FINANCIAL IZVESTIA 

TALKS BUSINESS TO 300,000 INFLUENTIAL 

RUSSIANS EVERY THURSDAY. 


Financial Izvestia is an 8-page weekly business newspaper 
produced by the Financial Times in partnership with Izvestia, Russia’s 
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FINANCIAL TIMES 

LONDON ■ WUUS ■ FRAMKFUtT ■ MW TOLL ■ TOKYO 





24 


FINANCIAL TIMES TUESDAY MAY 24 1994 


COMPANY NEWS: UK 


Betterware makes £14m 
but warns on outlook 


By Paul Taylor 

Betterware, the direct home 
shopping group, yesterday 
reported a 3 per cent increase 
in full year pre-tax profits held 
back by lower interest receipts 
and the absence of a large 
exceptional gain which bol- 
stered the previous year’s fig- 
ures. 

Profits for the year to Febru- 
ary 26 increased from £13 .7m to 
£ 14.1m on turnover which grew 
by 12 per cent to £63 .2m 
(£56 -3m). The growth in turn- 
over was underpinned by a 14 
per cent increase in UK sales 
which rose to £50 .5m and a 
fourfold increase of sales in 
France to £SL8m. 

The pre-tax result included 
net interest receipts of £823,000 
(£L14ra) while the comparable 
profit figure was infla ted by an 
exceptional £L53m VAT credit 

Earnings increased to 9.4p 
(&4p) helped by a lower tax 
charge of £4J9m (£5. 14m). A 
proposed final dividend of U95p 
makes a 2.6p (2p) total The 
shares closed 5p lower at 123p. 

Mr Walter Goldsmith, chair- 
man, said it h ad been “a chal- 
lenging year'’ but that Better- 
ware had emerged stranger as 
a result of a series of steps 
including the opening of a new 
£10m distribution centre near 
Birmingham, the strengthen- 
ing of senior management and 
further expansion in. continen- 
tal Europe. 

Operating profits increased 
by 5.5 per cent to £13.2m 
(£12.5m). However, excluding 
the VAT refund underlying 
operating profits grew by 19 
per cent 

UK margins were higher, 
helped by a greater emphasis 






Walter Goldsmith: start-up costs held back, first quarter sales 


an product development 

The UK average' order level 
held steady at about £8. That 
compared with £13 in the 
French operations, which were 
started two years ago and 
made about £300,000 In profits 
last year, and £10 in Spain 
where Betterware began 
door-to-door sales in Septem- 
ber. 

Mr Andrew Cohen, chief 
executive, said the group plans 
to begin operations in Ger- 
many in the current financial 
year and will invest about £lm 
in the startup. 

Co mmenting on the outlook 
Mr Goldsmith cautioned that 
sales in the first quarter had 
been held back by start-up 
problems at the new distribu- 
tion centre, although he said 
these had now been resolved. 
He added that sales were also 
affected by “the consumer 
uncertainty” of recent weeks 


but said sales were now show- 
ing “a distinctly more positive 
picture”. 

• COMMENT 

The years of strong growth in 
the maturing UK market are 
probably over but the group 
plans to maintain UK margins 
by encouraging customers to 
increase their average spend 
and by cutting its purchase 
costs. However, the real angina 
for future growth should be the 
new operations in continental 
Europe. Against this, teething 
problems at Birmingham anH 
other factors have hit sales and 
orders at the start of the cur- 
rent year. Overall, pre-tax prof- 
its are likely to edge higher to 
about £14 5m this year produc- 
ing earnings of 9.5p. The 
shares have fallen sharply over 
the past year and are now trad- 
ing on a reasonable prospec- 
tive p/e of 1&9. 


Manchester United scores 
in VCFs £28m flotation 


By Raymond Snoddy 

VCI, the videos and 
pre-recorded music publisher, 
yesterday marked the publica- 
tion of its flotation pathfinder 
document by launching 10 
titles devoted to aspects of 
Manchester United’s league 
and cup double. 

Mr Steve Ayres, chief 
executive, who hopes the 
company will be capitalised at 
more than £60m, cited the 
launch of the football 
titles 10 days after the 
cup final as the 
example of VCTs speed and 
flexibility. 

"We will probably sell about 
200,000 Manchester United 


videos across the 10 titles,” 
said Mr Ayres, who pioneered 
the video sell-through - sale 
rather than rental - market in 
the UK 

The company hopes to raise 
a net £28m through a placing 
and intermediaries offer to 
repay debt incurred in the 
management buy-out with 
directors sailing 30 per cent of 
their 17 per cent slake in the 
company. 

Mr Ayres has a 45 per cent 
stake which should be worth 
£l5m to £2m as a result of the 
float 

In the year to December 31 
1993, VCI made operating prof- 
its of £5 .9m before exceptional 
items an turnover of £595m. 


1 DIVIDENDS ANNOUNCED J 



Coreas - 

Total 

Total 

. Current 

Date of 

ponding 

far 

last 

payment 

Albion int 1.6 

payment 

July 7 

dMdend 

1.6 

year 

year 

4 


Bettarwwe -„—fln 

British Airways fin 

Domino Prlnt hi g Int 

Kelt Energy .. ti n 

Kenwood fin 

Richards int 

Scottish Radfo § Int 

Seton HeeHhcera— _fin 

Tops Estates fin 

Wamford tons .... fin 


2.206 2.1295 

7.75 75 


Dividends shown pence par share net except where otherwise stated. TOn 
increased capital §USM stock, jt&rhanced scrip alternative available. fFar 
nine months. 


However, operating pro fit for 
1992 was £2.3m, down from 
£5 2m. 

Mr Ayres blamed the 1992 
fall on problems at Strand 
Magnetics, its manufacturing 
arm, and the write-offs an chfl- 
drens' programming following 
the entry of Disney into the 
market. 

Strand was closed and its 
business sold to Rank. VCI 
videos aimed at children con- 
centrate on pre-school titles 
such as Thomas the Tank 

Engine and Sooty. 

"The publishing businesses 
have a fantastic track record 
and it's the publishing busi- 
nesses we are floating. The rest 
have long since gone,” said Mr 
Ayres, who added he had 
decided that now was the right 
timing for a float 

VCI was set up in 1985 and is 
one of the largest of the inde- 
pendent publishers. It has sold 
a total of 44m video cassettes 
In the UK alone. 

Next month, coinciding with 
the float, VCI will begin its 
move into personal computer 
software for the first 
time with games and educa- 
tional titles. 

The offer is being 
sponsored by Samuel Montagu 
with James Capel acting as 
brokers. 


Further Growth 
From Macfarlane 

Macfarlane Group (Clansman) P.L.C. 

Results for the year ended 31st December 1993 


PROFIT BEFORE TAXATION 

DIVIDENDS PER ORDINARY SHARE 
EARNINGS PER ORDINARY SHARE 


Chairman’s Comments 

"Dividends have increased by over 57% in 
the last four years and have increased every 
year since wc became a public company in 
1973." 

"I have stated on many occasions that 
shareholders should continue to benefit from 
growth in income which reflects (he earnings 
growth in the Group.” 

II lira kiniM like j « pi of i he Annul Rqnci a rile nr 
The So. irian. Motfaitanc Gnlip (CUiwnjn) PLC. 

:i NewiMi PIuk. tf.t fpy 


1992 INCREASE 


10,152 


12,732 

3.84p 

IL25p 


“The results are a tribute to the commitment, 
dedication, expertise and experience of our 
executives who have successfully managed the 
Group through recessionary conditions.” 

"I remain confident that Macfarlane Group 
will continue to make satisfactory progress." 


LORD MACFARLANE OF BEARSDEN 
CHAIRMAN 


NHL in the | Decrease in large bets on credit leaves gaming division lower 




black and 
to resume 
lending 

By Simon Davies 

National Home Loans, the 
centralised mortgage lender, 
yesterday announced it would 
resume residential mortgage 
lending after a three-year 
absence, following its return 
to profitability. 

The company reported pre- 
tax profits of £4.1m for the six 
months ended March 31, 
against losses of £26. lm. 

Mr Jonathan Perry, execu- 
tive chairman, said the com- 
pany had seen "substantial 
reductions in provisions, 
repossessions and bad debts’* 
and that a resumption of lend- 
ing was now “an obvious 
step”. 

NHL's mortgage portfolio 
has fallen from a peak of more 
than £3bn to £15bn, and con- 
sequently net interest income 
was down at gssLim (£35JBzn). 

However, operating 
expenses fell from £16JJm to 
£Z1.8m, helped by disposals, 
whfle provisions for losses fell 
by almost £30m to £20.5m. 

Accounts that are more than 
3 months in arrears have 

fallen by more Hum half to 

1,516. With the mortgage book 
under control and being rap- 
idly depleted, the company has 
decided to make a push for 
new business. 

It has signed a long-term 
lending facility with Abbey 
National, which will provide 
initial funding for its mort- 
gage portfolio, but this will be 
refinanced through securitisa- 
tion. 

Intermediaries are still esti- 
mated to account for more 
than one third of the mortgage 
market and NHL is confident 
it can regain access to this net- 
work. 

Mr Perry said NHL could 
compete with the building 
societies because their cost of 
capital had increased with 
competition for deposits, while 
NHL had the advantage of 
lower costs through the 
absence of a retail network. 

Renewed lending represents 
tiie second leg of NHL's strat- 
egy for recovery, and the third 
leg, a financial restructuring, 
is promised this year. 

The company still has nega- 
tive shareholders' funds of | 
£32m and preference share | 
dividends are £20.3m in ' 
arrears. 

A rights issue Is also consid- ■ 
ered likely. 

Earnings per share 
amounted to 0.4p (29. Ip 
losses). The shares rose ftp to 
23ftp. 


Slow start hits Ladbroke shares 


By David Blackwell 

The number of significant bets 
on credit made by high spend- 
ing customers with Ladbroke 
fell in the first few months of 
the year bitting profits in its 
betting and gaming division. 

Shares in the hotels, betting 
and DIY group fell 16ftp yester- 
day to close at 182ftp after Air 
John Jackson, chainuan, told 
the annual meeting that 
overall group profits were 
“currently below last year's 
level”. 

Credit betting “had a poor 
start to h»» year”, he said, and 
the division’s profits were 
lower than last year. 


Credit betting is thought to 
account for about a quarter of 
the division's turnover. The 
peaks and troughs of credit 

pnnhlfng ' are similar to threw 

faced by top casinos, which 
can rely on a tiny number of 
high spending customers for a 
large proportion of their prof- 
its. 

Mr Jackson said that the UK 
retail betting business had per- 
formed reasonably well, helped 
by the successful running of 
the 1994 Grand National Both 
the average amount staked and 
the number of bets were ahead 
in the first four months. Hiring 
turnover by 5 per cent. 

The shares hit 208p shortly 


after the announcement of the 
preliminary results in early 
March, before retreating to 
ISlp in early May. They started 
to riftnh to Friday’s dose of 
199p in the hope of some good 
news from the AGM. 

However, the chairman's 
statement at the London Hil- 
ton yesterday morning proved 
to be disappointing. 

Mr Jackson warned that 
while Texas Ho me care sales 
woe 3.5 per cent higher com- 
pared with the first four 
months of last year, profits 
were significantly lower. 

Operating profits at Hilton 
International were slightly 
ahead, with overall occupancy 


similar to lost year and better 
average room rates. 

The property division experi- 
enced reduced rental Income 
following disposals. Negotia- 
tion on further sales continue, 
and the group would be mak- 
ing further progress in reduc- 
ing its investment in commer- 
cial property for the rest of this 
year. 

Ladbroke was emerging from 
a period of considerable 
change, Mr Jackson said. 
While profits were below last 
year’s levels, “they are in Hue 
with the board’s expectations. 
The board continues to look 
forward to the future with con- 
fidence". 


Kunick expects to resume dividends 


By Peggy HotOnger 

Kunick, the fruit marhfna ram party which 
earlier this year floated its nursing homes 
division, expects to r e t urn , to the dividend 
list after a three-year absence. 

Mr Christopher Burnett, chairman . said 
he was "confident we will pay a dividend 
at the year-end”, barring unforeseen cir- 
cumstances. KViwirir suspended payments 
in 1992 when recession and the restructur- 
ing of the UK pubs industry hit profits in 
the leisure division. 

Mr Burnett was speaking at the compa- 
ny's interim results announcement, which 
showed a 50 per cent increase in profits 
before tax and exceptional gains to £3-lm. 
There was an exceptional profit of £L9m, 
after goodwill write-offs, on the flotation of 
Goldsborough Healthcare in March. 


Sales fell by 3 per cent to £47.8m in the 
six months to March 31. Pre-tax profits 
were £5m (£2.1m) and earnings per share 
came through at L07p (026p losses). 

Mr Burnett said the group had begun to 
see some recovery in its erne leisure busi- 
ness, while plans for Kunick’s future strat- 
egy were well advanced. 

Kunick is thought to be planning to 
develop its trial games arcade operation in 
Leeds along theme park lines, using pro- 
ceeds from the Goldsborough flotation. Mr 
Burnett said Kunick would announce 
details of its commerciall y sensitive strat- 
egy in the second half. 

He reiterated that the group’s efforts to 
refocus on its core amusement machine 
business had begun to pay off. 

The amusement machlnea division had 
increased operating profits by 10 per cent 


NEWS DIGEST 


to £ ?,.5 m in spite of the fact that consum- 
ers were not spending any more in pubs. 
Cost-cutting and new types of machines 
helped profits in the UK, he said. 

The discount retail business in France 
survived a severe price war to report a 6 
per cent increase in operating profits to 
£731,000. 

The four remaining nursing hemes in 
France increased profits by 54 per cent to 
£522,000, with occupancy levels running at 
97 per cent Mr Burnett said that business 
would be sold at some stage. 

The Goldsborough disposal also left the 
group with a strengthened balance sheet 
Kunick raised £25.6m from its share of the 
nursing homes business, jointly owned 
with NatWest Ventures. Net cash was 
£6.9m at the half-year, against debt of 
£17m last time. 


S Daniels 
warns of 
deficit 

Shares in S Daniels yesterday 
fell lOp to 64p as the supplier 
to the food manufacturing and 
baking industries warned of a 
loss for the first half of the 
current year. 

The group had returned to 
profit of £63,000 in 1993 after 
incurring a succession of 
losses. 

Mr Paul Daniels, chairman 
and chief executive, said pres- 
sure on margins remained 
as competition intensi- 
fied. Several group develop- 
ment projects- were under way 
but these would not impact an 
the interim result, he said. 

As a result of this setback 
Mr Daniels was reviewing 
operations and had started 
looking for a group nhiaf exec- 
utive. 


MY Holdings 

M7 Holdings, the enlarged spe- 
cialist packaging group, has 
acquired two more businesses, 
Clean print and Jensa Packag- 
ing, for a total cash consider 
ation of fii-fim. 

The two companies supply 
the healthcare sector and for 
1993 generated combined pre- 
tax profits of £240,000 on turn- 
over of £2m. Net assets 
acquired were about £260,000. 

Albion 

The closure of its County 
Down trouser factory left 
Albion, the Belfast-based men's 
wear company, with pre-tax 
profits substantially , lower at 
£291^73 in the six months to 
March 31, against £507,940. 

There was a charge of 
£250,000 relating to the closure. 
The shares fell 17p to 96p. 

Turnover advanced 47 per 
cent to £&5m (£9JL4m), mainly 
reflecting the acquisition of 
Maitland Menswear. However, 


£61m buy for Tops Estates 


Tops Estates, which in January paid £14m for 
two shopping centres in Lancashire, yesterday 
announced the acquisition of the Bond Street 
shopping centre in Leeds from Guardian Prop- 
erties for £61m. 

It also reported pre-tax profits up from 
£L69m to £2L37m in the year to March 3L 
Rental income expanded to £14Jm (£10. 6m), 
while property outgoings rose to £720,000 
(£499,000). 

The centre was opened in 1977 and occupies a 
2.5 acre site in the centre of the city. The 
consideration Is to be financed initially through 
new b ank fa ci lit ie s “negotiated for the pur- 
pose”, the company said. 

Most of the centre will be retained for 


investment giving a current rental Income of 
about J&5m but a part, valued at about £12m 
and providing income of £680,000, will be 
sold. 

The pre-tax figure included £494,000 of prof- 
its from the sale of a property acquired during 
the year for disposaL Interest took £10. 7m 
(£7.49m). 

Earnings per share rose to 4J»3p (4.4p) and 
the final dividend is fitted to a proposed 1.6p 
U.5225P) for a total of 2L2064p <2Jp), a rise of 5 
per cent 

The group’s investment portfolio was 
independently valued at £234m at the period 
end, compared with a valuation of £191m 12 
months earlier. 


SOCIETE ALSACIENNE DE MAGASINS 

Notice to holders of 

PINAULT-PRJNTEMPS-REDOUTE shore warrants 

Holders oF the above-mentioned securities are hereby informed of the decision 
taken at the Extraordinary General Meeting of the shareholders of Pinault- 
Printemps on 18 May 1994 to increase the capital of the company from 
1,445,758,300 French francs to 1,590,334,100 French francs by incorporation 
of the special long-term capital gains reserve. 

This capital increase involves the issue of 1,445,578 shares, allotted free of 
charge to shareholders on the basis of \ new share for each 10 shares held. 

The conditions under which the share warrants may be exercised have been 
adjusted to fake account of this capital increase, in accordance with the terms 
and conditions set out in the issue contract. Each share warrant exercised 
henceforth entitles the holder to 1 .1 shares. 

In the event that all the warrants exercised by a single holder were to entitle the 
holder to a quantity of shares other than a round number, the holder will receive 
a quantity of shares rounded down to the nearest whole number, and a cash 
payment equal to the value of the remaining fraction of a share, calculated on 
the basis of the opening share price quoted on the Paris Bourse on the day prior 
to that on which the request to exercise the warrants is received by a duly 
authorised intermediary. 

The new exchange value shall apply to warrants exercised from 20 May 1994 
inclusive. 

GROUPE PINAULT-PR1NTEMPS- REDOUTI 


The FT can help you reach additional business readers in France. ! 
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you a unique recruitment advertising opportunity to capitalise on 
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with margins cut to maintain 
market share, operating profits 
were only 7 per cent higher at 
£541,673 (£507,940). 

Earnings per share were 5.6p 
(9.6p) and the interim dividend 
Is maintained at L6p. 

Kelt Energy 

For the nine months to Decem- 
ber 31, Kelt Energy, the oil and 
gas exploration and production 
company, achieved net profits 
of £4.43m, equivalent to earn- 
ings per share of 3p. 

The company has changed 
its year end; profits in the pre- 
vious 12 months were £4.77m 
for earnings of JL3p. 

On turnover of £26. 7m 
(£21 .4m) operating profits were 
£5.78m (£6-56m). The pre-tax 
result was £5,05m (£5. 68m). 

A lp dividend is recom- 
mended with an enhanced 
scrip alternative. 

Mr Hubert Perrodo, chair- 
man. said that Kelt’s profile 
had changed considerable over 
the past two years with an 
expansion of its activities over- 
seas. 

Frost 

Frost Group, the petrol 
retailer, has bought 18 petrol 
stations in Yorkshire from 
Bayford for £2.45m cash. 

The company expects to 
spend a further £4U5m develop- 
ing the sites, which will not 
contribute fully to profits fin- 
two to three years. 

Scottish Radio 

Scottish Radio Holdings, for- 
merly known as Radio Clyde, 
achieved a 29 per cent increase 
in pretax profits to £l.97m for 
the half year ended March 3L 


BBL (Cayman) Limited 
USD 125,060,000 
Guaranteed Floating Rate 
Notes due 1997 


Interest Rale; 5.30% 

Isttnac Period: from 24^.94 

to 25.11.94 

Interest payable per 

USD 250.000 Note: USD 6^09.03 

USD 500,000 Note; USD 13.61SJK 

By Fuji Bank (Lnscmbot u g) S.A. 
Agott Bank 


Phili 


telephone: 

lip Wrifile: 


jey on 
351 


£75400,000 

HMC FINANCING 3 PLC 

Class A 

Mortgage Backed Floating Rate 
Notes due December 2010 

Notice ts hereby given that there 
will be a principal payment of 
£1.467.29 per Now on the interest 
payment date June 15. 1984. The 
principal amount outstanding per 
Note will be £38.623.49. 

8y: Tta One Mntnatu Bank, N A 

Lndoa. AgsntBat* 

May 24, 1994 


u„,o15% 

off electricity 


021 423 301 S 

I Powerline 


Turnover advanced 15 per 
cent to £8.lm - through its 
broadcasting outlets the USM- 
traded company serves more 
than 85 per cent of the Scottish 
population. 

Earning s rose to 14.1p (12p) 
and the interim dividend Is 
lifted ip to 4.5p. 

The comparative profits fig- 
ure included exceptional 
Income of £273,000. 

Eagle Trust 

Eagle Trust, the film and tele- 
vision services and distribution 
group, reported a reduced pre- 
tax loss of £5 .53m for 1993, 
against £7J59m- Turnover fell 
from £84.4m to £809m. includ- 
ing £17Bm from discontinued 
activities. 

The result benefited from 
lower interest charges of £4.6m 
(£6.84m). 

The figures took account of 
the disposal of the lighting 
activities of the film and televi- 
sion section and the cessation 
of trading by D Pavis. 

There was a preinterest 
profit on continuing activities 
of £l-92m. 

British Biotech 

British Biotechnology has 
moved its main product, the 
cancer treatment Batixnastat, 
Into tfy> next Stage Of pliniial 
development Success with the 
first trials, announced in 
March, ted within two weeks to 
a £94m cash-raising wpmiw. 

The next stage - Phase 2 -is 
designed to determine the best 
doses. Phase 3 large scale tri- 
als is scheduled to start in the 
last quarter of 1994. If the trials 
are successful, the product 
could be launched in 1996 or 
1997. 

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FINANCIAL TIMES TUESDAY MAY 24 1994 



"»i‘ (Ik 


i'4 



i 


25 


COMPANY NEWS: UK 


By Alan Cane 

Shares La Domino Printing 
Sciences yesterday rose 27p to 
517p following a sharp advance 
at the Interim stage. The Cam- 
bridge-based printer manufac- 
turer is benefiting from heavy 
Investment in the US where 
sales grew 49 per cent in all 
sectors. 

The group also announced 
the. acquisition of certain 

assets and intellectual property 

rights of Directed Energy for 
STm (U.6m). to be satisfied by 
shares and up to $l.8m n ash. 
The Californian company has 
developed laser technol- 
ogy for use in the coding and 
marking market. 

Profits before tax jumped 46 
per cent from £3. 73m to £5.44m. 
Earnings per share rose 
by the same percentage to 
13.65P (9.35p). An Interim 
dividend of 3J2p is declared, 20 
per cent ahead of last year's 



Tbn ii 


G®rald Dennis: predictions of return to normal growth fulfilled 


Sales rose 10 per cent to 
£4L4m (£37.Gm). In the Ameri- 
cas, where Domino’s chief com- 
petition is Videqjet, owned by 
GEC of the UK, sales rose from 
£9.5m to £14Jm. In Europe, 
however, they fell 10 per amt 
to £16.7m (£18-Sm) while the 
UK was flat at £5J3m (£5.7m). 

There was an encouraging 22 
per cent rise in the rest of the 
world from £&91m to £4.76m. 
The group performed particu- 
larly well in Saudia Arabia, 


DARBY GROUP has completed 
the acquisition of Unique 
Sealed Units of Ruisllp, Middle- 
sex. for a maximum £240,000 
cash. 

FTTZWILTON: Recent open 
offer of 117m new units placed 
with new and existing inves- 
tors; the latter took up 16 . 1 m of 
the unite on offer. 

FORTE has acquired two road- 
side service areas, at Bangor, 
north Wales, and Newark, Not- 
tinghamshire, from Pavilion 

gflpyj C g fl, 

IAWS GROUP: Holders of the 8 
per cent subor dinat ed convert- 
ible unsecured loan notes have 
agreed to their conversion on 
the basis of for each note, L2 A 
shares, one &5 per cent con- 
vertible preference share or I£l 
cash. 

JUPITER TYNDALL: the basis 


Dubai and Singapore. 

PackTrack, the diversifica- 
tion into mimeographic joint- 
ing; is near to break even with 
sales in the first half of 
£874,000. 

Mr Gerald Dennis, rthaiTTTum t 
said his prediction at the end 
of last year that the group 
would return to its traditional 
rates of growth and profitabil- 
ity had been fulfilled. 

The forward order book, 
worth £6m, was the best the 
group had achieved, he added. 
“We are confident that we win 
continue to grow profits 


NEWS IN BRIEF 


of allotment for the enhanced 
scrip dividend alternative win 
be one new share for every 
25.75 ordinaries held 
LtLLESHALL has sold ZZ.l 
acres of land at Telford, Shrop- 
shire, for £862,155. Net book, 
value of the land was £4&000. 
MEPC, the property, company, 
has submitted an outline plan- 
ning application for the rede- 
velopment of the Central Trad- 
ing Estate in Starnes, which it 
is planning to buy from Han- 
over Property Unit Trust. 
MEPC Developments has pro- 
posed braiding 415,000 sq ft of 
business space set in parkland 
on the 17 acre site. 

SCHOLL Is to set up a joint 
venture In Indi a with local 
company Piramal Enterprises 
responsible for the marketing, 
sale and distribution of Scholl 


through the second half,” be 
said. 

" Domino traditionally makes 
most of its sales in the second 
six months of the year and foil 
year profits could be almost 
three times the interim figure. 

The group is one of a small 
number of mainly UK-owned 
companies which dominate the 
continuous ink-jet printing 
market. Continuous ink jet 
printers are able to print on a 
variety of surfaces using differ- 
ent kinds of ink and are able to 
withstand the rigours of the 
factory floor. 


products in the subcontinent 
SILVERMINES intends to 
acquire compulsorily the bal- 
ance of the shares in Molynx 
Holdings not already owned. 
TEES AND HARTLEPOOL 
Port Authority has acquired R 
Durham, a Cleveland-based 
road haniag w aw A warehousing 
company, for an undisclosed 
sum. The company operates a 
fleet of more than 140 vehicles 
and has annual turnover of 
EZOm. Teesside Holdings, a con- 
sortium formed by Humberside 
Holdings, 31 and Powell Duf- 
fryn, acquired the Tees and 
Hartlepool Port Authority for 
£18Qm in 1992. 

WILLIAMS HOLDINGS has 
received acceptances for its 
recent rights issue in respect of 
73 An new ordinary shares rep- 
resenting 8EU# per cent: 


Growth 
report gives 
Celsis shares 
a fillip 

By DanM Orson 

Celsis, the biotechnology 
company, which was valued at 
£60m when it came to the 
stock market in July 1993, saw 
a sharp rise in costs and sales 
to the year to March 31. 

Spending on research and 
development rose from 
£156,000 to £984,000 while a 
rise in the number of employ- 
ees from 15 to 48 and the asso- 
ciated costs of growth, took 
overheads from £849,000 to 
£l-3m- 

The flotation proceeds lifted 
net current assets - an Impor- 
tant figure for a low-sales, 
high investment biotechnology 
company - to £10.8m 
(£770,000). 

A pre-tax loss of 21.58m 
compared with a deficit of 
£460,000 for the six months to 
end-Harch 1993. 

The shares rose 4p to 91p 
compared with the flotation 
price of lOOp that gave a mar- 
ket ffl pi h tljfaHnu of £54. 6m. 

Mr John Precious, chairman, 
said the new financial year 
had started wefL New products 
were well on track. 

For 1993-94, sales of the 
company's one product, a con- 
tamination detection kit, 
Increased by 46 per cent to 
£172,000. Fee income brought 
total turnover to £274,000. 

The contamination kit is 
used by Unilever, the Anglo- 
Dutch consumer goods com- 
pany and the Thames Water 
and Severn Trent water com- 
panies. Each Mt costs about 
£500 and is guod for 500 teste, 
said Mr Chris Evans, the com- 
pany's founder and 26 per cent 
stakeholder. 

What the company regards 
as potentially its biggest 
seller, the Digital kit for 
detecting and quantifying low 
levels of contamination, is 
scheduled for launch in the 
last quarter of 1994. 

The company said that it 
had signed a collaborative deal 
with Wellcouie, the pharma- 
ceuticals company, to deter- 
mine the feasibility of using 
Celsis technology to hygiene 
monitoring. It also launched a 
new product yesterday, the 
Colony Counter, which auto- 
mates part of the laboratory 
testing for microbes. . 


Murray Johnstone 
halts launch due 
to demand doubts 


By Bethan Hutton 

Murray Johnstone is 
postponing the launch, of a 
smaller company investment 
trust because of doubts over 
the level of investor demand. 

The Murray Acorn Trust ear- 
lier this month announced 
plans to raise np to £SQm to 
Invest in small companies capi- 
talised at up to £50m, and some 
venture capital projects, such 
as managemen t buy- fas. 

But yesterday Mr Alastair 
Stewart, one of the intended 
managers of the ftmd, said that 
after presentations to potential 
investors, the company decided 
not to proceed. “We did not 
have enough indications of 
institutional support to give us 
confidence to continue with 
the public offer,” he said. Flans 
for the launch could be revived 
at a later stage if market condi- 
tions changed. 

Mr Philip Middleton, invest- 
ment trust analyst with Smith 
New Court, said he was sur- 
prised at the development 

However, he added that the 
current state of the market 
made it difficult to launch new 
trusts. “You are pushing water 


uphill to get an investment 
trust away just with institu- 
tions, and the retail market 
has been very slack recently. 
There have been a number of 
issues which have not been 
able to raise the amount they 
wanted. 1 ' 

Records were set earlier this 
year for the amount of money 
raised by new investment trust 
issues, but since the first rise 
in US interest rates to Febru- 
ary, investors have been much 
more cautious. 

The oversupply of funds in 
Hip amaTUir pmmpawy and Ven- 
ture capital area may also have 
been a factor. Several new and 
established smaller company 
and venture capital trusts have 
raised new funds recently, and 
the proposed Acorn launch 
was overshadowed by the 
imminent P opart of 3i, 
venture capital fond. 

Yorkshire Food boy 

Yorkshire Food Group has 
purchased Sweeteners (UK), a 
Northamptonshire-based 
maker of artificial sweeteners, 
for £68,000 cash. 


* •' ' - 
-c * 


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.+«*■ 



26 


FINANCIAL TIMES TUESDAY MAY 24 1994 


COMPANY NEWS: UK 


12 


UK 


healthcare side grows 


By Andrew Botger 


Seton Healthcare, tin* mprtical 
products and sports equipment 
group, said, it would concen- 
trate for the next few years on 
the UK healthcare market, 
where it was enjoying strong 
organic growth. 

The Oldham-based company 
reported a 39 per cent Increase 
in pre-tax profits, from £6.1m 
to £&45tn, in the year to Febru- 
ary 28. 

Sales rose by 28 per cent 
from £38.6m to £49.4m. Of that, 
£L7m came from acquisitions 
and £8m was contributed by 
the Cupal businesses, bought 
at the end of 1992. 

Mr Ian Cater, chief execu- 
tive, said the contribution to 
group sales from healthcare 
had risen from 61 per cent to 67 
per cent 

Seton’s concentration on 
community care and the over- 
the-counter products was pay- 
ing off in UK healthcare, which 
showed organic growth of 11 
per cent Healthcare's operat- 
ing profits rose from £5-99m to 

mem. 


Trading conditions wore dif- 
ficult in continental Europe, 
with sales to Germany and 
Italy adversely affected by 
healthcare reforms. The focus 
of European activity was being 
moved into community care 
and the OTC sectors. 

The much smaller sports and 
leisure division increased sales 
by 9 per cent to £5. 5m. It 
increased market share and 
improved margins, lifting oper- 
ating profit by 16 per cent to 
£703,000. 

During the year Setou spent 
£5.25m on OTC brands, includ- 
ing Waspeze, an insect bite 
remedy, and Bumeze, a horns 
treatment Since the year-end, 
a further £6 .25m has been 
spent on dietary supplements 
and a range of antacid prod- 
ucts. 

Gearing increased from 3 per 
cent to 36 per cent during the 
year, although interest cover 
was a comfortable 28 times. 

A new £5.4m distribution 
centre at Oldham has been 
completed on budget and will 
become operational later this 
year. 


Earnings per share rose by 
17 per cent to 19.1p (16-3p). 

A final dividend of 49p (Alp) 
gives a total for the year of 
6J5p (5.74p), a rise of 13 per 
cent 


• COMMENT 

Seton’s focus on OTC brands 
and community care through 
its sales force of former nurses 
seems well suited to the pre- 
vailing trends, at tegs * In the 
UK. Seif-medication now 
accounts for more than 30 per 
cent of sales. The group has 
integrated the Cupal acquisi- 
tions SmOOthly and and mar - 
keting of new brands has also 
paid off. The shares, up 6p to 
318p yesterday, rose swiftly 
after being floated at 130p In 
1990. However, since peaking 
at 360p last year, they have 
underperformed the market by 
more than 20 per cent as 
healthcare stocks fell out of 
favour. Forecast pre-tax profits 
of £9.7m put Seton’s shares on 
a prospective multiple of about 
14 - which seems undemand- 
ing for a group with such a 
timely focus. 


Richards loss deepens to £1.6m 


Losses at Richards, the Aberdeen-based textile 
manufacturer, widened from £326,000 to £L62m 
pre-tax for the six months ended March 31 
1994. 

The figure included provisions totalling 
£L61m for the period. Before these items there 
was a swing at the operating level from losses of 


£248,000 to profits of £220,000 from continuing 
activities. 

Turnover of the ongoing businesses rose to 
£38£m, compared with £33 -3m. Losses per share 
emerged at 5.56p against a previous 0.63p, while 
the interim dividend is maintained at 197p net 
per share. 


Right connection for European expansion 

Andrew Bolger on a US purchase that changed the horizons of Senior Engineering 


F lexible couplings and 
expansion joints may 
sound ungUunorous, but 
these products have trans- 
formed the strategy and pros- 
pects of Senior Engineering 
Group. 

Until recently, Senior was 
best known as a solid if rather 
unexciting supplier of boilers 
and ductwork. 

Yet the last two years have 
seen it withdraw from the min- 
ing equipment business due to 
the shrinking of the UK coal 
industry. It has also stopped 
competing for large turnkey 
power projects because of the 
consequent reduction in coal- 
fired power generation. 

More significantly, Senior 
has acquired a US business 
with a commanding position in 
the US automotive market - a 
base from which the UK group 
has started to expand into the 
European motors market 
through heavy investment 
Flexonics, which Senior 
bought for £28m in 1992, has a 
dominant position in the US 
automotive market for flexible 
couplings and expansion joints, 
used to reduce exhaust vibra- 
tion and cut emissions. It will 
invest a further £»ftn over the 
next two years in this busi- 
ness, which is benefiting from 
tougher pollution controls. 

Senior has won a contract 
which will be worth S75m 
(£S0m) over four years to sup- 
ply General Motors’ fleet of 
light trucks with exhaust gas 
returns (EGRs), pipes which 
reduce vehicle emissions by 
c hanneling fumes back into 
the engine to be reburned. 


Encouraged by Ford, one of 
its main customers. Senior has 
invested fffrn in building a fac- 
tory in south Wales. The chart 
shows Senior Flexonic’s 
planned growth in production 
of exhaust connectors and 
EGRs, which is expected to tri- 
ple between 1993 and 1996. 

Mr John Bell, who became 
Senior’s chief executive in 
1992, said: “Flexonics is the 
thing that lias changed our 
horizons over the last two 
years. We need to be influen- 
tial in the markets we are in. 
We also need to be interna- 
tional - the world today 
requires that” 

Senior now has three divi- 
sions: 

• Engineered products, which 
includes Flexonics, made oper- 
ating profits of £10.6m on sales 
of £168m last year; 

• Thermal engineering, which 
made £8-5m on sales of £l60m; 

• Construction services, 
which made £6J2m on sales of 
£63m. 

The thermal engineering 
division supplies boilers and 
hpcit transfer components for 
main power generation con- 
tracts. Mr Bell says the group 
“has stopped pretending” it is 
big enough to compete as a 
turnkey contractor with the 
likes of Asea Brown Boveri and 
GEC Alsthom. Instead, “we 
will concentrate on compo- 
nents, and on being thermal 
engineering experts.” 

Mr Bell says construction 
services is wrongly named - it 
really should be called engi- 
neered air services. The bust 
ness cannot be international in 


Senior Engineering Group 


Sham price ratadue to the 
FT-SE-AM-Share index . 
260 — 


240 — — —I 


220 - — — 


190 


i 

r ' 


120 - 

J’ 






1901 

az 


93 94 


the same way as Flexonics and 
thermal engineering, not least 
because it feces huge interna- 
tional players at the smaller 
end of the air-conditioning 
market. He says: “We have 
nirfip businesses, tailor-making 
big thermal systems for cus- 
tomers such as hospitals. We 
need to find sustainable 

nich es ." 

ft is, however, the opportu- 
nity that Flexonics has 
brought to the engineered 
products division, which 
mainly accounts for the outper- 
form ance by Senior’s shares 
against the market 

Flexonics, based near Chi- 
cago. was the creation of a sin- 
gle entrepreneur. Mr Bell said 
of the owner: “The reasons for 
the sale are now becoming 
clearer - there is no way he 
would have been able to invest 
in the business in the way we 
are now doing. There is luck in 
things. The opportunities have 
turned out to be even greater 


Before you sign 


any deals abroad 


5 


make sure you’ve 


got all the facts. 



When you're doing export business, it’s 
not enough to know how someone’s behaved 
in the past. You've got to be able to Judge how 
they’ll behave in the future. Nobody does 
more to uncover the intelligence you need than 
Trade Indemnity. 

When we evaluate your potential 
customer, wc never rely on hearsay alone. 
Wc'rc not even prepared to depend entirely on 
published data. Instead, your own personal 
underwriter will, when necessary, travel round 
the world at the shortest notice to make on-site 
investigations on your behalf. Searching for 


any spanner in the works that could bring you 
nightmares in the future. 

Ail the time and trouble wc take pays 
off in the quality of the decisions we give you. 
Decisions which don’t simply protect you 
against bad debt, but which play a vital role in 
your overall development strategics. For 
instance, we can check out the strength of the 
links in your distribution chain. Something 
which could easily make or break your 
export success. 

Trade Indemnity is the leading British 
credit insurer, and is able to provide both 


political and commercial risk cover in virtually 
every country in chc world. And at a highly 
competitive price. 

At Trade Indemnity, we'll make sure 
the deal you bring home is worth the paper it’s 
written on. 

For more detailed information about 
how Trade Indemnity can help your export 
business, contact Trevor Byrne on 071-860 2577 
or talk to your broker. 

eg TRADE INDEMNITY 

V /^m Before you export anything, 
import us. 


Santar Ftoxonfas 
Extant Cemwctor and EflR 
production growth fm) ' 

12 ■— 



than when we first bought It” 

One such opportunity was 
the close relationship which 
Flexonics had already forged 
with Ford. When the US 
motors giant decided it was 
going to use exhaust connec- 
tors in Europe, it wanted a 
partner to work on the design. 
Ford talked to German and 
Japanese competitors but 
chose Flexonics, which is sole 
supplier of connectors In the 
US to Ford and GM. 

The £8m factory which 
Senior has built in south Wales 
was due to begin production in 
1995, but Sailor opened it ear- 
lier than intended principally 
to supply Ford's Mondeo. 
Senior can supply other manu- 
facturers from the plant, and 
Volvo and Saab are currently 
talking to the group - Volvo’s 
connectors are currently made 
by Flexonics in the US. 

One advantage which Senior 
found from bong a truly inter- 
national player was that the 
factory’s location in Europe 
was genuinely “mobile” - so 
the group attracted competing 
offers of investment aid from 
Ireland and the UK The Welsh 
plant opened early last year 
and now employs 60 people. By 
the time it reaches its maxi- 
mum employment level of 250 
jobs In 1996, Senior will have 
received a grant of £2m from 
the Welsh Development 
Agency - a quarter of the total 
cost 


NEWS IN BRIEF 


AER.TOURS rights issue of 
21.44m shares has been taken 
up in respect of more than 98 
percent 

ASHLEY GROUP has com- 
pleted the sale of Its wholly 
owned subsidiary Storflex to 
A/S Chr Fabers Fabriker, a 
Danish window blind company, 
for EL .89m cash. 

BRISTOL SCOTTS has agreed 
to sell its Scotts Restaurant 
operating from Mount Street, 
London, to Groupe Chez 
Gerard, for £380.000 cash plus 
stock at valuation. 

BRITISH POLYTHENE Indus- 
tries has acquired Nyborg 
Plast of Merseyside for an esti- 
mated £L3m cash, payable at 
the year-end. Net assets at end- 
December 1993 amounted to 
£L6m. 

BURNFDELD has acquired 
Advanced Particle Measure- 
ments for $2m (£l.3m) cash. 
ATM's sole activity has been 
the exclusive distribution in 
the US since 1985 fen- the range 
of particle size measuring 
instruments made by Bum- 


field’s Malvern division. 
CINVen, the venture capital 
company, is hacking the man- 
agement buy-in at Foxguard 
Group, a manufacturer of 
vehicle security systems. 

CITY CENTRE Restaurants 
has entered into a contract for 
the sale and leaseback of its 
property at. 20-21 Leicester 
Square, London, to Amps (Lon- 
don Life Fund) and Pearl 
Assurance fix' £10m cash. Book 
value of the property is 
28.4m. 

CONRAD has appointed Mr 
Rod McMillan as managing 
director of Match winner, the 
Conrad subsidiary which speci- 
alises in the design and pro- 
duction of replica sport and lei- 
surewear. Mr McMillan is 
subscribing for ev-im shares in 
Conrad (2L58 per cent of the 
enlarged capital) at 6p. 
SYSTEMS CONNECTIONS, a 
supplier of document manage- 
ment and Integrity systems, 
has changed its name to 
Formscan and its shares now 
trade under Rule 535(2). 



FINANCIAL TIMES 


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Senior emphasises that Flax- 
anics has a broader product 
base than automotive, even 
although that sector has grown 
from nothing to 38 per cent of 
its output la the last five 
years. 

Mr Bell said: "Flexonics’ 
roots are many and varied and 
our strength is because of our 
expertise In pipework and con- 
nective services. That Is what 
gave us our opportunity.” 

Senior Flexonics. which now 
includes the graup'exfsting UR 
hose and flexible tube busi- 
nesses, also supplies the indus- 
trial. aerospace and medical 
sectors. Mr Bell said recent 
acquisitions were designed to 
maintain the balance of the 
group, even although automo- 
tive was forecast to grow so 
rapidly. 

hi March, Senior launched a 
£G5m rights issue to fund the 
expansion of Flexonics and two 
simultaneously announced 
purchases. The group paid 
ElQm for Metal Bellows, a US 
maker of welded diaphragm 
metal bellows for the aero- 
space. semiconductor, medical 
and industrial markets. It also 
acquired Christian Berghofer. 
a German manufacturer at 
flexible hoses and expansion 
joints for £8m. 

Senior is also on course to 
achieve another strategic aim: 
decreasing its dependence on 
the UK market. Albert E 
Sharp, the stockbroker, esti- 
mates that by 1995 only 50 per 
cent of the group’s sales will be 
UK by origin - down from 71 
per cent in 1991. 

The acquisition of Flexonics 
has given the group a great 
opportunity - not only domina- 
tion of the US automotive mar- 
ket, but pole position in the 
race for the European market, 
where stricter environmental 
legislation is likely to 
increase demand for similar 
products. 

Mr Bell says: “We are not 
short of opportunities. You do 
have to be courageous - but 
you also have to keep your eye 
on where you are going." 


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■ TOC FOR FAST DELIVERY 071 240 57n| 










FINANCIAL TIMES TUESDAY MAY 24 1994 


27 


Exports help 
Kenwood rise 
14% to £llm 


By David Blackwell 

Higher sales, continued cost 
control and improved results 
from overseas subsidiaries 
were behind a 14^ per cart rise 
In annual profits at Kenwood 
Appliances, the household 
appliance maker which was 
floated in June 1992. 

Pretax profits for the year to 
end-March rose from a pro 
forma £9.6m to film, after 
£700,000 of exceptional charges. 
Turnover increased by 19 per 
cent from £iOL6m to £120 An. 

"We see these as very good 
results," said Mr Thn Parker, 
chief executive, adding: "We 
can't see how th in gs can be 
anything but better this year." 

Sales in the UK, its single 
biggest market, rose by 17 per 
Cent tO S4L2UL The com pany 
had 94 per cent of the UK table- 
top food mixer market 

Waymaster, the water filter 
and kitchen scales maker 
acqufred for £ 4 An last Octo- 
ber, contributed £524,000 to 
profits in the last five months 
of the year, and is expected to 
bring in £L5m this *hn^ 

The Hampshire-based group, 
which last month won a 
Queen's Award for Exports, 


increased sales to continental 
Europe from £3&5m to £*4m. 
and to the rest of the world 
from £27 -3m to MS-im . 

Capital expenditure rose 
from £4£m to £6.6m, and Is 
expected to reach a total of 
£9m this year. 

Mr Parker said the group 
was continuing to lock for fur- 
ther opportunities to 

Earnings rose to 20.8p 
(17-8p). A final dividend of 6p 
brings the total to 9p (7-flp). 
The shares rose 3p to 348p. 

• COMMENT 

The results show solid prog- 
ress on the back of sound 
acquisitions, and ‘there 
no reason why ’the maker of 
the Kenwood Chef mixer 
should not c ontinue to grow. It 
needs to be careful to protect 
the quality image of Its single 
brand when selling lower mar- 
gin goods like kettles and 
toasters, where competition is 
intense. Overseas distribution 
is being sorted out, particu- 
larly in G e rm an y, where the 
group has been severely under- 
exposed. With profits of m&n 
pencilled in for this year, the 
shares look good value on a p/e 
of 1W. 


Change of control 
at Celtic Gold 


Shares in Celtic Gold have an investment managpnHmt 
been suspended at the comma- and corporate finance group, 
ay’s request on news that dad- had indicated that ft planned 
dagh Gold, its mein share- board changes once the sale 
holder, intends to sell its 54 per was completed, 
cent stake to English Trust In addition]- En glish Trust 
At' the same tiwm Celtic, tire would arrange a share placing 
mineral and exploration com- in Celtic to raise I£S20,000 at 
pany, announced a rise in 1998 17p per share on a l-for-6 

pre-tax losses from 1060,321 to basis. 

££302,002 (£298*980), after excep- The company planned to dis- 
tional charges of I£266,493 pose of Clare Calcite, its 
(1029,953) relating mainly to wholly owned subsidiary, and 
gold, exploration' properties also contemplated entering 
written off. ‘ ' ftitn taTira for the acquisition cf 

Mr Herb Stanley, executive a substantial financial services 
chfltrman, grid En glish Trust, company. 


EURO DISNEY 

NOTICE OF 

GENERAL MEETING 

The shareholders of Euro Disney S.CA. are infornied that on 
extraordinary general masting wil be held on Jura 8, 1994 erf 10.00 am at 
the Hotel New Ywk- Convention Center (Euro Disneyland 1 Pori*), Otauy 
(Seme- at More *}. France. 

Hie agenda for the meeting, a list of resolutions and the report of the 
Company areovaiUjie from S.G.Warburg Securities, 2 Finsbury Avenue, 
London EC2M 29A unit June B, 1994. 

Any shareholder, regardless of #» number of shoos he/she holds, has 
the rightto attend ihUi n ee ling , to be represented by another shareholder 
and member of Ln meeting or by his/her spouse, or to «ale by mod. 

In order to oMendor to be rep re sented qtiw meeting or to vote by mail 

- holders of registered shores wil have to be registered of the latest five 
days prior to the dale of die meeting; 

- holders of bearer shares must ensure that the manager of tiwir share 
account confirms, prior to [hexene dale, their shareholding as at the dote 
of 4 m extraordinary general meeting with Banquelndoumz, 96 bouhwad 
Haussmann, 75008 Paris, France. 

Banque tndauwz wil moke cwaSaUe to mtereded iharehoUera pray or 
posted voting forms and admission conk Shareholders wbhmg to vote jw 
mail must pursuant to legal provision, request Eqr reabtared mdl win 
oc)mo%dedgerTMmt of receipt requested, a posriveting form from Banque 
Indosuex or the registered office of (he Company {Investor Relations 
Department). 

In ULCu r da i ice with the law, shareholders are reminded that 

- any request tor a fixm, to be token brio account, wdl have to be reaerved 
at the registered office of the Company or at the above office of Bcmcpe 
Indosuez six days prior to lie day of lie meeting, ire. by Thursday, -time 2. 
1994 at the latest; 

- the fccm, duly completed, will have to be received atthe registered office 
of the Compony or at the registered office of Bancpe Indosuez, 96 
bouknord Haussmann, 73008 Paris, France, three days prior to tfw 
meeftng, i.e. by Sunday, hme 5, 1994 at the latest; 

~ hoUars of bacuv shores will how ip afloch to tie fenn a certificate issued 
Vito mrtnagw of their shore account confirmBW their sfiarehofcfog; 

- shareholders voting by mo3 w# nerf be entitled to oBcsid fce meeting m 

person or be represented ot the meeting by pray. TJ»G«wt 


EURO DISNEY S.C.A. 


i-UHi 


F 77777 lawttWi C4c 4 Bren). tutor 4 C— nt -t r | t jwaMMWjg 5 


NOTICE REGARDING 

EXPORT TO INDONESIA 

or Indonesia (PTSI), headquartered in Jakarta, was 
in July 1991 to progressively take over Indonesia's 
it Inspection Programme from Societe Generate do 
ee SA (SGS) in line with Transfer of Technology 

n t venture between the Indonesian Government and 
ally opened its United Kingdom office under the name 
dtmtsto (UK) on 1st April 1994. Suiveyoc Indonesia is 
to providing the same high quality of standards and 
b has been provided by SGS. 

dooesia (UK) is fully operational as of 1st Jane. WnJe 
motion will continue to be performed by SGS United 
m, all administrative activities relating to preshipment 
>f Indonesia's imports are being processed by Surveyor 

noun cements about the development of Surveyor 
UK) will be made in due course. In the meamnne, 

;v mwtfions, please contact the Indonesian Dep 8 ™ 1 
^d^gdom M«d or Sur^or 111 *^^, 
CO mpaffi House, 207^215 LondonRm^Camberiey , 
rtc irv wi- 0276 22161 fte 0276 26051 


COMPANY NEWS: UK 


USAir’s financial problems overshadow ‘impressive* BA results 

£27 5m provision warning in the air 



lydnwa dar Maw 

Sir Colin Marshall: future of USAfr hinges on restructuring aimed at eHnrinatingjlbn. of cods 


By Pali Betts, 

Aerospace Correspondent . 

/Hie acute financial problems 
of USAir yesterday overshad- 
owed the announcement by 
British Airways of another set 

of iinpiTjKKh/N fl g nraa, Indniting 

pre-tax profits of £3Qim in its 
latest financial year. 

hi the worst case scenario. 
Sir Cohn Marshall BA’s chair- 
man, conceded that BA may be 
forced to write-off its £275-3m 
investment in its 2AB pear cent 
stake in USAir, the sixth larg- 
est US carrier. 

However, he also said the 
partnership with USAir, a cen- 
trepiece in BA's strategy of 
global alliances; was bringing 
benefits through the ticket 
code-sharing agreement 
between the two carriers, the 
Joint frequent fher programme 
and cost earing opportunities. 

These benefits totalled 
about nom last year and were 
expected to rise to £70m this 
yeari. 

- Even' if USAir was forced to 
file under the US Chapter U 
bankruptcy rules, the code- 
sharing and other co-operative 
ventures between the two car- 
riers would continue and so 
would the benefits from the 
increasing traffic feed from 
USAir's domestic services 
into 1 ' BA’s international 
network. 

However, should BA be 
forced to make heavy provi- 
sions to cover its USAir invest- 
ment, it would represent a sig- 
nificant setback fix- the earner, 
froth financially and psycholog- 


ically since it would raise fun- 
damental Questions about the 
UK carrier’s ambitious global 
strategy. 

Sir Colin said USAir had 
been severely bit by increasing 
competition from low-cost, tow- 
fare airlines in its principal 
market in the north-east of the 
US. 

USAir incurred losses of 
S196.7m (£13lm) in Its first 
quarter to March 31 1994 and 
the deficit for the whole year to 
now expected to exceed last 
year’s $349. to. 

The future of the airline now 
Tifwg iMt an a restructuring pro- 
gramme rimed at eliminating 
Jlbn of costs a year. 

Sir Colin explained that 
about SSOOsn of the cost savings 
and revenue enhancement 
measures would come from 
USAir management actions 
including the quicker turn- 
round of aircraft at airports. 

The other 9500m savings 
would have to come from 
union concessions - on work 
practices and salaries. 

Sir Cohn said there was “a 
sense of urgency” to reach 
these agreements with the 

mrirmg d urin g - t he irart flO da y s 

He warned that if these negoti- 
ations were not successful then 
BA would have to make a 
provision on its USAir 
investment. 

If USAir were forced to tile 
for Chapter 11, it would hit the 
curre n t £16m to £iam BA earns 
in annual dividends from its 
pre f erred stock in USAir. 

So for, BA has been cush- 
ioned fr om USAir’s financial 


problems because its 216 per 
cent stake in the US earner 
involves preferred shares. 

BA sotmded the first alarm 
bells about its USAir invest- 
ment in March when it 
announced it would not tnaVp 
any additional investments in 
the airline Ti T| *il it fyri haag 
reassured of the ongoing 
viability ctf the business. 

In contrast to the problems 
faring its investment, BA said 
yesterday that its partnerships 


with European airlines and 
Qantas of Australia were show- 
ing encouranlne shms 
Altto^hboSiTAT, its 
French affiliate, and Deutsche 
BA, its German partner, con- 
tinued to lose money last year, 
the two carriers were improv- 
ing and would help strengthen 
BA’s overall position in the 
newly-liberalised European 
aviation market. 

• Qantas, for its part, was prof- 
itable and Sir Colin said he 


expected ”1681 benefits” from 
BA's 25 per cent stake in the 
Australian carrier due to be 
folly privatised over the next 
13 months. 

However, should the USAir 
restructuring and recovery 
programme fafl , BA risks being 
left with a gaping hole 
in its overall global airline 
strategy, since the US market 
still accounts for abont 40 
per cent of world air 

travel. 


Racal pays 
£12.3m for 
Air Group 
division 

By Alan Cano 

Racal Electronics has paid 
£12. Sm for the information 
technology and security divi- 
sion of Air Group, the multi- 
media atid wireless communi- 
cations concern. Payment 
comprised £LL9m In cash mid 
£375354 in shares. 

Hie division, which includes 
three Airtech businesses, made 
pre-tax profits of £1.4m on 
sales of £8m last year. Racal 
skid it intended to combine the 
companies with its own IT 
security operations in Europe 
and the US to create a new 
force in the business. 

The new group, to be caned 
Racal-Airtech, will be nm by 
Mr Alan Lamb, Airtecb’s exist- 
ing renwaghig director. It wQl 
have initial sales of £15m a 
year. 

Racal expects revenues to 
double in three years. IT secu- 
rity has become an important 
issue as the dangers of hack- 
ing, fraud, »rei^witai damage 
and operator errors in large 
computer networks have 
become apparent The world- 
wide business to estimated at 
£lhn and growing rapidly. 

Mr Nick Randall, Air Group 
managing director, said the 
company would use the pro- 
ceeds of the sale to develop its 
interests in multimedia soft- 
ware, where sales had grown 
from nil to £4m over four 
years, and the communica- 
tions industry. 





mm 


mm 






4-e^v 






WMWm 


OPERATING PROFIT BEFORE PROVISIONS 

£580.2m 

£487.9m 

PROFIT BEFORE TAXATION 

£268. 7m 

£125.3m 

TOTAL CAPITAL RESOURCES 

£2,460m 

£2£56m* 

TOTAL ASSETS 

£30, 748m 

£29, 013m* 

EARNINGS PER ORDINARY STOCK UNIT 

12.2p 

5.0p 












28 


FINANCIAL TIMES TUESDAY MAY 24 1994 


COMMODITIES AND AGRICULTURE 


Copper pushes through 
resistance to fresh highs 


By Kenneth Gooding, 

Wning Correspondent 

Copper prices took oS again 
yesterday as US fund buying 
pushed them decisively 
through technical resistance 
levels that had held fins last 
week. Metal for delivery in 
three months went to $2,277 a 
tonne, up $#7.50, at the dose an 
the London Metal Exchange. 

The metal Capper continued 
its climb in late trading and 
touched $2,300 a tonne, its 
highest price in 16 months. 

Copper also moved again 
into backwardation, where a 
premium is paid for immediate 
delivery, frequently a sign of 
supply tightness. 

Mr Ted Arnold, analyst at 

the Merrill Lynch financial ser- 
vices group, in Merrill’s 
monthly metals report advises 
copper users "to act now and 
look to secure at least some 
forward cover". He forecasts 


that in the neat two to three 
months copper will trade 
between $2,000 and $2,315 a 
tonne. 

Ms Leanne Baker and Ms 
Janet Cochaff, analysts at the 
Salomon Brothers financial 
services group, say they expect 
that "short-term sentiment 
toward copper will remain 
bullish, driven by positive 
technical and seasonal consid- 
erations, as well as robust US 
demand”. 

They suggest, however, that 
"supply Increases will begin to 
overwhelm JpwanH during the 
second half of thit year an h 
budding into 1996 and 1996." 
They have raised their average 
copper price forecast for 1994 
from SO cents a pound ($1,763 a 
tonne) to 90 cents ($l£B4) and 
their 1995 price estimate from 
75 cents a pound ($1,653) to 80 
cents. 

• The International Wrought 
Copper Council, an association 


of consumers, suggests that 
there will be a “moderate" 
refined copper supply deficit 
this year - after taking into 
account net trade with China 
and the Commonwealth of 
Independent States - but adds 
that preliminary estimates for 
1995 indicate supply and 
demand will be much more 
closely balanced. 

According to the IWCC, 
refined copper production last 
year outside the CIS and China 
increased by nearly 3 per cent 
to 9.5m tonnes while consump- 
tion grew by more than 2 per 
cent to 9.4m tonnes. It fore- 
casts production will show a 
“modest" increase of under 1 
per cent in 1994 but then jump 
by nearly 5 per cent to more 
than iOm tonnes in 1995. Con- 
sumption, meanwhile, is pre- 
dicted to move up by 4 per cent 
this year and by anrrthpr 3 per 
rent in 1995 to more than 10m 
tonnes. 


Chilean plan angers workers 


By David Piling In Santiago 

Workers at Codelco, Chile's 
state copper company, have 
reacted angrily to a Bill sent to 
parliament last week that aims 
to break the company up into 
separate divisions. 

The powerful Federation of 
Copper Workers (FTC) said it 
bad not been consulted over 
mndernisafinn plans. Which it 
claimed represented a step 
towards privatisation. The Bill 
threatened the constitution. 
Which was amen ded in 1971 to 
guarantee that Codelco 
remained in state hands, it 
said. 

Workers were particularly 
concerned at the future status 
of non-core divisions - the 
Tocopilla power plant and 
workshops at Rancagua - 
which, under die Bin, would be 
allowed to raise private capital. 

“We are going to begin a 
great national movement to 
defend our inher i tance, " said 
Mr Raimundo Espinoza, presi- 
dent of the FTC. The union is 


COMMODITIES PRICES 


for ming a commission to ana- 
lyse the government's propos- 
als and to formulate a 
response. 

The Bill came In response to 
declining profits at Cttfelco - 
largely because of its inability 
to develop new projects - and 
to a futures trading scandal 
that raised questions about the 
company's structure. 

Mr Villarzd, Codelco’s presi- 
dent, plans to create a holding 
company which will oversee 
the operation of the group's six 
divisions, including its four 
mines. Autonomous manag e, 
ment teams will be expected to 
run the divisions as if they 
were private companies, a 
strategy designed to cut down 
on cross-subsidies between sep- 
arate branches and to raise 
efficiency. 

The bill also seeks to 
strengthen the role of the 
board of directors, much critic- 
ised for its lack of vigilance 
over last year’s metals futures 
trading fiasco that led to losses 
of more than $200m. 


Mr Villarzu gain the overall 
aim was to reach annual pro- 
duction of 1.4m tonnes of fine 
copper by the year 2000 - com- 
pared with about 1.1m tonnes 
in recent years - through 
increased productivity and the 
development of new deposits. 
He denied that 
implied a reduction in the 
number of Codelco’s workforce 
of more than 20,000. 

Criticism of the BUI is not 
confined to Codelco workers. 
Chile’s right wing opposition 
argues that plans do not go far 
enough in farfiitaHng the use 
of private capital, for example 
in the development of new pro- 
jects. Mr Sebastian Pifiera, a 
prominent opposition senator, 
said the government’s plan 
amounted to a dose of “aspirin 
which will not cure the sick- 
ness”. 

Some on Chile’s right have 
called for the outrigfat privati- 
sation of Codelco. an option 
entirely ruled out by the gov- 
ernment of President Eduardo 
FreL 


The growing pains of British horticulture 

Potential for expansion will be jeopardised if levy-funding of research is abandoned 


H orticulture is one of 
the most under-rated 
sectors of British food 
production. 

It uses just 4 per cent of the 
total land area but produces 
goods with a farm gate value of 
over £l.7bn, about half the 
total produced by conventional 
agriculture an the other 96 per 

rent of thp lwn^ and ft does it 

virtually without European 
Union support 
Some industry insiders say it 
could increase output by a fur- 
ther £750m over the next 
decade, given adequate encour- 
agement and access to poten- 
tial advances in research and 
development 

The UK has a horticultural 
trade gap with other, mainly 
EU countries, of some £L3bn a 
year, so there would appear to 
be every reason to expand 
domestic production. Britain 
imports 36 per cent of the 
tomatoes consumed in 
country, 48 per cent of the 
roses, 36 per cent of the chry- 
santhemums and so on. 

But this potential prpawgirm 
- and even the status quo - 
could be threatened if nakh for 
researching and disseminating 
improved production tech- 
niques dried up. The fixture of 
such work is in the balance 
this week, as is the fixture of 
the levy-funded Horticultural 
Development Council, which 
commissions and co-ordinates 
much of the “near market” 

research. 


FARMER'S VIEWPOINT 



By Davkl Richardson 


The HDC is being subjected 
to its statutory five-yearly 
review by the Ministry of Agri- 
culture, the outcome of which 
will determine whether it con- 
tinues or Is wound-up. 

Yesterday representatives of 
about 30 horticulture industry 
organisations met ministry 
officials to record their views 
on the future of the council. 
TncMw information in advance 
of the meeting suggested that 
they would back its continua- 
tion “to a man". But they rep- 
resented chiefly large-scale 
operations. Some of the 
smaller growers among the 
3,000 or so registered horticul- 
turalists are apparently not so 
happy- 

The HDC requires each regis- 
tered producer with gross sales 
of more than £25,000 to declare 
his sales value etjch year. He is 
then billed for half of 1 per 
rent of that gross as his contri- 
bution to council-co-ordinated 
research and development 


efforts. This raises just under 
£3m a year which, after modest 
administration costs, is all 
spent on selected “sear mar- 
ket” research and the trans- 
mission of the resulting Infor- 
mation to growers. 

The ministry, it must be 
said, spends some £i&5m on 
research geared to horticul- 
ture. although it is mainly 
basic, as distinct from applied. 
The HDC claims that if it did 
not ensure the “application" 
much of the ministry work 
would be wasted or, more 
likely, discontinued. 

A t a time when some 
horticulturalists, such 
as lettuce and tomato 
growers, are making a loss on 
every box of produce, however, 
they are understandably less 
than enthusiastic about 
increasing their immediate 
problems by paying a statutory 
levy to the HDC. 

Some grow er s are regularly 
tardy with their payments in 
any «« and over the last two 
years the HDC has spent over 
£30,000 on what it calls in its 
awvw ntu “enforcement costs”. 

Others, it is alleged, and they 
are not all small operators 
whose turnover is below the 
trigger point, have not regis- 
tered as growers and therefore 
also avoid payment of the levy. 

All of this raises the hackles 
of those who do pay promptly 
- especially during periods of 
poor or non-existent profits - 


and them to question if 
the council should be allowed 
to continue. In respo nse , the 
HDC says it is working on 
ways to ensure foil registration 
hut that, although the ministry 
haif fafnwnnHfln on all growers 
In the UK, it is legally prohib- 
ited from making this available 
to the HDC for policing pur- 
poses. 

The NFU, in its submission 
to the review, has Identified 
non-registration as one of the 
key points that require more 
attention. 

It is, of course, almost inevi- 
table in a volatile and multi- 
faceted industry, that petty 
points appear to be major hur- 
dles. For at any time, some of 
the 80 different crops that fall 
within the HDCs remit will be 
giving good returns while oth- 
ers make losses. . 

Last year, for instance, rasp- 
berry growers made a killing 
because normal supplies from 
eastern Europe - particularly 
Yugoslavia, for obvious rea- 
sons - were not available. As a 
result, many UK growers have 
planted more canes. These will 
come Into full production in 
two to three years, by which 
time, we must hope the Bos- 
nians, the Croats and the Serbs 
may have resolved -their diffi- 
culties and once again be sup- 
plying raspberries to British 
markets. 

Together with the increase 
in production from the new 
British canes, this will proba- 


Farm tax resisted in Pakistan 


By Farfian Bokhari 
In Isl ama b a d 

Pakistan’s federal government 
has appealed to the country’s 
four provinces to become more 
active in supporting its initia- 
tive to introduce income tax 
for farmers. 

The appeal followed months 
of speculation over the future 
of an important decision last 
year, when farmers were 
brought under the net of 
j pcoiTift and wealth tax for the 


first time in the country’s 
history. 

International financial pres- 
sure has built up, however, fol- 
lowing earlier reports that the 
provincial governments were 
proving reluctant to press 
ahead with the move, fearing a 
political backlash from the 
agricultural sector. Pakistan's 
political structure continues to 
be dominated by the country's 
wealthy landowners, who have 
directly or indirectly influ- 
enced the government’s 


dedikm. 

However, under a three year 
loan agreement signed with 
the International Monetary 
Fund Mriiw this year, Pakis- 
tan has agreed to introduce 
new reforms to improve its tax 
structure. Some officials say 
that a setback to the initiatives 
on agricultural taxation could 
make it difficult for the coun- 
try to persuade its key donors 
and lending institutions, that 
its doing enoug h to improve 
fiscal management. 


MARKET REPORT 

Cocoa and coffee surge 


Prices of both COFFEE and 
COCOA soared in late after- 
noon trading at the London 
Commodity Exchange yester- 
day in response to a sudden 
spurt of speculative buying. 

July coffee fixtures ended 
$111 up at $2£95 a ton™* after 
touching $2,305, the highest 
since late 1967. 

“It was speculative buying," 
said one trader. “London trig- 
gered tiie buying and it spread 
to New York.” With no funda- 
mentals justifying the rise an 


analyst described the coffee 
market as “hysterical”. 

Traders said cocoa’s late 
surge, which lifted the July 
position fry £51 to £998 a tonne, 
was also technically driven 
and lead by investment fund 
buying. “But the market still 
looks very strong,” one said, 
although noting London vol- 
umes were fairly low. 

GOLD built on its recant 
rally with a $155 rise to $387.75 
a troy ounce. 

Compiled from Reuter 


CROSSWORD 


BASE METALS 

LONDON METAL EXCHANGE 

(Prfcao from Amalgamated Metal Tiering) 

■ ALUMINIUM. 99.7 PURITY fS per tonne) 


Precious Metals continued 

■ BOLD QOMEX (100 TVoy azj i/truy oz) 


GRAINS AND OIL SEEDS 

■ WHEAT LCE £ per tonne* 


SOFTS 

■ COCOA LCE (Sftonna) 



Cash 

3 mtha 

Close 

13483-73 

1376-63 

Previous 

1341-2 

13693-70 

HgMow 

133871337 

13773/1384 

AM Official 

1338-83 

1367-73 

Karb ckxK 


1380-1 

Open M. 

251,601 


Total dafiy turnover 

38.895 


■ ALUMMUM ALLOT (5 per tonne) 


Qobb 

1340-50 

1355-60 

Previous 

1347-9 

135543 

Mgh/low 


1380/1350 

AM Offlciel 

1330-40 

1345-50 

Kart) closa 


1355-60 

Open Irt. 

3,603 


Total ttafly turnover 

648 


■ LEAD {S nr tome) 



Ctoae 

484.5-53 

802-3 

Previous 

477-8 

494-5 

Wflh/tow 


507/491 

AM Official 

470-1 

491-2 

Kerb doss 


507-8 

Open tot. 

36.830 


Total dafly tomw 

5.421 


■ MCKEL (S par tonne) 


Ctoss 

6870-6 

6768-60 

Previous 

8385-95 

6470-76 

Mgh/low 

8480 

6810/8410 

AM Official 

6480-5 

5568-72 

Kerb don 


8800-20 

Opan toL 

52.145 


Total dafiy turnover 

1&392 


■ TIN (S per tome) 



Ctass ‘ 

5590-600 

5666-75 

Previous 

6845-66 

5820-25 

High/tow 


5700/6620 

AM Offidd 

B588« 

5665-70 

Kart) doss 


5890-700 

Open Ini. 

16,510 


Total dally turnover 

3,168 


■ ZMC, apodal Mgti grads (3 par tonne) 

Close 

9743-63 

909-1000 

Previous 

0853-03 

969-60 

HfcMow 

987 

1004/963 

AM Official 

9605-7.0 

991.6-23 

Kart) dose 


1003-4 

Open tot, 

102331 


Total dafly turnover 

15.808 


■ COP POl, grade A (S par tonne) 


Ctooe 

2278-80 

2278-76 

Previous 

2223-4 

2229-30 

Hgh/tow 

2231 

2301/2193 

AM Official 

2231-2 

2231-2 

Kerb do M 


2298-69 

Open W. 

208.792 


Total daBy turnover 

68,486 




Sad 

grim 

cteage 

**. 

Opm 
tom « 

VoL 


Sett 

price 

ten 

draage 

a* u» 

Opm 

tat 

VM 


sett 

price i 

ten 

eteage 


tear 

Lie U M 


Nay 

3893 

+17 

3863 

3883 

- 

Jm 

11330 

-035 11430 11105 

657 

15 

»» 

978 

+61 

- 

30 

Jm 

An 

3893 

+18 

3602 

3863 68309 40390 

Sep 

(Mm 

+4X10 

8935 9935 

516 

29 

Jd 

998 

+«1 

1000 

947 19384 2316 

teg 

Jri 

391.4 

+16 

• 

- 

- 

tee 

100.85 

- 

10130 line 

1.783 

2 

Sep 

1017 

+50 

1017 

968 15,199 1305 

Oct 

Aag 

3923 

+17 

3914 

3892 31.144 

3398 

Jm 

102.66 

• 

10330 10235 

1,191 

165 

Dee 

1039 

+46 

1038 

989 25385 971 

Dec 

Oct 

396.1 

+18 

3963 

3823 5318 

72 

mr 

10425 

- 

- 

357 

48 

Ma- 

1080 

+45 

1059 

1013 28367 941 

M 

tec 

Tottl 

3993 

+33 

4003 

3853 163» 5,648 
152^90 51,178 

MW 

Tote 

10620 

- 

10620 10620 

4.7JI 

280 

ter 

Tetri 

1078 

+45 

1075 

1028 10303 175 
110348 5,108 

Tetri 


■ PLATBMM WYMEX (50 Troy az; Sfiroy oz) 


Jd 

4113 

+5.7 

4123 

4063 

11028 

1053 

Oct 

4143 

+53 

4153 

4113 

4.148 

284 

Jm 

4117 

+16 

4155 

4153 

1343 

48 

*1* 

4117 

+53 

• 

• 

1375 

- 

Tetri 





22282 

3385 

■ PALLADIUM NYMEX (100 Tray at; S/troy ozj 

Jen 

13140 

+135 

1 38.75 

13730 

2,100 

186 

Sep 

13835 

+1.70 

13930 

13830 

2302 

148 

Dec - 

13185 

+1.70 

• 

- 

646 

2 

Bar 

13835 

+220 

- 

- 

6 

- 

Tetri 





1383 

318 

■ SU.VER COMEX (100 Tray oz^Centsftroyoz.) 

ter 

5711 

+111 

5743 

5613 

245 

246 

Joe 

5754 

+110 

- 

- 

3 

- 

Jd 

579.0 

+133 

560.0 

5623 

8&300 

21378 

S*P 

5842 

+112 

5843 

5683 

9330 

508 

Dec 

5823 

+114 

5910 

5783 14234 

888 

Jm 

5917 

+114 

- 

- 

32 

- 


■ MffgAT car (E,00CDu n*g centa/BOb bmhaQ m COCOA CSCE (70 tomtK Monnag 

JBI 338/6 +1<Y0 338/4 3300130285 39/15 
Sap 34U4 +9/8 343 f0 336/4 3B£5S 6350 

Dec 353/4 +10/4 364/0 347AJ 48,110 10370 

Hr 357/0 +1074 357» 3500 3390 530 

Map 35170 -*04 - 250 

Jri 327/0 +3M 330)0 3230 700 30 

TOW 220388 57386 

■ MAIZE CST (5300 fau mto; cand/BtBb txahet) 


MEAT AND LIVESTOCK 

■ UVE CATTLE Off (♦O.OOCTta; canfate) 

SMt 0W OpM 

Price ctaageMgb Lo* tt Voi 

64^425 +0350 84300 63350 23344 8381 
BSJ2S +0300 65300 64325 21376 8/38 
67.725 +0300 85250 67.150 12342 2342 
09325 -0375 69.400 67300 9,128 1388 
09300 -0.173 70000 69300 5236 883 

71350 -0100 71350 70800 2315 319 

75,184 20380 
m ugijpwagijMgCtejgiM 


No. 8,461 Set by CINEPHILE 


1397 

+130 

1410 

1261 

37375 4377 

Joe 

48300 +0325 49325 49300 10398 

*cm 

1415 

+119 

1430 

1290 17364 1386 

Jd 

48350 +4275 60350 49350 

9317 

2328 

1419 

+88 

1419 

13Z7 

1723 

151 

teg 

48325 +4550 48300 47300 

4341 

831 

1452 

+88 

1452 

1381 

10356 

40 

Oct 

44375 +4175 44350 41900 

2.681 

286 

1484 

+88 

1470 

1379 

«399 

- 

Dec 

41225 +4300 45300 44350 

2J37 

212 

1508 

+68 

• 

- 

2.795 

- 

Ml 

45.150 +4475 41200 44300 

821 

80 





9MS 5387 

Tetri 


8038B 

8381 


Jri 275/2 +04 Z7MJ 271/0680785133330 

9v 272/2 +8/2 Z73M 288/018*230 12300 

Dec 28774 +0/0 268/4 262/4422.195 75335 

te 7130. +8/2 273A 270/0 41325 3330 

Hay 277/D +0/2 277/4 274 IQ 4330 465 

JO! 278/2 +0/4 278/4 Z74/B 13310 1,115 

Total 1301M22737D 

■ BARLEY LCE (£ per tome) 


Tttri 

■ COCOA QCCCBpOffd/taw) 


te» 

My.-. 


. 97082 


10 dm 


LCE (Stoma) 


m 


ftM. day 

902.15 

NM 


TaM 


125.148 24398 Jm 


ENERGY 

■ CRUDE OB. NVMEX WflGPUSgjoj/bgWj 


■ LME AM OfflcM US rata 13073 

LME Oaring Eg rate: 13023 

Spot 1-5055 3 00x13033 B nfflKl3025 9 ndhcT.5023 

■ HtOH GRADE COPPER fGOMEX) 



Oose 

tetr> 

eteage M* le* 

Open 

lot 

Vd 

ter 

10830 

+4.00 10730 10190 


276 

Jua 

10630 

+430 10630 10530 


5 

Jd 

KB.35 

+190 10630 10140 


172 

ado 

10530 

+4B 10530 10530 


0 

Sep 

10435 

+135 10145 102.10 


4 

Oct 

10175 

+120 


- 

Tetri 



HM 

It/A 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices supcfed by N M RottBcftflfl 


Gold {Troy tu4 
Close 

Opening 

Morning Bx 
Afternoon ftx 
Day’s Wgri 
Day’s tew 
Previous dose 


3 price 
38730-38000 
388.40-38630 
388.75 
388.45 

38730-38830 

38630-38530 

384.00-384^0 


£ equfv. 


256.416 

£56341 



Utost 

tejre 


teee 



prfra 

change 

Mgh 

lam tot 

Vd 

Jri 

1129 

+400 

1157 

1111 11703 30,141 

Aag 

1736 

+407 

1122 

1731 125301 

77351 

tep 

17.79 

+035 

1830 

1738 51370 18309 

Oct 

17.75 

+411 

1737 

1730 30306 

1336 

ter 

1730 

+421 

1730 

1734 20369 

3388 

Dec 

1735 

+039 

17.77 

1731 14304 

£158 

Tetri 




422204 15£411 

■ CAUDE OIL IPE (SAwreO 




Latest 

Oafs 


Opan 



price 

eteage 

B* 

Lew tot 

1W 

Jd 

(ISO 

+405 

1679 

1141 66368 11327 


16+5 

+40* 

1842 

1431 34419 22.838 

Sep 

1134 

- 

1151 

1621 11,721 

1142 

Oct 

1130 

-031 

1142 

1820 7345 

£181 

ter 

1643 

-405 

1123 

1620 1220 

1281 

Dec 

1127 

•oloi 

1138 

1112 8318 

803 

Tetri 




131347 37,142 

■ HgAITNQ OB. KVNEt (42300 US gels^ c/US gritol 


utnt 

tors 


ton 



price 

eteage 

a* 

tew tot 

Vd 

Jm 

4146 

+413 

4870 

4100 33314 

11223 

Jd 

4175 

+407 

4410 

4140 34393 10,457 

Aag 

4950 

+415 

4175 

4925 13312 

3340 

S«P 

3450 

+420 

5030 

60.19 10322 

1,502 

Oct 

5125 

+405 

5125 

5125 6366 

327 

Hoe 

5230 

+42) 

5230 

5220 6338 

77 

Total 




141207 29,785 

■ QA3 OU. PE (t/tnene) 




Sen 

ter» 


to* 



prtao 


Mgn 

Lear tot 

Id 

Jen 

15100 

+130 

15175 15200 27.142 

4.485 

Jd 

153.75 

+130 15475 15100 19LS30 

1200 

Aag 

15525 

+478 

15825 

154.75 1342 

847 

sop 

157.00 

+1.00 

15730 

15675 1931 

428 

Oct 

15450 

+075 15450 15450 6351 

7 

ter 

161.75 

+130 

161.75 16130 4337 

48 

Tetri 




91,376 

7238 

■ NATURAL OA3 NYMEX (10300 ante.; S/Brate) 


ime 

0*7*5 


flpte 



plea 

change 

np 

lew tat 

M 

Jon 

1385 

-4039 

1380 

135G 11595 18379 

Jd 

1338 

-0015 

1350 

1330 21378 11341 

Aug 

£009 

-aora 

£065 

1395 12,725 

£635 

Sep 

2340 

4015 

2350 

2340 11339 

1383 

Oct 

2.110 

-0005 

£108 

£100 1892 

706 

Nae 

2205 

-0006 

2205 

£195 10338 

537 

TOM 




128,918 3MB3 


Sep 

9930 

+025 

- 

- 170 2 

ter 

10050 

+0J5 

- 

- 278 

Jte 

10125 

- 

- 

30 

ter 

10235 

- 

- 

10 


10435 

■ 

- 

5 

c 

Tetri 




eJ 

■ SOYABEANS CST &oo(feu mkc (ateffiOU DUBhaQ 

Jd 

732/2 

+2SW 

732/4 

718/0331,025 16421 

Aeg 

728/2 

+29/8 

728/4 

7134) 72250 19220 

sw 

708/4 

+800 

70*4 

8950 4£510 4360 

ter 

693/2 

+304) 

883/2 

6820 246260 84275 

Jn 

897/9 

+30/0 

807/6 

88*0 20210 7.725 

ter 

702/2 

+30A) 

702/2 

891/0 7,525 £725 


Tate mmmm 

■ SOYABEAN OtL C8T (dOOOfac: cente/lfa) 

Jri 3031 +039 3062 3010 49206 8276 

Mg 3038 +4188 30.88 3038 15333 2312 

Sep 30.12 +0.78 3034 2938 10253 1,739 

act 30.43 +080 2954 2000 7,493 368 

Dec 28.78 +032 2887 2838 20325 2,771 


tey 

2323 

+114 

2320 2215 

488 24 

Jd 

2296 

+112 

2305 2175 

13327 1.709 

sra 

2284 

+83 

2290 2151 

15311 682 

Hot 

2235 

+98 

2230 2133 

5332 163 

Jaa 

2215 

+99 

2205 2115 

8312 323 

Her 

21 55 

+78 

2078 2076 

£423 7 

Told 




83388 £9® 

■ COFFEE •C CSCE «37200«sa; osntaft^ 

Jd 

13935 

+118 

13930 12110 

- 1143 

Sep 

13165 

+730 13830 12938 2B344 1879 

Dec 

13135 

+100 

13135 12125 

1*395 £577 

mm 

12830 

+630 

12830 12130 11733 1,154 

ter 

12735 

+830 

12725 mao 

1240 97 

Jri 

1262! 

+830 

12330 11125 

835 17 

Totri 




5732913387 

■ COFFg pCO) (US canta/pound) 


■te a 



Price 

tree, tey 

CDmp.da8r 


. 12024 

12137 

15 Sty oarage 


. 10438 

10237 


■ PORK BHJJEB CME (40300ta; carta/tbs) 

■hr 44.750 4X350 46300 44/400 176 65 

Jri 45400 +0.075 48.100 44300 5584 2369 

Aag 44325 +0275 44750 43.250 1333 622 

M 53375 +4X375 53300 51300 251 01 

Mar 92325 +0425 S287S 51300 28 2 

■ay 64300 +4X300 54300 53400 25 13 

Tetri 7399 3320 

LONDON TRADED OPTIONS 

Strike price $ tonne — Ce8e— Pule-— 

■ ALUMMUM 


■ No7 PREMIUM RAW 8UQAR LCE (cantsflba) 


2834 +094 2836 2830 3110 


92 


107372 18377 


Jri 1£46 +029 

- 

- 2319 

Oct 1233 +0.18 

- 

- 886 

JM 1132 

- 


te 12.12 +037 

• 

00 

Totri 

■ WWTE SUGAR LCE (S/tame) 

1419 


Jd 

2073 

+103 

2073 

2023 31551 

17390 

to 

35(180 

+430 

35070 34530 11.461 

1,193 

Aeg 

2013 

+103 

2095 

20Z.1 

15384 

1227 

Oct 

33030 

+430 

33130 

32530 1440 

91B 

te 

2043 

+103 

2045 

2003 

9.107 

883 

Dec 

31950 

+4.40 

31100 

31850 635 

29 

Oct 

gn? n 

+103 

2DZ0 

1993 

5342 

1348 

Hot 

31730 

+4.10 

31190 

31430 1,720 

150 

Dee 

2015 

+103 

2015 

1983 11489 

4,753 

B»y 

31750 

+330 

- 

- 205 

- 

Jen 

2015 

+103 

2015 

1005 

1382 

123 

Aap 

32110 

- 

32050 

32050 215 

20 

Tew 





82380 27,747 

Total 




22380 £348 

■ POTATOES LCE (E/tarra) 




■ SUGAR ’ll' CSCE fllLOOOIbs curtate) 


Jen 

2803 

+103 



2 


tel 

1£17 

+4X28 

1230 

1139 49.48811069 

Nov 

903 

- 

. 

. 

. 

- 

Oct 

1£32 

+058 

1139 

1£QZ 41577 1681 

Her 

1053 

. 

. 


. 

_ 

te 

1155 

+4X17 

1231 

11.76 21.438 1440 

tor 

1305 

+11 

1315 

1295 

834 

21 

ter 

1139 

+4X15 

1134 

11.73 3588 

54 

May 

1403 

- 

- 

• 

■ 

- 

Jd 

11JB 

+0.10 

11.73 

1138 1514 

3 


(00.734) LME 

Aug 

Nov 

Aug 

Nov 

1325 

77 

109 

23 

34 

1375 

48 

80 

44 

S3 

1425 

27 

« 

73 

79 

■ COPPER 





(Grade A) LME 

Aug 

Nov 

Aug 

Nov 

22 00 

139 

131 

39 

71 

2250 

107 

105 

57 

84 

2300 

81 

83 

ao 

120 

■ COFFEE LCE 

Jd 

Sap 

Jd 

Sap 


500 

521 

4 

57 

1850 

463 

483 

7 

88 

1900 

407 

447 

11 

83 

■ COCOA LCE 

Jul 

Sap 

Jd 

Sap 

900 

08 

138 

1 

8 

925 

77 

106 

4 

14 

am 

66 

88 

8 

21 

■ BRBir CRUDE IPE 

Jd 

Aug 

Jd 

AUfl 

1800 _ . 

180 

. 

4 

17 

1660 

131 

118 

8 

28 

1600 

• 

72 

18 

42 



LONDON SPOT MARKETS 

■ CRUDE OIL FOB (per bwreVJufl +or 


Jaa 1073 

Total 634 21 

■ HjgjjHT QBIFHEX) LCE (SlO/Index point) 


Oct 1139 +4X10 11.70 11-80 SO 
TBW 122^30 2 8^ 57 

■ COTTON NYCE IMLOOOfca; oantatoe) 


te 

1480 

+10 

1490 

1465 

961 

9 

Jri 

6&91 

+001 

84J» 

8228 22.190 6,1GB 

tea 

1330 

+6 

1330 

1326 

740 

S 

Oct 

7156 

+0JU 

79.75 

7520 5J73 1393 

Jri 

1232 

+1 

- 

- 

738 


Dec 

7524 

+036 

7528 

7185 21215 1085 

Oct 

1300 

-a 

1300 

1300 

356 

3 

Ma- 

7118 

+138 

71 IB 

7680 2296 493 

Jte 

1325 

-20 

■ 

. 

205 

- 

te 

7189 

+128 

7189 

7146 1,411 5 35 

Apr 

1360 

- 

. 

. 

68 

. 

Jri 

7190 

+110 

7190 

nSO 197 8 

Trial 





11M 

17 

Trial 




BMWB 


CtoW 

4aM 

Rf* 

4M4 





m ORANGE JUKI NYCE f15JXDB)« cdtta/fca) 

on 

•auu 

lain 





Jri 

9110 

-1.10 

95.75 

9390 14.006 1224 








Sop 

9U5 

-1.10 

9620 

oarn is<i 71 s 








Dev 

97.65 

-18S 

9180 

8176 1292 37 








Jra 

9900 

-14)0 

100JU 

9175 £503 112 








te 

100.05 

-1-20 

10220 

10105 785 S 








1 “* 

10106 

-120 

- 

24 

LT 







Totri 




22,153 £448 


Loco ten Moon Odd Lending Ram (Vs USS) 


■ UNLEADED GASOLINE 
NVMEX (42.000 US pte; c/US gate} 


2 morflha 

3 rtvsntfB 

—4.04 12 months 

4.10 

484 


Latest 

price 

Day's 

dmge 

»8h 

Opte 
Lew M 

Vd 

Sfivar Rx 

p/tray az. US cts eqter. 

JH 

5UQ 

-0.10 

53,15 

52.40 21888 

11,104 

Spot 

370.00 

571a) 

Jri 

5220 

-an 

5320 

5£85 35,134 

11X02 

3 months 

38350 

577^5 

te 

52.73 

-0.16 

5320 

52.70 14^80 

3,633 

6 months 

388.40 

58450 

te 

5230 

•0X8 

5160 

5220 11329 

1,167 

1 year 

39&90 

601.50 

Oct 

71 IK 

. 

. 

- 1303 

412 

QoUCdna 

Krugerrand 

Maple Lad 

Maw Sovereign 

S price 
391-394 

395.7549025 

89-92 

E eqdv. 
259-282 

59-62 

Be* 

Tetri 

4160 

■121 

4165 

4135 £488 
88/032 

183 

wp: 


Tn 

Tbs Tea Srcter’a AararteHn n rapem, strong 
general demai d. East Africans add ml and 
prices often advanced 4 to 8 pence and « 
limes more for ariectad Itaes. Central Africans 
were fifly firm to dearer. Olgtiier Zb nbo bms 
and Gaytans appreciated 143 to 10 pence. Oth- 
ers remained steady. Best salable. 240p/kg. 
ram, good 1BOp/kg^ good medun i3Sp/kg„ 
malum I 18 p/kg, lew median asp/kg. The 
highest pries noised Me week nos 295p hr a 
pl.l. 


VOLlflHE DATA 

Open taw** and Volume data shown lor 
contracts varied on COMEX. NVMEX, COT. 
NYCE. CME, CSCE and IPE Crude 09 are one 
day in anon. 


INDICES 

■ REUTERS (Base: 18/8/31c100| 

May 23 May 20 month ago ymrwgo 
10713 197X2 1831.7 1681 .4 

■ CUB Futures (Beam 4/B/E6"100) 

May 20 Me* 19 month ago year ego 
23338 232.43 22134 N/A 


1 

$15.14-5.1 Bw 

+4XOB 

Brent Blend (ctetacfl 

SI 162-168 

+133 

Brent Bend (juQ 

S1&48-&50 

+0085 

W.TJ. {1pm eat) 

snaoB-e.oew 

-1Q2 

■ on. PRODUCTS KWE prompt dei+wy OF (tonne) 

ftemtam Qasolna 

$181-189 


Qee Ol 

SI 62-153 

+1 

Heavy Fuel Ofl 

S85-87 


Naphtha 

5158-150 

+1 

Jri Fuel 

$163-184 

+0.50 

Aeeetown Argue Etewem 



■ OTHER 



QoW few tray 04 * 

$387.75 

+355 

Star (per troy o4A 

568.50c 

+500 

HaOnum (per troy az) 

$408. ID 

+160 

Pdtodeim {per trey az) 

*138.96 

+1.15 

Copper (f^ prod) 

107.00c 

-ZOO 

Lead (US prod) 

35.00c 


fin (Kuato Ldnpu) 

14^Sr 

+0.04 

r«i(NewVori 4 

26150c 

+3.00 

Zinc (US Prime Wj 

Unq. 


Ctt»e Sw wrightJT 

1285Bp 

■031- 

Sheep (ta wright)t4 

13&O40 

-14,03- 

Pigs (ta might) 

6 7£3p 

+3.70* 

Lon. day sugar (raw) 

$28150 

-160 

Lon. oay sugar (wte) 

$357.00 

-1.80 

Tate & Lyte export 

aazoo 

-400 

Bartey Sng. feed) 

Unq. 


Mates (US No3 Ve*ow) 

S140J) 


Wheat (US Dark North) 

B18SD 

+5J0 

Rdteer (Junft 

70-73p 


Rubber {Jd)f 

71 .OOP 


RdJbertKLRSSttal Jufl 

3S4Mn 

-1.00 

Coconut GO (PM)S 

Itaq. 


Patai <3* (Mday)S 

SSIOfly 

+110 

Copra (Ph^§ 

$4110 


Soyebeiana (US) 

E183.0Z 


Conon Outtoek A index 

68.80c 

+0.40 

Wooltops (64a Supert 

4260 

-2 


ACROSS 

1 Father gets through sort of 
joint with j oilier (5-4) 

6 Beat in bath robe Q5) 

9, 23 Young graph Ihiqwe follow 
playing card with chnsmwn 
(5’1,4) 

10 Metal from Amazon here? 0) 

11 Derby town with sailors could 
be cathartic (6,5) 

12 See 20 

14 Weep about stupid student in 
stupid way CO 

15 Take a bit (7) 

17 Drunk as an amphibian when 
young (7) 

19 Young amphibian destroyed 
old tape (7) 

29, 12 Amphibian ha« places 
planned for overspills (3,5) 

22 I use my horn to stir Jerome 
or Bosch (10) 

25 Loves ruin becomes lrat-hrng 
(9) 

26 Back start of a trunk road 
that doesn’t finish as main 
artery (5) 

27 Take land from ocean next 
time (5) 

28 Old TVay politician to depart 
with sea beast (9) 

Solution to Saturday’s prize puzzle on Saturday June 4, 

Solution to yesterday’s prize puzzle on Mo nday June 6. 


DOWN 

1 Resentment at the top, say (5) 

2 Newspapers go for Scotsmen 

- for conscription agency (5,4) 

3 Circus chiefs look-alike eating 
nuts (4-6) 

4 Where things are bound to be 
shelved (7) 

5 Dressing in short phases 
under columns (7) 

6, 24 Amphibian, female, indul- 
gent, gets wild flower (8) 

7 Extend for farther period far 
about three points (5) 

8 Money first before ga rm ent (8) 

13 Lindt of property by law, land 
register briefly shows (6,4) 

14 California country air coming 
up in reactor (9) 

18 Forcibly remove amphibian 
next month (9) 

18 Be ill and be vocal about It for 
sport (7) 

19 Having the top seat, was m 
harmony - about time (7) 

21 Textilefor Welsh baker? (5) 

23 See 9 

24 See 6 down 


eparmuMoanta 
f tagaato- m H«*edwi ca 
V Unton PhjataaL § CF 
doom, t Simp SJw <MigM 
pw trion ri prim 


p ptoica/fcg. c cnib 
xtaiUri.yJun.wJd. 


US 


Of broking and fobbing the Pdikan's fond. 

See Uoui sweetly he pute your word onto bond. 

SttMuw© 


JOTTER PAD 


y\ 


bly bring about a glut cm the 
market and prices and profits 
will plummet That is the way 
with horticulture. 

Stiff competition for the Brit- 
ish market is also coming, 
Increasingly, from southern 
countries within the EU. The 
climate tn Italy, Greece, Spain 
and Portugal me a ns growers 
can produce many . crops 
unprotected. In Britain, the 
same crops can only be grown 
in expensive greenhouses with 
ar tificial heating. 

Nevertheless, British horti- 
culturallsts claim, domestic 
produce has qualities that the 
competition cannot match - 
qualities that could be further 
enhanced by the application of 
R&D. R is widely recognised 
within the industry that the 
HDC has done, and is doin g. a 
good Job. To most it is Incon- 
ceivable that it should be 
wound-up. Indeed, that Is the 
message ministry officials wfR 
have heard yesterday. 

It is now up to ministers to 
respond to those representa- 
tions by the end of June. It is 
already clear that in the 
unlikely event that they klll-flff 
grower-funded HDC, the Dutch 
government-funded research 
establishment will quickly be 
imndritig on Britain’s door. Ini- 
tially, it will wish to sell its 
expertise but very soon, more 
of its produce, thereby increas- 
ing stffi farther the food tracts 
gap, now running at a total of 
some £6bn a year. 


/Sing 
j] hits 

tjjbrol 


i 


— c — 

" - x 

■? 






;*•>+* '* 

«v-. 




V 




■ -l \ 


T 






w «* 


inn; . 

•Mil 


% 



29 


MARKET REPORT 


Sharp setback at the close of a quiet session 


ByTeny Bytand, 

UK Stock Market Ecfitor 

The holiday closure yesterday of 
markets in Germany and Prance 
left London to bear the brunt of a 
Mtback in global bond prices follow- 
tog comments from the president of 
the Bundesbank. Herr Ttetmeyer's 
comment that the Bundes bank was 
not following a stephy-step cut in' 
interest rates for the time being 
brought sharp falls in UK gilts. US 
Federal bonds and German hnmW; 

as inflation feare resurfaced m fixed 

interest markets. 

UK stocks, which had been no 
more than mildly easier at mid-af- 
ternoon, m sharply after New York 
opened, bringing the FT-SE 100 
Share Index at one tfmi» to within 
6-4 points of the 3,100 mark from 
which the London market has b^e n 


atn«gltog to escape for the past six 

The final reading on the FT-SE 
todex of 3,108.4 showed a fall on the 
day of I&9. The Footsie stock inriwr 
future quickly feU below 3,100, 
showing a discount to the underly- 
ing stock market 

Traders hastened to point out 
that, to the absence of the foaiWnff 
European markets, London stocks 
had been only lightly traded and 
that prices tor many leading stocks 
had been barely te s te d. 

Emul Prices will face a more sig- 
nificant test this morning when 
German markets re-open and brace 
themselves for both thfa week’s 
money market repo, auctions and 
MS money supply figures. 
jfow ever. it was clear yesterday 
afternoon that UK stocks remained 
highly vulnerable to developments 


. Aceooot Oeelng Dates 

*f%at Dadfags 

IkyU Jm 8 

Jui 20 

Opera 0 atetra 

Jut 2 Jw 16 

Jun 30 

lm nmian 

Jen 3 Jun 17 

Jt4 1 

AaearntDran 

Jnll . JuiS 

Jill . 

■Haw am teaffrw. nay taka 
tnnima ton crattcr. 

ptaoa bora traa 


in bond markets, especially in the 
US Federal band sector. 

. With gilts easier from the opening 
of trading, share prices had slipped 
from a film start to show a 6 paint 
loss an the Footsie: But trading vol- 
ume was slow and it was left to 
individual company situations to 
provide the hiebiightg News of a 
modest reduction in Britain's 
non-EC trade deficit helped bond 
and share juices to steady briefly. 


In spite of a modest increase to 
■business fallowing Her Tietmeyer, 
the day’s Seaq total of 417.1m 
shares was around 40 per cent down 
on toe day. Friday’s 7082m shares 
were worth £L38hn to retail busi- 
ness. 

As usual, the fate-afternoon 
downturn was led from the futures 
markets, and the broader markets 
were to some extent left behind. 
The FT-SE Mid 250 Index closed 
only 52 off at 3,7092 having moved 
only narrowly throughout the trad- 
ing session. 

_ Among the international stocks, 
Eurotunnel units weakened as the 
market sensed that some Institu- 
tions were calling for a unusually 
large discount an the £85Qm rights 
issue widely expected later this 
week. Unexpectedly good trading 
figures helped British Airways, 


FT-SB-A AH-Sharw index 


EqidtySharw* Traded 

biMHtMHitttlNMatntamitiHMMtfhunow 


although enthusiasm was 
restrained by uncertainty over the 
prospects for Airway's $400m 
investment in US Air. 

The renewed concern over infla- 
tionary pressures on interest rate 
policies was discouraging for many 
consumer stocks, and the mood was 
not helped by a trading report tom 
Ladbroke, toe hotels and casino 
group. Breweries and food manufac- 
turing shares gave ground and 
some building and construction 
stocks, with fortunes closely tied to 
interest rate prospects, also turned 
lower, albeit to very thin trading. 

This week, toe second of an 
extended three week trading 
account to UK equities, brings a 
batch of trading reports from lead- 
ing British companies which will be 
scanned for evidence of the progress 
of the domestic economy. 



Amok Pt <&**£* 


■ Key Indicators 

hdfen and ratios 

FT-SE 100 
FT-SE Mid 250 
FT-SE-A 3S0 
FT-SE- A Al-Share 
FT-SE-A AS-Share yieW 

But perforating lector * 

1 Water 

2 Engineering. Vahfetes 

3 on, integrated .. 

4 Household Goods , 

5 Sectronic & Bee EqpL 


3108.4 

-189 

FT Opcfinary index 

24599 

-13.1 

3709^ 

-5J3 

FT-S6-A Non Rns p/e 

2a04 

(20.13) 

15749 

-73 

FT-SE 1 00 Fut Jim 

30900 

-31.0 

1 56598 

-7J30 

lOyrQHtyWd 

003 

(790) 

3.74 

*3.72) 

Long gOVOq^ty yid ratio: 

2-20 

(2.18) 


.*1.1 
. +0.4 


Worst p erf orm i ng le ctors 



.77 

•1-7 


-IS 


1.1 


402 
402 

+02 5 Printing, Paper & Fcfcg. 


_- 1.1 


t lid ci»ff et 




WOSSWORD 





Betting 
fall hits 
Ladbroke 


Starkly differing trading 
statements from two of 
Britain's biggest hoteliers saw 
the respective shares record 
predictably opposite fortunes 
yesterday. 

Ladbroke caused the most 
surprise as the annual meeting 
revealed a downturn in its 
credit betting business and dis- 
appointing performance from 


its HOton hotels division. The 
veiled profits warning put the 
shares under immediate "pres- 
sure as leisure analysts lopped 
a round 8 per cent from their 
current year forecasts, polling 
back to toe £l35m-l45m range, 
and several also downgraded 
thefr performance rating. 

“What is worry in g is that the 
problems are to two of Lad- 
broke's care businesses,” com- 
mented one formerly bullish 
analyst. The shares ended a 
torturous session 1 6% down at 
182%p, the worst performing 
FTSE 100 stock, unto turnover 
a hefty 82m, the biggest in the 
market 

In contrast. Forte produced a 
positive agm statement, which 


although less detailed than 
Ladbroke’s, said that trading 
was improving through hmgw 
occupancies and firmer room 
rates. Forte shares moved 
ahead on the news but foil 
back with the markm to dose 
unchanged at 232p. 

Airways steady 

Shares in British Airways 
firmed to 379p, to trade c£ 
62m, as the group reported 
full-year profits in line with 
market expectations and a bet- 
ter than expected earnings per 
share figure. . 

Profits for the year to March 
1994 rose by yil frn to cmu™ 
and dealers were particularly 


EQUITY FUTURES AND OPTIONS TRADING 


relieved by the lack of what 
one trader called “nasty 
shocks”. They were also 
encouraged by the. upbeat 
results presentation and a bull- 
ish outlook to trading pros- 
pects. 

Mr Ian Wild at BZW was 
encouraged by the results espe- 
cially because “there were no 
surprises to toe figures.” He is 
maintaining his CtUXent year 
profits forecast at" . £400m, 
although shaved bis earnings 
per share e s ti mat e by 10 per 
cent to 28p rtna to the 
to the tax charge. 

Water shares, heavily bought 
as . the market closed last Fri- 
day, Tnarig further rapid prog- 
ress yesterday as the market 


TRADING VOLUME 


Comments by the President 
of the Bundesbank sent bond 
markets Into retreat and stock 
Index futivos crashing through 
the 3,100 support level In thin 


trading in the derivatives, 
writes Joel tQbazo. 

The first trade In the dune 
contract on the FT-SE 100 
futures contract was struck 


■ FT-gg 400 94PCX WniRB P-IffE) £2S Pf ftd Index pejr* 


(APT) 



Opan 

Salt prtca 

Change 

Mgh 

’• Law 

Jim 

3130.0 

30900 

-31.0 

31300 

rwran 

Sap 

313S9 

31005 

•319 

31305 

31000 

Dae 

- 

31100 

-31.0 

. 



Eat vol Open tat 

7320 50682 

137 4333 

0 201 


■ FT-Sewaaoiwoex FUTURES (UFFQ £10 per ftJtadtBC point 


Jun 


37100 37064 


2j0 


37200 37100 


62 


4300 


■ FT-SE MP aw IMBCWmHBStOMUq CIO PW Mtatta* port 

Jun ' 3,7055 

M cpm Iimm tgm m tar prarious d*. t tort toeira ahown. 

■ FT-SE 100 IHPEX OPTION flJTFQ (*3107) CIO per luti Index point 

2880 3000 . 3000 3*00 3180 3200 3280 3300 

CPCPCPCPCPCPCPCP 
on 157 10211*21812 73b 3fe « 54 23 85fe 11 1202 * 171% 2 221* 
M 171*2 25 138 38 WUjM'j 73^ 702 *1* 105*2 33 138*218^1702 10 223 

MQ 187 44 002 57*2 128 78 S0j 37 76 125 62 155 302 182 2P? 231 

&* 2002 54 17412802 1402 88 1102 HO 82 ISP* W»2 iWl Mb 2D1»I 302 238 

Met ZU 1002 04 143 107hl90i IBh 281 

Me 3JZJ9 ft* <115 .if:* 

OEUroemaFFSg1WWD«OPTIOirtlJFFB etoper Ml hdex port 

3928 2876 3008 3078 3125 3175 .3225 3Z76 

Jm 172*2 7h 1202 13 W>2 202 80a 41 31*2 08 15^ 1002 Vj Wh 1 1802 

Jd W2W2 in 30 m» 43*2 68 64 68 SB «h110S 38 1S3 102 193 

AUQ 284 20z 188 41^1302502 187 702 « 1W** 88 134 402 187 302 2002 

Sop 223 45*2 164 75 9 02 118 57^ 175 

Duct 2M 78 185*2 W 141 1402 902200! 

Cite 1,16* Puli Urrtwljtac taflw’toe. Uranium «ownM on MOamragdcts. 

t law itod mute 

■ BMP STYLE FT-Se MD 250 840EX OPHOM (OMtX) CIO perUE tadH point 

3700 3750 3800 3860 3800 3890 400 0 4050 

Nqr 17*2 13^ 2 47 94 

C* 0 PUS 0 SeUeraart prim end referees era Man a OOpra. 


at 3,130, just ahead of the 
cash market However, this 
soon changed as June faltered 
on sporadic sell Eng mainly from 
independent tracers. 

But trading remained very 
thin Indeed and less than 
1,000 contracts had been dealt 
by 9.308m and just over 2.500 
lots had been traded by lunch. 

June was now tracing at 
a substantial discount but it 
was the comments from the 
Bundesbank President that 
sent the contract faffing 
through toe 3,100 support 
level, as both the bond 
markets and Wall Street 
reacted to the comments. 
Dealers also reported 
Increased arbitrage activity 
as the premium between the 
cash and toe cash market 
widened. 

The contract dosed-at *•' 
3'085, a 22 point discount to 
cash on poor volume of 7.320. 

In traded options, dealers 
reported toe least active 
session this year as total 
volume fed to 17,690 lots. The 
FT-SE 100 option traded 7,285 
lots and the Euro FT-SE option 
2,985 lots. No stock option 
traded more than 1,000 lots 
with the most active British 
Aerospace at 603 contracts. 


Stocks Ye st erday 

Vbi. Cfaefng DV» 


ASMCtoupt 
abbey Mttmf- 




Auaoa. 8* Port, 

ssu 

BET 

acc 

s? 

BPS to*. 

BTf 

m ht 

Berta of acattanft 




w 

MMiSMt 

Bud 

Bunnrti Orartt 
Bun 

CuUuftWtat 

CMMtont 
Ceitton Canras.t 
CwMVto*i» 

Comm. iMont 

Cottascn 

Coutmidtt 

SffU 

□tone 
Pmlttn But 
EartUMredBeCL 
Eng Cftair Cteya 
BrwpdeeOtt 
EmtunS Unto 
FM 
Ftaon* 

i&CoLLT. 


1J00 

2J300 

%" 

+4 

1000 

700 

00 

901 

-7 

130 

408 

43 

1,100 

861 

♦1 

1/taO 

2G0 

42 

998 

282 

-4 

ta 

665 

-0 

990 

205 

-4 

m 

9H 

-15 

2.100 

436 

-10 

3 POO 

«Qlz 

-a 

287 

436 

-3 

871 

783 

-8 

ZfflR 

mh 

ta 

330 

912 

-0 

9,100 

385 

-a 

07DQ 

288 

-i 

MOO 

308 

-3 

170 

180 

-1 

2500 

541 

* 

im 

520 

-6 

2000 

309 

-0 

57 

306 

-3 

an 

Z7B 

544 

443 

-13 

480 

450 


01300 

579 

5^rvi 

28S*j 

-i 

T78 

304 


a,mi 

142*1 

-i 

49 

168 

-2 

1 POO 

860 

«5 

WO 

Sill 

t* 


1300 
001 
US 
373 
880 
798 
2 Dt 
1J0D 


231 

£ 

531 


■ *2 
-13 
*1 
♦1 

-1* 


-It 

-t 

-9 


190 848 

1,100 201 

194 COO 

CM 687 

422 432 -fi 

624 422 -6 

Z5CD 8S9 -20 

BIS 182 +1 

1.300 ISO +2 

<71 *41 


1 FT - SB Aciuar-es S’- 

iar& Indices 



! he UK Series : 



Dtfo 

Yaar 

Dtv. 

Earn. 

PTE Xda4 

Tcttl 


May 23 cfioaw May 20 May tS May 18 

ago 

yWdK 

yWdN 

ratio ytd 

Rattan 

FT-SE 100 

3I08L4 

-4.B 3127.3 3122^ 31165 


3J0S 

663 

18US 4679 

115689 

FT-SE Md 230 

3TOL3 

-61 3714.6 3713^ 3711.7 

31664 


656 

21.73 40.68 

130251 

FT-SE Md 250 ax hw Trusts . 

371S.4 

-61 3723J 37265 37215 

3201 J] 

645 

601 

2631 41.40 

1382.14 

FT-3E-A 300 

1574fl 

-66 1582.4 18366 16760 

1411.1 

680 

638 

1679 1687 

1199.10 

FT-8E SttraWCap 

1822JS0 

-61 1823.48 1920^3 1921.12 101695 

2M 

614 

295 B 1616 

147644 

FT-SE SmalCap ax bw Tftrata 

188622 

189650 189600 169683 162653 

3J35 

458 

27.19 1955 

145690 

FT-SE-A ALL-SHARE 

166658 

-05 1573.38 1571^9 158661 1397 JU 

674 

622 

1930 1648 

121601 

■ FT-SE Actuaries All-Sham 









ow»- 

Year 

Ov. 

Een 

FVE Xd a* 

Total 


Out 
Gmnl Bact/f 

tSyrwnl 

Qmdst 

OtoudMatt 


H88C (7Sp tfvft 
Hmhm 
\l*won\ 


SSOM, 

Bfl 

ICTt 

tortonpet 


10 MNBUL EXTRACTTONCISJ 
12 Extncthis taduttitasM 
16 08, tategrand& 

IB 08 EtotaraMoo 5 Prodnn 


May 23 cteiaW M«y 20 M«y 19 Muy 18 ttflQ ylaMW yMdd ratio ytd flMum 

2709.09 +41 27D5.17 2706^0 2704^0 218S.10 3.44 4J2 20.00 37.88 107B^2 

392056 -02 393031 3944.79 394089 302090 031 5.04 24 39 4X38 106090 

2646.6T +03 2837^1 2639l64 2638.07 2T117.10 048 4.47 27.77 4043 1074X1 

_ 203 3.72 -08 204QS7 2032X6 203008 188QB0 031 M2 80 XOT 16X2 1166L72 

20 SEN IMMUMCTURBiSpfto 

21 BuWnn & CoratrucOonpi] 

22 BuBdtag »M> 5 MerchdXt 
20 Ctwifcatapi) 

24 OtwdlgU MwlitotaCtei 

26 Bearortc 5 Bad Equip(34) 

20 Enota88rino(7l} 

27 Enobwering. VeMdeapZ) 

25 Printing, Paper 5 FtahaCZT) 

29 TmctBaa 6 Apparalgg 


Laporu 

LagSIGwartt 


ItaydaB 

IASM0 


308 388 

SvSOO 320 
UDO 544 
378 388 

1000 817 

1,200 453 

813 014 

1,100 168 
381 800 

1800 487*2 
2JSD0 738 
303 371 

1300 203 

1400 UB 
1.800 30*>2 
8JOOQ 171 
271 3«3 

737 no 
014 no 

23E 384 

006 574 

300 847 

lOUOOO 1S2>2 

05 TVK 

800 430 

364 381 

1,400 883 

141 157 


-10 

48 

-10 

•a 

40a 

-4 

-4 

-0* 

-i 

+8 

•4 

-a 


-8 

+1 

-102 

-I 

-a 

-8 

-1 

-1 


206607 

-05207664207629205627 176650 

664 

457 

2646 

2457 

103570 

London BaeL 

166 

SOB 

-1 

J) 

127641 

-63 128638 127052 126639 109630 

252 

663 

3555 

1618 

982.43 

Luca 

«00 

100 


199630 

-15 201247 200550 198644 171250 

357 

35a 

3451 

28.79 

92630 

SS’ ct 

1500 



249958 

-06 2S1S27 252150 251 1.16 2104.10 

358 

AM 

2753 

2639 

108051 

IteMb 


087 


208638 

-05 211619 210660 206950 1857.70 

439 

4.43 

2750 

30.45 

1052.76 

VteteSSgmtet 

2400 

43*h 

■*h 

2iiaie 

+02 210613 2001.71 2074.69 195620 

148 

614 

iae8 

1250 

100655 

MEfandsSact 

23 

804 

*4 

1882-85 

-61 189405 189633 189153 150600 

256 

350 

3155 20.11 

108679 





231157 

+a4 230352 234645 231627 170550 

453 

2.14 

no 

32.42 

110184 

HWMbet Barttf 

6300 

438 

♦1 

283055 

-1.1 287124 286620 288253 2291-20 

252 

556 

2677 

29145 

1104.18 

NrafemPoraart 


431 >1 


177696 

-ai 177613 1772.77 177551 182640 

352 

_554_ 

2250 

2605 

99454 

Ntanh Wot Meat 

1500 

610 

<6 


30 COKSUMB! 00008(061 

31 Qraweri86(17) 

32 SrMtB, Vflnaa 5 CWantlCy 

33 Food Marufeotu*n(23] 

34 HouaahoM Goodapa) 

38 HwBh CwapO) 

37 Pitam w eauaealapi) 

38 Tobaecofl) 


2681^5 

2245S7 

2988JB 

228082 

256896 

1728.05 

2738S6 


-03270532 272037 Z721 .26 260190 438 7^6 1121 44^8 91350 

-1 J 2268.18 220833 22S7J3 194&20 430 7-51 16L36 11B3 98527 

-Q92B8&2Q 288193 zaa^OQ 286Q.ro 3.70 501 1792 41 JO 98191 

-09 2309.71280584 2287.18220050 4.16 793 1490 42JS 95290 

+09 2601 .S3 257498 2S8396 21 7490 142 795 1793 4574 81528 

-54 173596 172596 172S92 1665.70 390 598 2195 1990 981 J7 

+51273798278174 277295313790 497 501 1497 47.15 86796 

-29378794 377598 379696365560 177 992 1124 10296 B1396 


NertwnF&xtot 


P»Of 


40 SERVICE9(230) 20092 

41 CMribieofaPIJ 296291 

42 Leisure & HeMa£3) 220543 

43 Merfapq 3074.71 

44 Rrtalte*. Food(17J 163143 

46 Rotators. QonmtM 1758.^ 

46 Support S«PiksoBt4a 

48 7>anaport{*fl 237190 

51 Othar Sontow 5 BuataaaatlPI 118997 


ttoadh^t 


-57209794203561203493170190 2.98 5.79 2571 1540 97555 

-57297498288596 288597254500 297 588 2565 3496 101194 

—1.7 223579 223596 2224.71 172220 126 421 2791 1992 107572 

-1.0310577310497308512228530 2.10 499 2393 3496 106090 

+51 1637A61641911B41.il 190580 398 590 1292 1572 86094 

-53 17B2S8 176588 1758.18 147790 2.78 582 2196 11.14 82493 HFBkl 

-58 106414 166595 166294 149430 
-12 239577 240591 238572 206190 
-52 1182.78 118796 1197A4 123540 


PowmQtni 

PrudmOUf 

f 


KI2t 


ro unrnespQ 

62 BocttCttrflT) 

84 Gas Dtoixtfon?) 

66 Talaa « ai i un>c a 3tanef4) 

68 Wtaterfia 


228190 -03228796 226398 225694206500 

215157 -56 217197 216118 216597 170160 

1901.78 -53 190118 1692.18 166462 168470 

203173 -562045372011.10201191 193890 

175790 +1-1 173797 171890 172029 168990, 


WOfM=gt*WCtAL8»31) 
70 reiANCIALStlOa) 
n BanfcaflCI 

73 lnaunwa(1fl) 

74 LHa Aesurancan 

76 M arc hant BankafB) 

77 Othar nw n dS{ 24) 

79 ftcoartvOfl? 


253 

657 

450 

7.14 

456 

630 

1655 

2670 

80501- 

958 

1614 

651 

99348 

914.72 

100754 


1500 

2500 

11 

447 

624 

1522 

1453 

65755 


087 

695 

11.42 

1670 

1555 


s~™t 

6W0 

630 

t 

t 

9643 

889.13 

1 sss 


359 

7 50 

1660 

059 

84759 


37a 

578 

J44S- 

613 

648 

84548 

airafteapmtt 



3400 221 

JO ea 

907 vr 

wa iiSS 

3AOO 4«7 
5100 209 

033 Bt 
377 m 

IfiOO 225 
Z300 *17 

983 CBS 
227 508 

280 070 

818 223^2 
1.100 477 

•1J00 100 

1900 410 


+1 

+6 

-6 

-48' 

£ 

-41 

<h 

+3 
■8 
« . 


+4 

■ah 


+i 

-12 


£ 


1687.16 -09 170530 170397 1698A61S1511 173 506 2094 152S 119094 


2181.70 

280399 

126120 

230124 

280992 

166591 

158414 


-54 218193 216478 219393 195510 412 109 1441 4194 

-09281197278198278494242690 390 527 1406 89JJ7 

-1.t 1282AS 128501 131298 127530 504 1196 992 2794 

-1.0 233503 236504 23T7.4S253510 598 793 1598 6526 

291569 290792 281403 2525.10 398 1528 1190 2526 

-0.1 186148 186291 186297 141440 397 544 1564 2516 

-0.1 15859° • |Brtg<tn 1 ”0396 134320 395 393 31.92 1099 


85597 

67696 

86091 


MH)A ^ 

smn&NwMrf 

SD« BMCfOT lte.t 


ao wvraiiaBrr TttusTsnaa 28 ^ ro -oa 2^.<o tvslk &*■«> x-io ^ ^ ^ 

S8 FT-S&A ALUSHAREpeq 
■ Hourly movements 

Open MO 


168506 -55 T5739S 157198 156591 13879! 574 522 1990 1546 121591 


11W Hghfttoy toWdtor 


_ mmu 1100 1190 1200 *500 1490 1100 

<h«L9 31278 31189 31241 31257 31229 31239 51219 31079 31259 31054 

S « . 2 S* 37+ 89 37152 37154 37199 3719.1 37156 37056 37219 37059 

S S S S>J 15615 16612 188*9 *5809 *5749 *5849 *5739 

Ttaa «r FT-SC 100 Htft 895am low 4i4pra 

■ FT-SE Actuaries 350 Industry baskets 
Opon 

BldQ 6 Cna&oi 



■memaat 

Tuxdnat 

l agltoai 


500 1MO 1190 


■•2410 ■ 1390 <490 HOP W10 


Seda 


; laSi . 1231,1 12309 12354 12309 12350 *2279 12279 12319 

!*»•« 2705.7 27041 27049 27059 2711.0 27119 27009 +29 

2688,8 XSSI'S 1^1 17»1 17589 17589 17679 17644 17546 17345 +20.1 

SSJ SK JS I JSi SSI 2857.7 2855.0 28354 28379 28402 -%A 




. _ .ttatad ttoni i to a n l t aitt aaWi h to twwhs Hc w ton toe 

" m >¥>,-■» nnm FBiBMr m taa aama a**y MdaiLfT6E*8luttlw35Ourii>i0Fr9e4cM»l«BtoilM8Y 

iL iSaTmiMi Ff-3C MKShn hdu b 

osteM by Iha Hnvtol Tknaa IMM «»■ © ™ " AJ”?!**- 

OOai Mandore »* BslW S»«^ Ew*«p» UnksUBol FT9E, ***** Sum 
▼r-ep ve ^aaciW am |oH SSoaem •«» nmemt *• 

ityRwwu Company. tBaomrAenBoas' 


f-fiOO-l 


410 

1000 370 -2 

mtoCaracn ' 1000 im +1 

MOPW S36 100 -6 . 

W d aa U yt w sa -s 

YuUbBKl Si; 41 

YbPahfctlBtov I« .«*. +15 . 

Zamt iM 710 -4 

feraaabotaa tfrattar 

_t»8B«ajatafli 

yartaatayiaai 430pm. •fta totar a na ntoonar 
maan mmtod doML f WBeaiaa si FT-SE 
lOOta 


began to hunt for Tnri1ratiwn< 
of the preliminary “K factors” 
which were made known by 
Ofwat, tiie industry regulator, 
to the water companies last 
Friday. The water sector 
reporting starts tomor- 

row with results from North 
West Water, which the market 
expects to deliver a dividend 
Increase of around S per cent 
North West shares added 5 at 
Stop. 

Among the other water 
stocks, Severn Trent moved up 
7 to scrip, Thames put cm 6% to 
497%p and Anglian 3 to 496p. 
Yorkshire outpaced the rest of 
the sector climbing IS to 5Z3p. 

The electricity stocks rose 
strongly at the outset following 
a buy recommendation from 
Salomon Brothers, the US bro- 
ker, -but quickly ran out of 
steam to close with modest 
falls on the day. And there was 
plenty of stock around to the 
generators where PowerGen 
dropped U to 487p. 

■ Shares to Thorn RMI were 
weak ahead of today’s finals, 
off 18 at 1096p, although turn- 
over was thin. Profits are fore- 
cast at £33tim-340m, compared 
with £286-8m last year. Gran- 
ada slid 10 to 617p amid talk of 
problems being encountered in 
the merger with LWT. 

Profit-takers took the atifria 
from Marks and Spencer ahead 
of its animal results today, the 
shares slipping 2X to 424Kp. 
Analysts are forecasting arise 
to profits of around 17 pa cent 
to around £865m. However, 
Northern Foods, a supplier to 
M£S, rose 5 to 221p an hopes of 
good figures from the stores 
group. 


NEW HIGHS AND 
LOWS FOR 1994 

NBW MOHS fat 

OLT0 (Q BMOS (t) Tckb, BUODttM ft 

cnstim CQ jKhttM. Sham BtM luna « 

MCHCT to ItoQQUdO* Brink. 1 I ma m y 

Johatoon. ornmnon m nMcrmc 8 

BJtCT BQOP fl) Atom Conptttr. 
BMWWn itt Dcenk* HMUr, Koba smi 
SynonCh. ToNttv 4 C«toto. CXliUemc IHO* 

M HMMBtOLD OOOM ft) BMon A 


MRM M OIL BVUKMnON * POOD (0 05, 

MIBOfUTBI to ermra FttUNCUL (1) 
ftinttPionwiawuuiww 
PHARIHCeUTICM3 ff) BriL fito IMttt, 

amm. nwBi a rectoa n itob^ Rohor. 
vvyncbhm Pn« anOFCRTY (8 Buetaal. 

" -|4 Bar, Wanted ter- RHTMLBtt, 

OBERAL p) n«ndi CoenactJan. Houm at 

n 


I flj OUMOANS fl). 
WUM0I), 

QR.T8 CO KAMKS tP O HBKBmO ft) FtteM. 
BUtUKMQ 4 CMTBN (I) Nw BLOO MAILS 
4 MCHTB H Tanraa, Wk*M, WSnttBIflORB 
H) OMaport Vanwn, B9CTIfllC4CLECr 
aow m mammamta n ccnucnwc wn 
m MOW* Busk F00O IMN0F (8 BMar, 
LMaw. HEMTH CAME (1) Ub Sctecaa. 
HOUBBIOUI OOQD0 0 RdyoU Tonhtoaora. 
•WaWKX A Bwktocfc. HMDUiy. ORE. 

i Laotian. BW E iMnrr 


TRU0T3 (tl) 0I WB TM CW T COMttUMB (1) 
lamatHBTMBa— . wm 
TlcteOv LBV ASSUUNC0 (9 KDM 00 

Wtett wt, uwbd hmww orrara 
ivmncml m mMaMcamcALs m own. 

PWTMtt. 0 *1*0 1 4 PACKa re cyi i ¥tt 0i n . Da La 
fte MA FH0FBWY fQ HamfeM Onmyaitta, 

« wwa w a-fiaureowt — » 

Hk0n>0tti.SteaaanP4.1 


APMRB. a AUotl. fltowdb nUNBKWT f* 
AMB«Q4RB (2 CMMOUMS » 


Negative weekend press 
rqxirts hit Signet, the former 
Hatners group, and the shares 
retreated S4 to 39p with turn- 
over 7m. 

Home shopping group 
Betterware slipped 5 to 12^) 
after a slight improvement to 
profits to £14.lm came in at the 
bottom end of market expecta- 
tiems. • 

A pos iti ve tr ading statement 


from Lloyds Chemist helped 
the shares put on 2 to 827p. 
The company, which was mak- 
ing tha annmmwniflqt ahead 
of an analysts visit thte week, 
reported sales ahead 16 per 
cent to over fi ftno™ to the 46 
weeks to May 14. 

Tesco held steady at 223p, 
down just a half-penny, with 
dealers citing upgrades from 
UBS and Credit Lyonaise 
Latog. Argyll Gfronp firmed 2 
to 2S0p ahead of results tomor- 
row. 

Enterprise Oil drifted back 6 
to 422p as the market contin- 
ued to ponder the prospects of 
a cash alternative to the all-pa- 
per bid for Lasmo launched 
two weeks ago. Lasmo shares, 
however, held at 157p on the 
lowest turnover seen for many 
mouths. 

Reports that British Gas 
may float its domestic and 
business gas supply operation 
failed to trigger any big action 
in Gas shares which eased a 
penny to 28SAp. 

Bargain hunters helped aero- 
space and automotive compo- 
nents group Lucas Industries 
bounce & to 180p, on volume of 
asm. Fairey Group gain pH 
to 754p, with James Capel 
reported to have recommended 
the stock. 

News that airports operator 
BAA was Interested to acquir- 
ing «mit> of Australia's mam 
airports together with some 
concerns on the t rading out- 
look for the group, left the 
shares tr ailing 16 to 964p. 

Channel tunnel operator 
Eurotunnel slumped 20 to 355p, 
as the market braced itself for 
an £850m rights issue, higher 


than originally indicated by 
the company. 

Royal Bank of Scotland was 
one of the worst performers 
among the big UK banks, the 
shares sliding 12 to 418p on 
reasonable turnover of LSm, as 
the bank revealed it Is expand- 
ing its business in the US. 
Dealers said the market jibbed 
at the news, “any moves by UK 
banks in the US tend to worry 
analysts to the UK,” ***** 
Standard Chartered was 
another poor performer and 
also came in for some deter- 
mined selling, the shares 
retreating 9V4 to 244p on 2£ra 
traded. 

Switching operations left 
Barclays 5 off at Slip and Nat- 
West marginally firmer at 
456p. These were good gains, 
however, for TSB, up 3 at 222p 
and Abbey National, 4 up at 
409. 

SG Warburg, the only mer- 
chant bank in the FT-SE 100 
Index, eased 4 to 72to ahead of 
preliminary figures expected 
this week. Analysts are looking 
for a 14 per cent increase to the 
dividend totaL Klehxwort Ben- 
sou edged up 5 to 4T2fe> in the 
wake of switching out of War- 
burg. 

A big jump in profits at 
Domino Printing sent the 
shares racing forward 27 to 
517p. First half profits rose 
from £3.7m to £&4zl 

MARKET REPORT ERS ; 

Steve Thompson, 

Chris top her Price, 

Joel KBxazo. 

■ Other statistic*. P^tt 22 


LONDON EQUITIES 


1 LIFFE 

EQUITY OPTIONS 





Opto 

JM Oct to Jrt Oct Jm Opto 

Aog far R* Mg Not M 


REES AND FALLS YESTERDAY 


RtaM 


C*1 J 

(748) 

ASM 

fW) 


17 am 

030 4 m 

MO 16 2110 
200 0 11b 17 25 

50 aim 11 2 
60 a 5 «i 0 


-29H 38 - 
-era 7i - 
n *2 16 2 * 
23 3254 


4 4K 
9 9H 


MAtaM|0 360 27 SB 41 11JS1W304 
(*379 ) 390 12 2227293540 

Mi MM 300 80 3BH47M 12 21 H 28 
1*404 ) 420 M 253ZJ4 27 37 43K 

Boob 5OO40M&4H 04 7 14 2014 

C543 ) 960 16 20 sm 2S ara 43H 

BP 3B0 24HS4H41H 12 19 24* 

STB7 ) 420 10*20% IT* 29 36 40K 

MM Sttd 140 10 14H 1* 8 11 13K 

!*W2) 160 311 7 10 2IZ3H2SM 

am S00 37 90 06 110 IBM 31 
rS2B) 080 12 SB 3CH 3854 45J4 9 

CMIBi 450 5B - - IS - - 

(*4BB) <75 ISM _ - 2854 - - 

emuds 600 3m 495* 56 t2M 71 2354 
rs») 550 n 25 m 41 4W 5554 
cam UM560 31 3744 48 1354 25 78 
CS02 ) 600 0 IBM 20 44)4 08 99 

a BOO 47*81*79* in* 96 « 

(•820) BSD 71 H 97 32* 46* 63* 72 
Kta^htM- 060 4W SB* *m 14 24* 31* 
C574) BOO 17* 30* 43* 4(84 91 57* 


r2B3) 

tin 

H57) 

Ukm la 

(17B) 

P80 

fBTO) 


H80) 


f292) 

BE 

fBBB) 


Lata Sear 

650 

25 a 

4420*28* 33 

rw7 ) 

700 

6* 15* 

21 57 58* 64 

totals 

420 

18 20* 

32 IS 21 25 

r<23 j 

480 

3* 11* 

18 45* 47* 50 

fatwa 1 

<20 

46 82 60* 5*13*17* 

r«ssj 

480 19* 29 07* te* 31* 35* 

Stour 

390 10* 20 84* 18* 28* 34 

f3K) 

420 

6 16 

23 4347* 53 

Shefl Tram. 

700 

56 80* 

n 8* 18 23 

f735) 

75D19* 31 40* 27 42* 47 

anta* 

22D 

16 23 27* 7* 12 15* 

COO) 

240 

BIS* 

18 19*23*25* 

fatfara 

97 

7* - 

-s’ - - 

r») 

108 

4 - 

-12* - - 

OBAner 

1000 

n sb* 

74 27* 37 44* 

run* 

1050 

13 35* 

61 58* 66* 72 

ZaoBca 

700 S** SI 

8* 18* 36 44 

rno) ■ • 

750 

13 38 09* 49 85 72* 

Opto 


Ado far 

to Aug Nor to 

tort tot 

42B 

43 63* 

91 6 IS 22* 

C«3) 

460 

19 JO* 39* 20* 33 42 

LaXnte 

180 14* If* 

ZZ 9 IS 16 

n®> 

200 

• 10*10*21* 29 2B 

IM BbcuM 

330 

22 02 

38 12 22* 24 

f335) 

360 

0* IB* 

25 30* 38* 42 

Opto 


to Sap Dec Jon Sep to 

Rm 

UO 19* 10 21* 4 9* 13* 

nae) 

140 

4* 13 

19 5* 15 18 

Opto 


fag Mar 

to Ann Nw to 


2B0 12 17 20 10* 15 18* 
280 444 612*23*27*30* 

IS* 15 20 -10**3* - 
160 5 B 9* 28 29 2B 

180 25* 86 32 3 7* 10* 

100 12*16* 20*10* 17 20* 
650 47* 82 70*19* 39 45* 
700 22 37 46 47 68* 74 
100 16* 34* 28* 7 11* 15 
200 8* 14 18* 18 22* 28 
280 M29M 34 9 IS 15* 
300 12* t8* 23* 16 25*25* 

050 40 73 88*23* 45 52* 
000 35 46 83* 51* 71 78 
900 33* 46 M IB 31* 38 

SEC 12*23* 32 5062*60* 

280 20* 28 M* 12 10* 22 
280 11 13* 25* 23* 31 32* 
220 IS* 21* 2* 10* 15* IB* 
240 6* 12* 18 21 27* 28 
500 43*59*87* 16 26 33* 
550 18 34* 43* 43* 53 00 
354 28*36* - 9 IS - 

384 13 21 - 24 31 - 

M Otf Jn M Qfl tan 

950 37*60*71*27*39* 46 
1000 10 36*48* SB 68 75 
400 41* 47* 4M 8* 16* 23* 
500 18*25* 28 30 38 44 
JM Sn Dob Jn Sep Ok 


Ftrtttah Ante 


81 

10 

25 

134 

55 


Other toad tatarast 

4 

1 

79 

397 

General MamtaKturare 

133 






11 

06 

119 

54 

17 

202 

306 

34 





OBwre 

38 

Total* 

582 

600 

1463 


Dm MMd an 0 mm coonpanM IM on ttw London flhn Smk»L 


rs*j 
AW km 

rms) 

Taco 
rzzs ) 


TRADITIONAL OPTIONS 

FfetOmflngt May 23 

Last Dwflnga Jin 10 


UMOadanttaiw 
For aedtontett 


Bn** 
Sep* 12 


') 


(■370) 

Opto 

BAA 

f*3) 


Cate: Awa co , Mran, LBMS, Pranlar Conn, Hunan, M i teU 
Bag, TUlow 08. Puts: NHL Puts a CalK JU, Ramnone, IMow ON. 


LONDON KCENT ISSUES; EQUITIES 


Platform, Symonds 


r«7» 

Opto 

AOtoN 

C«*) 

ABttOid 

(«i 


r539) 

BIub CMe 

rsoz) 

BrtM G» 
f285 ) 
DIbbe 
(708) 


380 21* 
420 7* 
30 4 

35 1* 
500 44 
900 0* 
300 12 
330 2* 
280 *2* 
300 3* 
200 7* 
220 2 


36 44* 
21 S 
6 7 

4 S 
57 66* 

zmara 

28*31* 
13* 18 
22* 25* 
12*10* 
13*21* 
8* 14 


4 IS 19 

18 30* 34* 

1* 3 4 

4 5* 7 

2* 14 21 

19 36* 44 
8 18* 24 

31 38 42* 
5*13* 18 
17 23* 30 
7 18 20* 
22 31* 34 


480 4M ■ II 21*40* 40 
500 26* 49* 82* 42 62 68* 
420 38* 39* 48* 14* 34* 27* 
(*434) 40011* 22 30 38* 48* 91 


H71 J 

lMd» 
t*144 ) 

M Pmm 

r«i ) 

Scot Ama 

raae> 

sm 

nao) 

Forte 

rasil 

fame 

n«) 

TMnM 

nora 

TSB 

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Nta 

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204 

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800 

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150 

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410 

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154 Vymistt 

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RIGHTS OFFERS 








Issue 

Amount Latest 




Ckntaa w- 

price 

paid Ranun. 

1994 






P 

UP 

data 

HKjh Low Stock 




P 




r«v) 


r«i ) 

imam 

C550) 


Bin 380 22 31*38* 13*22*23* 

(•396) 420 B* 16 25 31* 39* 42* 

MTMCOO 360 S3 37 3m 813*10* 
(*385 ) 390 13* 20* 24 24 29 35* 

CMteiySetl 460 48 88 63* 5 13 15 

f 494 ) SOB 21 31*40* 19 28* 32 

EMmae SOU* 89 78 15 24 31 
f»9) 600 28*41* D 36* 40 55* 

a*HB 460 42 51* 00 a ISM 17* 
r«7 > SCO 17 28* 37 26 35* 37* 
«C 300 28* 29* 32* 7 11* 15 
C320 ) 330 714* 1824* 28 31 


240 6 17 21* 7 16 19 

280 2 I* 13 21*29* 32 

500 28 40 69*13* 35 44* 

800 528* 39 48* 65 73 
J* Oct Jaa m Oet Jn 


Oam SO 

(*43 ) 550 

KK75PM 750 

r7S6) BOO 

RB0B3 475 

T476) 487 

opto 


99* M* 78* B* 26 32* 
» 41* SB X 52* 58* 
SB* 75 « 38 61 72* 
9 S3* 79* U BB 100 
29* 36 - 18 30* - 
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Aog Bw F*b Aug Uov F«b 


- 

NS 

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27 

m 

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7'ttpm 

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M 

3175 

11 1 2{xn 

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270 

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500 

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23/0 

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Afatiuot Scotland 
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L— ptanw uiteriadil. tar Me w«on. 


FINANCIAL TOMES EQUITY INDICES 

May 23 May 20 May 19 May 18 May 17 Vr^o T4gn im, 

OrtOnmy Sten 24SOO 2473.0 8477a 2460 2408.8 Z193B smart QJTg? 

Ord.dv.yMd 4.06 4^3 4.Q3 4U6 4M 4i6 UB W 

Earn. ykJ. 96 W 5£1 547 540 550 5L51 8.14 K m sm 

P/E ratio net 1042 1955 1&58 1946 1048 2004 88A8 ioaz 

P/E ratio i* 20.16 9030 2032 2020 2036 1820 3030 an in 

rfc 

Orcttrtary Sham hottey c hanpaa 

Open MO 1CL00 HjOO 12J0 13J» 14J0 13J» iniy; ^ 

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' *25 x ' m *** SSI 

Sham traded (mot S66.4 6263 6369 n »| 9ira 

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LONDON SHARE SERVICE 




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36 


CURRENCIES AND MONEY 


F INANCIAL TIMES TUESPAV_MAY24j9»4__ 

MONEY MARKET FUNDS * 


MARKETS REPORT 


German rate gloom 


Pessimism over the outlook for 
German Interest rates domi- 
nated markets again yesterday 
following further cautionary 
comments from the Bundes- 
bank, writes Philip Gamith. 

Mr Hans Tietmeyer, the 
Bundesbank president, was 
quoted as raying in Hels inki : 
“We are not following a step- 
by-step cut in interest rates for 
the Hme being.” This followed 
various comments last week 
suggesting a slowing in the 
pace of German monetary eas- 
ing. 

The December euromark 
contract finished yesterday at 
&L68, 21 basis points below the 
Friday close, and 44 basis 
points down over the last two 
trading days. 

The trend in the futures mar- 
ket was at odds with the cash 
market, where call money 
rates still favour a substantial 
lowering of the repo rate. This 
led some observers to specu- 
late that the Bundesbank 
might slow the pace of mone- 
tary easing by announcing a 
fixed rate repo, possibly as 
early as today. 

Trading on the foreign 
exchanges was generally fairly 
quiet, with most European 
markets closed for a holiday. 
The D-Mark was stronger 
against th e yen and fhn Italian 
lira. 

The Bank of Israel said it 
would raise short term rates by 
0.5 per cent on Thursday, with 
the rate on the daily monetary 
tender rising to a minimum 
10.8 per cent 

fl The bearish tone to futures 
markets forced some market 
participants to reconsider their 
view that the market had 
turned a corner last week, and 
entered a more bullish phase. 

But analysts said the market 
had overreacted to Mr Tiet- 
meyer's comments, which were 
seen as no more than a repeti- 
tion of what he had said last 
week. Business was fairly quiet 
until his comments provoked a 
flurry of activity, with the 
December contract ending up 
trading more then 69,000 lots. 

Euromark futures are cur- 
rently pricing in a rise in inter- 
est rates by June and Septem- 
ber. Mr Tony Norfield, UK 
treasury economist at ABN- 
AMRO, described these rates 
as “completely crazy”. He said 


Gc f i ria iiys Money supply M3 

'% febanse from pretfoim 4tfr'qtr ova. 


25 — 

•• 'i 




r 



■r ll ■■■■ ■ 



1993 

Scotch: Damstreem . 


York 


My 23 
ESpOt 
1 rath 
3 art 
ir 


-Rev. data. 
1.5070 1.5050 

1.5061 1J5041 

1-5040 1-5023 

1-502* 15X0 


he was “not prepared to see 

this as a ftindamanlal mn vp." 

Although economists have 
been revising up their fore- 
casts for Cennan growth, Mr 
Norfield said these remained 
modest and were not an argu- 
ment against further interest 
rate cuts. 

The sharp movement in the 
fixtures market has not been 
mirrored in the rash marfep-ts . 
with overnight money cur- 
rently trading at 5.0/5.12 per 
cent. This creates a policy 
dilemma for the Bundesbank, 
because these rates are well 
below the current repo rate, of 
5.23 per cent, and this would 
normally favour arwHiw sub- 
stantial fall in ttte repo rate. 

Were this to happen, how- 
ever, the Bundesbank could be 
forced to lower official rates 
again quite soon, contrary to 
what Mr Tietmeyer has been 
saying. 

Ms Phyllis Reed, European 
bond strategist at BZW, argues 
that the solution to this conun- 
drum may Ue in the Bundes- 
bank returning to fixed rate 
repos as a method of slowing 
the fall in interest rates. 

■ Gloom in the euromark con- 
tracts spilled over into short 
sterling, where the December 
future lost 8 basis points to 
close at 9359. Volumes were 
light 

In the UK money markets, 
the Bank of England supplied 
late assistance of £l25m after 
forecasting a shortage of 


£750m. Earlier it had provided 
£616m of liquidity to the sys- 
tem. Overnight rates mowed 
from 4 to 5% per cent 

Sterling showed little 
response to the better than 
expected April non-EU trade 
deficit It closed at DM2.4789 
against the D-Mark, from 
DM2.4856. Against the dollar it 
finished at SL5064 from SL5098. 

■ The dollar had another 
uneasy day, with Mr Tietmey- 
er's comments doing no 
favours for the US currency. It 
closed in London at DML6456, 
from DM1.6463, against the 
D-Mark, and Yl0<L4Q0 against 
the yen, from Y 103.910. 

Mr Tim Yetman, head of pro- 
prietary trading at Natwest 
Markets, said the dollar contin- 
ued to trade very softly. “If 
this is a rally, it is not very 
impressive,’' he noted. With 
investors increasingly wary 
about the outlook for US asset 
markets, Mr Yetman said it 
was difficu lt to see why people 
would buy more dollars. 

The dollar could weaken fur- 
ther today if the German April 
M3 number is a poor one. This 
would bolster arguments for a 
slower pace of easing, and lend 
support to the D-Mark. 

■ The D-Mark continued its 
recent rally against the yen, 
dosing at Y63.45 compared to 
Y62 on May 18. Mr Avinash 
Persaud, head of currency 
research at JP Morgan 
(Europe), said the markets 
seemed to be responding to the 
threat of another election in 
Japan, and the possibility of a 
trade agreement with the US. 

He said investors were fear- 
fill to sell the yen against the 
dollar, but were positive about 
the outlook for the D-Mark, 
with German Interest rates 
seen to be close to the bottom. 

The lira also slipped yester- 
day, to close at L966.1 from 
L959.4 an Friday. Analysts said 
the poor performance recently 
of the bond and equity markets 
had encouraged investors to 
take profits. 

■aim canmcEs 


1 POUND SPOT FORV 

v ; ARD AGAINST 

THE POUND 








May 23 


Ooaing 

Chongs 

BkVtoCer 

Day’s MU 

One month 

Three monflia 

One yoar 

Bank U 


1 

auJLraAMrarefawa 
nau uotm 

on day 

apnad 

high low 

Bate 

%PA 

Rate 

%PA 

Rate 

KPA Eng. Mm 

Europe 













Austria 

Pch) 

17.4338 

-0X489 

271 -404 

17.4824 17.4257 

17.43 

03 

17X244 

OX 

- 

- 

114.1 

Belgian 

{Bft> 

51X148 

-0.141 

845-451 

51.1500 50.9640 

51.0096 

21 

51X096 

OO 

507398 

05 

1114 

Dennark 

(DKr) 


-0X205 

922 - 89S 

9.7215 9X909 

3. 7038 

-OX 

9.7117 

-07 

9.7291 

-03 

USX 

Finland 

m 

61071 

-0X083 

97T - in 

8.1460 8X870 

- 

- 

- 

- 

- 

- 

61X 

Ranee 

(Ffi) 

8.4763 

-0X231 

726 - 799 

8X044 8.4716 

6.482 

-OX 

8.465 

-04 

8-4513 

03 

1004 

Gamtarty 

COM) 

ZA7W 

-0X067 

778 - 799 

2.4905 2.4766 

2X797 

-0.4 

2.4795 

-Ol 

2.4864 

OX 

123X 

Greece 

m 

386401 

-7X68 

242 - 560 

375.013 369235 

- 

- 

- 

- 

- 

■ 

- 

Ireland 

w 

1X117 

-0X02 

106- 125 

1X168 1X105 

1X12 

-0.4 

1.0127 

-04 

1.0139 

-02 

106X 

Baly 

u 

2384,72 

+623 

319-62S 

2399.75 2383X0 

2400.42 

-29 

241012 

-2X 

244077 

-IX 

710 

Luxemfaoug 

(LFr) 

51.0148 

-ai4i 

845 - 451 

51.1500 50X640 

51.0098 

0.1 

51 .0098 

00 

507398 

OX 

115.4 

Nsdwrtandt 

(to 

X7E15 

-0X067 

803 -627 

2J897 zraat 

2.7611 

02 

2.7808 

■ Ol 

2757V 

ax 

mi 

Nonusy 

1 w« » 

10.7266 

-0X356 

233 - 299 

10.7562 106896 

10J21 

OX 

107335 

-03 

107247 

ao 

85.0 

Portugrt 

m 


-0X88 

037 - 574 

257.600 256X00 

257X81 

-4.6 

250X28 

-48 

- 


- 

Spain 

(Pta) 

204.188 

-1.185 

001 -370 

204X93 204X00 

204X96 

-3.0 

205.526 

-2.6 

200306 

-2.0 

611 

Sweden 

tSKO 

11X446 

-0X322 

370 - 622 

11X688 11X233 

11X061 

-22 

11.6966 

-IX 

11X856 

-IX 

77X 

Switzerland 

(3ft) 

2.1217 

+0X003 

206 - 228 

2.1246 Z1153 

1 2.1201 

09 

2.1153 

1.1 

2X87 

1.6 

117X 

UK 

to 

- 


. 

• 

- 

- 

- 

- 

- 

- 

79.7 

Ecu 


1X878 

-0.0029 

872 - 884 

1Z914 12866 

1JWTO 

-1.1 

1X898 

-08 

1X882 

OX 

- 

SORT 

_ 

0X38151 


* 

- 

- 

- 

. 

- 

- 

. 

_ 

Americas 













Aigentraa 

(Pood) 

1X040 

-0X029 

037 -043 

1X078 1X018 

- 

- 

- 

- 

- 

. 

- 

BroB 

ecu 

255522 

+3663 

478 - 585 

2558.00 2511.00 

• 

• 

- 

- 

- 

- 

- 

Canada 

(CS) 

2X766 

-0X017 

758 - 773 

2XS23 2X719 

2078 

-OX 

2.0813 

-OX 

2X998 

-09 

87.0 

Mexico (blew Peso) 

4X887 

-0X303 

828- 748 

4X825 4.6758 

- 

- 

- 

- 

- 

re 

- 

USA 

n 

1X064 

-0X034 

OBI - 066 

1X108 1X023 

1X055 

07 

1X042 

OX 

1X019 

03 

66X 

PacMctlBaJe 

Eaat/A&ica 











Auatrala 

(AS) 

2X516 

-0X222 

505 -526 

2X688 2X480 

2X609 

04 

20433 

OA 

2.0483 

OX 

- 

Hang Kong 

(HKS) 

11X368 

-0X267 

339-392 

11X699 11X250 

11X285 

OX 

11X246 

04 

11.6516 

-0.1 

_ 

Inga 

(Rs) 

472542 

-0.1082 

426 - 658 

47X940 47X000 

- 

- 

- 


- 

- 

- 

Japan 

(Y> 

157283 

+028 

182 - 364 

157X60 158300 

156X48 

32 

156X78 

3X 

152.193 

3X 

184.3 

MXoysla 

(MS) 

3X063 

-0X03 

049-077 

3.9150 3X690 

- 

- 

■ 

- 

- 

. 

- 

Now Zealand 

(tas) 

2X581 

-0X148 

568-596 

2X684 25525 

2X574 

OX 

2X609 

-04 

2X875 

-04 


PMBppinre 


408222 

-0X835 

804 - 549 

41.1530 40X783 

- 

- 

- 

re 

- 

• 

re. 

Soucfi Arabia 

(SFO 

56492 

-0X13 

460-504 

5X657 5X420 

- 

- 

. 

- 

- 

. 

re 

Sragopora 

(SS) 

2X171 

-0X055 

159 - 182 

2X212 2X115 

- 

- 

. 

re 

- 

. 

re 

3 Africa (Com) 

P) 

5X091 

-0X39 

071 - 111 

5X443 $.4979 

- 

- 

- 

. 

- 

- 

- 

S Africa (Fta.) 

(to 

7X661 

-0X897 

496 - 823 

7.4087 7X460 

ra 

- 

. 

- 

re 

. 

re 

South Korea 

(Won) 

121420 

-2.78 

392 - 447 

1217.70 1212.78 

a. 

- 

m 

- 

- 

- 

- 

Taiwan 

(RJ 

404631 

-0X649 

388 • 673 

40X600 40X900 

- 

- 

. 

. 

- 

. 

- 

Thailand 

PO 

37X224 

-0.1019 

085-382 

38.0270 37X830 

- 

- 

- 

- 

- 

- 

- 

tSORraraforMayaa ffidtattor spreads ki tbs Poond Spu Wds tliow ody aw ret Itna dacum i 

pram. 

fbnraid ntaa are net drsetty guatsd to ttw nwM 

bra sn hnpOad by cunera tasmat ota 

1 8Mng tadat cWcdUad 

l by Ota Bank ol EnremL Sow suwaos 1085 - UXUBU. Otter aid lad-rota In bom ttm snd 

ttw Ocasr Spot wen dwtan from THE WMffla/TBRS CtOSMQ SPOT RATES. Scow rekna are roundsd by ttw FT. 




DOLLAR SPOT FOR' 

WARD - 

AGAINST 

' THE DOLLAR 







May 23 


dosing 

Change 

BdfloBar 

Oay^mU 

One month Three months 

One year XP Morgan 


mid-point 

on day 

spread 

high low 

Rata %PA 

Rato KPA 

Rate KPA 

Index 



Ehrope 

Austria 

Betgfran 

DenmaK 

FHond 

Franca 

Germany 

Greece 


■wy 

Lux em bourg 

Netherlands 

Noway 

Portugal 

Spain 

Sweden 

Switzerland 

UK 

Ecu 

SDFtf 


{Seta 

(BFt) 

(OKr) 

(FM) 

m 

90) 

(DO 

(to 

(U 

(U=f) 

0=1) 

(NKi) 

CBD 

(Pta) 

{SKrJ 

fSft) 

to 


11.5735 
33X665 
6.4387 
f j s trop 
5.6270 
1.6458 
244X65 
1.4890 
1580.75 
33.8665 
1X485 
7.1209 
17D.150 
135X50 
7X840 
1.4085 
1X064 
1.1698 
1.41 446 


-0.006 710 
-01016 520 
+0.0012 3S3 
+0X068 782 
-0X025 2SS 
-0.0007 452 
-4X55 900 
-0X004 880 
+875 900 
-0X16 520 
-0X002 460 
-0X073 199 
-OX 000 
-0475 450 
-0X038 602 
+0X034 080 
-0X034 061 
- 694 


760 11.6190 11X710 
810 33X350 33X300 
64558 64285 
5.4134 5X711 
5X485 SX1S7 
1.6515 1X418 
630 248.700 244.500 
000 14011 1.4816 

050 1683.15 1581X5 
810 33X950 33X300 
1X520 1X448 
7.1429 7X894 
300 171X00 169.730 
660 138.120 136450 
7X961 7-6521 
1.4115 1.4027 
1X108 1X023 
1.1721 1.1680 


11X81 -OX 11X825 -OX 114963 0.7 103X 


380 

877 


-480 


470 

218 


877 

090 

066 

701 


Argentina peso) 09885 +0X004 984 - 985 0X981 09960 

Brad (Cr) 1698X0 +28.14 828 - 630 1698X3 1690X2 

Canada (C$) 1X788 +0.002 783 - 788 1X800 1X783 

Modoc Pour Paso) 3X88S -0X165 990-020 3X100 32960 3X995 

USA to 

PedBc/Mddle Eaat/AMca 


1X820 -OX11B 615-624 
7.7250 -OOOOI 245 - 255 


Australia (AS) 

Hong Kong (HKS) 

India Pa) 31X700 

Japan (Y) 104.400 

MOayala (MS) 2X932 +0X039 927-937 


Iky 23 

Mngay 

kan 

ItowA 

Poland 

HusSa 

OA£ 


Now Zealand (M23) 1X982 -0X058 975 - 989 

PMppfaws (peso) 27.1000 

Saud Arabia (Sfi) 37503 

Singapore (SS) 1X382 -0X001 377 - 387 


- 675 - 725 31X725 31X675 
+0.49 350 - 450 104.600 101700 104.196 

2X950 2X685 
1.7050 1X975 

- 500 - 500 27X500 2619000 

- 501 -504 3.7504 3.7501 

1X400 1X355 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

May 23 BFr DKr FR- DM 


NKr 


154X17 - 156.120 
263480 - 2M090 
04487 -04600 
838463 - 3 3732X 
2838X8 - 2848X0 
5X307 - 99333 


Pta 


162X80 - 102X60 
174840 - 173040 
OXSn - 02987 
2234Q4 • «w» 
186440 - 189140 
16715-18735 


S Africa (Com) (R) 3.8573 -0X175 585-590 3.8790 3.6505 3X728 


S Africa (Ho) (H) 4X900 

South Korea (Won) 808X50 
Taiwan 
Thdtand 


-0035 800-000 

- 000 - 100 808300 806X00 609X5 


(TS) 263550 +0X25 500 - 600 268700 28X400 28.875 
(80 25.1750 -0X1 700 - 800 25X000 25-1600 25X475 


33X916 

-09 

33X165 

-08 

3X7886 

OX 

104.6 

6.4462 

-IX 

8.4592 

-1.4 

04647 

-OA 

104.0 

53845 

-06 

5X885 

-03 

smm 

-03 

76X 

■mm 

-IX 

5X423 

-1.1 

16138 

02 

104.6 

1X47 

-1.1 

1X483 

-07 

1X422 

0L2 

105.1 

245X15 

-6.6 

248.765 

-3.6 

249X65 

-IX 

88.4 

1.4877 

1.1 

1.4854 

IX 

1.482 

OX 

- 

. 15S4X 

-3.4 

1602X5 

-XI 

1B23JS 

-2-1 . 

78X 

33.8915 

-OX 

33X165 

-06 

317885 

OX 

104X 

1.8478 

-OX 

1X485 

-04 

1X361 

OX 

104X 

7.1238 

-OX 

7.1254 

-OX 

7.1009 

OX 

9SX 

171.115 

-08 

172.735 

-6.1 

177.1 

-4.1 

92.7 

135X45 

-3X 

138X25 

-3X 

138X25 

-12 

801 

7.6825 

-2X 

7.7085 

-2X 

7.789 

-1.4 

SZ5 

1.4088 

-Ol 

1.4089 

05 

1X906 

IX 

103.7 

1X055 

07 

1X042 

OX 

1X019 

0.3 

88X 

1.1683 

1.5 

1.1667 

1.1 

1.1718 

-ai 

- 

1X807 

-IX 

1X838 

-1.5 

1X858 

-IX 

8X6 

3X995 

-04 

3X013 

-OX 

3X087 

-03 

- 

- 

- 

- 

- 

- 

- 

96X 

1X673 

-4X 

1X682 

-IX 

1X645 

-OX 

88X 

7.7245 

0.1 

7.727 

-Ol 

7.7412 

-02 

- 

31.45 

-3.1 

31X95 

~2X 

- 

- 

- 

104.196 

2A 

103.765 

Z4 

101X4 

2$ 

148.1 

2X857 

3X 

2X822 

1.7 

2X132 

-08 

- 

1.7 

-IX 

1.7046 

-1.5 

1.7263 

-1.7 

- 

3.7509 

-02 

3X529 

-OX 

17656 

-04 

re 

1X375 

06 

1X372 

OX 

1X392 

-ai 

- 

06728 

-6.1 

3,7011 

-4.8 

17778 

-3X 

- 

4X237 

-ax 

4X825 

-7X 

• 

- 

- 

809.05 

-4X 

812X5 

-3-2 

831.05 

-XI 

- 

26.875 

-OX 

26X15 

-OX 

- 

- 

- 

25X475 

-35 

25X75 

-3-2 

25X55 

-2.7 

- 


180R ran lor May aa SdfaBnr apraad) W ttw DoBar Spot tads show orty tbo taut Owe dacferel (dare*. Formal new am not tfcecdy quoad la *» maim 
btf am kqplad fry omant Manat mbs. UK Mind 4 BCU ■» quoted In US amney. JP. Margin nomtmt indcn May 20. Bam oversea WfalOO 


SKr 


SFr 


CS 


Ecu 


Belgium 

Denmark 

France 

Germany 

ketand 


{BFr) 100 19X0 1681 4X59 1X84 4894 5.453 21X3 502.4 400X 22X2 4.169 1X60 4X71 2X52 3063 2X25 


Norway 

Portugal 

Spain 


(SKr) 

(SFr) 


UK 

Car 

US 


62X2 

10 

1742 

2X57 

1.044 

2470 

1869 

11X7 

284X 

2106 

11X0 

1189 

1X31 

1142 

1X53 

1812 

1X28 

Ireland 

0X08628 

0787417 

+0000012 

-2X2 

8X7 

6019 

11.44 

10 

2X2S 

1.194 

2826 

3X82 

1166 

3014 

2409 

1161 

1504 

1.180 

1460 

1.777 

1818. 

1X20 

IMhertamts 

119672 

116706 

-0X0055 

-1X5 

4X9 

2058 

3X11 

1419 

1 

0408 

9611 

1.122 

4X28 

1014 

8137 

4X55 

0X56 

0403 

0X38 

0X08 

6145 

0X20 

Belgium 

40X123 

317540 

+00191 

-1.14 

4.77 

5042 

9X81 

8X75 

1450 

1 

2387 

1748 

10X0 

2S3X 

201 X 

11-4Q 

1097 

0X88 

2X52 

1.488 

1514 

1X73 

Germany 

1X4964 

1X3138 

-0X0048 

-094 

4X8 

2.130 

0405 

0X54 

0104 

0042 

100 

0116 

0448 

1070 

1328 

0482 

0089 

0X42 

0087 

0063 

8X68 

0X54 

Ram 

6X3883 

8X0509 

-000797 

1X1 

154 

18X4 

1485 

3X47 

0891 

0X84 

8609 

1 

3X67 

9113 

73A0 

4.148 

0783 

0X59 

0747 

0541 

58X4 

0483 

Danmark 

7.43879 

7X5293 

-001108 

1X8 

1X8 

47X5 

9X36 

7X99 

2X10 

0X43 

2232 

2X83 

10 

2319 

1903 

1075 

1X78 

0X32 

1X38 

1.404 

1418 

1X00 

Spain 

154X50 

15SX48 

+0X7 

ISO 

007 

19X1 

1783 

0307 

0967 

0385 

834X 

1X85 

4.187 

ioa 

79X7 

4X03 

0X28 

0X90 

0810 

0588 

61X7 

0503 

Portugal 

192X54 

18a 750 

+0X98 

056 

000 

24X9 

4,748 

4.151 

1X14 

0496 

1173 

1X62 

5X55 

1215 

ioa 

5X51 

1X39 

0490 

1.017 

0738 

77X3 

0X31 







44X1 

8-402 

7X46 

1148 

0X77 

2075 

1411 

9X96 

2211 

1719 

10 

1X39 

0867 

1X00 

1X05 

138X 

1.118 

NON ERM MEMBERS 





24.® 

4X69 

X994 

1.168 

0477 

1129 

1X11 

5X57 

1208 

9623 

1438 

1 

0471 

0X79 

0710 

74.13 

0807 

Greece 

284X13 

291.056 

+3X04 

1004 

-187 

51X2 

9.696 

1476 

1479 

1.012 

2396 

1782 

1073 

2513 

204X 

11X4 

1122 

1 

1077 

1X08 

157X 

1X88 

Italy 

1793.19 

1851X0 

+13 

3X7 

0X0 

24X8 

4X68 

4X81 

1.194 

0487 

1153 

1X38 

1168 

123A 

88X1 

1566 

1.022 

0481 

1 

0725 

7173 

0X20 

UK 

0788749 

0774800 

+0000501 

-1X2 

117 


Ecu 

Yon par 1X00; 


(9 33X8 
(V) 324X 
38X1 


6438 

61X4 

7X28 


5X28 

53X8 

6X81 


1X48 

15.76 

1X25 


0X72 

6434 

0.788 


1990 

15228 

1889 


1X47 

17.89 

2.160 


7.125 

68X1 

6331 


170X 

1829 

199X 


1366 

1298 

1565 


□tafeti Kronor, Front* Franc. Norwegian Kronor, end fT n wHt i Kronor par 10; Banyan Franc, Eacudo. Urn and Paoala 

flMjjg OM 126000 per OM 


7X63 
73X8 
8X80 
par 100. 


1.409 

13.49 

1X48 


0X64 

6357 

0.778 


1X79 

19X0 

1X13 


1 

9X74 

1.189 


104.4 

iooa 

122.1 


axes 

6188 

1 


(IMM) Yen 12X par Van 100 



Open 

Latest 

Change 

High 

Low 

EsL vof 

Open bit 


Open 

Latest 

Change 

Hgh 

Low 

Est. voi 

Open It 

Jun 

06071 

06058 

-0X019 

06084 

06057 

39X54 

122X61 

Jun 

0X617 

09696 

-0,0027 

0X640 

0X500 

11007 

57,770 


06069 

0X052 

-0X000 

0X089 

0.0062 

1400 

9.178 

Sep 

0X675 

0X883 

-00016 

0X87$ 

09600 

670 

6X07 

Dec 

- 

0X077 

* 



86 

318 

Dec 

“ 

0X761 


“ 

“ 

95 

917 

■ SWISS FRANC FUTURE* (MM) SFr 125X00 per SFr 



■ SnmJNGnrrUFKSOMM) £82X00 per £ 





07107 

07095 

-0X026 

07122 

07092 

16X91 

41,115 

Jun 

1X044 

1X060 

+00004 

1X100 

1X044 

15X49 

44X67 

Sep 

07137 

07104 

-00018 

07137 

07104 

709 

1680 

Sep 

1X006 

1X040 

+00030 

1X070 

1X040 

522 

1492 

Dec 

“ 

07162 

' 

“ 

' 

3 

337 

Dec 

' 

1X030 

* 

1X050 

“ 

12 

59 


EMS EUROPEAN CURRENCY UNIT RATES 

May 20 Ecu cea Rata Change % +/- from % spread Dtv. 

rates against Ecu on day oatv rata v weakest ImL 

18 

8 

S 
-11 
-24 
-24 


Ecu caraod ram set fay flu Eraopaan Cranabdan. OumonolM on In duotadng Motha otrangtti. 
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Hflp between two until, Bw pwcanrage iMaim between la acted wiM raid Ecu control tdaa 
tor a arrency, and ttw mrodmum pa w tal narottw deviation d ttw orrnno/a marital rat Irani la 
Eeu o i a a ri ena. 

staring red Ukn Lke i mp ended tarn EBU. Adornment cafcdM by Via Fin a nc ia l Tirana. 
■ PHOAPBJMASBe/SPNIIONS E31X50 (cento per poraid) 


Money Market 
Trust Funds 


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WORLD INTEREST RATES 


MONEY RATES 

May 23 Ouar 

night 

One 

month 

Three 

mtha 

Six 

TTlth* 

One 

yoar 

Lomb. 

Inter. 

Ota. 

rate 

Repo 

rate 

Belgium 

54 

54 

54 

54 

SM 

7X0 

4X0 

- 

week ago 

64 

54 

64 

64 

54 

7.40 

4X0 

— 

France 

Sfl 

Sfl 

61 

Sft 

S» 

160 

- 

175 

wmrit ago 

5% 

5fl 

54 

5» 

5M 

5X0 

- 

175 

Germany 

118 

5X5 

5X8 

5X0 

4X3 

6X0 

4X0 

123 

week age 

145 

125 

5X3 

4X8 

4X6 

100 

4X0 

147 

Ireland 

53 

6% 

6 

64 

64 

- 

- 

0X5 

week ago 

53 

SB 

6 

64 

64 

— 

- 

6X5 

Ra|y 

7% 

74 

74 

79 

7% 

- 

7X0 

7X5 

week ago 

7% 

74 

7% 

7* 

75k 

— 

7.00 

110 

Nathatlawde 

118 

5.12 

108 

5X7 

5X0 

— 

5X5 

— 

week ago 

5X8 

112 

108 

102 

100 

— 

5X5 

- 

Switzerland 

44 

43 

4% 

4M 

44 

1625 

3X0 

- 

week ago 

4 

44 

4 

4 

4 

6L625 

3X0 

- 

US 

44 

4V> 

4M 

4Ii 

6% 

— 

3X0 

— 

weak ago 

39 

4K 

4« 

5% 

59 

- 

3X0 

- 

Japan 

2 

2» 

2% 

24 

2% 

— 

1.75 

— 

week ago 

m 

254 

24 

24 

24 

• - 

1.73 

- 

■ s LIBOR FT London 








kttatfaanfc Fbdhg 

- 

44 

44 

49 

54 

- 

- 

— 

wook ago 

- 

44 

4% 

54 

5% 

“ 

- 

- 

US Dollar COa 

_ 

4.13 

4X7 

4X0 

5X0 

- 

- 

- 

week ago 

- 

4.13 

4X2 

5X0 

161 

- 

- 

- 

SDR Linked Ds 

- 

3% 

4 

44 

« 

- 

- 

- 

week ago 

- 

3% 

4 

44 

44 

“ 

- 

- 


■ TWa^KOinHBUItOatAHKWnilWe3(LffFEr DMImpoInteof 100M 


Strike 

Price 

Jrai 

— CALLS - 
jra 

Aug 

Jun 

— PITTS — 
Jii 

Aug 

1X25 

111 

109 

121 

- 

0X4 

025 

1-460 

5X9 

185 

113 

- 

0X4 

0X0 

1X75 

131 

3X1 

4X7 

0X9 

0X9 

1X0 

1X00 

1.41 

122 

174 

0X3 

1X3 

115 

1XIW 

0X8 

1.12 

1X6 

2X7 

186 

148 

1X80 

003 

048 

0X3 

4.18 

4.71 

119 



Open 

Sett price 

Change 

rtgh 

Low 

Eat. VO) 

Open in 

Jrai 

94X3 

9482 

•010 

94X4 

94.79 

25221 

160466 

Sep 

95X3 

9484 

-019 

85.06 

94X3 

58540 

188517 

Dec 

84X8 

94X8 

■021 

94X8 

94X7 

74622 

228779 

Mar 

9478 

9454 

-0X7 

0478 

94 51 


197300 

■ THROB MONTH BOJHOUIA BfTJRATH HITUSS QLIFFE) LI 000m points ol 100% 


Open 

Sett price 

Charge 

Hgh 

Low 

EsL ud 

Open in 

Jun 

9134 

82X8 

-008 

92X8 


1804 

31148 

Sop 

9146 

9230 

-016 

9240 

92X7 

4753 

51021 

Dec 

82.29 

82.13 

■019 


9111 

2619 

48518 

Mar 

8112 

91X6 

-020 

9112 

91X6 

410 

13062 

■ im 

■X MONTH 

euRoswtsi 

S FRAMC FUTURES (UFFE) SFrtm pointa Of 100% 


Open 

Sett price 

Change 

Wgh 

Low 

Eat vd 

Open m 

Jun 

9197 

9187 

-Oil 

9199 

95X0 


23105 

Sep 

96X7 

at no 

-0.18 

08X7 

95X7 

3197 

12822 

Dec 

9199 

9179 

-019 

96X9 

9180 

429 

614a 

Mar 

9173 

9160 

-018 

9173 

9166 

15 

3305 

■ ima month bcu nmnestUFF^ Ecu lmpdntaoi 100% 



Open 

Sett price 

Change 

W9h 

Low 

Est. vof 

Open m 

Jun 

94.17 

94X0 

■017 

94.17 

9400 

486 

9900 

Sap 

94X9 

9418 

-017 

9430 

9416 

615 

11709 

Dec 

0419 

9404 

-018 

04X0 

9403 

131 

7807 

Mar 

93X8 

33X1 

-021 

93X8 

93.61 

131 

3205 


’ UffE Adtare kadatt on APT 


BCU LMrad Oa Md rato* 1 MR Oft; a iiiOb: 54k 8 mttir «e 1 yoan 39- f LfflOR frMbmk fcdng 
ram ora aflhmd raraa tar 310m quettd » dw rnartni by four rrimnec bodes at lion am* anridng 
do. The banks m Brekon Trust. Bmk of TtAyo. O on da y and National Wao&nurar. 

Md mm ■« shown hr the donwMic Uomy Botoi US S CD* and SDH UnfcOd Ooposko (DaJ. 

EURO CURRENCY INTEREST RATES 


KONTH B MMMUAH (MM) Jim pottm of 100% 


May 23 

Short 

term 

7 days 
nodes 

One 

month 

Three 

months 

Sht 

months 

One 

yaar 

Belgian Ram 

5 

5d-5d 

. 5&.S& 

S&-5& 



Danish Krano 

SV-512 

5*-S% 

5%-55| 

5%-55s 

5%-SSg 

5%-A 

D-Marir 

5&-SA 

Si - Si 

SA-SA 

SA-5A 

5-4% 

43-43 

Dutch Quadra 

tfa-Sl® 

6V-5»« 

sd -6& 

5is-S 

51,-6 

- 5 

French Franc 

5L-55, 

S3|.55b 

63 -sa 

5%-5>a 

5*a -5% 

5% .<* 

Portuguese Esc. 

11A - Vfio 10% - 101* 

12 - 11 

12- 11 

iiH - io*i 

11-10 

Spanish Peseta 

7li - 7A 

7J4 - 7\ 

»-7* 

7ft -7A 

7»-7fi 

73 -7ft 

Stating 

5*. -5 

5-4% 

a>s-5 

S*«-5A 


53-53 

Swi*s FfWIC 

4% -«* 

4 It -4 

**1 -4 

4&-3B 

4i-® 

4-3% 

Can. Data 

SU-5& 

B^-SS* 

6% -Sit 

8-S% 

6A-BA 

63-6A 

US Data 

4V-4I» 

4V-4I* 

4A-4A 

4A-4A 


5A-5A 

Italian Ufa 

9-7>a 

tS-t\ 

7*1- 7(* 

7** -7V 

7h-7\ 

7^-712 

Yen 

2A-2 

24 - 2ii 

zh-zii 

2A-21* 

2*1-24 

211-24 

Asian S8feg 

3^-3* 

3%-3l, 


44| -4S, 

6A-6 it 

53-53 



Open 

1 atapt 

Change 

Hgh 

Low 

ESL ud 

Open mt 

Jut 

95X8 

95X5 

-0X2 

96X8 

96X4 

68.434 

380.192 

Sep 

94.72 

94.70 

•007 

94.74 

94,60 

135X99 

416X54 

Dec 

94JS 

94XQ 

-0X8 

94X4 

94.19 

177,067 

406X78 


■ US 7H8A8UHY H6I. KJniUBI flfcM) 51m per 100% 


Jun 

9166 

9165 

-001 

9196 

96.64 

3X92 

21195 

3ep 

9118 

9116 

-006 

9117 

96.16 

1402 

14X84 

Dec 

94.74 

94.73 

-005 

94.78 

94.74 

202 

7X16 


n Open kdorou Ago. on fa pmtouo day 
■ BUBOMABK OPTIOBIS (LB^FE) DM 1m pofrlta ol 100% 


Start tom rotes era col lor ttw US Dolor aid Yon, uUM. two d tyf Mdn, 

■ THRegWOWrHPIBOHWnWBWftdATiq Patio Intwbonk Offered rata May 20 


Str^te 

Price 

Jut 

- CALLS - 

Sop 

Dec 

Jrai 

— PUTS 
Sep 

9478 

0.11 

022 

0X4 

004 

013 

9500 

002 

Oil 

015 

020 

0X7 

9829 

0 

0X5 

0X0 

043 

046 


Deo 

0X1 

0X7 

0X5 


BAvoL 



Open 

Sett price 

Change 

Hgh 

Low 

EsL ud 

Open It 

Jun 

94X5 

94.48 

-Oil 

94X6 

94.46 

28X35 

62X31 

Sep 

94.78 

94.64 

■022 

94.78 

94X0 

62.705 

44X67 

Dec 

84.73 

94X7 

-034 

34.73 

94X2 

25X16 

34X88 

Mar 

04X8 

94.47 

-027 

94,68 

94.48 

11X24 

35X30 

■ THRU HCdmi RjnOOOUJW (UFFE)* Sim points 0( 100% 




Open 

Sett price 

Chaige 

Hgh 

Low 

ESL ud 

Open m 

Jun 

95X6 

9125 

-002 

95X8 

95X6 

26 

6458 

3ep 

94.72 

94X6 

-0.10 

94.73 

94.72 

204 

2015 

Dec 

- 

94.12 

-0.15 

re 

- 

0 

1500 

Mur 

94X0 

93X1 

-016 

94.00 

94X0 

20 

1022 


raw, Cols 19198 Putt I IH8T. Ambus day-* upon in. Cals 999064 An 170818 
FRANC OPTIONS OJFFE) SFr 1m pointa Cl 100% 


CALLS 


Price Jim 

9575 ai4 OXS 

9800 0X1 0.12 

9005 0 OXS 

Ere ml ntre cats 0 pub too. Pramui 


Dec 

Jun 

PUTS - 

Sep 

Dec 

0X7 

002 

Oil 

023 

015 

0.14 

OM 

038 

0.07 

038 

041 

0X3 

open Int, Calb 489 

Pus MM 



raaMan drark ni. can 39i 103 flrfs 37^90 . An. drare epre M. Ores 4811*2 An 437479 


UK INTEREST RATES 


LONDON MONEY RATES 

Mey 23 Over- 7 days One Three Sbt One 

mot* notice month montfra months year 


(ntertwilt SBOrfhg 
Staftig CO» 


64t-4 5-4^4 5.V-43 5A-5i 5%-5V 5H-6ii 

5A-40 5i-6i 5 1 * - &tfl 5*8 -5i 
4^-45 4* - 4# 

Bank Bfe - - 4^ - 4H - 4* 5^ - Si 

Local adhority depi 4ft - 4& 4« - 4fi 5-4% 5% - 5 Sf, - sA - Sf. 

Dbcuunt Market daps 5>z - A\ 4fl - 4H 

UK ebaring bank ban fencing rata 5L* per cert from February 6 1994 

Up to 1 1-3 34 6-0 9-12 


1*2 


4 «4 

MEhdhmn lor uuii liim 


3^ 


3i 2 


Outs at Tax dap. (?1 00X00) 

Cow at Tre dsp. under CIDOJBOa b t>r 

An. Iindsr raw re mooum 4.74S0j#c. ECQD Brad rats SHp. &port Franco. Mafca u, ttsyAfif 28, 
108< Oflned re for pread May 29. 1894 to Jun 25. 1984, bdismea H IBlX^sc. n sfsrancs roast 
p«lod /pr 1. 1894 ID Apr 21 1094. Sctames IV S V 3200pa Anmes Haum Sms An «^pc tan 
M>y 1. 1094 


Open 

Sett price 

Change 

Hgh 

Law 

EsL ud 

Open InL 

94.71 

84.71 

-0.02 

94.73 

94X9 

5324 

67334 

9443 

9439 

■006 

9445 

94X5 

9122 

91561 

9406 

93X9 

-a os 

94X7 

9195 

11199 

121891 

93X6 

9149 

-009 

9158 

93.43 

4024 

54034 


■ umb »*o*mi anenuBO punmea (uffe) esooxoo pranta of 100% 


Jun 
Sep 
Dec 
Mar 

Tradad on APT. M Qpre hbaari Kgs. its for povlgua day. 


■ SHOUT 31KWUWQ OPTIONS (UR 5 !-) ESOOXOO pointa of 100% 

SUe 
Price 
9450 
9475 
8500 


Jrai 

- CALLS - 
Sep 

Dec 

Jun 

WT3 

Sep 

Dec 

0X2 

a is 

0.13 

0X1 

ngri 

034 

004 

007 

007 

008 

043 

0X3 

0.01 

003 

0X3 

0X0 

0.64 

1.04 

am 1025 Puli 2140 Prarioua day's open mt, Ce*s 

175560 Puts 156357 



BASE LENDING RATES 

_ ~ % « % 

Adam&Company — aSB Draican Lsrarta 5XE * AoxburohaGtwzxdea 

HkdTiiietBBrk 6K ErttOrBonkUmaad- 635 Ga^aSanUi6adtano 

AlBBank..— 525 Fbancsd 1 Oan Bark — 8 fengeraudiorioadao 

8H«yAn*0Cftet 525 •Robert Flaring & Oa _ 525 o tlf rtdnglnatttudgn. 8 

Bonk Broods — 525 Qkobenfc 123 Rcyd Bk d Snotaid - 525 

Banco BBao Vbcaya— 525 •Oufenass Mahon 525 «8n«i&vwm Sees. 525 

Ba-km cypus .- sa Hacaj Bark AG Zurich, 525 SbmdardChratBred—525 

BortccfMand 625 •HaitnaBarih S2S TS8 .......... 525 

Bankctmtla-.. 525 Kerntiie&GenlnvBk.&2S «LModBk of Kuwait- 526 

BarftrfScoHroid -525 mmSenwL 523 LWy7luB(aar*Pfc~6XS 

BercteyaBank —.525 a Hosts 8 Co 525 WtetemThol. 525 

Bril Bk at MU Emt — 625 Hongkong IShanrihaL 625 wmsawayUtdaw 525 

•Brawn ST^doyS CO Ud 625 Jutoi Hodge Bafc— 626 YartaNraBan* 525 

CLBonkNodortand... 525 •tn^gld JoSoph & S«525 

UojUs Bank _ 625 • Members of British 

aydoodatoBOf* 6ZS Mosy»a|Ba*Lld 625 Merchant Banking & 

The CooporaSwe Bade. 525 MdandBar*.. 525 Secuririee Howaee 

Cwi to lOo...— ....~52S * Mcot Banking 6 taoddkn 

Cra*4iomal6 ......... 525 Nat W e at ii uki r 525 • UafriMMtai 

Cyprus Papular Bank -525 dMeeBrattns S2S 


YORKTON 







IS PLEASED TO INVITE YOU TO 

THE EMERGING MINING 
MARKET PRESENTATION 1994 

Mi«n. 10 

Paris, Yrj&pft p I ^day, June 13 

Contact- R&on^VofJglg at Yor^^Securities in London 

— 

OroonpleteUitaa^CMq^a'faxtoue. 

Name: - 

TiUe: 

Cbmpany: 

Address: ' . ... ..... 

Postcode Country. , 

Telephone: 

.Facsimile: • 





;r.en V- • ^ ot* 





Tto&reey «M ho an arenlow e( Honmy, pmMnd a «wra*obaeUre 
“""^t*** *** eeeeerelc! and poOtteal steettnn, tojettrar wtth le+loetk . 

WMMtnt 4 b kmj wi socti bs H4flsBy*4 EU MMnhAvdilBp Ofl^ A AbSb 

Tlll ** ll, * ,lf,l * l ** ll * ii>lh> ‘ 1 * M 1 -rnifirr ~inkT wills 


Tbfr HM1 4M 0922. ft* +4421 488 6889, or 
KMyaremfcnwa 

T-t Ifel +44.71 BT3 Ida 

FT Surveys 




FINANCIAL TIMES TUESDAY MAY 24 


WORLD STOCK MARKETS 


OKS) R lMftiri 
EMMY sasoar 
BtMG 3.7BS 


G8U*< 4,450 

asep t,r>os 
OanBnq Mffl 
SmM BJMM 





7« 
.160 
,130 
754 

mam 2,-iw 

HM 540 
IfdMF BBS 
U»m 399 
Man* 1.740 



m 


ill 



Casino 1B1-S8 
QnSB 1,480 

CUM 433.10 



to 


m 



-so 

3 


70S 4-12 
840 -20 


U 
2 A 
3.75 32 
1&40 tIH 107 
i48 320 &3 
7JS0 373 7 A 
71 30 12 

23 
2.7 
2.1 


1.170 14) _ 
B30 _ __ 


IjOO _ _ 

1#0 _ — 

800 

1,110 _ _ 
2.010 OlB __ 
1.100 — _ 
350 12 _ 
727 03 35.7 
734 _ _ 
780 _ _ 


K1 Z Z 

442 


m 


mob 

_ _ 

3^ 

_ 

2.7 

Jt 

U 


IB 

|ir _ 

LB 

__ 

U 


IB 


IB 

- 

2J 


2-2 

— 


V, 




& 







r*rS> 





TUZ 


NB1B > M» H Mt Mi M H oMtf ai M 


m 


rr rM Tirr 


+4 Sanyo Bee 
+6 Komatsu _ 


INDICES 


US INDICES 


m m 

19 W 




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38 


FINANCIAL TIMES TUESDAY MAY 24 1994 


4 pm dose Mey 23 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 



I AW 

jALUtBA 
; AM? 

{AMR 
I ARX 
I ASA* 
i Aim 

. iNm* 
13%. ifttoptMSto 
31 24%ACELH 
12% 10% ACM (tat h 



Ctfgi 

hl n a tahi 

B* % E I* Mpk Urn (been CM 
0 <8 13487 45 14% 14% 14% -% 
1 18 10 31 96 13% 13% 13% -% 

1.68 28 23 1SS2 uffi% 65 65% 

36 1675 55% 55 55% 

14 3M 4% 4% 4% 

ZOO 40 29 1480 44% 42% 44% +1% 

0.76 20 17 8646 29% 

050 441 S 507 12% 

22 74 12% 

457 28% 

379 10% 

5t 8% 

402 8% 

749 10 

138 9% 

160 8% 


4% 


044 15 
1.09102 
tACHOOff 080 SL2 
lAOUfiKSp 096 115 
I ACM CM S« 109119 
(AOIMU 108115 
6ACMuamda72 &s 
B% AaoeCh 044 42 12 128 11% II 
7 AoimBk( 4 EB 7 « 

23 Aorta OH 2.1 14 17(08% 28 

9% 5%ActM 036 40 2 359 8% 6 

15% 11% team 116 400 15% 14 

16% 10% Adana Bgv i 048 16 0 115 17% Iff 
■" ' 100 BJ 86 54% 54 

100 11.5 11 5757 2B*a 25 
016 ID 6 126 5% 5 
0.10 06110 89 17% 16 
265 54 12 0 54% 54 

176 5.1 B 011 55% 54 
046 14 14 1524 u33% 32 
OBB 48 12 1102 16% 18 
1 17 2% t 

OB2 Z2 22 5580 43% 41 : 
000 00 22 212 37$ 37* 
43 493 2ft 24 
104 110 12 44 15% 151 
8162 24% 231 
016 70 3 104 



B4 

31% 15% AdiUc 100 liS 11 6757 ZB*a 25% S 
6% 

20 1i 
57% 

65% 

32% 25%AhCX 
20% 18% Atonsn 
4 1% ABrahc 
49% 38% AdPrC 
39% 31% MrtmeFit 
26 19%A&v>ta 
16% 14% AMeeaa 
24% 21% AH’* 

lift ItflAlBPsOlO 
18% 13% AiatkaAir 
21% 17% Abanytat 
15% 13% ABand 
25% 2OAOQ0 
21% 17%MCdnA 
30% 25% ABXst 
25% 19% AkziNx 
58% (ftMuSlX 
38*8 23%Ata8lDWl 

22% 14AbxH 
24% T7A8agaUid 
26% 20% A**? 

16% 1ft Alan CUn 
25% 20 A— c an t 
4% 1% Allan 
27% 17% Atm Cap 
10% BABneaQ 
27% 21% AkUrttS 
40% 33% AkSgx 
29% 24 Abel Op 
5% 4%AlM3tB 
27% 21% Atanax 
82 04% Alcoa 
30% 20% Aba Cp A 
11% 8%AmBDUnc 
B% 6% AraPrad* 

B% ft AmaxEd 

25% 3%AnaatU 

51% 44ftwJaHs 000 10 21 1540 50% 

B% 0%AnA4R 004 2.7 84 9% 

31 2D% Am Banfck O10 04 34123B9 25% 

35%29%A*ftnd 200 60 9 3856 31% 

19% 17% Am BOH M 052 20 12 6 17% 

25% 20% An Bex Pro 080 07 13 241 21% 

8 6% Am Cap hex 063 90 421 7% 

20% 17% Am Cap Bd 104 05 31 79 18% 

23% 19% Am Cap Or 103 £2 0 19 20% _ _ 

52 42% AnCyni x 105 30 29 2200 1152 50% 

37% 27% AsEFw 140 6.4 141571 28% 28% . . 

33% 26% AraExpr 100 14 12 6046 30% 29% 29% 

29% 24% AmGdrt 1.16 40 22 1810 26% 26 26 

9% ft An Govt la 077106 335 7% 7 7% 

27% 34% Am HBb R 200 00 9 345 28% 25 20% 

20% 16% AaHamgdd OBB 30 10 7 17%d16% 1 


020 10 9 211 16 15% 15% 

035 20 30 47 18% if17% 17% 

020 1.4 872 14% 14% 14% 

028 1.4 13 121 20% dfft 20 

028 10 13 75 17% 017% 17% 

044 16 22 1623 27% 27% 27% 

030 M 39 1748 22% 22% 22% 

100 1.7 WO 671 58% 57% 58 

000 20 4 199 28 2B% 27 

100 60 25 1582 14% 14% 14% 

048 2.7 18 514 18 17% 17% 

104 70 11 3483 21% 

016 00 14 1243 17% 

040 10 15 690 24% 

7 08 2 

104 8.1 21 270 20% 

018 10 29 9% 

104 5.4 14 17 23 

007 10 7 3401 34% 34% 34% 

008 30 18 602 26% 28% 28% 

19 506 5% 4% 5% 

B 522 26 24% 26 

1.60 20 95 2157 71% 70% 7ft 

44 4336 24% 23% 241 

006106 577 6% 

005 15 34 30 7% 

008 10 6 2506 u8% . . _ _ 

048 20 14 181 21% 21% 21% 
■ 48% 



/ft 

*3 



__ S6AnMxmx 

2% 2% Am Hotels 
93% 81% AnW 
11% 8% AnQpphc 
27% 23% Arfrtm 
34 19 Am ftasttx 040 10 7 638 
8% 7% Am Ran Es 044 50 5 S3 


27% 

22 % 


202 50 11 3308 56% dSft 55% 
075 31.B 8 25 2% 2% 2% 
000 04 15 3837 92% 91% 82% 
10011.1 647 9 8% 8 

008 30 413 27% 26% 27% 

20 20 % 

n 


21 AmStor 048 10 7 1780 25% 
18 Am War 5% 105 50 01 II 


62% 27 Am W* 106 30 12 413 27% 

43% 30%Amrtdi 102 40 14 5896 38% 

43*2 3S%AmsontaC 108 30 5 23 36% 

14% 11% Aortal* 024 1.7143 229 14% 

58% 50% Amoco 220 30 158974u58% 

9% 7 AnbcoPfn O10 10 8 11 8% 

4% 3% Amine 0.12 34 58 B 3% 

32% 29% Aasouli 140 44 10 638 31% _ . 

4% 3%%Mcanp 12 705 3% (□% 

58% <2% MvdiiKn 030 05 80 2137 57% 58% 

31% 23% Analog 273159 27% 27% 

29% 24%Angalca 004 30 23 34 25% 25% 

54% 47%AnBKh 1.44 17 24 3319 54% 53% 53% 

28% 25%AWPpM1x lanOB 3 3% lB5% 

34 23Anham 17 280 26 25 

1B% 14% Antony b 044 19 15 87 I5%d14% 1 

35 30 Am Cp 102 5.7 8 431 34% 33% 3 

29 22%Apad»Op 028 1.1 37 1054 27% 28% 

10% 9%Apvl0nFx 073 70 388 8% 9% 

18% 1*% APR 29 993 17% 16% 1. . 

5Appldltao 1 244 5% 5% 5% 

012 00 33 26 20% 20% 20% 




27% 22% ArtKta 010 04 18 3311 
50% 43%AimCtomi 250 54 20 303 48% 
51% 47*aw45Px 400 93 9 48% 

6% 4%Anwe 2 2179 5% 

29 23% Anna IIP x 110 18 9 24% 

57%49%Anrn«l 10B 15 38 3051 52% 

45% 33% Arrow BBC 18 1401 39% 

7% 4%/WraSp 2 59 5 

33% 24% Ante W 078 11 13 385 24% 

27% 21% Asncox 040 10 83 1382 28% 

31% 22% AaMdQWx 040 10 10 100 25% 


23% 23% 
46% ‘ 


34Aann 


25% iftAtePKF 
3% 1% Amber 
37 31%Aa*M6aa 

S 48% ATM 
22fi%A8FM2x 



100 17 13 978 
007 1.4 00 _ 

000 7.0 1 319 3 2% 

012 03 24 468 U37 38% 

102 14 12682 1157% 58% 

2.80 10 3 241% 241% 241% 

. 34 AamaOasx 208 60 14 180 35% 34% 34% 

9% ftAMaSw 008 40 8 45 8% dft 6% 

21% 17%AHcEfey 104 80 10 307 18% 17% 18% 

112% 02*2 AMix 500 50 80 2152 1(0% 100% 100% 

10 4%A#as 1 64 7% 7% 7% 

20% 17%Abm&gjx 088 40 8 155 If 

12% ft AtoteADR 046 50 4 1581 
. 17%AugB 


12% 8% Austria Fa 
55% 47%Artab 
20% 14%Avsnco 
19 14 Antal 

46 30% Amta 
81% 48% AMXlYx 
. n% AjWnCtap 
Alldr 


'Si'S 


14% 11% 

7% 5% 


040 10 24 281 

010 1.0 140 8% 

002 10 23 1831 51 s 
044 18 11 S3 157 

004 00 2 683 14 

000 10 IB 1986 _ ... . 

100 30 171879 60% 59% 60% 

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150 25 10 2579 64 B3? 83? 

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158 95 11 72 17? 

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18$ 9? OStfEhex OBD 14 0 23 Pa 9? 9? 

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28 55 24? 23? 23? 

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MWBCft 158487 15? 15? 15? +? 

WCTM 302375 30? 30? 38? -1 

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AMEX COMPOSITE PRICES 


4pmctosaMfy23 


W Eta 

DU E 100c Up LawChtoCteg 


Stack 


Art Itaon 
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Alpha M 
AmtarPe 144 
AmMHaA 0649 
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AntoAmA 47 213 

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BAT lad 049 12 314 7? V 
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38 11 10 

72 3 

73 20? _ _ _ 

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Crtprop 2 XI 00 H 

Centra jt 020 13 9 22% 22% 

On UK 046 22 4 

□ndnA OBI 8 433 
□atom 8 7 

Ownptan 47 151 

Otet 200 463 
am 004 20 199 
BUFdA 041 U 



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Conputac 1 60 
Coned FM 4 3 

CnnsATA 044556 1338u1 
Crown C A 04040 29 
CTOwn CB 040 14 9 

Came 053 90 10 
Cintamte 14 5 

Ollnrt 10 431 
Dtanrii 27 62 

Dubhidui 8 347 
Dbftex 049 48 22 


Bata (tax 048 15 
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Fto(J) 052 72 
FOrtstla 25 cm 

Raquency 2 25 

B8an 040 7 IB 
GMFdAx 072 13 206 
070 34 108 
2 1® 
32 40 
034 22 254 


GoUBald 

Gmann 

BunCdc 

Hsntta 

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Kawna 

KhnrfcCp 

KMvExp 

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21 3 4j 2 r ' ' 

23 Z75 20? II 
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Tab Prod* x 020 56 
THUMB 036 5B 494 30? 39? 39? 

Unrendu U 230 IB 14? 15 

311001 29? 28 29 
ToMA 040 21 288 15% 15? 15? 

TownCaijr 0 71 2? <J2& 2jJ 

Trite 10 273 1? 1ft 1* 

TUrtUrt 19 207 5? 43 S? 

TtoftA 007 05 SB 18 17% 17? 

OxnrtkB 087M2 3ST 17% 17% 17% 

UkfbOdM 5 97 2f* 2A 2A 

OldRxxM 0201® 24 2? 2? 2A 



Xyxndx 


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15 14? 

trtl 40? 40? +? 
13012? 13 +? 
21 71 12? 12% 12? +ft 
0.10134 2130 12? 11? 12? +% 
020 14 582 21? 21? 21% +? 
240 20 51 57? 57? 57? +? 

400904 2B?2B?28? 4ft 
048 16 248 24?d23? 24% +% 
14 Z74 Bft 7% 7? J 
AfcnOra* 042 14 11 33 33 35 

AltaoRi 0 52S 10? 9? 10? +? 

AkJCapd 140 12 36 14? 13? 14 

4“ Cap 09012 50 14? 13? 14? 
AtaetOC 032 22 158 3H 3% 3% 

Alta Goto 048 7 671 1? 1ft ift 
l Co 324173 33? 32 32% 
AmBMtar 048 a 90 22 »? 22 

AnC&fcl 13 2 14? 14? 14? 

An Ham 21 85 22? 22 23% 

An MadB 131021 3% * 

An SMtwa 0321® 902 5% 

ArsFrtwy* 322066 (9? 

AmGrtAx 050 IB 201 7 2B% 

AtoP 2 4B5 1ft 

AnWtai la 7 10 48? 

AndteCOW 393072 21? 20? 20? 
AnTtav B 128 T2? 12% 12% 
AmgWtac 1717S20 45? 44? 45% -1? 

Amtadi Gp 048 24 1203 18 17 17? -ft 
Amflo 4 51 9% 09 9 -% 

Anaktfc 15 509 15? 14? 15? +? 
tatoto (MB 13 2 17 IB 16 

AmogtUn 140 14 10 17? 17% 17? 
AntbwCp 101117 35 34 34? 

AntouAn a 61 15? 15 15 

ApcgnEn 0X24 54 12% 11% 12 

AFPBta 92539 8? 6? 6ft 

AnddUat 29 6074 44 43 43? 

ApplaC 048 2710737 31? 30 30? 

Anton OW 381391 18? 14? 15 

ArtnrDr 024 38 7 16? 10? 16? 

Arctnx 020 21 744 u29 28? 26? 

Argauic 1.16 6 . 10 28 27? 28 

Amor A! OLM 20 458 2D? 20 20? 

Anctatax 040 17 378 21 1 9? 20% 

ASK Bp 3 7377 13 12B 13 +ft 

AlpCOTd 28 501 29? 28 28% 4? 
AasxCDmm 283 337 23? 22? 23? 

9 8289 15? 14% IS? -? 

14 160 B? OB? 

032 18 1875 27? 28 25 -1? 

048 20 5247 51? 48? 50% +% 

13 382 4? 3% 3% 

09214 138 7? 8% 7? 


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Bteugea 8 174 10? 10? 10? 
Marti Wl 40 ft dft ft 

Baker J 006 12 1220 2D? 19? 20 
BUwnLBx 024 3 10 14 14 14 

taKtaC 16 711 23 22? 22? ■? 

BrtSouBi 044 11 BIS 19? 18? 18? -3% 
BrttexCp (MB 9 17 18? 17? 17? 
Bteknanh x 080 12 33 u» 20 2D? 
BaokMra 020 28 1801133% 33{1 33% 

Brtta Gao 052 16 335 33? m2 33ft +lft 
Fx 080 14 272 X 25? 25? 
BayVtow O0O 12 72 23 22? 22? 
Btabtox1te131166uB0? 59? 60? +? 
BUTRn LOB 8 404 29% 29? 29? -% 
BE Am 31 1483 9? 6? 6% +? 
BWtaCU 028 30 3 13? 13? 13? 

BaoUny 14 144 14? 14? 14? -? 
BateyHH 044 14 51 30? 37? 38? -% 
BHAGrp 01212 11 9% <J8? 8? 

102 27 5% 5% 5? -% 
012 17 61 12 11? 12 +? 
088 13 901 12% 12 12 -? 
38 680 37 30 36 -1? 

17 1855 10? 9% S3 -ft 
L04 11 28 30?d29? 30? +% 
172542 54? 53 S3? -1 

BartnNflS 154 11 7989 34% 34? 34? 
BobBansxOZT 181868 20% 20% 20% 


Blno 
BfcB 
BtoteyW 
Btapan 
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BbekOra 
BMCSoDm 


BoatoSB 
BaiWrt 
Bonn 8k 
Boson Tc 
BraftWA 
Bnuoo 
BruooSx 
BSBBncpx 07B 

BTSNpna 048 

Budeta 
BDhMT 
Bur Brim 
BrttoaasR 
BdteMlg 


-? 

14 62 28% 28? 2B% -? 
173689 9% 6% 9% +% 
076 5 175 32 30 30? -1? 

462728 10% 10? 10? -? 
068 18 22 46? 48 48? 4? 
020 24 184 10? 10 10% +? 
024 151177 7? 7% 7? -? 
B 311)26? 25? 26 +? 

7 10 3? 3? 3% 
301740 2D18?19g ft 

21 1228 13d12? 12? -? 
29 100 9% 8% 8% -% 
61 83 33 32 32? -? 


5 2 21? 21? 21? 


CTae 
Cabot Vied 


- c - 

185 66 28? 24? 
6? 7% 


26+1? 

7% 


B 32 

CBSCtataU 131 17 209 30% 30 30 

C0ftunmtt20 10 125 15? 141] 15? 

(tereCp 122 875 7% d7 7? 

CHUNK 225 811709 14% 13% 14? +1 
Cal Micro 18 395 20? 19? 20? +? 

cmdxSto 1 589 1% ift ift ft 

Canute. 2 82 3% 3% 3% 

Codes 0 135 1? 1% 1? 

CSKXltne 060113 41 81% 31% 01% +? 

Canonta 1 23 3? 2% 3% +? 

CtatM 0.12 25 144 46? 46? 48? 

CmtonCm 0® 23 38 29% 28% 2B% -? 

>X 060 IS 67 21? 20 20? -? 

Casey S 080 15 1767 10?d10? 10% -% 
OBgna 4 188 6? 8 6? 

CaUar 0 334 19? 1B% 10? 

cat OP 18 228 11?tf11? 11? +? 

CenteTel 77 459 IT 10% 10% 
CCTtoenr 6l52D0in4? 12% 14»+ +1% 

CnblRd 1.12 11 407 31? 31 31? +? 

CnUSpr 25 7100 12? 12? 12? 
Oiandkr 8 8 4? d4% 4? 

Chaptarl 080 7 104 20% 20 20% 

Chmsn am 1221225 9? d8? 8iJ -ft 
Cbsadsgn 42 47 ufl? 8ft 0? 
Cbaaftb 15 102 10%d10% teh -ft 
Chandb 1 290 ? d% ? 

GataUHT 12 8 8? 3? 3? 

CHpa&Te 8 696 4% 4? 4% -? 
0*1X1 Op 843955 67? 65? 89 -1 

CtaFta 136 12 83 52? 52 52 -? 

ChtalCp 017 30 223 32 31? 31? Jz 

Onwlfle 334384 32% 30% 31? -? 
OS Tedl 121 B38 2ft 7% 2% -% 
13220® 24? 23 24? +1? 

CtzBaoCp UB 16 12 28? 27? 26? 
QeanHOr 2* 126 7? 7 7 ■? 

CMaOr 43 139 13 12? 12? 

Ctataaan 82B73 4% 4% 4% 
CocaCutaBxUOD 15 274 25? 24? 25? +? 
CodnEngy 110 H5 S? 5? 5? 

■ Cafeteria 26 308 10? 10? 10? +? 
OtapwQD 30 384 19? 19? 18? -? 
Comas 101 280 11? 10? 11? 
Cdaraat 17 34 13? 12? 13? +? 
Crtaou 8» 763 22? » 21-1? 
CcHGaa L26 13 14 20? 20 20 -? 
COM &p 060 8 12 23?d22? 22? -? 
Conte 024 12 1282 18? 18 18? 

Craatt 009 1G10M 16 15? 15ft -ft 

CncstAEp OLOB 32 9275 15? 15? 18% -% 
CbnnBMftrtUB Tl 738 32? 32 32? +? 

Domna 070 W ISO 18? 17? 17? +? 
OamprtJda 418 708 12? 12 12? +? 

canton 90 174 iri4 13? 13? -? 
CamtufA 361380 3% 3ft 3ft ft 
Cdatep 128 25 1 020 38d3B? 37 -? 

12 324 8? 7? 8? +% 
144 18 5028011? 10% 11 

CMUCll 30 687 17? 15? 15? -1? 
CrtBan is 158 m% 10? 10% +? 
Qxnk OS0 17 1088 19% 16% 18% -% 
Cantata 871050 11? 10% 10? ft 
CDnIl Cp 22 1785 5D? 48? 49? -? 
CapUA 41 888 15? 14? 15 -? 

CndarB 002 29 2328 25? 24? 24? -? 
CUgrCamp 0 705 ift 1% 1% 
fiamfla* 43 178 8% 5% 6? 
Oytagm 21384 4? 3% * +% 


- D - 

OSCQn 3038907 50% 046% 46ft -2ft 
Dart Bran 013 18 45 77? 077 77? -2ft 
MBSM % 9 29 2% 2? 2? 

Dhtetaa 28 12 6? 8? 8? 

Daacqn 15 751 15? 14? 15% +? 
DaupktaOp 082 11 287 25? 25? 25? 


FT te 

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DN> Snaps 020 20 0 07% 7% 8% 

MaftEn 032 21 40 14% 14 14? 
Dakata 84X080 48 5 32? 32 32? +88 

Dtehanm W* 11 B5 22 21? 22 +? 
DaOQnp 240577 25 34? 28+1? 
DafeaQSraxOie IS 53 15? 15 IS 
DrtjKy 32 792 36? 35? SB? 

Dtp By 1J» 8 143029? a? 29? +% 
Davcon 020 4 470 te? 8? 9 -% 

OHTKtl 16 31018? 18 10? +? 
DtartaB 072 7 BE 18? 15? 15? •% 
MgltaU 13 397 14 13? 13? -? 

HglScro 71857 13? 12 13% +% 

HoSouafl 61373 1? 1% 1% -ft 
OkJSVrt 7 M 4% 3? 3? -? 
DtanaxCp 15 Z7 33? 32? 32% -? 
D&deYhlx 020925 249 9? 9 ^ ft 

DMA Hail 23155 4% *? 4% -% 
ttaftr&IX 020 25 1658 26? 34% !5? +? 
DotdlMn 06814 9 13tfl2? 13 -? 

Otaccew 13 28 8? 0? 9? +? 
DrasSam 121980 11? 11? lift ft 
EknyfiD 024 191959 23 22? 2 ai -ft 

DrupEnpo 006 45 103 4% 4? 4? -? 
D5 Bancor 180 17 638 31? 30? 30? -1? 
Doriran 042 11 534 15? 15? 15? +? 
DotHI 030 24 B 033% 32? 32? 
DtntacO 11 140 18 17? 17? 


Ouanbin 

Orttetv 

CNCNtert 


wy« 


EaotoFd 

EanlCp 


H2TN 

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BPaaoB 

BacbSd 


BacMrta 

EnconAai 

En**» Gp 

EiqWi a 

EnteSxs 

Ben toe 

EtadiyOl 

BBteBx 

BHd 

Buna Sta 


ErideSK 

Bqiedtl 

BnxpAnv 


- E - 

5 46 4? d€? 4? 

2 M 4? 4? 4? 

Z 30 1ft 1ft 1 A 
018 21 2841 17? 18? 16% 

E 244 7? d7% 7? 
21332 2% 2? 2% +ft 
8 843 9% 9% 8% 

089 54 5 53? 53? 53? 

2410682 20% 18? 20ft 
20 119 7? 6% 6% 

27 1442 B? d6 6% 

49 41 14? 13? 14 

E 30 1% T% 1% 

22195 2% 02% 23 
01014 138 3% 3% 3% 
057139 4944 51? 50% 50% 

7 8 dB 8 

77 351 17? 17 17? 

191875 15? 14% 14% 

11 52 8? 8? 8? 

16 861 23 21? 22? 

010 20 944 17? IB? 17? 

22 129 13? 12? 13? 


-% 

+? 


3 


$ 

■H 

-% 

-% 

+? 

+? 

+? 


dm. E «k to to to anon 


- K - 

K Sites 006 12 45 23? 23? 23? +? 

Kanon (ta 044 5 180 9% 0? 9? +? 

kaydonCp 04014 42 22? 22 22*' s ft 

KaS+yOi S 785 5% (&% 5ft ft 

KaBllDt 072 23 622 27ft 26? 27ft +H 

Kemueky 011 9 52 B? 05? 5? -> 

KMnI OW IS 118 24? 23? 24? +? 

Ntsctner 12 33 8 6 6 

KLAtaak Si 3388 39? 37? 38? 

Knewtadja 5 902 10*2 09? 10 

KMA 1 14 % ft % 

Konautae 1931063 22 21 21? -? 

KidXteS 92872 14% 13? 13% +% 


- L- 

laddBxn 012 49 S3 B? 8? 8% -? 

324553 29? 28? 28 +? 
Uncartar 060 21 130Bu49? 47? 49ft ft 
Lmcatac 090 17 340 T0d17? 17U +ft 
UKfclftQta 42 456 33? 32? 3KB +27 

Ltotes 11 57 8? 8% 6? -? 

Laaancpa 65 452 6 5% 5% 

UdncaS 14 5201 17? 15? 17? +1? 

Lawson Pr 048171144 23^ 23 23H ft 

I LDOS 
UUCP 
Lactam 
Lagert CD 
UotadBBe 
Ufa Tech 


ft 3k 

ML 5 INi m to to COW 

fTxtanBx 012 6 BS 20? 19? 20ft +ft 
Ipjnniu 12 810 7? 7? 7? +? 

12 E 7? 7ft 7? 
lOutonOxn 062 73 25 18? 18? 18? 

I Oval Food X 020 17 358 23? 22? 23 


0811705 15? 14? 15 
17 3ta 12,? 12? 12? 
21 1328 31% 30? 31? 


+? 

ft 

ft 


15 15? 
5? 5ft 
4% 4% 


Raymond 

Receon 

RaLBeA 

RapepgD 

HapWto 

nea ro l i W d 

Reuto 

Raaonnc 

RtaM 


- R- 

14 218 15? 

51525 0% 

3 871 5% 

25 580 18? 18? 10? 
30 733 32? 31? 32 

15 18 18 17? 17? 

4? 3% 4 

3? 5? 9? 
9? 68? 0? 
44 42% 4S? 

6 B 5% 


26413228 18% 16? IB? 

018 7 14 5? 5 5 

14 234 11? 11? 11? 
171B51 29? 27? 2B? 

IUB 13 384 28 27? 27? 

020 15 S3 17? IB? 17 
21 42 4% 4? 4 

03 23 23 24? 23? 24? 

87 842115? 115115? 

OE 15 228 15? 15? 16% 

14 14 32? 32? 32? 

024 37 2834 45? 44? 45? +>4 
040 10 5 37 38% 36% -% 

Eta 0® 28 177 22?d22? 22? -% 
LeneStar 25 353 0? B? B? -? 

I LubaO 5024200 63? 57 02? +2? 

LIXCp 2 624 2% 2% !? 

LUW 035 41012 32? 31% 3l% 


IfeytodA 
UOBT 
LkwdnT 
itartayW 
, UmTw 


-% 

■? 

+? 

ft 

-? 

-% 

-? 


2 423 

5 10 . . . . . 

14 542 8? d8? 8? -? 

224 131179 44 <2% 4S? -% 

1 45 6 B 5% -? 

OBD 10 94 35% 34? 35% *? 

1.40 23 ZBB4 70? 89? 70% *% 

RMpet 012 13 42 6? 8% 0% -% 

RndlSllBk 058 4 406 18% 16% IB? +? 

RxaortRx 015 31213 o17 IB? 10% +? 
Ron Sir 020 11 1197 14? 13% 13% -% 
fttaCMled 25 496 21 20? 20? -? 

089 60 498 18? 19 19? +? 

iRPMbc. 052 20 257 IB? 17% 18ft ft 

REHn 046 12 12 20>* 20 20 -*2 

1 RyarFn+y 143087 7% 7% 7% +? 


- F- 


005 2021396 24? 23% 29% 
172823 20 19? 19? 

060 *3 21 1402 13% 14 

ttadtaonCE Ite 14 12 32? 32? 32? 

14 355 31? 30? 30? 
Magna GrotfLTB 12 879 19% 19 19ft 


MO Cm 
MS Cab 

Me MB 


MEOp 
Fan Op 


FHPtaB 


11 20 
024 14 30 
CUM 51 807 
14 2E 
3 174 


ntaTtrt 
my on 

HgghA 


4% 4? 4? 
S% 5% 5% 
33 E? 32? 
23 22 22ft 

3% 2% 3 


-? 


ft 


Mb* Bex 
■ CD 
Mata Dr 
1 Co 


1D6 18 B32u54? 54? 54% 
51277 3? 2% 3 

024 1 455 10% ID? 10? 

38 798 Z7? 20? 27 
FNABama 120 12 10SZ 35% SS% 35% 

Hrrt Am* Q04 8 338 31% 31% 31% ft 
FOScOita 100 10 142 2S 23? 23? -% 
FatCnBk 000 21 BB 24? 24? 24? 
WSadyx 1JM 11 90 29? 28? 29 

Rtf Tim 108 9 234 41? 41 41ft 
036 7 70 9? 8% 8% 

052 8 133 23? 23? 23? 

1JB 11 385 48 45? 48? 

44 20 7? 7? 7? 

20 888 21? 20% 21 
18 388 6% 5? S% 

009 151639 5% 05? 5% 
009087 747 6 5? 5% 

108 10 33 31? 30? 30% 

13 BB 15? 14? 14? 


ttMMn 

ttfadMc 


How fat 
RnU 
Fonts 


-% 

-? 

ft 


+? 

-? 


Raidnr 

Pfantox: 030 32 388u33% 33? 33% 
RatarA 
MiFfaix 
RtfEate 
MRS 
RtIM 
fUtarHB 
RBtanRt 
FUnn 
RdmedADR 


38 70 3? 3? 3? 
104 11 70 28? 28 28% 
L12S35 2011(28? 26% 26? 
OC 8 175 16? 10% IB? 
LIB 11 563 D28 27? 27% 
058 23 20 30? 35% 35? 
Q0B U 603 26? 25? 28% 
024 20 96 10? 15% 15% 
48 6 5? 5? 


-? 

-% 

% 

-? 

-? 

+% 

ft 

+? 

4% 

+? 

-? 

-? 


12 208 B 1 * 8 8 

28 61 10? B? 10 
131555 4% 64% 4% 
9 15 40? 39? 40? 
1 138 2? 2 2ft 

10 7Q aL flL oJL 

l MantfinkADM 10 56 1D% 10? 10? 
IX 080 11 2385 21? 21? 21? 
9 708 8% 8 B 

MaxtnH 40 243 53? 01? 32 

Hater CD 0 261 6? 5% 5% 

MeGuSlR 044 12 27 18? 18? 10? 
bfcCorndc 048 176605 21? 20? 20U 
McCawC 484795 53% 52? 52% 
Mad knag 01118 ft g ft 
I MedBxtac 016 15 327 12?d11% 11? 
|MnUmSx04B12 39 22? 21? 21? 

024 0 21 5? 5 5 

Manor Cp 016 45 20 14? 18? 13? 

024 21 13B5 11? 10% lOtf 
MaroaUB 006 ID 400 19% 19? 19ft 
Mercury G 070 7 BOO 26? 26? 28? 
IX 10B 11 714 30% 30% 30% 
IS 1590 16? 15? 16 

; MattndaA 005 151045 15? 14? 15? 

IF 020 16 333011? 11% 11? 
MfctiltaB 200339 5835075? 73? 74% 
B 194 4 S3? 3? 

2D 1096 
5 285 
15 848 
31255 

1417274 nSI 48? 5(ft 
41 3103 48? 48% 47% 
040 11 1851 29% 28% 29ft 
llte&ata 050 SB 26 32? 32% 32% 


llancosi 
H uitort 
MkapoBt 
Mcxfi 
MU AH II 


28 26? 
5% 5ft 
6 % 5 ? 
7 8% 


-% 


*? 

ft 

-? 

+? 

+? 


ft 

-% 

■? 

+? 

ft 

-? 

-? 

-? 

-? 

-? 

ft 

*? 

-? 

+? 

+% 

+? 

ft 

ft 

-? 

-? 

ft 

ft 

►ia 

-a 

ft 


- s - 

I Stem 108 8 1008 55? 54% 55% 

| Sandman 000 12 231 16% 18? 16? 
SettWJOrt 030 17 444 24 22? 233 

SdMsdL 7 1424 28? 27? 28 

SOSyann 121889 15? 14% 14% 

Setae 8 280 7 8% 63 

! Selim Cp x 05Z 71557 16% 16 16? 

Score Bril 8 5548 8? 7? 8% 

Seated X 120 48 4 40 39 38? 

S-gsta 109168 22% 22 22% 

I SB Cp 012 23 6362 18?tfT7? IB? 

IB 036 1 84 1|| 1? 1? 

[SataCrtB 1.12 15 345 26? 25? 25? 

58 743 14% 13% 13% 

26 364 412 4 4ft 

I Sere Tied 14 247 B% 0? 9% 

Isanftact 22 3 4? 4% 4% 

IB B 17% 17? 17? 

Stated 004 171275 24? 23% 34? ft 
SHLSysm 3 601 7? 6% 7? ft 

Staxmnod 27 2507 ul 7? 1616% ft 

ShowtazP 10 n ID? 10? ID? 

SfenaOn 18 965 22? 20? 22? 

|StamTuc 2 11 3% 3? 3? 

SfaynN 033 181219 41? 41? 41? 

Senate 1 919 9? 7? Bft 

SVcnVBe 008 52 12 10? 10 10? 

SMoMp 31 1584 10? 10? 10? 

OGB 24 75 10? 619 10 

SrnfaMd 31 589 22? 22? 22% 

Snappkev 684134 25? 24? 25? 

Stomp 11834 5% 4% 8? 

Sonora x 056 1* 421 z0?d1B? 20 

SodHlKX 068 10 25031(20? 19% 19% 
Sptagri A 020 461235 22? 21? 21? 
StJodaMd 040 11 1042 27? 28? 27? 
StPkuBc 030 10 552 21? 20% 20? 

1 484 2% 2% 2A 
444173 30 28? 29? 

058172088 41? 40? 41 

SWUfan 11 596 18? 16% 16% 
SURaglai 088 14 436 21% 2121? 

Stool T*C 006 16 43 16? 16? 16? 
SfekliUSA 020 2 575 Hi 0? 0% ID? 

Sto 147 47 20? 20% 20% 

Steward 1.10 13 29 20? 20 20? 

StracSDy 21 2248 10% 10? 10% 
Sfaytar 028 202713 Z7? 25? 26? 
SuteanD 21 296 15 14% 14? 

GamteKfl 080 S 5 22? 22 22 
SummkteXOM it 3)7 22 21? 21% 


ft 

-? 

■ft 

-? 

-? 

■I? 

■? 

•1 

ft 

■? 

ft 

ft 

ft 

ft 

-? 


ft 

ft 

-% 

ft 

ft 

ft 

ft 

•? 

ft 

+12 

-? 

ft 

ft 

4 

-H 

ft 

ft 

ft 

-? 


ft 

ft 

-A 

-% 

ft 

-? 

ft 

-? 

ft 

+? 


GMApp 
GKKScxv 
tenon 
GamatRs 
Quid CP 


- a - 

7 4 4% 


4? 

14 

3? 

3? 


007 21 40 14? 

0 29 3? 

10 5 3? 

018158 ® 8? IP* 6? -? 
GralBMx 04017 180 18? 15? 10? +1 
Gatyw 17 318 114% 4% 4? ft 
GentaHi 5 817 15? 13? 1? L * -fi 
Gate Cp 400 45 854 27 26? 26% ft 
Ganuatoc 133 671 4 3% 4 

Garajna 671400 29? 29 29 ft 

GflnxxiGt 040 11 221 19 18% 18% ft 

GkASngaLx 012 171018 23? &? 23? ft 
GfcertAx 080 18 IN 16? 16? 10? ft 
Gtari Sum if 9 5? 5? 5? ft 

Good Give 15 810 12? 11? 11? -? 

GttoPmp 060 10 76 21% 21? 21? ft 

GnteoSjU 35 178 2? 1% 2? 

testa 020 HJ 45 21? 20? 20? ft 

temAPx 024 10ZIOO 17? 17? 17? +24 


HX 052 17 3» 25% 24? 24? +.40 
Mien 786 22? 21? 21? ft 

Ubimeb 14 25 11 11 11 

MGitaTM 42190 17% 17 17? ft 
Modem O) 020 18 15 7% 7? 7% ft 

Mate W 052 IB 93 27? 26? 26% ft 

Moktt 004 1590 34? 34 34 ft 

MaHKilK 004 27 784 38? 35? 30 ft 

teBOB 004 18 514 10% 10? 10% 

MutortP 038 22 25 29% 30? 29? 

ROOM 182188 15? 14? 15? 4% 
MlSSy* 056 11 151 26? 26? 26% +% 

ttanod 12 580 26 27? 28 +? 

Ktycogan 4 203 11? ID? 10? ft 


teMChPt) 

Gnnamans 

GmdWtr 

GtlCttp 

GbNYSvg 


HBtagA 


01188 
1 559 3% 
BBS 325 -14 

8 73 ID? 
51582 9% 


- H - 

63 223 6? 


? % 
3? 3% 
13 13? 
11 11 ? 
8% 9% 


ft 

ft 

ft 

ft 

+? 


ft 

ft 


B 0? 

064 a 5 22? 22? 22? 
KaiperQg 020 13 18 15 14? 14? ft 

HB060P 018 233727 27? 2B? 27? tJJ 
18 2420 20? 19% 19% ft 
Hearten 008 20 248H12? 12 12? +? 
Headbdyn 10 B 6% 8? 8? 

11 67 7 8? 7 

016 25 854 15? 15? 15? 

8 10 ? 10 ? 10 ? 

HetanThv 8 310 14 13% 13% 

072 14 2D40 21? 18? 20ft +lft 
HnganSjM 015 28 M 9% 9% 9? ft 

Hatoglc 48 123 10? 10 10? ft 
Home Barf XO0O 9 5 21? 21? 21? 

HoreeOfca 072 25 251 iffl 2D 20? 

Hon lnd» X 044 21 135 30? 29? 30, 7 , ft 
18 845 18? 15? 18? +? 
Honafaflaa 044382 90 3% 3? 3% ft 

IfaBSJB 020 191870 19?rf18? IB +? 

080 11 1837 2B% 26 26? ft 

HmoCo 008 0 18 2? 2% 2? 

MdcHTadi SZ 238 31? 30? 31? 

HjCOrBta 18 117 5? 4% 5 


- N - 

NACRa 018 13 57 31 30? 30? ft 

NteMdixOra 11 108 15? 16? 16? +1A 
Hal Pina 11 91 5? A 5ft 
NrtConpl 038 76 614 13? 12? 12? 
NbaSiaix OdDIB 004 13? 13 13 
Naidgatar 18 24 19 17 18? 

NEC 048 96 Z7D57? 57? 57 

War 171005 27? £5? 27 

NadakGra 22108T 16? 15? 15? 

97 282 7 6? Bft 

Naungen 25 3 7% 7% 

H&gna 027 16 874 18? 17? 

NeaCBra 080 22 95 20? 20 

Hew Image 7 STB 10? 9? 

3211578 44? 42% 42% -1? 
NawprtCp 004 12 44 5% 5% B +? 
Note UK 222648 7? 8% 7? 

056 25 54 56ft 55? 50 

040 254644 44? 43 43? 

12 4 16? 15? 15? 

3 6 5? 4? 4? 

OB8 13 693 41? 40? 41? 
152559 14% 14? 14% 
194138TB 17% 17? 17? 

27 830 31? 29? 29% 

10 7 4 4 4 


+? NMBMBt 


7% 

18 

20 

9% 


ft 

■ft 

ft 

ft 

ft 


Ndetoa 


l 

N Star Ur 
NorthnTN 
HWtt 
Novel 


. NSC Cup 


+? 

ft 

ft 

ft 

ft 

ft 

ft 

• 1 ? 


- o - 

29 54 18 17? 18 ft 

151435 21? 19? 20 -* 

15 783 14? 14A 14A +A 
8 10 25 25 25 +01 


FRSya 

IDG 

IS total 


Imparl Be 
tod tax? 
Indira 
WRbb 


huortfev 


fata 


kiSgUBx 

isarTel 


- I - 

55 87 irt? 8? 8% 
41 7772 15?d13? 14? 
7 248 8 7? 7% 

27 71 5? 04? 4? 
3 468 5 4? 4? 

040 34 116(117? 17 17? 

L1G 19 364 30? 39 33? 

024234 28 15? 15? 15? 

T7 52D 14? 14 14? 

194429 IB? 15? 18% 

008 15 128 11% 11? 11? 
33 4637 28% 27% 27% 
29 513 12 11? 

16 83 3% 3? 

034 1125306 BOA 59 59? 

9 84 2? d2? 2% 
032 342184 21% 20 30? 

20 33 9? 


ft 

ft 

ft 

ft 

ft 


ft 

ft 

ft 

-% 


12 +? 
3% ft 


trrtriraAx 034 17 292 13% 


Hgph 


Heroic 

MtffekyQA 

UHbbx 

kS Tool 

kwaara 

txnamCp 


31038 9? 
7 148 8% 
220 06 11? 


Mtttato 


JU Snack 
Jam fee 
Jfl M 
JrfntwW 
JonaaftS 


ft 
ft 
ft 

9% 9% ft 

13 13% ft 

9? 9? ft 

B 8? ft 

11 11 ft 

20 877 11% 10% 11? -? 

15 32 16? 17? 17S +/, 

009 20 3 3 8 3 

462 348 B% 6? 9? +? 
001 18 167 28 27? Z7? ft 

1 78 2% 2? 2? 

16 4 IB? 18 18 ft 

139 38 10 2082SB? KB -3? 


- J - 

18 173 11%tff1? 11% 

026 17 38 11? 11 11? +? 

010 24 18 28? 27 27? ft 

5B 122 23? 22? 23? 

9 375 13? 12? 12? 


OQnrtay* 

Octal Cun 
OflWtaM) 

OtferiayNxOBO 
OhtaCa 1A8 5 979 29>4 27? 28 ft 

OUHMX 1.1B 11 898 35% 35? 35? ft 

OH IWB 092 18 70 36? <08 38? +? 

Ordmcup 100 7 341 31 30? 30? ft 

OraPrira 14 421 18? IB 18? +? 

OptfcalR 2D 409 22 21 21? ft 

i 4719KB 32? 31? 32? ft 

OltlScnra 52 3253 21? 20? 20? ft 

OrtUKri 009 23 112 fl? B? 8? ft 

Orctatepp 9 11 13? 12% 13? +? 
Ongutet 031 9 7S S? 4? 5ft 

OctfeP 3 1M 2? d2% 2% 

QtfSBAx 041 41 710 13S12? 13 +? 

OataOtfiT 050 11 89 11? 19? 10% ft 

OBOTalx 1J72 13 21 30? 29? 29? ft 


- P-Q - 

Paccar* 100 13 191 50? 40? EO 
PacOnntop 002 13 123 13% 13% 13% +? 
1 PMant 132 14 317 22? d24 21 ft 


PncfflCre 

23 

66 55 04 55 

+1 

PamneXc 

3313TO1 30% 27? 28? 

ft 

Hqcbex 

024 41 

323 34? 33? 33? 

-? 

Payco Am 

- 21 

27 9? dB? 6? 

ft 

Itowlrai 

050 44 

13 TO? 9? 10? 


PoonTrly 

8 

7 14? 14? 14? 

ft 


+1 

ft 

+? 


PWtVOgx 100® 13 33? 32 32+1.58 

220 18 284 30? 20? 29? 

Rantkta 072 18 11 35? 34? 34? ft 

PurteHl IS 32 G? 5% 5% ft 

PanwartLxO20 21 14 19? is 18? -ft 

N 024 13 654013% 13% 13% 
PatanRb 1.12 18 79 38? S3? 33? -1? 

Ftasmacr 21 42 7? 6? 7? +? 

PboWWTeh 25 84 5? 5 5ft 

Hecate 048 4 Z100 11? 11? 11? 

Ptttmta 282055 12? 11? 12? ft 
42 75 17? 17 18? ft 

FIOOMGp 08027 290 41 40 40,% ft 

PfanaartB 058 25 2707 38? 36 36? ft 

014 14 581 25? 24? 24% ft 

5 80 8% B 8 

18 9 6? 6%. 6? +% 


JmaMed aioiBisos loftno? 10? 

JdatyQCpx 13011 560 24? 24 24 

JSBFh 064 15 675026? 24% 24% ft 

JwoUg 028 W 1® 18 18? 1B% ft 

IP 018 8 682 13012? 12? ft 


I PtanauSt 
PooeaFod 
P«kb 
F ree Lite 

Pnrtrtk 
I MCoat 
Pride PW 


Prod On 


008 3 30 6% 6% 

Si 384 23 24? 24? 

20B9B4 14? 13% 13? ft 

. 30 70 5? 8 5ft 

18 95 8? 9 9? ft 

024 22 172 25?d34? Z4? -? 


SumndtTe S3 676 28 24? 24? 

GUI Sport 14 134 5% S? e 

SuMc 114307 22? 21% 21% 

Stella 29 101 28? 28 28? 

Srinaehe 58 0706 52 50 50? 

Gymaitac 371407 14% 13% 13% -? 
SVfitBayx 008 18 130 18? 18 18? ft 
Synerean G5 106 3? 3% 3? ft 

Synarpra 3 500 10? 0% 8% ft 

Synedc 551ZB1 14 13 13% •? 

Symptxa 185104 20? 19% 20? ft 

SyrtmSoft 012 14 1659 13? 12? 12% ft 
Systorato E 671 10% 19% 19% 
Syafemad 252610 u6% 5% 6? +? 


- T- 

T-CBflSc 7 106 4? 4 4? 

TxowaPr 052 181020 28? 28? 29 -? 
•race* 17 07 12? 12? 12ft 
TO Cate 044 23 887 20% 19? 19? ft 
IMflrta 122318 19? 1818? 
TBCtanri 000 14 107 58 53% 53? ft 

Teriatoe 2 43 8% 9 Bft 

TofcnSp 8 282x14? 14% 14? ft 

TafeCttamA 27119480 19% 18% 18 ft 

TataOtt 83284 5? 4? 5? ft 

Tafate 283219107? B? 37 +? 
Teton Cp 001 91 528 18? 15? 16? +% 

TataTec 88 57 8? 8% 8% ft 

7wfllMn*027 231381 23% 22? 22H ft 
Tires Com 3712304 54 52% 53? ft 
TJfat 022 34 04 23 E? 23 ft 

Tote Mud 2 175 4 3? 3? ft 

Tokyo Mu 037 3B 37 64? 64? G4? 

Tun Brim B9 21B 13? 12% 13? 

TappaCD 028331 216 B% 8% 8% 

IPI Enter 42402 8? 7% 7? ft 

Tnrawtt 10 B 11 10? ID? 

Dnmifcfc 100 11 453 41? 40? 41 +? 

Tricon 8 314 3 2? 2% ft 

ntnte 48 124 0? 8? 9? +? 

J TnotaafikC 100 10 48 20? 19? 20? +% 

Tang Lad 029 12 1388 7? 6% 7? ft 
TyiFdA 006 17Z708 21? 21? 21? ft 


-u - 

| US Wrier 088 1310809 39? 3824 38? ft 

2 1W 5? 5? 5? ft 

UCtaesGfl 100 13 157 IB? 15? 16 

USTai 209 11 340 50? GO? 50? -? 

IMUdSt 040 10 219 12? 12? 12? ft 

UnttOB 02921 3 U27 27 27 

IMtax 1.4021 B80 40 39 30? ft 

USBancp 088 103770 20? 26 28? ft 

US Energy 28 17 4? 4jJ 4ji 

USTCup 1.12 10 148 14? 1^! 13% ft 

Utah Med 12 213 7% 7? 7? ft 

UUTOfev 10 7 45? 44? 44? +? 

Uft 18 238 5% 5% 5% 


- V- 

IMaaM 030 31 68 14? 13? 14? 
VogrdCefi ® 779 33^ 33? 33? 
VUttane 181217 17? 18? 16% ft 
ttw 40 IB 28? 25? 28 +? 

Mmpffatf B 638 15%d14? 14? ft 

Ytavdogta 251724 21? 20 20? ft 

Via Tech 301180 14? 13% 13% ft 

MotwB 084 18 28 100 99? 99% ft 


- w - 

Warner 81X010 201380 27? 26? 26% ft 
Wuntoch 15 im 4% 4% 4? ft 
WWhMUSBOSO 73839 19? 19? 19? 
VYMhFfldSL OflD 9 1022 22? 22 22 

HtaMPdA 022 911E 23 22? 22S +fi 

Wausau PM 024 18 397 27? 25? 28? -1 

MMO 2® 15 551 40? 38% 39? -1 
24 1035 4% 3% 4% +? 
072 11 1039 29% 29% 20% ft 
61136 121112 12 +? 

1 4039 15? d15 16? ft 
IS 322 3? 2B 3 
006 22 MB 46? 45? 45? +1£ 
732020 34 31? 32? -1% 
12 181 14? 14? 14? 

040 25 1309 19? 19? 19? 
WBonwsa MB 3ft 3A 3A ft 
Wyaaiv-&hOA) 5 in 6% 6? 6% +? 


-X-Y-Z- 

XBK 253213 38? 38? 39 ft 

Xanmcnp 2 1U 3? 3? 3% -ft 
Mow ' 084 291885 10? 19? 19% +U 
VtakRa* 50 358 4% 4? 4? ft 
ZbtaUHh 1.1210 iqswnii » 40? ft 


teat Ora 
UAriPub 


rtetSaaiA 



..rf- 



> 




12 





40 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Tuesday May 24 t 


AMERICA 


ASIA PACIFIC 


Dow stumbles as rates 
worries resurface 


Nikkei 



Tokyo 


Wall Street 


Concern over rising interest 
rates resurfaced in the US 
stock markets yesterday morn- 
ing, as share prices followed 
bonds sharply lower, unites 
Frank McOurty m New York. 

By 1pm, the Dow Jones 
Industrial Average was down 
2&55 at 3,737.30, while the more 
broadly based Standard & 
Poor’s 500 dropped 1.72 to 
45330. 

In the secondary markets, 
the American SE composite 
was off 0.56 at 437.64, and the 
Nasdaq composite shed L33 to 
73537. 

There was no fresh economic 
news yesterday to drive stocks. 
However, the break in the 
release calendar served to fix 
investors’ focus on the bond 
mar-fee^ which was experienc- 
ing solid losses. The dollar was 
holding fairly steady, bat 
prices of gold and other com- 
modities were up sharply, a 
concern for investors in fixed- 
rate jns t nimants s nnh as gov- 
ernment securities. 

The renewed weakness in 
bonds, after last week’s firmer 
trend, was more ffam enough 
to trigger a downward adjust- 
ment in share prices, following 
a 107-point net jump in the 
Dow industrials in the previ- 
ous five sessions. 

But yesterday's decline may 
have reflected a shift in senti- 


ment that ran deeper than a 
desire to book profits after a 
rally. Investors seemed to be 
growing increasingly con- 
cerned that the bear market in 
bonds, triggered by the Federal 
Reserve's shift in monetary 
policy in early February, was 
not brought to a halt by last 
week’s fourth move by the cen- 
tral bank to tighter money. 

The upturn in the financial 
markets wnw* Tuesday’s rate 
increase was built on the wide- 
spread perception that the Fed 
would hold off on further rate 
actions until the end of the 
summer. But rising commodity 
prices and the soft dollar were 
now clouding *h» outlook awfl 
/yrnipHr^fing- fhp strategic per- 
spective among equity inves- 
tors. 

Among the cyclical, Procter 
& Gamble dropped $1VS to $54% 
and 3M shed $1 to $50%. In the 
energy sector, Atlantic Rich- 
field lost $1% to $101% and 
Chevron $1% to $87%. 

Amid the general decline, 
there was at least one bright 
spot Shares in Gerber Prod- 
ucts surged $15%, or about 45 . 
per cent, to $50% on the 
annnniwpmff rit: that SandOZ, 
the Swiss pharmaceuticals 
house, had agreed to buy the 
baby-food maker for $3-7bn, or 
$53 a share. 

The news excited speculation 
that more takeovers in the sec- 
tor were in the offing, helping 
to lift the share prices of other 


food processing groups, CPC 
International gained $1% to 
$47% and Quaker Oats 
advanced $1% to $66%. 

Kodak also outperformed 
most of the market The stock 
climbed $1 to $46% after a fed- 
eral court lifted long-estab- 
lished restrictions on the com- 
pany’s marketing activities. 

• Toronto was dosed for a 
public holiday. 


Brazil 


Sfio Paulo rose 23 per cent in 
lackluster midday trade as 
investors became hesitant after 
a mild rally shortly after the 
opening. The Bovespa index 
was up 521 at 20,838 at 1pm in 
turnover of Crl80.8bn 

($l06.6m). 

Telebras preferred rose 23 
per cent to Cr5930, while the 
Vale do Rio Doce preferred 
traded 53 per cent higher at 
Crl4330 after news that the 
mining group lwii trimmed its 

losses to $8 million in the first 
quarter of 1994* against a $41 
loss in. the same period last 
year. 


Mexico 


Mexican stocks extended last 
week's gains. At first, trading 

Was li ghf [ arui wiari mi by C3U- 

tious optimism, but by mid- 
morning the IPC index of 37 
leading shares had gained 
2139. of 03 per cent to 2,439.19. 


Hopes of a breakthrough for 
the US-Japan bilateral .frame- 
work talks on trade, combined 
with an easing of the yen, 
prompted active buying. The 
Nikkei index advanced by LI 
par cent, led by a rise in huge- 
capital shares, writes Emiko 
Terazono in Tokyo. 

The 225 average rose 22634 
to 20368.71, and the Topix 
index by.lL67 to 13543L Prof- 
it-taking dropped the Nikkei to 
a low of 2032837 in the morn- 
ing session, but buying 
emerged later as the yen fell to 
the Y104 levet the index rose 
to a high of 2037431 just 
before the dose. 

Volume totalled 360m shares 
against 355m. T rading by arbi- 
trageurs, overseas and domes- 
tic invest o rs supported activ- 
ity. The Nikkei 300 rose 2J3 to 
30230, gainers led losers by 621 
to 380 with 179 unchanged and, 
in London, the ISE/NIkkei 50 
index rose 132 to 13S534. 

Mr Yasuo Ueki at Nficko 
Securities said that the strong 
rise in large capital stocks 
reflected baying by domestic 
institutions. However, whether 
the index can sustain its cur- 
rent level to rise farther 
depends on the amount of trad- 
ing volume, said another bro- 
ker. 

Large capital steels and ship- 
builders were traded heavily. 


Nippon Steel, the most active 
issue of the day, rase Y3 to 
Y369, NKK gained YlD to Y284 
and Mitsubishi Heavy Indus- 
tries advanced Y6 to Y714. 

Takuma, an industrial 
machinery maker, rose Y50 to 
Y1360 on hopes of a rise in 
profits for the current business 
year to 

Nippon Telegraph and Tele- 
phone fen Y 16,000 to Y827.000 
an continued seOing. The stock 
has lost 73 per corf since the 
beginning of last week, before 
the government decided to 
freeze an planned increases in 
public sector prices, in cluding 
a rise in local call rates on 
Wednesday. 

Non-life insurance compa- 
nies, which were also lower on 
the freeze of the expected 
increase in fire insurance 
rates, rebounded. Taklo Marine 
and Fire Insurance rose Y10 to 
Y1340 and Mitsui Marine and 
Fire Insurance rose Y32 to 
Y863. 

Retailers were lower on prof- 
it-taking. The sector has been 
strong recently cm hopes of a 
recovery in consumer confi- 
dence. However, economists 
expect that household spend- 
ing data, due to be announced 
this week, will reflect contin- 
ued sluggishness. Seiyu lost 
Y50 to Yl.370 and Nichii 
declined Y6Q to Y1.490. 

In Osaka, the OSE average 
rose 11134 to 2231939 in vol- 
ume of 173m shares. 


China 


hdkas rebawd In $ tarnn 
110 


FTA R n U B a flM ln 



Roundup 


A quiet session was seen in 
many Pacific Mm markets as 
investors awaited fresh incen- 
tives. 

SHANGHAI’S B share index, 
however, rose 43 per cent as 
the renewed confidence that 
emerged last week brought 
local and foreign investors 
back as buyers. The index, 
which had fallen by 40 per cent 
since the beginning of the 
year, rose 3.06 to 7034 in heavy 
volume of 143m shares, 
against a recent daily average 

Gf fim 

MANILA shrugged off last 
week’s worries and advanced 
13 per cent on aggressive buy- 
ing of blue chips. The compos- 


ite index rose 5135 to 232247 
in volume that eased to 751.4m 
shares from Friday's l3bn. 

HONG KONG saw profit-tak- 
ing erase early gains and the 
Hang Seng index, 141 points 
higher at one stage, ended 
4135 lower at 9389.78. Tom- 
over tumbled from 
HK$736bn.to HKJ432bn. 

HSBC topped the active list 
and gained 50 emits to HK$9L 
It was followed by Cheung 
Kong, which lost 50 cents to 
HK3393S, as the group denied 
press reports that it was bid- 
ding for London's Broadgate 
office complex. 

SYDNEY revived during the 
afternoon to close firmer on a 
buoyant gold sector. The All 
Ordinaries index closed up 17JL 
at 2,121.0, while the gold 
marker rose 683 or 3J. per cent 
to 2314a after the rise in the 
bullion price. 

Among gold stocks. Placer 
Pacific leapt 24 cents to A$339, 
Samantha rose 30 cents to 
A$S30 and Newcrest jumped 21 
cents to A2632. 

TAIPEI was lightly lower in 
slow, narrow trade , as inves- 
tors remained on the sidelines 
after a week of foils. Brokers 
said that the market was ripe 
for a technical rebound after 
the weighted index lost 1330 to 
5317.68, turnover falling to 
T$31.14bn from Saturday’s 
T$3238tlO. 

BOMBAY was lower in very 
quiet trade in response to last 


week’s refusal fay fin Securi- 
ties and Exchange Board of 
India to dilute tough condi- 
tions for the resumption of the 
badJa, or carry forward system 
of trading. 

The BSE 30-ahare index 

dosed 46.44 lower at 3,73733. 

SEOUL was easier for the 
third consecutive session in 
mixed trading with persistant 
blue chip cons ol idation over- 
shadowing the market The 
composite index lost 039 to 
94S3Q. 

SINGAPORE was mixed in 
sluggish trading ahead of a 
market holiday to mo rrow and 
the Straits Times Industrials 
fr y fe r rose 33** to 23893L 

JAKARTA was in bullish 
mood with foreign and local 
Investors buying heavily 
across a range of stocks and 
the JKSB index rose 1037 to 
49836. 

KUALA LUMPUR finished 
easier after another dull see- 
sfam as lack of. flash betas 
depressed investors. The com- 
posite index dosed 236 Iowa , 
at 999.10 In volume of 68.7m 

BANGKOK was marginally 
higher in thin hade as most 
investors remained cm the side- 
lines because of a lack cf ffirao, 
tlosL The SET index dosed itw 
up at 133839 in turnover that 
shrank to Bt63hn after Frk 
day’s Bt93bn as ingtitutfonsT 
investors slow down their buy- 
ing. 



i**' 


.... ■ 


sti :■’* 


EUROPE 


Growth prospects lift Japan’s OTC stocks 

n * i i • •« ti •¥ m i _ a • 1 !1 1 * 1 _ 1 j.. 



Milan down by 2.4% 
as liquidity dries up 


Most senior bourses were 
closed for the Whit Monday 
holiday. In London, the FT-SE 
Eurotrack 100 index indicated 
a gentle , and almost g ener al 
downtrend and, with Wall 
Street lower, neither Milan nor 
Madrid were disposed to argue 
at the end of the European 
day. 

MILAN added to last week’s 
declines with a further 2.4 per 
cent f an, althoug h some late 
buying helped to pick shares 
up from their lowest levels. 
Hue Comit index, which lost 
1&48 was seen testing support 
at 75737, In modest trading 
which involved further selling 
by foreign investors. 

Mr Michele Pacitti at Nat- 
West Securities noted that the 
current downturn had accom- 
panied the drying up of the 
high levels of liquidity that 
had driven the market higher 
after the general election at 
the end of March. 

Elat lost LL66 or 2.4 per cent 
to 13,687 but Olivetti picked up 
from a day’s low of 13,740 to 
finish down L44 at L2.822. 1 

Against the trend, Itahnobi- 
liare rose 1327 to L48330 an 
the view that recent foils had 
been overdone. Assitaha added 
L282 to L18050 in response to 
the the Berlusconi govern- 
ment’s statement that it would 
stick to the planned privatisa- 
tion schedule of the insurer’s 
parent, IN A. Nuovo Pi gnome 
rose L60 to 13,750 as ENI com- 
plete the sale of a majority 
stake to General Electric of the 
US. 

MADRID'S midsession recov- 
ery foundered on weakness on 


Wall Street, and the general 
Index closed 039 lower at 
33731 after a high of 33936. 
Turnover foil to Pta22.7bn as 
attention focused on second 
rank stocks. 

TEL AVIV bad another bad 
day. Israel’s central bank 
raised interest rates by half a 
percentage point in an effort to 
stem rising Inflation and hous- 
ing costs, and the Mishtanim 
index slid by 5.14, or 235 per 
cent to 19630. 

This followed a 2.4 per cent 
fall on Sunday, after Israel 
Radio broadcast more excerpts 
from a controversial speech 
which Mr Yasser Arafat, the 
PLO chairman, made in a 
Johannesburg mosque on May 
10. The radio said that Mr Ara- 
fat’s remarks put into doubt 
his commitment to thg deal on 
Pales tinian seif-rule. 

ATHENS fell 23 per cent, 
driven down by one month 
interbank rates that remained 
above 140 per omit and a liquid- 
ity shortage due to pressures 
on the drachma. 

The general index closed 
2531 lower at 887.08 in active 
volume of 13m shares. 

WARSAW extended its 
recent gains, the Wig index ris- 
ing by 423, or 3.6 per cent, to 
123403. 

Brokers liked the fact that 
most stocks were appreciating 
moderately, but with foreign 
investors remaining on the 
sidelines there were also fears 
that profit-taking could inter- 
rupt the uptr end. 


SOUTH AFRICA 

Early gains were pared in 
Johannesburg as worries 
emerged that the higher bul- 
lion price would not hold and 
in response to initial Wall 
Street weakness. The under- 
tone remained firm, however, 
although many investors were 
thought to be awaiting direc- 
tion from today’s speech to 
parliament by Mr Nelson 

MflinMa. 

The overall Index was 50 
better at 5,524, industrials 
added 19 to 6,640 and golds 
put on 82 or 43 per cent, to 
1,990. 

Barlows rose 85 cents to R39 
in response to its higher half- 
year profits. Tobacco stocks 
remained under pressure. 


Small is beautiful again, writes Emiko Terazono, but strategists like cyclicals long term 


-* 


S mall is beautiful again in Japan. 
Shine the beginning cf this year, 
the country’s over-the-counter 
stock market has gaine d 28.1 per cent 
on prospects of high growth against an 
18.4 per cent rise in foe Nikkei 225. 

The current attractions of the OTC 
market are different from those of 1990, 
when it climbed to a record high before 
plun g in g an profit taking . That upsurge 
was supported by investment funds 
looking for alternative investments, 
which ploughed in money without 
proper research. Some OTC companies 
were valued on their land holdings 
rather than earnings. 

The current buzz word is growth. 
With years of slow growth ahead for the 
Japanese economy and the large blue 
chip companies, the OTC market is now 


regarded as virtually another emerging 
wiwriretj along with the small south east 

Asian stock mar kets. 

Recent profit announcements have 
supported the theory. According to 
Nihon Keizai Shimhnn, the business 
daily, pre-tax earnings for leading OTC 
companies are showing an advance of 
147 per cent a gains t a foil of 193 per 
cent for all listed companies. 

The new consumer trend towards 
cheaper prices has given OTC compa- 
nies extra scope. Far example. Sari, a 
discount liquor store chain, has boosted 
its profi ts by offering its own, economy- 
priced house brand. The shares have 
risen by 80 per cent since their initial 
listing to the current Y4300. 

With the Ministry of Finance’s ban on 
listings lifted and Japan’s Securities 


Dealer Association eager to allow five 
to six companies to list every week 
freon next month, the scope far invest- 
ment on the OTC market is expected to 
widen this year. 

However, investors need to be aware 
of the high risk factor surrounding 
these stocks. The market became a 
playground for speculators during the 
1990 rally, since prices could be manipu- 
lated easily due to the lack of liquidity; 
and lax disclosure requirements, lead- 
ing to unexpected bankruptcies, have 
left many investors nervous. 

Mr Craig Chudler, manag ing director 
of Thomas Norton Associates, an 
investment research company specialis- 
ing in small Japanese companies, says 
that OTC mmpaniag are different ani- 
mals from t hei r larger peers, usually 


beaded by a maverick entrepreneur and 
needing In-depth, individual analysis. 

Meanwhile, while str a tegists do not 
deny that OTC growth stocks are a buy, 
analysis suggests that larger, cyclical 
stocks may have longer term appeal. 

Mr Rod Smyth, strategist at Baring 
Securities, says that OTC stocks have 
more or less discounted the growth foo- 
ter for now, and that the greater profit 
surprises which will push share prices 
higher will be in the larger blue chips. 

The retu rn of domestic institutional 
investors to the market also points to a 
riafcfrHuterest in the huger companies, 
sfnefethe large fimmclfli Institutions are 
loa th to invest in high risk instrumeuts. 
Mr Smyth advises: “Investors who 
dump the larger stocks now far smaller 
OTC shares may miss tin boat” 




Sara.’.!. ti\ 


ks: 


MARKETS IN PERSPECTIVE 



Kdtoqatalosd cwnocyt 


% ctmga 

atotoiBt 

% ctngi 
taUSt 


1 HM* 

4 HWa 

1 Ymt 

tonal 

t*M 

Start at 

IBM 

Start al 

HM 

Austria 

+1.69 

+004 

+2763 

-767 

-463 

-267 

Belgium . 

+033 

+266 

+22X1 

+1.74 

+668 

+865 


-067 

-1.77 

+2063 

-1.72 

+168 

+3.77 

Finland 

+062 

+4.81 

+55.05 

+1762 

+2467 

+2661 

France — 

-162 

+061 

+2064 

-404 

-167 

+065 

Germany. 

-073 

+063 

+33.72 

-1.86 

+1X2! 

+362 

Ireland 

+1.00 

-169 

+2068 

-3.10 

+036 

+2X2 

Italy 

-422 

-064 

+37.76 

+2568 

+33.12 

+3565 

Netherlands 

-078 

-269 

+2060 

-262 

+066 

+2X1 

Norway — 

+088 

+167 

+33.14 

+094 

+1066 

+1263 


+2.47 

+0.23 

+28.01 

+2X4 

+5.47 

+764 

Sweden — „ — 

-037 

+462 

+3005 

+761 

+14.63 

+1668 

Switzerland 

+1.87 

-1.76 

+2463 

-569 

-263 

-062 

UK 

+012 

-068 

+1166 

-7.62 

-7.62 

-5.73 

EUROPE 

-0L29 

+067 

+21X9 

-267 

-Offi 

+1X0 

Australia 

+163 

+360 

+25.13 

-2.1 2 

+269 

+5.00 

Hong Kong 

+5-35 

+5X2 

+38X7 

-1968 

i -2098 

-1965 

Japan . 

+0.10 

+2.04 

+466 

+13X4 

+1969 

+2164 

Malaysia 

-071 

-5.75 

+4060 

-2261 

-2079 

-19.17 

New Zealand — 

+262 

+3-14 

+30X9 

-2.73 

-061 

+265 

Shgapora 

+266 

+2X5 

+3268 

-863 

-565 

-462 

Canada 

+368 

+3X0 

+1160 

+062 

-5.17 

-362 

USA 

+2X6 

+166 

+067 

-268 

-462 

-266 

Mexico 

+768 

+1267 

+4465 

-763 

-1562 

-13.79 

South Africa 

-165 

+7.74 

+38.78 

+1165 

-466 

-3.01 

WORLD INDEX 

+166 

*+168 

+863 

+166 

+2L10 

+460 


Written and edited by WDBam 
Cochrane and Mcheel Morgan 


t DHNd on Ktagr son tSM. OwM Ilia FfcancW Hmm UmM, Ookbnav flaefta & Ca*nd 


FT-SE Actuaries Share Indices 


May 23 

Hon* champs 

Opart 

1O30t 

TFE EUROPEAN SERES 
11 -OOt 1200t lioor 1400T 15JJ0f Oowr 

FT-SE Bronck 100 
FT-SE Etantrad; 200 

14S321 

1408X8 

14SZS8 

148&B4 

14S1X7 14448B 144142 
14818B 14S7J58 148727 

1448.18 

1487X0 

1447JB 1448.42 
1467.78 146875 



Wy zo 

May 19 May 18 

M* 17 

MW 16 


FT-SE EUTObadc 100 145887 1466.18 147B8B 147X21 1471.75 

FT-SE Batta* 20D 147420 14047 148145 146&B4 148581 

mm hm prune; Maw** no - wun an ■ i«us imm* im - wtja sa - msue t pwm. 


America led the way last week, the only sizeable Impetus as the 
FT-Actuarfes World Index rose by 135 per cent 
US stocks efimbed on the tightening of US monetary policy. 
Canada followed Us neighbour, but its equity market got an 
adtfitional boost from fts base metal co n tent 
Mexico, depressed this year, and extremely sensitive to intere s t 
rate action, gained most In part, this was a prag m ati c response 
to the per fo rmance of the ruling party's pre si dential candidate, 
Mr Ernesto Zecfillo, ki an earlier, televised debate. 


FT -ACTUARIES WORLD INDICES 


Jointly comptad by Tha FinancfaJ Times LttL, Goldman, Sachs & Co. and NatWtat Securities Ltd. In conjunction with the biSttutt of Actuaries and ihs FscuBy of Actuaries 
NATIONAL AND 

REOKMAL MARKETS FRIDAY MAY 20 1994 THURSDAY MAY IS 1004 DOLLAR MDBC 

Figures ki pa rantti eaeg US Do/s Ptxnd Local Local Gross US Pound Local Year 

show number of Ines Dolor Change Storing Yon DU Currency % ohg Dtv. Dcflar Sterling Yen DU Cumney SB week 52 wet* ago 
of stock mete* to Index Irate* Irateat Index on day Yield Index Indw Index Index Index High Low (approx) 


AwWtoW) 

i til) 



174.28 

178.35 
17457 
13082 
253.89 

154.94 

17856 

144X8 

384.85 

187.86 
64.10 

157.39 
47083 

8033 ,Q6 

205.39 
68-84 

20056 

35X50 

257.84 

14793 

231.35 
15868 
16X61 
18562 


171.37 

17567 

17165 

128.72 

24644 

162.34 

17349 

142-24 
371121 
18461 
ft? 5? 
154.78 
46865 
1990.00 
20165 
07.79 
19760 
34768 
253-52 
145-45 
227.48 
18660 
18868 
132.81 


114.66 

11762 

11463 

08.12 

106.88 

10162 

11640 

06.10 

25363 

12364 

6160 

10363 

31367 

133766 

135.11 

4565 

13163 

23264 

100.61 

9761 

132.19 

10460 

12860 

12260 


14667 

153.47 

15021 

11266 

21866 

13362 

16220 

124X8 

33069 

181.74 

6067 

13543 

41061 

174667 

17874 


17267 

304.18 

22160 

12769 

16067 

13843 

16060 

15968 


156.10 

15368 

14867 

130X1 

22363 

17566 

15764 

124X8- 

381X9 

17874 

111.42 

10363 

47847 

738873 

174.14 

62X8 

195.07 

24868 

27763 

15266 

2G366 

13861 

18868 

18062 


189.15 

19841 

17867 

14831 

275.79 
15872 
18667 
14767 
80S6B 
20833 

97.78 

18061 

92163 

2847.08 

20743 

7768 

20GX2 

37882 

28028 

155.79 
23165 
17866 
21468 
19804 


13816 

14814 

14162 

121X0 

20768 

8564 

14860 

10769 

271X2 

15563 

6768 

12464 

31261 

1431.17 

18414 

4857 

15061 

242X8 

17563 

11833 

16885 

12267 

17832 

17895 


13472 

14463 

147.42 

12819 

221.72 

9760 

15162 

110.77 

28963 

159.67 

7262 

14267 

34363 

151471 

16463 

4960 

159.00 

25429 

20068 

12821 

177,18 

123.14 

17810 

18418 


a«0PEp24 

17164 

02 

16863 

11264 

147.16 

16063 

-02 


17163 

16078 

11090 

14768 

16062. 

17868 

14168 

14559 

Nwdfc(115) 

217X5 

oa 

21052 

14263 

188.11 

21567 

-OX 

169 

21769 

21074 

143.00 

18765 

21827 

22060 

1G562 

18769 

Pacfflc Basin (75Q 

18763 

OS 

18450 

11004 

14369 

11448 

07 

168 

168.19 

163X0 

10032 

14360 

113.70 

18860 

13479 

14766 

Em-PacMc (1474) 

18921 

OS 

186.15 

111.14 

14462 

13268 

03 

163 

18860 

165X8 

11071 

14481 

132.16 

17078 

141.98 

14862 

North Arnica (625) __ 

18268 

-02 

178.79 

11059 

15564 

18167 

-02 

267 

18261 

17045 

12005 

15764 

18269 

192.73 

17567 

16071 

Strop® Ex. UK pIB) 

™ 15665 

02 

15362 

10269 

13362 

141.74 

-03 

268 

15869 

153X8 

10268 

13431 

14261 

157X7 

12267 

12S-12 

Padflc Ex. Japan 

255.18 

16 

25067 

18761 

213X1 

22073 

16 

268 

252.18 

24768 

18569 

21760 

22763 

29021 

18258 

188X2 

World Ex. US (1857] 

17017 

08 

187.10 

111.77 

1456S 

13S65 

03 

16S 

18025 

168X2 

11163 

14663 

135X1 

17261 

14264 

14761 

World Ex. UK fl971) 

17267 

03 

18025 

11361 

147.53 

14764 

ai 

263 

17161 

16963 

11868 

14762 

147.40 

17668 

15022 

15058 

Worid Ex. So. Af. (2117)« 

173.73 

06 

17058 

11411 

14868 

15060 

ai 

261 

17368 

17038 

11368 

14010 

15032 

17866 

15560 

16860 

Worid &l Japan (1707) _ 

18481 

ai 

181.27 

12168 

15861 

17860 

-ai 

2.82 

18461 

181X2 

12167 

15878 

17864 

19020 

165.72 

18867 

The Worid Index (2176) _ 

17422 

03 

17167 

114X3 

14012 

151X7 

ai 

261 

17077 

17086 

11461 

14962 

15168 

17867 

15817 

158X9 


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MBOs 


-Weighing up the Options - 


Acquisitions Monthly’s Management Buyout Conference 

Tuesday 18th/Wednesday.l9th October 1994: 

The Marriott Hotel, Grosvenor Square, London W1 



Case Studies: 

Bell Freight Transport Group • Peoples Limited 
Bristow Helicopter Group Limited 
Speakers include: 

Roger Brooke, Omdover Investments ■ lan Forrest, Montagu Private Equity 
Robert Smith, Morgan Grenfell Development Capital 
plus speakers from : Ashurst Morris Crisp • Nat West Ventures • Bankers Trust Company • CINVen 
Murray Johnstone • Barclays de Zoete Wedd ■ Gresham Trust • Foreign & Colonial Ventures 
Coopers & Lybrand • Intermediate Capital Group • Ernst & Young • Alsop Wilkinson * Lloyds Development Capital 

To book a place or receive further details, please contact: 

Vanessa Foss, Acquisitions Monthly Conferences, 11 Gloucester Road 
London SW7 4PP Tel: 071-823 8740 Fax: 071-581 4331 
Acquisitions Monthly is the leading mergers, acquisitions and buyouts magazine in Eurbpe 


For a sample copy please contact: 

Peggy Small, Tudor House Publications Ltd Frances Harvey, Tudor House Publications Ltd 
Lonsdale House, 7/9 Lonsdale Gardens or PO Box 48429 

Tunbridge Wells, Kent TNI 1NU Washington, DC 20002 - 0429. USA 

Tel: (0892) 515454 Fax: (0'892) 511547 Tel: (202) 396-1052 Fax: (202) 396-1053 


Acquisitions 

* Monthly 


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