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FINANCIAL TIMES 


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uroce's 8usir ; «ss Newsoac-er 


WEDNESDAY MAY 25 1994 


D3523A 


Kravchuk accuses 
Yeltsin of raising 
tension in Crimea 

Ukraine president Leonid Eravdxuk. attacked 
his Russian counterpart, Boris Yeltsin, accusing 
him of fomenting separatist tensions in Crimea. 

He said the Russian mwtia spread “rabid 

and dishonest" information about Crimea, where 
the local parliament has restored a 1992 constitu- 
tion denounced by the Kiev authorities as an 
initial step to secession. Page 16 

Boss! for trial: Umberto Bossi, leader of Italy’s 
Northern League movement., and. former Italian 
prime ministers Bettino Craxi and Amaldo Forlani 
were among 31 people salt for trial by Milan 
magistrates on charges of breaking the law on 
political party finanrfng Page 2 

BTR directors get pay rbee of up to 17% 

Directors of UK indus- 
trial conglomerate 
BTR have received 

Ytat pr salary Wy<| of 

up to 17 per cent and 
chief executive Alan 

Jackson (left) has been 

told his salary cannot 
be cut The rises took 
effect an January 1 
and so did not feature 
in the 1993 annual 
report, published last 
month. BTR reported a 19 per cent rise in aim™? 
pre-tax profits to £L28bn (*L92bn). Page 24 

240 years for Trade Center bombing; 

Mohammad fiaTamah Nidal Ayyad and Mahmoud 
AbouhaHmi, Moslem ftmdamentalists convicted 
of bombing the World Trade Center in New Ycak, 
were each sentenced to 240 years' jafl. 

800,000 Jobs at risk In Ewopw Privatisation 
in Europe could cost more than 800,000 jobs by 
the end of 1998 as previously sheltered nationalised 
industries face up to tougher competition, a study ! 
by six European economic research institutes 
warns. Page 2 

IMS HRs profits 16%: Marks and Spencer 
extended its Lead as the UK’s most profitable 
retailer with a lfi percent increase in pre-tax 
profits to £85L6m. Page 18; Lex, Page 16; Details, 
Page 24 



Santander to —8 IwimIo an— Ins Banco 
Santander, which acquired Banesto last month, 
intends to saTl the bulk of the collapsed group's 
foreign banking interests over the next few months, 
Santander chairman KmiKn Botin said. Page 17 

Japan often HaltwfiilBto ififtiiiy 

Japan has offered to hdp establish a whale sanctu- 
ary in part of the Antarctic Ocean. Page 5 

Lap may parity float US mu Lep tomp, 
Ins smaking TTIt freight forwarding and security 
group restructured by its hooks in 1992, is consider- 
ing a partial US flotation of its American security 
business to reduce its £400m of debt Page 25 

W Barman Inflati on rate fells: The immediate 
outlook for inflatio n in west Germany has improved 
further this month, but long-term prospects are 
clouded by rapid expansion in money simply. 

Page 8 

Cohnnbta/HCA, the US healthcare group which 
operates the country's largest chain of hospi t als, 
announced the acquisition of Medical Care America 
in an all-stock transaction valued at 2850m. Page 16; 
Ctinton in push over healthcare, Page 4 

Maytag to sail Australian and HZ imlfc 

US home appliance manufacturer Maytag is to 
sell lts Australian, and New Zealand-based white 
goods and Goorcare appliance operations. Analysts 
expect the sale to raise between AJIOOm (US$73m) 
and A$1 50m. Page 19 

Japan's non-Ufa profits hits Japan's leading 
non-life insurance companies posted weaker profits 
for the year to March because of increased disaster 
payouts and a decline in interest income. Page 21 

JVC, Japanese maker of video cassette recorders 
and other audio-visual products, reported a consoli- 
dated pre-tax loss for the third consecutive year 
and passed its dividend. Page 21 

Suzufld down 10%: Weak export mark ets 
and low demand for motorcycles in Japan were 
behind a 10 per cent drop in pre-tax profits in 
the year to end-March to Yl&4bn ($176J24m) at 
Suzuki, the car and motorcycle manufacturer. 

Page 21 

UK-Malaysiafi trade rift narrow*: The British 
and Malaysian governments are “definitely on 

the way to solving" the trade rift between the 

two countries, UK trade minister Bichard Needham 
said. Page 10 


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Resources will go to deprived* Business welcomes fiscal conservatism 


Mandela pledges 
lower spending 
and deficit cut 


By Patti Wa khn a a- fn Cape Town 

President Nelson Mandela 
yesterday pledged to curb gov- 
ernment spending and reduce 
South Africa’s budget deficit as 
part of a programme dedicated to 
redirecting state resources to 
meet the basic needs of those 
deprived under apartheid. 

In his state of the nation 
address to the new multiracial 
parliament, Mr Mandela concen- 
trated an economic policy, prom- 
ising to maintain financial disci- 
pline and to reduce the deficit 
without any increase in general 
taxation this year. 

It was Mr Matadela's first for- 
mal n t flt wmwt of ecoDcmic policy 
since becoming president on May 
10, and was widely welcomed by 
businessmen and PHmnnd t tn for 
its emphasis an fiscal conserva- 
tism. ' 

Mr Mandela outlined a cau- 
tious plan for his government's 
first budget, due to be presented 
to parliament on June 22. He 
naUfld for government spending 
erf ]&5hn (6680m) on the so-called 
Reconstruction and Development 
Programme, and said fliaaa finida 
would come from rationalising 
and redirecting government 
spending, which is forecast at 
R125bn for 1994-85. . 


Government ministers said 
spending by all government 
departments would be cut by as 
much as 4 to 5 per cent, with 
. military spending to face the 
largest cut. The proceeds would 
be used for investment in hous- 
ing and other social services, 
including a plan to improve chil- 
dren's health services during Mr 

Mandela pleases 
business Page 8 

Mandela's first 100 days in offiro - 

fn addition, electricity is to be 
provided to about 350,000 more 
bouses during the next year, with 
fainting provided by Hi» public 
utility Rnktym. This spending will 
be separate from the estimates 
no ntawiad fa the central govern- 
ment hmjg pt 

Further productivity improve- 
ments in government, as well as 
redirected spending wonld be 
required to free more funds for 
the re constru ction programme. 
The estimated total government 
spending is about R37bn over five 
years, with finther ftmds to came 
from the private sector and for- 
eign sources. 

Throughout the programme, 
the government hopes, general 
government expenditure would 


be held constant to real terms 
and the budget deficit would con- 
tinue to decline from last year’s 
69 per cent of gross domestic 
product. 

General tax rates wonld not 
rise this year, but mi ght increase 
temporarily to help reduce the 
deficit in later years, government 
officials said. But Mr Mandela 
insisted that “a permanently 
higher g ener al level of taxatio n fe 
to be avoided”. 

Mr Mandela avoided quantify- 
ing promises to build new houses 
and provide other baric services, 
though he said a camp ai g n would 
be launched “to rebuild our town- 
ships, restore services in rural 
and urban areas while addrewring 
the issue of job creation and 
training, especially for our unem- 
ployed youth”. He made no refer- 
ence to the vexed issue of land 

r eform 

Mr Mandela stressed his gov- 
ernment's mnrni tt mart to “free- 
dom from want, freedom from 
hunger, freedom from depriva- 
tion. freedom from ignorance, 
freedom from suppression and 
freedom from fear". 

He said the government had 
decided to apply to rejoin the 
Commonwealth, which South 
Africa left in 1961, and would 
soon sign the United Nations’ 



US and Japan to 

‘ • 'ar 

Leaders vow to 


South AMom president Nelson Mandela , accompanied by iris uli ftwt 
daughter, takes the salute on bis arrival at parliament for fts'first 
full sitting 

Universal Declaration on Human 
Ri g ti fe and well as -Other Interna- 
tional human rights covenants. 

His gove rnment would q!§o pre- 


pare amnesty proposals which 
will cover members of the secu- 
rity forces who have been linked 
to apartheid wrongs. 


By Nancy D«hm In Washington 
and McHyo Nakamoto bi Tokyo 

The US and Japan yesterday 
agreed to resume negotiations on 
a trade “framework" which 
Washington expects win produce 
a measureable improvement in 
specific sectors and a more gen- 
eral reduction of Japan's massive 
trade surplus. 

Agreement was announced 
after five days of talks in Wash- 
ington and a 14-minute phone 
call between President Bfll Clin- 
ton and prime minister Tsutamu 
Hata. The two leaders congratu- 
lated each other an aiding three 
months of stand-off and vowed to 
strengthen the bilateral relation- 
ship. 

Mr Mickey Kantor. the US 
trade representative, said sec- 
toral talks would begin immedi- 
ately on cars and car parts, insur- 
ance and government 


resume -stalled trade talks 

strengthen bilateral relationship 


procurement. He also hopes to 
lannrh discussions “as soon as 
possible” in other disputed areas, 
such as financial services, glass 
and Intellect ual property. 

The agreement reflected a less 
tense political climate between 
the two countries, and could 
influence foreign exchange mar- 
kets. hi recent months, the stal- 
led talks had been cited as a 
cause for the, weakness of the 
dollar and strength of the yen. 

On February U, when Presi- 
dent Clinton and Japan's then 
prime minister, Morihiro Hoso- 
kawa, met, both sides seemed 
determined to say “no’ to each 
other. Since then, Japan has a 
-new prime minister and the dol- 
lar has fallen to near-record lows 
a gainst the Japanese yen as fears 
have grown that the bilateral 


relationship was in serious jeop- 
ardy. 

Their dispute bad centre d on a 
US demand for market-opening 
agreements that contained 
“objective criteria" to measure 
progress. “We have confirmed 
that we are not seeking numeri- 
cal targets," Mr Kantor said. “We 
have said it continually since 
July 3 1993, again and again, we 
are not seeking numerical targets 
or managed trade. 

“Objective criteria will provide 
the basis for deciding if the 
agreements succeed or fail to 
meet their purpose to achieve 
concrete results,’ he said. In 
Tokyo, officials were generally 
guarded in their view of yester- 
day's breakthrough and stressed 
that the latest agreement was 
only one step towards resolving a 


wide array of issues over which 
Japan and the US still remained 
at odds. 

Mr Kpji Kakizawa, foreign min- 
ister, said in announcing the lat- 
est agreement, that the two gidpg 
had agreed not to use numerical 
targets as “objective criteria” for 
measuring progress in opening 
Japan’s markets. 

Japanese business leaders wel- 
comed the breakthrough in the 
talks. Mr Sboichiro Toyoda, 


chairman of Toyota Motor, and 
chairman-elect of Keidanren, 
Japan's Federation of Economic 
Organisations, said that the 
resumption of the talks was wel- 
come but the issue of greater 
imports of foreign auto parts was 
a matter that ahnnid be decid ed 
by private industry. 

US officials have said they 
would like to reach sectoral 
agreements in time to be signed 
at July's Group of Seven summit 

US test fin* a ‘dead fish* theory, 
Page 5 


O&Mwins 

IBM’s 

worldwide 

advertising 

contract 


By Diane Summers, Marketing 
Cor re spond en t, In London 

International Business Machines 
is to give a single advertising 
agency, Ogilvy & Mather, all its 
advertising around the world, in 
one of the largest account moves 
in advertising history. 

IBM, which currently uses over 
40 different agencies around the 
globe, would not yesterday put a 
figure on how much it spends on 
advertising, but industry observ- 
ers believe it could be up to 
2500m a year. 

The company said that O&M - 
which is based in New York but, 
as part of the WPP group, is 
listed on the London Stock 
Exchange - will assume full 
advertising responsibility, includ- 
ing media buying, far the IBM 
brand and all IBM products and 
services from next month. 

The consolidation into one 
agency came as a surprise to the 
advertising world, which was not 
aware that IBM's account was up 
for review. It follows a fundamen- 
tal shake-UP Of IBM'S markp-Hrig 
and sales, announced earlier this 
month. Tratemd of befog organ- 
ised along geographic lines, mar- 
keting and sales are to be 
restructured into 14 teams, each 
covering a specific industry seg- 
ment 

The wider reorganisation is 
part of a plan by Mr Lou Ger- 
stner, IBM chief executive, to 
restore the company to profit 
this year’s first quarter results 
showed net earnings of 6392m. 
compared with net losses of 
|399m in the first quarter of 1993. 

Ms Abby KnhriHtoniitt , IBM 
vice-president for corporate mar- 
keting, said: “IBM is one of the 
world's best-known brands. Our 
advertising team decided that in 
an industry undergoing such 
rapid change, we would be better 
able to maintain and increase 
brand awareness by having a sin- 
gle agency to leverage IBM and 
its products arounds the world." 

Analysts said it was too early 
to tell what effect the account 
win would have on WPP - the 
agency could lose other custom- 
ers as a result of account con- 
flicts. The marketing services 
group reported pre-tax profits of 


Continued on Page 16 


PLO picks Morgan Stanley 
to monitor West Bank aid 


By Roger Matthews 

and Norma Cohen in London 

The Palestine Liberation Organ- 
isation grid yesterday it had cho- 
sen Morgan Stanley Asset Man- 
agement, fund m ana g e ment arm 
of the US-based investment bank, 
to monitor more than 62bn in 
international aid committed to 
the West Rank and daera Strip 
over the next five years. 

The appointment was made to 
allay international fears about 
the control and direction of the 
funds, particularly that they 
should not be diverted to political 
purposes. 

Morgan Stanley has bad signifi- 
cant business interests in the 
Arab Middle East but has also 
advised Israel in arranging debt 
finance for its US-guaranteed 
loans programme. The bank’s 
MSAM division has about $50bu 
in assets under management. 

In a statement from its Tunis 
headquarters, the PLO said the 
involvement of Morgan Stanley 
would “help assure contributing 
nations that the funds provided 


directly to the Palestinian 
National Authority would be 
managed with total transparency 
in a highly skilled and profes- 
sional manner". 

Total international aid commit- 
ments to the Palestinians s tand 
at about 62-flbn ova* the next five 
years, lids includes grants, con- 
cessionary loans, loan guarantees 
awl aid from flw UN Relief and 
Works Agency. 

About 62JLbn can be considered 
“new” commitments made after 
the interim self-rule agreement 
ri gnflri by Tqrqpl and tha PLO in 
Washington cm September 13. 

Scone 6800m has been pledged 
for the first year erf interim Pales- 
tinian self-rule but some donors, 
such as Saudi Arabia, have been 
reluctant to commit themselves 
beyond that 

Officials in Riyadh, still 
angered by the PUTs support for 
Iraq during the Gulf war, have 
said they wanted to be certain 
every dollar went to specific 
infrastructure projects and noth- 
ing to Mr Yassir Arafat, PLO 


The World Bank is coordinat- 
ing the international aid 
but has not taken responsibility 
for liaising on specific projects or 
acting as a channel for the flow 
of money to the Palestinian Eco- 
nomic Council for Development 
and Reconstruction (Pecdar). 

Fears had been raised among 
donors that the membership of 
Pecdar, headed by Mr Arafat, was 
too heavily politicised and lacked 
technical expertise. 

As a result it it likely that Feo- 
dor's main board will only set the 
broad policy outlines, leaving 
detailed work to Mr Ahmed 
Qurie, also known as Abu Ala, 
director-general, and depart- 
ments under Ww. Palestinians 
associated with Pecdar insist 
they wOl soon have mechanisms 
for accounting and maintaining 
control ov e r the council’s spend- 
ing. 

Senior Palestinians accept that 
it will be impossible to disburse 
anything app roaching |800m in 
the first year, but expect the pace 
to pick up as projects are agreed 
with donor governments. 


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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


NEWS: EUROPE 


12 


Immediate outlook improves but rapid expansion 
of money supply clouds prospects in long term 

W German inflation shrinks 


By Christopher Partes 
In Frankfurt 

The immediate outlook, for 

infla tion in west Germany has 

improved further this month, 
although long-term prospects 
are still clouded by rapid 
expansion in money supply. 

Consumer prices in North- 
Rhine Westphalia, the region's 
most populous state, rose at an 
ann pal rate of 2J9 per cent in 
the month to mid-May, down 
from 3 per cent in April, 


according to new figures. Infla- 
tion in Baden-WOrttemberg 
was unchanged at 3.1 per cent 
The figures supported econo- 
mists' forecasts of an »™™«i 
rate for the whole of west Ger- 
many of 3 per cent at most, 
after 3.1 per cent in April 
Meanwhile, the Bundes- 
bank's favoured indicator for 
potential inflation, the M3 mea- 
sure of money supply, contin- 
ued to exceed forecasts and the 
bank's 4-6 per cent target range 
for growth with a 15.8 per cent 


annualised increase during 
April Markets had been given 
clear advance warnings of 
another inflated figure. 

The Bundesbank said part of 
the reason was its handing 
over to the government of 
DMl&3bn (£7 2bn) in 1993 prof- 
its. It also singled out private 
sector lending as another con* 
tributary factor. Borrowing 
had expanded at an annual 
rate of 9.5 per cent in the six 
months to the end of April 

The hank once a gain blamed 


“special factors", evidatf gfryy 
January. Investment uncer- 
tainties had drawn large vol- 
umes of funds into short-term 
deposits (within the scope of 
M3) rather than long-term 
instruments. 

Long-term investment grew 
DMi03hn in April, compared 
with DM5v4bn a month earlier, 

but. as tiw hank pnirytcrf in it 

monetary capital formation 
had risen at a seasonally-ad- 
justed annual rate of only 4 per 
cent in the first four months. 


Mood lifts in manufacturing 


By Christopher Partes 

A clear improvement in 
business conditions during 
April has boosted opti mis m 
and production plans among 
west German manufacturers, 
according to a leading econom- 
ics institute. Rising output in 
the chemicals sector, and a 
surge In the region’s first- 
quarter trade surplus, 
reported separately yesterday, 
provided further evidence that 
economic recovery is tinder 
■way. 

Findings from the Munich- 
based Ifo institute’s latest 
monthly poll of industry 
showed new orders rising and 
inventories sh rinking . Some 
manufacturers reported an 
increase in unfilled orders 
even though output had been 
stepped up. 

According to the DIW insti- 
tute in Berlin, pan-German 
gross domestic product 
showed its first real yearnm- 
year increase for 12 months in 


the three months to the end of 
March. DIW said most of the 
L9 per cent growth came from 
an Unexpected surge in private 
sp ending . 

While many indicators 
showed tiie gloom lifting rap- 
idly, the German central bank 
appears anxious that expecta- 
tions do not run too far ahead 
of reality. Mr Hans Ttetmeyer, 
Bundesbank president, said on 
Monday that it was difficult to 
assess exactly the strength of 
the recovery. “At the moment 
it seems to me that the mood 
in business is rather better 
than the facts Justify,” he said. 

The Ifo poll, one of Ger- 
many’s most trusted economic 
barometers, also showed fad- 
ing optimism among wholesal- 
ers and retailers - a widely- 
forecast consequence of falling 
real incomes. 

Although negative reports 
still predominated among 
ma nufacturers , with suppliers 
of investment goods and con- 
sumer durables clearly less 


satisfied with current condi- 
tions, the institute said poll 
participants overall showed 
“considerably strengthened'* 
optimism on the outlook for 
the next six months. 

Most hopes woe focused on 
improving exports, particu- 
larly among suppliers of semi- 
finished products and raw 
materials, which are typically 
among the first to detect the 
onset or earing of a recession. 

The VCI chemicals industry 
aggnriaHrm, for example, yes- 
terday reported a 3.6 per cent 
rise in output from west Ger- 
man factories in the first quar- 
ter of the year. A 6J> per cent 
increase in foreign demand 
more than offset a 2.6 per emit 
decline in the home market, 
although prices continued to 
fall. The association said it 
expected Increasing momen- 
tum from markets outside Ger- 
many, but no significant 
growth at home for the rest of 
this year. 

The continuing weakness In 


domestic martefet was under- 
lined by a report yesterday 
that German r eg is t rati ons of 
new road vehicles tumbled 
23.6 per cent to 342JM4 units 
last mo nth- The total mrmter 
of new cars registered had 
fallen 12 per cent in tiie first 
four months, while registra- 
tions of truths and vans were 
down 7 per cent, according to 
the federal registry. 

Strengthening exports 
showed up in a pan-German 
trade surplus for the first 
three months of DM19bn 
($11.3bn), compared with 
DM9bn in the comparable part 
of last year. Exports rose &5 
per cent, while imports were 
virtually unchang ed. 

However, when compared 
with the last quarter of 1993, 
foreign shipments fell 3A per 
cent, the federal statistics 
office noted. Exports in March 
were almost 27 per cent higher 
than in February, which had 
three fewer working days, it 

aditerf 



Germany’s outgoing President Richard von WeisScker (left) with 
his successor, Roman Herzog, and their wives outside the presi- 
dent's residence, Schloss Bellevue, yesterday. The election of lb 1 
Herzog, a Christian Democrat, sparked fresh exchanges between 
Chancellor Helmut Kohl's CDU and the Social Democrats yester- 
day. SPD leader Rudolf Schaxpiug struck an unusually shrill 
tone by questioning the legitimacy of tiie electoral college vote 
because it ignored opinion polls be said showed more popular 
support for the SPD’s candidate. Mr Johannes Ran. Kohl 
branded as hypocritical the SPD’s criticism and challenged the 
disappointed party efthm- to accept the procedure or to campaign 
to change it He said tiie SPD were "poor losers". piewKfMr 





Ministry of Trade and Tourisn 


SPAIN 

THE INVESTMENT LOCATION 

London, 16 th June 1994 

THE SPANISH EMBASSY COMMERCIAL OFFICE in London in association with HAMBROS 
BANK LIMITED, has pleasure in inviting you to the seminar "Spain. The Investment Location". This 
se min ar offers you the chance to hear e min ent business people and public administration representatives 
talk in depth on different aspects of Spain's economy and business opportunities in sectors such as 
Automotive Components, Tourism-Leisure and the Environmental Industry. 


PROGRAMME: 


9:15 


Perspectives on the Spanish 
Economy and Reforms of the 
Labour Market 

Mr Federico Prades - 
Economic Adviser, 

Spanish Association of Private Banking 
AEB 

9:45 Investment Support 

Measures within Spain's 
Industrial Policy 

Mr Eugenio Triana - 
Secretary General of Industrial & 
Technological Promotion. 

Ministry of Industry & Energy 

10:45 The Automotive Component 
Sector 

Mr Juan LLorens - 

Chairman of SEAT 

11:05 The Environmental Industry 

Mr William J. Whitley BSc - 
Managing Director of Watson Espana S A 


11:25 The Tourism-Leisure Industry 

Mr German Porras - 

Director of Spanish Tourist Office in 

London. 

Ministry of Trade and Tourism 

11:45 Practical Aspects of 
Investing in Spain 

Mr Colin Blessley - 
Partner of Coopers & Lybrand 

12:30 Close 

Mr Apolonio Ruiz Ligero - 
Secretary of Slate for Foreign Trade. 
Ministry of Trade & Tourism 

12:45 Buffet Lunch 
14:15 Workshop Sessions 


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Russia to 
halve oil 
export 
duties 

By Leyta Boulton bi Moscow 

Russia plans to halve duties on 
oil exports following Monday’s 
removal of oil export quotas, 
Mr Alexander Shokhin, deputy 
prime minister for econom ic s, 
announced yesterday. 

President Boris Yeltsin is 
also an the verge of issuing a 
new decree with detailed 
instructions enabling tiie state 
to sell off bankrupt state- 
owned enterprises. 

“Now we are in a transi- 
tional stage when It has 
became obvious that there are 
no extravagant measures for 
s timulating economic growth.” 
Mr Shnkhln said, ex plaining 
the new flurry of reformist 
activity after four months of 
government inaction. “Now we 
need painstaking work to cre- 
ate mar k e t rnwhanimm " 

The impact of the various 
measures Is likely to be 
uneven. Foreign oil companies, 
which have been complaining 
about high taxation, say that 
congestion of Russian pipelines 
and ports means that exports 
are unlikely to increase sub- 
stantially in the near future 
despite a drop In export duties 
from Ecu30 ($35) a tonne to 
Bcol5. 

But in an area of groat 
importance for ordinary Rus- 
sians, Mr Anatoly Chubais, 
deputy prime minister for pri- 
vatisation, said that separate 
decrees ushering in long- 
awaited measures to regulate 
finanrifli markets, as well as to 
combat dishonest advertising 
by hanks and finanrlal compa- 
nies, were imminent. 

Mr Shokhin said the latter 
mi gh t go 85 tar as banning any 
advertising which promised 
specific dividend payments to 
small investors, who have been 
the main victims of extrava- 
gant promises in aggressive 
advertising campaigns. As evi- 
dence, however, of the govern- 
ment’s tendency for contradic- 
tory action, it announced last 
week that it would tax banks' 
profits from the sale of trea- 
sury bills at a time when the 
government is trying to widen 
their use to cover the budget 
deficit by non-inflationary 
methods. 

Mr Shnkhhi dismissed sug- 
gestions by some deputies and 
ministers that Russian budget 
expenditure would increase 
sharply when parliament came 
to approve the 1994 budget at a 
second reading. He also 
warned Russia's foreign credi- 
tors that only would be 
available for debt servicing 
this year. 

Talks scheduled with the 
Paris Club of creditor govern- 
ments for June 2-3 could only 
produce a rescheduling agree- 
ment if creditors moderated 
their demands for repayment 
of Soviet-era debts taken on by 
Russia as the successor state of 
the Soviet Union, he said. 


Sale of Ina set 
to raise at 

least L4,500bn 


By Andvw HU in Rotnw 

The Italian state should raise 
at least L4.500bn ($2-8bn) 
through the sale of up to 61 per 
cent of Ina, the state-owned 
insurer, at the end of next 
month. It will be the largest 
privatisation yet attempted in 
Italy, and the first under the 
new g o ve rnment 

The Italian treasury, which 
owns 100 per cent of Ina. 
announced yesterday the offer 
would begin on June 27, and 
shares would be priced at 
between L2^200 and L2.700 
each, valuing the whole com- 
pany at LS^OCftm-UO^OObn. 

The terms of the sell-off 
include safeguards for small 
shareholders, following criti- 
cism that ordinary investors' 
interests were neglected in pre- 
vious privatisations. The same 
tactic may now be adopted for 
fixture privatisations, such as 
that of Stet, the telecommuni- 
cations group, and End, the 
elect rici ty company, which are 
due over the next 13 months. 

Single institutional share- 
holders in Ina will be unable to 
boy more than 2 per cent of 
the company in the issue itself. 
That stake can be increased to 
5 per cent with subsequent 
purchases on the market But 
tiie shares of investors already 

tinted through the ster aholder 

voting syndicates of other Ital- 
ian companies will be treated 
as belonging to a single share- 
holder. 

The measure should prevent 
close «ihp« from building up 
effective control, circumvent- 
ing the ceiling on share stakes. 
That happened earlier this 
year following the sale of the 
state-controlled banks, Credito 
ItaUano and Banca Commer- 
d&le Italians (BCD- 

The treasury has also 
approved a special system for 
electing the first directors after 
privatisation. Under tiie inno- 
vative g*htmp t a certain num- 
ber of seats on the board wifi 
be reserved for directors nomi- 
nated by small shareholders. 

The double system of protec- 
tion was agreed by Mr Lam- 
bert© Dini, the new treasury 
minister and former central 
banker, and his colleagues Mr 
Vito Gnutti at the industry 
ministry and Mr Giancarlo 
PagJiarini, the budget minister. 
This same trio would guide the 


Grachev puts 
proviso on Nato 
partnership 


By Bruce dark in Brussels 

General Pavel Grachev, the 
Russian defence minister, said 
yesterday his country would 
sign the Partnership for Peace 
p rogra m me designed by Nato, 
as long as it was combined 
with a separate agreement rec- 
ognising Russia’s special 
importance. 

Nato defame ministers who 
gathered to hear Russia’s new 
military doctrine said no sup- 
plementary treaty was possible 
but a political declaration 
about Rusrian-Nato relations 
might be feasible. 

“There will be no special pro- 
tocol for Russia,” said Mr WB- 
ham Perry. US defence secre- 
tary, underlining Nato’s 
reluctance to make any legally 
binding arrangem e nts that dif- 
fer from those enjoyed by 
PFFs current members. 

Mr Sergio Balanadno, Nato 
dep uty s ecretary-general, said 
the PFP - which 20 countries, 
mostly ex-communist, have 
agreed to join - had to be the 
mainstay of ties between the 
alliance and Moscow. 

However, alliance officials 
did stress that a dialogue over 
issues - particularly nuclear - 
that lay outside the PFFs 
remit was in existence and 
could be expected to intensify. 

Mr Balanzino said a state- 
ment underlining the impor- 
tance of Russian-Nato relations 
could not be made by the cur- 
rent meeting of defence mini*. 
tors, but could be issued by 
Nato foreign ministers meeting 
in Istanbul next month. 

Diplomats said that if Russia 
settled for a political statement 
this could pave the way for a 
breakthrough in relations 
between Russia and the west 
this month or np yt 

PFP calls for joint exercises, 
particularly in the field of 
peacekeeping, and an exchange 
of military know-how. Mr 
Perry called yesterday for the 
programme to be sharply 
upgraded next year, to include 
co-ordination of defence plan- 
ning in east and west. 

Mr Malcolm Rifkind, UK 
defence minister, voiced his 
concern about Russian empha- 
sis on the army’s role In pro- 


tecting ethnic Russians in the 
smaller ex-Soviet republics. 
Underlining the danger of 
accepting the idea of military 
intervention in the name of 
protecting kith and kin, he 
said both Germany and Britain 
could claim they had large 
numbers of citizens or kinsmen 
living in other countries. 

Moscow’s demand to upgrade 
the 52-nation Conference on 
Security and Co-operation in 
Europe was also coolly 
received by most Nato coun- 
tries. 

Russia, maintains that it had 
a caw deal from, the treaty an 
Conventional Forces in Europe 
because it was negotiated 
before anyone foresaw the dis- 
integration of the Soviet 
Union. Many of the best 
equipped Soviet units ware 
located on the western fringes 
of the union and have been 
incorporated into the arsenals 
of Ukraine and Belarus. 

However, Russia’s request 
for an upwards revision of its 
CEE troop ceilings has caused 
alarm in Norway and Turkey, 
the two Nato members winch 
bonier former. Soviet territray 


THE FINANCIAL TIMES 
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(Europe) GmbH ire Tbe FimwaaJ 
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ISSN: ISSN 1148-2731 CbnaWw mm 
No 678080. 





. 3 
4 

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Judge orders 
trial of Bossi 
and ex-PMs 

A Milan judge yesterday 
ordered two former Italian 
prime ministers, several lead- 
ing businessmen, and the 
feeder of the Northern League, 
Mr Umberto Bossi, to stand 
trial, charged with breaking 
the law oa the financing of 
political parties, writes 
Andrew H3XL 

The derision is tin; next step 
in the process of unoovertag 
an alleged network or bribery 
and corruption surroandteg 
tiie ill-fated Enbnont chemi- 
cals joint venture between 
state-owned Bnl and the Per- 
mxxi-Montedison Industrial 
group. The trial should begin 
on July 5. 

The list of 82 people accused 
includes Mr BettlnoCraxi, foe 
former Socialist prime minis- 
ter, who has so tar failed to 
hand In his passport to Italian 
magistrates, and is thought to 
be in Tuntete. 

Abo accused are Mr Arnolds 
Forlani, the former Christian 
Democrat prime minister, Mr 
Paolo Chino Ponddno, a far- 
mer budget minister, and Mr 
Gianni De Mlchelis, former 
foreign minister. Mr Giuseppe 
Garofano, Montedison’s ex- 
chairman, and Mr Carlo Santa, 
its former managing director, 
wlD also be tried. 

Mr Bossi will stand trial 
because fate party is alleged to 
have received payments from 
Femral. 

Stet and Enel sales. Both Mr 
ftnntti and Mr Pagliartiii are 
members of the Northern 
League, which has been 
sharply critical of the domi- 
nance achieved by allies of 
Mediobanca, the Milan mer- 
chant bank, an the boards of 
Credito Itahano and BCL 

Imi of Italy and Goldman 
Sachs are acting as global 
coordinators of the issue, 
which will be launched in Italy 
and internationally. A certain 
proportion of the issue wfll'be 
reserved for former sharehold- 
ers in Ilia's subsidiary Assi- 
talia, the group's employees, 
agents, and policyholders. 


\ 




■-a*,.,. 


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DENMARK 

Financial Tima , 

stifled J2A, DK-1161 « 
phone 33 13 44 41, Fsx 33 


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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


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NEWS: EUROPE 


EUROPEAN NEWS DIGEST 

Austria set for 
slow recovery 


Auwirta.^ 

GiOPpik* deflator 
Annual change 
4,5 



te- as 


, Austria's economy will 
growth at about 1.5 per cent 
this year, although expansion 
is likely to pick up to 2.4 per 
cent next year, according to 
the Organisation for Eco- 
nomic Co-operation and 
Development This follows a 
0.4 per cent fall in gross 
domestic product in 1993. hi 
its annual report on the Aus- 
trian economy, published yes- 
| terday. the OECD mid slug- 
gish recovery among 
principal European trading 
partners was likely to limit 
the scale of the upturn. Addi- 
tionally, Austrian, exports are 


.Source oeco , . . ... A. or 0^93 forecaat to iose market share 

abroad as a result of the delayed effect on competitiveness of 
the appreciation of the schilling. The recovery of corp o rate 
investment will probably remain weak, the OECD said. 
Although a stimulus to business investment abmi l d come from 
further interest rate cuts and corporate tax reform, the impact 
might take time to come through. The OECD forecasts infla- 
tion as measured by the GDP price deflator will fall to 2^ per 
cent this year and 2.4 per cent in 1995 from 3.7 per cent in 1993. 
Austria's inflation performance hag been underpinned by the 
credibility of the ‘hard currency” policy iiniring the warning 
to the D-Mark. However, the OECD pointed out that Austria’s 
ext ens i ve system of credit subsidies has been placing a burden 
on public fin ances. David Marsh, Europe Editor. 

Alitalia to cut 3,500 jobs 

Italy’s state airline plans to cut up to 3,500 office and ground 
staff jobs In the next four years as part of a rescue package, 
trade union said yesterday. They said Alitalia, which 

lost $200m last year and a further $U0m in the first three 
months of 1994, aimed to lose 1^00 jobs by the end of 1995 and 
the rest by 1997. At present, the group employs 20,000 people. 

A management report to the company's unions this week 
depicted the airline as heavily overstaffed and its structure as 
too bureaucratic and rigid. The manag in g director Mr Roberto 
Sdiisano has said the airline is in such bad shape that without 
drastic action Ali talia had only 500 days to live. "The plan has 
a logic to it,” said Angelo Braggio, national secretary of the 
FFF-CISL trades union. “To leave things as they are would 
quite simply lead to the airline being liquidated.” In return for 
backing the restr u c turi ng plan, unions want the state to 
guarantee a loan of nearly $lbn to recapitalise the airline and 
ensure its future. Reuter, Some. 

Rubio may escape jail sentence 

Spain’s economy and finance minister Mr Pedro Solbes Indi- 
cated yesterday that disgraced former Bank of Spain governor 
Mariano Rubio could escape a prison sentence in connection 
with tax evasion. Parliamentary sources said Mr Solbes told a 
private congress hearing yesterday that Mr Rubio had appar- 
ently foiled to pay PtalSm (£82300) in tax in 1988, a total below 
the PtalSm threshold which makwa evaders liable to a jail 
term. Mr Rnblo, who was released last weak an PtsCISm bail 
after a fortnight in prison, allegedly kept secret the profits of a 
portfolio account managed at the time he was central bank 
governor by the failed Banco Iberoorp. Mr^SolbeStolil the 
legislators that an intitial investigation into Ibercorp, a finan- 
cial group which managed the assets of wealthy and feshion- 
able Spaniards; had uncovered a complicated network of shell 
companies that masitpH the identities of Its' chants and the 
nature of their investments. Tom Bums.Madrid. 

EU auditing ‘unintelligible’ 

The Court of Auditors, the European Union's main financial 
watchdog, suffers from “top heavy” senior management and is 
not professional enough in fighting fraud In the EU budget, Mr 
Jo Carey, a former UK Treasury official and expert on EU 
finances, said yesterday- Giving evidence to the House of 
Lords’ European, communities committee, Mr Carey criticised 
the EITs “quite unintelligible” system of financial controls and 
said the lack of accountability of many senior officials encour- 
aged waste. Mr Carey yesterday did not give an estimate for 
the budget waste through fraud and other irregularities. But 
many expats believe tins totals at least 5 per cent of EU 
spending, with much of the fraud due to abuse of agricultural 
subsidies. Mr Carey said the court’s efforts to pinpoint fraud 
in the EU budget ranged from reports akin to “slightly haphaz- 
ard investigative journalism" to documents which were rigor- 
ously argued and “objective and relevant to policy”. Peter 
Marsh, London. 

NZ peacekeepers for Bosnia 

New is to send 250 troops to serve under British 

command on peacekeeping duties in Bosnia. This is the coun- 
try’s biggest commitment of military personnel to a combat 
zone since World War Two. The government is believed to 
have been reluctant to send the troops, but felt obliged to do 
so as It was of the Security Council when the 

decision was taken to step up the UN peacekeeping role in 
Bosnia. The force will serve for six months and then be 
replaced by another company. 

Many MPs are known to be privately concerned at the 
development, although only the leader of the Alliance party, 
Mr Jim Anderton, spoke against it in parliament when the 
decision was announced. The foreign minis ter Mr Don McKin- 
non said earlier this year that New Zealand should not be 
drawn into another European war, but he supported the move 
yesterday saying it was in line with New Zealand’s member- 
ship of the Security C6unciL Terry Ball, Wellington. 

economic watch 

Danish inflation reaches 2.1% 

The strong recovery under 
Dmkrim *s Inflation *' way In the Danish economy 
yr ~ was reflected in a si gnificant 

Antal M ohang* fci CPI increase in consumer prices 

: ----- — . in ApriL The index rose by 0.4 

per cent front March and by 
9 /- A,— — — 2.1 per cent from April of last 

J/^V year. In the 12 months to 

s, j? / April 1993 prices increased by 

r. A /v v only 1.1 per cent. The 

ij r. .aX-v-/-. increase over the past 12 

Y- \ fj months, however, has been 

predicted by the gov e r n ment, 

which expects consumer 

— — prices to 1994 to increase 2.0 

. . per cent from last year. This 

. jg wj i compares with an increase of 

- - issa 93 \2 per cent from 1992-3. The 

3 ddfcD«aiMM>. government last week 

adjusted its economic forecaste upward^ predfoti^^ 

in GDP oT 4.0 per cent this year, with private era- 
Stan to ria by M ier cent and bindm s inve nfanem by 
10.4 per cent in constant price terms. The ^rowtiiis 

expected to continue in 1995. the government said. Binary 
Barnes, Copenhagen. 

■ Inflation in the European Union was 33 Per «*“]■ 

April, unchanged from March, but margmafly tfown from the 
aatratea year earlier, according to Eurostat, the EU 
Statistical Office In Luxembourg. 

■ Italy's merchandise trade account with eibCTEU coimlxl^ 
saw a surplus of Ll,Q26ba to February 

plus of L508bn in February 1993. the Italfon 

output 0.7 per cent higher than Marcn ia»- 


France and Balladur — on recovery road 


David Buchan on clear signs of an 
economic and popularity pick-up 


Frances investment 


M r Edouard Balladur 
now has something 
more sustaining to 
buoy him up than the tradi- 
tional bark cigarettes and fer- 
mented manioc he had to 
smoke and drink last weekend 
with French Guyana Indiana 
on an improbable European 
election swing through 
France's territories to the New 
World. 

On his return, he found con- 
firmation both of the recent 
recovery in his popularity in a 
Journal du Dimanche poll 
-which showed 47 per cent of 
French people were “satisfied" 
with him as prime minister as 
against 44 per cent who were 
“discontented” - and of the 
recent pick-up in the French 
economy. 

The lesson which Mr Baha- 
dur will almost certainly draw 
from this is that his best bet 
for the presidential election 
next year is to sit tight politi- 
cally, avoid a repeat of his con- 
troversial education and labour 
market reforms of ea rilar this . 
spring, and count on economic 
recovery to continue steadily 
into 1995. 

Insee, the government statis- 
tics agency, said last week it 
had enough evidence to from 
industrialists’ order books and 
investment intentions, and 
from consumers’ car and house 


purchases, to predict a 03 per 
cent growth in the first half of 
tills year. Even in the unlikely 
event that the recovery flat- 
tened out entirely In the sec- 
ond half of the year, the “car- 
ry-over" effect of this spring 
recovery would still give the 
country year-on-year average 
growth of L3 per cent over 
1993. 

Insee provided still greater 
psychological comfort - by 
scrapping its gloomy forecast 
of last Christmas that France's 
record 122 per cent jobless rate 
would be half a percentage 
point higher still by mid-1994. 
The agency noted that the ser- 
vice sector in France was at 
last performing as in most 
other advanced post-industrial 
societies by hiring enough peo- 
ple to absorb job losses in man- 
ufacturing and newcomers on 
to the labour market Nan-agri- 
cultural employment rose by 
0 J per cwnt in the first quarter 
of 1994. 

There are other signs that 
French companies and house- 
holds are ?h airing off their hes- 
itancy about the future. 

After catting spending on 
new plant and equipment by 17 
per cent last year, company 
managers have told Insee and 
the Bank of France in repeated 
surveys that this year they 
intend to Increase Investment 



Compared wtfr'Gormany 

ttfcporawiposs fixed capita formaBonas KoJGOP • 

' — — — r* 

Qoouany 


BMirnd'amatU 
.Priftwntfnfefor 


by up to 2 per cent globally. 

They need to do this -not to 
expand capacity (only 80.6 par 
cent of which was used in the 
first quarter of this year) but 
to modernise It Low domestic 
inflatio n and dwmawd , coupled 
with improved terms of trade, 
more than offset last year’s 5 
per cent appreciation of the 
franc against the weighted 
average of the currencies of its 
six leading European partners, 
and gave France a FFr90bn 
(£105bn) trade surplus to 1993. 

But as Europe came off the 
top of the German reunifica- 
tion boom, capital spending fell 
successively in France in 
1991-93. “Only a powerful 




-V 1860 .': a 


revival in investment”, a 
recent Paribas bank report 
claimed, “is capable of 
htwi hung France to h»ng on to 
the benefits of the structural 
improvement in its trade bal- 
ance.” 

Few French companies will 
need to go to the banks to fund 
new investment. Their rate of 
self-financing has risen from 
95.6 per cent of their needs in 
1991 to 121 per cent last year. 

As in the case of companies, 
it has not been chiefly shortage 
of cash or credit that has inhib- 
ited French households from 
spending more. Most indeed 
are net creditors, a feet that 
perversely puts less rather 


92 

■ soutwoeco 


than more money in their 

hands as hanlny cut Tates and 

so reduce their interest 
income. It is fear of unemploy- 
ment that has so depressed 
h ousehold consump tion. 

By allowing companies to 
keep real wages virtually static 
and by forcing the government 
to raise more money to pay for 
high social security expendi- 
ture, the jobs crisis has meant 
little rise in disposable income. 
People have also been putting 
more of it into "precautionary 
saving”. 

This is why the Insee judg- 
ment that unemployment may 
now have stabilised may be 
important in persuading the 


FOR THE 


French to save less and spend 
more, to response to specific 
government incentives, they 
are already spending more on 
new cars and houses this year. 
But the economics ministry is 
forecasting a more general 
improvement, with a 0.8 per 
cent rise in household con- 
sumption largely firnded out of 
a 0.6 per cent drop in the 
savings rate this year. 

For a steady recovery of its 
economy, France needs steadi- 
ness abroad and at home, bat 
the second condition is nearly 
impossible to guarantee in the 
run-up to the presidential con- 
test next May. Mr Michel Roe- 
ard, the Socialist leader and 
presidential contender, pre- 
dicted last week that Mr Balla- 
dur would “take no more risks, 
after his frightful dimbdowns" 
earlier this year on education 
and labour reforms. That is 
probably true, though last 
week the government quietly 
liberalised the rules on Sunday 
opening hours for shops. 

However, at the very least, 
the prime minister will have to 
settle divisions within his own 
conservative majority over 
whether to use any elbow room 
in the 1995 budget for election- 
year income tax cuts or for less 
glamorous reductions in social 
welfare charges. Waiting to 
exploit any internal govern- 
ment arguments, too, is Mr 
Jacques Chirac, the RPR Gaull- 
ist leader, who may not now 
wait much longer to announce 
his claim on the Elysde. 


ADVERTISEMENT 


Communication is Key 






Casio Computer is recognised as a leading 
manufacturing company of electronics and personal 
items such as calculators , watches, musical 
bisffumenis and pocket TVs. Cashes future, says 
company president Kazoo Kashio, lies in applying 
its technical skills and expertise to the greater 
dutllenges presented by the communication age. 


McCulloch: Despite 
Japan’s lingering reces- 
sion and weak consumer 
confidence, Casio is confi- 
dent qf raising sales and 
lifting pre-tax profits in 
fiscal 199$. How will this 
be achieved? 

Offshore 
Production to 
Beach 70 Per Cent 

Kashio: All manufac- 
turers know that the key to 
higher profits lies in lower 
production costs. At Casio, 
we have made attaining 
cost-competitiveness our 
top priority this year In 
order to avoid Japan’s high 
production costs, over the 
past few years we have 
been reinforcing our off- 
shore manufacturing bases 
in countries such as Ma- 
laysia and Mexico. At the 
moment, almost half of 
our production takes place 
outride of Japan and our 
goal this year is to raise 
this portion to 70 per cent 

McCulloch : An in- 
crease qf over 20 per cent in 
a VS month period seems 
very ambitious. Will such 
an increase be possible? 

Kashio: We can do it. 

' Fbr example, in Malaysia, 

there are many factories in- 
cluding one of our largest 
overseas facilities and 
these employ a total of 
about 7,000 people These 
operations are proving very 
successful and are assum- 
ing the role of being Casio’s 
core overseas plants. 

If I have a concern, it is 
for the impact that our 
relocation plans might be 


having on the local commu- 
nities in Japan that have 
supported us through 
Casio’s history. But I believe 
this problem of the so- 
called "hollowing out" of 
Japanese manufacturing 
industries can be overcome 
by giving our domestic 
plants the responsibility 
for manufacturing new 
products. 

McCulloch: Multina- 
tional comparties are (ften 
accused of locating facto- 
ries in lesser developed 
countries merely to exploit 
available cheap labour. 
How do you think Casio is 
viewed in Malaysia? 

Kashio: I believe that 
we are viewed very 
favourably— both by the 
Malaysian people and by 
the Malaysian government. 
Other foreign companies 
relocating in Malaysia have 
had great trouble locating 
and keeping skilled wor- 
kers, but in our case Casio 
is ranked highly by local 
workers and we have had 
no difficulty attracting 
skilled employees. 

Moreover; we recently 
held a ceremony to mark 
the successful commission- 
ing of our new plants in 
Selangor which began 
operations in June, 1992, 
and we were honoured to 
welcome Prime Minister 
Dc Datuk Seri Mahathir 
Mohamad. It is rare for the 
Malaysian prime minister 
to attend the opening of a 
private company’s plant. 

McCulloch: Lower 
production costs alone vtUL 
7iotinsuUdeyoitrcomparty 

against the effects of 


By KumkB McCribc* 


reduced consumer spend- 
ing and economic reces- 
sion. How is Casio coping 
with these problems? 

New Products to 
Stimulate New 
Demand 

Kashio: This recession 
was caused, in part, by 
manufacturers being una- 
ble to stimulate demand 
in the marketplace. What 
we need are some new 
products that will arouse 
consumer interest. In the 
past automobiles, electric 
appliances and computers 
played the role of stimulat- 
ing consumer demand but 
interest in these segments 
has now waned: a new area 
of business needs to be 
opened up and we believe 
that c omm unications - 
related products fit that 
criterion. That is why we 
are reinforcing our market- 
ing efforts for products 
such as pagers. 

McCulloch: Why are 
you so confident about 
conrnnmications? 

Kashio: There are two 
main reasons. The first 
relates to the present 
and potential size of the 
market. In our domestic 
market, the Japanese 
government recently liber- 
alised Japan’s mobile com- 
munications sector and this 
will spur demand for port- 
able telephone handsets 
and other equipment that 
Casio manufactures. A 
similar expansion is taking 
place outside of Japan. In 

China, fbr example, the lack 

of infostructure for con- 






Ifiino Kashio, President, Casio Computer Co, Ltd. 


ventionai telephones has 
made wire-less communi- 
cation devices -such as 
pagers extremely popular 
Last December, we formed 
two joint ventures In 
China to manufacture and 
produce our pagers. 

I am also confident 
about communications be- 
cause it relies heavily on 
technology and manufac- 
turing expertise that Casio 
already possesses— namely 
electronics and micro- 
assembly. Data storage in- 
volves semiconductors and 
these we are familiar with; 
data read-out requires 
Liquid Crystal Displays 
(LCDs) which we manufac- 
ture; and our range of mu- 
sical instruments proves 
our excellence in audio 
reproduction. 

McCulloch: In the 
field of communications 
equipment, which group 
of marojtfactoxrers will be 
Casio 's keenest competi- 
tors — UJS. or Japanese 

Kashio: In terms of 
hardware, our toughest 
competitors will be Japa- 
nese. Though U.S. com- 
panies such as Motorola 
are strong— particularly in 
China— the forte of U.S. 
companies is in writing 
software, not manufactur- 
ing hardware. 

However; Japanese 
and U.S. companies don't 
necessarily have to com- 
pete. Both have skills that 
often complement one 
another and these can be 
tapped for mutual benefit. 
Our ‘‘IP-300” pager is an 
excellent example of this 
because while the hard- 
ware has been designed 


and manufactured by 
Casio, the software was 
created by PageMart Inc, 
based in Dallas, Tbxas. The 
pager-pocket organiser is 
the fruit of dose collabora- 
tion that began three years 
ago between Casio and 
PageMart. 

McCulloch:/t seems 
difficult to imagine pagers 
launching a communica- 
tions revolution. 

Kashio:Nevertheless, I 
believe that consumer 
products will be “commu- 
nicationised” in the near 
future. Allow me to give 
two examples. 

The first is our Digital 
Etiary for children. These 
have become extremely 
popular and this year we 
expect to sell 8 million units 
worldwide. One of the rea- 
sons for their success is 
that our diaries have com- 
munication function which 
enables children to send 
messages to each other via 
their diaries By incor- 
porating this very short- 
distance communication 
feature, the value of the 
diary has been enhanced. 
Children love playing with 
them more than computer 
games! 

“Visual Radio” to 
Be Launched 

The second is what 
we call “Visual Radio". 
Fbr the moment, radios 
can only offer sound, but 
the “Visual Radio” has 
a screen that can display 
text. That is, the radio 
station broadcasts text in- 
formation as well as sound 


on an FM frequency. Fbr 
example, when a disc jock- 
ey plays a song, the name 
of tiie song and the artist 
will flash on the display of 
the radio. Other kinds of 
data could also be broad- 
cast, such as names of 
players during a sports 
program, and share prices 
and ranges. Casio is a 
member of a study group 
called the "Visual Radio 
Committee" and we are 
confident that a product 
with these functions will 
be launched next year 

McCulloch: What 

about the geographic 
expansion of Casio’s 


Kashio: I mentioned 
previously that we had re- 
cently established two joint 
ventures in China to 
manufacture and sell our 
pocket pagers. Naturally 
China represents a huge 
potential market and, as 
you know, it is difficult to 
enter the market without a 
joint venture partner or 
close relations with a local 
enterprise. Therefore; we 
are intending to establish 
very close relations with 
other companies in the 
local Chinese market. 

At the same time, we 
are also monitoring de- 
velopments in Russia and 
in the countries of the 
former Eastern Europe. In 
December last year; we for- 
mally opened an office in 
Moscow through which we 
will coordinate our activi- 
ties in the CIS. Fbr the time 
being Casio Europe Head- 
quarters in London will 
focus on our activities in 
Western Europe. 


CASIO COMPUTER CO., LTD. 

2-6-1, Nishi-Shinjuku, Shlnjuku-ku, Tokyo 163412, Japan 
Telephone: (81-3) 3347-4811 Facsimile: (81-3) 3347-4650 


CASIO ELECTRONICS CO., LTD. 

Unit 1000 North Circular Road, London, NW2 7JD 
Telephone: (081) 450-9131 Facsimile: (081) 452-6323 










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This important conference, whit* has been timed to coincide with the tercentenary 
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international mining developments and a major forum on the rote of the markets In the 
mid-1990s. To be chaired by Mr Dick Gazmarartan, Republic Mase Bank Limited; 
Mr Tom R N Main, Chamber of Mines of South Africa and Mr David Pryde, J P Morgan, 
speakers will Include: 


Mr Rupert Pennant- Rea 

Bank of England 


Mr Harry M Conger 

Homestake Mining Company 


Dr Chris Stals 

South African Reserve Bank 


Mr Jean Zwahlen 

Swiss National Bank 


Mr Phil Wilson 

Standard Chartered Bank 
The Mocatia Group 

Mr Kevin A Foo 

BakyrchikGokJPLC 


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Rothschild Australia Limited 


Mr Yuri Mitvuk 

Bank for Foreign Trade of Russia 


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& Company 


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Typettf Bontoesa, 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


THE AMERICAS 


Defiant Uruguay leader 
holds out for free market 


Setbacks have not deflected President Lacalle’s 
vision, write John Barham and Stephen Fidler 


P resident Lois Alberto 
L a c a i le , now weB into 
Ms last year in office, 
has bad hk share of wQwfct 
As the head of Uruguay’s 
minority con se rv at ive govern- 
ment since he toed; office in 
March 1990, be has been des- 
erted by allies, weathered 
numerous defeats in Congress, 
and suffered eight general 
strikes and a h umiliating refer- 
endum defeat in 1992 that dealt 
a severe blow to his privatisa- 
tion plans. 

This has not stopped him 
from plugging away at market- 
oriented economic policies, in 
spite of their apparent unpopur 
larity with the electorate. 

The government has been 
selling state assets not covered 
by the December 1992 referen- 
dum verdict, when 72 per cent 
of voters opposed the sate of 
five en terprises including *"Hp 
telephone company. 

By the year-end, it will have 
reprivatised the last of the four 
banks absorbed by the previ- 
ous government, and the last 
meat packing plant It is eval- 
uating an offer to buy the state 
airline. Pinna, inviting bids for 
the government gas company 
in Montevideo and restructur- 
ing the ungainly state oil, 
cement and alcohol conglomer- 
ate. 

It has ended the government 
monopoly of the insurance 
business, and pushed through 
port reform. It has promoted a 
bill which will mean fall legal 
au ton o my for the central hank 
and is making another push - 
with the help of the World 
Bank and InterAmerlcan 
Development Bank -to reduce 
the size of the country's 
bloated and inefficient civil 
service. 

An this has won the govern- 
ment plaudits outside the 
country. The Economist Intelli- 
gence Unit decided recently to 
improve the country's political 
risk rating because of “contin- 
ued efforts at structural reform 
by the Lacaile administration 
- and its partial successes - de- 
spite a hostile congress." 

Inside the country the efforts 
of Mr Lacaile, who is forbidden 
under the constitution to stand 
for successive terms, go largely 



since taking office and 
increased education spending 
by two-thirds to 4300m. 

His opponents say invest- 
ment rates are still too low and 
point to a gro wing trade defi- 
cit The 1993 deficit was 467*0, 
almost double the previous 
year's. Yet according to Mr de 
Posadas, capital flows Into the 
country remain positive and 
Kttie affected by the interest 
rate increases in the US. 


Lacaile: can claim policies have led to economic growth of 15 per 
cent, rising investment rates, an increase in real incomes of 
one-fifth and a much-reduced budget deficit Tor,, 


tingling 

His P&rtido National is 
t railing in the opinion polls 
ahead of November’s elections, 
b ehind both the centrist Colo- 
rado party and its candidate, 
former president Julio Maria 
Sanguinetti, and the left-wing 
Freute Amplio. 

Mr Lacaile can claim that his 
policies have ted to economic 
growth of 15 per omit since he 
took office, rising Investment 
rates, an increase In real 
Incomes of one-fifth and a 
much-reduced budget deficit 

Mr Ignacio de Posadas, the 
finance minister, says last year 
the economy grew about 2'A 
per cent, and the . government 
Is tentetbtiy^forecastjng 2 pa- 
cant for 1994 - though this 
could be higher if the Brazilian 


economy continues to improve. 

Inflation fell to 53 per cent 
last year, half the rate when 
the administration mthp to 
power. The rate has since 
fallen to 44 per cent, and the 
target for the year end is 
30 per cent says the minis ter 
He says the government will 
show a small budget deficit 
this year, despite a spate of 
strikes from government 
employees for higher salaries, 
but It will be the lowest budget 
deficit in an election year for 
at least 70 years. •. - .. 

Criticised as an unfeeling 
free-marketeer, Mr Tjnaiia 
emphasises that he has over- 
seen important increases in 
social spending. 

Hie has almost doubled the 
health budget to 4170m (£113m) 


W hile the president 
can claim same vic- 
tories in his cam- 
paign to modernise the state, 
he has test the most important 
battles -the Mg priva tisation s 
and reform of serial security. 

Social security is Uruguay's 
sacred cow: the country was 
among the first to introduce a 
welfare state and voters are 
keen to hold an to their privi- 
leges. The ratio of the working 
population to the dependent 
population is one of the lowest 
in the world- L4 or 15 -and 
tiie cost of supporting the sys- 
tem grows yearly. Pensions 
and social security account for 
14-15 per cent of GDP and more 
than half the gnrw w nnumt bud- 
get. Because pensions are 
Indexed to the previous year's 
inflation rate, when inflation 
goes down it implies a bigger 
burden an the treasury. 

Politicians on all sides agree, 
though same win say so only 
in private, that social security 
is in dire need of reform, bid 
few will court unpopularity to 
push it through. 

On this issue, the govern- 
ment has now thrown in the 
towaL “The only thing we’ve 
really given up on is the sodal 
security reform, 1 * says Mr de 
Posadas. The government has 
mule four attempts to get con- 
gressional . approval for an 
overhaul of the system, but 
succeeded only in making 
minor adjustments. 

Mr Tj»«iI1p fturia te that this is 

an issue that udH not go away. 
Whoever succeeds him will 
have to adopt tire policies he 
has struggled to implement 
“The next government will 
have to tackle this issue. II the 
trend continues, it will become 
unbearable by 1996-97." 



Earth the $ . 
final 


frontier 
for TV’s 
Star Trek 


) 


Ely Rfcherd Tbmfcfae 
In Naw York 


Starship Baterprtse, the 
spaceship ' that boldly went 
whoa no one had guru before 
In the tehrriskm series gtet 
Trek, was yesterday bid op on 
planet Earth after a dwtarinai 
by its ownteto end Us weekly 
(mays into the cosmos. 

Paramount Commvnfc* 
tkms, the US entertainment 
group that made tin flrrtSfer 
Trek series and its sequel, Star 
Trek: The Next Generation, 
has cancelled the tetevistdu 
series because it beBeftrer^t 
can make more money out of 
the concept by reserving it for 
blockbuster movies. - 

Star Trek has been one of 
the most successful pre- 
grammes to television history. 
The first sates -* lew-budget 
affair with wobbly scenery and 
unconvincing special effects - 
ran for only 79 episodes 
between 1966 and 1989, bat ft 
bunt up a cult following that 
spread its popularity around 
the world and gave rise to 
almost incessant re-runs. 

In 1987 Paramount launched 
Star Trefc The Next Genera- 
tion, a new series based on fin 
original concept but featuring 
high-technology special efforts 

ami a new cast 

Some Star Trek fans were 
dis a ppointed by the poiiticaHy 
correct tenor of the new series. 
While meyjrew of the orfcgteal 
Starship Enterprise tried hard 
to be open-minded about dvB- 
isations differing from their 
own, they could usually be 
retied on to fell, blasting nan- 
conforming Species info anni - 
hilation. 

In contrast, the crew of tbe 
Next Generation’s Enterprise 
seemed all too understanding. 

Even so, the Next Genera- 
tion succeeded in becoming 
one of tbe most-watched mo- 
grammes on US television, 
drawing a regular audience of 
about 30m. 

It was also one of Para- 
mount’s biggest money mak- 
ers. • 

The last episode, a two-hoar 
special entitled “AD Good 
Things brought the 176ep- 
isode series to an mid on Mon- 
day night 


K bi 


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» • - .-l 


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IVI. - 


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.'j U. 


Clinton in 
drive over 
healthcare 


President Bill Clinton plans to 
meet congressional leaders of 
the Democratic party today to 
revive prospects of passing 
healthcare reform legislation, 
writes George Graham in 
Washington. With reform bog- 
ged down in five congressional 
committees, Mr Clinton wants 
to “keep everybody focused on 
the endgame," a White House 


official said. 

Mr Clinton is also expected 
to meet all the Democratic 
members of Congress this 
ev ening , although tbe subjects 
may spread wider than health- 
care. Despite some small 
breakthroughs, progress has 
proved agonisingly slow. All 
five committees seem likely to 
miss the informal deadline Mr 
Clinton had set of completing 
drafting work before next 
week's recess. 

Many officials in Washington 
doubt whether it will be possi- 
ble to pass a comprehensive 
reform this year. Prospects 
next year, after likely Republi- 
can gains in November elec- 
tions, would be even slimmer. 

However, Senator George 
Mitchell. Democratic leader in 
the Senate, said: “Going from 
the general to the specific is 
always difficult but none of 
this is insurmountable if there 
is good faith.” 


Venezuela alters dollar auction 




-to- M-:, 
Jy-. r*-. v 


By Joseph Mann in 


Venezuela’s central bank has 
abandoned the system intro- 
duced this month to ration 
sales of dollars to banks and 
exchange houses. The system 
had led to a growing gap 
between the official exchange 
rate for the bolivar, determined 
by central bank sates of dol- 
lars, and that on the parallel 
market 

Yesterday the central bank 
began using a Dutch auction 
system, under which banks 
and exchange houses offer bids 
each business day for a specific 
volume of US dollars they wish 


to purchase. The monetary 
authorities then decide on a 
minimum price, and provide 
dollars to all bidders who have 
offered the minimum price or 
above. 

The central bank’s main 
goals are to slow the depreda- 
tion of the bolivar and lower 
pressure on the country's 
international reserves, which 
have feTi™ sharply since the 
beginning of to e year. 

Since* May 2, the official 
value of the bolivar fell 9 per 
cent against the dollar, but, on 
the parallel market, the decline 
was more than 24 per cent 

Mr Chip Brown, an econo- 


mist at Morgan Stanley in New 
York City, said that tbe new 
system, If properly managed, 
should help to stabilise the 
bolivar and bring it closer to 
parity." 

Tbe previous system used a 
weighted average to determine 
the dollar’s price each day, and 
placed a strict limit on the 
resale margin for foreign 
exchange obtained from the 
central bank. There are no lim- 
its air resale margins under the 
new plan. 

Venezuela depends heavily 
on imported food and indus- 
trial inputs - and currency 
depreciation therefore feeds 


straight into cost-of-living 
increases. The bolivar’s devalu- 
ation alone is expected to grab 
inflation this year to 60 per 
cent or more, compared with 46 
per cent in 1993. 

Under the system just aban- 
doned, which was introduced 
on Mky 4, demand for dollars 
from the central bank was 
greater than what the bank 
was wfifing to supply. Foreign 
and domestic 
plained they wore 
get foreign exchanges 
pay for imports and i 
international- 
warned of shortages 
Dow of imparts slowed' -■-#$ 
. • ■ 



Foreign banks accept US curbs 


v-- ! - 


By George Graham 


European and Japanese banks appear to 
be ready to drop their opposition to con- 
troversial restrictions on foretgn-owned 
banks in US legislation designed to 
remove barriers stopping banks in the US 
from opening branches outside their home 


Interstate branching legislation has 
passed both booses of Congress, but tbe 
Senate version of the bill would re stri ct 
foreign banks from opening new branches 
in the US unless they operate through a 
separately incorporated subsidiary. 

The US treasury, the European Commis- 
sion and some House members have 


argued this would breach tbe p rincip le of 
national treatment by imposing more 
restrictions on foreign banks than on 
their US counterparts, and could rebound 
against US banks seeking to operate 
abroad. 

In Europe, for example, US banks may 
open a branch directly in all EXT countries 
without setting up a subsidiary. 

But most international banks appear to 
have concUuted that the practical conse- 
quences of the restrictions would be 
small, and they have not beat pressing 
their finance ministries to intervene 
actively in the dispute. 

Many banks have also decided they 
would rather undergo these limited 


restrictions than engage in an'-Afi-bst 
fight that could streng th en caHt- br-tte 
Senate for foreign bank branches', ttFJbe 
subjected to the reqtrirementedf 
insurance and of the Ctemmttf-'niP' 
vestment Act. This requires I 
a certain proportion of -their . 
deprived areas. . . 

Foreign i»nfa that wish tb, r 
branch network in the US have 
chosen to do so by ba y ing ai 
iary. 

Senate concern Is driven by 

that foreign banks haver been 7 

increase their market share In thevS 
because they do not bear toe. costs of 
deposit insurance and GL& compHance. 







1 





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This Survey will be an overview of Russia, providing a 
comprehensive analysis of the economic and politioal 
situation, together with in-depth comment on hey areas 
such as Russia’s Economy. Foreign Inv es t m e n t, Tirade, 
The Energy Sector, and Engfoserfng. 


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ir auctm 


I ' S curb; 


Companies asked 
to join China fight 


By Nancy Dunns 
ki Washington 

Human Rights' Watch, a 
worldwide organisation, has 
for the past five months been 
holding “quiet conversations” 
with dozens of multinational 
companies in the US, Europe 
and Asia with the aim of devel- 
oping a set of principles which 
they could voluntarily employ 
to improve human rights in 
China. 

The effort began in January 
as the US administration was 
waning Beijing it must m3 fro 
efforts to improve its human 
rights record or risk losing its 
Most Favoured Nation status. 
China mostly ignored the 
warning, and President Bill 
Clinton has unto June 8 to 
decide what action to take. 

Mr Warren Qjristopher, the 
US secretary of state, told the 
president on Monday China 
had complied with only same 
of the craxditHms, but he rec- 
ommended very KmifoH sanc- 
tions. 


Human Rights Watch’s Asia 
aim said there had been a “sig- 
nificant overall deterioration" 
of human rights in China 
where the government has 
“opted for a policy of conspicu- 
ous crackdown . . . and wide- 
ranging repressions". 

Mr Richard Dicker, associate 
counsel of Human Rights 
Watch, said: “It now appears 
likely that some approach to 
the corporate community to 
take voluntary measures win 
figure into the Clinton admin- 
istration’s MFN resolution 
package. The issue is how in a 
discreet low-key, effective way 
[companies] can use their pres- 
ence and lnflnmre for the bet 
torment of human rights, 
which is clearly in their 
long-term interest” 

Human Rights Watch has 
developed five proposed mea- 
sures: 

■ Prevention of the inadver- 
tent use of prison products or 
forced labour products . in their 
production process. 

■ Prohibition of mandatory 


UK business wants 
our man in Havana 


By Stephen Hdter, 

- i Latin America Editor 

*:i, The impr o v em ent in relations 

between Britain and the gov- 
> eminent of Fidel Castro indi- 

cates growing opportunities 
:% perceived by British business 

in Cuba. 

It follows the opening by the 
Cuban government to foreign 
investment as part of its des- 
perate search for hard enr- 
rency since the collapse of the 
^ Soviet Union, its main supplier 

^ of financial support. 

The growing contacts 
between the two g n ve r nn wits 
an reflected in die visit of a 
Cuban parfiamentary wrfwrfww, 
c including Mr Ricardo Alarcdat, 

often described as Mr Castro’s 
. number, two, to- London this 
week. Junior trade minister 
Patrick MrTnnghlfn |g due to 
become the first British minis- 
ter -to visit Cuba since at-kast . 
V the 1970s when he goes to 

Havana in September. 

The decision to send a minis- 
ter to Havana has not been 
taken lightly, since it is bound 
.. to incur same US displeasure. 

■ I! It is the latest manifestation of 

U1 the differences between Wash- 

ington and London over the 
Cuban question, following the 

strong British representations 
against US legislation that 
tightened the embargo on Cas- 
tro by making it toucher for 
the subsidiaries of US compa- 
nies to do business in the US. 
UK companies were forbidden 
to comply with this law. 

It shows that the foreign 
office has reached the condn- 


skm that Castro and his gov- 
ernment are likely to be 
around for some despite 
the country's severe economic 
difficulties- “A year ago there 
was a real (question over 
whether there would he a vio- 
lent upheaval,” said one Brit- 
ish official. “Now that seems 
less likely.” 

UK officials say the closer 
ties reflect a British interest in 

The British decision 
to send a minister 
on a visit to Cuba 
has hot been taken 
lightly, since it is 
bound to incur 
US displeasure 1 . 

a. peaceful transition in Cuba, 
which wfH be encouraged by 
development ~ of trade and 
Investment link*. There is 
also, they say, a long-standing 
i n teres t in the stability of the 
Caribbean in view id the loca- 
tion of British territories such 
as Hq 1 Cayman nearby. 

The shift also follows the 
stepping down as foreign 
office minister last year of Mr 
Tristan Garel-Jones, who was 
strongly opposed to moving 
closer to the Castro regime. 
His successor, Mr David 
Hoathcoat-Amory, is meeting 
Hr Alarctin this week. 

But the real driving force 
behind the move is the grow- 
ing interest by UK business in 
Cnba, a market of 11m people 


from which the US is excluded 
by the economic embargo. 
While there is some scepticism 
in Whitehall that Castro win 
ever allow hugely profitable 
Joint ventures, there has been 
enthusiastic support for closer 
ties from businesses attached 
to the Caribbean Trade Advi- 
sory Group (Caritag), which 
has led unofficial trade mis- 
sions to Havana. 

Mr David Jessop, Caritag 
director, said agreements cur- 
rently being negotiated by UK 
companies involved significant 
sums in the agriculture, tour- 
ism, mining and other sectors. 
He declined to be more specific 
since the decision to invest 
usually involved mirfw board 
deddons because of the diffi- 
culties of the US embargo. 

. Howevaymost involved say 
negotiations are not easy - the 
rules of the game are some- 
thnes changed by the govem- 
raent and each joint venture 
must be referred to the council 
of ministers for permission. 

UK companies have been 
slower than their M imitoy jMrtu 
elsewhere in exploring the 
market The Dutch bank. ING, 
has established a joint venture 
with the Cuban group, Ace- . 
mex, to open a bank aimed at 
financing Cuban trade. The 
Netherlands Caribbean Bank, 
to be based in Curacao, will 
soon open a representative 
office in Havana -the first for- 
eign bank representation in 
the country. ING officials, say 
they hope business will be 
sufficient to justify a branch 
there. 


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s WORLD TRADE 


US test for a ‘dead fish’ theory 

Uruguay Round ratification brings Congress another ‘crisis’, writes Nancy Dunne 


political indoctrination ses- 
sions an company premises. 

■ Adoption of an employment 
policy which bars discrimina- 
tion on the basis of p oliti cal 
beliefs. 

■ Protection of employees’ 
rights to free expression 

association 

■ Conveying concerns about 
human rights violations to rel- 
evant authorities. 

Many businesses have been 
cool to proposals for a code like 
the Sullivan Principles which 
were employed in South 
Africa. 

Mr Cal Cohen, one of the 
leading Washington lobbyists 
for renewal of MFN, said in the 
case of Sooth Africa, the effort 
was a global one; in the case of 
China, only the US is inter- 
ested in human rights. 

“If we as U government ask 
companies to convey political 
sentiments, we w£D be seen as i 
government representatives 
rather than business. We 
might then accomplish less,” 
he said. 


GATT 


As that 
unschooled 
basebalter Yogi 
Berra might 
have said, it 
was d&& ou all 
over again 
when last week 


milJ 


Tom Foley 
warned that 
Congress faced 
“a very real crisis” over ratifi- 
cation of the Uruguay Round 
fnteirn a tyfflai trade ’deaL 

Nine months ago ft was the 
North American Free Trade 
Agreement that was in jeop- 
ardy. Then President um (rHn - 
ton's arfminigh-aftifl n put allitS 

efforts into securing Nafta pas- 
sage; im pftflfifftimt presidential 
speeches, a vice-presidential 
debate, and a frantic round of 
politi c al horse-trading fn 
a stnnning victory two months 
later. 

Although President Clinton’s 
power to pull off more victories 
ought not be under-estimated, 
passage thin year of the imple- 
menting legislation for the 
Gatt agreement now seems 
almost as improbable as did 
the Nafta victory last year. 
Obstacles to passage seen to 
be mounting Instead of 

shrinki ng 

Mr Foley and bis colleagues 
see as the chief impediment 
the need to raise $10bn-$14hn 
over the next five years and 
perhaps as much as $40bn over 
the next decade to compensate 
for the tariff revenue lost 
under the Uruguay Round 
deaL Budget rules require this 
to be done either by pro- 
gramme cuts or taxes. 

The alternative is a congres- 
sional waiver to be grained on 
the grounds that the US would 
raise more revenue through 
increased trade than it would 
lose by the tariff cuts. A 



Foley; foresees problems in making up lost tariff revenues 


waiver must gamer GO votes in 
the Senate and a majority in 
the House; that alone would be 
a formidable but not impossi- 
ble task 

“If we do a waiver, the press 
will instantly say the Clinton 
administration Is ahaniinning 
its focus cm fiscal discipline. 
The long bond will go up 
another % of a point,” an 
administration official said. 
Neither Republicans nor Demo- 


crats have been able to agree 
among themselves about 
whether or how to cut pro- 
grammes or raise fees. So the 
administration sent rvin greas a 
list of possible actions which 
included a 4 per cent revenue 
tax on radio and television sta- 
tions, a SSAbn cut in farm pro- 
grammes, a $600m gambling 
tax, a $500m tax on parking 
space fringe benefits and 
$200m for taxing chemicals 


under dean air rules, ft is, a 
long-time Washington lawyer 
said, “a parade of horribles, 
designed to get everyone mad” 
- or in the waiver camp. 

Passage of the Uruguay 
Round deal faces other formi- 
dable obstacles. Business has 
been distracted by the need to 
lobby over renewal of China’s 
Most Favoured Nation trading 
status. Lobbyists complain 
about chaos in the administra- 
tion’s policy-making and lack 
of vision; the president has yet 
to announce if or what kind of 
“fast track” negotiating 
authority he win seek. 

There are worries that the 
influential Congressman Dan 

Rostenkowski, chairman of the 
House ways and means com- 
mittee, will be indicted for 
c riminal Of funds 

have to step aside at a crucial 
time for passage of trade legis- 
lation, health insurance and 
welfare reform. 

There is strong Republican 
opposition to Gaft’s subsidies 
agreement that legiti mi ses gov- 
ernment aid for research and 
development, regional develop- 
ment and environmental com- 
pliance. Angriest of all is Miss- 
ouri Senator John Danforth, 
who represents the aircraft 
manufacturer McDonnell 
Douglas, which has been hurt 
by subsidies to Airbus, the 
European aircraft consortium. 
He says he will oppose the Gatt 

dnnl imlftgK the nrimlnigtratiptt 
organises a side agreement, 
signed by the EU, Canada and 
Japan, which wonld limit 
subsidies. 

The round's most committed 
foes, led by Mr Ralph Nader, 
the consumer advocate, argue 
that the new World Trade 
Organisation, the more perma- 
nent successor to Gatt, threat- 
ens US sovereignty on trade 
matters. That charge cuts 


across the political spectrum 
and appeals to arch-conserva- 
tives such as Congressman 
Newt Gingrich, the House 
minority whip. 

A ruling this week against 
the US by a Gatt dispute settle- 
ment panel gives the opposi- 
tion new ammunition. The 
decision found that US actions 
to protect dolphins under US 
Marine Mammal Protection 
Act are inconsistent with Gatt 
“It was helpful for Gatt to 
reveal its hand u gaip jiqfl make 
vividly dear what is In store 
for US environmental con- 
sumer laws,” said Ms Lori Wal- 
lach of Mr Nader’s Public Citi- 
zen. “Many laws will be found 
Gatt-fllegal and then Congress 
must either eliminate the laws 
or face perpetual trade 
sanctions." 

Mr Ranter's response to the 
panel decision was to complain 
about Gatt secrecy and 
demand that all the relevant 
documents in the case be made 
public. 

Ms Wallach issued a derisive 
response about “Gatt spin con- 
trol” which concluded that 
“releasing the documents now 
is too late to affect the legal 
and political reality of the Gatt 
ruling”. 

Partly out oT fear that oppo- 
sition will just harden if there 
is a delay, the administration 
is trying to repeat Its Nafta 
triumph. 

No cabinet member lets a 
speech go by without plugging 
the Gatt deaL 

Ms Wallach sees as con- 
firmation of her “dead fish” 
theory. “If you have a dead 
fish, you want to get it out erf 
the sun as soon as possible 
before ft begins to stink,” she 
argues. 

“This Gatt deal is the biggest 
dead fish to hit Congress in a 
long time." 


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6 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 



ifre things you earn 


neriK 




Charles N Coppi 
Sr. VP— Engineering 
& Technology 
Gulfstream Aerospace 


impart of that tk led 

| he was ha the^c^^^^|p^> : : ;v ^^^0.:^:;: 

• specifically designed for business use. 

'• ' - ’' : V: . . • ... . 

•'•••».'•• ' "•'• • .. 

“IFyou fold me back then we’d be designir^ sptoft- i. 

thing like the Gulfstream V, I wouldn’t have bhll^e^ ‘ 
you. New York to Tokyo at Mach .80? It was just a 
dream. But in. 1995, when the Gulfstream V flies, it 
will be a reality.” 


the fifth time Charlie has guided the launch of a new standard 
in business aircraft. And while it will offer the ultimate-in- 
state-of-the-art. technology, it is built around a proven concept. 

“Some of these new planes seem pre-occupied with bells and 
whistles at the expense of function. Simplicity is a virtue. 

It pays dividends in reliability, safety, extra pilot margins 
and performance.” 


and 


are not things you get 


from a brochure.' 


Charlie just shrugs when someone suggests he’s an 
aviation legend. “I’m hardly the legend. 

Gulfs treams are the legend.” 



GuMstream 

Aerospace 


Contact: Robert Cooper, Executive V.R 

(912) 965-5555 Fax (912) 965-3084 


Setting the Standards 
Others Follow. 




I 




FINANCIAL TIMES WEDNESDAY MAY 1994 


Compromise aimed at averting Antarctic ba n 

Japan offers limited 

sanctuary for whales 


Japan, faced with a possible 
ban on whaling in Its tradi- 
tional South' Sea hunting 
grounds, has countered with a 
compromise proposal to estab- 
lish a whale sanctuary in 
Part of the Antarctic Ocean, 
Reuter reports from Puerto 
Vallarta. 

Japan presented Its plan to 
the. International Whaling 
Commission's annual confer- 
ence held in Puerto Vallarta, 
Mexico, as an alternative to a 
French proposal to create a no- 
hunting zone covering all of 
Antarctica and stretching half- 
way to the equator. 

The French proposal needs 
the support, of three-quarters of 
the approximately 40 commis- 
sion member nations attending 
the five-day meeting if it is to 
be adopted. » 

Delegates and observers pre- 
dicted the vote, expected later 
in the week, would be dose. 

The Japanese plan would 
eventually allow whalers to 
capture up to 4,000 mlnke 
whales In the seas outside the 
sanctuary once the commis- 
sion establishes a scheme to 
regulate and monitor the 
hunt 


Mlnke whales have survived 
in greater numbers than other 
whales because, although they 
are larger than elephants, they 
are smaller than the great 
whales and were consequently 
hunted less in previous 
decades. 

The whaling commission 
estimates there are 760,000 
mlnke whales, but it has 
imposed a moratorium on com- 
mercial whaling for the past 
eight years pending the pas- 
sage of the so-called Revised 
Management Flan. 

Despite the ban, Japanese 
whalers are permitted by the 
commission to capture up to 
330 minke whales in the Ant. 
arctic under a 13-year research 
progra mme. The whale meat 
eventually enri$ up in Japanese 
markets, where it fetches $50 a 
pound. 

Norway, which protested 
against the moratorium, 
resumed commercial whaling 
last year and more than 
200 whales. 

The current situation frus- 
trates environmental groups 
and other opponents of the 
whale hunt as well as whalers, 
who accuse the whaling com- 


mission Of taking Up animal 
rights and neglecting its origi- 
nal mandate to regulate what 
mg. 

"Our proposal provides a set 
entific basis for a sanctuary," 
said Mr Kazoo Khwm head of 
Japan's delegation to the com- 
mission. 

Supporters of the Preach 
plan to create a giant whale 
sanctuary to. the Antarctic said 
on Monday that they had lined 
up nearly all the votes they 
needed. 

"We’re pretty sure of 18 or 19 
votes, and another tour or five 
look good,” said Ms Cassandra 
Phillips, an Antarctic specialist 
with th e envi ronmental organi- 
sation, WWF World Wide Fund 
for Nature. "On the whole, 
we're pretty optimistic.” 

Ms Phillips said around 21 
votes would be needed to over- 
come the votes of seven IWC 
members expected to oppose 
the proposal. 

Environmental groups 
accuse Japan of buying the 
votes of its whaling commis- 
sion allies, mostly poor Carib- 
bean and South Pacific states 
with no whaling industries, 
with aid. 


NEWS; INTERNATIONAL 

Cotton supply crisis alarms Beijing 

Tony Walker reports on how the boll worm threatens thousands of jobs 


C hina’s .political leaders are being 
obliged to take seriously a cot- 
ton supply crisis that has forced 
a slowdown In production or closure of 
dozens of textile mills and is threaten- 
ing the livelihood of thousands of 
employees in the textile sector -one of 
the country’s biggest employers. 

Such is the concern that Mr Zhu 
Rnngfo china's senior vice premier In 
charge of the economy, in meetings 
with provincial offfcfalg recently Identi- 
fied countering the disastrous drop In 
cotton production as a main priority for 
the government - 
People’s Daily, the Communist party 
newspaper, reported this month that 
the crisis was particularly severe In 
central Henan province, which is both a 
big producer and consumer of cotton. 
Disorderly markets are affecting 
the tprfflp sector throughout the coun- 
try. 

China's legal daily newspaper yester- 
day iriflirttflflH arwithar serious prohlem 
facing the textile industry. It quoted a 
gove rnment survey which showed that 
to 220 large state cotton mills, the qual- 
ity of cotton supplied had dropped 
dramatically over the past year or 
so. 

"That to such a short period of time, 
the quality of cotton should drop to 
such a degree is unprecedented,” the 
paper said. 

China’s experiment with pilot free 
markets in two provinces and the 
decentralisation of cotton marketing 
nationwide - cotton Is the one commod- 
ity whose supply and price Is still con- 


trolled- appears to have felled, and the 
authorities have moved to reassert cai- 
trai control 

fix Wuhan in central Hubei province, 
the city's No 1 Cotton Mai , one of Chi- 
na’s most modem mills, is beset by 
chronic supply problems. Kb manager, 
Mr Zhang Bao Xin, says he Is never 
certain from one week to the next 
whether it will be possible to maintain 
production. 

to Sichuan province to the south-west 
of the country, one third of cotton mills 
have been closed because of lack of 
simply, according to newspaper reports. 
This touches the issue of labour unrest 
In thfi provinces, which is als o of con- 
cern to Mr Zhu. 

Con sinners are facing difficulties on 
two fronts; first, domestic production Is 
flagging because of cotton disease In its 
northern producing .areas, ami second, 

prices are high intonmtionally 

The price has rocketed from some 52 
cents a pound last year to the present 
price of about 80 cents a pound. Poor 
crops in India, Pakistan China are 
forcing the price up. 

People's Dally, under a headline 
"Where on earth has the cotton gone?” 
reported a widespread i«»faign into the 
open market of cotton earmarked tor 
teitiia nrfiic f mm state warehouses. 

The newspaper did not allege directly 
that corruption among state officials 
had caused supply problems, but hard- 
pressed textile factory managers are in 
no doubt that unscrupulous nfflriak are 
profiting personally from the worsening 
shortage. 


Mr Zhang of Che Wuhan No 1 Cotton 
Mill called for a freeing of the cotton 
nwrVpf to enable “fair competition” for 
scarce supplies. He described his deal- 
ings with the provincial supply depot 
which operates under the Ministry of 
Internal Trade as a source of “daily 
frustration and daily anger”. 

He said officials of the local "Cotton 

The problems can be 
traced to the slide in 
land planted to 
cotton. In 1993, about 
5m hectares were 
planted compared 
with 6.5m hectares 
two years earlier. 

and Jute Corporation” were “overlords" 
of Che cotton trade. 

The problems can be traced most 
immediately to the slide In land planted 
to cotton, to 1993, about 5m hectares 
were planted, compared with &5m hect- 
ares two years earlier. 

That to turn had a big impact on 
production, with 3.7m tonnes harvested 
last year, compared with 5.6m tmwwi fa 
1991. 

Infestation - especially in the north- 
ern regions which account for about 75 
per cent of production -of the cotton 
boll worm (no relation to the weevil) 


has been one of the main causes of lost 
cotton acreage. 

Farmers have been turning to grain 
and soya beans to avoid the risk of 
losing an to this worm, which is report- 
oily beyond the control of pesticides. 

Estimates of land sown to cotton this 
year are around the same as 1993; 
although Tn^iang in China's tor west is 
continuing to extend areas under cotton 
by about 17 per cent a year. Xinjiang 
expects to plant about 670,000 hectares 
this year. 

Chinese officials have until now been 
loath to admit the extent of the crisis 
and have not been beyond inflating pro- 
duction figures. Western agricultural 
attaches say attempts to paint a “rosy 
picture” of cotton production reflect 
concerns that the extent of the debacle 
might serve to add further to pressures 
on international cotton prices. 

The crisis is certain to be. fuelling 
discussion in Beijing about alternative 
ways of bringing order to the market 
and ensuring adequate supplies to the 
textile sector, one of China's main 
exporters. 

In the longer term the establishment 
of a genuine free market would seen to 
be the best solution, but to the mean- 
time, and with demand far outstripping 
supply, the authorities need to find 
ways of encouraging tenners to sow 
greater areas. 

If China is to maintain its output of 
textiles, it would seem, to have 
little choice but to begin increasing 
imports. 

See Editorial Page feature 


Japanese bank 
governor sees 



By Gerard Baker In Tokyo. 


Mr Yasnshi Mieno, governor of 
the Bank of Japan, said yester- 
day several negative factors 
threatened to impede the coun- 
try’s economic recovery. 

Speaking to the house of rep- 
resentatives' budget commit- 
tee, Mr Mieno cited trade fric- 
tions with the US, the 
accompanying rise in the value 
of the yen, corporate balance 
sheet adjustment and the pace 
of labour-shedding as factors 
that might weaken the upturn. 

But the governor said the 
foundations for economic 
recovery were being laid, 
largely as a result of stock 
adjustment, company restruct- 
uring and the effects of past 
fiscal and monetary policy. 

The strong performance in 
certain overseas markets, in 
particular the US, gave added 
grounds for optimism. He said 
the central bank would con- 
tinue to monitor economic con- 
ditions closely to determine 
whether the small glimmers of 
recovery appeared to be 
spreading. 



Mieno: foundations laM 


barriers 



The remarks did nothing to 
dispel growing market specular 
tion that another cut in official 
interest rates is in the offing. 
Ih the last fortnight, the hanlr 
has allowed key money market 
rates to fell Overnight interest 
rates have dropped by one fifth 
of a percentage point and now 
stand at a fraction over 2 per 
cent 

But the bank has so for 
baulked at a cut in the more 
symbolically imp o rtant official 
discount rate from its current 
all-time low of L75 per cent 

Such a move would send a 
much clearer signal of a looser 
monetary policy to financial 
markets, something the bank 
has been anxious to avoid, opt- 
ing instead for a policy of eas- 
ing by stealth. 

Many analysts believe the 
markets have now discounted 
a cut in official interest rates, 
and this has helped relieve 
same of the upward pressure 
on the yen. 

If the bank fails to cut rates 
as expected, the pressure on 
the Japanese currency is likely 
to revive, threatening again to 
push it through the Y100 to the 
dollar level 


South Yemenis 
vow to resist 


By Brfc Watkins In Aden 

Political leaders in south 
Yemen yesterday acknowl- 
edged that north Yemeni 
forces had made military 
gains, but vowed to resist fur- 
ther encroachments by the 
government of General All 
Abdullah Saleh. 

They said their forces were 
bring consolidated in prepara- 
tion for a counter offensive 
against Gen Saleh's regime. 

Mr All Salem al-Beidb, presi- 
dent of the newly announced 
Democratic Republic of Yemen, 
conceded on Monday that 
northern farces had captured 
the strategic town of Ataq, to 
Shabwa province 300km north 
east of Aden. 

But he said that irregular 
forces in the region could be 
expected to contain any fur- 
ther northern, advances from 
the town. That view was sup- 
ported by Mr Abdul Rahman 
All al-Jlfri, vice-president of 
the new republic. Mr Jlfti. who 
represents Shabwa to the five- 
man presidential council, raid 
that guerrilla forces were being 
mobilised and would start a 
counter-offensive within days. 

Both iwwiprw flatly rejected 
the Idea that Gen Saleh’s 


forces would be able to take 
Aden, stronghold of the south. 
Mr Bdrih claimed on Monday 
that southern forces were still 
in control of al-Anad, a key 
defensive position 60km to the 
noth of Aden. AtAnad - the 
name means “stubborn" - has 
coon intensive fi ghting for the 
past week, with both northern 
and southern leaders claiming 
victory. „ ^ 

Southern officers said they 
had staged a tactical with- 
drawal from al-Anad an Sun- 
day, luring northern forces 
from the nearby mountains 
and shelling them with heavy 
artillery as they entered the 
500 sq km camp. Journalists 
who visited the battle scene 
yesterday confirmed - that 
northern forces had still not 
secured al-Anad and that fight- 
ing continued around it 
Other southern leaders said 
that mistrust of the Yemen 
Socialist party, which ruled the 
south for 23 years after inde- 
pendence from Britain, had 
prevented formation of a 
iimW front against the north. 
This however, had changed in 
the past week with reassur- 
ances from the socialists about 
power-sharing and formation ; 
of a coalition government 


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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


NEWS: INTERNATIONAL 


Mandela pleases business 


By Patti Wakime&r 
in Cape Town 

Such has been the revolution 
in the economic rhetoric of the 
African National Congress that 
President Nelson Mandela 
might have drawn yesterday's 
state of the nation address to 
the multi-racial parliament 
from a textbook on financial 
and fiscal orthodoxy. 

It has «y»»ie more likely, how- 
ever, from the pen of finance 
Minister Derek Keys, source of 
all orthodoxy in the previous 
National party government, 
and now trusted adviser to Mr 

Gone are the days when 
ANC leaders sent markets into 
hysterics with comments about 
repudiating' debt or nationalis- 
ing industry. In the words of 
one leading businessman, 
“they sound more and more 
Hire Tories aQ the time”. 

Given that the speech seems 
to have been aminri primarily 
at calming white fears and 
reassuring overseas investors 
- far more than at the domes- 
tic constituency, which was 
promised little of concrete sub- 


stance - it is scarcely surpris- 
ing that the business commu- 
nity reacted well 

The credibility and cost of 
the government's Reconstruc- 
tion and Development Pro- 
gramme can only be tested 
over time. But It is hard to 
fault its intentions, as outlined 
in yesterday's speech: over the 
five year span of the RDP, gov- 
ernment consumption expendi- 
ture will be held at constant 
levels in real terms and the 
budget deficit will continue to 
de cline from last year’s levels 
of 6^ per cent of gross domes- 
tic product; some R2.5bn 
(£450M) will be dedicated to the 
RDP in the first budget, to be 
unveiled on June 22, but this 
will come entirely from ration- 
alising and redirecting govern- 
ment expenditure, not from 
additional borrowing or a rise 
in general taxation. Though 
there could be a temporary rise 
in taxation in later years, Mr 
M an d ei a committed to 

avoid a “permanently higher 
general level of taxation”. 

The catalogue of prudent 
commitments is long. Mone- 
tary policy will remain on its 


recent steady course (and 
Reserve Bank Governor Chris 
Stals will remain in his post to 
ensure that it does); the battle 
to cut inflation will continue; 
the private sector will play a 
central role in generating 
growth and government will 
create an investment climate 
conducive to new investment 
No uno knows whether 
commitments will survive the 
pressure to deliver on the 
RDP*s promises, which include 
building lm new houses over 
the next five years, and supply- 
ing electricity to 2.5m more 
among a host of other 
service improvements. But Mr 
Mandela’s approach appears to 
be both c a utious and gradual: 
saving R2.5bn on the first 
year’s budget will be difficult 
but probably not impossible, 
and is £ar more realistic th an 
earlier estimates. Minis ter 
Keys says it represents 3 per 
cent of the budget, which can 
be covered by the current attri- 
tion rate In the civil service. 

Further productivity 
improvements in the dvil ser- 
vice to fund a government 
commitment rising to RlObn in 


the fifth year of the pro- 
gramme (a cumulative commit- 
ment of some R37bn over five 
years) is likely to prove feu- 
more difficult. Mr Mandela 
promised to protect white dvfi 
servants’ jobs while at the 
same time adv ancing blacks 
through the service and the 
cost of nine new provincial 
bureaucracies will further bur- 
den central government Fur- 
thermore, ANC ministers seem 
to have unrealistic expecta- 
tions of the speed with which 
the government’s efficiency 
can be improved. 

But Mr Keys seems content 
to let the new government 
learn its own lessons about fea- 
sibility. He suggested yester- 
day that Minister without Port- 
folio Jay Naidoo, charged with 
iTn plcmwnting the RDP, Would 
find it nearly impossible to 
spend the R2£bn allocated in 
the forthcoming budget, and 
thfo would temper demands for 
further funds in subsequent 
years. 

Ultimately, Mr Mandela may 
face the prospect of breaking 
promises to his people, or bust- 
ing through, deficit barriers. 



UN finds Rwandan haemorrhage unstaunchable 

Leslie Crawford on few hopes of an end to the massacre of civilians on the day UN envoy flies into Kigali 


A special UN envoy was flown 
into the eye of the Rwandan 
storm yesterday with a mis- 
sion to broker a ceasefire between 
government and rebel troops that 
could bring an end to the indiscrimi- 
nate massacre of civilians in 
Rwanda. 

Tutsi rebels and the Hutu army 
continued to fight for control of the 
capital, Kigali, as Mr Iqbal Riza, the 
UN envoy, tried to reach a central 
hotel for talks with representatives 
of the Rwandan government. A truce 
agreed between rebels and the army 
fix- the duration of Mr Riza’s visit 
collapsed on Monday. 

However, Reuter reported out of 
Ki g al i yesterday afternoon that UN 
nffimals had said bombardments of 
the centre of the city halted just 
before Mr Riza arrived- But sporadic 
mortar bomb blasts and clashes 
between rebel and government 
troops shook other areas of the capi- 
tal 

Rwandan Patriotic Front (RPF) 
guerrillas control the airport and 
outskirts of the capital, while the 


city centre is held by the army or 
Hutu militias. 

Mr Riza is trying to negotiate con- 
ditions under which a 5,500-strong 
UN force would be allowed to enter 
Rwanda to protect civilians and 

deliver h umanitarian aid. 

The ethnic bloodbath in Rwanda, 
sparked by President Juvenal Hab- 
yarimana’s death in an air crash 
seven weeks ago, has the 

lives of half a million people, most of 
them members of the minority Tutsi 
tribe, according to aid agencies. 
More than lm people - an eighth of 
the population - are estimated to be 
displaced and in need of food, medi- 
cal aid, and protection from gangs of 
murderers who still roam the coun- 
tryside. 

Tens of thousands of decomposing 
corpses from Rwanda’s killing fields 
have been washed into Victo- 
ria. Authorities in neighbouring 
Uganda fear the outbreak of disease 
in the districts bordering the lake. 
They say they have buried more 
than 27,000 corpses in mass graves. 

The Rwandan mission ordered by 


the UN Security Council last week 
faces several immediate problems. 
No country has yet volunteered 
troops, though Italy's defence minis - 
ter said on Monday his country 
would be willing to do so. 

The UN has not spelled out how it 
is to secure safe havens for civilians 
and deliver hiimanitarian assistance 
in the midst of the dvil war. With- 
out a ceasefire and negotiations to 
halt the slaughter, many believe the 
UN’s presence in Rwanda would be 
futile. 

Having withdrawn its peace-keep- 
ers when the butchery began seven 
weeks ago, the UN faces charges of 
providing too little, too late. 

In the eyes of the Tutsi-led rebel 
movement, the UN’s reputation has 
been tarnished by its decision to 
abandon civilian Tutsis to their fate. 
At the same tune, government forces 
accuse the UN of allowing the rebels 
to shelter behind UN positions as 
they advance with their assault on 
the capital Ibis may explain why 
the UN garrison in Kigali came 
u n der fire this week. 


Sandwiched between the warring 
parties, the UN forces in Rwanda, 
like their ill-fated colleagues in 
Somalia, risk losing the ir neutrality, 
and therefore their effectiveness. 

Both the Rwandan army and the 
RPF have said they would fire upon 
UN troops if they got in the way of 
the fighting. 

Austr alia was yesterday the latest 
country to decline a UN request for 
specialist troops, incl uding engi- 
neers, si gnaller s and medical teams, 
saying it would not send soldiers to 
Rwanda until their safety could be 
assured. 

In Nairobi, Mr Theogen Ruva- 
smgwa, the secretary-general erf the 
RPF, cast doubt on the UN’s ability 
to alleviate the suffering in Rwanda. 

“The UN’s first response was to 
pack their bags and go. The latest 
UN response has come too late,” he 
said, "hie UN will not be able to 
restore law and order in Rwanda. 
That is the task of the RPF.” 

Mr Ruvasragwa pledged to con- 
tinue fi ghting until “the machinery 
responsible for the genocide in 


Rwanda is totally crippled”. The tar- 
diness of the UN response, and 
doubts about the e ffe ct i veness of a 
military intervention, have 
prompted certain African nations to 
mediate, a political solution to the 
Rwandan conflict. 

Tanzania, which is sheltering 
more than 300,000 Rwandan refu- 
gees, has twice failed to bring the 
warring sides together in the past 
month. Plans to hold a summit of 
regional heads of state next week 
have also been postponed, according 
to Mr Shani Lweno of the Tanzanian 
foreign ministry. 

"We are holding more consulta- 
tions; there are no easy answers to 
the Rwandan conflict," Mr Lweno 
said yesterday. 

Diplomats in the region, however, 
believe the RPF is unlikely to agree 
to a new peace accord while it 
retains the military advantage. 

But a rebel victory would not nec- 
essarily allow it to govern. The Tut- 
si-led RPF would have difficulty 
imposing its rule on the majority 
Hutu population in the wake of the 


slaughter of hundreds of thousands 
of Tutsi civilians by Hutu militias. 
Even Hutus who have not been 
involved in the tribal bloodbath fear 
Tutsi retaliation. 

Although the Rwandan conflict 
has the potential to destabilise 

wri ghhmring Rumnrii, Tanzania and 

Uganda, all of which have popula- 
tions of ethnic Hutus and Tutsis, 
regional governments have ruled out 
an African military intervention to 
out the conflict 

Mark Suzman adds from Johan- 
nesburg: In his state of the nation 
address yesterday South Africa’s 
President Nelson Mandela men- 
tioned Rwanda, as well as Angola 
and Mozambique, as countries where 
South African asmatanen might help 
the peace process. 

However defence and foreign 
affairs officials are known to be 
strongly against military involve- 
ment in the onnfHrt and a govern- 
ment press secretary, who last week 
implied that South Africa was on the 
verge of sending troops to Rwanda, 
was publicly reprimanded. 


Stampede 
kills 200 
pilgrims 

About 200 Moslems have died 
In a stampede during the 
annual baj pilgrimage to 
Mecca in Saudi Arabia, Renter 
reports from Doha!. 

The deaths occurred on Mon- 
day (taring a ritual in which 
pilgrims go to Mina, 15km 
from Mecca, to throw stones at 
three piles of rocks which 
symbolise the devil 
It was not clear what triggered 
the stampede. Most victims 
were said to be from Pakistan, 
Afghanistan or Africa. 

The official Saudi press 
agency quoted the Ministry of 
Health as saying 829 pilgrims 
had died during the hai of old 
age, heart ailments and other 
causes, Including an unspecif- 
ied number killed by "intense 
crowdi ng" , 

This year's haj has also seen 
confrontations between the 
Saudi authorities, who ban all 
political activity at the pil- 
grimage, and Iranians deter- 
mined to hold political rallies. 



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FINANCIAL TIMES WEDNESDAY MAY 25 1994 

PEOPLE 


Leathes joins board in Warburg reshuffle 


Simon. Leathes, 48, chtrf 
financial officer of S G War- 
bWR has joined toe board of 
™ S G Warburg Group.. His 
Promotion is the latest sign 

that the next g e neration of 

managers is moving into place 
at Britain's fewest , merchant 

pan King group. 

liftfl t teg, a chartered accoun- 
tant who joined Warburg in 
1%0 from Coopers & Lybrand, 
effectively replaces Michael 
Gore. 56. who had been finance 
director since the fa rm^i j ^ of 
the group in 1966. Gore, , who 


r emain s a group vice chair- 
man, h a nd ed over most of his 
financial responsibilities to 
bathe s just over a year ago 
when , he moved to Tokyo to 
bead the group’s Asia/Pacific 
business. 

A lthough Sir David Schoky, 
58, c onti nues as chairman of 
the S G Warburg Group, sev- 
eral of the senior figures 
involved in the 1986 merger of 
Mercury Securities, Akroyd & 
Smtlhers, Rowe & Pitman and 
Mullens & Co, have retired. 

Beter Stormonth Darling, SI, 


who headed the Mercury Asset 
Management business for 
many years, retired last year 
and banded over to Hugh Stev- 
enson, 5L Next ™n"»h. Peter 
WUmot-SItwell, 59, former 
senior partner of Rowe & Pit- 
man, retires as «h*imnm of s 
G Warburg Securities and a 
vice chairman of the group. 

He wifi remain a non-execu- 
tive director but hands over 
. the chairmanship of S G War- 
burg Securities to Nicholas 

Verey, 51. the deputy chair- 
man. Verey, whose cousin 


David heads Lazard Brothers, 
is a former Rowe. A Pitman 
partner. 

'Meanwhile, Dutchman Her- 
man van dm 1 Wyck^SO, is hand- 
ing over lie chairmanship of S 
G Warburg & Cp, the merchant 
bank, to Derek Higgs, 50, the 
deputy chairman. Van der 
Wyck remains a vice c ha i rm an 
of the group and becomes 
rhnfr-man of S G WarbUTg 
International, a newly-formed 
company which will concen- 
trate on foe development of foe 
group's International business. 


Why Rogerson 
wifi need 
more energy 
at British Gas 

Philip Rogerson, finance 
director at British Gas, was 
yesterday given strategic 
responsibility for British Gas 
TransCa, the new corporate 
entity into which the tamspor- 
tatkm and storage division of 
the company has been pl a ce d 

His appointment Is the first 
of a number of such moves 
which will result in British 
Gas executive directors hafng 
given responsibility for a port- 
folio of operations. 

The moves are part of a 
wide-ranging restr u ct u r in g of 
British Gas in prep ara tion for 
the phased introduction of 
domestic competition from 
1996.' 

Rogerson, who was brought 
into the company in 1992 from 
1CI, said he welcomed “direct 
involvement” in the opera- 
tional side of the business. He 
hoped his new role would 
allow him to bring greater 
“financial discipline to com- 
mercial decisions". 

Harry Mouliop will ramtHine 
as managing director of Tran- 
sCo, with day-today responsi- 
bility for its operations, while 
Rogerson concentrates on. stra- 
tegic issues. 

Rogerson described TransCo 
as the “backbone" of British 
Gas operations, and the core of 
its business profitability. There 
was no linkage between his 
appointment recent mar- 
ket rumours that British Gas is 
considering divesting the gas 
trading end div isions, he 

Rogerson will continue with 
his current financial respansi- 
bilifies until a successor can be 
named, probably within a “few 
months”. 


■ Michel Urbain ha s been 
appointed president dtrecteur 
gfiaflral of Cogete x-Sote ia. part 
of COGRTAOLDS TEXTILES. 

■ Lawrence Jackson, md of 
VOLEX Wiring Systems, has 
been appointed to the group 
board. 

■ WrharH Mwhm Tnm Wi 

appointed md of Sky Sites, part 
of AVENIR HAVAS Media: 

be moves from Mflla & Alton 

■ Charles Ryder, group md 


appointed to the board ot 
CLAREMONT GARMENTS 
(HOLDINGS). 

■ Mich a el Ward, former group 
finance director of ELP. Buhner 
Ho ldi n gs, has been appointed 
finance dire ctor of LLOYDS 
CHEMIS TS 

■ George Plant, chief 
executive of BARDON 
Roadstooe, has been appointed 
to the group board. 

■ John McCann, formerly 
group vice-president of The 
Crane Company, has been 
a ppointed ceo of STAVELE7 
INDUSTRIES’ weighing & 
systems group, based in 
Connecticut 


Sweeney looking to 
raise BBA’s profile 


Being the public fa ce ot British 
banks might be th ou ght an 
unattractive task, given the 
degree of opprobrium the 
industry now attracts. Yet Tim 
Sweeney says he was keen to 
become director general of the 
British Baidals’ Association. 

Sweeney, a 49-year-old career 

Han lr of 1Zn gland mwi mill 

take over from Lord Inchyra, 
the current director general, 
who retires at the mid of Sep- 
tember after six years. He says 
that he has yet to decide how 
to develop the association. 

Providing a stranger public 
lobbying voice for banks will 
be an important part of his 
takk, since some BBA member 
banks have looked enviously at 
the comparatively high public 
profile achieved by the Build- 
ing SnrfjiHpg Association. 

The BBA was tanned in 1919 
as a forum for the banks in the 
august forum of the Committee 
of London and Scottish Bank- 


ers to talk to their provincial 
counterparts; it became the 
main UK hanking body w he n 
- the fTT-RR disappeared in 1991- 

Lord Inchyra oversaw that 
reform, and the abolition of 
two-tier membership two years 
ago to allow foreign banks par- 
ity with the UK ones. "The 
interest and loyalty of same of 
the foreign haiika was starting 
to wear a bit thin,” says 
Inchyra. 

Rrmnfng the BBA involves 
an assortment of duties, from 
carrying out research and lob- 
bying for its 320 members, to 
providing a voice for British 
banks. The latter role has 
g r own in i m p o r tance as criti- 
cism of hanks intensified. 

Sweeney, who is currently 
responsible for deploying and 
developing the Bank’s gradu- 
ate staff after spells in banking 
supervision and in money mar- 
kets, says he feels “the voice of 
hanking- deserves to be heard”. 


Gurr’s taskforce of one sets sail 



What does life hold in store 
for a man Who stops being 
chief executive of a Training 
and Enterprise Council? He 
could always become chief 
ex e c utive of a set of islands. 

Indeed. Andrew Gurr, «*lrf 
executive of the North and 
mid-Cheshire Tec, is to take up 
fab new poet as chief executiv- 
eof the Falkland Islands gov- 
ernment, in Port Stanley In 
September, replacing Ronald 
Sampson, who hae wwipii^ 
an extended five-year contract 

Gurr, 49, who joined the Tec 
after spending many years in 
industry, says that running a 


Tec demands a complex range 
of dtiDs which are applicable 
to Ms new job. “The key to toe 
job is running the gov e r n ment 
as a business, while stimulat- 
ing local wi t rppi w iwwHp «nH 
ensuring sustainable growth 
in the economy,” he says. 

The Falkland Islands gov- 
ernment selected Gurr - who 
will assume the role of acting 
governor when the governor is 
«ii— i* from tiie island - from 
over 250 applicants; it says it 
considered that he met the 
re qui rements of the Islands’ 
rapidly evolving economy and 
society. 





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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


/ 


NEWS: UK 


12 


Lloyd’s says 
it will pass 


solvency test 


By Richard Lapper 


Lloyd’s of London will pass its 
anrraal solvency tests later this 
year despite recent losses, Mr 
Peter Middleton, chief execu- 
tive of o™* insurance market, 
told yesterday’s annnal meet 
mg. 

Mr Middleton told the meet- 
ing - which was low key in 
comparison with some recent 
gatherings - that he had "no 
doubt at alT Lloyd’s would be 
able to pass the tests in 
August "We are going to be 
able to pass. We have been 
through the methodology with 
the Department of Trade and 
Industry and they are comfort- 
able with the way we are pro- 
ceeding,” he told some 1,350 
Names, the individuals whose 
assets have traditionally sup- 
ported the market 

He said Lloyd's had used 
computers to forecast the 
impact of the 1991 loss on 
Names. Losses for the 1991 
year - reported last week in 
line with its three-year 

g tf ECf fti fifing 1 ny niigm — fliHflimt 

to £2.05bn, and have led to 
repeated allegations by critics 
that the market’s ability to 
pass solvency w31 be impaired. 

Cumulative losses since 1988 
amount to about £7bn and 
Lloyd’s expects to report a fifth 
consecutive year of losses 
when it announces its results 
for 1992 next year. 

The market must pass two 
solvency tests each year. The 
first, which Mr Middleton 
described as "the more critical 
in the eyes of the DTT\ com- 
pares the overall level of pre- 


mium income received by the 
market with its reserves. The 
second matches the assets and 
HahiiitTPg of individual Names 
with any shortfalls "ear- 
marked” from the Central 
Fund, which pays claims when 
Names cannot meet obliga- 
tions. 

Mr David Rowland, Lloyd's 
chairman, «nd its 1991 result 
showed the "beginnings of an 
improving trend which will 
carry on through 1992 to good 
profits in 1993” 

The meeting was also told 
that Lloyd's was exploring how 
Names forced to reschedule 
their debts through- so-called 
“hardship” arrangements 
could have direct access to any 
compensation won from legal 
action against their agents. 

Names in ’hardship transfer 
all their assets to Lloyd’s but 
are allowed to retain a "mod- 
est” income and home. In 
return they hand any recov- 
eries from legal action to 
Lloyd’s. 

• A former underwriter yes- 
terday contradicted testimony 
he bad given to an internal 
inquiry into the heavy losses of 
the Gooda Walker syndicates 
at Uoyd’s. 

Mr Anthony Willard, lead 
underwriter for Gooda Walker 
syndicate 299 during most of 
the 1980s, said in the High 
Court that information he bad 
given to a loss-review commit- 
tee investigation three years 
ago was "nonsense”. His evi- 
dence came in the second week 
of a case brought against 
Gooda Walker by 3495 of its 
lossmaking Names. 


Superbug 

horror 

infects 


imagination 


By CQve Coofcson 


Mutant flesh-eating superbugs, 
capable of killing a healthy 
adult within hours, are ram- 
paging through Britain. Or, to 
put it another way, the media 
is indulging In one of its peri- 
odic frenzies of terrifying the 
public with a medical horror 
story. 

The foots feeding the hype 
are that seven people in the 
Gloucester area of west 
En glan d have suffered a viru- 
lent inflection by an 
strain of Streptococcus A bac- 
teria this year. The infection 
causes “uecrotising fosdttis”, 
a condition similar to gan- 
grene which rapidly destroys 
tissue. Three people died, 
three recovered after surg e ry 
awl antibiotic treatment, 
the seventh, a 45-year-old 
woman, is in a critical condi- 
tion in hospttaL 

Publicity about the cases, 
combined with an official alert 
issued by the government’s 
public health laboratory, has 
brought reports of at least six 
more cases of necrotising fas- 
ciitis - three fatal - in other 
parts of Britain. 

Health officials said fears of 
a horrifying new epidemic 
were misplaced. Dr Christo- 
pher Bartlett, director of the 
Communicable Disease Sur- 
veillance Centre, said: "Public 
anxiety should be allayed by 
file fact that we have exam- 
ined all indicators of strepto- 
coccal infection in the country 
and these are demonstrating 
no change in either numbers 
or patterns of infection.” 

Bat scientists believe the 
emergence of antibiotic resis- 
tance in bacteria may be giv- 
ing virulent strains scope to 
evolve. 



Tony Blair yesterday: Labour wants social action as the toute to individnal opportunity, he said 


ff nto yi tft Tony An ar— i 


Blair sets up stall to sell his ideology 


It was a curious venue for the 
man who may be the next 
leader of the Labour party. 

In the neo-something splen- 
dour of a Westminster hotel 
ballroom in London, Mr Tony 
Blair faced an audience of aca- 
demics, social workers and 
community police officers. His 
host was the freemarket think- 
tank, the Institute of Economic 
Affairs. His subject crime and 
the family. 

Mr Blair had made it clear 
that his first speech since the 
death of John Smith, former 
party leader, was not to be 
seen as the opening shot in his 
leadership camp ai g n. Formally 
at least, that must wait until 
after the European elections. 

But Mr Gordon Brown, his 
friend and rival for the 
modernisers’ ticket, had 
already staked out his claim in 


a weekend speech to the Welsh 
Labour conference. 

Mr John Prescott, deter- 
mined to Stand as a candidate 
of the left, win do the same In 
an address tomorrow to the 
Prison Officers’ Association. 

So the narrow remit of his 
subject and his feigned irrita- 
tion with the television cam- 
eras did not prevent the 41- 
year-old shadow home secre- 
tary from setting out his ideo- 
logical stalL 

Mr Blair’s reputation as one 
of Labour's leading “modern- 
isers" rests on his efforts dur- 
ing the past few years to con- 
struct a new philosophical 
compass for the party. 

Like Mrs Margaret Thatcher 
in the 1970s, be judges that if a 
political party puts in place a 
firm strategic framework for 
its ambitions, the detailed 



policymaking tends to look 
after itself. 

His thesis yesterday was 
straightforward. For the past 
15 years the prevailing ideol- 
ogy had been one that pro- 
moted the interests of the indi- 
vidual above every thing else. It 
has been based on a fundamen- 
tal flaw. 

Thatcherism,' Mr Blair con- 
tended, missed the point that 
the Individual cannot escape 
from the environment in which 
he or she lives. Unfettered lib- 
eralism produced an atomised 
society. Mass unemployment, 
crime, drug abuse, poor educa- 
tion and poverty were all signs 
that the social fabric had been 
ripped apart 

Mr Blair offered the Labour 
modernisers’ prescription. It 
was not a return to the central- 
ist collectivism of earlier 


stages of socialism: "The task 
of the left Is not to replace this 
crude individualism with old 
notions of an overbearing 
paternalistic state.” 

Nor was it based on the sim- 
plistic notion that blame for 
anti-social behaviour could be 
pinned on unemployment or 
poverty. Rights brought 
responsibilities. 

Instead, Labour wanted 
social action - through private 
sector and voluntary, as well 
as government initiativ es - as 
the route to individual oppor- 
tunity. Housing, education and 
social policies would be tai- 
lored to that central ambition. 
The audience applauded 
warmly. Mr Blair must hope 
his own party will be as recep- 
tive. 


Philip Stephens 


Immigration rules 
eased for the rich 


By Roland Rudd 


Foreign millionaires willing to 
invest in Britain will be 
allowed to bypass the usual 
immigration rules to enter the 
UK, the government has 
announced. 

Mr Charles Wardle, home 
office minister, said the gov- 
ernment planned to create a 
new category for "entrepre- 
neurial investors" to boost 
investment In the UK. Over- 
seas investors who prove they 
have film at their disposal and 
agree to invest £750.000 in gov- 
ernment bonds, shares or cor- 
porate bonds win be allowed to 
enter the UK for a year. 

They will have the opportu- 
nity of extending their stay for 
three years, and then indefi- 
nitely, if they can prove they 
have Invested the necessary 
funds. 

Investors and their depen- 
dants must also be able to live 
in the UK without taking 
employment, other than in 
their own businesses, 


or seeking public funds. 

However, the changes, which 
come into force in October, 
were attacked by the Labour 
party which said they would 
benefit millionaires to the det- 
riment of ordinary people. 

Mr Graham Allen, Labour’s 
shadow home office minister, 
said: “Under these arrange- 
ments, if you are a millionaire, 
you will get in. If you are an 
ordinary person, a husband 
trying to reunite with his wife, 
for instance, it is a lot 
tougher." 

Minsters accused Labour of 
being "fundamentally anti- 
business” in opposing the mea- 
sures which they said were 
designed to promote invest- 
ment 

However, some Tory back- 
benchers privately voiced 
"strong reservations” about 
the changes and said they 
would ask the Home Office for 
guarantees that it would not 
allow any millionaire to enter 
the UK irrespective of his or 
her background. 


Executive 
pay ‘should 
reflect 
long-term 
results’ 


By Norma Cohan, 
Investments Correspondent 


Executive directors' contracts 
should bar them from receiv- 
ing payment if they are dis- 
missed for poor performance, a 
leading shareholders’ group 
urged yesterday. 

The Association of British 
Insurers, whose members 
make up a big portion of UK 
institutional investors, makes 
the suggestion in guidelines 
designed to encourage Unking 
executive pay with a compa- 
ny’s long-term performanc e . 

Among other guidelines, the 

ABI suggests that executives 
should have to wait a mini- 
mum of three to five years 
before being allowed to exer- 
cise share options and that 
contracts should require that a 
portion of cash bonuses should 
be used to buy company stock. 

"Remuneration committees 
have a central role and respon- 
sibility in requiring that 
demanding targets be set in 
such schemes and that the 
rewards relate realistically and 
responsibly to performance in 
the context of such targets,” 
the ABI said. "If the remunera- 
tion committee appears to fail 
to measure up to its responsi- 
bilities, shareholders should 
quite properly ask for com- 
ment or explanation.” 

The guidelines urge annual 
review of bonus arrangements 
even for longer-term contracts 
and full disclosure of the terms 
to shareholders. 

Criticism of executive pay 
has focused not only on the 
very high rewards involved hut 
also on the structure of remu- 
neration packages which grant 
substantial amounts for 
short-term share price 
improvements. Shareholders 
have argued that significant 
cash bonuses based on a single 
year’s improvement do little to 
encourage companies to invest 
heavily thair futures. 

"Any hoard that wants to 
look at the long-term perfor- 
mance should welcome these 
guidelines,” said Mr Huw 
Jones, chairman-elect of the 
ABTs investment committee. 

Bonus arrangements which 
link cash awards to a single 
year’s improvement in say, 
earnings per share, could dis- 
courage executives from 
investment in research and 
development, he noted. 

The guidelines, developed 
over two years after consulta- 
tions with leading industrial- 
ists, were also endorsed by the 
National Association of Pen- 
sion Funds, other 
UK shareholder group. 

Some members of the NAPF 
said they would have preferred 
to see the g uidelines go further 
and bar executives from 
"rolling” contracts which 
renew automatically every 
three years. The NAPF also 
prefers to executives sacked for 
poor performance be paid over 
a long period so they can be 
stopped If alternative employ- 
ment is found. 


Britain in brief 



Minister sees 
early end to 
Malaysia ban 


It Imposed its ban the 
Malaysian government said 
that up to £4bn worth of 
contracts wttfa British 
companies could be affected. 

Mr Needham has met Dr 
Mahathir M ohamad, prime 
m iniste r, Mr Anwar Ibrahim, 
deputy prime minister, and 
Mrs Bafidah A rig, trade 
minister, and brought a letter 
from Mr John Major to Dr 
Mahathir. 


The British and Malaysian 
governments are “definitely 
on the way to solving” the 
trade rift between the two 
countries, Mr Rjehard 
Needham, trade minister, said 
yesterday. 

At the end of February, 
Malaysia Imposed a ban on 
giving government contracts 
to British companies in 
retaliation for critical reports 
in the British media about the 

KnaL Lumpur government. 

"They went out of their way 
to make us welcome,” said 
Mr Needham, after meetings 
in Malaysia with with senior 
officials. "They even offered 
us scones and cream tea. It 
was real strawberry jam. We 
are definitely on the way to 
solving the problem.” 

Mr Needham, who arrived 
on a surprise visit on Monday, 
said it was not a question of 
whether the ban would be 
lifted, more a case of when. 

He is due to report hack to 
London today. Malaysian 
officials also feel that the ban 
on British companies will be 
lifted “in a matter of weeks 
rather than months”, 
according to otife senior 
finance ministry offidaL 

Malaysia has been one of 
the biggest markets in the Far 
East for British goods and 
services in recent years. When 


Sea Containers 
rail bid 


year for the first time since 

1989, in spite of substantial 
project failures, a snrvey by 
the consultancy Price 
Waterhouse has founds 
The survey of 82 
organisations in chafing banks, 
bunding societies and 
insurance companies with 
annual IT budgets ranging 
from under £5m to more than 
£l(hn found that 57 per cent 
expec t ed to increase their rate 
of spending on IT. Last year 
only 30 pea* cent predicted a 
rise in spending. 


plans 


Sea Containers, the container 
and Hoverspeed ferries group, 
plans to bid for two British 
Rail franchises, but on terms 
which foil outside the 
government's guidelines. 

The group would make its 
offers conditional on obtaining 
along lease on the rail track 
concerned and on acquiring 
its own rolling stock. Bids on 
these terms would be regarded 
as “nan-compliant ” but would 
still have to be considered. 

Normally the government 
would require train operators 
to rent track from Rail track, 
the company created to own 

track and signalling It al«o 
expects most operators to lease 
their rolling stock. 

Sea Containers is 
considering bids for BR's 
franchises which would 
complement Sea Containers' 
ferry operations between the 
mainland and the Isle of Wight 
off the south coast. 


Premiers to 
discuss Ulster 


The British and Irish prime 
ministers are to meet at 
Downing Street tomorrow to 
review crosfrborder security 
and progress on their Northern 
Ireland peace initiative. 

The meeting follows a 
renewed surge of violence by 
both the IRA and loyalist 
paramilitaries In Northern 
Ireland, and a foiled but 
potentially devastating bomb 
attack in Dublin last weekend 
by the loyalist Ulster 
Volunteer Force. 


Polly Peck 
probe outlined 


IT spending 
increases 


A majority Of financial 

services companies wflj 
increase spending on 
information technology thi« 


The Joint Disciplinary 

Scheme, the accountancy 
profession’s highest regular? 

body, has fonimlly announced 
an inquiry into Polly Peck 
International, the coUapaed 
conglomerate controlled by 
Mr Asfl Nadir. The scheme 
will examine the professional 
and business conduct. 


jit’ 


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Stoy Hayward, the 
accountancy firm which was 
anditor to Polly Pack. 




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ch 


FINANCIAL TIMES WEDNESDAY MAY 25 *994 

MANAGEMENT 

Lonrho s private army has shown how a company can r 

protect itself in the face of war, finds Leslie Crawford 


When managers 


W eoaNSJ As- N0RM/H- I MEMT 

wawNt; A tie to m o&ve 



D uring Mozambique’s 17- 
year civil war, which 
finally ended with the 
signing of a peace accord 
in October 1992, the toughest battal- 
ion belonged to neither the govern- 
ment nor the insurgent rebel forces. 
Commanded by Gurkhas, it was 
recruited by Roland ‘Tiny” Row- 
land to guard Lonrho’s vast cotton 
estates in an even vaster and law- 
less land. 

As Mozambique’s biggest foreign 
investor and partner of Samora 
Madid's Marxist government, Lon- 
rho’s $8Qm-aperatkm <£53m) was an 
obvious target for rebels. 

The Mozambique National Resis- 
tance (Rtmarmo) Wad already crip- 
pled much of the economy: electric- 
ity pylons were blown up; railways 
sabotaged; land mfacw mad* travel 
impossible along many routes; 
whole villages were burned and 
their men marched into the bush. 

With government forces folly 
engaged In fighting Renamo, prl- 


carry guns 


0 


-d 




R unning a prune production 
operation in California 
from a converted silk mill 
in Bradford, England, 
might seem a recipe for disaster. 

Kit it was thanks largely to the 
acquisition of the Californian dried- 
fruit business of Dd Monte last 
July that Yorkshire Food Group, 
the UK food processing company, 
almost doubled its pre-tax profits 
to flLlm In its first year as a puhhc 
company. 

“We were not fazed by 5^)00 
miles, 1 * insists Mflro Fifth, 47, 
Yorkshire Food’s chairman and 
chief executive, who has built the 
group from a sugar packing 
operation started in 1974 with a 
£3^000 bank loan. 

Given the distances involved, 
Yorkshire was determined to do 
its homework from the outset the 
company spent £2m on professional 
fees - and sent an acquistion team 
to Fresno - to Investigate the 
prospective Dried Fruit purchase 
in early 1993. “When we arrived 

With OUr irumflggmgn* team which 

was formed during the negotiations, 
we knew more than anyone in Del 


vate farmers had no chmgg but to 
organise their own security. In the 
Limpopo Valley, great triple stacks 
of concertina wire surrounded Lon- 
rho’s 2,000-ha cotton farm at 
Chokwe. Watch towers and ta^ks 
guarded the perimeter. The mam 
buildings became fortresses. “An 
our managers were used to fanning 
with a gun cm their back,'* says 
John Hewlett, Lonrho’s manag in g 
director in Mozambique. “They 
were mostly Boers or white Rhode- 
sians, and they were excellent at 
their jobs." 

These battle-hardened managers 
were backed by a miw^ of 1,400 
men. Every morning, Hewlett 
recalls, tractors on the Chokwe 
estate would leave in convoys of 
five, guarded by 50 militias. The 
farming was planned with military 
precision. 

Routines were changed daily to 
foil surprise attacks. The working 
parties maintained constant radio 
contact with their headquarters 


during their solitary expeditions 
Into the cotton fields- Despite the 
war, Chokwe’s 2.000ha of ir rig a ted 
farmland achieved Africa’s highest 
cotton yields in 1969; 20,000 tonnes 
were produced. . 

Lomaco, the joint-venture with 
the go vernment, also became the 
biggest tomato grower in the 
Southern hemisphere. At a tremen- 
dous cost. Hewlett says Lonrho’s 
security outlays in Mozambique 
consumed 30 per cent of the compa- 
ny’s operating costs - about Urn a 
year, not counting production losses 
due to sabotage. 

Trinrho also operates a pipeline in 
Mozambique, which supplies fin- 
babwe with 95 per cent of its fueL 
During the war, it was guarded by 
Zimbabwean troops. “But we had 
the best-trained force in the coun- 
try" Hewlett says of Lonrho’s pri- 
vate army. “Occasionally there 
were foil-blown battles with Ren- 
amo. Once 16 guerrillas were 
kffled." 









One attack in the early 1990s, 
however, changed Hewlett’s mfod 
about flip feasibility of r unnin g mil- 
itarised farms in a civil war. The 
rebels came at dawn, 200-strong. 
They drove a herd of cattle towards 
the p erim eter fax* , raising ffaxiB 
of dust A tree was hurled over the 


* ^e££&u= 

barbed wire, the cattle surged 
across in a wild stampede, and the 
rebels charged in. 

In a matter of minutes Renamo 
blew up $500,000 of chemicals and 
irrigation pipes. Offices were 
torched; tnx±s doused with petroL 
Hewlett later found his radio opera- 


Prunes can be good for you 

David Blackwell reports on a Yorkshire recipe for long-distance takeovers 


Monte - people were asking ns 
the questions," says Firth. 

Once inside, Yorkshire started 
imposing a proper business 
structure on a company winch 
hitherto had been supplying dried 
fruits into the American Dal Monte 

sales and iHgtr ilmti nw ny stom (and 

as sucfo formed only 5 per cent of 
the fruit giant's operations). 

Yorkshire put is a team of five, 
including David Morgan, chief 
financial officer, who was to remain 
for two years. It concentrated on 

the fiiMTirial, sys tems and logfot foi 

aides erf the business. 

The priority was to install a 
financial reporting system. 
Yorkshire quickly discovered, 
though, that often the best way 
to learn is through experience. 
Faced with one of the worst prune 
crops for years, the new owners 


were forced to meet demand by 
buying in supplies from Bulgaria, 
Chile and Argentina. 

"The nice thing about having 

a few problems is you get to know 
your business a bit better and you 
also get the chance to see how 
people react to those problems," 
says Firth. The group has now 
spread the source of its prunes 
across all three of the growing areas 
in the ftm Joachim Valley, 

minimi ring thn rlflV /if wiy foflU Te. 

Yorkshire, however, avoided the 
temptation to try to change 
everything. Allan Giddings, 
rftv ferifmal d ir ector of thn 17$ 
operation, paints out that the group 
has not tried to impose UK sales 
practices. “We have kept the CIS 
sales team - we are not saying this 
is how to sell, this is who you 
should sell to* Furthermore, 


Yorkshire surprised the US farmers 
by showing than its accounts. 

“We displaced gossip and rumour 
with bard financial fact. Than Allan 
roDs up ta kes their 
cheque tu person,” says Paul Haley, 
Yorkshire’s director, afldmg 
that a US chief executive, based 
in New York, would be nnhkely 
to turn up at a farm. 

Yorkshire, which was floated 

nn tfm nfcnrir martot In Maw* lari 

year, was no newcomer to the 
takeover business and had teamed 
lessons from its previou s 
expe rience. 

It bad moved seriously into the 
fruit and nut sector with the £l2m 
purchase of Scotia Haven, Berisford 
International’s lossmaking dried 
frnit packag in g b usiness fa 
Warrington in 199L Here it had 
sent in an acquisition team of five 


for six TrymfKa- by the jt left, 
£7m had been taken out out of 
working capital through reduced 
stocks mid Im pro ved efficiency. 

Yorkshire was also already in 
California, having bought 
Treehouse Farms, Berisfbrd’s 

fialifinimlfln almon d pm paMf ir i in 

1992. The acquisition of Treehouse 
marked a move into downstream 

p mrgarirf g, with manufacturi n g 
plant to *j«an and cut the abounds. 
A roaster has «wyp h aan added 
Despite being described by Firth 
as “a relatively simple business 1 *, 
Yorkshire believes in kee ping a 
dose eye on the operation. 
GlrtdingB, who spent six months 
in Cahfornia when Treehouse was 
first bought, now spends 10 (fays 
in every month there. 

Yorkshire has tried to motivate 
Treehouse’s ariaBng management 


tor burned to death at his station. “I 
realised then that we couldn't fight 
them any lunger,” Hewlett recalls. 
“I took photos of all the death and 
destruction and showed them to 
Tiny at a board meeting in London. 
I told him: the war has to stop." 

There are those who believe that 
peace would not have returned to 
Mozambique hoi Lonrho not been 
involved. Rowland is credited with 
arranging the first meeting between 
Joaquim Chissano, who became 
president after Samora Machel’s 
fatal plane crash in 1986, and Ren- 
amo leader Afonso Dhlakama- 
Shortiy after their talks in Gabo- 
rone. the capital of Botswana, a 
peace accord was signed in Rome. 

Against all expectations, the 
agreement has held. The country is 
dne to hold its first multi-party elec- 
tions in October. Now that the war 
is over, Lonrho is at least making 
money out of Rename’s attempts to 
transform itself into a respectable 
pfiHHreii party. Many of Renamo’s 
cadres are bring housed to. Lonrho’s 
Cardoso Hotel In Maputo, at the 
United Nations’ expense. 

Lonrho has also supplied Renamo 
with vehicles, computers and office 
equipment The company Gurkhas 
are bring employed as sappers in 
another fast-growing business: the 
clearance of land mines. Nobody 
knows how many lie beneath 
Mozambique’s roads and fields - 
estimates vary from several hun- 
dred Himwawl to 

Lonrho is one of the companies 
involved in mine clearance, and a 
start has been made on routes 
essential to the distribution of 
Hwmanlbnian aid. 


by making its members feel part 
of foe Yorkshire team. The latter's 
ethos is s tro ngly quality driven. 
Both Giddings and Firth have 
operational backgrounds from Mars, 
which they believe gave than a 
global perspective and a strong 
insight into customer needs. 

“It’s not just price and production 
- we have to talk technofogy,” says 
Giddings. The value of the 
company’s products lies in ensuring 
tiie ingredients supplied are of top 
quality, he says. Technical teams 
from Cadbury, Safeway and other 
customers have visited the Del 
Monte operation to ensure that 
there will be no stones or stems 
in the product 

The group is also using computer 
technology to reduce the distance 
between its operations. It is close 
to having a full network 
information system which will 
enable staff at head office to look 
Into any of Its companies* financial 
positions in real time. Firth says 
Bradford will then be as immediate 
as the local TnawagranMit, able to 
said a fax to reach California before 
staff there arrive for work. 


Dizzy 
pace of 
change 

T he trend for UK 

companies to allow their 

subsidiaries greater 


autonomy looks set to continue. 
But the move to political 
correctness in the boardroom 
is proceeding at an even dizzier 
pace. 

This emerges from a survey 
of company stru c tu res and 

group management styles 

among 270 finance directors 
of leading UK quoted companies 
by the venture capital group 
3L 

The report* says most 
respondents <71 per cent) 
identify thetr companies with 
the “strategic control” model, 
where shortterm financial 
performance and long-term 
strategies are of equal concern 
to the centre; 16 per cent said 
that their management style 
conld best be characterised as 
“financial control” (the centre's 
primary role fa to set strict 
financial targets while 
delegating strategic decisions); 
and 15 per cent said they had 
adopted a “strategic planning** 
model (where the centre aims 
to shape the strategies of the 
group as a whole). 

A surprising Issue raised by 
the research is how to describe 
these “tncrees tag ty autonomous 
operating companies". The 
authors say “the term 
‘subsidiary’, though accurate, 
is no longer ‘politically 
correct*”. The reason why, 
however, is left to readers' 
Imagination. 

As for future corporate trends, 
most respondents expect a cut 
in the size of head offices; a 
majority now employ less than 
1 per cent of their total staff 
at headquarters. Further 
elimination of middle 
management tiers is predicted; 
as is the growing need for 
managers to be technically 
qualified and the need to build 
structures and training. 

Improvements in information 
technology will “allow more 
cootror but “require greater 
accountability of operating 
companies”. 

Tim Dickson 

* Available from 3i, 91 Waterloo 
Road. London SE18XP 




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Much of this information is simply unavailable 
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The Guide to Registering Companies in Moscow 
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NEURAL NETWORKS IN CAPITAL 
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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


BUSINESS AND THE ENVIRONMENT 


S anta Barbara is not one of 
the twin towns listed on the 
sign outside tbe municipal 
limits of Christchurch, one 
of the prosperous resort and retire- 
ment communities which line 
England's south coast 
But an event that took place off 
the OS west coast 25 years ago has 
a particular relevance to residents 
of environmentally sewstHve seaside 
areas In the UK such as Christ- 
church, hi 1969, a blow-out at an 
offshore production platform left 30 
miles of beach near Santa Barbara, 
me of southern California's ™ain 
tourist destinations, covered in oil 
pollution. 

The impact of the spill on public 
opinion was such that development 
of the state’s rich offshore oilfields 
was curtailed for decades, while the 
political fallaut from it is felt even 
now. Hazel O'Leary, OS energy sec- 
retary, recently confirmed that resi- 
dents of coastal states still have a 
virtual veto over new offshore ofi 

ripv plnpmpnt*. 

The Santa Barbara spill has also 
had a lasting effect on how the 
international oil industry operates 
in sensitive coastal areas, rnnintting 
those in the UK. Over the next few 
years, oil companies plan to 
increase inshore exploration dril- 
ling; encouraged by coastal discov- 
eries such as the Wytch Farm oil- 
field near Poole in Dorset and tbe 
Liverpool Bay natural gas field. In 
last year’s 14th licensing round, tbe 
government included a large num- 
ber of inshore blocks, many of 
which are located near well-known 
coastal beauty spots, important fish- 
ing or breeding grounds, or in areas 
which support endangered species. 

But the special requirements of 
operating inshore often conflict 
with established ways of working in 
the North Sea, according to Geoff 
Nicholson, manager of near-shore 
exploration projects for Elf Enter- 
prise, a Joint venture between Elf 
Aquitaine of France and Enterprise 
Oil, the biggest UK independent It 
has been active in Poole Bay on the 
south coast and is about to begin 
exploration in the Irish Sea, 15 
miles off Anglesey. 

"The industry likes to move fast 
and with few constraints,” he says. 
In the North Sea, the sadden avail- 
ability of a drilling rig at an attrac- 
tive rate can cause companies to 
alter plans overnight. In the explo- 
ration phase, oil companies also 
tend to operate at an arm’s length 
through specialist contractors. 

"But yon can't operate like that. 
inshore," says Nicholson. "Long 
JiJ pferiods of consultation with local 
^governments and community 
groups are necessary before actual 
operations, such as seismic surveys 
or d rillin g, can begin." 

* Senior Elf executives say it is as 
important to understand the “geo- 
political aspects" of England’s 


Energy 

efficient 

tomatoes 

W hen Cantelo Nurseries, 
one of Britain's biggest 
tomato producers, 
wanted to save on its huge 
energy costs, it turned to the 
country with supreme expertise 
in glasshouse production - the 
Netherlands. 

Herman Van Den Ende, a 
Dutch consultant, was brought 
in to design an energy-efficient 
system for tbe Taunton-based 
glasshouse that produces 2m 
kilos of tomatoes a year. 

Tbe system, which stores 
waste heat from day-time use 
to heat the tomato plants during 
the cooler night hours, won 
Cantelo a £500 award for energy 
management this week from 
Adas, the UK government’s 
agricultural development and 
advisory service, as part of its 
pgmp ai g ri to cut the £320m 
animal energy bill on Rn gHgh 
forms. 

Horticulture accounts for by 
for the largest bills in the 
agricultural sector because of 
the high costs of hearing 
greenhouses. Cantelo 's armnal 

energy bill amounts to just over 
£200,000, or about 30 per emit 
of its non-labour running costs. 
But Van Dot Bmfe says this 
would have been 15 per cent 
higher before the installation 
of fine-gas condensers that are 
attached to the gas-fired water 
boilers to recapture most of the 
heat that would otherwise 
escape. 

Tomatoes need tempe ra tures 
of about 20°F by day and 15” 

°°at ni gh t. Because of the 
storage Systran, the nurseries 
can afford to burn more heat 
during the day to produce more 
of the carbon dioxide that the 
plants require to grow - and 
thus increase production. 

"We should get a 5 to 10 per 
cent increase in yields,” says 
Kevin Hamilton, general 
manager. 

Smaller farms might not want 
to invest in new eqxdpmrait to 
save energy, but that does not 
matter, according to Adas. 
“Simple economy measures can 
lead to energy savings of 10 per 
cent or more,” says Gareth Ellis, 
energy consultant. 

Alison Maitland 



Inshore exploration in Poole Bey; EH Entacprtrehreo b otnMdiiwnyoftitao u w hu iB n t u fatf contg8on» set by Uw gowmmwi t 

A last resort by 
the seaside 


As oil companies drill closer to land, Robert Corzine 
looks at how they are stepping up safeguards 

problems. It also provides a mecha- 


south coast as it is of south Yemen 
or the other remote locations in 
which the oil industry operates. 

ElTs emphasis on the careful 
identification and cultivation of 
community gro u ps is no accident. 
In 1992, its initial exploration efforts 
in Poole Bay ended in angry con- 
frontations at sea between seismic 
survey ships and local fishermen. 

The company had reached an 
early a gnoftmanf on compensating 
those who fished for crab and lob- 
ster. But it struggled to reach an 
understanding with the trawler- 
men. “We first had to define who 
was a fisherman," says Nicholson. 
“In the winter someone might be a 
painter and decorator, but in sum- 
mer they might do a little fishing.” 

In addition, some political pres- 
sure groups saw the chance to use 
Elf’s dispute with the fishermen to 
their own advantage. Elf eventually 
had to pay out more than £lm in 
compensation to the fishermen. 
“We had to solve the dispute on the 
run and in a very unsatisfactory 
way,” concedes Nicholson. 

The problems of drating with 10 
different fishing associations per- 
suaded ti&e company to set up and 
fond a forum in which to channel 


msm far arbitra tion 

The fragmented nature of the 
fishing im hm t ry ir unit* it the most 
difficult for Elf to deal with. Bat 
many other groups also saw the 
company as a threat Some were 
concerned that even the hint of an 
oil g pifi offshore in summer could 
do long-lasting damage to the area’s 
important tourist industry. Others 
simply did not want oil companies 
operating in their back yard. “I 
don't care if you drink your bloody 
oil,” was tiie attitude of one resi- 
dent at a public megting . 

Late last year. Elf drilled an 
exploratory well, the results of 
which it has yet to divulge. The 
licence for Poole Bay was issued in 
an earlier round, but Elf observed 
many of the environmental condi- 
tions set by the government for 14th 
round licences. 

Seabed studies were carried out 
both before and after drilling to 
determine if there was any damag m 
to marine life. A narrower than 
usual well was specified to cut 
down on the amount rtf rock cut- 
tings brought to the surface. Water- 
based drilluife muds were used 
when possible in preference to off- 


based ones to lubricate the drill bit 

Hock cuttings brought to the sur- 
face were cleaned before being dis- 
persed over a wide area - rather 
than piled cm the sea bottom - to 
avoid smothering fish feeding 
grounds. And the normal stand-by 
safety vessel was augmented by one 
carrying a ohgmfani dis persant and 
booms to contain any spills. 

Local officials say such precau- 
tions have made inshore explora- 
tion drilling acceptable to tbe pub- 
lic. But they say tiie prospect of 
permanent plat forms within sight of 
land is no more acceptable now 
than in 1968 when a British Petro- 
leum proposal to bufld an artificial 
island off Wytch Farm to tap the 
offshore extension of the field trig- 
gered a stor m of protest along the 
south coast 

New technology, in the form of 
horizontal drilling from a land base 
to a point more than 5km offshore, 
solved HP’s problem. But technol- 
ogy is unlikely to offer a solution in 
all cases. At some time in the next 
few years an inshore discovery 
could be made that will test 
whether coastal residents in the UK 
have a similar power of veto as 
their co un t e rparts in California. 


Jane Martinson on plans to boost 
British Waterways Board's income 

A bigger splash 


on the 

T ha British Waterways 
Board, the nationalised 
body which runs Britain's 
canals, plans to turn people's 
desire to mess about by the river 
into profit. 

With a leisure and tourism 
strategy launched by Robert 
Atkins, environment minister, 
today, the board appeals for 
“imaginative partnerships" to 
increase the money-making 
potential tf its most popular sites. 

Such developments would have 
to satisfy the board’s commitment 
to conserving the heritage and 
environment of the and 

h nilrting ^ it eontambe, Iwrf ndfng r 
more than 2,000 listed structures 
and ancient monuments and 64 
ri tes Of f ywb tl je riimfifip Inter act 

A private bill before parliam e nt 
defines the board’s statutory 
duties with regard to maintaining 
environmental conservation. 

"We have to appreciate that 
many people enjoy going to the 
canals to ‘gongoozle’ - to simply 
watch the wildlife and canal life 
go by,” says Simon Salem, 
marketing and communications 
manag er. “Our aim is to increase 
everybody's enjoyment of this 
natural resource.” 

Another aim is to increase 
profits. The board earns 40 per 
rant of its annual naming costs 
of £87m, the rest coming from 
subsidies. Profits from leisure 
and tourism contribute 25 per 
cent of that earned income, a 
percentage the board wants to 
increase. Market research has 
suggested there is potential for 
this, says Salem. 

Possible developments include . 
leisure facilities such as tea shops, 
small museums or playgrounds. 
Financial incentives will be 
considered for suitable proposals 
and extensive consultation with 
load interest groups is planned. 

The board hopes to capitalise 
on the 158m visits made to British 
canals each year by more than 
7m people. It plans to improve 
access for particular interest 
groups such as angers and 
boaters and attract some of the 
47 per cent of the population who 
live within five mites of a BWB 

canal. 

Popular sites which regularly 
attract in excess of 200.000 Visitors 


canals 


each year, says Salon, would 
particularly benefit from forther 
dewtopawut, “We m tourism, 
and particularly the day trip 
skte, as a key growth area,” he 
adds, “At tbe same time, we are 
aware that plans have got to be 
balanced. Our main aim is to 
conserve our heritage.” 

He says "smsitive" proposals 
would be welcomed. Fast food 
chains and vast car parking space 
would not Hans are particularly 
welcome in timer dries where 
Miuih are vital "green lungs". 

Today's launch follows a report 
cm the board by tiie Monopolies 

UwpFS fV ffTi fniiBri nU tw 

January which made 48 

improvement, indo^ng cost 
control and mm active marketing 
of leisure facilities. 

Neff Hamilton, corporate affaira 
minister, said: “BWB has changed 
from a centralised organisation 
orientated towards administering 
a grant to one developing a strong 

f-nmmptirinl n iitlook “ 

But he added that the MMC 
frit BWB could continue to 
improve its effic i ency and the 
quality of its services, and 
expected BWB to be able to 
generate higher net revenue. 

The board supplied half the 
funding needed for a £L5m 
nfkuUdunant of grade two listed 
canal warehouse* in Bumtey last 
year in partnership with 
Lancashire county council. The 
site is to be used for mixed 
ognmattdtf and kluw 
development. 

In developing its strategy, the 
board haa taken advice from the 
National Trust, the charity which 

» bu ri *n«t« mm InKjiwm 

as National Trust Enterprise and 
which saw a large increase in 
membership in the 1980s. The 
board is considering a 
membership scheme which could ; 
indude a magazine and lecture 
programmes. 1 

Bernard Henderson, the board's 
chairman, says: “Of course, it’s . 
early days but we certainly think 
that the National Trust is a 
template which deserves study. 

We have two main responsibilities 
- to provide facilities for people 
to enjoy the wwi ninmcnt and 
toimpiroveft" • 


! 


1 


ABB Transportation 


Accredited suppfler 
of overhaul ad 
locomotive power 
units 


British Steel 
Track Products 

Accredited supplier 
of steel raH 


' -v ■ 

*: ' a • t 






It’s 



no Oscar 


Not all Oscars are won as the result of hard work, 
commitment and continuous self-evaluation. But 
every Link-up award is. 

Just ask GEC ALSTHOM Paxman Diesels, 

ABB Transportation and British Steel Track Products. 
They’re the first suppliers to achieve a Link-up 
accreditation award. 

Link-up is the Supplier Development Through 
Accreditation Programme launched by the 
British Railways Board and RAILTRACK. 

It involves an in-depth review of a supplier’s 
capabilities and performance and demonstrates their 
commitment to the highest quality standards. 

Fashion and favouritism play no part Hard work arid 
dedication definitely do. 

Congratulations. 


Procurement & Materials Man^jement 
British Railways Board 
Derwent House 
Railway Technical Centre 
Derby DE24 8UP 



r 







HNANCMX. TIMES WEDNESDAY MAY 25 1994 


13 




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Tel evlsioii/ Christopher Dunldey 

At last: first with the news 


T he idea that television was 
about to become the main- 
stay of Jomualism and that, 
willy nilly, newspapers 
woul d have to turn to the 
provision of background materia l com- 
meat and colour, was in great favour 30 
years ago. Nothing very much hpwhH 
to happen, however, and the subject 
went out of fashion. Yet slowly televi- 
sion did expand its Journalistic capacity 
and techniques, and the subject 

it was able and willing to deal with, and 

now (looking beyond this week’s strike 
by BBC journalists) we are seeing the 
success of something awfully like the 
revolution discussed in the 1960s - 
though now nobody seems to be paying 
much attention. 

An interesting example occurred last 
Thursday. At 9.30 in the True Stories 
slot Channel 4 had screened a long doc- 
umentary by Nicholas Broomfield, who 
in a previous programme had shown 
himself spending a long time failing to 
get an interview with South African 
right-winger Eugene Terreblanche. 
Since that seemed to amuse people 
Bro omfi eld used the same idea again ^ 
but this t xm e hls subject was Margaret 
Thatcher. 

While other people got themselves 
onto the press list, gained access to the 
lunches on her book promotion tour 
and so on, Broomfield showed hfawjf 
falling at every turn. He made- the rea- 
son fairly clear: he is inept. Seeking an 
interview with Mark Thatcher, Broom- 
field was asked far his tele ph on e num- 
ber but was unable to remember the 
name of his hotel, let alone the phone 
number. His journalism comes from the 
“Hey mum took at me" school of stud- 
ied naivety. Roger Cook, -whose Cook 
Report on ITV had offered a lacklustre 
item on steroids earlier in the evening; 
sometimes seems in dwngg r of joining 

fha yifllw 


However, it was the programme alter 
■ toe Broomfield fiasco which was inter- 
esting. Instead of the billed item on the 
health service at 1L05, channai 4 
rushed into the schedule a Dispatches 
Special about Robert Black, the man 
who. earlier that day, had been given 10 
life sentences for murdering young 
girls; Obviously nnnfa in p re p are! i nn tor 
the ending of the trial, the programme 
contained a mass t£ background infor- 
mation an Black's life and upbringing, 
and dear indications that he may have 
been responsible for many more mur- 
ders. Some of the programme’s 

content and technique were highly 


were a tiny fraction of that figure, but 
Ethiopia under the regime of CoL Men- 
gistu. This may not have been the clear- 1 
est or most technically polished pro- 
gramme of its sort ever made, but it is 
the first I have seen to give a detailed 
account of the Mengistu pogrom. More- 
over, if there has been a report with 
anything Iffr* tw« detail in the British 
preps I have missed it 
Furthermore, although X have cer- 
tainly seen newspaper reports about the 

activities of Dame Shirley Porter and 
her Co n s er v a t iv e colleagues on Wes fc- 
nrinster City Council, I have never read 
an account with the detail that last 


Viewing figures for an unscheduled programme 
late on Channel 4 may have been low , but the 
fact remains that television was several hours 
ahead of the newspapers 


questionable: did the relatives of one 
victim really need to hear Black’s 
description of what he did to hex? And 
given the emotional nature of the case 
was it necessary to add mood music 
and heartbeat sound effects? Wbat can- 
not be questioned is the speed with 
which television brought this material 
to the public. No doubt the viewing 
figures tor an unscheduled programme 
late on Channel 4 were low, but the fact 
remains that television was several 
hours ahead of the newspapers. 

Last night in Assignment an RBC2 
George ATagiah, who did such admira- 
ble work far BBC News In Somalia, 
reported on the “reign of terror” fn 
another African country in the 1970s 
whan, as Alagfah said, “ethnic origin 
alone was anongh to put you in prism.” 
and 150,000 people were killed. Not 
South Africa, of course, where deaths 


week’s Panorama provided. This was 
the program m e notoriously pulled from 
the schedule immediately before the 
local elections, and it was not hard to 
see why there had been nervousness. 
No punches- were polled, the word “ger- 
rymandering” was used frequently, and 
no viewer can have been left in doubt 
that the programme makers' believed 
there had been delib erate wrong doing. 

The final sentence In commentary 
stated that Conservative party chair- 
man Kenneth Baker portrayed the 
result of Dame Shirley's successful 
local election nampeign as “a victory 
far prudent and rffidimt local govern- 
ment” but that in truth her victory 
“had largely been bought freon the pub- 
lic purse”. Assuming the preceding 
statements ware all reliable, the pro- 
gramme certainly justified ftwH 1 conblu- 
sfam and it is a pity that it was not 


broadcast as a public service before the 
local elections rather than after. 

Nevertheless the most si gntftemt fact 
is that the BBC did not. to adopt the 
language of The Bin, bottle out John 
Blit's first major task at the BBC was 
to overhaul, combine and evpand the 
news and current a ffai rs departments 
(to reorganise BBC journalism in other 
words) and. Game say, to introduce 
rigid hierarchical control «nd a uniform 
approach. Opponents of “Birtism” ninim 
that it smacks of both Stalinism and 
’Ihatcherism, apd that, in twwtinnany or 
- not, ft ser ves the interests of Conserva- 
tiye gtnrarninpaifB It would seem diffi- 
cult to square that argument with the 
Panorama in question. In the tong team 
the sheer expansion of television jour- 
nalism, partly resulting from the Birt 
reforms, partly from the general prolif- 
eration of television, will surely .prove 
jnore significant than any supposed 
political slant 

Yet however extensive television 
reporting might become, the medium 


would continue to be a poor relation In 
the world of journalism while it lacked 
tofe techniques, and to a large extent 
perhaps the will, to deal also in opinion. 
But these days even that is changing, 
albeit in a fairly small way so far, and 
chiefly on Channel 4. Frederic Raph- 
ael’s attack cm “righteism” - the special 


black people and so on - In last week's 
Without Walls an Channel 4 was a par- 
ticularly significant straw in the wind 
since it ran counter to the political cor- 
rectness which tends to dominate think- 
ing in tiwwp areas on te levision . 

Gratify ingly there appears to be no 
tendency at present far television to 
drive newspapers out of business. But 
the expansion ami development in tele- 
vision journalism discussed at such 
length 30 years ago does seem finally to 
be happening; 


Opera/David Murray 

Mose in Egitto 


A t the Royal Opera the Midland 
Bank proms, now a great insti- 
tution, recommenced on Mon- 
day with a new production of 
rare Rossini. Most m Egitto. (Moses in 
Egypt) was composed far the Lent sea- 
son at the Teatro San Carlo in 18X8. 
Hence its subject, and its billing as an 
“aziane tragica-sacra” - though Rossini 
and his librettist Tottola had laced the 
. Old Testament story with a conven- 
* tianal love-interest: a pre-echo of the 
Aida situation, indeed, but nan-triangu- 
lar. 

In fad: toe work was played at Covent 
Garden in 1833 as a sacred oratorio, 
with interpolated bits from Handel’s 
Israelites in E^ypt (and toe “love-tnter- 
est" pres uma bly trimmed). For Paris, 
the composer re-jigged and elaborated 
the piece in 1827 as Moise et Pharaon, 
which went on to enjoy a long popular- 
ity. This time the Royal Opera has pre- 
ferred toe Neapolitan original, with 
only Rossini's 1819 additions. The pro- 
duction comes from Bologna, with its 
conductor Paolo Ohni; the Teatro San 
Carlo has collaborated on the version 
used. The director and the designer are 
one man, Hugo de Ana. 

That seemed to be part of the trouble 
on Monday, when Most seemed exces- 
sively tame for its length. Italians 
understand rocky landscapes very well; 
de Ana's sets revel in great expanses of 
high-quality mock rock (never mind toe 
visible seams, feel the depth!) and 
evoke an oppressively parched land. 
The enslaved Israelites are dressed as 
gypsy nomads; their Egyptian overlords 
have shaven heads, strangely elongated 
to accommodate the singers’ hair under 
their skullcaps. (My . companion 
remarked how much they resembled 
the other-planet family in Roeg's The 
Mem Who Fell to Earth.) 

For all the tribal co n fro n ta t ions, how- 
ever, the director de Ana contrives little 
but static, formal patterns. A sinuous 


quartet of bare-breasted dancers enliv- 
ens the action a Ut, but there is rarely 
any sense of real manana or danger. 
Nor does he give his pr incipals much 
help: even in their longest and most 
fraught numbers, he fixes them in lan- 
guid art. nouveau poses, more decora- 
tive than dramatic. Authoritative sing- 
ing and conducting might easily maim 
upthe gap - .but there was toe reheat 
least onth&MSrst night .- i*. ' an 
- Ohni was tasteful to a fault A square 
beat, innocent of anything like sponta- 
neity ^urgency; the orchestral attack: 
soft-edged (characteristically crisp Ros- 
sini dotted-notes were regularly 
smoothed into bland triplets); none of 
the stark granites that the best of Ros- 
sini's score deserves and needs. Its 
grandest passages involve not only 
some far-sighted chromatics, but bold, 
obsessive play with single phrases, 
almost symphonic - which its first 
audiences recognised as Teutonic 
“learnedness” fax beyond the Italian 
norm. Olmi left all of that under- 
pointed, mild, ineffectual 

At least Ruggero Raimondi’s Moses 
enjoyed ringing support from his four 
trombones, though they nearly swal- 
lowed him towards the end whan he 
was audibly tiring. His majestic decla- 
mation is still splendid; hut his bass 
was cramped at the top, and effortful 
when negotiating the recurrent “turns” 
in his opening music. Simone Alaimo's 
Pharaoh. - the competing bass here, 
younger fi ghter of timbre - main- 
tained his sharp, ener getic bite all the 
way. He is a major asset to toe show. 

As his son and heir Oshide, inconve- 
niently enamoured of an Israelite 
■matron, the American te nor Bruce Ford 
sounded merely careful and correct 
throughout Act 1, probably discouraged 
by the low prevailing temperature. It 
took toe distraught, non-confessional 
Act 2 duet with his fa t he r to show this 
already distinguished Rosshdan at full 



Muir 


DWated lovers Brace Ford and Anna Caterina Antonacd 


expressive stretch, secure at toe risky 
vocal heights of Ms role. 

That might have been crowned by his 
next duet, in abortive Eight with Ms 
inamorata Elda; but it wasn't, because 
hie Elda is the young competition-win- 
ner Anna Caterzna AntonaccL Her 
soprano boasts a lovely dear ring; is 
beautifully even throughout its range, 
and gracefully adept with all the orna- 
mentation - but so far, too carefully 
polished and placid to register any cri- 
ses of loyalty or passion. When some- 
body cried “Brava!" after her main aria, 
I thought that kind of him; nonetheless, 
she stm needs is a rudely demanding 
conductor-dramatist Overnight, she 
•mi gh t become a far more writing art- 
ist 

Fortunately far the opera, we had the 
mezzo Ann Murray in the secondary 


role of the Pharaoh’s wife, an anxious 
sympathiser with the Israelites - to 
spell out what is embedded in Rossini's 
“serious” music. She did that superbly. 
In the less grateful role of Elda’s confi- 
dante Patricia Bardon leaves a dispro- 
portionately vivid stamp. With still 
thinner material. Philip Dogban makes 
something of the nasty High Priest The 
tenor Aaron, who ought sorely to be 
more sHver-tongned than anybody, 
sounded out-of-sorts and fragile. What 
with Ms choked delivery and Rai- 
mondi’s rusty creaks, the famous final 
Prayer scored only a tame modicum of 
its proper effect We wanted more. 

Supported by the Peter Moores Foundft- 
tion; further performances May 28 
(another Prom) and 81, June 3, 6, 8 and 
11 



Uma Thurman between ODs in 
starry cast which scooped the top 


romp with a 


Palm goes to pulp 


T he science of Palm- 
istry suffered a major 
setback when the top 
prize at Cannes went 
to America’s Pulp Fiction. 
There we an were, clutching 
our Pemods and tipping Wwng 
Yimou’s 7b Uoe at Kieslows- 
ki's Red, when, lo! - nothing 
doing. The golden frond was 
bestowed on the new film from 
Quentin “Reservoir Dogs” Tar- 
antino. 

With Eastwood as jury presi- 
dent we should have been pre- 
pared. Pujp Fiction is a 2%- 
hour gangster ramp in which.- 
various members of starry cast 
(Bruce Willis, John Travolta, 
Uma Thurman, Harvey Keitel) 
have their days made by vari- 
iqw gtabWjigs. shootings and 
s umma r y , executions. S-and-M, 
torture and drugs are also on 
the menu. Indeed if you want 
to anthologise one scene for 
toe book of “Greet Throw-Up 
Moments In . Hollywood Cin- 
ema”, it must he that in which 
gangster’s moHMiss Thurman, 
having OD'd an heroin, has a 
needleful of adrenalin thrust in 
her chest by a desperate escort- 
bodyguard (Travolta), anxious 
that she should not die while 
he is on the job. 

How the Palais roared. Like- 
wise when the kidnapped 
young black has his brains 
scattered all over the car. Or 
when Mr Big (also Mack) is 
captured and raped by a pair of 
Los Angelenos running what 
seems to be neo-nazism’s 
answer to Salisbury's Home- 
base. 

The virtue of Reservoir Dogs 
was that it kept wiping the 
smile off our faces. One 
moment you were giggling, toe 
nest yon were all but pasting 
out But Pulp Fiction is a 
string of in-connected stories 
about toe underworld held 
together, if at all, by the sick 
wit of its gifted writer-director. 

The prize seems another 
shameful crawl to Hollywood 
from a festival that not long 
ago golden-palmed America 
three years in a row for unwor- 


thy films and is now, post-Gatt, 
anxious for another bout of 
kissing and making up; 
although I decline to name toe 
part of Hollywood’s anatomy 
that it might be kissing. 

Other hand-outs were more 
just Kieslowski's prizdessness 
was greeted with indignation 
by many critics, though not 
this one: I thought Red toe 
weakest of Ms trilogy films. 

TngtonH TVinng - Yimou’s hnpk Of 

history about China 7b Uoe, 
reported an last week, shared 
the nxnqer-np Special,,, Jury 
Prize with Nikita Mikhalkovfs 
Burned By The Sun, jostling 


Cannes f winning 
film seems a 
shameful crawl 
to Hollywood , 

. reports Nigel 
Andrews 


with Tarantino in the last busy 
weekend. 

The Russian film-maker is 
becoming the festival world's 
duty dark horse. Three years 
ago he came from nowhere to 
seize the Venice Golden Lion 
with Urga. Now he blends 
Chekhovtan chamber drama 
with Stahnera historical tragi- 
comedy - this is another IVr 
hour piece in a festival Where 
we could all have filed over- 
time claims - in a film that is 
a small triumph of art over 
obstacle. 

obstacle is audience 
resistance to what seems ini- 
tially yet another Cherry 
Orchardrisb. elegy about the 
idle rich socked by a changing 
Zeitgeist. Mikhalkov himself 
plays toe central Colonel, at 
play with Ms family in a sum- 
mer dacha while Uncle Joe 
Stalin gears up for his 1936 
purges. But there is an oddness 
and energising sinisterness 
even in these scenes of sun- 


light, Chopin and cotton 
dresses. Who is the young fam- 
ily friend who arrives dis- 
guised as a blind man? Why 
are there so many mock-sui- 
cide games? 

Finally the film tears the 
idyll with a vengeance. Just 
like toe chauffered car jolting 
our hero down the country 
lane towards his eventual 
gulag, this plush movie vehicle 
grids op showing it lively 
springs and a feel far the road. 
And Mikhalkov, if he had not 
won a prize for toe movie, 
could have won it for a , perfor- 
mance that grows from the 
subtle to the bravura. 

The Best Actor prize went 
instead to Ge Yon, gauntly 
memorable in 7b Live. And the 
Best Actress was Vlma lisi - 
good lord, surely we remember 
her as a vacuous Italian starlet 
of the I96QS? - playing Cather- 
ine de Medici In France's La 
Reine Margot 

list's was not toe only iden- 
tity change at Cannes. A num- 
ber of directors kept turning 
into actors and vice versa. Tar- 
antino and Mikhalkov both 
jumped in front of the camera 
when not shouting "Action!" 
behind it Raman Polanski bur- 
gled several scenes from 
co-star Depardieu in Toma- 
tore’s A Simple Formality. And 
the Best Director prize went to 
a man better known, at least in 
the Eternal City, as a per- 
former: Roman comedian 
Nannl Moretti. who, as per my 
last report, enchanted le tout 
Cannes with Dear Diary. 

And talking of toucans, there 
should have been a prize for 
the large-beaked tropical bird 
an an adjoining hotel rooftop 
who kept waking me each 
morning in time for the 
dreaded 880. press show. “Bon- 
jour!*, it cried, sharp on 7.45. 
And then something, I insisted 
to friends, that sounded like 
“Serie noire! Serie noir! . . 
Only later did I realise that the 
bird was giving me a tip. Serie 
Noir is the French title for 
Pulp Fiction. 



■ BONN 

Oper Tonight Sat Les Contes 
(f Hoff ma nn . wfth cast ted by 
Francisco Araiza. Tomorrow, Sun: 
Tosca. fit Valery Panov’s 
production of Prokofiev's ballet 
Cinderella (0228-773667) 


■ BORDEAUX 
Palais dee Sports Tomorrow, Fri: 
Alain Lombard conducts Orchestra 
National Bordeaux Aquitaine in 
works by Britton, Debussy and 
Stravinsky, with tenor Keith Lewis 
and horn soloist Jean-Marc 
Daknaaao. Sat (at Grand-ThAStre 
Y 23no Vinnikov directs Las Sollstes 
de Bordeaux Aquitaine in works 
by Handel, Bach and Mendelssohn 
(5648 5854) 


■ COLOGNE 

PMhannonte Tonight Stephane 
Grappelli Trio, fit peter KKvfis 
conducts Ensemble Modem in 
Vawse. Antheil and Cage. Sat Sun, 
Mon: tngo Metmmcher conducts 
GGrzentch Orchestra and Cologne 


Radio Chorus in Henze's Das Floss 
der Medusa. Sun afternoon: teddy 
bear concert with Peter Ustinov. 
Next Tues, Wed, Thus, Fri: Daniel 
Barenboim conducts Chicago 
Symphony Orchestra (Q221-2B01) 
Opemhaus Tonight, Fri: Lothar 
Zagrosek conducts Andreas 
HomoW’s new production of 
Lortring’s Der wadschOtz. Sat next 
Tues: TanzForum production of Peer 
Gynt choreography by Jochen 
Ulrich. Sun: Macbeth with Alexandra 
Agache and Elizabeth Conned 
(0221-221 8400) 


■ COPENHAGEN 

Thtoff Tomorrow: Jan Krenz 
conducts Tivott Symphony Orchestra 
In works tv Brahms and 
Mendelssohn, with piano soloist 
Stephen Kovacevlch. Fri: Krystian 
Zxnerman piano recital. Sat 
members of the Danish Opera 
Academy sing arias and duets by 
Verdi, Puccini and Massenet Next 
Wed; Paavo Berglund conducts 
Royal Danish Orchestra in 
symphonies by Sibelius and Brahms 
(3315 1012) 


■ DRESDEN 

DRESDEN FESTIVAL 
This year’s festival, which runs tiB 
June 5, takes Its theme from August 
the Strong, whose accession 300 

years ago herakded a golden era 

Jn Dresden’s artistic life. The 
programme features a wide range 
of baroque instrumental specialists, 
and there is a chance to hear rare 
choral and operatic works by 
Telemann, Hasae and Handel. The 
Semperoper has festival 
perfo rma nces of Capriccio, Der 


RoeenfcavaBer and The Cunning 
Little Vixen. The orchestral 
programme over the corning week 
includes the Vienna Phffliarmonlc 
under Riocardo Muti and the 
Dresden StaatskapeOe under Neville 
Mariner, with piano sotoist Alfred 
Brendel (0351-486 6666) 


■ DUSSELDORF 
Deutsche Oper am Rhein Tonight 
tomorrow, Suit. Der FretechOtz. Fri, 
next Tues: Le nozze dl Figaro. Sat 
Heinz Spoerffs new choreographic 
version of A Midsummer Night's 
Dream (0211-890 8211). Duisburg 
Theatre has Lohengrin on Sat and 
a Stravinsky ballet progra mm e on 
Sun (0203-300 9100) 
Schauspl o l heus Tonight Lorca’s 
The House of Bernards Alba, fit 
new production of Brecht’s The 
Resistible Rise of Arturo Ul, directed 
by Wotf-Dletrtch Sprenger. Sat aid 
Sim: Shakespeare’s Romeo and 
JuHeL Mon: Die Ftedermaus. Tues: 
Shakespeare’s Troflus and Crestida 
(tickets 0211-369911 information 
0211-1822005 


■ FRANKFURT 

AHe Oper Tonight My Fair Lady' 
Tomorrow, fit Daniel Barenboim 
conducts Chicago Symphony 
Orchestra in two pro gram mes 
Inducing The Rita of Spring and 
two Brahms symphonies. Next Wed; 
Heinz Hoffiger directs Chamber 
Orchestr a of Europe (068-134 0400) 
EngMi Theater Kaaerabrasse 
Tonight first night of new 
production of Bill ManhofTs comedy 
. The Owl and the Pussycat Dafiy 
except Mon till Jtey.lfi (0189-2423 
162Q) 


Oper Sat Sytvain Cambrefing 
conducts Herbert Wernicke's 
production of Duke Bluebeard's 
Castle, wfth Henk Smit and 
Katherine CtetinskL Sure Guido 
Johannes Rumetadt conducts Nuria 
Esperfs production of Bektra, with 
Jante Martin and Lhria Budai 
(069-238081) 


■ GOTHENBURG 

Konserthuaet Tomorrow: Hans Graf 
conducts Gothenburg Symphony 
Orchestra ki an aB-Mozart 
programme, with piano soloist Mats 
WkJund (031-167000) 


■ HAMBURG 

Musikhdle Tonight Hamburg 
Singakademie in choral works by 
Mendelssohn and Rossini. Fit Sat 

North German fiadto Symphony 
Orchestra plays Musorgsky and 
Tchaikovsky. Sun: Wassische ■ 
Philharrnonie Bonn plays orchestral 
works by Brahms and Beethoven 
(040-354414) 

Staatsoper Tomorrow, Sun: Gerd 
Albrecht conducts Harry Kupforfa 
new production of Khovanshchina, 
with cast heeded by Olga Bororfina 
and Mate Sabiranen. Frfe next Tues: 
Alda with Maria GtiegNria and 
Michael Sylvester. Sab Die ' . 
ZauberflOte. June 4: Hermann Prey 
song recftal. June 5: first night of 
John Neunaier’s new production 
of Henze’s baflst Undine 
(040-351721) . 


■ HELSINKI 

FkmUh National Opera Tonight 
La travtata. Tomorrow: Bourmebter 
production of Swan Lake, fit 


Carmen. Sat, next Tues: Jorma 
Uatinen’s new ballet Sonata in 
Glass, music by Sibelfus (0-4030 
2211) 


■ LEIPZIG 

Gewandhaus Tomorrow, Fit Yuri 
Temirkanov conducts Gewandhaus 
Orchestra In works by Rossini, 
Mozart and Prokofiev, wfth piano 
soloist Rudolf Buch binder. Sun 
morning, Mon and Tues evenings: 
Daniel Nazareth conducts MDR 
Symphony Orchestra in Brahms 
and Stravinsky, with piano soloist 
Homero Francesch. Stm evening: 
Gewandhaus Quartet plays Mozart, 
Frangaix and Dvorak (0341-713 
2280) 


■ LYON 

Optra Tonight, Sun, next Tues: 
John Nelson conducts Klaus 
Michael Gruber’s production of La 
travfata, with cast headed by Giusy 
Devinu (repeated June 3, 16, 19, 
22). Tomorrow: Claire Gibault 
conducts concert performance of 
Mozart’s Apollo et Hyacfnthus (tel 
7200 4545 fax 7200 4548) 


■ MUNICH 

Staateoper Tonight Jun Mflrid 
conducts revival of Tony Palmer’s 
1992 production of Dvorak's Dknitrfj, 
with cast headed by Ben Heppner 
and Lhria Aghova (repeated May 
2fl, 31, June 3, Cl). Tomorrow, Sun; 
Don Pasquale. Fri: Bavarian State 
Ballet's American programme. 
Inducing new choreographies by 
Robwt LaFossa and Lucinda ChlldS- 
Sun (Prinzregententf w ater): Kathleen 
Kuhlmann song necttaL Mon, next 


Wed: Cos! fan tutte (089-221316) 
Ganteig Sab Leonard StatWn 
conducts Bavarian Radio Symphony 
Orchestra in works by Bernstein, 
Gershwin, Barber and Ives, with 
soprano Unda Hohenfatd. Next 
Tues, Thus, Fri and Sun: Sergiu 
Celibidache conducts Munich 
Phtoarmonio Orchestra fa Bloch 
and ShtKtakovIch, with cello soloist 
Natalia Gutman (089-4809 8614) 


■ STOCKHOLM 

Drotintnghohn The 1994 season, 
the second directed by Elisabeth 
Sfiderstnftm, opens tomorrow with 
the first night of a new Royal Opera 
production of Edouard Du Puy's 
early 19th century Slngsptel Youth 
and Folly (repeated May 28, 30, 
June 2, 4, 7, 9, 11), The season, 
which nrns tiff Sep 9, also includes 
Haydn’s Orlando PaJadmo 
conducted by hEcholas McGegan 
and a staged Handel compftation 
starring Anne Sofia von Otter 
(08-660 8225) 

Royal Opera Tonight ingvar 
Lid holm'S Strindberg opera A Dream 
Play. Tomorrow, More Simon 
Boccanegra. fit La boheme. Sab 
Natalie Conus' production of Swan 
Lake (tickets 08-248240 information 
08-203515) 

IfonserthuMt Tonight Kiystian 
Zroerman piano recftaL Tomorrow: 
NHdas Widen conducts Royal 
Stockholm Philharmonic Orch es tra 
in concertos by Mozart, Richard 
Strauss and Tchaikovsky (tickets 
08-102110 information 08-212520) 
Ber wnM haMnn Sat afternoon: Leif 
Segarstam conducts Swedish Radio 
Symphony Orchestra in works by 
Mahler, Sandstrom and Beethoven 
(08-784 1800) 


ARTS GUIDE 

Monday: Berlin, New York and 
Paris. 

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

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

Friday: Btfilbftions Guide. 

European Cable and 
Satellite Business TV 

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

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

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

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730; 


i 


t 


t 


i 





FINANCIAL TIMES WEDNESDAY MAY 25 1990. 


Edward Mortimer 


r 


Hie “success” 
of Operation 
Provide Com- 
fort, which 
established 
northern Iraq 
as a “safe 
haven", off lim- 
its to Saddam 
Hussein’s forces, has come to 
be taken for granted: the one 
dear demonstration that inter- 
national force can be used to 
humanitarian effect, given a 
dear objective and the political 
will to pursue it The Kurds of 
Iraq having been out of the 
TiearflfriwE for some time , It is 
assumed that, with them at 
least, all must be well 

Alas, not so. The latest news 
is that they have fallen out 
among themselves. Since early 
this month there has been 
fighting in many parts of Iraqi 
Kurdistan between the two 
main Kurdish parties: the Kur- 
distan Democratic Party (KDP) 
of Massoud Baizani and the 
Patrio tic Union of Kurdistan 
(PUE) ted by Jalal Talabani. 

The rivalry between these 
two parties is deep-seated, 
going back to the 1960s when 
the original KDP s plit because 
Mr Barzani's father, a charis- 
matic tribal leader, quarrelled 
with the urban intellectuals, 
including Mr Talabani, who 
controlled the party structure. 
Broadly speaking, the Baizanis 
dominate the northern area 
alnmg the Tu rkish border, and 
have had good relations with 
successive regimes in Iran., 
while Mr Talabani' s followers 
are strongest in file southern 
area around Sulaimaniyya, and 
have tended to support fellow 
Kurds demanding autonomy in 
Iran and Turkey. 

The two groups’ cooperation 
in holding elections in the safe 
haven in 1992, and in adminis- 
tering it on a 5050 basis since 
then, has astonished those 
familiar with their earlier his- 
tory. It began to unravel last 
winter when there was fierce 
fightin g between the FUK and 
an Tala min. group hankpd by 
Iran. Mr Baizani intervened to 
stop the fi ghting , and in the 
process quarrelled with Mr 
Jabar Farman, a FUK military 
leader who Is defence minister 
in tiie nominally united admin. 
istratioiL 

Since then Mr Barzani has 
been pressing fin: Mr Farman's 
resignation, and it appears Mr 
Farman may have been largely 
responsible for the escalation 
of what started on May 1 as a 
local vendetta about a piece of 
land into a general conflict 
between the two parties. They 


Danger 
in safe 
havens 


P ublic hearings con- 
vened by fixe US 
Financial Accounting 
Standards Board do 
not normally attract capacity 
crowds. But when the stan- 
dairis-setting body held a meet- 
ing in San Jose, California, 
recently, 3,000 managers and 
employees protested outside 
and a band attempted to drown 
out the proceedings. 

The board's 100-page techni- 
cal document known as 
“127-0", published last June, 
has proved highly controver- 
sial. Its subject is the one 
accounting topic guaranteed to 
provoke ire among companies 
on both sides of the Atlantic: 

the difiplngirr p and f rt»q1m<mt fa 
accounts of the details of exec- 
utive — and in 

particular options, which are 
rights to buy shares at a fixed 
price in the future. 

Business is coming under 
increasing pressure in both the 
US and UK. Last week, the UK 
Accounting S tandar ds Board, 
the national standards-setting 
body, issued draft recommen- 
dations that urge wtmpanfas to 
disclose full details of the 
options they grant to directors. 

In the US, its counterpart, 
the FASB, reconvenes next 
month to draft revised propos- 
als. These would require com- 
panies for the first time to 
treat options granted to senior 
executives as a cost to be set 
against profits. 

Concern about executive pay 
packages has risen as a grow- 
ing number of top managers 
are remunerated not only with 
salary and perks, but also with 
options. The intention is to 
provide a farm of performance- 
related pay. D ir ectors exercise 
their options only if the value 
of the shares on the stock mar- 
ket rises above the fixed price 
at which they are entitled to 
buy them. The greater the dif- 
ference, the mare profitable are 
the options, giving executives 
the incentive to run the com- 
pany in a way that boosts the 
share price. 

But many companies now 
complain that draft require- 
ments from accounting stan- 
dards bodies will jeopardise 
their future growth, by forcing 
them to stop awarding options. 
This, in ton, would nuke it 
more difficult to hire the best 
people, they argue. 

“You would never have 
thoug ht this level of reaction 
would have come out of a pro- 
posed accounting standard,” 
says Stephen Zeft professor of 
accounting at Rice University 
in Texas. “The debate is 
extraordinarily emotional. To 
listen to company executives 
you would think this was. the 
Doomsday scenario.” 


Quarrelling 
Kurdish parties 
must look to 
Iraqi democrats 
for assistance 


have now virtually partitioned 
the haven, forcibly closing 
down each other's offices in 
their respective territories. 

While the conflict is essen- 
tially intra-Kurdish, it has no 
doubt been exacerbated by the 
haven's isolation and its lack 
of dear political perspectives. 
The Iranian regime, always 
h i g a iiant about this experi- 
ment in democracy on its fron- 
tiers, is now openly hostile to 
it, and to the FUK in particu- 
lar. Meanwhile the Turkish 
army is engaged in an anoint 
effort to stamp out the guerrO- 


The area is 
blockaded by 
Saddam from the 
south and subject 
to UN sanctions 


las of the PKK (Kurdistan 
Workers' Party) on their side 
of the frontier. Many civilians 
have fled from Turkey into 
Iraq, by the same mountain 
paths used by Iraqi Kurds to 
reach Turkey three years ago. 

At that time Mr Talabani 
established a good relationship 
with the then Turkish presi- 
dent, Turgut Oral, and acted as 
unofficial mediator between 
him and the PKK leader, 
Abdullah Ocalan, who lives in 
Lebanon under Syrian protec- 
tion. In March last year Mr 
Ocalan declared a ceasefire, 
saying he wanted to convert 
the PKK into a non-violent 
political movement, working 
for Kurdish rights within Tur- 
key. But after Ozal’s death a 
month later the ceasefire soon 
broke down. Since then the 
violence in southeastern Tur- 
key has escalated, and the 
Turks suspect Mr Talabani 's 
followers of helping the PKK 

Last week the Turkish air 


force bombed a PKK camp 70 
miles inside Iraq in an area 
controlled by Mr Talabanl’s 
party. Mr Talabani himself, 
meanwhile, is in Damascus, 
apparently unable or unwilling 
to pass through Turkey on his 
way back to Iraqi Kurdistan, 
where his presence is needed 
to Impose discipline on his fol- 
lowers and restore a working 
relationship with Mr Barzani. 

The haven in northern Iraq 
is also isolated economically. It 
is blockaded by Saddam from 
the south and is subject to UN 
sanctions on grounds that it is 
part of Iraq. By the same 
twisted logic Mr John Major, 
the British prime Tnrnfcfar — 
who could claim to be the 
architect of the safe haven - 
explained in a recent letter to 
Lord Avebury, the Liberal 
peer, that it would be “impossi- 
ble” to station UN human 
rights monitors in northern 
Iraq “without the permission 
of the Iraqi government”. TO 
do SO, he said, “would call into 
question the territorial integ- 
rity and political independence 
of Iraq, as recognised by the 
United Nations". 

Surely he should have 
thought of that in 1991 when 
he sent British troops into 
northern Iraq to secure the 
safe haven, but told them to 
stop at the 36th parallel. In so 
doing he helped create a de 
facto Kurdish state, but one 
whose leaders have had the 
wisdom not to declare indepen- 
dence. In inviting human 
lights monitors, whose brief 
would be to monitor the situa- 
tion in Iraq as a whole, those 
leaders are reaffirming the 
haven as a libe rated area of 
Iraq, not an independent state. 
And in this month’s fi ghting it 
is the Iraqi National Congress 
(INC), bared in Kurdistan but 
composed mainly of Arab oppo- 
nents of Saddam from 
southern and central Iraq, 
which has been accepted as an 
honest broker by both Kurdish 
parties and has had some suc- 
cess in negotiating ceasefires. 

One good result of this sad 
episode is that Kurds have 
acquired respect for the INC 
and have seen that Arab Iraqis 
can play a constructive role, 
even in Kurdish affairs. The 
Kurdish parties, which both 
belong to the INC. should now 
place themselves formally 
under its authority, and the 
west should recognise it as the 
legitimate alternative to Sad- 
dam. From then on, sanctions 
should be applied only to the 
parts of Iraq which are. still 
under Saddam's control. 


Designer stubbie, designer drugs . . . it's become a term of abuse. 


but I proud to be a DfcjTl ® “ 


Ji r Terence, fl*s**y»**s~ 




,-c bJ*****- 


■ V\ 

TL \ 


1 » 




* d *‘ C c «-w _ 

i.., . 




T VT- 


AT THE CONRAN SHOP. QUAQLINO'S, BIBENDUM AND THE GASTRODROME AT BUTLERS WHARF. 



One option they 
don’t want 


be precisely measured but t.'\ M 


US and UK companies are angry at plans to give »« based northern cm. .1 ■ 
more information in accounts, says Andrew Jack ii* 1 

Huk MNmiVMMulwJiAnD Vrrhl * 


which are included, such as N ’ 
post-retirement benefits • 
“Accounting is not very pr* 
rise once you get past what 
cash you have,' she says. 

However, business has been 
almost universally opposed to 
FASB’s proposals. No sector Is 
more upset than the new high- 

technology companies, such as 
there based in northern Calif. 


! nUll^ 


Last week's guidance from 
the Urgent Issues Task Force, 
a subcommittee of the UK 
Accounting Standards Board, 
was an attempt to dose a loop- 
hole which has allowed compa- 
nies to disclose far less about 
option s in their accounts than 
the law intended - and less 
than their counterparts in the 
US have to reveal 

It fellows growing pressure 
for disclosure from investors. 
The report of the Cadbury com- 
mittee an the financial aspects 
of corporate governance, pub- 
lished at the aid of 1992, called 
for fall disclosure of directors' 

While a few UK companies 
have began to make detailed 
disclosures on options - such 
as British Petroleum and Reu- 
ters - most make it impossible 
for shareholders to see how 
much directors are being paid 
In this way. 

Mr David Tweedie, chairman 
of the UK Accounting Stan- 
dards Board, says the aim of 
the draft gniririfTigs is far suffi- 
cient disclosure to provide 
readers of accounts with a 
“do4t-yoarself kit” of informa- 
tion, from which they «»n cal- 
culate the value of options 
being granted to (Erectors. 

The guidelines call for com- 
panies to show the total num- 
ber of share options granted, as 
well as the number awarded to 
each director. They call for 
publication of the date and 
price at which the options can 
be exercised and when they 
ex p ire; They also recommend 
that, if any options have been 
taken up during the financial 
year, companies should dis- 
close the market price of the 
shar es on the day when they 
woe exercised. 

However, in contrast to most 
standards issued by the board, 
the share options guidelines 
are only advisory and cannot 
be enforced by the Financial 
Reporting Review Panel, the 
UK accounts watchdog. The 
board hoped to make them 
mandatory, but it recently ran 
into a legal httoh* the existing 
law does not require disclosure 
of remuneration unless it can 
be precisely valued. . • 

“The law says that if you are 




McMaBmr ' H.VfaymHofc4ng<r 



Michael D, Elmar 


Wayne CaHoway 


Sanford LWaffl 


Rauban Marie 


DanM P. Tufty 


SburoteftalMaslBMc 


Coinpany 


Waft Disney 161.378 y 

-‘-I t? « tf.** f ■' Wm * 

D*ocrouM*f ' - ^-93^7 .• . 

PepsiCo 81,283 j'- 

Thwetara .47,288 \ 

. Ccca-Oofa '. 'XI l "- V 

Colgate-Palmoftm 42£84 

.L ea M a naP sc IB B ' 4&Q76-. 

Merrfl! Lynch 40.453 . 

*aa® ..war.::': 

* D aw d an Hock pica si Via' 
enter Company** aval year • 


ardtee their only way to attract 
the best workers. Others 

accuse FASB of jumping on the 

current bandwagon of criticism 
of excessive executive pay. 

Even the large , accountancy 
firms, which initially sup- 
ported the FASB proposals, 
have now turned against them 
- Mr Welter Schuetze, the 
chief accountant of the SBC, 
denounced the firms in a 
speech in January for losing 
their independence acting 
as “cheerleaders for thair efi- 


<lHl> 


paid £100 plus a sheep and you 
cannot value the sheep, you 
are not required to say you are 
paid £100 plus a sheep. You can 
just say you are paid £100," 
says Mr Tweedie. 

Options defy precise valua- 
tion. Directors cannot sell 
them immediately, and their 
final value is dependent on the 


Tliere will never 
be a definitive 
method of 
valuation, but the 
existing value of 
zero is wrong* 


share price - which may be 
hi ghly volatile - at the time 
when they can be exercised. If 
the company collapses. Or the 
share price at the time of exer- 
cise is less than the fixed price 
at which they were granted, 
they are worthless. 

This difficulty also lies at the 
heart of the current debate in 
the US. There have long been 
requirements for, companies Jo 
disclose the number , and exer- 


cise price of share options in 
the proxy statements, which 
are sent to shareholders before 
a vote. Two years ago, the 
Securities and Exchange Com- 
mission, the US market watch- 
dog, tightened the rules to 
stop companies burying the 
information in the small 
print 

However, the FASB propos- 
als go much further. The draft 
accounting standard issued 
last summer argues that 
options are a charge to the 
company and should therefore 
be taken as a cost, which 
would correspondingly reduce 
earning s - the single financial 
measure most used to assess 
corporate performance. 

Ms Diana Willis, FASB’s 
project manager for stock 
options, is ermfidant that there 
are mathematical models 
which are sufficiently precise 
to place a more realistic value 
on options. “There will never 
be one definitive method of 
valuation, but we all know that 
the existing value of zero is 
wrong,” she says. 

She points out that there are 
many other numbers in finan- 
cial statements which cannot 


S urprised by the public 
reaction, the seven- 
member FASB board - 
meets again next 
month, and hopes to produce a 
final version of its standard by 
early next year. The indica- 
tions are that it Is still firmly 
behind its proposals. { 

Meanwhile, the politicians - 
responding to business pres- 
sure - have joined the growing . 
ranks of critics. A senate reso- 
lution has urged FASB to drop 
its proposals, and a draft bin 
row to Gcragress mandates tha 
SEC to ignore them even If 
they are issued, which would 
render them ineffective. 

Mr Dermis Beresford, FASB’s 
chairman, remains committed. 
“We are not going to back 
down simply because of politi- 
cal pressure,” he says. “The 
board is still strongly con- 
vinced ttoft options have a 
value and there is a way to • 
value them. There have been 
some questions about how 
appropriate is the valuation 
method we discussed before, - 
but we are going to try our 
best to come up with a reason- 
able approach.” 

Shareholders in the UK 
looking for greater disclosure 
of the costs of options are 
unlikely to receive any such 
strong reassurance. The 
Accounting .-Standards Board’s;, 
proposals are likely to be 
republished within two .. 
months, virtually unaltered. " 
There is little sign to the short 
term that the Department of 
Trade and Industry or the 
stock exchange will change the . 
regulations in order to make J.~ 
such disclosures mandatory. •' 


LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SE1 9HL 

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


Monopoly policy no less tough 


From Mr Robin Aanmson and 
Mr Robert Young. 

Sir, Robert Rice (“Watchdog 
barks but the MMC moves on”. 
May 17) suggests that the 
Monopolies and Mergers Com- 
mission has adopted a less 
interventionist approach since 
its 1989 report on beer was 
overruled by the government 
May we, as two of the authors 
of the beer report, point out 
that the MMC has recently 
tfl frpn an equally tough Una on 
a n o th er major industry? 
August’s report on gas recom- 
mended enforced division of 
British Gas's trading arm from 
its transportation business - 
hardly evidence of a “relaxed 
policy”. 

Some of the recent criticism 


of the MMC appears to Ignore 
the legal framework to which 
it operates. The Fair Trading 
Act penults the MMC to make 
recommendations only where 
it finds a situation to be 
“against the public interest”. 
In other words, there is no pre- 
sumption that refusal to sup- 
ply, tying of retail outlets, or 
any other practice is prohibited 
unless it can be shown to be 
positively good for consumers 
(as would be the case to Euro- 
pean law). The presumption is 
that such practices are permit- 
ted unless they can be shown 
to be positively bad. 

We might not agree with 
every recent decision the MMC 
has made, but we are not con- 
vinced that there has been a 


change of policy or even 
approach. 

What would be very disturb- 
ing, however, would be any 
suggestion that the MMC's 
independence from political 
pressure was at risk. The great 
strength of UK competition 
policy is the major rote it gives 
to an Independent body with a 
statutory duty to publish its 
findings for all to see. This 
goes a tong way towards de- 
pohtkrising decisions on partic- 
ular cases. Any threat to this 
independence should be 
strongly resisted. 

Robin Aaranson, 

Robert Young, 

Coopers & ly brand, 

1 Embankment Place, 

London WCZN SNN 


Zimbabwe 
climate not 


yet right 


EU law needs enforcing I Wrong route 


From Mr Richard Brown. 

Sir, Emma Tucker’s report, 
“Brussels to name Btngle-mar- 
ket laggards” Ofay 23). reveals 
how out of touch is the law- 
making perspective of the 
European Commission. Wel- 
come thmg hi a leaguo table of 
the performance of member 
states In adopting EU single- 
market legislation might be, it 
is not the adoption but the 
implementation and enforce- 
ment which matters. 

Countries with legal systems 
that allow them to “copy our 
numerous directives into 


national law en bloc have little 
difficulty to adopting EU legis- 
lation. The flaws and gaps to 
the single market occur where 
the legislation has been trans- 
posed but fails to be executed 
on the ground. UK regulators 
appear to be among the most 
efficient in Europe. This is 
where a league table would be 
really useful 
Richard Brown, 
deputy dtectorgeneml. 
Association of British 
Chambers of Commerce, 

9 Tuflan Street, 

London SWlP 3QB 


Accountants' alternative view 


From Mrs AntheaL Rose. 

Sir, While Andrew Jack cor- 
rectly points out that the stu- 
dent recruitment to the Insti- 
tute of Chartered Accountants 
in En gland and Wales has 
fallen steadily over recent 
years ("You don’t have to be 
Australian but it helps”. May 
19), his statement that among 
the different accountancy qual- 
ifications, “management 
accountancy reigns supreme” 
is rot borne out by the facts. 

Last year, the Chartered 
Association of Certified 
Accountants registered more 
than 22,500 students - more 
than 8£00 of them in the UK - 
up 7.5 per cent on the previous 
year, and more than 14,000 
overseas - up 22 per cent 
These figures are more than 
five times those of the ICAEW 
and more than doable those of 
the Chartered Institute of Man. 


; agement Accountants. 

Moreover, while there may 
be some in the profession who 
are still living in the “halcyon” 
days of the 1980s and who do 
need to indulge in more “soul 
searching” on the scope for 
revisions to future training 
and recruitment, the ACCA 
has successfully introduced 
streamlined examination struc- 
tures and competence-based 
training requirements, aimed 
at imparting skills that 
employers now want their 
accountants to possess. 

It is the responsibility of 
those in the profession who 
have rot yet come to terms 
with today's reality to learn 
from those who have. 

Anthea L Rose, 
chief executive, 

ACCA. 

29 Lincoln’s inn Fields, 

London WC2A SEE 


From Sir Loot Broom. 

Sir, I note that Michael 
Thompson-Noel “hurled him- 
self out of London down the 
motorway to Solsbury Hill 
very close to Bath” to support 
the protest against the pro- 
posed by-pass (Hawks & Hand- 
saws, May 21/22). 

Surely those who are con- 
cerned about road building 
“madn e ss” should set an exam- 
ple by leaving their cars at 
home whenever possible. Why 
did he not use public transport 
from London to Bath - and 
then proceed the short distance 
from Bath by road? 

Ivor Broom. 

Cherry Laum, Bridle Lane, 
Loudwater, Ridcmansworth , 
Hertfordshire WD3 4JB 


From Lawrence W Harris ILL 

St, Tony Hawkins’ hopeful 
article ("Harare sows seeds for 
an investment harvest”, Mtiy 
18) about the improving invest- 
ment conditions in Zimbabwe 
resulting from exchange con-, 
trol and foreign, exchange liber- 
alisation, price deregulation, 
privatisation of some state 
companies, and freeing of 
interest rates did not refer to 
his previous article (“Zim- 
babwe cancels controversial 
tend leases”. May 5) on Zim- 
babwe which featured a radi- 
cally different theme. 

In that article. It was noted 
that 72 leases of farms expro- 
priated from white farmers, 
theoretically for resettlement 
of landless peasants, had In 
feet been allotted to senior pol- 
iticians (such as the head of 
the air force and the former 
agriculture minister). The 
article noted that businessmen 
[were] ... concerned that the 
Zimbabwe investment promo- 
tion conference to London on 
May 19 would have been under-" 
mined by the controversy”, se- 
ttle leases were cancelled. 
Indeed, I should think that the 
fear of expropriation of invest- 
ments (with the possible subse- 
quent donation of same to poli- 
ticians) would not be assuaged 
by any amount of exchange 
control liberalisation or prica 
deregulation. 

Lawrence W Harris, 

12 East 49th Street, 22 nd floor, 
New York, NY 10017, US 


COs 


ivingt 


EU generics at a disadvantage 


From Mr Greg Perry. 

Sir, In his article, “Price 
wars over name-dropping” 
(May 18), Daniel Green points 
out that this year’s expiry of 
US patents on many branded 
pharmaceuticals will result in 
a rapid increase to the supply 
of generic medicines. 

While this is good news for 
US-based pharmaceutical com- 
panies supplying generics, it 
brings no joy to EU-based 
generic companies which oper- 
ate under more restrictive 
patent laws. Under US law, 
generic companies can develop 
and register their products in 
advance of patent expiry and 
thus put their products on the 
market the day after patent 
expiry. Generic companies 


operating under EU tews are 
usually only allowed to begin 
product development or 
authorisation procedures after 
patent expiry (see my letter 
published to the FT, October 18 
1393). 

This restriction not only lim- 
its EU generic manufacturers 
from competing equally with 
US companies in the US mar- 
ket but also ensures that In fe 
European pharmaceutical mar- 
ket, generic competition will 
rot be anywhere as intense as 
Daniel Green depicted, for 
US market 
Greg Perry. 
director, 

European Generics Association 
PO Box 193. _ - 

Brussels, Belgium 






FINANCIAL TIMES WEDNESDAY MAY 25 !9<M 



\ v 


hi; ok 


, ‘ »’ ;i . 


V • . . • ■ *»»x 


FINANCIAL TIMES 

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

Wednesday May 25 1994 


A manifesto 

for business 


The government's long-awaited 
white paper on competitiveness 
will seriously disappoint those 
expecting original insights into 
the factors underlying the conn- 
try's industrial performance or 
radical innovations in policy. 

Indeed, much of it reads hke a 
self-justifying c ompilation of mea- 
sures already in place or planned, 
and one which fails to counter the 
a nx i e ties recently expressed by, 
among others, the Commons trade 
and industry committee. As such, 
it is likely to be dismissed by 
many, inchrdfng same on the gov- 
ernment benches, as a damp 
squib. 

However, the document Is not 
without merit First it is pleasing 
that ministers recognise that their 
separate departmental actions 
affect a wide range of business 
activities and have sought to draw 
up an audit of their impact Quite 
how the government intends to 
achieve the necessary co-ordina- 
tion across Whitehall over the laa- 
ger term is less dear. The Trea- 
sury, in particular, is often rightly 
accused of ignoring the impact of 
its policies on business and wealth 
creation. 

Secondly, the document is to be 
commended for what it does not 
say. It wisely eschews big new 
spending on industrial support It 
also steers dear of sectoral inter- 
vention and picking winners. It is 
encouraging that the gover n ment 
now appears to accept that these 
approaches offer no solutions, but 
more often create problems by 
retarding essential adjustment. 

In reality, that acceptance has 
been imposed by circumstance. 

Any temptation to embark an a 
big spending spree is constrained 
by the budget deficit and the gov- 
ernment's commitment to main- 
taining stable macmecomHnic pol- 
icies. likewise, scope for action is 
circumscribed by the shift to Brus- 
sels of control over trade policy, 
public procurement rales and, 
increasingly, competition .policy. 

Without these weapons, the 
ars enal of classic interventionism 
which some ministers enjoy prom- 
ising their -political followers is 
largely denuded. 



Mild dirigisme 

The other htntting factor is the 
wide spread of opinions within the 
government's own ranks. These 
range from advocacy of mQd diri- 
gisme to heavy reliance an deregu- 
lation. Read as a political mani- 
festo, which it is in part, the white 
paper is an attempt to bridge 
these two extremes. Inevitably, 
that has produced a minimalist 
result, marked more by laundry 
lists of unexceptionable proposals • 
than by truly innovative thinking 

That said, what prescriptions 
does the white paper have to 
offer? Most concern small business 
and education and training. In the 
former area, the proposal to 
encourage faster payment of bills, 
initially by Insisting an mare die- 

The cost of 
saving energy 


closure is welcome. Increased 
empha sis on advisory services will 
be good news for cons ultants, 
though it is unclear how far it 
meets small firms’ actual wwfo 
Bat at least, this type of s u pport 
seems unlikely to do much harm. 

The white paper correctly recog- 
nises the central importance of 
education and training in ra(«*ng 
skin levels. Much remains to be 
done in delivering on government 
initiatives such as the re f orm of 
the national curriculum and the 
Introduction of new vocational 
q ua li ficat ions. One priority rightly 
identified Is the need to tacHe the 
shortcomings of GNVQs, the new 
vocational qualifications widely 
criticised for their lack of rigour. 

Learning credits 

There are some new proposals 
cm training, notably the extension 
of the “modem apprenticeship' 
scheme to aH l8-IS year olds. This 
welcome move shows that the gov- 
ernment has listened to construc- 
tive comments on its mpHw pia«« 
Mach more radical Is the idea of 
learning credits, vouchers that 
would allow young people to make 
their own choices in education 
and training after school Credits 
would keep schools, colleges and 
other providers of education and 
training on their toes. And they 
would boost parity of esteem 
between academic, technical and 
vocational education by providing 
the same form of finance for each. 
The government should press 
ahead with its promised study of 
the potential for credits, and 
mount pflotschsmes. 

However, it is regrettable that 
more has not been done to 
strengthen the role of Training 
and Enterprise Councils in educa- 
tion and ' training: Mergers 
between Tecs and chambers of 
commerce are now permitted, and 
the developing network of one- 
stop shops wfll help to strengthen 
their position. But to acquire the 
strength of German chambers, 
they need clearer strategic pur- 
pose arid-mote financial and offer-* 1 
ational independence from govern- 
ment. - 

,The jno§t positive achievement 
of the while papdr is that it sets 
out clearly the government’s 
Hrinkfng an industrial policy and 
wealth creation. At a time of 
mmmting rtdwtn on t he se issues, 
business the public needs to 
know where it stands. The result 
foils for short of being a “blue- 
print for industrial success”, as 
stone ministars suggest That is an 
implausible claim for any govern- 
ment to make, above all one 
which has held office for 15 years, 
like a blueprint, however, the 
effectiveness of tire measures set 
out yesterday will hinge as much 
on their execution as on their 
design. -The government’s priority 
must be to press ahead firmly 
with implementation, above all 
in the field of training and 
education. 


In creating fire Energy Saving 
Trust UK government ministers 
thought they had found a winner: 
a tool for bringing about expen- 
sive environmental improvements 
that would also be popular. But 
the trust has been stalled by a row 
over its funding, which has also 
exposed the confused state of the 
government’s plans for energy 
conservation. 

The trust Is intended to subsid- 
ise household improvements such 
as low-energy light bulbs, efficient 
heritors and insulation for lofts and 
walls. The costs - same &40Qm a 
year by the aid of the decade - 
will be passed on to gas and elec- 
tricity customers, even if they 
have not benefited. 

At least, that was the plan. 
Today Ms Clare Spottiswoode, 
director general of Qfgas, the reg- 
ulator, is likely to tell a parlia- 
mentary select committee, for the 
third ti™**,, why she will not allow 
these costs to be passed on to gas 
ongtT ) j pcrrg Sha is rig h t tO insist 
tha t the government should not 
use regulators to levy taxes, and 
to point out that the impact would 
be regressive, falling proportion- 
ally hqr dwr on pOOTfir famili es. 

But the row obscures the 
broader questions of whether 
Britain needs to promote energy 
conservation, and if it does, 
whether the trust is the right tool 

Curbing emissions 

The government's main argu- 
ment for energy saving is that the 
UK committed itself at the 1992 
Rio Barth Summit to curbing 
wmfecffln fl of carbon dioxide from 
fossil Aids, The Rio targets are 
questionable - scientists are 
uncertain of the threat of global 
wanning - but countries feel that 
precautions are warranted. 

In giving its hnriHng to Rio, the • 
government has not weighed up 


the costs of cutting emissions 
against the value of file global 
benefit It has tended to imply that 
saving energy is always worth- 
while, whatever the cost But even 
if the aim is justified, ministers 
put too rcmch weight on the trust 
they want It to generate a quarter 
of the savings needed to meet the 
Rio targets. 

Funding aside, the trust was 
never likely to be up to the task. It 
lacks the administration to dis- 
burse £400m a year in parcels of 
several hundred pounds. Jet alone 
to identify which households 
should benefit 

Sharp price rises 

Instead, the more appropriate 
tool for curbing carbon emissions 
- though one the government may 
fed is poetically inaccessible - is 
further sharp energy price rises. 

The better argument for the 
trust’s existence Is that some 
household energy conservation 
measures pay for themselves 
quickly. The trust says that all of 
its schemes would cover their 
costs within five years, but t hat 
the public is deterred from adopt- 
ing these measures by ignorance 
and by the initial spending 
needed. It estimates that 90 per 
rant of hmiaikvirtg lack at least a 
quarter of the energy saving mea- 
sures which it recommends. 

To the extent that the trust can 
overcome those barriers, it has a 
justifiable role, although a smaller 
one than it now envisages. It also 
needs to direct its cash towards 
fon»» who can least afford to pay. 

But the trust's ftmds should 
come from taxpayers, n ot fro m 
consumers. Energy conservation 
costs money; the government 
sf ym™ not use rhetoric and the 
regulatory system to usher 
through, a disguised and regres- 
sive tax. 


P resident Bin Clinton has 
described his dedshm on 
the renewal of China’s 
privileged trade access to 
the US marirfli as nrw of 
the most critical of his *d mmiH t rn - 
fion. In China itself, the Most 
Favoured Nation status issue' is 
regarded as hardly less important 
Both the US and fihinBw leader- 
ships appear to sense that the rid- 
ing cm MEN renewal due by Jnne 3 
will mark something of a watershed 
in Slno-US relations: that much 
more is at stake than simply 
two-way trade running at about 
$40bn annually. 

Not least of the vexed questions 
faring the niwitrtn administration is 
how, in the former term, it might 

dftal with human rights pnd flhfoa. 

Unless a way is fotmd to cope with 
the issue' within the broader rela- 
tionship, it will continue to fester, 
threatening an increasingly impor- 
tant commercial and strategic part- 
nership. 

While the White House has con- 
ducted a high-profile sometimes 
agonising debate with Itself over 
MEN renewal, Chinese officials 
have appeared at one in tbordeter- 
nrination to secure an extension 
without making significant conces- 
sions to western pressures on 
human rights. Mr dintwi in grant- 
ing MFN last year called for “over- 
all gfgnifiremt improvement” in Chi- 
na’s human rights behaviour, 
including greater respect for the 
universal declaration on human 
rights. 

But China’s appearance -of 
unyielding unity of purpose on 
MFN tells only pvt of file story. No 
less than in the outside world, MFN 
renewal has encouraged fairly wide- 
spread discussion in China about 
questions such as relations with the 
west, economic liberalisation and 
political change and most crucially 
about the best means of harnessing 
western pressures to achieve desir- 
able political reform. 

This debate, because of China’s 
lack of open discussion, is furtive. B 
is cer ta inly not ventilated in the 
official press, but among scholars. 
dimriitontu n«d even some of the 
more liberal members of the Com- 
munist party these are lively issues 
and ones that go to the heart of how 
Chinese society might evolve. 

Mr rimfaw mu! his advisers may 
not folly appreciate the implica- 
tions for China's fata m ai develop- 
ment mid its relations with the 
west But many Chinese intdlectu- 
als antipathetic to the Communist 
regime hope that MFN is granted 
and moreover that trade and ' 
hnwum rights issues are delinked. 

They are frankly critical of what 
they regard as the US use of the - 
blunt trade instrument in its 
well-meaning efforts to achieve 
progress on human rights. 

1 of those who hold such . 

is Mr Cui Wenhua, an histo- The 

nan and television s cri ptw riter, " bates the success of these 
who lost his job over his involve- 
ment in, the June 1969 prodemoo- 
racy protests and who professes no 
love to the communist rulers. 

“ft the world seeks to isolate 
China it will only slow down the 
process of UberaHsatian,’’ he says. 

“Since the world cannot totally 
ignore China, it should try to 
engage it more fully.” 

These may appear naive views 
given that the Communist party 
shows little sign of yielding any 
ground to its opponents and indeed 
has recently been cracking down 
even harder on dissidents; but it is 

al«\ tnip. that China te in thp mid dip 
of a process of economic liberalisa- 
tion and opening to the outside 
world unprecedented in its history. 

This opening, which differs mark- 
edly from past contact with foreign 
influences in that it has not been 
forced on China, is introducing 
western ideas and values to a recep- 
tive audience at> urban 
an increasing number of whom 
have travelled and lived abroad. 

Notions of individual rights, 
democracy and basic freedoms 
which are taken to granted in the 
west have tremendous appeal for 
younger Chinese intellectuals, but 
inevitably fids embrace of western 
ideas teds to mnfori with as older 
generation of scholars who believe 
that Conforian ideals of filial obedi- 
ence and respect for authority 


The debate on renewal of China’s MFN 
status has sparked a covert discussion 
about political reform, says Tony Walker 

Wrong attitude 
to human rights 



ing embarked an a far-reaching pro- 
gramme of economic reform they 
are riding a tiger whose behaviour 
will be to from predictable, and 
that economic and social change is, 
in any case, loosening central con- 
trol 

But the leadership also appreci- 
ates that as to as economic reform 
is concerned there is no turning 
bad without risking the fete that 
has b efalle n the Communist party 
of the former Soviet Union which 
felled to adapt to change and paid 
the price. 

Chinese officials are fond of the 
bicycle metaphor when describing 
China’s current circumstances: if 
you stop pedalling, they say, you 
win fell over. This in turn raises the 
question of whether China’s leaders 
are pedalling fast «wmgh to cope 
with the dermoids of a restive popu- 
lation at a of rapid **fYnrimin 
ami social change? 

These worries about the unknown 
- China in its economic reform has 
entered uncharted waters - are in 
turn prompting a re-emphasis on 
political stability, a crackdown on 
dissent such as the recent arrest of 
prominent dissident Wei Jingsheng, 
and restrictions on the media's abil- 
ity to ventilate conflicting political 
viewpoints. 

Since the Communist party's 
policymaking central committee 
approved an adventurous package 
of economic reforms last November, 
China’s leaders, fariwifag - premier 
Li Peng, have laid heavy emphasis 
an the need to maintain stability as 
the fifth anniversary of the June 4 
Tiananmen massacre loams. They 
have sought this while navigating 
their way through a testing phase 
Involving a painful r attomaMsattan 
of overmanned and loss-making 
state enterprises. 


I 


With the fifth anni ver sary of the Tiananmen square massacre due next week, premier Li Peng (top left) is 
determined to maintain stability, while dissident Wei Jingsheng fright) wants to imrease p res su re to reform 


should prevail 

Tang Dangpmp, a researcher at 
the Beijing Pcdytwmhfo -ahd com- 
mentator on changes in Chinese 
society, says that both sides of the 
debate look to Singapore, South 
Korea and Taiwan to. prove their 
lattri- 

SOUtfar 

east Asian tigers to market econom- 
ics and relative democratic free- 
doms, while niripr scholar s choose 
to believe that Confucianism has 
mutopinnpd their advancement. 

Whan the views af the two sides 
converge is on the pace of (i wrirahip 
rharge fn China to avoid what an 

Both die US and 
Chinese leaderships 
sense that the ruling 
on MFN renewal will 
mark a watershed in 
Slno-US relations 


albeit Ann veneer of politically liter- 
ate Chinese fear most: chaos. “Most 
people, including the younger gen- 
eration, understand it will take 
mare than a day to adapt western 
ideas and values,” says Mr Tang. 

This fil-deflned majority among 
the politically aware would in turn 
part company with hardcore dissi- 
dents such as Wei Jingsheng, the 
pro-democracy activist recently 
detained for questioning in connec- 
tion with unspecified “new crimes". 

Mr Wei behaves, according to his 
friends, in “making haste" in pur- 
suit of political change. He also 
favours, aa he made clear in a con- 
versation. early this year with an 


nfflrial US toman rights envoy, in 
cnn H r m pd and even increased west- 
ern pressure oh’ China- "to bring 
about SUch chang a 

In his contacts with Mr John 
Shattuck, the US assistant secretary 
of State to humar^ ri ghts Mr Wei 
was committing what' m t& eyes of 
the regime was a virtually unpar- 
donable sin known as H tong 
waguo, literally maintaining illicit 
relations with a foreign country, or 
to employ the colloquial western 
description: washing one’s dirty 
ltnem in public. 

Other leaders of the 1969 protests 
SUCh as T,iu Xiaobo, the philnanphar 
and writer, also advocate continued 
western pressure an questions such 
as MFN, t hou gh Mr Ian is in favour 
of renewal “Without pressure from 
the international community * he 
observes, “the Chinese gnvp mmHnt 
would be rampant fin its treatment 
of dissidents]," he says. 

Among international human 
rights activists, who are frustrated 
by what they perceive as the (Hin- 
ton administration’s cynical han- 
dling of the MFN issue and a drift 
away from sanctions, a similar view 
prevails. Robin Monro of the 
Human R i ght s Watch/Asia believes 
that “pressure is the only thing that 
works” when it comes to forcing the 
Chinese to recognise western con- 
cerns over human r ights . 

Mr Monro, whose organisation 
compiles the most comprehensive 
dossier of China's human rights 
transgressions, dismisses what he 
describes as a "mantra” argument 
that economic change wfll inevita- 
bly spawn political reform. This is 
a pious hope," he says, “ft does not 
connect with reality.” 

In contrast, even those critics 


with the gloomiest perspective 

would concede that profound’ 

change' is afoot, although they^’Tteader Deng Xiaoping* anflWUriles 


n tTifo difficult period Beijing 
is grappling with twin 
threats: workers laid off from 
state industries, and a peas- 
antry - surplus rural labour 
numbers between 100m and 200m - 
made anxious and angry by a wid- 
ening gap between rich and poor, 
country and city. 

Compared with these challenges, 
dissident activity, whfle it might be 
eye-catching in the west, is hardly 
the problem that loams largest in 
Beijing’s Among China’s 

rulers than is always the residual 
fear that dissidents will nwV> com- 
mon cause with disaffected ele- 
ments in the cities and cou ntry side 
— as the Communist revolutionaries 
did in the 1920 b. 

Permeating nhhnwm official con- 
cerns at almost all levels at present 
is also the failing health of senior 


would differ on where it is leading. 
Whfle there has been a gignffleant 
improvement in Chinese living 
standards in many areas, the coon- 
tty's rulers continue to discourage 
thoughts of political fibaraUsation. 

The historian Mr Cui has no 
doubt that quite apart from impres- 
sive material advances, a more 
important change is that of the 
‘heart’. “Chinese citizens have 
emerged from being slaves of the 
dark ages to citizens with some 
modem thoughts, and this should 


Many intellectuals 
antipathetic to the 
regime hope that 
MFN is granted and 
that trade and human 
rights are de-Iinked. 


be the springboard for 
change in the future, ” he says. 

He cites by way of example of 
changes afoot, the Communist party 
decision to embrace what it 
describes as a “socialist market 
economy”. “In reality the word 
'socialist* does not mean anything,” 
Mr Cui observes. “A market econ- 
omy is a market economy. As long 
as you allow the market to exist 
this will produce changes of owner- 
ship and interest that will eventu- 
ally lead to political diversifica- 
tion." 

This latter development is one 
that disturbs China’s communist 
rulers. They understand that hav- 


ahout a potentially difficult titinsi- 
tfon to a new generation of leaders. 
Preparation to an uncertain future 
without Deng is one of the factors 
prompting the present crackdown 
an dissent by a nervous leadership. 

These uncertain times present 
rhaTWigpg as well as opportunities 
to file west in the managipmAnt of 
its fractious relationship with a 
mode rnising China. The Clinton 
administration because of its grow- 
ing HMiiflinifl imH strategic relation- 
ship with China is in a unique posi- 
tion to influence developments, hid 
constructive engagement will not 
be easy and conflict over human 
rights issues is certain to persist 

The west's patience is certain to 
be tested not only over human 
rights but also over problems such 
as trade liberalisation, copyright 
infringements and disagreement 
over anus sales. But to the US, 
there would seem to be little alter- 
native to seeking a more predictable 
relationship with China - one that 
does not become hostage to the 
annual politicking involved in MFN 
renewal 

While the US is poised to extend 
China's privfledged trade access to 
tee American market to another 
year, it will be doing so In the 
knowledge that Beijing has hardly 
fulfilled req ui rements ipi fl down by 
President CHnhm to improvements 
in human rights. China win have 
won fids round but what is impor- 
tant to the west, and the US in 
particular, is that it seeks other ave- 
nues in future that are not so poten- 
tially disr upti ve to the broader com- 
mercial relationship. 


Observer 


Back into 
the cold 

■ Investment bankers at leading 
Eurobond houses await the return 
of Karl Nars with scone trepidation. 

Finland's head of treasury 
management has been an a 
three-year secondment to the 
EBRD, but is due back at hfe desk 
next month, ffleknamed 
“Basis-Point Billy”, his talent for 
driving a hard bargain is not easily 
forgotten. 

However, Finland was Messed 
with a triple-A foreign currency 
credit rating in those days, so 
syndicate managers had little 
choice but to suffer his tough 
market tactics, Ms cart telephone 

matinw and hi* mhApm 
nan w l nf ij ipfaig. 

During Ws absence, the country 
has lost one of its three As, and 
investor appetite for its pa per is 
less keen. At (he 


Vdkko Kantola, is reckoned to have 

made a good fist of a difficult job 
and to have wan over syndicate 
managers by djaUfluiting business 
fairly. Surely Basis Point KBy isn’t 
going to have to reinvent himself 
as Percentage Point Paul? 


Arid patch 


■ Horror of honors. Who was that 
luring hi the flower beds at the 
Chelsea Flower Show when Graham 


Heame’s Enterprise Oil hasted its 
annual Arnnw for foe great and 
tte good on Monday nights 

Step forward Rudolph Agnew, 
the new chairman of Lasmo, the 
struggling oil company which is 

imifar a tta plr f mm Tgnfar p rigo 

Apparently, both i ^urii 'niwi fl jri 
bump into each other but Observer 
is assured that the only thing they 
talked about was that handy 
pe rennial . . . the weather. 


Taken away 

m Looks like the owners of four 
of London’s trerufiest Chinese 
restaurants were too busy 
meditating to notice that their 
holding com p an y wan levitatin g 

somewhere below solvency. 

Blaidwood, which owns Now & 
Zen, ZenW3 , Zm Central and Zen " 
Chdsea, has gone into receivership 
this week because it cannot service 
loans unrelated' to its food outlets. 

The good news is that the 
'receivers believe the eateries in 
question remain an appetising 
target far prospective purchasen. 


Dust to dust 

■ Powell Duffryn’s interest in 
bidding to British CoaTs South 
Wales operations has the kind of 
historic ring that would surround, 
for example, attempts to 
rehabilitate descendants of the tsars 

iw Rnssta. 

After all Powell Dnffryn was 



Tm b oy cott in g w h ate me Hti 

fop. MggtttM tMl pnmpwny 
CTp h rilflng tnnrn than BP pitas and 
employing more than 32,000 miners 
before the indnstry was 
nationalised in 1946. The company 
was detested, not least to its 
decision to “encourage” miners 
to dig bigger lumps of coal by 
equipping them with tools 
resembling pitchforks raths- than 
shovels. 

Like Russia’s monarchists, 
though, the company has durable 
roots. About 150 years ago, its 
founder. Thomas Powell, introduced 
tile first locomotives to the Welsh 
coalfields and founded a 
coal-shipping business which, to 
this day, is one of its main 
activities. 


Its influence persisted even after 
nationaBratiop — the National Coal 
Board’s first chairman waB Lord 
Hyndley, the company’s former 
manag ing director, and another 
PD man was the NCB’s first 
director for marketing. 

Subsequently, it formed a joint 
i ntematianal mining mms nltanry 
with the Coal Board and even 
opened a travel agency which 
served the Coal Board's staff. There 
will be those in south Wales who 
will view its return with as much 
enthusiasm as the Russian serfe 
would welcome a tsarist revival 


Codswollop 

■ What can have got into (heir 
Lordships? The Earl of Longford, 
the former Labour cabinet minister, 
was yesterday complimenting Earl 
Ferrers, the home office minister, 
on his ability to preach ‘Tost as 


is required to deliver, even ff a 


an earlier one”. 

Ferrers replied that receiving 
Hrd words from Longford was 
■rather like imndn wtfh 

a fish; it slides all over the place 
and one does not know whether 

ftnp has hold of the haad Or the 

tail”. 


Tony's scoop 

■ Not many media tycoons would 
turn to cam of their competitors 



when looking for a : 
director. But then Tony i 
owner of 80 per cent of 1 
Press, is not yet playing in the first 
division - which may explain why 
he has added Ben Bradlee, the 
legendary editor of the Washington. 
Post, to the board of his 
Independent Newspapers. 

O’Reilly, who sat on the 
Washington Post board until very 
recently, is one ctf those people who 
think that the Post is the greatest 
paper in the world. Adding the 
Prat’s 72-year-old vice- 
president-at-large to bis board 
ought to give him a bit more 
credibility with the hacks - if not 
with fellow newspaper proprietor 
Conrad Black, who has been quoted 
as saying that O'Reilly c yn 
“schmooze his way with the 
bankers, but there’s an element 
of horse feathers". 


Finite 

■ Patient souls awaiting that most 

elusive event in (he City calendar, 
the flotation of Si, sustained a near 
mortal blow yesterday in the shape 
of a letter from. Barings. With 
admirable foresi ght, si’s financial 
advisers are ghriDg advance 
wanting of a briefing on the 
pathfinder prospectus - for Friday 
May 27 2094. 

Just in case anyone thought that 

was a misprint, the letter goes on 

to reveal that tba annual results 
for the year ended March 31 2094 
wfll also he treated at the meeting. 







12 


16 


| A FINANCIAL TIME 
( for change 

i 



FINANCIAL TIMES 

Wednesday May 25 1994 



0816892266 


COMMITTB* TO Q^fUltY 


Ukraine leader accuses Yeltsin of fomenting separatist tensions 

Kravchuk vents fury over Crimea 


By JO Barshay in Kiev and 
John Lloyd in Moscow 

Mr Leonid Kravchuk, Ukraine's 
president, yesterday lashpri out at 
his Russian counterpart, Mr 
Boils Yeltsin, accusing him of 
fuelling separatist tensions in 
Crimea. 

M A president can only issue 
’warnings to his own government 
bodies and ministers and not to 
the presidents of other coun- 
tries,” Mr Kravchuk said, con- 
demning Mr Yeltsinm an address 
to military veterans in Kiev. 

He blamed Mr Yeltsin’s advis- 
ers for aggravating tension and 
accused the Russian media of 
spreading “rabid ?nd dishonest” 
information about Crimea, where 
the local parliament has restored 
a 1S92 constitution - denounced 
by the Kiev authorities as an ini- 


tial step to secession. 

‘"This is a serious question 
because we do not accept state 
level attacks on neighbours with 
whom we want long-term 
friendly and equal relations, not 
just for a single day ” he said. 

Mr Kravchuk adopted a more 
peaceful stance in a meeting with 
Mr Douglas Hurd, UK foreign sec- 
retary. “We have no intention of 
using force. Td like to stress 
that." he told Mr Hurd, adding 
that he hoped foreign support for 
Ukraine within its present bor- 
ders would continue. 

The Kiev parliament has issued 
a Monday deadline for Crimea to 
rescind its constitution. There 
has been increased military activ- 
ity on the peninsula. 

Simultaneous negotiations in 
Moscow and Kiev have foiled to 
resolve the stand-oil. In Kiev, 


talks with Crimean politicians 
concluded unsuccessfully yester- 
day. Crimean MPs refused to 
withdraw their assertive consti- 
tution, but did agree to establish 
joint commissions with Ukraine 
for further discussions on issues 
such as economic policy- 

in Moscow talks involving the 
Russian, Crimean and Ukrainian 
prime ministers were said last 
night to have produced an agree- 
ment cm the future of the Black 
Sea Fleet, based at the Crimean 
port of Sevastopol. The prime 
ministers have agreed to base the 
T>ns<aflri and Ukrainian fleets in 
separate ports. 

The official news agency TASS 
said “It is expected that in the 
final document precise conditions 
will be laid down for the division 
of the infrastructure of the 
Sea Fleet, and also for the issue 


of the bases for the national 
fleets.' 

Unconfirmed reports from the 
meeting suggest there is agree- 
ment in principle that the Rus- 
sian share of the fleet will remain 
in its base of Sevastopol • on con- 
dition that it remains a Ukrai- 
nian city. 

Ukraine’s foreign minister, Mr 
Anatoly Zlenko. is eager to seek 
support for bis country's position 
from the United Nations and 
other multilateral western organ- 
isations. 

Britain, the US and Germany 
have expressed support for 
Ukraine’s current borders, but 
Mr Zlenko is pressing for a 
“broader statement" that would 
show that the international com- 
munity shows a clear under- 
standing of “the territorial integ- 
rity of Ukraine”. 


Privatisation in 
Europe could cost 
over 800,000 jobs 


By Peter Norman, Economics 
Editor, in London 

Privatisation in Europe could 
cost more than 800,000 jobs by 
the end of 1998 as previously 
sheltered nationalised industries 
face up to tougher competition, a 
joint study by six European eco- 
nomic research institutes warns 
today. 

The Ereco network of research 
institutes says that more than 
120 companies in the European 
Union and the European Free 
Trade Area, employing more 
than 3.5m people and with 
annual sales of Ecu400bn 
($464bn), are candidates for priva- 
tisation. Ereco's forecast suggests 
more than one in five of the pres- 
ent labour force in these compa- 
nies will lose their jobs. 

The expected job losses In the 
period from 1992 to 1998 are con- 
centrated in France, where 
290,000 are expected to go, Italy 

(180.000) and Germany (140,000). 
The heaviest concentration of 
labour shedding Is expected in 
the telecommunications sector, 
where an estimated 268,000 jobs 
will be lost, followed by 
energy (250,000) and transport 

(77.000) . 

The Ereco estimates are based 
on Britain’s experience of privati- 
sation and subsequent corporate 
restructuring. Five UK privatised 
industries - British Telecom, 
British Gas. British Airways, 
British Steel and the electricity 
supply companies - shed more 


than SOQjOQO jobs in the 1980s. 

The Ereco report comments: 
“The scope of the new privatisa- 
tion programmes across the 
whole of Europe in the 1990s 
threatens to dwarf this in its 
employment impact.” 

It predicts that more than Llm 
jobs could be lost if restructuring 
is especially severe. Much will 
depend on how for governments 
press for deregulation and mar- 
ket liberalisation in. the telecoms 
and energy sectors. 

But “perhaps only 500,000 jobs 
will be shed” if output growth 
turns out to be particularly 
strong in the newly privatised 
Industries or if governments tnkp 
action to prevent the full employ- 
ment implications of privatisa- 
tion. 

The report warns, however, 
that mounting competition and 
the reduced opportunity for 
states to intervene to protect 
national champions mean that 
eventual Job losses, totalling 
about 800,000. are unlikely to be 
postponed for long. 

Ereco expects privatisation in 
Europe to become a big political 
issue. 

Ereco members are Cambridge 
Econometrics of the UK; Ifo Insti- 
tut fflr Wirtschaftsforschong, 
Germany; BIPE Consefi, France; 
Prometeia, Italy; NEL the Nether- 
lands; and Wifo of Austria. 
Europe in 1998, available m UK 
from Cambridge Econometrics, Tel 
(0223) 460760, fax (0223) 464378. 
Bail, 400. 


Britain announces 
measures to boost 
competitive edge 


By Peter Norman and 
Roland Rudd m London 

The UK government yesterday 
launched its long-awaited white 
paper on boosting Britain’s com- 
petitiveness with a promise to 
raise standards of vocational edu- 
cation and tr aining and provide a 
better climate for business. 

The document, presented with 
much razzmatazz by Mr Michael 
Heseltine, trade and industry sec- 
retary, contained a multitude of 
initiatives cm employment, man- 
agement, communications and 
infrastructure, innovation and 
export promotion. 

However, toe document admits 
that many of toe meas ures out- 
lined were existing ideas that 
had been repackaged and 
brought together to constitute a 
strategy. 

Mr Hesriti-na said it contained 
61 new proposals. He said the 
proposals would not lead to any 
overall increase in planned pub- 
lic expenditure, in spite of toe 
government’s intention to pro- 
vide an extra £300m ($450m) over 
the three years to 1997-98 for edu- 
cation and training. 

hi annthar initiative, Mr John 
MacGregor, transport secretary, 
announced, proposals to privatise 
toe UK’s air traffic control sys- 
tem. National Air Traffic Ser- 
vices may be floated on the stock 
exchange, becoming a private 
sector contractor to the Civil Avi- 
ation Authority. 

Mr Robin Cook, trade spokes- 


man for the opposition Labour 
party, said the proposals were an 
admission of Britain’s competi- 
tiveness problem. 

He added: “This is a bankrupt 
sta tement from a government on 
the verge of liquidation.” 

The document said Britain ha< 
“an enormous task" correcting 
more than 100 years of relative 
economic decline. 

Mr Kenneth Clarke, chancellor 
of the exchequer, said he would 
be looking at how for UK compa- 
nies had achieved the right bal- 
ance in paying out a greater pro- 
portion of their profits in 
dividends than continental com- 
panies. 

However, he dismissed sugges- 
tions that he was envious of Ger- 
man industry’s long-term 
approach to investment “Ger- 
many has lost its competitive 
edge against British industry" he 
said. 

The broad coverage of the 
white paper reflects the Trade 
and Industry Department’s view 
that there is so single cause or 
no small number of causes for 
the UK’s competitiveness prob- 
lems. 

In focusing on many facets of 
the economy, the white paper is 
intended to provide ministers 
with a check list to Judge future 
progress towards making govern- 
ment policy more friendly to 
business in an increasingly com- 
petitive world economy. 


Editorial Comment, Page 15 


IBM moves all advertising to Ogilvy & Mather 


Continued from Page 1 

£54.4m for the year ended Decem- 
ber 31 1993. up from STlSm the 
previous year. 

hi spite of the improvement in 
performance, Mr Martin Sorrell, 


chief executive, was cautious 
about the forecast for this year, 
saying that recovery for the 
Industry was “still unstable and 
uncertain". The group’s other 
main advertising network is J. 
Walter Thompson. WPP shares 


gained ftp last night to close at 
126p. O&M. which has among its 
other clients American Express, 
Ford and Unilever, will also 
become responsible for a substan- 
tial proportion of IBM’s direct 
marirftHng . Mg Kohustamm said 


toe agency would help “deliver 
clear, consistent messages, in the 
most efficient way possible". 

Advertising agencies which 
will lose out because of toe con- 
solidation include Lintas, DDB 
Needham, and McCann-Erickson. 


FT WEATHER GUIDE 


Europe today 


Low pressure will produce rafn over Ireland, 
Wales and south-west England. The Benelux 
and northern France wil also be unsettled with 
a few showers but some sunshine. Scandnavia 
will have sun and showers which will be wintry 
In the north with hail and sleet The northern 
Balkans will be cloudy with outbreaks of rain, 
while the southern Balkans will have showers 
and thunder s torms. Southern France. Spain 
and Portugal wiP be warm and rather surmy. It 
win be very hot In Greece with temperatures up 
to 36C. Italy win have sunshine and Isolated 
showers. 

Five-day forecast 

On Thursday, northern France, the Benelux, 
Germany and the Alps will have showers, 
sometimes with a rumble of thunder. The UK 
will also be cloudy with showers. Later in the 
week, the showers will spread to the northern 
Balkans. As a result, conditions wlU Improve In 
western Europe. The sun wiD return, but it wiB 
be rather cool Southern Europe wDI remain 
warm and rather sunny. From Satutiay, 
thundery showers wfll develop over Spain and 
wiH move north. 


TODAY’S 



SrnaBan Bt12 QMT. TempeiaBaas maxkrum far day. Forecasts by Mateo Consult at the Nathn ta ruJs 



Maximum 

BdMno 

fair 

27 

Caracas 

cloudy 

31 


Celsius 

Belfast 

ram 

14 

Cardiff 

mm 

14 

Abu Dhabi 

sun 

39 

Befpade 

cloudy 

27 

Casablanca 

doudy 

24 

Accra 

ehowo- 

32 

Berlin 

shower 

18 

Chicago 

cloudy 

IS 

Algiers 

cloudy 

30 

Bermuda 

far 

26 

Cologne 

fob- 

20 

Amsterdam 

Shower 

17 

Bogota 

shower 

18 

Dakar 

tor 

26 

Athens 

sun 

35 

Bombay 

fair 

33 

Oates 

tor 

31 

Atlanta 

Bund 

31 

Brussels 

shower 

18 

Ddhf 

sun 

41 

a Aires 

tor 

20 

Budapest 

thund 

24 

Djakarta 

cloudy 

31 

BJnm 

dowdy 

14 

C-hagen 

cloudy 

15 

DuOai 

sun 

37 

Bangkok 

Shows- 

30 

Cain 

8tfl 

36 

Dublin 

rain 

13 

Barcelona 

sun 

35 

Capo Town 

sun 

18 

Dubrovnik 

sun 

30 


Latest technology in flying: the A340 

© Lufthansa 

German Airlines 


Gdnbutft 

tor 

13 

Madrid 

fair 

29 

Rangoon 

lair 

34 

Fare 

tor 

24 

Majorca 

aun 

28 

Reykjavik 

tor 

10 

Frankfurt 

shower 

22 

Malts 

tor 

33 

Rio 

thund 

26 

Geneva 

SUI 

24 

Manchester 

cloudy 

14 

Rome 

sun 

27 

Gibraltar 

tor 

28 

Mania 

thund 

31 

S. ftsco 

tor 

21 

Gtasgow 

fair 

14 

Melbourne 

shower 

16 

Seoul 

rain 

21 

Hamburg 

Shower 

IB 

Mexico City 

fac- 

22 

Singapore 

shower 

31 

HefafnW 

tor 

16 

Miami 

tor 

31 

Stockholm 

tor 

19 

Hong Kong 

shower 

31 

Man 

SUI 

30 

Stmboug 

shower 

22 

Honolulu 

doudy 

30 

Montreal 

ton 

16 

Sydney 

ttuxt 

21 

IstenbJ 

shower 

31 

Moscow 

shower 

15 

Tangier 

doudy 

24 

Jersey 

fair 

15 

Muich 

fak- 

23 

Tel Aviv 

sun 

34 

Karachi 

Ur 

SS 

Nairobi 

doudy 

26 

Tokyo 

tor 

26 

Kuwait 

tor 

43 

Naples 

tor 

30 

Toronto 

rain 

16 

L Angeles 

far 

22 

Nassau 

tor 

31 

Vancouver 

shower 

19 

Las Palmas 

doudy 

24 

New York 

shower 

24 

Venice 

fak 

26 

Lima 

doudy 

21 

Nice 

sun 

24 

Vienna 

shower 

24 

Lisbon 

sun 

23 

Nicosia 

tor 

32 

Warsaw 

doudy 

20 

London 

few 

17 

Oslo 

fak 

18 

Washkwtsn 

thund 

29 

Lux-boug 

Ur 

18 

Parts 

fair 

21 

Weifrigtnn 

doudy 

17 

Lyon 

sun 

25 

Forth 

Mr 

21 

IMnnteg 

sun 

17 

Madeira 

doudy 

22 

Prague 

shower 

20 

Zurich 

to- 

22 


THE LEX COLUMN 


Full marks for M&S 


It has become a stock market tradition 
to greet Maries & Spencer's foil year 
results by marking down its shares. 
Last year worries about the company’s 
annual pay award were behind the 
fa! While M&S has delivered an its 
promise that higher pay would be 
earned through productivity gains, 
yesterday’s figures contained an unex- 
pected £l6m pension charge. Since 
that amounts to 2 per cent of profits 
and is likely to be repeated, it could be 
aigued that the 3 par cent foil in the 
shares yesterday is a rational 
response. Yet MAS’S management has 
little control over the pension charge. 
In areas which matter there is no rea- 
son for disappointment 

Turnover growth in the UK of 9 per 
cent over the full year - and rather 
more in the second half - is ample 
evidence that the “outstanding value” 
campaign fax got the top lfaa moving 
again. Market share has been 
increased at the right point in toe 
cycle, without giving anything away 
in terms of margin. Rising raw materi- 
als costs may squeeze mar gins this 
year, but productivity gains leave 
M&S well placed to cope. Doubters 
who predicted that its food business 
would be ravaged by price competition 
from the supermarket giants have aian 
been firmly rebutted. 

U M&S has a problem - other than 
the irritation of another poor perfor- 
mance In Qnaria — it is deriding how 
to invest its cash flow. After toe chas- 
tening experience with Brooks 
Brothers an acquisition looks unlikely. 
The financial services business can 
support itself and overseas capital 
spending of is not enoug h to stop 
accumulating nash- A credible 
solution on that score would reinforce 
the group’s formidable momentum. 

Germany 

The Bundesbank always has an 
excuse for the explosion in MS money 
supply. This time it is toe particularly 
ingenious one that broad money is 
bring swollen by the size of the cen- 
tral bank's own profits. But, after 
April's annnaKspd increase of 15.8 per 
cent, it will take a miracle for the 1994 
target to be met The aggregate would 
have to shrink by DM5bn between 
now and toe end of toe year to hit 
even the top of the target 

By July at the latest the bank must 
confront this reality. Then its council 
is scheduled to review progress 
towards meeting this year's target It 
has numerous options: it could ignore 
toe overshoot suspend the target tern- 


FT-SE Index: 3089.1 (-19.3) 


Maries and Spencer 

Stare price retetivs to the 
General Rotators Sector 
150 



porarily, scrap it altogether, rebase it 
to a different period that excludes the 
tax-related inflows at the end of last 
year, choose another aggregate on 
which to focus, or raise the target ceil- 
ing. None of these, however, will 
restore toe Bundesbank’s flagging 
credibility with the bond market. 

Perhaps it would have been, different 
if the hank had not itself made such a 
fetish of the MS target One of its 
hopes at the time of the last rate cut 
was that lower short term rates would 
encourage investors to move further 
out along the yield curve. There Is 
little evidence of this so for. despite 
the sharp steepening of the curve 
since the start of toe year. The worry 
spreading outward from the US is one 
factor. But the Bundesbank’s inability 
to get a grip on the money supply is 
also likely to hold Germany’s bond 
market back, especially now there is a 
whiff of economic recovery in the air. 

Thorn EMI 

There may be some value in combin- 
ing a muse business with a book pub- 
lisher. But Thom EMI will have to 
work hard to convince investors of the 
benefits if it does decide to acquire a 
publisher. There are obviously similar- 
ities between music and books. They 
both involve handling creative talent 
and have rimiiar distribution systems. 
What is moire, several of the other 
music majors - Warner, MCA and 
Bertelsmann - are also in books. 

But of this amounts tO a Com- 
pelling case. Thom will need to show 
not merely that book and music distri- 
bution systems are similar but that 
combining them could cut costs. It 
will also need to show that the group’s 


skills in managing intellectual ^ 
erty can be transferred from one area 
to the other. Otherwise, shareholders 
will be worried that the group's 
resources could be squandered. 

The sums Involved could be large. 
One indication is that Thom wotdd be 
happy for interest cover, currently lo, 
to foil to three or four. To get to such 
a level, net debt would have to rise by 
£600m or more. Before Thorn 
embarked on a big publishing acquisi- 
tion, investors would probably also 
want to see earnings in the existing 
business moving ahead. The 3.4 per 
cent increase in adjusted earnings per 
share in the last financial year was 
hardly much to crow about 
Meanwhile, a demerger of the music 
and rental businesses inches forward. 
The reebristening of the rental side as 
toe Thom Group is a step in that 
direction. Bat ch airm an - Str Colin 
Southgate thinks a split cannot take 
place until toe troubled defence inter- 
ests are sold. Gives that these have 
been on the block since 3989, a quick 
disposal cannot be guaranteed. 

BET 

BET’S management cLfrfmg to have 
nursed the company back to corporate 
health, but it is a shadow of its former 
self. Since 199G shareholders’ foods 
have halved to £260m despite a £200m 
rescue rightsissue. the dividend has 
fallen by 75 per cent and turnover has 
fallen by a quarter. Profits have more 
than halved, notwithstanding last 
year's recovery. Admittedly the group 
has net cash an its balance sheet and 
the focus has sharpened to four basic 
business areas. But Mr John dark 
the chief executive who masterminded 
the surgery, must now put some flesh 
back on the bones. 

It will be a daunting task. Though 
BET has managed 14.7 per cent mar- 
gins in its textile cleaning services, 
margins on other activities such as 
contract cleaning and security person- 
nel services are slow to recover. Plant 
hire, which consumes more than its 
foil share of capital, looks a particular 
drag. 

Not does the newly sanitised bat 
ance sheet offer much scope for fund- 
ing acquisitions with cash, especially 
since capital speeding is at lari being 
permitted to increase. Given the prob- 
lems it faced at the outset, the man- 
agement may be forgiven for some 
sense of satisfaction. Yet Its optimism 
must be tempered by the board's deri- 
sion to defer increasing a dividend 
which is more than twice covered. 


simon 

Simon Engineering pic 


BADGERLINE GROUP pie.~ 



£56 million 
Rights Issue 


Hill Samuel advised and 
underwrore the refinancing 



£30 million 
Acquisition Finance 


Hill Samuel underwrote 
the Facility 



Nordic Investment Bank 

US$49 million 
Currency Equivalent 
February 1994 

US$48 million 
Currency Equivalent 
April 1994 

Ten Year Private Placements 


Tibbett Sc Britten 
Group pie 


Hill Samuel provided a Senior 
Debt Facility to assist in the 
purchase of Tolemau (Holdings) Ltd 


Doing what we do best. 

♦ 

Hill Samuel 


Bank 


Hill Samuel Bank Limited - 100 Wood Street ■ London EC2P 2AJ 

A member of the Securities 6c Futures Authority ■ A member of tfarTSB Group 


f 






1 


\ 








J 


;',V . 






FINANCIAL TIMES SURVEY 


",'i\ 

or 



The economy; steady growth 
at- a rate above the 
national avera ige......Page || 


T 




Wednesday May 25 1994 




T he people of Tennessee 
spend modi of the time 
comparing: their state 1 
with other states or dti es of 
the South. ‘'Not as bad ^ Miss- 
issippi or Louisiana,’’ yon hear 
of the educational -system. 
“Behind Atlanta, but ahead of 
Charlotte,” someone says of 
NashviBe. 1 - 
Perhaps it isn't surprising. A 
land-locked state which shares 
its borders with eight others; 
Teflaessee site sqnately in the 
middBe' of the South. It looks 
like a fiction created by map 
makers; a. thin wedge cut out 
of the underbelly of . the US 
which (intends between two 
distant natural borders - the 
Mississippi- river to the west, 
the Appalachian mountains to 
the east; What «m there be ' 
that Unites ‘ this 1 - -disparate ' 
place?.- 

But there is amptber reason 
for the comparisons,' the con- - 
stant assessment and reassess- 
ment of how weB Tennessee Is 
doing. Hie new middia classes' 
in Tennessee’s cities are . 
searching for an identity. . 
Once, the state took its iden- 
tity from the land: the cott o n 
fields of the the Missiratppi 
delta, for example, nr the ■" 
wooded hints nf the east . 

The. importance of cot--, 
ton - and the textile businesses 
wjuch . it ,. supported - has 
receded. Tennessee h&s . suf- 
fered: the same rural- depopula- - 
tibn as imich of the USL 
• . Many, of the new jobshare; in 
manufacturing plant^sbch ps 
carmaking, or servb»*ttdns- 1 - 


fy\ x r 


.tries such as healthcare or dis- 
tribution. Many of the manag- 
erewho rim these new indus- 
tries have moved to the state 
fro m' th e north-east of the 
country, from the nation’s rust 
. belt, nr, from some far-away 
country. Tenues&e has been 
spec tacularly successful in 
- attracting overseas companies 
in recent years, particularly, 
hum Japan and the-TJK 

Mr Bob Margo of Vanderbilt 
University in Nashville « in? ft 
Nhe end of regional economic 
Meatflies” in; the US- / - . i 
■ .The-tranrfEMmatidn hasbear- 
^rilring: A -poverty-stricken, 
lately ruraT state has clawed . 
its way up ftXEn 'the bottom of 
-file pile te became, htaconpmi b - 
toTns, ane.cf the nKwe success- 
ful in tbaTTew South.” 

A decade ago, Tennessee - 
ra nked 4 5tft out of 50 US states, 
tn tarns of per income. - 
Now,iti3iffltbiArecenttargEt 
sef-bya neWooabSon between. 










Memphis bee more in common with tbefiat region that tfpem tire JBssisdppf datta than ttw MQy cw i fa rf or 


regtona of Tacm ew 


cies, ’ imn wh 'as - ’Tennessee 
TtmwrrOWj.'is to- reach partly 
with:- the- national average - 


v it has>alre^f joame a long 
way fi^nr .R^eyilt^ T-New 
DCaT gra, t ,wfefeH»the . Tennessee 
’■VMM*- Airtjkafty was • created 
tabling ehe^poWer -tiijd,- With' 
it, jobs - to 1 ^ ■ impoverished 
reglorn Tbe' Corporation' for 
Enterprise Development, a hob 
fbrprefitentttylased-hi Wash- 
ington DC .y^^yropares 

PwSpmaoLce and 
- ...... ^:W . -States, .puts 

fo SttyA fop of 



y*a he 

ftt. 'Weft' 1 -*cvr-cv: 






Search for a new identity 

A poverty-stri cken state has clawed its way up to become one of the 
more successful in the “New South.” Richard Waters reports 


the . country jo. terms of eco- 
nomic vitality - thanks to a 
diverse economy, strong 
inward investment in manufac- 
turing and five competitiveness 
of its existing businesses. - 
Analyses such -as these usu- 
ally put Tennessee ahead of 
inuhediate -neighbours Missis- 
sippi^ -Louisiana, Alabama and 
. Arkansas, as wbfi as more dis-. 
taut Southern rivals sud h as 
Florida! But the state’s eco- 
nomic growth struggles to be 
compared with Georgia, North 

f fonWna grid Vir ginia 

- While these comparisons are 

encouraging, others' are less, income disparity; between -which would raise an esti- State University’s centre fo: 

flattering. In particular, Ten- urban and rural, and between mated $100m a year -have business and economii 

nessee suffers from . a the rich and poor,” says' Mr fallen foul otf Tennessee voters’ research. 

long-st an din g underinvestment Brian Dabson, head of the Cor- . disapproval i-of all gambling The st 

in.lts edu cation system, which, potation for Enterprise Devel- Hns is, after all, the heart of Governin' Ned McWherter, whi 
ranks at- least as bad as its opmenL 

Southern neighbours. The By the Corporation’s mea ... 

state come8'41st among US sure of income dlstxibu- . remains is tu be found in the right the balance. Mi 

riatesin;ite;Jhi^udiopl grado: . turn -comparing the incomes, countryside. The growth that McWherter, a Democrat win 

ation rate, ahd^Llpwly 47th in ofthe most wealthy fifth of the has come tothe state’s biggest likes to rotate how he was bon 
terms of the, number of heads, state’s population with those of" cities - Nashville, Memphis, on the fritrhon tnhia of a Jam 

ofho iB eholds whfi have had at the poorest - Tennessee ranks- . Chattanooga and Rnifx- in the north-west of the state 

least. 12 years of education.'' 45th in the country. “ . ’ ~ ’ * ' " ‘ ' 

Also, Tennesseans have done . Also, it retains a regressive 

httle to spread Ihsfr hicrearipg taxation system, with, a hefty (MveryweJl in the l98Qs bu*it ’An infrastructure pro 

wealth across the . population /sales tax mid no tax oh earned was concentrated in urban : gramme has added L000 write 

as- ‘a wholfcr “Wherq -it {five income. Efforts to introduce a' — - ' 

stated ifeal^flcores/pooriy is state lottery -r a move , fo 

.equity- tfcare' i* a- great . . with- pthar states, gn&r one 





•which would raise an esti- 
mated JlOOm a year -have 
fallen foul of Tennessee voters' 
disapproval iOf all gambling 
This is, after all, the heart of 
the Bafe B^L ; . 

Much 'of the poverty that 
remains is to be found in the 
countryside. The growth that 
has come to the state’s biggest 
cities - Nashville, Memphis, 
Chattanooga and Knox- 
ville - has largely failed to 
spread into other areas. “We 
(M vetyw& in the lSBQs but it 
was concentrated in urban 
areas: .Rural areas have suf- 
fered,”.-^says Mr John 
Gnuscld^; head- of Memphig ' 


State University’s centre for 
business and economic 
research. 

The sta te afaifairfratitm of 
Governor Ned McWherter, who 
this years completes two terms 
in office; bag mado efforts to 
right the balance. Mr 
McWherter, a Democrat who 
Hkes to relate how he was bom 
on the Mfrhwi tnhlft of a farm 
in the north-west of the state, 
has put rural development 

)rigb An Trin a gpmb 

- An infrastructure pro- 
: g ramma bag added LOOO wrilpg 
. of - new.: roads. • since Mr 
McWherter took office-finking 
: rural' areas with -the state's 


highway system. Under a new 
healthcare scheme, Tennessee 
has this year extended a degree 
of medical cover to 400,000 low- 
income people who did not pre- 
viously qualify. And spending 
on education has been lifted, 
with a redirection of resources 
towards poorer areas. 

“Within one or two years,, 
funding will be equalised 
within one or two per cent for 
every girl and boy across Ten- 
nessee” Mr McWherter says. 

The question is not whether 
file administration has tar- 
geted the right areas for devel- 
opment, but rather whether it ' 
has done enough. Tennessee 
continues to promote itself as 
an accommodating home for 
business, with lower wages 
than the national average, a 
more conducive tax regime and 
fewer trades union members. It 
is a message which has 
brought companies to -the state 
but the greater prosperity that 
has resulted has failed to 
trickle down sufficiently to 
alleviate some deep-seated 
social problems. 

“Think of it as another coun- 
try,” says Mr Margo, “ft has 
come a long way from a very, 
very poor base, and it is con- 
tinuing to converge. But the 
last few yards will be the hard- 
est: they involve the conver- 
gence of attitudes.” 

Meanwhile, cities such as 
Nashville and. to a lesser 
extent, Memphis, are discover- 
ing a new sense of confidence 
as important centres in their 
own right. Memphis, on the for 
southeastern tip of the state, 
is frequently referred to as 
“the biggest city in Missis- 
sippi." It has more in common 
with fiie broad flat region that 
spans the Mississippi delta 
thaw thp hilly central or east 
em regions of Tennessee. 

MUSiC bag brought naHwial 
recognition to both NashviBe, 
centre of the -country music 
industry, and Memphis, hnmg 
of t he blues. But members of 
their gro whig middle-class pop- 
ulations, many , of them from 
outside the state, crave other 
symbols of -their success. 

The search for a local iden- 
tity has found its most obvious 
outlet in ffie pursuft of a big 
league sports team* For these 
emerging cities, a hog sports 
franchise would bring status 


The motor industry: 

carmakers look to 
the south Page III 


and exposure nationally, allow- 
ing them to s tand their ground 
against the capitals of neigh- 
bouring North Carolina and 

Georgia. 

“We want to be like Atlanta 
-we want a team,” says Mr 
Gnuschke. “We’re desperate 
for recognition and acceptance 
in a national network of suc- 
cessful cities. We're struggling 
to keep pace.” 

Everywhere you go, the talk 
is of bringing a big league 
sports team to Tennessee. 
Memphis failed in its attempt 
to win a football franchise last 
year, while Nashville is. cur-, 
really in pursuit of both' foe 
hockey and basketball teams. 

According to Mr Dick Evans, 
chief operating officer of Gay- 
lord, the entertainment group: 
“This communit y is starving 

for professional sports.fi g&tfre 
hugest . market ta’-fbB&pKgh. 
without a franchise." 

Mr Evans, a former heal of 
New York city’s Madison 
Square Garden. Is bidding to 
bring teams to play m a nSw 
20,000-seat arena under con- 
struction in downtown' Nash- 
ville. It may not sound much 
but for Tennesseans.- success 
would help reinforce the claim 
that they have finally arrived 
on the natifunqi stage. 




Healthcare: Radical rafon-fc* 
are under way in an attempt' 
to extend coverage and 

bring down costs Page I 

Inward investment: Tennes- 
see lures newcomers with 
severed attractions ,_Pao».tif 
Education: The ai*n,ite,4o< 
create a competitive work- 
force Pagan 

Country music Industry: A 
substantial lift to the state's 
economy - Page IV 

Profile: Oak Ridge high 
technology faefifty: Excessive 

brain power Page IV 

Profile: Federal Express: 
Tennessee's biggest private 

sector employer Page IV 

Totatem: From Gracetend to 
the foothills of the Great 
Smoky Mountains Page V 


E tftor ia l production: 
PM Sanders 






❖ 




Come land in Tennessee! 


»V’, 




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v nil! h i s | ; j i Uni! .U-is- llii.su I s I ( illtUIA l( lllll sM c piodlKis: 


S(hoo!s: 


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f jn;;! 1 I i : ju,:/! . nmpur.it ^ I h..-I u!n ;•(!'. (.ill I rn m-ssec llu . ii I i< I io lotttunow 




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in i f i vi i \ l hi;;v> Irnm saii iruj In sniiu sKiin** ib ail;ti)li . 

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and a brand nov lax irna nin. t pacKanr lor busimsst-s local ina in ihr siak. 


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II 


FINANCIAL TIMES WEDNESDAY MAY 25 19$4 


TENNESSEE II 


There is steady economic growth at a rate consistently above the national average, writes Richard Waters 

Economy is maintaining its momentum 


A broad-based economy 
- and the continuing 
benefits of investment 
from outside the state - helped 
Tennessee to shrug off the 
nation’s shallow recession in 
the early 1990s. The same fac- 
tors are now propelling steady 
economic growth at a rate con- 
sistently above the national 
average, in turn supporting a 
gradual rise in state-wide liv- 
ing standards towards the US 
norm. 

During 1993, while the US 
economy as a whole grew at !L9 
per cent the Tennessee valley 
region - covering Tennessee 
and some rural counties in sis 
neighbouring states - ad- 
vanced 6.4 per cent, according 
to Mr J uan Gonzalez, a senior 
economist for the Tennessee 
Valley Authority. 

In the state of Tennessee 
itself, the number of jobs rose 
about 4 per cent daring the 
year, while job growth in the 
country as a whole reached 
only 3 per cent. The state's 
unemployment rate over the 
same period fell from 6 per 
cent to about 5.5 per cent, 
while the national jobless rate 
dropped from 7 per cent to 6.5 
per cent Tennessee’s unem- 
ployment rate has remained 
below the US rate for the past 
three years. 

This steady growth owes 


much to the state's success 
since the early 1980s in posi- 
tioning itself as an attractive 
manufacturing base. New car 
plants operated by Nis- 
san -which began production 
in 1983 -and General Motors' 
Saturn division - 1990 - and 
the car parts suppliers 
attracted to the state by these 
facilities, have underpinned 
the growth. The upturn in the 
US vehicle industry last year 
had much to do with the 
state's overall economic perfor- 
mance. 

Even though Tennessee has 
faile d to win recent “trophy” 
facilities - a BMW plant, being 
built in South Carolina, and 
Mercedes-Benz, in Alaba- 
ma - its parts sup plier s should 
still benefit from the strength- 
ening of the car industry in the 
Southern states. Now, about 23 
per cent of Tennessee’s jobs 
come from manufacturing, 
compared with a US average of 
16 per cent 

The influx of new jobs came 
at a vital time. The recession 
of the early 1980s cost the state 


one out of every six of its 
goods-producing jobs, mostly 
in the textile and leather 
industries. 

Those jobs have never 
returned: employment in tex- 
tile and related industries has 
continued to fall, dropping 
another 1.5,000 in the past five 
years to about 85,000 now. 

But while Tennessee’s manu- 
facturing sector has bucked 
the national norm, the real job 
growth of the past decade has 
come - as it has in other states 
-from services. And most of 
those service jobs have come 
in metropolitan, rather than 
rural, areas. 

Both Nashville and Mem- 
phis, for wamplfl, have 
healthcare industries. Nash- 
ville was home bo the largest 
private US hospital group, 
HCA, until the company was 
tafrpn over by Columbia last 
year. 

“Clearly, healthcare has 
been part of the success of the 
urban area,” says Mr John 
Gnuschke, director of the busi- 
ness and economic research 


bureau at Memphis State Uni- 
versity. 

Memphis, for its part, has 
developed into an important 
distribution centre. Although 
it has failed to match the 
explosive development of 
Nashville in the past two or 
three years, it has experienced 
“slow steady growth, assoet- 


tion growth, says Mr 
Gnuschke. Mr John Kelley, 
president of First Tennessee 
Bank, reports “moderate 
growth - but with it has come 
stability, which isn't all bad.” 

Nashville, meanwhile, has 
benefited from playing host to 
both the state government 
the country music industry, as 
well as a disparate range of 
service and manufacturing 
industries. The property US 


slump of the late 1980s. though 
hurting Nashville more than 
other urban centres in the 
state, was not as devastating 
as that experienced by many 
other US cities -nor was the 
over-building as extreme. As a 
result, Nashville once again 
has a thriving construction 
sector and has regained a 


strong self-confidence, buoyed 
by the growing popularity of 
country music. 

Tim advantages that have 
stood the state in good stead 
over the past decade may not 
be sufficient on their own to 
sustain the momentum. The 
benefits of growth - highpr per- 
sonal incomes, for exam- 
ple - are undermining one of 
the traditional arg uments for 
basing business in the state* a 
low-cost workforce. 


By the end of 1992. the aver- 
age hourly wage in the state 

was 510 . 12 , compared with a 
US level of $11.45. The attrac- 
tion to manufacturers of non-u- 
nionised labour may nisn be 
less than is commonly per- 
ceived: about 17J5 per cent of 
workers in mantfwtoring jobs 
in the state are unionised, com- 
pared with 21 per cent for the 
country as a whole. 

“Cheap labour is only any 
good (at attracting jobs] if it is 
really cheap," says Mr Bob 
Margo, an economics professor 
at Vanderbilt University in 
Nashville. 

As wage levels have risen, 
Tennessee has began to turn 
its sights to better-quality jobs 
- and in the process discovered 
that its skills base may not be 
adequate. “What we have to do 
to get competitive is improve 
our education,” says Governor 
Ned McWherter. Like other 
Southern states, its public edu- 
cational system is straining 
under years of under-invest- 
ment a recently launched pro- 
gramme to improve standards. 


particularly in rural areas, will 
fray? years to have an effect 

In the meantime, the quality 
of the local workforce remains 
one of the concerns of 
employers in the region. A 
comment by Mr Lewis Nolan of 
Schering Plough’s healthcare 
division, located in Memphis, 
is typical: The education sys- 
tem “needs improvement - we 
have to do a good deal of reme- 
dial education here,” he says. 

There are other, more spe- 
cific challenges. First, Tennes- 
see's economy could be more 
v ulnera ble than the US as a 
whole to a rise in the value of 
the dollar. According to Mr 
Gonzalez of the TVA, 14.3 per 
cent of the area’s jobs are in 
industries which are vulnera- 
ble to import penetra- 
tion - such as textiles - com- 
pared with 5.6 per cent In the 
nation as a whole. 

Second, both east and west 
Tennessee face local threats. 
Each has its share of poor 
rural counties, for example, 
and each has suffered from 
being far removed from the 


perceived centre of state life, in 
Nashville. 

la the eastern part of the 
state, the Department of Ener- 
gy's Oak Ridge fedlity, which 
employs 16.000, could shrink 
Fast in the years ahead as Us 
budget is cut back. Efforts an 
under way to foster new high- 
technology industries in the 
area, using the extensive skttb 
of Oak Ridge. 

“The potential is very gnat 
- and the downside (from lost 
jobs] could be very bad,” says 
Mr Richard Riebling, the 
state's commissioner for eco- 
nomic development 

Memphis, meanwhile, faces 
its own challenge from the 
south: the advent of river-boat 
gambling in nearby Tunica 
county. Mississippi. With Ten- 
nessee's ban on gambling 
unlikely to be reversed in the 
near future. Tunica will 
become a powerful draw for lei- 
sure dollars that were previ- 
ously spent in Memphis. 

Memphis, like many other 
US urban centres, is also begin- 
ning to feel the pinch from 
spending cuts in healthcare: 
the Baptist Memorial Hospital, 
the largest In the area, has cut 
1.000 jobs in tim past year and 
a half, and has some “pretty 
significant cost reductions in 
mind,” says Mr Stephen Reyn- 
olds, the hospital’s president 


As wage levels have risen, Tennessee has begun 
to turn its sights to better-quality jobs - aid in 
the process cfiscovsred that its skills base may 
not be adequate 


ated with slow, steady popula- 


Richard Waters finds that healthcare costs threaten state finances 

Radical reforms under way 



Expectations of healthcara have not moderated mu*: Ta* *><*••■» 


“Americans want their 
healthcare like they want their 
food: all you can get for $8." 

The comment, by Joe Powell, 
chief executive of the Baptist 
Memorial Hospital in Memphis, 
sums up a familiar problem: 
despite soaring costs, 
Americans' expectations of 
healthcare have not moder- 
ated, imposing a drain on those 
who foot the bill - among them 
state governments. 

Tennessee is no exception. If 
left unchecked, spiralling 
healthcare costs could wreck 
the state’s finances. Through 
the Medicaid system, it pro- 
vided healthcare to lm people 
last year. Unlike other states, 
though, it has opted for radical 
and sweeping reforms in an 
attempt both to extend cover- 
age of medical care and to 
bring down its cost The exper- 
iment could provide an early 
pointer to the sort of shake-up 
that may come for the US as a 
whole from the Clinton health 
plan. 

“We were getting big 
increases in Medicaid every 
year - no one can sustain that 
in a responsible government 
year after year,” says Governor 
Ned McWherter. “It threatened 


the financial future and stabil- 
ity of Tennessee. It was taking 
away [resources] from educa- 
tion and infrastructure.” 

In 1987. the Medicaid system 
set the state hack 5700m and 
covered 400,000 people - a cost 
of $1,750 a head. By last year, 
the cost had risen to 53bn, and 
the number of people covered 
to lm - or 53.000 for every per- 
son covered. Over the same 
period, the proportion of Med- 
icaid spending met tiy the 
state, as opposed to the federal, 
government, remained essen- 
tially linrhang pd. 

The state’s first attempt to 
deal with this rising cost was 
to impose a tax on providers of 
healthcare - largely hospitals. 
This brought in 5500m last 
year, but hurt hospitals in 
rural areas in particular. 

Last year, the state acted to 
break the cycle of ever-higher 
taxes to match higher spend- 
ing. Mr David Manning, the 


state's director of finanro and 
administration, says: “No tax 
system could keep up with the 
costs.” Instead of using its 
power to tax. the state chose to 
apply its Influence another 
way - through its role as a big 
buyer of healthcare services. 
“Governments don't tend to 
use their purchasing power 
enough,” says Mr Manning . 

Depending upon your point 
of view, the result - a scheme 
known as TennCare - has 
either unleashed marital forces 
on the healthcare market in 
Tennessee, or has brought 
state-mandated cost-contain- 
ment of the most direct nature. 

There is no surprise about 
which line the state's adminis- 
tration takes. “My intent in the 
reform was to put the health- 
care providers out in the free 
market," says Mr McWherter. 
“They are not accustomed to 
that" 

The response from physi- 


cians ami hospitals ba« been 
equally predictable. “We con- 
cur with managed competition 
- but not with managed cost,” 
says Mr Stephen Reynolds, 
president of the Baptist Mano- 
rial Hospital. 

Under the new scheme, the 
state has set a flat annual capi- 
tation level of 5L600 for each 
individual covered -that is, 
the amount it has set for pro- 
viding care to each person. The 
organisations which provide 
care don't receive the 51,600. 
thnng h - the actual amount 
being paid is about 5L200. The 
difference, says the state, 
reflects the taxes which provid- 
ers no longer have to pay. 

This is much less than the 
53,000-a-person average cost of 
care last year. But the new 
scheme does not pay for 
long-term and nursing home 
care, which remains in Medic- 
aid. This accounted for 5700m 
of the last year’s $3hn of spend- 


ing. Also, the state justifies its 
capitation level by reference to 
a similar scheme it baa run for 
state employees for several 
years. 

Under TennCare, the local 
Blue Cross-Blue Shield organi- 
sation and a number of private 
managed care organisations 
have competed to s ign up peo- 
ple covered by the scheme. 
They receive cash for each per- 
son they sign up, and are 
responsible for buying health- 
care from physicians, hnspifoia 
and others. Some managed 
care groups retain all of the 
financial risk - others share it 
with the healthcare providers. 

The imposition of a cost ceil- 
ing has been accompanied by 
an extension of the scheme to 
as many as 400.000 people. 
These are people on low earn- 
ings who have not fallen into 
the Medicaid net before. So for, 
about 2S0.000 of these people 
have signed up. 


The extension of coverage 
has agitated hospitals in the 
State. “To US, the mathPmaHcg 
do not work. You can’t add 
400,000 people and do it for the 
same amount as before,” says 
Mr Reynolds at the Baptist 
Memorial Hospitai 

The state hopes that limiting 
the amount of money available 
will act as a spur to greater 
efficiency, leading to no reduc- 
tion in the level of care pro- 
vided. In part, says Mr Man- 
ning, the result will be a 
switch from expensive medical 
interventions towards more 
cost-effective methods of care. 

“We have in the past limited 
access to the most cost-effec- 
tive forms of care - primary 
and preventative care.” he 
says. The basic economics in 
capitation encourage health- 
care organisations to move 
towards preventative care.” 

The introduction of the 
scheme at the beginning of this 
year was accompanied by wide- 
spread confusion. Patients 
were left without treatment as 
many doctors refused to partic- 
ipate. The problem was partic- 
ularly acute around Knoxville, 
in east Tennessee although 
now the Blue Crass-Blue Shield 


network in the area has 
returned to 95 per cent of its 
earlier coverage, says the state 
administration. 

Most big hospitals agreed to 
take part from the start, 
although they grumbled about 
doing so. In one hospital, when 
obstetricians and anaesthetists 
refused to treat TennCare 
patients, the numbers of births 
by caesarean section fell 
sharply, as did the use of 
anaesthetics in childbirth. Sup- 
porters of the reforms point to 
this as evidence that “better” 


healthcare -a lower rate of 
surgical intervention and less 
use of drugs - has been the 
result The doctors who would 
not participate in the scheme, 
and the women who gave 
birth, may well disagree. 

It remains too early to judge 
how successful the scheme will 
prove. But it has at least one 
powerful virtue: it is different 
from what went before. As Mr 
Joe Powell, head of the Baptist 
Memorial Hospital, growls: 
“Medicaid was so bad, almost 
anything is better.” 


MUSIC Q1Y 



7.SOA.M. 

Nashnlle. 

Mayor Bredesen 
makes a paint to 
Richard Miller, CEO, 
Wilis Comm and 
Yotchiro Kauaki, 
Chairman /CEO, 
Bridgestone / 
Firestone be.. after 
bteatyast meeting 
at Wilis Comxm 
Headquarters. 


y* /-/Y Irnt'ricun Somtop Bel ven 


AA 


London Gat wick And Sashvilk 


USA 


“Every major American city is telling business it's ‘business friendly.’ So I’ll just say 
this. Here, several of our top city officers, including me, are business people bv background," 
says Nashville Mayor Phil Brcdcsen. “I won’t promise we’ll always agree with business. 
But wc i ill! always understand." 

The Nashville area has recently attracted 62 corporate relocations, including Willis 
Corroun Group U.S. Headquarters, Bridgestone/ Firestone Headquarters, Caterpillar 
Financial Services Headquarters, Bankers Trust, Lockheed and the National Federation of 
Independent Business Administrative Headquarters. Why? According to Mayor Brcdesen, 
“People who come here from somewhere else sty that the work ethic here is unbelievable. 
Plus wc have a good cost of doing business, and a great quality of life." 

As a transplanted New Englander himself. Mayor Brcdesen has a special perspective. 
“This is a place where you don’t have tn sacrifice your business operations in order to have a 
great quality of life for families. This is one place where you really do get to have it both ways." 


If your company Is 
ready fir a bright 
netr day in Music 
City, call Fred 
Harris, Nashville 
dial Chamber of 
Commerce. 

(61S) 259-4740, 
161 4th Amuse K. 
Nashnlle, TN 
37219. 



We hope youl cane pay us a cal here at jack Dane) DisStery uMKtme soon. And brag mr camera akmg. 


THE MOST PHOTOGRAPHED man in Lynchburg, Tennessee is: 
Jack Daniel. No doubt because he stands still so well. 

Visitors to our distillery have always liked taking pictures 
of the man who made the world’s finest whiskey (so said 
the judges at the 1904 World’s Fair). Today, Mr. Jack’s 
statue keeps us mindful of the high standards he set- and 
we still abide by. Occasionally, a visiting expert will 
suggest we modernize and change our oldtime 
whiskey. But, as you might guess, nobody around 
here would stand still for that. 

SMOOTH SIPPIN’ 

TENNESSEE WHISKEY 


Tennessee Whiskey ■ 4043* alcohol by volume (80-86 proof) • Distilled and Bottled by 
Jack Daniel Distillery, Lem Motion*, Proprietor. Route 1. Lynchburg (Pop 3611. Tennessee 37352 
Pbcrd in che National Register of Hiironc Place » by the United Ststfi Government 



1 




FINANCIAL TIMES WEDNESDAY MAY 2S 1994 


it •* , * Ld 


ya nbar ol" says a large sign at 
ffie trim shop in Nissan's Text 
®*ssee car assembly plant The 
Japanese slogan means “Make 
it happen" and could stand as 
a motto for the Tennessee state 
gotor industry, which has 
Brown from small beginnings 
to one of the most s tenfftenw t 
10 to? US over the past decade. 

Tennessee has been involved 
m the motor industry for many 
years, but its recent rise to 
promin e nce owe much to Nis- 
san, which in October 1980 
selected a site at Smyrna, Ten- 
nessee, south of Nashville, as 
the site of its first vehicle 
assembly plant in the US. Pro- 
duction began there in June 
1983 and it now employs about 
6 , 000 . 

Then General Motors 
selected Spring ran, a tiny 
rural community hidden away 
in the rolling bills south of 
Nashville, as the manufactur- 
ing site for its new Saturn car, 
a project de s i g ne d to show that 
a US company, starting from 
scratch, could build a 
vehicle equal to the Japanese 
competition. Saturn production 
began in 1990 and the company 
now employs more than 7,000. 

The presence of the two 


Martin Dickson says the motor industry is benefiting from a trend among manufacturers to look south 

Third place in US new car production 


assembly plants bag greatly 
increased the number of 
vehicle parts suppliers in the 
state. Among the largest are 
Ford Motor, which makes 
vehicle glass, Nippondenso 
Tennessee, which makes start- 
ers and alternators, TRW, man- 
ufacturing air bags, and War . 
m an Automotive, mairinjy 
mirrors. 

Seatttebased Paccar's Peter- 
bilt subsidiary has. manufac- 
tured trucks in Nashville for 
the past 25 years and over that 
period it has doubled in size to 
employ about 1,000 people. 

Tyre manufacturers Good- 
year Tire & Rubber and 
Japan's Bridgestone-Firestona 
both have large manufacturing 
plants in the state and Bridge- 
stane-Firestone moved its US 
headquarters to Nashville foam 
Akron, Ohio at the start of this 
decade. Bridgestone, which 
had long been headquartered 



INWARD INVESTMENT 

An upbeat 




can help 


Seated in a Shanghai airport 
lounge not long ago. Mr Allen 
Neel, Tennessee's deputy com- 
missioner for economic and 
community development, could 
hardly behove his ears. Coun- 
try and western music was 
playing over the piped marie 


To Mr Neel, this not only 
proved the worldwide appeal of 
Tennessee's best-known 
export, but it also meant that 
the dime of marketing Tennes- 
see to international investors 
could get a lot easier. After all, 
he had a state with an identity: 
the home of country music. 

Amid the clamour of US 
states seeking investors, a 
state with an upbeat musical 
identity seems to have a help- 
ful advantage. At least it is a 
conversation opener. But Ten- 
nessee has hugely staked its 
fortunes on other more solid, 
un- glitzy attractions: low 
wages, a central US location, 
tax incentives, a modest cost of 
living and a pro-business, anti- 
union climate. 

Such allures have been suffi- 
cient to draw $l2.4bn worth of 
investment In just the past five 
years - more than a quarter of 
which, |3.6bn, was foreign. 

And, over the past decade or so 
as the motor industry has 
moved increasingly into the US 
south-east, Tennessee-has net- 
ted a very sizeable chunk. 
Japan's Nissan and General 
Motors' Saturn chose Tennes- 
see and many of their suppliers 


are spread around the state. 

"Ten years ago, there wasn't 
a trinpifr auto waifa in Tennes- 
see," said Mr Billy Stair, a top 
aide to Governor Ned 
McWherter. “Today, Tennessee 
ranks third [among US states] 
in antes.” 

If state officials have their 
way, Tennessee will farther 
w panrf its automotive invest- 
ment by capturing suppliers 
for the plants of BMW and 
Mercedes in, respectively, 
nearby western South Carolina 
and northern Alabama. To 
potential European and other 
suppliers of BMW and Mer- 
cedes, officials are emphasising 
that Tennessee is within one 
day’s drive of every Mg auto 
manufacturing plant in the US. 

This is part of a larger cam- 
paign to attract foreign invest- 
ment. In an effort to capitalise 
on its new direct air link 
between Tennessee and Lon- 
don, the state began in April to 
market itself to more than MO 
countries with a commercial 
on CNN InternationaL 

Yet Tennessee has had two 
key concerns about its indus- 
trial recruitment. It wants to 
keep its economy diversified, 
and it wants to spread the 
prosperity that comes from 
more investment to poorer 
regions of the state. For diver- 
sification, Tennessee is looking 
for a variety of non-auto 
investments, particularly in 
high technology. With a sub- 
stantial scientific community 



in Nashville, had shifted its 
headquarters to Akron after 
merging with Firestone in the 
late 1980s. But when this 
merger ran into financial prob- 
lems, Bridgestone’s manage- 
ment decided to return to 
NashvflLa, both to make a fresh 
start and have a geographi- 
cally central location. 

This influx means that Ten- 
nessee today ranks third in the 
US in new car production. It 
made some 514.000 vehicles, or 
8.7 per cent of US production, 
in 1998. Admittedly, that is a 
long way behind Michigan, 
with 33 per cent of US produc- 
tion, and Ohio, with 169 per 
cent, but it makes Tennessee 
the leading southern car pro- 
ducer, followed by Georgia, 
with 6.4 per cent, and Ken- 
tucky, where Toyota has a 
large plant, with AA per cent 

In tracks, Kentucky is the 
leading southern manufac- 



Tho Saturn cm preset coat GM $Sbn and Is borofy tunring a profit 


turer, ranking fourth with 10 
per cent of output, while Ten- 
nessee is 13th with just 22 per 
cent 

The state has been one of the 
prime beneildaxies of a trend 
among manufacturers in gen- 
eral, and the car industry in 
particular, to shift production 
from high wage, unionised 
states in America's northern 
“rnstbelf to the south, where 


pay is lower, unions are less 
well and employ- 

ees retain a strong work ethic. 

Other factors helping it 
attract man u fa cturing industry 
include relatively low taxes, 
utility costs, and living 
expenses; an innovative school 
system; and a central location, 
with good transport links to 
the industrial mid-west and 
southeast 











Chattanooga: one of fhv low cities on wNch much of ttiejob ovation road to be embed 


-largely related to defence 
work-around Knoxville, Ten- 
nessee can offer brain power. 

In the past year, it has cre- 
ated a Science and Technology 
Council, with the participation 
of top defence contractor Mar- 
tin Marietta, to develop a strat- 
egy about where the state 
should go in high technology. 

It is also in the process “of 
thinking through where we are 
going in telecommunications," 
according to Mr NeeL The state 
installed an extensive fibre 
optic network hugely to serve 
its more sophisticated manu- 
facturers. But it has yet to 
determine how best to take 
advantage of its improved tele- 
coms ability. 

If the state's economic strat- 
egy doesn't seem to have 
caught up with its potential, 
this is in part because fast- 
paced economic progress in 
Tennessee is ctf recent vintage. 
Only since the arrival of Impor- 
tant car industry investment 
in the 1980s has Tennessee pul- 
led away from the South's tzar 


(fitkmally languid growth rate. 

Between 1982 and 1991, it had 
long-term employment growth 
of 18 per cent. In March, “Biz”, 
a Dow Janes magazine, ranked 
Tennessee’s economy as the 
healthiest among the 12 south- 
eastern states. An example of 
Tennessee's economic fizz is 
that metropolitan Nashville 
added 14,000 jobs over the past 
year while New York CSty lost 
27,000 and Los Angeles 70,000. 

Yet, while the state’s unem- 
ployment rate today runs 
about a foil paint below the 
national average, there is con- 
cern over economic disparity 
and a desire to reduce it 

When Mr McWherter took 
office seven, years ago, much of 
the job creation bad centred 
around the four 1«»hn g 
of Memphis, Nashville, Knox- 
ville and Chattanooga. Of the 
state's 95 counties, 40 were 
determined to be “economi- 
cally depressed," with 
hog-team tmumphi yH iont rates 
of more t han 12 per cent and 
per capita tnnmmm of less than 


75 per cent of the state aver- 
age. 

Governor McWherter set out 
to even out Tennessee’s pros- 
perity. He built roads to physi- 
cally connect depressed areas 
with big interstate highways, 
and be improved their schools 
and healthcare facilities. He 
also offered special tax incen- 
tives to businesses creating 
jobs in depressed areas. 

As a consequence, more t h an 
9l.4bn in private investment 
went to the poorest 40 counties 
during the past seven years, 
inchidmg 163 new manufactur- 
ing plants. Today, state offi- 
cials say that only two coun- 
ties have double-digit 
unemployment. 

This will no doubt be a diffi- 
cult record to match for who- 
ever wins this year's guberna- 
torial election. But officials are 
hoping that many more inves- 
tors. particularly foreign ones, 
will be humming country and 
western tunes. 

Barbara Harrison 


Tennessee lost out in recent 
tussles among south-eastern 
states to attract America's two 
newest car plants'- one being 
built by BMW in South Caro- 
lina and the other by Merced- 
es-Benz near Tuscaloosa. Ala- 
bama. But both these states 
lured the German companies 
with huge subsidies which 
have raised eyebrows in state 
development agencies across 
the US. 

Still, the Tennessee vehicle 
parts industry should benefit 
greatly from the Mercedes 
plant, which lies just 150 miles 
to the south of the state end is 
due to produce 65,000 vehicles 
a year from 1997. Alabama has 
virtually so motor industry of 
its own, and in choosing the 
Tuscaloosa site Mercedes 
expected to draw on Tennes- 
see's supplier base. 

But for all Its strong growth, 
the Tennessee motor industry 


has not been i mmu ne from hic- 
cups. Nissan, which led the 
Japanese import charge into 
the US market in the 1970s, 
saw Us car market share stag- 
nate in the 1980s. While other 
Japanese companies enjoyed 
large market share gains, Nis- 
san produced dull, boxy cars at 
its Smyrna plant and sold 
than through a lacklustre US 
dealer network. 

Now, however, Nissan is 
doing much better. After a 
9490m capital spending pro- 
gramme, the Tennessee plant 
has been manufacturing an 
attractively priced, stylishly 
designed new family sedan, the 
Altima, which has enjoyed 
strong sales. 

The Smyrna plant has a 
capacity of about 450,000 units 
a year and a reputation for 
good labour relations. Apart 
from Althnas it makes the Sen- 
tra small car, pick-up trucks. 


and stampings for a mini-van 
which is manufactured in con- 
junction with Ford. 

Asked what advice he would 
give BMW and Mercedes as 
they prepare to manufacture in 
the US, Mr Jerry Benefield, 
president of the plant, says: 
“Localise, localise - labour, 
parts supply, engineering." For 
by local sourcing a company 
not only saves costs but also 
understands the political and 
cultural subtleties of the US. 

Saturn has also had prob- 
lems. The plant got off to a 
dazzling start, creating an 
innovative, co-operative labour 
relations agreement with the 
United Auto Workers which, 
has been widely balled as a 
model for the industry. And 
the Saturn car rapidly became 
a strong seller, with a reputa- 
tion for high quality. 

However, the project has 
cost GM $5bn, is barely turning 
a profit and is feeing stiff com- 
petition from a new generation 
of rival small cars. Production 
at Spring Hill was trimmed 
back in March because of 
heavy stocks of unsold vehicles 
but late in April the company 
said it was returning output to 
full capacity. 



Barbara Harrison on plans to reform education 


The aim is to create a 
competitive workforce 


In 1990, 320 Tennessee 
companies were asked in a sur- 
vey for their top recommenda- 
tion to improve the state's 
business climate. The over- 
whelming answer -by 70 per 
cent of the companies - was 
that the most important thing 
to do was to improve educa- 
tion. 

In Tennessee, as elsewhere 
in the American South, the 
poor quality of education has 
increasingly been viewed as a 
barrier to economic progress. 
The concern reflects the chang- 
ing nature of the South’s econ- 
omy - from low-skilled assem- 
bly plants and textile mills to 
high-tech manufacturing and 
higher-skilled service indus- 
tries. 

Tennessee's response was an 
education reform plan called 
the 21st Century Schools Pro- 
gramme. The plan, launched 
by Governor Ned McWherter 
in 1992, includes an infusion of 
funding, a comprehensive 
revamping of the way schools 
are run - from kindergartens 
to high schools -and a set of 
basic goals that each local 
school system must meet by 
the year 2000. The aim is to 
create a workforce that can 
compete nationally and inter- 
nationally. 

Tennessee, like many of its 
neighbouring southern states, 
has traditionally ranked at the 
bottom of the US education 
ladder. Its schools were 
plagued by high dropout rates 
and low scores on national aca- 
demic achievement tests. As 
many as 20 per cent of high 
school graduates lacked the 
basic skills needed to be 
trained for jobs. Even students 
who went on to university 
often required remedial 
studies. 

Governor McWhorter's pro- 
gramme, funded by a 0.5 cent 
increase in the state sales tax, 
has injected funds directly into 
classroom expenditures, rather 
th an teacher salary increases. 

From the 1992-93 school year 
through to 1994-95, the state 
budget will have pat 9504m 
into the programme, which 
represents a 45 per cent 
increase, said Mr ffiQy Stair, 
the governor's top aide on edu- 
cation. By 1997, the programme 
will have generated some 
ggoom in new funds for 

The previous governor, Mr 


Lamar Alexander, who served 
as George Bush’s education 
secretary, had already brought 
some much-needed improve- 
ments to the pay scale for 
teachers during his tenure 
from 1978-1986. 

But despite the salary rises 
for teachers, educational 
achievement still lagged, in the 
mid-1980s and poor quality 
schools were increasingly 
viewed as the culprits in a 
growing skills gap. 

Business leaders, weary of 


schools' are constaitant with ' 
those sat by tha fedora] . 
government for the year. 

' 2000..Th«»toWer'. ' 

'# iflgfc school prafteteocy 
'test pass rates of. 90 per : 
cqnt 

MBs of 90 per cent • •• 

• 'Academic- gains by an 
.stodenlq atorabov^tfifr - . 
national oonn.., > 

• Promotion rates of QT per 
.cent in fcfedeQ^stm-hvougb' 
®ti Grade; raid ’ 

• . Attendance of 9§ per ' • 

. centtiiuugMaracte s and of , 
,8&pat <rattt}vtiugh Grade . 


poorly prepared workers, asked 
Mr McWherter to “Give us a 
high school diploma that has 
meaning," recalls Mr Stair. 

While it is too early to mea- 
sure the impact of the 2ist 
Century Schools Programme 
with respect to improved 
examination results or better 
skill levels, the infusion of 
monies has helped to build, 
renovate and outfit more class- 
rooms, buy hooks and comput- 
ers, provide adequate bus 
transportation and equip voca- 
tional classes with modem 

TO address overcrowding in 
schools, class size was 
decreased by the hiring of 2400 
more teachers. Another 1,400 
are expected to be hired over 
the next year. 

Other aspects of the pro- 
gramme include: 

• A new “fair and equitable” 
funding formula. Given that 
American schools are sup- 
ported by local taxes as well as 
state and federal monies, the 
new formula provides more 


state money to schools In 
poorer districts which have 
smaller tax revenues. The for- 
mula helps remedy the 
inequality of funding for 
schools in rural Tennessee and 
in urban minority communi- 
ties. 

0 Higher pmi^ standards. 
Students in all grades will be 
tested to assure they have 
attained or exceeded the 
national standards for achieve- 
ment To graduate from high 
school, students will have to 
pass a proficiency test for basic 
skills. 

• Increased school account- 
ability. Schools are held 
accountable for the achieve- 
ments of their students. A 
“report card" on how the stu- 
dents have performed in tests 
at each school is issued to the 
public. 

• Greater local decision-mak- 
ing and control. The state has 
freed its 139 school systems 
from 3,700 burdensome rules 
and regulations about how 
they should be run. And, while 
increasing their budgets, the 
state has refrained from telling 
them how they must spend 
their monies. Instead, the state 
has demanded that they attain 
national achievement stan- 
dards at a minimum. 

If schools fail to perform, 
they will face sanctions, such 
as sacking the district superin- 
tendent or the local school 
board. If they exceed perfor- 
mance, they are rewarded with 
extra Binds. 

The programme, backed in 
the legislature by both Repub- 
licans and Democrats, has 
received little criticism. It has 
also been lauded by national 
education expats such as the 
University of Pennsylvania's 
Centre for Research and Evalu- 
ation in Social Policy. 

But doubts exist that the 
funding will be sufficient to 
achieve its goals. 

Nonetheless, while perfor- 
mance improvements are gtin 
not dearly in evidence, Ten- 
nessee officials believe the pro- 
gramme is already yielding 
important results. "Hie first 
and most dramatic h n* 

been just a change in attitude," 
says Mr Wayne Qualls, Tennes- 
see commissioner of education. 
“Local school administrators, 
principals and school boards 
now all say *We want to make 
a change.’" 


If you think the Nashville/Gatwiek jet is fast, 
check our speedy delivery in the State of TVIDA 







re# 

V, 3 fc*. 







IV 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


TENNESSEE IV 


Martin Dickson investigates the music industry 

A lucrative lift 
for Nashville 


A building surge is under war 
on Nashville's Music Row, the 
centre of America’s country 

music industry, as record com- 
panies invest millions of dol- 
lars in new or expanded 
offices. 

Los Angeles-based songwri- 
ters have begun checking out 
the Nashville housing market 
because they are thinking of 
moving there from the West 
Coast And in downtown Nash- 
vine, work is under way on an 
entertainment complex which 
will house a country music 
dance dub-concert hall and a 
television production centre. 

AH attest to the extraordi- 
nary growth of the past few 
years in the country music 
industry, which is synonymous 
with Nashville and which is 
giving a substantial lift to the 
Tennessee economy. 

Country music's share of US 
record sales has soared from 
just 6.8 per cent In 1988 to 17.5 
per cent in 1993. Record reve- 
nues have leapt from 6921m to 
tLTOm. 

In 1993 more than 41 per cent 
of the US population timed 
their radios to country sta- 
tions, compared to 34.2 per 
cent just two years earlier. The 
format has been malting big 
gains outside its traditional 
base in the American South. 

Boosters in Nashville claim 
that country stations are now 
ranked number one in the rat- 
ings in such unlikely northern 
markets as Seattle, Buffalo and 
Baltimore. 

Now the indus try is mairmg 
a push to conquer the world: 
Garth Brooks, country music's 
most popular artist, has just 
been on a European tour, and 
Europe's first full-time terres- 
trial country radio station is 
starting to broadcast from Lon- 
don. 

It is a lucrative sea-change 
for Nashville, since after a 
series of booms in the 1950s 
and 1960s, country music 
became stuck in a rut in the 
early 1980s. Dominated by mid- 
dle-aged stars with a penchant 


for elaborate, old-fashioned 
costumes, playing music with 
a synthetic, syrupy sound, it 
faced a downturn in sales. 

The turnround is due to two 
main forces. The first is a new 
breed of much younger musi- 
cians with lots of sex appeal, 
carefully cultivated by the 
record companies. 

The men tend to be known 
collectively as “new country 
hunks” or “hat acts,” because 
of the cowboy hats many of 
them, favour. They dress in 
plain, figure-hugging blue 
jeans. 

Both male and female artists 
tend to sing songs with a much 
simpler, more traditional 

Cotottry has been helped 
by the sheer 
weakness and fractured 
nature of other pop 
formats 

sound, emphasising fiddles, 
guitars and a stogie voice. And 
their lyrics have a more con- 
temporary flavour. 

For example. Garth Brooks, 
the biggest phenomenon to hit 
the industry in decades, has 

tarlclpH delic ate am* 

as wife-beating and date rape. 

Country has been helped by 
the sheer weakness and frac- 
tured nature of other pop for- 
mats. Ageing baby boomers 
find it easier to relate to coun- 
try - which reminds them of 
early 1970s rock groups such as 
The Band and The Eagles 
- than to rap, grunge or heavy 
metaL 

The second important factor 
is the growth of cable televi- 
sion in the US, bringing speci- 
alised country channels into 
homes across the nation, far 
beyond the music’s traditional 

hear tland. 

The Nashville Network, 
which began in 1983, reaches 
60m US homes. It has a maga- 
zine format, miring music with 
programmes on other subjects 
which stir the soul of rural 



Musk: Square, Nashvffie: country music's share of record sales has soared 


GtT Tut fnx about flitdipi 


«ASrj& 



2 pdg 0 z you in z mining 


America, such as bass fisfrfeg. 
pick-up trucks and drag racing. 

Its more recently established 
sister channel, Country Music 
Television (CMT) is in almost 
25m US cable homes, a 44 per 
cent increase in a year, and 
reaches more than awm hnmog 
worldwide. CMT broadcasts 
non-stop country music pop 
videos. 

Both channels are owned by 
Nashville-based Gaylord Enter- 
tainment, which has become to 
country music what Walt Dis- 
ney is to children’s entertain- 
ment, with interests ranging 
from theme parks to hotels. 

At the heart of the Gaylord 
empire lies the Grand Ole 
Opry, a folksy country show 
broadcast from Nashville ever 
since 1925. The Opry has 
played a crucial role in com- 
mercialising country music 
-which stems from the folk 
haiiaik of istb century immi- 
grants to the Appalachian 
mo untains - and in. ensuring 
that Nashville is the capital of 
the business. 

The Opry House, where per- 
formances are held is the cen- 
trepiece of Gaylord's Opryland 
complex, which lies just out- 
side Nashville. 

This also inrfndec a theme 

park revolving around country 
music and a vast hotel, partic- 
ularly popular for conventions, 
which f eatures enormous glass- 
enclosed gardens. Gaylord last 
year announced plans to spend 
6175m to add 979 rooms to the 
existing 1,891 and create 
another big glassed area, called 
“The Delta." 

The company is also busy in 
downtown Nashville. It is 
responsible for the new dance 
hall entertainment complex 
and is also renovating the inte- 
rior of the Ryman Auditorium, 
a tourist spot which is revered 
as the home of the Grand Ole 
Opry from 1943 to 1974. - 

The boom is thus having a 
substantial ripple effect on tire 
wider Nashville economy, help- 
ing the construction, hotel, res- 
taurant and transport indus- 
tries. 

Eastern Tennessee, for its 
part, benefits from the pres- 
ence in the foothills of the 
Great Smoky Mountains of 
Pigeon Forge, home of Dolly- 
wood, a 90-acre theme park 
owned by the most famous 
female star of country music, 
Dolly Parton. 

However, one part of the 
country music surge has 
slipped beyond Tennessee’s 
borders: a thriving strip of 
music halls has g ro wn up in 
Branson, Missouri, a small 
town deep in the Ozark Moun- 
tains, which features old-time 



Music has brought national recognition to Mompfab fabov*), borne of th» bluet, a* writ as to Nashvflto 

country artists and other popu- 
lar, mid dle-of-the- road enter- 
tainers. 

Some critics argue that the 
rise of Branson is a rebuke to 
Nashville, which should have 
been sufficiently entrepreneur- 
ial to see there was a gap in 
the market for old-style acts. 

The Nashville establishment, 
for its part, fends to dismiss 
Branson as being not genu- 
inely “country." 

The biggest question facing 
country is how long the boom 
can last and whether it wifi be 
followed by a bust Industry 
leaders are resigned to a slow- 
ing of the growth rate, but 
many argue that country is 
unlikely to suffer a precipitous 
decline to US popularity. 

Country might also make 
inroads in overseas mar- 
kets - although some observers 
question whether Europeans 
will ever warm to such a senti- 
mental, quintessentiafly mid- 
dle- American musical format. 

Mr David Hall, general man- 
age - of TNN, points out that at 
the aid of each previous period 
of growth, industry revenues 
have remained higher than 
when the craze first began, and 
he expects this long-term pat- 
tern to continue. 

Whereas in the past the 
industry was reliant on radio 
stations to sell its image, tele- 
vision is a much more power- 
ful medium for keeping Amer- 
ica sold on country. GaylorcPs Opiyfand complex Bn just outside NaahvOe piaim/htokoaoa 



PROFILE: Oak Ridge high technology facility 

Excessive brain power 


How do you create a new 
Silicon Valley, or a Research 
Triangle - the area in North 
Carolina circumscribed by 
three universities and home to 
many high-tech companies? If 
there is an answer, then Ten- 
nessee would like to know it. 

Hie nurturing of high-tech- 
nology industries has become a 
priority in the area around 
Knoxville, in the foothills of 
the Great Smoky Mountains. 
The region boasts one of the 
highest concentrations of sci- 
entists in the country. Keeping 
them employed win provide a 
stiff challenge in the years to 
come. 

The area’s excessive brain 
power is centred on Oak Ridge. 
A Department of Energy- 
funded .facility operated by 
contractor Martin Marietta 
Energy Systems, Oak Ridge 
will forever be known as the 
place where the first atomic 
bomb was developed. It has 
developed skills other than 


building nuclear weapons since 
them but the ending of the cold 
war has bit the facility's bud- 
get hard. 

Along with pressure to gen- 
erate new sources of income by 
commercialising its technolo- 
gies. this has forced Oak Ridge 
to try to turn itself into a cen- 
tre for innovation of a different 
sort, a sort of godfather to new 
high-tech industries in and 
around east Tennessee. 

Oak Ridge employs 16,000 
people, on an animal, budget 
freon the Department of Energy 


honed in a highly specialised 
area, are now being applied to 
more mundane industries. Two 
years ago, Oak Ridge began a 
project with the state of Ten- 
nessee to offer help to small 
businesses. Last year, its peo- 
ple worked mi 350 projects for 
private sector manufacturers. 

Another third of the employ- 
ees works on energy conserva- 
tion and efficiency. This began 
more than two decades ago 
with work an the peaceful use 
of nuclear power, and extended 
into ways to make better and 


To encourage innovation among its staff, Oak 
Ridge shares a quarter of the Bee rising income 
it receives with employees 





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of JLSm-but is under pres- 
sure to cot back. 

“Employment levels will 
drop. Budgets will drop," says 
Mr Bill Martin, rice-president 
in charge of technology trans- 
fer at Martin Marietta. How-far 
and how fast “depends on how 
much private sector money 
becomes involved," 

In the 1980s, Oak Ridge lost 
several thousand jobs when its 
uranium enrichment plant was 
closed. It was older and less 
efficient than similar 
operations elsewhere in the 
US, and shut in the face of 
overcapacity in the enrichment 
business. 

The threat now is gradual 
erosion of the Department of 
Energy budget rather than out- 
right closure of facilities. 

Oak Ridge’s winkers are split 
roughly evenly into three 
units. A third works in the 
area of national security. Oak 
Ridge has not built an atomic 
warhead for three years. 

U is charged, though, with 
maintaining the US’s supply of 
wea pons-grade uranium, and 
developing the sort of 

advanced manufacturing tech- 
niques used in making war- 
heads -from the latest mach- 
ining and inspection 
technology to robotics. 

Those manufacturing skills. 


cleaner use of fossil fuels. Oak 
Ridge also broadened out Into 
energy conservation, working 
on projects such as better insu- 
lation materials. Development 
work extends from “roof insu- 
lation to devices that enhance 
the running of refrigerators,” 
says Bill Martin. 

The ftnri third are involved 
in environmental technologies. 
This is one part of the Oak 
Ridge operations which has 
actually grown in the 1990s. 

What can these people do to 
help fester high-tech industries 
in the region - and in the pro- 
cess safeguard their own jobs? 
One aim has been to develop 
patentable technologies that 
can be licensed to companies 
in the private sector. 

To encourage innovation 
among its staff. Oak Ridge 
stoves a quarter of the licen- 
sing income it receives with 
employees. 

Since 1984. it has signed 103 
such Hemming agreements. The 
Income remains modest -a 
total of $&5m in royalties so 
far, from commercial sales of 
6100m -but there are some 
promising developments to the 
pipeline. One example is a 
method for carrying out rapid 
blood tests, which has been 
licensed to a Californian com- 
pany. Already used to analyse 


samples from animals, the pro- 
cess Is awaiting approval for 
use on human blood, and could 
eventually find a market In 
hospitals and doctors’ sur- 
geries throughout the US. 

From the wide range of tech- 
nologies that has been devel- 
oped at Oak Ridge, Bill Martin 
stogies out two as having the 
greatest potential: instrumen- 
tation and advanced materials. 

A second aim is to attract 
private investment to help 
commercialise developments 
begun at Oak Ridge. So for. 
some |200m of private capital 
has been committed. 

The bigger question, though, 
remains: Can Oak Ridge foster 
a local high-tech industry in 
east Tennessee? Optimists talk 
about a “corridor” extending 
from Oak Ridge to Knoxville, 
home of the University of Ten- 
nessee -no doubt hoping to 
emulate the successful Austin- 
San Antonio high-tech corridor 
in Texas. Much work needs to 
be done before their dream 
becomes a reality. 

Local chambers of com- 
merce. industrial development 
boards and marketing organi- 
sations have recently begun 
research into whether the 
region has sufficient infra- 
structure to sustain a thriving 
manufacturing base — from the 
availability of skilled workers 
and adequate telephone lines 
to the provision of finance. The 
results will not emerge until 
this summer. 

One significant challenge is 
to make the staff at Oak Ridge 
more responsive to the outside 
world. The nature of much of 
their work in the past, and 
their location - tacked away to 
a valley 30 mites from Knox- 
ville - has encouraged an 
inward-looking, isolated com- 
munity. 

“There is a tremendous 
amount of resources in the 
area," says Mr Martin. “Has 
the region benefited enough 
from that? No." 

Richard Waters 


PROFILE: Federal Express 

First few steps 
abroad prove 


costly, 

Not many years from now. the 
fortunes of Tennessee's biggest 
private sector employer will be 
forged far away - in Europe, 
largely, and Asia. But if future 
prosperity lies abroad, the first 
steps have been painful ones. 

Over the past three years. 
Federal Express has lost about 
61.2bn, including restructuring 

charges, in its attempt to cre- 
ate a world-beating interna- 
tional package delivery and air 
freight service. The losses are 
at lenst getting smaller 6182m 
last year, on revenues or 
62-lbn, after a decision at the 
end of 1992 to cut back 
operations in Europe. 

This year, says Mr Alan 
Graf, chief financial officer, the 
company’s international busi- 
ness will finally turn the cor- 
ner, reaching break-even. In 
the long run, he adds, the bulk 
of the company’s profits is 
likely to come from abroad. 

What happens in the skies 
over faroff countries is of vital 
interest in west Tennessee. It 
is difficult to overstate the 
importance of Federal Express 
to the local economy. If there 
is one industry that dominates 
Memphis, it is distribution. 
And if there is one company 
that dominates the Memphis 
distribution industry, it is Fed- 
eral Express. 

The package delivery compa- 
ny's fast growth over the past 
two decades has created many 
thousands of new jobs in the 
area directly- it now employs 
20.000 people -and helped 
encourage many others to 
locate their businesses in or 
around the city. A distributor 
based in Memphis can drop its 
goods off at the Federal 
Express hub late in the even- 
ing and have them delivered 
anywhere in the country by 
the nert morning. 

There were two factors that 
madp Federal Express’s initial 
foray into international mar- 
kets a disaster. One was its 
purchase of Flying Tigers, an 
airfreight company, just as a 
slowdown in the worldwide 
economy hit the airfreight 
business hard. “We knew that 
the business would be subject 
to cyclicality. It was a risk we 
took with our eyes open, and it 
cost us some money ” says Mr 
GraL 

The second - and more cost 
ly- mistake was a miscon- 
ceived attempt to recreate in 
Europe the company’s success 
to its home market To that 
end. Federal Express went 
about building an extensive 
network inside Europe -but 
then failed to win enough vol- 
ume to justify the costs. 

“We had a belief that we 
could develop the gam * 1 syner- 
gies and economies of scale 
that we had in the US. (But] 
the ™ of the market is much 
smaller in Europe,” says Mr 
Oaf. Federal Express’s meteor- 
ic rise in the US. from its foun- 
ding in 1972, owes much to the 
development of just-in-time 
techniques and , 
new methods of inventory con- 
trol: customers found it 
cheaper to send or received 
small items from around the 
country by express mail, 
rather than to keep them in 
stock. 

The company bet on the 
same process sweeping Europe, 
and was proved wrong. 

Also, Federal Express foiled 


painful 

to break the strong hold on the 
European package delivery 
business oft number of power- 
fid rivals. “One of the things 
we had hoped for is that people 
would make a stogie-carrier 
choice,” using the same carrier 
to ship a package inside 
Europe that they Used to 
deliver items to the US, says 
Mr Michael Glenn,- senior 
vice-president in charge of 
marketing and communica- 
tions. That didn't happen. 

The company has now 
scrapped the attempt to 
become a regional carrier in 
Europe, contenting Itself 
instead with operating a trans- 
atlantic service. 

The break-through into prof- 
itability in the international 
businesses, when it comes, wifi 

signal an im portant 

In the company’s history. 
Founded in 1972, Federal 
Express has a d ominan t dura 
of the overnight parcel market 
to the US. Yet that business Is 
getting steadily less profitable. 


Many customers are 
turning away from the 
most expensive, and 
therefore pr ofit abl e, 
overnight priority service 


Far a start, much of the com- 
pany’s business is with tog cus- 
tomers who are able to negoti- 
ate large discounts. “We have 
no control over pricing in the 
US,” says Mr GraL 

A second problem is that 
many customers are turning 
away from the most expensive, 
and therefore profitable, over- 
night privity service towards 
less costly services. 

The decline to margins is 
evident from the figures, the 
volume of packages carried in 
the US leapt from 312m in 1991 
to 406m in 1983 -yet over that 
period, the proportion of prior- 
ity overnight packages dropped 
from six out of every 10 pieces 
carried to five out of every 10. 
Largely as a result, the compa- 
ny's revenues in the US grew 
at a slower rate, -from 65.ibn in 
1991 to 65.7bn last year. Its 
operating income slid from 
6871m to 6559m. 

For all that, the express 
package delivery business 
remains a strong growth busi- 
ness in the US. “It’s difficult to 
find another business growing 
at the same rate,” says Mr 
GraL 

The key for Federal Express 
is to bring down its costs for 
anf-h packag e shipped in jtoe 
with its revenue-per-pack- 
age - something it failed to do 
last year. New technology is 
the answer. It will also have to 
avoid the sort of costly mis- 
takes it has made to the past 

According to Mr Glenn: 
“E- ma il could have an impact 
- how much; we don’t know." 

However, Federal Express 
claims to have already been 
through the worst, reducing 
the pressure on it to respond. 
"You can’t fax hard goods,” 
says Mr Glenn. “The amount of 
goods that is still document-re- 
lated and could be transmitted 
another way is . very small' We 
believe we have suffered sub- 
stantially all of .the dilution 
already." 

Richard Waters 


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.FINANCIAL TIMES WEDNESDAY MAY 25 1994 


TENNESSEE V 




Snapshots of some of Tennessee's tourist attractions, by Richard Waters 

From Graceland to the Smoky Mountains 

I t is smaller than you ersecfc ■‘ v ~ 4 , r - 

a 1930s copy of Mold v"* - ; A- ‘ SCOTe ** ***& sheds, each 

Southern ■ . one houstae a mountain of oak 


■ c-mT — r ' uiu 

■ southern mansion, sitting 
&ehmd iron gates an the out 
skirts of Memphis, A suburban 
home for a successful doctor. 
Perhaps - which is what it was 
for many years. 

But Graceland looms lanze in 
Elvis Presley myth. To ths 
22-year-old country boy it 
must have seemed the pinnacle 
? ■ suc ^S?- He WWiOOO for 
it m 1957 and proceeded to do 
with it what yon would expect 
of a 22-year old with sudden 
wealth: bufld three television 
sets into a wan in the base- 
ment and buy a pool table. 

Anyone loured here by the 
teles of garishnesss - mirrors 
on the ceilings, carpets on the 
walls -will be disappointed. 
These are familiar remnants of 
1970s interior, decor to a n y one 
who lived through the era. 
Fans of kitsch wffl get more 
fun across the road at the Elvis 
Presley car museum, with its 
famous convertible pink Cad- 
illac, or the Elvis Presley air- 
craft, named after daughter 
Lisa Marie - or, better yet, just 
stop at the Elvis Presley souve- 
nir shops. 

Graceland is an exercise in 
hagiography. But, strangely, 
there is no music. Hushed tour 
parties are ushered around in a 
reverential silence. There is 
also little at Graceland to 
remind visitors that the great- 
est career in rock and roll his- 
tory disintegrated into farce. 
There is just one sign, placed 
in the glass cases alongside the 
1970s sequhmed jump suits: 
“The image is one thing , and 
the human being is another it 
is very hard to hve up to an 
Image.” 

Nashville may like to call 
itself Music City USA, but 
Memphis can lay claim to a 
musical history just as rich. It 
is the home of the blues, a 
musical strain that grew up in 
the Mississippi delta in the 
1930s and now one of the city’s 
biggest leisure industries. 

Downtown Memphis, like 
many other US downtowns, 
has been subjected to a succes- 
sion of building sprees since 
the 1960s. Some relics r emain 
- the great pile of the Peabody 
Hotel, for example -but it . 
takes great imag ination to. con- 
jure up the farmer cotton capi- 


Ehrta Freaky statue in Beale 
Street, Memphis Hon; ustta 

tal of the Mississippi Paddle 
steamers still, navigate the 
broad sweep of the river, Mem- 
phis' most distinctive feature. 
But the city is probably better 
known these days through the 
books - and the films of books 
-of thriller writer John Gris- 
ham, author of The Firm: a 
modem Southern city, with a 
giant glass pyramid sitting gnr- 
reaDy on the river banks. 

The heart of the Memphis 
blues history nearly suc- 
cumbed to the familiar urban 
devastation of the 1960s. But 
Beale Street, the place where 
the musical style was bom, 
was given a last-minute 
reprieve from the developers. 
Today, it Is a low-rise isolated 
strip of bars, chibs and souve- 
nir shops which stands in 
stark contrast to the develop- 
ment that has gone on all 
around. The blues and rock 
and roll from even doorways 
fight it out on the street as 
bars compete for passers-by. 
This part of Memphis’s musical 
history is very much alive. 

Old-style charm 
The evening sunshine Is slant. 
ing across the rolling bins of 
south-eastern Tennessee. Hid- 
den in the woods an the tops of 
these billfi are more than a 


score of large tin sheds, rack 
one housing a mountain of oak 
casks of whiskey. Yet you can’t 
legally buy a drink here in 
Moore County. 

The Jack Daniels distillery is 
Lynchburg’s biggest - indeed, 
its only -attraction. Its “sour- 
mash” whiskey - don’t make 

the mictplrp of wiiWwg it bour- 
bon, it doesn’t go down well 
- was first made here more 
than a hundred years ago. 

Not mwch Tiag changed at tte 
distillery, which prides itself 
on Its old-style Southern 

fli Upn 

The history of Jack Daniels 
reads like a battle against the 
non-drinking lobby. First, the 
distillery’s Lynchburg saloon 
was clo^d, and in 1909 Tennes- 
see got its first “dry" law, 
before the rest of the US. The 
distillery was packed up and 
moved to St Louis. The prohi- 
bition era did not shut down 
the operation completely, but 
its output was kept in a 
bonded warehouse, and made 
available only for “medtohiar 
purposes. It was a good time to 
be friends with a doctor. 

There have always been 
ways of getting a drink of 
whiskey in the South. The dis- 
tillery's St Louis neighbours 
found a way in 1923: they fed a 
pipe through into the adjoining 
warehouse and sucked out 
42,800 gallons of the stuff- re- 
placing it with water, lest any- 
one should notice the barrels 
were running empty. 

Roger Brashears’ porch is 
one place in Lynchburg where 
you can get a proper drink. 
The head of marketing and 
publicity for the distillery, he 
lives within a hundred yards of 
the site. Yet he drives to and 
from it in his battered Ford 
pick-up trade. That’s how you 
can tell a Southern hoy, he 
says - only ever walks if it's to 
get in his pick-up. 

Brashears is the gmhnriTmfmt- 
of the Southern charm that 
Jack Daniels exerts over its 
visitors: old-fashioned, laconic, 
warm. With his braces, his 
chain smoking, his steady 
drawl, perhaps Brash- 
ears -and, the distill- 

ery as a whole - is just a clever 
artifice constructed for tour- 
ists. But after a glass of his 
“sippin’ whiskey", you're con- 
vinced he’s the genuine article. 



visited state park in the US. 

But the displacement caused 
by its creation is still a power- 
ful memory In the communi- 
ties that huddle outside the 



Oprytand NagtivHtas the Wabaah Cannonfcafl 


Pictavdera 


It doesirt cost anything to go 
on tour of the distillery. 
Says Brashears; "We don’t 
charge. But after you've been 
through here, you'll be paying 
to- the rest of your life.” 

Bus-loads of sightseers 
The desk clerk at the Qpryland 
hotel advises you to drive 
round to anntfnM* entrant to 
get to your room. He takes out 
a map and writes instructions 
an it, bat you stm manage to 
get lost 

The complex to the north of 
the city has become one of 
Nashville's most-visited tourist 
attractions. At night, bus-loads 
of sightseers are brought out 
from town to gawp at the 
hotel’s fountains which, 
improbably, dance to taped 
music. Walking back through 
the dense tropical undergrowth 
of one of file hotel’s giant 
glasshouses, you get stuck 
behind columns of ageing 
sightseers. They are peering up 
into the trees trying to work 
out if the bird songs they can 
hear are from real birds, or 
just more recordings. The local 
youth population seems to 
have discovered that the artifi- 
cial sub-tropical glades are a 
good pises to hang out 
The hotel -and Gaylord, the 


company that owns ft- Js xi* 
ing high, on the*^iocesS of 
country nmsic. In the cadre of 
Nashville, two new jbrihOBfto 
music are ne»njpg':c»ngd^lbit. 

pressed 

try music hall In the tolMle 
years of the century, is finally 
being fitted out properly for 
the purpose. The woodsnfloofti 
and pews, and the' Stained 
glass windows, r tgmafn: but 
this time it will have ah condi- 
tioning. 

Nearby, Gaylord Is ; also put- 
ting Hw fjnfaHng fooefeg to 
the WSdhorse Gaft -a restau- 
rant with a wide stage and 
wooden dance floor. This will 
provide more performance fod- 
der for the cable television net- 
works which the company also 
runs. IF Country proves more 
than a passing fed, the Wild- 
horse could became the Hard 
Rock of the 1990s: it is a format 
that Dick Evans, Gaylord’s 
chief operating officer, hopes 
to spin out both around the US 
and internationally. 

A powerful memory 
The resentment is still palpa- 
ble in the foothills of the Great 
Smoky Mountains in east Ten- 
nessee. 

This has become the most- 


Cades Cove -an enclosed 
valley deep in the park -sup- 
ported a large community in 
the 1930s. Then, buying up 
land pfecemeaL the state grad- 
ually emptied its wide pas- 
tures, Recent structures were 
knocked down. All that 
remains now are the log cabins 
and white-plank churches of 
the pioneers who first settled 
here, scattered among the 
woods. 

The water-driven min ts 
being operated by an old man. 
He is a descendant of the man 
who buQt this mill, and was 
taught how to run it when still 
a boy. 

Now, in retirement, he is 
. running it for tourists. 

He won’t offer a view about 
the fete that has befallen the 
valley. But the woman at the 
j door is more fo rthcoming , shn 
went to school here in the 
-1938s -until the school was 
tom down and she, Hke evetffr- 
qdb else, was forced out. 

. . She is still httter- although 
j,®zis better that foe: land has 
been turned aver to public use, 
rather than felling into private 
hands, foe adds. 

Sarah Ball’s father is also a 
refugee from the park. He sold 
more than 100 acres and used 
the money to buy land in the 
foothills outside the park 
gates, at Sevlerville. An 
upright old man, he stops to 
tdl you about it as you sit on 
the porch of the Blue Mountain 
Mis t Country fan Sarah and 
her husband, Norman, have 
built the fan on part of **«* 
land. You can sit on its parch 
and muse at the hin« while 
bullfrogs cmmplnfa in the pond 
below. 

At the top of tire mountains, 
on the border with North Caro- 
lina, a tower rises above the 
tree-tops. 

From here, you can gaze 
back an Tennessee - the steep 
slopes below giving way to the 
green wrinkles of hills «nd , fur 
away, scattered towns. 

If it was only a little clearer, 
you fed, you amid see dean, 
across foe state to the Missis- 
sippi- 




Dogwoods hi the Smoky Mountains part 


naiK L Fon&m&e UMjutoua 



Afl that ramato now are the log cabins and churches of the ptomeni 


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FINANCIAL TIMES SURVEY 


IRELAND 


More than i£3.5bn will 
be spent on transport 
and tourism: Page IV 



When the Channel Tunnel 
linking Britain and fVance was 
officially inaugurated earlier 
this month, most Irish newspa- 
pers were quick to note 
Ireland was now the only EU 
nation without a land-link to 
the rest of the member states. 

They lamented the fact that 
the tunnel would reinforce 
Ireland’s isolation and warned 
that bMx goods would find it 
more difficult to compete with 
British, ones in Europe’s popu- 
lous heartland. What good are 
Irish Oscars. Booker Prizes and 
successes in the Eurovision 
song contest if they do not pro- 
duce jobs, they asked? 

Although Ireland has had 
some outstanding successes in 
stealing the European lime- 
light in music, literature and 
film over the past year, the 
frustration of not being closer 
to the economic and political 
pulse of Europe is strongly felt 

As the European parliamen- 
tary elections approach, there 
are no powerful Euro-sceptic 
lobbies or irate backbenchers 
berating the government for 
wanting to be in the fast track 
to European monetary rminn 
(EMU). That goal is a cross- 
party objective. 

But Irish fears of economic 
isolation are perhaps over- 
stated. 

As the clouds of recession 
show signs of breaking up, the 
country appears to be better 
positioned than many of its EU 
partners to take advantage of 
the upswing. The Fianna EaU 
Labour coalition, now in its 
second year, has tnarntatn^ 
the central thrust of the eco- 
nomic policy pursued by two 
previous governments since 
1987 - reduction in the debt/ 
GNP ratio and securing price 
stability. A measure of that 
policy's success is that infla- 
tion in 1983 fell to L5 per cent 
one of the lowest in the EU. 

The crisis in the European 
exchange . rate mechanism 
towards the end of 1992, put- 
ting pressure on several Euro- 
pean currencies including the 
British pound, forced the 
in co min g coalition g overnm ent 
to accept a 10 per cent devalua- 
tion of the punt within weeks 
of taking office. Despite the 
turbulence at the tune, this has 
had a salutary effect Interest 
rates are now at record lows 


Goal is to be on the fast track to EMU 

As recession lifts, Ireland is in a good position to take advantage of the upswing. Tim Coone reports 






•yji; - 

M . '£/ 


Mary Robinson, the presMont ft, and Abort Reynofcfa, the prime mMsfar ft 

lent to LI per emit cf GNP. 

Indeed, the budget’s underly- 
ing assumption of a 3.8 per 
cent growth rate in GNP this 
year is now looking conserva- 
tive. The latest spate of eco- 
nomic forecasts from Tmteptm. 
dent analysts put the figure 
closer to 5 per cent, a level 
.which is expected to be sus- 
tained up to tiie end of the 
ce n t ur y . On that basis, the cur- 


_ cur- 
rency reserves are higher than 
before the crisis: exports look 
likely to hit record new levels 
and consumer demand is show- 
ing strong signs of recovery. 
The fiscal deficit is well under 
control - Mr Bertie Ahem, the 
finarrta* minister, felt ivwrfVtawt 
enough to give away ictram in 
tax rehefc to the lower-paid in 
last January’s budget, equiva- 


lent budget deficit will be elim- 
inated by 1996, and the bmtt 
target of reducing the debt/ 
GDP ratio to 60 per cent 
appears attainable by the end 
of the decade. Provided that 
inflation, is not stoked up 
a gafn , Ireland baa thus posi- 
tioned itself well to taka the 
fast track to Europe. - 
Yet there remains a funda- 
mental problem at the heart of 



7b* Bank of Intend stands grandy on the curve of Coffees Groan, facing Trinity Cofega, in eontrat DiijSn 


Angela Long examines the economy arid employment prospects 

The boat has stayed afloat 


Whither the economy of 
Ireland? Or should that be 
“wither? 

The Republic has advantages 
in its highly educated, youthful 
workforce, its (often perplex- 
ingly) healthy economic indica- 
tors and its enthusiasm to 
attract investment from for- 
eign companies. But nothing 
can deny its geography, and 
after the Channel Tunnel 
starts operating at last. Ireland 
wfll indeed be the only Euro- 
pean Union country without a 
direct link to the European 

land magi! 

Well may Mr Albert Reyn- 
olds, the Taoiseach, claim that 
while geographically periph- 
eral, Ireland was “at the heart 
of Europe" - as he declared to 
a meeting of the Irish Manage- 
ment Institute last month. 
Dependence on Europe, pri- 
marily the UK, is a fact of life 
for the Irish economy. 

A population of 3m is not 
enough to sustain a country in 
isolation, and so Ireland has to 
look outwards, which perhaps 
accounts for the much more 
continental feel that Dublin 
has, for example, than any 
BngHflh city. Often, because of 
blood links, the overseas link 
is with the US. 

This year has seen growing 
optimism for the Irish econ- 
omy. Predictions of growth 
have risen from near 3 per cent 
at the end of 1993 to between 4 
per cent and 5 per cent Infla- 
tion, at about 2 per cent, is one 
of the lowest in the EU, compa- 
rable only with France. The 
punt is healthy, «nd a leading 
stockbroker, Davy, recently 
predicted tiurt it could reach 
parity with sterling tor the end 
of the year. 

Exchequer returns, a k ey 
’jndhfl tfinn of how the adminis- 
tration's bookkeeping is faring, 
were good, showing a 25 par 
cent increase in total tax reve- 
nue for the first quarter of 
1994. And although Ireland 
may still be one of the poorer 
members of the EU, its relative 
prosperity is improving: aver- 
age income has risen from 60 
par cent of the EU average in 
1986 to 74 per cent today. 

The Reynolds government, 
with Mr Bertie Ahern a popu- 
lar and comp&mt finance min- 
ister, has kept its head and rid- 
den out the currency storm. 
Interest rates are fairly stable. 
The government is entering Its 
second Programme for Eco- 
nomic and Social Partnership 
(PESP), which features a tri- 
partite agreement between 
itself, the unions and employ- 





ers, which should help to 
restrain wage levels. Public 
sector pay, however, may 
prove harder to control than 
Mr Reynolds and Mr Ahern 
have hoped, with civil servants 
using provisions for increased 
pay as a result of work 
restructuring: 

Another awkward acronym 
to ride with PESP, the PCW, 
stands for the Programme for 
Competitiveness and Work. 
The rumw may be clumsy, but 
these are the important issues 
Ireland w£D have to ad dress. . 

At present, the PCW has yet 
to be ratified finally, by the 
unions. The “Work" side of any 
plan will be the real test for 
the government, because it is 
not yet dear whether unem- 
ployment - which has been 
levelling off in recent months 
- can be Certainly 

e no ugh bas been said about 
tackling it, but the heart of the 
problem remains intractable. . 

The influential Economic 

and Social Research Institute 

(ESRD published an upbeat 
mid-term outlook in April 
which gave rise to a he adl i ne 
in {he Irish Times: “The rising 
international tide could lift the 
Irish boat". The E$RI, working 
with computer models, pro-. 
tUrtpri an improving economy . 
“in the mid-tenn M - that is, 
into the next century. 


Consumer spending, for 
example, should rise by &5 pee 
cent tins year, and by up to 6.4 
per cent in 1995. There has 
been «»»» sign that the bat- 
tered consumer, devastated by 
the rise in i nterest rates that 
preceded the 10 per cent deval- 
uation of punt in January 
1993, has returned to the high 
street. Retail sales have been 
showing a slight ftnpm wmwit , 
and there was a big leap in 
new car sales ih the first quar- 
ter, with a 46 par cent increase 
an the same period in IMS. 
However, this is partly due to a 
reduction in Vehicle Registra- 
tion Tax announced in the 
Budget 

But the ESRI report , (by Sara 
O antiDcp. John Curtis, and 
John FtteGerald. san'&Garfet 
FitzGerald, the- former Tao- 
iseach) warned ’that wShouni 
“major policy change" 
long-term employment would 
remain a grave problem. 

A mixed blessing for the 
country came last November 
the Republic’s football team 
qualified for the World Cop by 
defeating Northern Ireland. 
People who might otherwise 
have bought a sew car or even 
a house will sow be spending 
any surplus - or borrowed - 
cash oh a trip to the US, or on 
a new wide-screen television 
for the month of matches. 


The ESRI justifies its opti- 
mism, in part, by the way in 
which the Irish “boat" has 
managed to stay afloat daring 
recent stormy times, compli- 
menting its “robust perfor- 
mance in the face of interna- 
tional recession over the past 
couple of years". 

Desp i t e bad conditkms last 
year, the economy managed 
about 2 per cent growth. 
Exports rose by about 8.75 p er 
cent compared with growth in 
world trade of only 2.6 per 
cent But ESRI sensibly quali- 
fies its cheery view: “The one 
uncertainty about the future is 
that the actual outturn will be 
more eventful tiwn flw aiwift 
path we have plotted." 

The effect of demographics 
win he watched with interest 
Ireland's high birth rate; has 
meant a crushing ratio of 
wage-earners to dependants; 
the highest in Europe. For 
eveay 10 people at work, there 
are between 20 and 30 depen- 
dants compared with three in. 
say, Denmark 

“The rate of increase in 
employment necessary to pro- 
vide jobs for the young people 
c an te ring the labour market hi 
Ireland is 15 times greater than, 
in the rest of Europe,” wrote 
Garret ntzGerald recently. 

Continued an Page n 


economic policy-making, as Mr 
Han de Jong, chief economist 
at Goodbody, Dublin stockbro- 
kers, paints out “In conduct- 
ing exchange rate policy, the 
authorities are a basket 
of currencies with sterling and 
the DM as heavy w eights. The 
foreign exchange market, on 
the other hand, baa effectively 
relinked the punt to ster- 
ling . . . the perceived poor 
quality of economic policy- 
making in the UK is the core of 
the problem for the Irish 
authorities and constitutes the 
paradox of Irish policy inten- 
tions," he said 

While the Irish authorities 
want Ireland to be among the 
first to participate in nwpate r y 
union, they are being held hos- 
tage to the political fortunes of 
a UK Cons e r vative party in dis- 
array over Europe. According 
to Mr de Jong: “UK politics is a 
constant potential threat to 
(economic) stability.” 

In other economic policy- 
making areas - notably the 
deregulation of state enter- 
prises -Irish freedom of action 
is subject to internal rather 
than external constraints, but 
still the process has had suc- 
cesses. Aer Ltogus, the state- 
run airline, has managed to 
emerge from a big restruct ur - 
ing, aimed at returning it to 
profitability, without a crip- 
pling labour dispute. Unions at 
An Post, the state postal ser- 
vice, have accepted radical 
changes to work practices. 
Both companies are saamhing 
for overseas partners. 

The rail unions are proving 
more reluctant to accept 
change at Iamrod Eireann 
(Irish Rail), the heaviest gov- 
ernment loss-maker, but as 
practically all of Europe's rail- 
ways are heavily subsidised, 
most of the attention will non 
focus on Telecom Eireann, the 
sta te teinnrwnwiiTTnre>tion ff com- 
pany, and an whether a pro- 
posed link-up with British tele- 
communications group. Cable 
& Wireless, will get the 
go-ahead from the government 
Telecom unions have indicated 


that they will support a joint 
venture with a foreign partner 
- but are opposed to one with 
Cable & Wireless. 

The importance of telecom- 
munications to the economy 
cannot be overestimated. Over 
the past 10 years Ireland's tele- 
communications services have 
improved dramatically. The 
recent entry of competitors 
into the international segment 
of the market Is rapidly bring- 
ing down the cost of calls, 
adding to the continuing tax 
attractions of setting up busi- 
ness in Ireland, not least in the 
financi al service industries. 

More than 150 offshore fends 
totalling some $9bn are now 
managed out of the Interna- 
tional Financial Services Cen- 
tre (IFSQ in Dublin, a sector 
which has grown rapidly in the 
past two years. A growing 


number of fends is »ia> being 
listed on the Dublin stock 
exchange, which itself is 
attracting an increasing 
amount of overseas attention. 

Inward industrial investment 
is also continuing to notch up 
successes. Several new projects 
- in the health care sector, in 
telemarketing and in electron- 
ics, among others - have been 
armraini-pfi since the beginning 
of the year. (Generous grants 
and a low tax regime have 
helped to attract these, despite 
intense competition from, for 
e x ampl e , Scotland and Wales.) 

Ireland's profile - and its 
hopes of attracting further 
investment In both manufac- 
turing and services - will be 
raised further next month 
when its team travels to the 
US to play in the finals of foot- 
ball's world cup in Orlando 



and New York, accompanied 
by tens of thousands of sup- 
porters. 

A flood of Italian tourists to 
Ireland followed Ireland's par- 
ticipation in the 1990 World 
Cup in Italy. A similar effect is 
hoped for in the US, tradition- 
ally Ireland's main overseas 
tourist market An increase in 
numbers from the US will be 
especially welcome in the west 
of Ireland, which is having to 
come to terms with the reform 
of the EU's common agricul- 
tural policy. This is forcing 
change in the traditional dairy 
and beef farming sectors in 
favour of new industries such 
as tourism and forestry. 

Planting of new woodlands 
and forests has accelerated in 
the past five years, encouraged 
by generous grants and incen- 
tives which are scheduled to be 
increased again soon. A forest 
products industry is already 
undergoing expansion. This is 
expected to be as important to 
the economy, in 20 years, as 
the food industry is now. 

So Ireland's position at the 
edge of Europe is not the disad- 
vantage it is frequently made 
out to be. Its comparative 
advantages have been recog- 
nised and economic and politi- 
cal stability is fostering a posi- 
tive climate for inward 
investment by companies posi- 
tioning themselves for growth 
in the European market 
Much more would be possi- 
ble, too, given a satisfactory 
resolution of the island of 
Ireland’s most intractable prob- 
lem - Northern Ireland, an 
issue which has absorbed large 
amounts of ministerial time 
over the past year. 

While prospects for peace In 
the province have came tanta- 
Iforinig iy closer than at any tima 
in the past 25 years, as a result 
of talks with the UK govern- 
ment leading up to the Down- 
ing Street Declaration, the gov- 
ernment has had to accept that 
its suggestion last year that 
“peace by Christmas” was pos- 
sible was wide of the mark. 

It may be some way down the 
road yet Nevertheless, even on 
this issue, there are signs of 
the same movement which, in 
other areas, is leading to hopes 
of a more prosperous and sta- 
ble future for Ireland in the 
twenty-first century. 



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business and technology than any other 
country in Europe. 


So while the rest of Europe worries about 
growing old and greying, Ireland is in her 
prime. 

Previding a prime location for industry 
already profitable for over 1000 international 
companies. 

Powered by people. 


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FINANCIAL TIMES WEDNESDAY MAY 25 1994 


IRELAND II 


W hen the Fianna 
Fail-Labour coali- 
tion was formed in 
January 1993, after 
the last general ejection, some 
political pundits were predict- 
ing that it would not survive 
two years. 

The 1982-87 Fine Gael-Labour 
coalition broke down after four 
years, in disagreement over 
economic policy and over 
Labour's eclipse by its larger, 
and co n s ervati ve partner, Fine 
GaeL 

The last coalition, formed in 
1989 by Fianna Fail and the 
Progressive Democrats, col- 
lapsed in 199?-. culminating in 
the spectacle of the two party 
leaders accusing other of 
being liars from the witness 
box of a public inquiry into the 
Irish beef industry (the report 
cf which is finally expected to 
see light 1 of day jn jnne 
this year). 

Some early ministerial turf 
battles aside, the latest coali- 
tion partners have displayed a 
surprising degree of cohesion 
fhniig hj anrf are now approach- 
ing the June Euro-elections in 
c onfident mood. They are even 
contemplating an unprece- 
dented voting pact to make 
sure that their randiriataH get 
an easy ride to Strasbourg. 

The few wobbles that have 
occurred in public, usually 
when tire word privatisation 
has been mentioned, have not 
yet been sufficient to throw the 
tamtam out of wmtml 
The latest batch of economic 
forecasts are confidently pre- 
dicting strong growth, low 
inflation, and rising employ- 
ment levels up to the end of 
the decade. Even the sun has 
been putting in a strong 
appearance over the past 
nawifh after nn<> of the dreari- 
est and wettest winters on 
record. 

A spokesman for Mr Albert 
Reynolds, the prime minister, 
said: “There is a strong feet 
good factor and the govera- 


P oet, political scientist, 
sociologist and socialist, 
university lecturer and 
now minister for arts, culture 
and the Irish language, Mr 
Michael D. Higgins is one of 
the more colourful figures to 
have entered the upper eche- 
lons of Ireland's political estab- 
lishment in recent years. 

He is a liberal thinker, 
author of two well-received 
books of poetry and renowned 
for his erudite and impas- 
sioned Dail speeches. Mr Big 
gins has given a surge of confi- 
dence to Ireland's arts 
comm unity since his appoint- 
ment to the cabinet in January 
1993, his first ministerial post 


Continued from Page I 

But in the past five years the 
Irish birthrate has dropped 
dramatically, as members of 
the current generation tailor 
their families to their pockets 
and life styles rather than to 
the traditional Catholic model: 
“as many as heaven sends.” 

The hn pHcatinrw of this are 
many. For example, the ESR1 


The Fianna Fail-Labour coalition is approaching the June Euro-elections in a confident mood 

A few wobbles have not upset the tandem 


Tnpnt is riding high 

“The coalition is performing 
well, and if anything should go 
wrong, we will simply batten 
down the batches and ride it 
out." 

Mr Dick Spring, the deputy 
prime minister and Labour 
party leader is in an equally 
optimistic mood. “We are well 
on course. Unemployment is 
edging down and other prob- 
lem areas such as health, edu- 
cation pnd hnngTnp are effec- 
tively off the political agenda 
because of the progress that 
has been made on all these 
fronts,” he s a i d 

Public housing starts are 
well up, 17,000 people have 
been taken off hospital waiting 
lists, and additional res o urces 
are being pumped into educa- 
tion. 

If progress has not been as 
rapid on the jobs front as 
Labour would have hoped “we 
have at least established our 
credibility with the markets in 
the past two budgets", said Mr 
Spring. 

With so much good news 
about, the opposition - flap its 
arms as it may - has been 
unable to unnerve the compla- 
cent coalition beast Fine Gael, 
the main opposition party, has 
still to recover from its misera- 
ble performance in the 1992 
elections. 

Mr John Bruton, the party 
leader, with one eye constantly 
over his shoulder, wondering 
where the next challenge to his 
leadership might come from, 
has been unable to do more 
than smpe at occasional gov- 
ernment blunders. 

Red faces there have been on 
gov e rnment benches - when a 
promised pot of EU structural 


With an annual budget of 
more than l£50m, he has 
increased government funding 
far the Irish Arts Council by 25 
per cent and secured pre-pro- 
duction tax breaks mid if- l fim 
in funding for the film indus- 
try over the next four years. 
He is now turning his attention 
to the music and multimedia 
industries. 

“X want an active rather than 
a passive cultural policy, 
which is open to diversity and 
which creates a cultural space 
to fUL the narrowing of the eco- 
nomic space,” be says. 

He quotes approvingly from 
Edward Said’s latest book Cul- 
ture and Imperialism , and says 




MSS i In' Jj it 1 - ill =i . 

/-. .jjt L. •*** " tuuu.. tiiitih: iiiiUri:, 



Ireland's par fl amant is D6B Hraann, which has 166 atoctod nwnbaim. A 60-rownbar agnate i» partly no mina ted 


funds turned out to be only 
three-quarters full, when a 
middle-class outcry over a resi- 
dential property tax sent the 
finance minis ter scurrying 
back to his calculator and 
when a whiff of sexual scandal 
entered the flail (parliament) 
after a Labour minister was 


publicly reprimanded by Mr 
Spring for his “poor judge- 
ment” in haying chatted to a 
homosexual in his parked car 
in Dublin's Phoenix Park. 

But none of these Issues 
have set coalition knees trem- 
bling: Issues that might, espe- 
cially in F ianna Fail ranks, 


such as sorting out the now- 
ambiguous legal situation on 
abortion, and property rights 
in the event of divorce being 
introduced, are being quietly 
pushed on to the back burner. 

A fafil to legalise homosexu- 
ality was passed last year, 
however, with barely a ripple 


of controversy. 

Causing more worries for 
government programme man- 
agers is Ms Mary Harney, the 
new leader of the Progressive 
Democrats (PD - the smaller of 
the two conservative opposi- 
tion parties) and someone who 
has proved herself to be a 


Michael D. Higgins, minister for arts, culture and the Irish language, 
believes in offering a wide range of cultural choices, says Tim Coone 

Polymath of many colours 


he is a firm believer in cultural 
development as a stimulant to 
economic development. He 
says people across Europe will 
have to adjust to greater work 
flexibility and make more use 
of their leisure time in order to 
deal with unemployment 
“If we have enhanced cul- 


tural activity, there will be 
more alternatives to use that 
spare time and people will be 
more willing to make those 
adjustments.” He points to the 
success of the Irish film indus- 
try as proof that cultural pro- 
motion also creates jobs. 

Hie is known for arguing his 


views forcefully with his EU 
counterparts in the European 
Cultural Council, but he 
became more widely known 
outside Ireland earlier this 
year far his lifting of the two 
decade-old broadcasting ban on 
Sun Fein, the political wing of 
the IRA. 


forecast notes that the popula- 
tion change will have “trau- 
matic” effects for the teaching 
profession, where jobs are 
already a big Issue, and for the 
health care sector, which will 
have to concentrate an an age- 
ing population. Since 1972 
employment in health ami edu- 
cation services has risen from 
90,000 to 140,000 - according to 
last month's meeting of the 


The boat stays afloat 


Irish Business and Employers 
Congress. These areas are now 
likely to shrink. 

Other job sources will have 
to be found. The running sore 
on the Irish economy for 
nearly a decade has been 
unemployment; Ireland he g 
competed with Spain for the 
dubious title of having the 
highest unemployment in the 


EU. Last year the Republic suf- 
fered about 19 per emit unem- 
ployed compared to Spain's 
frightful 21 per cent, but since 
late last year the figures have 
been dropping - save for 
December. (Officials put that 
down to “reverse emigration"-) 
The unemployment figure 
fell in March for the third suc- 
cessive month, with 290,600 


We can set up your office. Answer yoor phone. Organise 
your shipping. Provide your warehousing. Handle your payroll. 
Arrange your distribution. Manage your credit control. 

In fact, we can take cane of evoy aspect of your business in 
Inland, except one. Reaping die return. Find oat man. 

Talk loCblmSyme at (353 1)8730099. 

Irish Warehousing & Transport Co. L»d, 'BL 

Oran Horae. Arran Coon. Am Quay. Dublin 7. 


Maim g ayit i oB i laa ji;*:. Or? ' 

M.apercaiiagaoi jB NfoX ^ ^ \ } ' i-J- ■■ 

--W [ym'.yjto .. .«;/ 

soittfesiji -. • • : V- ./*.* ■: ..*!■■ • 


people on the live register, 
WOO fewer than a year ago. 
The Central Statisti c al Office’s 
figures for this time last year 
showed L146m people at work 
compared with L139m In 1992. 
Much of the rise in employ- 
ment has been, among 
workers. Many women who 
previously stayed at home to 
look after their families are 

PeriMfe e a ftrem Wa yit";. 

A# a percentage Of ®NP ^ *./ 


•tt ■ •• 


' - 1965 1990 Cl 996 : 20©T ZOtisl-- 

1 .V 


“I took a lot of flak from all 
sides for that, but it was done 
in the context of the public’s 
right to information and the 
political censorship issue. I 
revoked the ban not to facili- 
tate Sum Fein but to facilitate 
. the public,” he says. 

A desire to give people a 


now being forced by circum- 
stance, or liberated by chang- 
ing attitudes, to seek work. 

Only 18 months ago you 
could read angry letters writ- 
ten to newspapers by gradu- 
ates in Co Galway, complain- 
ing of the “cheek” of married 
women in taking jobs. The sta- 
tistics do show a stasis in the 
numbers of men at work, 
whereas female employment 
has risen by 554X10 since 1967. 
Many of these women are in 
the services sector - many, 
too, have lower pay than men, 
and inferior con ditio n s. 

What is the government 
doing to create jobs? Tax 
breaks far small emjiloyers and 
drives to persuade overseas 
companies to set up in Ireland 
are two - perhaps too common 
- solutions. The Industrial 
Development Authority is cam- 
paigning to draw multination- 
als, and has bad success with 
some telemarketing compa- 
nies, creating hundreds of jobs. 

But the problem remains; 
when things go badly for the 
multinational, as for any crea- 
ture on earth, it wants to go 
home. 


tough and competent per- 
former in the DaiL She is 
busily creating a higher profile 
for the party, and carefully tar- 
geting the right-wing vote 
which Fine Gael has tradition- 
ally monopolised. 

Sweeping tar reform, privati- 
sation and a get-tough 
approach with Northern 
Ireland's paramilitaries are the 
PDs proposals for solving 
Ireland's problems. ft is not so 
different from Mr Bruton's 
message, but somehow sounds 
more convincing coming from 
Ms Harney. 

According to Mr Spring: the 
two crucial political issues that 
are now facing the country are 
unemployment ami the con- 
tinuing crisis in Northern 
Ireland. The latter fr** domi- 
nated the political agenda of 
both Mr Reynolds and Mr 
Spring (who is also foreign 
minister) for most of the put 
eight months, aiewng h of the 
two, Mr Reynolds has grabbed 
of the UmeUght. 

His joint declaration which 
was signed last December with 
Mr John Major, the British 
prime minister, succeeded In 
creating an entirely new 
framework for the settling of 
the Northern Ireland conflict, 
and simultaneously gave Mr 
Reynolds an entirely new 
framework for projecting his 
hitherto lacklustre image. 

His handling of the Anglo- 
Irish negotiations, during 
which be demonstrated that he 
could be a tenacious negotiator 
in handling Ireland's interests 
abroad, at the same time as 
being prepared to hon- 
ourable comp ro mises and take 
imaginative and risky initia- 
tives, has greatly boosted his 


wide range of cultural choices 
underpins his arms-length 
approach to the government- 
funded arts bftdio* which came 
under his r emit. These must 
have autonomy with responsi- 
bility, he says. It is for govern- 
ment to help create “the cul- 
tural space” within, which 
broadcasters, artists, writers 
and musicians have the free- 
dom to innovate. The public, 
he insists, does not need to be 
told by government what to 

The growing international 
acclaim of Irish actors, direc- 
tors, writers and musicians, 
bolstered by a string of recent 
successes with Oscars, the 


.uvsemproyimwoi. 


reputation both at home and 
abroad. 

But there has been gMUtine 
disappointment, bordering on a 
sense of deception, tint Shm 
Fein, the political wing of the 
IRA, has so far failed to grasp 
the dive branch held out to tt. 

There ia also growing frus- 
tration with the ma tii waati ei 
of UK parliamentary politics - 

the devastation of the Tories in 

the British local elections ear- 
lier this month, has raised 
fears in Dublin that Mr Major 
will now be even, non 
beholden to the Ulster Union- 
ists than ever to retain Us sBa 

Commons majority in the face 
of backbench revolts. 

Government priorities are 
therefore set to shift to tin 
other key issue identified by' 
Mr -Spring - unemployment 

Unfortunately, the job of 
mating any rig n i ffc pto In wd t 
into the dole queues against a 
backdrop of rising unemploy- 
ment withto the EU is likely to 
prove as frustrating as the 
Northern Ireland, peace pro- 
cess. 

Those same sunny economic 
forecasts alee predict that 
long-term unemployment Is 
likely to remain stubbornly 
high at 18 per cent until the 
year 2000. 

The coalition has at least 
three years to run before the 
next general election Is due, 

and M r Sprin g la wm fMwnt font 

it can hold together. He of 
course stands to lose most if it 
fails. 

Labour’s vote doubled to a 
record 21 per cent In 1992 as 
unemployment figures also 
reached record highs. Failure 
to deliver on jobs could see 
that vote halve again as easily 
as it doubled - and the "new 
era” Mr Spring promised for 
Irish politics 18 months ago 
may in retrospect appear to 
have been a mere flash in the 
pan. 

Tim Coone 


Booker prise - even a third 
successive win at the Eurovi- 
sion Song Contest - shows 
how for Irish cultural policy 
has come from the dark days of 
the 1930s when writers such as 
Joyce, Synge and Beckett, 
chose exile in order to get pub- 
lished. Tbday they would be 
given grants and live tax-free. 

As Mr Higgins finishes Ms 
lunch a man comes over to 
shake his hand. T liked your 
last book of poems. Minister. 
Keep it up," he says. Mr Hig- 
gins confesses he has written 
“only four and a half in the 
past 18 months. Nonetheless, 
Joyce would have been 
impressed. 



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r 








financial ^onesday May as to<m 


err> 


IRELAND III 


best perfor ming °£t5* John McManus finds that the Dublin stock exchange is experiencing a mediocre start to the year 

Europe brt 2 “ 


m a r ketB in Europe last 

5m At 1 *** a -■"» 

The 1SEQ index of- Irish 

SST* ^ down **«rat 2 per 
cent on the year to date, com- 

a 51 per cent rise 
last year in the prolonged bun 
ran triggered by the devalua- 
tion of the Irish pound. 


involved significant ca tching 
np by the Dublin market after 
two years of under-performing 
London (which it traditionally 
shadows). The market’s perfor- 
mance was exaggerated by the 
low valuations to which Irish 
stories had sunk during 1991 
and 1992 - relative to UK 
stocks - because of the differ- 
ence in the Interest rates pre- 
vailing in Ireland and toe UK. 

The valuation differential 
between the two markets has 
largely been eliminated, 
according to Sir John Conroy, 
h eed , analyst at Dublin's larg- 
est independent stockbroker, 
NCR. He predicts that further 
gains will be dictated by toe 
performance of London 


Last year’s gains prove hard to repeat 


New York, the two markets 
which traditionally give a lead 
to PnMin. 

Mr Conroy believes Irish 
stocks are still attractive in 
valuation toms, on a stock by 
stock baste, as the outlook far 
domestic earnings is positive. 
Ireland is forecast to have one 
of the highest growt h rates in 
the EC next year and govern- 
ment and independent fore- 
casters predict that the Irish 
gross national product will 
grow by more than 4 per cent 

But as in the other European 
markets, sustained progress 
wfil only take place in Dublin 
if international equity markets 
decouple (ran the bond, mar- 
kets which have been exer tin g 
a negative Influence on them 
far much of this year. 

Last year saw Ug changes in 
the investor profile of toe Irish 

stock, market. Turmoil in. the 


exchange rate mechanism 
(KRM) in 1992 and 1998, and 
the subsequent post-devalua- 
tion hull rim, raised aware- 
ness of the Irish market The 
market's increased visibility 
and the inclusion of 10 of the 
largest Irish stocks in the Mor- 
gan Stanley Capital Index, has 
raised the level of overseas 
investment in Irish stocks, 
particularly by US tends. 

Although the flow ot US 
investment funds into Europe 
has been drying op as US 
interest rales tick upwards, 
most Irish analysts believe 
that US and overseas inve st o rs 
in the Irish market have taken 
a medium to long term view. 

“It Is a good time to boy 
Irish stocks, but csfly if inter- 
national mar k et s move ahead 
- we are not going to move on 
our own," Mr Conroy says. 
The two big Irish tmta, AIR 


and Bank of Ireland, have 
both attracted interna t io n a l 
attention in recent months. 
They are seen as cheap, rela- 
tive to the European sector. 
Both have strong domestic 
retail operations, controlling 
about 70 per cent of the mar- 
ket between them end can 
«pw4 to benefit, in «rntiig K 
terms, from the anticipated 
growth in the Irish economy. 
One of toe biggest disadvan- 
tages for overseas in vestor s in 
the Irish market is lack of 
stock dfrerrity. AIB, Bank of 
Iceland, Irish life, the state's 
largest life assurance com- 
pany, and two industrial 
stocks, Smurfit and CRH, 
account far 54 per cent of toe 
marku ps tot a l a p MlEbDi of 
I£12Im. The top 10 listed com- 
panies have a total capltaltea- 
tion of KSbn. • 

Despite the expected arrival 


of two new companies on the 
exchange this year, Dublin 
wifl continue to suffer from a 
scarcity of listed large indus- 
trial and retail stories. The 
country's largest supermarket 
chain, the I£900m Dunne's 
Store empire, is privately 
owned. Qohmswarth, the sec- 
ond biggest retell chain, with 
a turnover in excess of 
12500m, is owned by Associ- 
ated British Foods, 

The dominance of the mar- 
ket by finanrfai stocks win be 
increased when Ireland's larg- 
est bnfkfing society, the Irish 
Pe rmanen t, is in toe 

middle of thte year. 

The other new entrant to the 
market is DCC, which is seek- 
ing a listing, haring success- 
fully comple ted the transition 
from venture capital tend to 
industrial holding company 
over the past 10 years. 


Both floats are small in 
terms of the overall size of the 
market DCC Is expected to 
raise between about 2£10m and 
l£20m through its flotation. 
The Irish Permanent may 
raise up to l£70m. 

The biggest challenge faring 
toe Irish stock, exchange te the 
break with toe London stock 

exchange scheduled for this 
year. The split is necessary to 
comply with the EU invest- 
ment services directive, which 
specifies that each member 

state must regulate its own 
securities markets. (Since 1973 
the Dnhttn stock exchange has 
been merged with the London 
stock exchange, which has 
effectively regulated the Irish 
market) The Irish government 
is preparing legislation, the 
Stock Exchange Act, which 
will make the central Bank of 
Ireland the vWimte regulator 


of the Irish market 
The Irish stock exchange’s 
handling of two highly publi- 
cised incidents last year is 
being taken into account in 
the framing of the new laws. 
Davy, Ireland's largest stock- 
broker, was reprimanded and 
fined I£150,000 by the London 
stock exchange last March for 
its role in the placing of the 
Irish government's 30.4 per 
cent stake in Greencore, toe 
food company, in April 1994.. 
The brokers initially told the 
government they had suc- 
ceeded in placing the shares, 
but later admitted they had 
been unable to sell all the 
stock and had bought a pro- 
portion themselves to avoid 
anbamusment 
The reasons for the repri- 
mand woe not made pnblic - 
which led to a written request 
from the Irish g ov e rnment to 


Davy for an explanation. The 
result was an indication from 
the Irish government that the 
new Stock Exchange Act will 
tests* on greater transparency 
in toe Irish exchange’s regula- 
tory procedures. 

The Dublin exchange has 
also been criticised for failing 
to protect the interests of 
shareholders in the small 
listed property company Coun- 
tyGlen, now the subject of an 
inquiry by an inspector 
appointed by the High Court 

The inspector is looking at 
transactions which Involved 
the expenditure of almost half 
of the company’s assets of 
I£2m without the approval of 
the company's 1,100 small 
shareholders. The stock 
exchange has yet to take any 
public disciplinary action. 

The new rules far the inde- 
pendent Dublin exchange will 
provide for more information 
about regulatory issues to 
made public. But they will be 
modelled on the London stock 
exchange’s rule book which, 
according to Mr Tam Bealy, 
manager of the Irish stock 
exchange, is bring revised. 




ds 

slice 




5tK^ 


O ver the past two years 
offshore fund manage- 
ment in Ireland has 
grown at such a pace that Dub- 
lin now rivals Jersey 
Guernsey in terms of the 
amount of offshore funds 
under management 
More than 99bn in offshore 
tends Is managed in Ireland, 
almost entirely by companies 
based in Dublin's International 
Financial Services Centre. This 
compares with $2Abn of over- 
seas funds twangpori in Tfr riKHn 
in June 1992, according to offi- 
cial figures. 

The main reason behind 
such rapid growth has been 
the introduction by the Irish 
government of favourable leg- 
islation since 1989, and the 
development of an Interna- 
tional Financial Services Cen- 
tre in Dublin. Ireland was one 
of the first EU states to adopt 
the UC1TS (Undertakings for 
Collective Investment in Trans- 
ferable Securities) directive in 
1989. The UCITS directive 
allows funds that are regulated 
in nna w omhw state to be mar- 
keted throughout toe EU. 

Ireland and Luxembourg are 
toe only two EU states where 
tax ffVftmp t managed tends mm 
piake use of this facility, some- 
thing which haB been crucial 
to Ireland’s recent success in 
attracting offshore fanitg. 

After deciding to set up an 
offshore fund in a tax-free 
Tptift, the ppvt: factor influenc- 
ing the decision of where to 
establish the ftmd is the mar- 
kets in which it will be sold, 
says Pat McNanghton, manag- 
ing director of Morgan Gren- 
fell's Irish fond management 
subsidiary. “If you wish to sell 
to the public in Europe then 
setting up where you can avail 
of the UCFTS directive is a 
great advantage," he explains. 

Morgan Grenfell derided to 
set up m Dublin rather than 
Luxembourg because it was a 
more cost-efficient location, 
particularly from the print of 
view of staff costs which are 
roughly two thirds of those in 
comparable offshore locations. 
The attitude of the workforce 
was also attractive, according 
to Mr McNanghton. “There is 
more enthusiasm for work 


here than in other tax havens 
because the others nearly all 
have full employment," he 


Morgan Grenfell’s move to 
Dublin followed the pattern of 
most of the more than 40 com- 
panies that manage roore than 
150 tends in Dublin. 

hi 1991, Morgan Grenfell 
transferred some existing 
tends from its operations in 
other tax havens to Dublin, in 
order to establish a base in 
Ireland from which to laimrh 
new funds and provide custo- 
dial services for other fund 
managers. Morgan Grenfell 

The regulators respond 
quickly and let you know 
if they can help 1 

now manages tends worth 
$L5tm in Dublin. 

Tax incentives are available 
to companies setting vp in the 
International Financial Ser- 
vices Centre. It is located an 
disused docklands near to the 
centre of Dublin «iH compa- 
nies that obtain an IFSC 
licence before the end of 1994 
can make use of a 10 per cent 
corporation tax rate until 2005. 

Companies, that, obtain an 
IFSC licence are expected to 
establish an office on the Dock- 
land site but many have not . 
yet done so, preferring to oper- 
ate out erf cheaper offices else- 
where in Dublin. However, 
companies that do move to the 
docks site «m makp use of a 
remission of municipal rates 
and double rent relief for 10 
years, as well as generous capi- 
tal allowances. 

Although companies that 
move to toe dories site can 
obtain 25-year leases, rather 
than the traditional 35-year 
lease w|mTnnn in I reland, most 
would still prefer five-year 
leases, such as those in the US, 
or the rollover indexed leases 
of three, six or nine years that 
are available in Europe. 

The accessibility and oo-oper- 
ative nature trf the Irish regula- 
tory authorities nwfcwt Dublin 
attractive to foreign tends, 
says Paul Dobbyn, a partner in 
one of Ireland's largest com- 


Favourable legislation has allowed fast growth of offshore funds 

Accessible and co-operative 


mercial law firms A &L Good- 
body. The main regulatory 
authority is toe central Bank 

Of I reland and its approach to 

the regulation of offshore 
tends can he characterised as 
“putting a lot of store by the 
credibility of the tends opera- 
tor," says Mr Dobbyn. 

“The regulators are very 
accessible,'' agrees Mr Nick 
Alford, general manag er of GT 
Asset Man a g nm ant I reland, toe 
Irish subsidiar y of toe hank m 
Iifichtenstem-owned CT Asset 
Maimgamant , which manages 
14 funds worth more than 
$1.8bn in Dublin. “They 
respond quickly and let you 
know if they help." 

Most tends under manage- 
ment in the IFSC are unit 
trusts, many constituted so as 
to comply with the UCFTS 
directive. However, Irish legis- 
lation also allows for other 
types of tax-exempt tends that 
are more attractiv e to interna- 
tional investors, Grinding 
investment companies with 
variable or ffrad share «ipHai. . 

Both UCITS inv estme nt com- 
panies and non-UCFTS invest- 
ment com panies are managed 
in toe IFSC and there are also 
a number of private funds. 

Although the Irish legal and 
regulatory framework is highly 
comp etiti ve it could soon lose 
this edge, warns Mr Dobbyn. 
Any changes in the law 
required to mufatam Ireland's 
competitiveness as a location 
for effehore fund Tirarragpmenfc 
have to go through the normal 
Irish legislative process, a 
drawn-out affair which does 
not give as high a priority to 
financial services legislation as 
other tax havens - such as the 
Cayman Islands, where finan- 
cial services are of greater sig- 
nificance to the economy. 

So for toe g overnment has 
been active and recently it 
added another type of invest- 
ment vehicle to the “menu” of 


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vehicles which can be operated 
from the IFSC. The Irish part- 
nership law is shortly to be 
amended to allow limited 
investment partnerships to 
operate from toe IFSC. The 
government is projecting that 
more than I£10Qm will be 
attracted to m ra tmoit limited 
partnerships at the centre «n«r» 
they are operational. 

Dublin’s other attractions 
include Ireland’s membership 
of the OECD, which is impor- 
tant for TnarkwriTig funds in 
Japan, and the Irish legal sys- 
tem which, like thfl US and 
British systems, is based on 
common law. Fund managers 
can also get funds listed on the 
Dublin stock emhange which 
is part of the London stock 
exchange and Is similarly regu- 
lated- Although the two 
exchanges are to split tbfa 


T he dial trmp far Telecom 
Eireann (TE) has been 
somewhat discordant 
over the past six months 
National unease, over raised . 
calling charges gave way to 
dismay at a proposed affiance 
with a giant outsider, Cable A 
Wireless. 

The new chief exec ut ive of 
TE, Mr Alfie Kane, has big 
problems to solve, such as 
about I£900m in debt (with an 
enormous debt/equity ratio of 
about 250 to 1) and thousands 
more employees than nritir* 
say are necessary. 

Comparison with Aer Lin- 
gua, the national airline - 
which has faced waves of 
union hostility as it tried to 
correct its overstaffing - is one 
calculated to ring unpleasant 
bells with the management of 
the semi-state operation. 

The big shadow an TE*s hori- 
zon is January 1, 1998, when 
the European telecoms market 
will be opened up completely 
(although Ireland, like some of 
the smaller EU states, win get 
special inn in domes- 

tic services). The level of cam- 
petition across Europe is some- 
thing TE could scarc ely 
survive In its present form. 

Bat TE is having consider- 
able success in its campaign - 
run jointly with the Industrial 
Development Authority’s over- 
seas arm - to attract telemar- 
keting companies. With inter- 
national charges for business 
among the lowest in Europe, 
Ireland has recen tl y been cho- 
sen by Dell computers. Best 
Western Hotels, ICT Group and 
others as a site for operations 
that will create hundreds of 
jobs. 

Last year’s charging changes 
aroused opposition, especially 
from small businesses, as local 
or internal national calls bore 
the brunt of big cuts for inter- 
national use. The “rebalanc- 
ing", as TE prefers to call it; 
has led to an average redu c tion 
of 7 par cent in business tele- 
phone tells. Further cats are 
on tbe horizon. 

Mr Brendan Hynes, chair- 
man of TE tinta an abrupt and 

areniinjfly aiT hnmtinn « depar- 
ture two years ago, wr o te his 
own analysis of Irish semi- 
state bodies (Telecom Eireann, 
Aer TJn g ng ) earlier this year. 
Mr Hynes tod not mince tea 
words. "Telecom Eireann is 
very inefficient, 1 * he declared. 
From Us research, he gave fig- 
ures that reflected badly cm the 
management of the country’s 
telephone operator. 


year, toe Irish wrofamg e hag 
indicated that it intends to con- 
tinue following the rules of the 
ijwdnn exchange. 

But the msHfi of 

Dublin for fatftnratinnaT fmnd 
managers such as GT and Mor- 
gan Grenfell is toe work forc e. 
The lfi par cent tax rate is just 
another bonus,” says Mr 
MffNTatighfcrBi Ultimately Mor- 
gan Grenfell will repatriate 
any p ro fi t s mad« in Ireland to 
its German parent, Deutsche 
B ank, and pay tax on it in Ger- 
many, he explains. 

The Irish g mf g m nwnt. hopes 
the workforce, and wider 
aspects of tbe business envi- 
ronment, will keep the notori- 
ously mobile offshore fund 
managers in Dublin nw* the 
corporation tax breaks expire . 
The funds themselves will 
remain tax exempt after 2005. 



“We would not have moved 
here just for the 10 per cent 
tax,” says Mr McNaughton. 
“The raw materials had to be 
here, intimately toe financial 
services centre tost win. win 
will be the one which provides 
toe proper skills and people at 
a reasonable price," he says. 

Companies arriving after 
1994 will not be eligible far the 
10 per cent corporation tax 
tnwmtiw i ]mt the fund manag- 
ers who have established them- 
selves by that time will be able 
to offer hi g hl y itmipii iiiiM cus- 
todial fafjittiea to other fimd 
managers. There are sug- 
gestions fiyat the Triah govern- 
ment win seek approval from 
theEU to extend toe 1994 dead- 
line, but as yet so official 
request has been made. 


John McManus Ds nm I n ter na tio na l Rna ncM Services Centre in DubOn 


The telecommunications and energy sectors 

Discordant dial tone 


Irish mafaim p i- e paid *m aver- 
age of K704 annually far each 
telephone line, compared with 
K550 in B ritain fiiii IE534 else- 
where in Europe, he said. 
European telephone companies 
average one worker for 172 
lines, whereas TE has one 
employee for every 85 
(although tinw has come down 
from a figure nearer 40 just a 
few years ago), population dis- 
persal cannot justify tods, Mr 
Hynes says; New Zealand, 
which has a similar population, 
but a much greater area, has a 
line ratio much closer to the 
European norm than that of 
Ireland. 

The last National Develop- 
ment Flan turned a deaf ear to 
TE’s calls for funds for invest- 
ment, allocating only I£27m 
from EU structural funds 
whoa I£200m had been sought 
' min |iB|pitefl 0 fl existing stispt- 
dons that toe government 
would prefer TE to link up 
with a bigger, richer outrider. 

However, union opposition 
and national defensiveness 
sprang to life when the govern- 
ment sta rted to talk euphemis- 
tically about "strategic alli- 
ances" late last year. In March, 
TE received a frill proposal 
from Cable & Wireless to form 
a joint venture, with about 
I£400m on the table. 

The minister, Mr Brian 
Cowen, has instructed the TE 
board to study the CAW pro- 
posal and report back within j 
she months on its feasibility - 
and any other options. He is 
also considering the establish- ; 
ment of an independent Irish | 
telecoms authority equipped 1 
with enforcement powers, 
which could be essential if the 
mum changes firm one wr pv* 
operator to a cast of dozens 
scrabbling for market share. 

Mr Cowen’ s portfolio also 
includes energy. This is not as 
contentious an area as tele- 
coms, but the fnture could hold 
some headaches for whoever is 
in charge. 

Unlike TE, there are no 
plans to place tbe energy utili- 
ties in pablic hands, the minis- 
ter told the Irish Business and 
Employers' Confederation 
recently. However, the indus- 
try should not be complacent - 
the Electricity Supply Board 




BEAUCHAMPS 

SOLICITORS 

Inward Investment 
Corporate and Commercial 
Ranking Insolvency litigation 
Commercial Property 

Dollard House, Wellington Quay, Dublin 2. 
Telephone (0103531) 6715522 Fax 6773783 
Contact: JackKirwan (Managing Partner) 


(ESB) is currently being 
“reviewed". 

RRR,- which was founded in. 
1927, is under the scrutiny of a 
cost and competitiveness 
review announced in February. 
This, the department says, wfil 
not only help the gover nment 
d ecide on RSR up pHcaHimie fa 

have price rises sanc t ioned, 
but also provide toe minister 
“with a solid regulation for 
future r eview s of the electric- 
ity industry". ' 

A review of toe milling 
industry and c o n co m ita nt pol- 
icy was also announced late 
last year (Ireland has 20 per 
cent of western Europe’s sup- 
plies of zinc). 

The new gas interconnector 


linking south - western Scotland 
with Ireland, at a rite north of 
Dublin, is now on-line. At a 
cost of IfiSQm, l£90m of which 
came from the EU. the 290km 
pipeline is the Republic’s most 
significant energy project. 

The project involved four 
construction efforts, mduding 
construction of a gas compres- 
sor station in Scotland. Bard 

Ruin, toft TraHmral ggg supplier, 

has a security gas agreement 
with National Power and a gas 
purchase agreement with Brit- 
ish Gas. Should Ireland find 


Tax incentives to promote 
exploration in offshore nilffalds 
have also been, in force for sev- 
eral years. In March Mr Noel 
Treacy, the Irish energy minis , 
ter, awarded five exploration 
licences to five consortia, cov- 
ering 28 blocks in toe Slyne 
and Ems troughs. 

Last October's National Plan 
published fay toe Irish govern- 
ment mad e a commitment to 
promote alternative energy 
sources. The Electricity Supply 
Board (ESB) has been asked to 
bring 75 megawatts of capacity 
on imp from such sources as 
combi ned heat and power 
(CHP), small hydro or wind 
power. This scheme is now 
being developed. Peat-fired 
power stations are also an 
option, although the environ- 
mental debate over farther 


fresh reserves of natural gas in ” threads into Ireland's famous 
current exploration, there is peat bogs is likely to gain 
provision far surplus supplies impetus, 
to be exported back to Britain 

through the same pipeline. Angela Long 





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rv 


FINANCIAL TIMES WEDNESDAY MAY 23 1994 


IRELAND IV 


More than I£3-5bn win be spent 
on Ireland's transport infra- 
structure and tourism industry 
over the next five years under 
the Irish government's I£20tm 
National Development Plan. 

The money win come from 
the government, the private 
sector, and the European 
Union which has promised in 
the region of I£7bn under the 
nex t tranche of cohesion funds. 

The first objective of the 

Tt*9 flhn iw ra s hrien t fn transport 

infrastructure is to bring 
Ireland's roads, railways, ports 
and airports up to the same 
standard as its EU partners’. 

The main target is the 
national primary road net- 
work, which takes a quarter of 
all Irish, road traffic. More than 
KLibn will go to improve the 
road links between the impor- 
tant titles, including the road 
from Dublin to Belfast 

Spending cm secondary and 
local roads will be much less 
significant: I£115m will be 
spent on secondary roads and 
I£475m on local roads. As a 
result, the motorist in Ireland 

can expect little respite from 
the potholes on the smaller 
rural roads and lanes. (They 
have become an election issue 
in some counties.) 

The rolling stock of Iamrod 
Biream], the state railway com- 
pany, is to be upgraded, as are 
the tracks and signal systems 
on the parts of the Irish rail 
network which are included in 
the ElTs Trans European Rail 
Network - mainly the links 
between Dublin and the larger 
cities and towns. 

With the opening of the 
Channel Tunnel. Ireland is 
now the only state in the EU 
without a direct rail link to the 
continent. The Irish govern- 
ment has promised to invest 
I£100m upgrading strategic 
ports, including Dublin and its 
satellite port of Dun laoghaire. 

No aid is available for 
improving ferries serving the 


John McManus looks at investment in transport and developments in the tourist industry 


EU helps out with ‘cohesion’ cash 


routes between Ireland and Its 
EU partners, but the two main 
ferry companies, Stena Sealink 
and Irish Continental Group, 
have announced ambitious 
ship building programmes. 

In Tasmania, Stena Sealink 
is constructing one of the 
world's largest car carrying 
catamaran ferries for use on 
the Irish sea this summer. The 
new super-ferry will replace 
the existing Stena Sea Lynx 
catamaran service between 
Dublin and the Welsh port of 
Holyhead. It will have capacity 
for 120 cars and 600 passengers, 
travel at 50 miles an hour, and 
Stena promises that it will cut 
the sea crossing time by halt 
to 99 minutes. 

Irish Continental has 
acquired one the the world's 
largest wight ferries, the I£56m 
Pride of Bilbao, for use on the 
routes from Rosslare. in Co 
Wexford, to northern France. 
The company has also commis- 
sioned a I£46m ferry for use on 
the Dublin-Holyhead route 
next year, with an option for a 
second. The new Dublin-Holy- 
head ferry will triple the 
group's freight capacity on the 
route, allowing it to cut costs 
and - according to Mr Samoan 
RothweLL, chief executive of 
Irish Continental — attract a 
subs tantial amount rf the traf- 
fic, originating in the Republic, 
which now exits via the North- 
ern Irish port of Lame. 

A J£340m investment is pro- 
posed in the state's airports 
under the plan, on top erf the 
I£i75m in state aid to the 
national carrier, Aer Lingus, 
which was approved by the EU 
last December. The money is to 



Investment will improve Ireland’s roads, ralways. ports and afrports, but traffic Jams on Dubfin'a quays, beside the rfvar LJffey, seem to go on forever 


meet the cost of a big restruct- 
uring at the airline, Which lost 
I£58m last year. Aer Lingus 
has agreed to cut its costs by 
I£50m and has obtained per- 
mission from the Irish govern- 
ment to fly direct from D ublin 
to cities in the US. avoiding 
the compulsory stop-over at 
Shannon airport in Co Clare, 
for the first time, Aer Lingus 
has also leased three new Air- 
bus 330 aircraft for use on the 
transatlantic routes. 

The last 12 months have seen 
two new airlines enter the 


fiercely competitive Dublin to 
London route. Virgin Atlantic’s 
City Jet - an Irish company 
operating a Virgin Atlantic 
franchise - started flying from 
Dublin to London City Airport 
in January. British Airways 
Express - a UK company oper- 
ating a British Airways fran- 
chise - started flying from 
Dublin to Gatwick last year. 

The three airlines already on 
tiie route - Aer Lingus, British 
Midland and the email inde- 
pendent Ryanair - have all cut 
fores and cost as competition 


intensifies. Aer Lingus’s share 
of the route has follow from 49 
per cent to 39 per cent; a big 
shakeout is planned. 

In a country with more than 
16 per cent of its workforce on 
the dole, most aspects of the 
economy are ultimately evalu- 
ated in terms of their ability to 
create jobs. Ireland's tourism 
industry is no exception. 

The I£lbn investment in 
tourism over the next five 
years is expected to create 

35,000 jobs. Mr Matt McNulty, 
director general of Bord Failte. 


the Irish tourist board, believes 
that it is a realistic aspiration. 
Five years ago the beard was 
set the target of doubling tour- 
ism revenue from just over 
l£lbn and creating 25.000 jobs 
by the end of 1993. "Revenue is 
up 74 per cent and 24,000 jobs 
have been created, despite the 
Gulf war and recession in our 
main markets,” Mr McNulty 
says. 

Mr McNulty believes that 
tourism can create jobs more 
effectively than otter sectors 
of the economy; he points out 


that 75 per cent of the net job 
gains in Ireland over the past 
five years have come from 
tourism. Bord Failte estimates 
that the more than 3m tourists 
visiting Ireland each year 
spend about EEiAbn, 

The emphasis over the next 
five years will be to create 
"sustainable tourism and sus- 
tainable jobs” through an 
intensification of the board's 
international marketing effort 
and extension of the the tour- 
ism season. Ireland’s tourist 
season is only 23 weeks, but 
the board believes it can be 
stretched to 46 weeks by devel- 
opment of off-season "prod- 
ucts” and the creation of 
year-round attractions. 

More than 30 per cent of the 
I£58Qm worth of EU cohesion 
funding hoped for by the Irish 
government for tourism will be 
spent on international market- 
ing over the next five years. 
"We have not folly exploited 
any market - particularly Ger- 
many, which is the world’s big- 
gest,” explains Mr McNulty. 

Together with the traditional 
markets of the US, UK and con- 
tinental Europe, Bord Failte 
plans to aim at new markets. 
Two countries seen as having 
large potential are Argentina 
and South Africa, both of 
which have strong Irish con- 
nections. 

The board's strategy is not to 
go for "ethnic” tourism, but to 
target countries where Ireland 
is well known to the whole 
population because there is an 
Irish community there, Mr 
McNulty explains. 

The UK is still a very impor- 
tant market for Ireland; visi- 


tors from Britain mate up lTio 
of more than 3m people who 
visited Ireland last year. The 
next biggest markets «e cooti. 

nentftl Europe, with 374,000 via- 
iters, and North America, with 

417.000 visitors. 

About I£3QQjD00 will be spent 

on projects to extend the tour- 
ist season. The rest of the 




a national conference centre 

and otter projects. 

. Mr McNulty befievto that tat 
datives for projects to. extend 
the length nf the tourist season 
must come from the Private 
sector, "ffwe mote sometbs* 
ourselves ft fa not likely to be 
sustainable," he says. "w e 
have to tet things develop oat. 
urafly and support them 
through * marketing or grant 
aid." (Citing horse fairs, hr. 
points out that there have bees 
many attempts to develop 
International horse fairs in 
Ireland, none erf which have 
been as successful as the cen- 
turies-old horse fair at Baltt- 
naslne in Co Galway, in the 
west of Ireland.) _ 

A good example of the type 
of investment that the board is 
trying to encourage to a project 
to revive a woollen mill at Fos- 
ford in Co Mayo, in the west of 
Ireland. The mill has been con- 
verted into a "steep to step" 
experience for tourists, Mr 
McNulty says. This sort of 
project is an integral part of 
the role he sees for Bord Faflte 
as "Ireland’s economic agency 
for tourism." 

There Is no doubting his 
enthusiasm for such projects. 
With something of the manna 1 
of a proud fatter, he cannot 
resist showing visitors to Ms 
office in DuhHn an album of 
before-and-after shots of pro- 
jects. He feels that he has a 
right to be proud; only one of 
the 300 projects funded in the 
last five years has failed - 
“and we got nearly all oar 
money bade” 





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Tim Coone investigates the renaissance of an ancient industry 

planted for the 


Ancient oak forests once 
covered much of Ireland. Over 
the centuries they were gradu- 
ally laid bare to serve the eco- 
nomic and military amhitinna 
of the Vikings, then the Nor- 
mans. and late:, to build the 
British battle fleets of Tudor, 
Stuart ami Hanoverian kings 
and queens. 

Land that once grew Irish 
oak - which helped to spread 
the British empire from 
Jamaica to Jaipur - now grows 
cattle and sheep to build beef 
and butter mountains in the 
EU. Today there is no natural 
forest left in Ireland. Moreover, 
only 7 per cent of the country’s 
land surface is afforested, com- 
pared with an average 24 per 
cent in the EU. 

But Irish forestry is now 
undergoing a renaissance, 
thanks to the overhaul of the 
EU common agricultural pol- 
icy, a range of new financial 
incentives and a commitment 
by the Irish government to a 
big afforestation programme. 
Together, these have helped 
forest plantings grow to some 

22,000 hectares a year. A target 
of 30,000 hectares a year has 
been set for the year 2000. 

“Forestry will be a main- 
stream industry here within 30 
years with an output of over 
I£lbn a year at today’s prices,” 
says Mr Martin Lowery, chief 
executive of Cofllte, the Irish 
forestry board. 


Trees 

Encouraged by tax-free 
grants and incentives, private 
plantings have grown 30-fold in 
the past decade, from fewer 
than 300 hectares a year in the 
early 1980s to more than 10,000 
hectares a year at present 

Proposals to increase the 
grants by about 50 per cent 
with the maximum levels at 

123,000 per hectare, are cur- 
rently awaiting approval in 
Brussels. In total, some I£40m 
a year in grants is expected to 
be channelled to the forestry 
sector up to the end of the 
decade. In addition, all income 
from forestry activities has 
been rated free of corporation 
and income tax. 

The easting 450,000 hectares 
of forest in Ireland, 85 per cent 
of it conifers, has mostly been 
planted since the early 1950s; it 
is only just beginning to 
mature. Current output of 2m 
cubic metres of timber a year 
is projected to rise to about 
3.5m cubic metres by the end 
of the decade and will continue 
to rise thereafter. 

In the longer term, if current 
planting rates are maintained 
over the next 20 to 30 years, Mr 


Lowery believes that a sustain- 
able yield of 12m cubic metres 
a year is feasible from a total 
planted area of L5m hectares 
which have been identified as 
being the most suitable for for- 
estry. This would exceed the 
UK’s current output of some 
10m cubic metres a year. 

“Forestry is a far better use 
of EU funds than set-aside pay- 
ments, because at least there is 
a new industry being buflt up," 
Mr Lowery says. 

Currently, there are two 
important industrial develop- 
ments in preparation, both of 
which will once again place 
Ireland on the map as an 
exporter of forest products. 

Medite, the US company, is 
investing I£2lm to double out- 
put from its existing plant 
making medium density fibre- 
board (MDF). It aims to pro- 
duce 300,000 cubic metres of 
MDF a year, using forest thin- 
nings and by-products freon the 
country's 100 saw-mills as raw 
material. 

Louisiana Pacific Corpora- 
tion, also of the US, is due to 
start a joint venture late this 
year with Cofllte to build an 


oriented strand board plant to 
export to Europe. Together, the 
two plants located in the 
Waterford region of Ireland are 
expected to absorb most of the 
residues and pulp wood coining 
from the newly-maturing Irish 
forests up to the end of the 
decade. Beyond then, addi- 
tional processing capacity will 
be required as well as addi- 
tional saw-mills. 

But can planting levels reach 
the government's 30,000 hect- 
are-a-year target? Mr Lowery 
admits that obtaining suffi- 
cient laud is becoming a prob- 
lem. Spiralling land prices “is 
going to make it difficult,” he 
says. 

Ms Elaine Farrell, head of 
the forestry division in the 
Irish Farmers’ Association, 
says that poor land is currently 
being sold for forestry in a 
range of I£900 to 122,000 a hect- 
are, and that many formers are 
now finding it diffic ult to com- 
pete with outside investors. 
More than three-quarters of 
private forest plantings are 
currently done by formers. 

Mr Lowery says that Cofllte 
aims to pay no more than 


future 

121,700 a hectare for the very 
best forestry land, and in 1992 
paid an average of 121,313 a 
hectare. Land prices have risen 
more than 30 per cent since 
1990, almost three times foster 
than the general inflation rate. 

Mr George O'Malley, manag- 
ing director of Beltra Forestry, 
a private company which 
plants more than 1,000 hectares 
a year and manages planta- 
tions for private clients, says 
the tax incentives and grants 
available make forestry invest- 
ment "very attractive as long 
as the cost of the land is not 
too Ugh”. 

The growing competition for 
land, however, is resulting in 
available sites now more likely 
to be in parcels of “hundreds 
rather than thousands of 
acres." he says. 

Meanwhile, opposition is 
growing from another quarter. 
Environmentalist groups are 
becoming increasingly vocal 
over the steady encroachment 
of sombre blocks of Sitka 
spruce on the Irish country- 
side, and are demanding that a 
greater variety of tree species 
be planted and that p lanning 


controls be introduced for new 
plantations. 

The government has 
responded predictably (by set- 
ting up a a committee to con- 
sider the issues), but bas sig- 
nalled that new legislation will 
probably - eventually - follow. 

Mr Lowery says that Coillte's 
aim is to reduce Sitka spruce 
plantings from just over 80 per 
cent at present down to 65 per 
cent, and to increase native 
broadleaf species such as oak 
and beech to around 10 per 
cent 

Four years ago it began land- 
scaping new plantations. But 
the speciesdiversity problem is 
that Sitka grows better than 
any other tree on low-quality 
soils, and in Ireland's damp, 
temperate climate at rates five 
to six times faster than in 
Scandinavia or North America, 
and at about double the rate of 
growth in the UK 

Better quality conifer trees 
and hardwoods, suitable for 
joinery and sawlogs, require 
better soils, and the best agri- 
cultural land can now cost 
over 126,000 a hectare. 

The higher grants will 
undoubtedly have the desired 
effect of encouraging increased 
plantings and greater species 
diversity, but the danger is 
that they might also drive land 
prices higher still and ulti- 
mately dampen investor enthu- 
siasm in the sector. 




If you can 
make it for 
breakfast, don’t 

worry. We’re 
serving all day.” 

Tf Paddy Kelly, 

Head Chef 



Right throughout the day, we serve complimentary food and drink on every one 
of chit flights between London Heathrow and Ireland. Breakfast, lunch, dinner 
or a light snack. And because only Aer Lingus offers you the flexibility of up to 
44 flights a day, you're flee to choose foe one that's most convenient for you. 

Aer Lingus ft 




Angela Long at the movies 


Investors get 
good terms 


To call the whole country 
“Paddywood" is stretching 
language, but over the past 
year there has been a 
mini-boom in film production 
in Ireland. 

In April some 12 films woe 
in production. Six more were 
about to start filming. A 
London newspaper went 
slightly wild recently, 
predicting that Ireland could 
become Europe’s main site for 
film production. 

Mr Michael Dwyer, film 
critic of the Irish Times, points 
out that ever since 1928, when 
Alfred Hitchcock made Juno 
and the Paycock in Dublin, 
Ireland's rapidly changing 
Light and slowly changing 
landscape have been 
irresistible to directors seeking 
not just nostalgia but 
authenticity. What is more, 
the 1993 Finance Act gives a 
three-year tax relief on 
whatever proportion of a film’s 
investment is Irish, up to 121m. 
More recently, the government 
h a s again tinkered with 
financial incentives, while 
insisting that share capital 
with a minimum three-year 
payback should be the baseline 
source of funds. 

Companies such as Farrell 
Grant Sparks, Dublin 
accountants (FGS), have taken 
advantage of the favourable 
terms for film investment FGS 
has set up a film production 
company, which raised I£2m 
within two weeks. Mr Richard 
Fox of FGS says the company, 
which "met investor demand 
for a tax shelter before the 
year-end cut-off for individuals 
on April 5”, is now looking 
for a project ‘Td say that 
judging by the success of this 
venture, we would look at 
similar ones in the future." 

Internationally, Irish films 
have a high profile at present, 
following American interest 
in In the Name of the Father, 
directed by Jim Sheridan, and 
last year’s Crying Game by 
Nell Jordan, The prominence 
of Daniel Day Lewis, who also 
starred In Sheridan's previous 
big success. My Left Foot, has 
also called attention to the 
Irish product 
It should be no surprise if 
the Irish were to make a 
success of the film industry, 
at least at the creative level 
Their seanadud (storytellers) 
of old possessed the wild 
imagination and verbal 
creativity which later surfaced 
in the work of Swift, Beckett 
and Joyce. Today Ireland is 
top in the whole of western 
Europe for per capita cinema 
attendance. 

In Dublin, the Irish Film 
Centre, with smart premises 
in a former Quaker meeting 
house in Eustace Street, in 
the centre of town, attracted 

16,000 members in 1893, its first 
full year of operation. 

Squabbles about management 
and financing spoil its image 
slightly, but, with several film 
development and production 
companies located in its 
premises, the £FC provides an 


attractive focus for the film 
buff in the national capital 
So for, most films for main 
release made in Ireland have 
tended to be modest in budget 
compared to the big spending 
on Jurassic Park and its 
lavishly produced kindred. Yet 
the success of, for example, 
Into the West, made by 
Dubliner Gabriel Byrne, has 
shown that dime is a market ■ 
for the “small" picture. 

“The Irish industry is never 
going to make Terminator 3. . 
but our films will always be 
stray-driven - smaller films 
costing I£3m to 125m," says 
Mr James Elynn, submissions 
manager at the Irish Film 
Board, based in Galway. 

The film board (Bord 
Seaman in Gaelic) has been 
receiving about 30 formal 
applications for funding each 
month since it was revived 
in IS92. This, says Mr Flynn, 
is on top of less formal 
approaches from a. wide range 
of film-makers. 

The government has also 
been launching initiatives to 
create the right sort c£ stifled.' 
labour for film production. Mr 
Michael Higgins, minister for 
arts, announced a 
“comprehensive training 
programme for the film 
industry" last October. His 
department was looking for 
EU structural fluids to assist 
the programme, which he said 
aimed to raise standards in 
the complete range of film 
skills. 

While the future for features 
looks rosy (provided they get 
a better critical reception than 
the recently-released Widow's 
Peak - despite the talents of 
Mia Farrow, Jim Broadbent 
and Natasha Richardson), the 
animation sector has not lived 
up to its promise of five years 
ago. After An American Tail, . 
a charming full-length feature 
which failed to ignite the box 
office in the Aladdin mode, 
the animation company mainly 
responsible, Sullivan Blutb, 
went bankrupt The shell of , 
the company was subsequently 
salvaged by overseas 
investment 

Fred Wolf Animation, the 
Los Angeles based company 
responsible lor the invasion 
of the teenage mutant Ninja 
turtles, has had a Dublin 
studio since 1989. Most 
recently, it did all pre- and 
post-productimof the U-part 
television version of the 
Duchess of York’s Budgie the 
Little Helicopter, to be seen 
onITV. 

Mr Bamonn Lawless, Wolfs 
managing 1 director in Dublin, 
heads a fuli-time staff Of 1& 

"We are feeling very 
optimistic, but things are 
relatively slow in the industry 
overall,” he says; “For 
full-length features, Dublin 
would be a good location 
because labour and production 

costs are lower than in the 


But still competition fo® 
.sia, where labour costs are 
ven lower, is growing- 


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FINANCIAL TIMES 

^JBrvant 

TYPEWRITERS 

WORD PROCESSORS 
PRINTERS 
COMPUTERS 

COMPANIES & MARKETS 

96 Group 

Invest in Quality 

HOMES* PROPERTIES -CONSTRUCTION 

FAX 

©the financial times limited 1994 W edjo.csclt'iy Ms.y 25 1994 



IN BRIEF 


Moulinex shake-up 
runs into snag 

Moulinex, the troubled French household aT«*ri<»^i« 
amipMiy, faced a lart-mbrate hitch in the comple- 
uon of its long-awaited finaiyflai restructoring 
package. Page is 

Home's iMst for BMch-Sfemens 

Mr Herbert WOrner, presidait and chief executive ’ 


~ uouapaaw, wuwaia IS £ 

ionable to knnrlf maniT far - tm-mg in f> rimmy 

as too costly and uncompetitive. Page 18 

Mack Trades forecasts return to profit 

Mack Trucks, the US subsidiary of France’s Renault 
v arie t i es Industrials, see a profit this 


Euromarkets creak bade 

Two large sterling issues helped the eurobond 
market creak back into action. Page 22 

Uaytag sale bi Australa and NZ 

Maytag, the US hm w fl appliance manufacturer, 
is to sell its Australian and New Zealand-based 
white goods and floorcare appliance operations. 

BTR directors’ pay rim 17% 

Directors of BIB, the industrial conglomerate, 
have received basic salajy increases for this year 
of up to 17 per cent. And it has emerged that ' 
the salary of chief executive Mr Alan Jackson 
cannot be cut. Page 24 

BBT fMshmt Ms rastmeturing 

BET, the UK business services group which over-ex- 
panded by acquisition during the 1980s, said its 
restructuring was complete, hut warned that 
pressure on margins Anri difficult trading condi- 
tions persisted. Page 24 

Thorn EM negotiates sales 

Thom EMI said yesterday that it was negotiating 
to sell its security business and part of its defence 
subsidiary. A sale of the businesses could precipi- 
tate a.demerger of its core music and rental divi- 
sions. Page 21 

Coutts buys bn Franco 

Coutta Consulting Group, the career consultancy, . 
out placement and residential training rampany 
yesterday agreed to acquire GBA Group, one 

of the leading nr rijTaflpman t and canwr n raingfliffing 

groups in France. Page 23 - 

Lop Qroiqi may float US arm 

Lep Group, the kssmaking UK fredgit forwarding 
and security group restructured by its banks 
in 1992, is considering a partial US flotation of 
its American security business to reduce its debt 
Page 25 


Andrews Sykes 

23 LCH 

17 

Archimedes Inv Tat 

23 Lasmo 

25 

Angus Nownpapare 

19 Lap 

28 

Automotive Precision 

23 Leveraged Opport 

28 

BET 

24 Mack Trucks 

2D 

BTR 

24 Marks and Spencer 

18.24 

Banco Santander 

18 Maytag 

19 

Baneeto 

17 MecScai Care America 

19 

Baris 

25 Metro Radio 

25 

Barjaya 

21 Microsoft 

20 

Bosch-Sierrwra 

18 Meats Marine A. Re 

21 

British Gas 

9 Monks InvTst 

23 

Butte Mining 

25 Moudnax 

18 

CLS 

23 Nippon Fke & Marine 

■ 21 

Casket 

23 Ocean &ot(> 

23 

CjukmH 

24 Pharmacia 

18 

Cementane 

25 Prtncedsis 

25 

OofcanbWHCA 

19 Ralhbone Brothers 

23 

Cantata 

25 Reacbcut inti 

24 

Courts Consulting 

23 Rogers Cabiesystema 

20 

David 

25 Royal Bank Scottond 

25 

Dawson hitl 

23 Seiko 

21 

Deere & Co 

20 Shires Investment 

23 

Enterprise 08 

25 Sumftoma Marine,Rra 

21 

Euro Disney 

18 Suzuki 

21 

European Colour 

25 TDK 

21 

Fafcfliw Boats 

23 TefeWest 

24 

GBA 

23 Thames TV 

24 

HW Motors 

21 Thom EMI 

24 

Hozafocfc 

25 ToWo Marine & Fire 

21 

KJlmSa 

19 Tonies 

25 

Incentive 

18 Verity 

20 

lochcape . 

17 Wamfbfd bws 

25 

Irish Ufa 

25 Yasude Hre & Marine 

21 

JVC 

21 YorksWre-Tyne Tees 

24 

Market Statistics 

(Annual repots sendee 2*29 Foreign exetenos 

32 

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22 GBs prices 

22 

Bond tares and options 

22 Uffe equity options BaokPBgs 


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US companies in the spotlight over their exposure to financial instruments 

SEC scrutinises use of derivatives 


By Richard Waters hi New York 

The pressure on US companies to 
reveal more about their use of 
derivative financial in strum ents 
grew yesterday as it emerged 
that the Securities and Exchange 
Commission had written to a 
number of companies asking 
them far more information about 
their activities In this area. 

News of the SEC’s request 
comes ahead of an appearance 
today by the agency's chairman, 
Mr Arthur Levitt, before the 
House of Representative's sub- 
committee on telecommunica- 


tions and finance. Mr Edward 
Markey, the subcommittee’s 
chairman, revealed last week 
that be is legislation on 

derivatives. 

The SEC*s letter is believed to 
have been directed to some of the 
largest users of derivatives, 
instruments which companies 
use to reduce exposure to 
exchange or interest rate fluctua- 
tions. 

In recent weeks reported 
losses, most notably from Procter 
& Gamble, has led to concern 
that in some cases derivatives 
have increased the risks compa- 


nies are running, rather t han 
reduced them. 

Yesterday Dell Computer 
announced an after-tax loss of 
S 15.6m after it misjudged the 
trend of European and Japanese 

interest rates and incurred losses 
on its investment portfolio which 
used derivatives. 

The Financial Accounting 
Standards Board, which sets 
accounting regulations, is also 
presting US companies for extra 
disclosure. The body has released 
draft disclosure rules for deriva- 
tives, and hopes to have a final 
version in place to apply to com- 


panies whose financial years end 
in December. 

The FASB's draft requires com- 
panies to explain the objectives 
of their use of derivatives, and 
the instruments and hedging 
strategies they use. 

The spotlight that has been 
tamed on to the use of deriva- 
tives - and the attention paid to 
every small loss incurred, 
whether or not such instruments 
have enhanced companies 1 prof- 
its in the past - has scared most 
trig companies away from talking 
publicly about this area. 

"It's like asking them about 


their marital relations,'' said one 
auditor with a big US accounting 
firm. 

Also, several companies are 
believed to have commissioned 
external reviews of their deriva- 
tives portfolios, to reassure them- 
selves that they do not have 
losses in this area as wefl. 

Today's bearings in Washing- 
ton have been prompted by a 
report on derivatives from the US 
General Accounting Office last 
week, which called for more reg- 
ulation of the way companies use 
such fmaririai instruments. 

Defl Computer, Page 18 


Lasmo goes (Uraetty 1 » 

Lasmo, the oil exploration company; yesterday 
took its battle to f^ht off a hostile bid from follow 
explorer Enterprise Ofl direc tly to its shareholders. ♦ 

. . . 

M&S extends retailing laid 

Marks and Spencer yesterday extended its lead 
as the UK's most profitable retailer, announcing 
a 16 per cent increase in pretax profits. Page 
18; Expansion accelerates, Page 24 

Companies In thb issue 


22 

27 

32 
22 

33 


Santander lines up Banesto disposals 


By Tom Bums in Mack-id 

Banco Santander, which acquired 
Banesto last month, intends to 
sell most of the collapsed gram's 
hanVtng interests outride Spain 
over the next few months, 
according to Mr Emili o Botin, 
Santander chairman. 

Confirming market expecta- 
tions, he also told a parliamen- 
tary bgartng tw Madrid that ht» 
would dispose of Banesto’s corpo- 
rate interests, which include min- 
ing, mn d n i rftnn, battery man n- 

facture and media. 


Mr Botin was me king fife first 
public statement on the future of 
Banesto since Santander 
acquired the banirfng group for 
gZtm on April 26 in the largest 
domestic takeover to date. His 
evidence to the legislators 
suggested a strategy weighted 
towards stripping the assets of 
Banesto rattier thaw consolidat- 
ing tbatm within Santander. 

However, Santander will retain 
Banco Totta e Azores, the Portu- 
guese bank, which Mr Botin said 
was a "high value" asset and one 
of thg “ mam wwaW for acquir- 


ing Banesto. He intended to dis- 
cuss the future of BTA with the 
Portuguese authorities. 

The Lisbon government con- 
tests the site of Banesto’s holding 
in BTA. Banesto holds just under 
25 per cent of the Portuguese 
b ank 's stock — the marimnm 
allowed for a fore ign hawk under 
BTA’s privatisation. - but Bait 
esto is estimated to control a fur- 
ther 25 per cent through nominee 
shareholders. Santander already 
owns a Portuguese hanking 
group. Banco de Comerdo e 
Industrie, BCL 


Mr Botin bluntly said he 
intended to sell Banesto’s indus- 
trial assets “in an orderly and 
prudent fashion without sur- 

prises . . . and never at knock- 
down prices". Companies in Ban- 
esto’s industrial holding facfaida 
the large battery producer Tudor, 
the mining group Asturiana de 
Zinc and the construction com- 
pany Agrr mrin 

Banesto's new owners will, in 
addition, put up for sale the 
bank’s wiarfia interests, the most 
important of which are minority 
wbarebniding R in the Anima S 


television network and in the El 
Mundo newspaper group. Bank- 
ers Trust, the US investment 
hawk baa been given the man- 
date for the media disposals. 

Mr Botin said Banesto’s inter- 
national banking subsidiaries - 
Banesto Banking Corporation in 
the US. Banesto Chile Bank, Ban- 
esto Banco Uruguay and Banco 
Shaw in Argentina - were “of 
little importance". They would 
either be absorbed by the San- 
tander group (Santander has sub- 
sidiary hanks in Chile and in the 
US) or sold. 


Strong yen leads 
to Inchcape 
profit warning 


May 1 1993=100 ' 


By Andrew Bofgarki London 

Shares in Inchcape fell 2lp to 
499p yesterday after the UK- 
based motors, marketing and ser- 
vices group warned that profits 
jcb the r first six m onths of this 
year would be below last yen’s. 

Sir David Plastow, chairman, 
said that — as in 1993 — the group 
was s uf fe ri ng from the strength- 
ening of the yen and the Japa- 
nese recession, the downturn in 
continental European motor mar- 
kets and austerity measures in 
China. He told yesterday’s 
ftwnnfll mpqtfng - “Not much hSS 
changed since then and, in par- 
ticular, we have yet to gain any 
significant respite from, the yen's 
strength." 

Nonetheless, the chairman was 
cautiously optimistic that hub- 
cape could achieve sufficient 
progress in the second half to 
maintain the group's year-on- 


year profit growth. Last year 
Thehrtape wiflda pretax p rofi t s Of 
2272m. ($408m). Analysts down- 
graded forecasts to between 
22SSn £27Dm. Sr David — M 
the group’s performance in the 
early rn tmthn of thta year hart 
varied. Motors import mid distri- 
bution rontmneri to suffer from 
the strong yen and the depressed 
ffrmthipntal car markets. 

"However, the Asian busi- 
nesses generally continue to per- 
form wall although, as previously 
announced, we no longer hpnpnt 
from the joint venture in Hong 
Kong, exporting Toyota vehicles 
into China," he said. 

■ This joint venture came to an 
end at the turn of the year, hav- 
ing contributed £i4m to group 
profits in 1993, of which nearly 
SUm was earned in the first baft. 

The group’s marketing busi- 
ness stream had improved its 
performance in 1994 and the 



remedial actions taken, particu- 
larly in Malaysia and Taiwan, 
were paying dividends. However, 
Japan, in spite of signs of 
improvement, continued to be a 
challenging economy for most of 
the marketing businesses. 


“Insurance services, shipping 
services and testing services 
have continued to make good 
progress, and although the west- 
ern retailing environment is still 
depressed, buying services is 
recovering." said the chairman. 


K .SMB*DttanMfcr 


Inst month Inchcape made a 
£176.6m agreed bid for Hogg 
Group, which, it hopes to merge 
with its own insurance broking 
subsidiary. Bam Clarkson, to cre- 
ate the seventh largest insurance 
broker in the world. 


Low price 
prompts 
LCH to 
pull float 

By Simon Davies In London 


The £l50m <$22Sm) flotation of 
London Capital Holdings, the 
property investment company, 
was polled yesterday in the face 
of a weak stock market and 
investor indigestion at the 
£930m of capital raised in the 
listed property sector this year. 

The issue was to be launched 
this morning, but Citibank was 
not prepared to accept the price 
at which advisers said its shares 
would have to be sold. 

They had planned to raise 
more than £100m from the com- 
bined sale of np to 70 per cent of 
Citibank’s holding and £l5m of 
new shares. However, It is 
believed that Warburg Securities 
recommended the share offer 
should be made at a 10 to 15 per 
cent discount to the company’s 
2160m net asset value, in line 
with other recent issues. 

The property sector was the 
star per f o r mer of the stock mar- 
ket last year, sparking a prolifer- 
ation of flotation candidates. 

Capital Shopping Centres, the 
first property flotation or the 
year, was offered at a 13 per cent 
premium to its asset value, but it 
received an unenthnsiastic 
response. Since then, values 
have fallen, while competition 
has intensified, with CLS Hold- 
ings, Pillar Properties and 
Argent Group all launching 
offers in the past fortnight. 

Mr Jeffrey Heintz, Citibank’s 
representative on the LCH board, 
said: “We weren’t prepared to 
chase the market down for the 
sake of doing a deal,” 

LCH has 2245m of gross assets, 
and is wholly owned by Citi- 
bank. Mr Heintz said the bank 
would review its options. These 
include relaunching the issue 
later tins year, selling the prop- 
erty portfolio directly, or a pri- 
vate placement with institutions. 

The offer was being sponsored 
by Baring Brothers, with War- 
burg as brokers. LCH was 
formed from the remnants of 
Sandsworth Trust, which was 
taken private in 1989 at the peak 
of the market, hot subsequently 
had to be rescued by its banker - 
Ci tibank. 

The company has a portfolio of 
West End of London properties, 
but the management has suf- 
fered from thefect Unit Citibank 
was restricted from putting new 
capital into the business. This 
left the joint managin g directors, 
Mr Nigel Kempner and Mr Step- 
hen Musgrave, with little scope 
in the rising market, other than 
to improve the quality of exist- 
ing properties. 


Barry Riley 


Scarce capital chases the 
swings of the cycle 



The switch from 
last year’s appar- 
ent global abun- 
dance of capital to 
this year’s devel- 
oping scarcity has 
been sharp, but 
not at all unusual 
in terms of past 

This week global long-term 
interest rates have edged up 
again after a short respite. As for 
short-term markets, there has 
already been a flip up in dollar 
rates most UK economists 
now appear to believe that ster- 
ling rates have bottomed. Worse 
for sentiment, the comfortable 
assumption that continental 
European short-term rates would 
continue dow n wards for a consid- 
erable; period was called into 
question by remarks made by Mr 
Hans Ttetmeyer, Bundesbank 
president, on Monday. Only 'in 
Japan, do interest rates seem 
thoroughly subdued - but, even 
there, the laws of arithmetic 
state that there is little downside 
from 2 per cent 

The background to aH this is 
economic acceleration. Last 
year’s capital market frolics were 
conducted in the context of 
OECD* growth of only about L2 
per cedt, and zero outside the US. 
But this year the OECD growth 
rate should be fairly close to the 
long-term average of about 2.4 
per cent .Meanwhile the dynamic 
A«fam economies are surging 
ah part at around 8 per cent; by 
1995 the -global growth rate may 
be 4 per cent 

From the global investor’s 
point of view the challenge is 
that the worldwide cycle is a 
composite of many different 
national cycles. Although out of 
phase they are linked by interna- 


tional capital flows to a degree 
not seen in recent history. Thus 
German long-term interest rates 
have gone up this year even 
though this move would not yet 
be justified by the domestic cycle. 

Financial theory says that in a 
recession idle capital drains out 
of the productive economy and 
tends to push up the value of 
fhisnHa! assets. With recov e ry, 
money is sucked bade Into work- 
ing cnpitel anrt eventually into 
rising fixed investment Bond 
yields rise and prices therefore 
fall, though equity prices are sub- 
sequently sustained in a rising 
trend for a number of months 
because of the positive pull of 
rising profits and di v iden d s. 

Securities 
markets are no 
longer buoyed by 
liquidity 
surpluses 

Later in the cycle there is a 
buoyant demand for real assets, 
including property and commodi- 
ties. Finally,, late cycle inflation- 
ary pressures feed to bun mar- 
kets in inflation hedges and 
collectables, ranging from gold to 
old masters. 

This chr onology has been 
dearly displayed in the dollar 
markets, with long bauds peak- 
ing last October and the stock 
market in eariy February. Now 
the bull market h*« shift ed to 
commodities with the CBS 
Fhtnres Index, for instance, up 12 
per cent aver the past year. As is 
characteristic of a cydical bull 
market, the rise in prices of 


many commodities - such as 
apparently abundant base met- 
als, for instance — is often diffi- 
cult to justify on fundamentals, 
but it reflects a combination of 
inventory building by industry 
and trend-chasing by speculators. 
Only gnrap late r may the 
ex ci te m ent spread to gold, which 
is op a bare 3 per cent over the 
past 12 months. 

Meanwhile bonds are suffering. 
Real interest rates on bonds are 
now becoming very high, because 
of shifts in the delicate balance of 
global financial flows. In pressur- 
ising tiie Japanese to stimulate 
their economy the Americana are 
also threatening the major source 
of global savings. 

Big public sector deficits are 
too prevalent Whether the pres- 
sures within the global ffnantrifll 
markets produce a serious 
crunch will depend on whether 
the borrowing governments can 
tighten their budgets and neatly 
withdraw from the capital mar- 
kets as recovery gathers pace. 

The immediate ™>cgag p is that. 

the climate hflg fundamentally 

changed. We may not be in a 
folly fledged bear market, but the 
balance has shifted and securities 
markets are no longer being 
buoyed by liquidity surpluses. 
Instead they are liable to be hit 
by obscure selling pressures as 
various market participants 
(such as the hedge funds last 
winter) axe forced to liquidate or 
redirect resources. Issues are 
trickier to lamchand Hows into 
mutual funds are moderating. 

Shortterm opportunities may 
be cyclically scarce, but on the 
other hand long-term investors 
are once again finding value - in 
high real yields, for instance - 
that will satisfy their realistic 
funding objectives. 


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18 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Moulinex shareholders 


delay financial shake-up 


By AGca Rawsttiom In Parts 


Mhiilinm^ the troubled French 
household electricals company, 
yesterday faced a last-minute 
hitch in the completion of its 
long-awaited financial restruct- 
uring package when its share- 
holders postponed until this 
afternoon a vote on bringing in 
a new investor. 

The company, which also 
disclosed that it sustained an 
unexpectedly heavy net loss of 
FFr550 m ($97.7m) in Its last 
financial year to March 31, yes- 
terday morning announced 
plans for a FFrlbn rights issue. 
But it can only proceed with 
the issue after its shareholders 
have appointed the new inves- 
tor. 

Moulinex, which is con- 
trolled by Flnap, a company 
owned by its founders and 
employees, has for months 
been in negotiations with pro- 
spective investors. It has 


received firm offers from Glen 
Dimples, an Irish competitor, 
and Euris, a French invest- 
ment consortium. 

The Moulinex workforce ear- 
lier this year voiced its opposi- 
tion to the Glen Dimples offer 
on the grounds that it could 
lead to job losses. Moreover the 
company’s executives last 
week voted in favour of accept- 
ing the Euris bid. 

Moulinex last night could 
give “no specific reason” for 
the decision to postpone the 
meeting. If the vote goes ahead 
today, the company will pro- 
ceed with plans for the rights 
issue and for the reorganisa- 
tion of its complex share struc- 
ture. 

The completion of the finan- 
cial restructuring will end 
years of uncertainty for Mou- 
linex which has been in deep 
difficulty since its acquisition 
in 1991 of Krups, a German 
competitor. The Krups deal 


made sense in strategic terms 
as it enabled Moulinex, best 
known for food processors and 
Swan kettles, to expand into 
buoyant new product sectors 
such as expresso coffee 

Tnarhirres 

But the Krups acquisition 
also left Moulinex with heavy 
debts on the eve of the eco- 
nomic recession. 

The company fell into the 
red in the 1992-93 financial 
year with a net loss of FFrUSm 
on sales of FFr8.22bn, only to 
sustain even heavier losses last 
year. 

Moulinex, which has made 
dramatic cuts in its workforce 
to try to stabilise its finances, 
said it had been forced to make 
provisions of roughly FFrSOOm 
in the 1993-94 financial 
year. 

These charges Include 
FFrl50m to cover restructuring 
costs and FFrl60m for product 
and litigation risks. 


Euro Disney 
investors set 
for debt vote 


By Alice Rawsthom 


Euro Disney, the troubled 
leisure group, yesterday called 
Its shareholders to an extra- 
ordinary general meeting on 
June 8 to vote on proposals for 
a FFrl3bn ($L3bn) emergency 
financial restructuring: 

The meeting, winch will be 
held at the EuroDisneyland 
theme park on the northern 
outskirts of Paris, will be some- 
thing of a formality. Walt Dis- 
ney, the US entertainment 
company that orchestrated the 
restructuring, owns 49 per cent 
of Euro Disney's equity, 
thereby ensuring that the 
proposals will be approved. 

However, the meeting is 
expected to be stormy, as it 
offers a rare opportunity for 
Euro Disney’s other investors 
to air their views. 

These investors, many of 
whom have sustained heavy 
losses on the steep fall in Euro 
Disney's shares, face dramatic 
dilution in the value of their 
holdings because of the FFrtbn 
rights issue which is a key part 
of the restructuring. 


M&S extends lead 


in UK retailing 


% Nefl Buckley in London 


Marks and Spencer yesterday 
extended its lead as the UK’s 
most profitable retailer, 
announcing a 16 per cent 
increase in pretax profits to 
£85L5m ($L3bn). 

it also said it planned to 
spend more than £lbn in the 
next three years on stepping 
up expansion in the UK, conti- 
nental Europe and east Asia, 
and was looking at opening 
stores in China and Japan. 

Last year, M&S's profit of 
£73&5m was only just ahead of 
J. Sainsbury, the UK’s laigest 
grocery retailer. However, with 
Sainsbury this year reporting 
only £369m after exceptional 
charges - or £777m before 
these - M&S's lead was 
unchallenged. 

“We have shown we can 
deliver profitable growth in 
fids country and overseas, con- 
sistently,” said Sir Richard 
Greenbury, chairman. “If we 
can do that through the kind of 
recession we have been 
through, we think we are in 
good shape for the years 
ahead.” 


However, M&S shares fell 
12‘Ap to 412p on what was seen 
as a cautious results statement 

- warning that cost inflation 
might re-emerge later this year 

- and disappointment that 
profits were at the lower end of 
expectations. They were 
reduced by a £16m increase in 
pension costs. 

Group turnover rose 10 per 
cent to £&54bn, and operating 
profits 18 per cent to 
£873.4m. 

Sir Richard attributed the 
improvement to M&S’s strat- 
egy of offering “outstanding 
value” by improving product 
quality and trimming some 
prices, particularly in food. 
That had been made possible 
by cutting costs and investing 
in information technology, 
which allowed the group to 
reduce its gross margin while 
maintaining its net margin. 

UK clothing sales had 
increased 7.5 per cent in a mar- 
ket which grew only 4£ per 
cent, and food sales had risen 
7.1 per cent, against general 
growth of 5.9 per cent 
Lex, Page 16 

Expansion accelerates. Page 24 


Derivative losses cost Dell $15m 


By Richard Waters 
in New York 


Dell Computer has announced 
an after-tax loss of $l5Bm after 
misjudging the trend of Euro- 
pean and Japanese interest 
rates. It joins a list of US com- 
panies which have reported 
losses on derivative instru- 
ments in recent weeks. 

Dell believed that medium- 
term European and Japanese 
bond yields would fall, 
reflecting the pressure on econ- 
omies in those countries, at a 
time when US interest rates 
were rising. In the event, bond 
yields around the world 


jumped as the US Treasury 
ratchetted up short-term inter- 
est rates. 

“We anticipated the US rate 
movement - we had that spot 
on. What we didn’t anticipate 
is what that would mean to 
other finance ministries 
around the world,” said Mr 
Tom Meredith, chief financial 
officer. 

The losses were incurred in 
the company's investment 
portfolio, which at the end of 
last year was valued at 6313m. 
Dell used derivative instru- 
ments to boost its returns from 
these investments. According 
to Mr Meredith, such instru- 


ments have added more than 
$l0m to investment income in 
the past three years. 

Dell’s investment strategy 
involved it writing (or selling) 
options and swaptions (options 
which give the buyer the right 
to enter a swap agreement In 
the future), said Mr Meredith. 
Writing options in this way is 
generally considered a high- 
risk exercise for a non-finan- 
dal company, since the poten- 
tial losses are difficult to 


The company said it had 
closed more than half of the 
derivatives positions In its 
investment portfolio, and 


planned to dose the rest by the 
end of its third quarter, at the 
beginning of November. 

“We have decided to discon- 
tinue this level of exposure, 
and we do not intend to engage 
in derivatives for Investment 
purposes in the future," Mr 
Michael Dell chairman and 
chief executive, said. 

Dell also announced an unre- 
lated 610.7m loss on its invest- 
ment portfolio linked to a 
change in accounting practice. 

The losses reduced the com- 
pany’s net income In the three 
months to May l to 618.9m, 
compared with 610.2m a year 
before. 


Pharmacia share offer details unveiled 


Ely Christopher Brown- Humes 
in Stockholm 


Sweden is to offer domestic 
investors a maximum of 47.5m 
shares in next month's sale of 
up to PB-2»n shares in Pharma- 
cia, one of Europe's top 10 
pharmaceuticals groups. 

The balance of the issue will 
go to international institutions, 
taking foreign ownership in 
the group above 15 per cent 
from its current 6 per cent 


The figures were revealed 
yesterday when the prospectus 
for Sweden's largest privatisa- 
tion was published. The state 
plans to sell up to 47.4 per cent 
of the votes in Pharmacia, but 
will retain 10.1 per cent to 
ensure ownership stability. 
The issue is expected to bring 
in around SKrlQbn ($1.3bn), 
based on the company's SKrl2S 
share price. 

The government wants to 
make Pharmacia a “people's 


share”. It aims to ensure that 
each private Swedish investor 
gets at least 50 shares at a 
SKrlO-per-share discount to the 
institutional price. 

The issue size has been set at 
72m shares - 40m for the pub- 
lic agm for institutions - 
bat it will rise to 82.2m If the 
demand, is there. The offer is 
also subject to a clawback 
arrangement, meaning institu- 
tions could end up with only 
24£m shares. 


The state Intends to offer 
10m shares in the US, 9.5m in 
the UK, 7.5m in the Nordic 
region and 5m in continental 
Europe, although final alloca- 
tions will depend on demand 
and pricing. The institutional 
price, to be set through a book- 
building process, will be pub- 
lished on June 17. 

Volvo, the Swedish vehicle 
group, holds a 28 per cent 
stake in Pharmacia which it 
Intends to sell in 1996. 


Big jump in 
first quarter 
at Incentive 


By Christopher Brown-Hum#* 


Bosch-Siemens casts eye over new ground 


Herbert Womer speaks to Andrew Baxter about expansion in and out of Germany 


M r Herbert WOrner 
concedes it is fash- 
ionable to knock 
manufacturing in Ger man y as 
too costly and uncompetitive. 
However, the president and 
chief executive of Bosch- 
Siemens Hausgerdte says: “We 
would not go along with that 
on a general basis.” 

The wisdom, or otherwise, of 
manufacturing in Germany Is 
an important issue for Mr WOr- 
ner. Bosch-Siemens is the most 
German and least global of the 
big three white goods produc- 
ers in Europe - Electrolux of 
Sweden is market leader and 
Whirlpool of the US is in third 
place. 

Mr WOrner wants to chang e 
that, at least partially, and 
says Bosch-Siemens is develop- 
ing a better manufacturing 
base to support his plans. 

The group has been working 
behind the scenes to reduce its 


domestic production costs and 
raise productivity. A re-organi- 
sation that began in 1991 and 
was completed last summer 
has significantly reduced costs, 
says Mr WOrner. 

Over the past three or four 
years, he says, the company's 
components sourcing policy 
ha« changed fundamentally. 
“We used to buy much more in 
Germany,” he says. If the qual- 
ity is good, Bosch-Siemens is 
now open to buying compo- 
nents in the UK, Italy and 
Spain. 

Recently, it has been holding 
“buyers’ meetings” in Hun- 
gary, the Czech Republic, Rus- 
sia and the Ukraine, where 
potential parts suppliers are 
shown a complete machine and 
asked whether they can supply 
components. 

Mr WOrner sees two very 
good reasons why Bosch- 
Siemens win continue manu- 


facturing at its five plants in 
Ge rman y. First, in an industry 
where economies of scale are 
vital to manufacturing compet- 
itiveness, the group can boast 
the world's biggest plants in a 
number of product lines. 

Secondly, labour costs may 
be higher in Germany than 
elsewhere In Europe, but there 
are logistical advantages to 
manufacturing in a country 
which accounts for one-third of 
the DM45bn ($27.3bn) west 
European white goods market, 
and where Bosch has a market 
share of more than 30 per cent 


B osch-Siemens has even 
been expanding its Gor- 
man manufacturing. A 
new factory at Nauen In east- 
ern Germany will start produc- 
ing 400,000 driers a year from 
next year, and manufacturing 
of cooker hobs is being added 
at the Bretten factory south of 


Frankfurt Any further expan- 
sion of manufacturing will, 
however, be outside Germany. 

Already, Bosch-Siemens has 
five factories in Spain - the 
legacy of two important Span- 
ish acquisitions in 1988 and 
1989 - one in Greece, and one 
In Slovenia making small 
appliances. A washing 
machine plant at Lodz. Poland, 
is due to start production at 
the beginning of next year. 

It is not hard to see why 
Bosch-Siemens is now looking 
beyond Germany. The strength 
or the D-Mark and the reces- 
sion in many European coun- 
tries means that, out of total 
sales of DM6.66bn last year, 
non-German turnover dipped 
to 42 per cent, compared with 
50 per cent in 1989 and 1990. 

In western Europe, Dr War- 
ner wants to raise Bosch- 
Siemens' share of the market 
from 15 per cent to between 18 


and 19 per cent within five 
years. He says: “We can now 
better work on those markets 
In Europe where our market 
shares are relatively low.” 

In eastern Europe, he thinks 
Bosch-Siemens can raise its 
sales from DMl50m this year to 
between DMSOOm and DMfiOQm 
in five years, mainly in Russia, 
Poland, the Czech Republic 
and Hungary. 

HO is also keen to expand 
Bosch-Siemens' position in 
Asia, where current sales of 
DM70m-DM80m could be multi- 
plied in the next few years. As 
a first step, the group has 
signed a letter of intent with a 
Chinese company to produce 
washing machines and, ulti- 
mately, other white goods 
there. 

Meanwhile, Bosch-Siemens' 
Spanish companies are being 
used as a springboard to the 
Latin American market. 


ii> 


inn 1 


, Ini,' 


Rising demand and improved 
competitiveness provided tite 
impetus for a big jump in first 
quarter results at Incentive, 
the industrial and Investment 
group controlled by the 'Wal- 
lenberg family. 

Profits before financial 
items rose 51 per cent to 
SKrlSOm (616.9m) from 
SKr86m, excluding associate 
companies. Sales rose U per 
cent to SKr3.35bn, while 
orders were 11 per cent higher 
atSKi&65bn. 

Last month. Incentive paid 
SKr3L7bn to acquire a 44 per 
cent stake in Canto, the Swed- 
ish investment group. It thro 
launched a bid far the rest of 
the group in a move to secure 
control of Gambro, the medi- 
cal equipment specialist. 

The group forecast higher 
profits per share in 1994, even 
though the Cardo purchase 
wifi lift interest exprases and 
goodwill amortisation. Last 
year, profit per share was 
SKr6.75. Mr Mikael Lilias, 
president, said demand was 
increasing in Europe, North 
America and Asia. 


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FINANCIAL TIMES WEDNESDAY MAY 25 iqcm 

international, companies and finance 


Columbia/HCA 
to buy Medical 
Care America 


By Richard Waters 
In New York 

Columbia/HCA, the US 
health c are group which oper- 
ates the country's hugest c>»m) 
of hospitals, has announced 
the acquisition of Medical Care 
America is an all-stock trans- 
action valued at 5850m. 

The deal marks the latest 
consolidation among US 
healthcare providers, prompted 
equally by cost pressures and 
the growing power of managed 
care organisations. 

Medical Care America owns 
96 surgery centres which 
between them have sOd operat- 
ing rooms. Columbia/HCA, 
which was formed in a $6bn 
merger last year, already has 
196 acute-care and specialty 
hospitals. 

Columbia/HCA, under chief 
executive Mr Richard Scott, 
has been more active 
other US healthcare providers 
in pursuing mergers. By pro- 
viding a wide range of health- 
care services, the company 
hopes to sign up large custom- 
ers such as health mainte- 
nance organisations, which 
buy healthcare services in bulk 
for their individual members. 

The two companies also 
a merger would save money by 
enabling them to negotiate big- 
ger discounts from suppliers 
and to cut overheads. 

Around 60 per cent of Medi- 
cal Care America’s surgery 


by one of Columbia/HCA’s hos- 
pitals. This overlap would help 
to reduce costs and mnVi» the 
combined service more attrac- 
tive to customers, the two com- 
panies Baid. 

The deal follows djaniaeimiq 
between the c ompanies about 
ways of stren gthening an alli- 
ance that was already in p fare 
Earlier this year, Medical Care 
America sold its Critical Care 
America home infusion imtt, 
just IB months after those two 
companies merged. That deal 
proved a failure as the home 
infusion business bww under 
pricing pressures, slashing 
Medical Care's earnings per 
share from $L87 in 1992 to $L29 
last year. 

Medical Care America's 
shareholders will receive stock 
worth $29 for each of their 
existing shares, if Colum- 
bia/HCA’s stock stays close to 
its current price. 

The value ctf the deal would 
be subject to a sliding scale if 
Columbia’s share price moved 
above $40 or below $36, with 
the maximum price for the 
a c quisition set at $850nv. At 1 
mid-day yesterday the shares , 
were standing at $39, down % 
an Monday's close. 

The all-stock deal, which has I 
been approved by both compa- 
nies' hoards, is subject to 
approval by Medical Care 
America’s shareholders and 
regulatory clearance. 


Bahamas hotel changes 
ownership for $65m 


Carnival Carp (CCD is to sell 
Blper cent of its Crystal Palace 
hotel and casino complex in 
Nassau, Bahamas, to the Ruf- 
fin Hold Group for 565m in 
cash and senior secured notes, 
AP-DJ reports. 

Under the deal, Carnival win 
pay off $2Sm of existing Crystal 
Palace debt This agreement 
supersedes a substantially sim- 
ilar earlier agreement made 


with a German group of inves- 
tors. 

A 10 pw Hint nhaiBTinWing fa 

Crystal Palace win be retained 
by Carnival, which wQl con- 
tinue its unrigritig H nghipgg ' wla. 
tranships with Crystal Palace. 

The agreement is subject to 
the approval of various Baha- 
mas governmental agencies. 
The transaction is expected to 
close soon. 


Earnings 
forecast 
from Argus 
Newspapers 

By Marie Suzman 
in Joheonesbug 

Argus Newspapers, the- South 
African press gro u p in which 
Hr Tony O’Reilly’s Indepen- 
I dent Newspapers has bought a 
l controlling shareholding, will 
today release a pre-listing 
! Bto to nMHi l showing mwnAHwfl 
group tur n over of R706-7m 
(5193m) for the year to March 
and earnings of R29m. 

Earnings have been adjusted 
to take’ account of discontin- 
ued operations, such as the 
Sunday Star, the sale of a 
majority Inte re st In The Sowe- 
tan, South Africa’s biggest 
selling daily, to a consortium 
of Mack investors. 

The company is forecasting 
turnover of R795m and earn- 
ings of R32.6m for the entra nt 
year. In a calculation based on. 
46 Am shares in issue, audited 
pro forma Saratoga for the 
year to March were 84 c e nt* a 
share. Net asset value was 364 
cents a share. 

Argus Holdings and JCI 
directum will r etir e from the 
Argos Newspapers board prim* 
to the listing Mr Liam 
Healy and Mr James Parkin- 
son, managing director and 

ftianrial iHrMtar of Twtopwv . 

dent, wih join the board. 


Maytag plans flotation of 
Australian and NZ unit 


By MkU TO In Sydney 

Maytag, the US home 
appliance manufacturer, is to 
sell off its Australian and New 
Zealand-based white goods and 
fioorcare appliance operations. 

Maytag said it would prefer 
to float the division's shares on 
the stock market. Analysts 
expect the sale to raise 
between A$100m (US$73m) and 
ASlfiOm. 

The operations were for- 
merly part of the Hoover 
group, which was taken over 
by Maytag in 1988. Hoover 
(Australia), based In Sydney, 


makes and distributes home 
appliances under brand wamw 
Including Hoover and Admiral. 

Mr Robert Dunkerley, man- 
aging director of Hoover (Ana- 
tralia), said the businesses bad 
been run "largely indepen- 
dently" of the US parent Be 
expected to finalise agreements 
permitting the operations to 
continue marketing under 
their established brand 

Maytag's decision to sell its 
Australasia operations through 
a flotation is the latest in a 
series of such moves by over- 
seas parents - notably British 
companies - operating both in 


the manufacturing and finan- 
cial services spheres. 

PiUdngton anno imnwi simi- 
lar plans earlier this year, as 
did Pirelli, the Italian group, 
with its Australian cables busi- 
ness. 

• North Broken BID Peko 
has sold its 19 J. per cent stake 
in base metals group Pasminoo 
for A$233.1m, or A$52.07m 
more than book value. Reuter 
reports from Melbourne. NBH 
that the buyer was CRA 
and that jt had now success- 
fully completed a process of 
returning to managed core 
businesses. 


Disposals lift ICI India result 


Daewoo Heavy Industries Ltd. 

US$ 40,000,000 
3 per cent Convertible Bonds 2001 
NOTICE OF MERGER WITH DAEWOO 
SHIPBUILDING & HEAVY MACHINERY LTD. 

Notice is hereby given to the holders of the above- 
referenced Bends fist the Board of Directors of the 
Company resolved cn April 21, 1994 that, effective as of 
October 1, 1994(sutject to {he approval of the shareholders 
of the Company at the Shareholders' meeting to be held on 
June 25, 1994), Daewoo Shipbuilding & Heavy Machinery Ltd. 
wiD be merged with and into the Company and that upon 
merger, the Company w31 issue new shares in exchange for 
the shares of Daewoo Shipbuilding & Heavy Machinery Ltd. 
at the share exchange ratio of HI. 

Daewoo Heavy Industries Ltd. 


•• ' * '-V • ■ 

< ' .ri * • 

■ •• H r 


By Staten wagstyl 
In New Delhi 

ICI India, the Indian subsidiary 
of Hip British chemicals g rou p, 
has reported a 13-fold increase 
in annual pre-tax profits to 
Rs728m ($23zn) for the year to 
March, due largely to a corpo- 
rate restructuring which 
included tfr? sale of its fertil- 
iser business and a 49 per cent 
stake in its fibres operations. 

Profits tqclnflprt Rs538m of 
exceptional ga™ from thp dis- 
posals and from the sale of 
pro pert y in Bombay. The sales 


also helped the company 
reduce its interest charges. 

Overall revenues fell to 
Rs&fibn from Rs9.7bn because 
of the disposals but continuing 
operations saw revenues rise 
by 11 per cent and operating 
profits by 27 per cent 

The company, which is 51 
per cent owned by ICI, has 
been reorganised partly In 
response to the liberalisation 
of. the Indian economy and 
partly because of the group 
restructuring in which phar- 
maceuticals were spun off into 
a new company called Zeneca. 


The fertilisers business was 
sold mainly because the group 
has also withdrawn from fertil- 
iser wKuntfartiiring 

Id India said that following 
the disposals it was committed 
to expanding its operations, 
including paints, catalysts, 
polyurethanes, agrochemicals 
and rubber chemicals. 

The company is importing 
technology from other parts of 
the group, fapindfog new tech- 
niques of catalyst manufacture 
and of producing vehicle paint 
It would also consider acquisi- 
fcLons. 


77» Financial Times reaches 75* of the Professional Investment 
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INTERNATIONAL COMPANIES AND FINANCE 


Mack Trucks forecasts return to profit 


By John Rkkling in Paris 

Mack Trucks, the US 
subsidiary of France's Renault 
Vfihicules Industrie^, should 
record a profit this year after 
five years of losses, Mr Elios 
Pascual chairman, said yester- 
day. 

According to Mr Pascual. 
productivity gains and 
restructuring measures, com- 
bined with the upturn in the 
US truck market, should mean 
a net profit of 520m-$2Sm this 
year. This compares with a 
loss of 936m in 1993, and a net 
deficit of Si 82m the previous 
year. 

“In less than three years 
Mack has gone from monthly 
losses of about $20m to a profit 
of £ftn-84m in March and April, 
having returned to profit in 
February,'* said Mr PascuaL 

He said the company was 
now able to contribute to the 


results of RVL, the truck and 
bus arm of the state-owned 
Renault group. 

The recovery in results 
partly reflects an upturn in 
demand and prices in the US. 
Sales are expected to increase 
to about S2bn tws year, com- 
pared with 91.7bD in 1993. 

But Mr Pascual said the 
improvement mainly reflected 
the restructuring at the group, 
which he said would allow a 
sustained, rather than a cycli- 
cal, recovery. 

“We now need to sell about 
20,000 vehicles to break even, 
compared with 40,000 three 
years ago,” he said. This was 
achieved through cost cutting, 
productivity gains, and the clo- 
sure of some factories. 

Purchasing costs have been 
reduced by between 1.5 per 
cent and 2 per cent a year, 
according to Mr Pascual, while 
productivity has increased by 


41 per cent over the past three 
years. 

He added that the cyclical 
nature of the US market meant 
it was necessary to continue 
improving productivity. 

“The market can decline just 
as quickly as it has recovered," 
he said, forecasting a Call in 
the market from next year. But 
he pointed out that the com- 
pany was aiming to reduce Its 
break-even production point to 
17,000 vehicles by the end of 
the year and to 15,000 at the 
end of 1995. 

Despite the company's cost- 
cutting measures, however, Mr 
Pascual the company had 
maintained its Investment in 
new products and R&D. 

“Between 1994 and 1997 we 
win invest S40m-S45m a year,” 
be said. The group will also 
develop its commercial net- 
work in the western US and in 
Mexico. 



Duff Forecasts and Market Myths for 1994 

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in TV deal 
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By Bernard Simon In Toronto 

Rogers Cablesystems, Canada’s 
biggest cable-TV operator, is to 
co-operate with Microsoft to 
install the US software group's 
new interactive television soft- 
ware, known as Tiger. 

Tiger is one of several com- 
peting software systems being 
developed, which will deliver 
video-on-demand, shopping, 
education and other services to 
cable-TV subscribers. 

Rogers has signed a letter of 
intent to license the Tiger sys- 
tem, and take part in early 
testing of Microsoft's operating 
system for interactive broad- 
band cable networks. TCI, the 
biggest US cable-TV operator, 
has signed a similar deal with 
Microsoft. 

Rogers said it was attracted 
to the Microsoft system by its 
open architecture and cost. 
Microsoft claims Tiger can 
deliver interactive program' 
mlng for about a tenth of the 
cost of rival technologies. 

The system is based on per- 
sonal-computer technology 
rather than mainframes. 
Microsoft's rivals doubt 
whether PC-type hardware can 
provide the communications 
and processing power for a net- 
work of cahle-TV subscribers. 


Strong farm sector boosts Deere 


By Laurie Morse In Chicago 

Deere and Company, the 
Mniine, Uliuois-based manufac- 
turer of farm and industrial 
equipment, said strength in the 
North American farm sector 
boosted second-quarter net 
income to $18?.3m, or S2J2G a 
share. 

In last year's second quarter 
the group recorded income of 
9101m, or $1.30 a share. 

Deere's other equipment 
operations, which include 
ground care and lawn 
machines and construction 
equipment, also improved with 
the generally strengthening 


North American economy. Its 
worldwide sales for the quarter 
jumped 17 per cent, to $2.46bn, 
from S2.10bn a year ago. 

Although analysts had 
expected strong secowi-quarter 
results for the company, 
Demo's share price rose after 
the results were released, trad- 
ing $Yx Higher at $73% at mid- 
day in New York. 

Mr Hans Becherer, chair- 
man, said that in response to 
strong retail demand, Deere 
has increased its North Ameri- 
can production schedules. 
“1994 worldwide production 
tonnage is now anticipated to 
be 16 per cent higher than 1993 


output, tip from our prior esti- 
mate of 13 per cent,” he said. 

However, the company 
waned that production in the 
second half would drop below 
first-half levels, reflecting nor- 
mal holiday Shutdowns and re- 
tooling for a new tractor line. 

“North American retail sales 
activity during the first two 
quarters of 1994 provides a 
sound base for operations dur- 
ing the remainder of the year,” 
Mr Becherer said. 

“For 1994. the US Depart- 
ment of Agriculture has proj- 
ected substantial increases in 
planted acreages of corn and 
soyabeans, and is forecasting 


that farm net cash income will 
be at one of the highest levels 
in history." 

He said that while Europe's 
long-term downward trend in 
sales of agricultural equipment 
is likely to continue, Deere 
expects its 1994 European sales 
to be about equal to 1993. 

• Ford Motor has named Mr 
John Devine vice-president and 
corporate controller from June 
1, Reuter reports from Dear- 
born, Michigan. Mr Devine, 50, 

Is chairman chief execu- 
tive officer of First Nations- 
wide Bank, a Ford subsidiary 
being sold to First Madison 
Bank of Dallas. 


Varity first-quarter income up at $29i 


By Laurie Morse 

Varity Corporation, which 
makes braking systems and 
diesel engines for cars and 
trucks, reported an increase in 
first-quarter net income to 
$29.4m, or 65 cents a share, on 
sales of $5053m. 

This compares with Slim, or 
20 cents a share, on sales of 
9455.6m in last year’s first 
quarter. 

During the quarter to April 
30, Varity agreed to sell its 
remaining Massey Ferguson 
farm equipment operations to 


Agco for 9310m in cash and 
500,000 shares of Agco stock. 

The sale, expected to be com- 
pleted during the current quar- 
ter, should bring an income 
gain of between $15m and 930m 
and increase Verity's stock- 
holders’ equity by about 
9100m, the company said. 

Varity’s first-quarter income, 
excluding Massey Ferguson’s 
results, was 925m, or 55 cents, 
up from a comparable 915.1m, 
or 33 cents, a year ago. 

Massey Ferguson's results, 
reported separately as discon- 
tinued operations, showed that 


the farm equipment business 
improved, with net income ris- 
ing to 94m in the first quarto 1 , 
against a net loss of 94m a year 
ago. Sales were $2S3m, up from 
9189m last year. 

Varity's remaining busi- 
nesses benefited from a 9 per 
cent increase in North Ameri- 
can vehicle production. Its Rel- 
sey-Hayes automotive products 
group generated 927m in oper- 
ating income on sales of $355m, 
up from $25m on sales of 
9302m in last year's first quar- 
to - . 

The Perkins Enginp division 


saw operating income rise to 
913m, from 98m a year ago, 
with sales advancing to $180m. 
from $15&n in the first quarter 
of 1993. 

“Varity is ofT to a good start 
this year," said Mr Victor Rice, 
Varity chairman. “With the 
recently announced sale of 
Massey Ferguson, we are now 
positioned to focus on generat- 
ing even more value for our 
shareholders from our core 
businesses of supplying auto- 
motive braking systems and 
diesel engines to customers 
worldwide." 


Merck chief 
resigns to 
pursue other 
interests 

Mr Martin Wygod has resigned 
as chairman of Merck’s Medco 
Containment Services unit and 
as a member of the Merck 
hoard, Reuter reports from 
Whitehouse Station. New Jer- 
sey. 

Merck, the US drug manu- 
facturer, said Mr Wygod 
would serve as a consultant to 
it and Medco under a multi- 
year contract. 

“Now that the integration of 

Medco and Merck has beat 
substantially completed, 1 
have decided to pursue other 
business and philanthropic 
interests," Mr Wygod said. 

“I believe that Merck, as a 
result of its merger with 
Medco, now has a strong com- 
petitive advantage in the 
phnngtiig environment of phar. 
maceutical care.” 

Mr Roy Vagelos, chairman 
of Merck, said: "While we 
regret Marty's decision to 
move on, we understand Ms 
desire to pursue other inter- 
ests. We are indebted to Marty 
for bis role in bringing 
together Men*, and Medco." 

Mr Vagelos continued: “The 
integration of the businesses is 
essentially completed and a 
strong management team of 
Medco and Merck people is in 
place." 


Digital poised 
for recovery 

Digital Equipment 
Corporation, the US computer 
maker hit by losses and lay- 
offs, is poised for a recovery 
on the back of the Cast-grow- 
ing Asia-Pacific market, Reu- 
ter reports from Singapore. 

"The Asia-Pacific part of the 
world has a very distinct role 
to play in the company's path 
to recovery because it is the 
fastest-growing, and it’s a 
place where we have very good 
operations,” said Mr Bobby 
Choonavala, president of Digi- 
tal Equipment Asia Paci fic . 

The losses were mainly doe 
to the company’s switch to 
new product lines during the 
past two years, he said. 

The group has suffered 
losses of more than 93bn over 
the past three fiscal years. 


i 


D-DAY 




50 YEARS 
AGOTHEY 
WERE THEREIN 
WHEN WE 



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NEED US... 
PLEASE HELP 
THEM IN THEIR 
HOUR OF NEED 

The Army. Benevolent Fund provides help 
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are serving or have served in the British Army 
and are in real need. This help is given in two 
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70 national charities providing for the special 
needs of those in distress. 

Our overall aim is to bring help to the many 
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inadequate or unable to meet the 
immediate need. 

Your donation, covenant or legacy will 
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served their country. 

Please help them in their hour of need. 


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^gSANCIAL TIMES WEDNESDAY MAY too^ 

international companies and finance 


JV C records pre-tax loss 
for third consecutive year 


By Wcmyo Nakamoto 
in Tokyo 

JVC, the Japanese maker of 
video cassette recorders and 
other audio-visual products, 
yesterday reported a consoli- 
dated pre-tax loss for the third 


dividend. 

The company cited the 
strong rise of the yen n pH weak 
d em a nd In Japan as key foo- 
ters behind a 6 per cent ten in 
sales to Y726.5bn ($6£bn) from 
Y7689bn a year ago and a pre- 
tax loss of TO&atm. against a 
loss of Y25.$bn last time. The 
net loss tor the year to March 
1994 was Yl9.6bn, compared 
with Y43.1hn last tfmp 

Sales of the company's main- 
line audio- visual products suf- 
fered from Sluggish wmawiwr 


spending in Japan while infra- 
^tion equipment, such as 
cordless phones, also saw a 6 
per cent decline. 

In terms of regional perfor- 
mance, JVC suffered a toll in 
demand in Japan. But sa tes in 
Ada were strong and contrib- 
uted to profits in spite of the 
foreign exchange losses the 
company incurred, on the yen's 
appreciation. 

JVC depends on export mar- 
kets for 50 per cent of its over- 
all sales. 

For the parent company 
alone, JVC posted sales of 
Y507.7bn, down 1 pm* cent from 
YGlslSm, and a pre-tax loss of 
Yl9.5bn against a loss of 
Y26-lbn last time. 

Efforts are being stepped up 
to restructure the company in 
a bid to return to profitability 


Business divisions have been 
reorganised, staff has been con- 
solidated and inventories have 
been reduced. New, advanced 
products such as the btdefmi- 
tion VCR are expected to 
become core products and help 
boost profits. 

JVC last week announced 
that its president, Mr Takuro 
Bojo, would resign to be 
replaced by an executive from 
Matsushita, the consumer elec- 
tronics company which owns a 
52 per cent stake in JVC. 

The company does not see a 
strong recovery hut expects to 
return to profitability in the 
current year, with eonsoHdaied 
sales rising to YTSflbn. 

On a parent company basis it 
sees sales rising to Y53Qbn and 
pre-tax profits of YXbn for this 
year. 


Low demand 
pushes Seiko 
into the red 

By Our Financial Staff 
In London 

Seiko, the Japanese watch and 
clock maker, plunged further 
into the red dining the year to 
March 31, reporting a 12- 
month consolidated pre-tax 
loss of Y6.5bn ($62m) against 
a .deficit- of Y3.4bn a year 
earUer. 

The company, which is a 
world-renowned brand, 
blamed weak demand for its 
core products and the costs of 
restructuring its overseas 
operations for the gloomy 
financial report 

Revenues of Y334.7bn were 
down on last year’s Y378bn, 
and earnings per share slipped 
to a loss of Y59.61 against a 
loss of Y49.45 last time. 

The final dividend is 
unchanged at Y5. 

Seiko had warned during the 
year that the recession was 
having an adverse affect on 
sales in the domestic market, 
In the shape of consumer 
reluctance to buy new watches 
and lower levels of gift pur- 
chases by companies. 

For the current financial 
year, Seiko is forecasting a 
pretax loss of Y5hn on sales of 
Y860bn. . 


Suzuki sales suffer 
at home and abroad 


By Mtchlyo Nakamoto 

Weak export markets, 
particularly in Europe, and low 
demand for motorcycles in 
Japan were behind a 10 per 
cent drop in pre-tax profits in 
the year to end-March to 
Y18.4bn ($176.24m) from 

Y20.5bn last time at Suzuki, 
the car and motorcycle manu- 
facturer. 

Suzuki, which specialises in 
smaller cars, reported a 4 per 
cent decline in sales to 
Y2,009bn from Yl,053bn. Net 
profits declined 12 p» cent to 
Y7bn frornYBbn. 

The yen’s appreciation was a 
large factor behind the deterio- 
ration in overseas revenues 
which fell by YH5bn, Suzuki 
said. 

Suzuki took an appraisal loss 
of Y£3bn for its stoke in San- 
tana Motor, its ailing S panish 
subsidiary which stopped pro- 
duction in March. The com- 
pany is still in negotiations 
with the Spanish government 
over Santana’s tote, Suzuki 
said. 

Motorcycle sales were 
depressed particularly in 
Japan while ifemanri in Totin 
America and China was firm. 

In contrast, passenger car 
sales held up well in the 


domestic market while exports, 
particularly to Europe, were 
weak. 

The company expects sales 
in the current year to remain 
flat at about YljWObn and pre- 
tax profits to toll to Y18bn 
amid continuing pressures 
from the high yen. It also fore- 
sees motorcycle and car sales 
declining ftythif tn nwit tem« 
and wams that its fmannial 
haiann> sheet is likely to dete- 
riorate as a result of its need to 
refinance outstanding debt 
issues. 

• Hino Moiras, the Japanese 
truck and bus manufacturer, 
yesterday reported a sharp ton 
in parent company profits due 
to the continuing dump in t he 
Japanese economy and the 
impact of the strong yen. 

.Sales in the year to the <*"d 
of Ma roh EeQ 15 per «gnt to 
Y535^bn from YKfiLSbn while 
pre-tax profits declined 33 per 
cent to Y4bn from a previous 
Y6bn. 

Domestic sales of trucks 
were particularly hard hit, toll- 
ing 15 per cent while exports 
were down 3 per cent largely 
due to the yen’s rise. 

Hino expects its p er for mance 
in tire current year to improve 
with pre-tax profits rising to 
Y4Jjbn- 


Strong yen 
depresses 
TDK sales 

By Gerard Baker h Tokyo 

TDK Corporation, the world's 
largest maker of magnetic 
topes «n»d a laadhig manufac- 
turer of computer products, 
yesterday reported a slump in 
earnings for the year to March 
31. Consolidated pre-tax prof- 
its toll by 47 per cent to 
Y17.8bn (I170ZD) as sales 
declined by 13 per cent to 
Y457.4bn. 

The company attributed 
most of the collapse to the 
sharp rise in the yen, which it 
said had reduced sales by an 
estimated Y44.8bn. In 
response, TDK was continuing 
to pursue an agg res sive policy 
of expanding production over- 
seas, with particular emphasis 
on Asian operations, It said. 

But weak demand in Japan 
ftigfl co nt ributed to ft* 

A depressed home market 
forced , the company to cut 
prices, and the growth of 
imports of low-priced video 
fai pix created an extremely dif- 
ficult nHimrin. 

Amoog the few bright spots 
wore a rise in orders from the 
telecommunications sector and 
an upturn In the production at 
audio-visual products in the 
half of the year. 

The parent company’s pre- 
tax profit dropped 25 per cent 
to YlLflm on sales lower by 
some 9 per cent at Y33L6bn. 
Weak private sector capital 
spending and the strong yen 
pushed sales of electronic 
materials and components 
down by 6 per cent, while 
recording media sales dropped 
by 16 per cent 


Disaster costs hit 
Japan’s leading 
non-life insurers 


By Emlko Terazono 
In Tokyo 

Japan's leading non-life 
insurance companies posted 
weaker profits for file year to 
last March doe to increased 
disaster payouts and a decline 
in interest income. 

Pre-tax profits feD for the 
leading three companies - 
ToKo Marine apd Fire Insur- 
ance, Yasuda Fire and Marine 
Insurance and Mitsui Mfrrf np 
and Fire Insurance. However, 
Sumitomo Marine and Fire 
Insurance, and Nippon Fire 
and Marine Insurance posted 
increases due to profits from 
asset sales. 

The five companies’ total net 
premium equiva- 

lent of sales at other compa- 
nies, rose 5.5 per cent to 
Y3£Wbn <$333bnX 

Premiums from voluntary 
motor insurance rose sharply, 
but income from compulsory 
motor insurance premiums 
declined. 

Disaster payouts rose due to 
thp increased typhoons and 
heavy rains last year. Tokio 


paid out Y64BSm in claims, up 
44) per cent on a year earlier, 
while Yasuda’s overall pay- 
ment rose 4.6 per cent to 
Y457-5bn. 

The insurers said the total 
of bad loans — to 

which borrowers have not paid 
Inter est over six months, 
those extended to bankrupt 
companies - fell by 11 per cent 
from the previous year to 
.YSOSbn. 

Yasuda had the highest level 
of problem loans at Yl&fihn, 
but 24 per cent lower than a 
year earlier, and the highest 
percentage of bad loans to out- 
standing total loans at 21 per 
cent 

Tokio reported a 33 per cent 
rise in its bad loan balance to 
Y15.0bn, the second biggest fol- 
lowing Yasuda . 

For the full year to next 
March, the companies, except 
Sumitomo, expect a rise in pre- 
tax profits. 

Tokio predicts a L7 p er ce nt 
rise in pre-tax profits to Y78hn, 
while Yasuda expects Its pre- 
tax earnings to rise 32 per cent 
to YSflm. 


Japanese non-llfa i wu rt s (V bn) 


Company 

Premium 

Income 

Change 

1%) 

Pm-tiK 

profit 

Change 

(%> 

ToMo 

1.190.0 

4A 

7Bl7 

-05 

Yasuda 

852.1 

6.0 

334 

-11.0 

Mitsui 

583.1 

63 

23l2 

-184 

Sumitomo 

5C1^ 

•7.1 

306 

4.1 

Nippon 

4092 

&6 

194 

1.7 


Malaysian group to raise M$722m 


By Kiaran Cooke 
In Kuala Lumpta 

Berjaya, the diversified 
conglomerate which has rap- 
idly grown into one of Malay- 
sia’s biggest companies, has 

annremrpri rights j figr yy pfrupd 

at raising M$722m 
(US$278.85m) to fund several 
new ventures. 

The issue is being split 
between the Beijaya Group 
and its mat n listed mri t, Ber- 
jaya Industrial. Beijaya Group, 
which controls a 58 per cent 
stake in Beijaya Industrial, 
aims to raise more - than 


M$500m by issuing 2S4m new 
shares at M$2 each. Beijaya 
Industrial aim a to raise 
M$214m by Issuing 126m 
shares at M$L70 each. 

Beijaya said that new Invest 
meats undertaken by the 
group bad increased its fund- 
ing requirements. 

Beijaya is controlled by Mr 
Vincent Tan, a Chinese Malay- 
sian closely connected with 
some of Malaysia's senior polit- 
ical figures. 

Mr Tan, through Beijaya, 
ban been aggres sive ly expand- 
ing Us business hi te rwchi and 
is now involved in lottery man- 


agement srf)gmft8 in Malaysia 
and riniiB, a Hmhw project in 
the Solomon Islands and 
numerous resort developments 
around the eastern Asia 
region. 

Berjaya, with North West 
Water of the UK, is undertak- 
ing one of Malaysia’s biggest 
infrastructure projects - a 
M$6bn national sewerage 
scheme. Beijaya is also 
involved in several tight indus- 
trial businesses. 

One of the group’s latest ven- 
tures is the Malaysian fran- 
chise for the US “Kenny Bog- 
os Roasters” restaurant rhain. 


intrum fp justitia 

(Registered in Curagao No. 41415) 

Notice to Shareholders 

Shareholders ollnlrumJustiUnNV a corporation organised and existing 
under the laws of The Netherlands Antill es, with registered offices at. 
Oumuceirokade 3, WIDemstad, Curacao. The Netherlands Antilles, are 
hereby informed that in the Annual General Metaug of May 24, 1994 
it has been resolved to determine the payment of die final dividend of 
22 pence per share, payable on Jane 3. 1994 at die following addressee 

Paying Agents 

Kicdletbank SA Lnxcmboargeoise Hsmbros Bank Limited 

43 Boulevard Royal 41 Tower Hffl 

L-29S5 Luxembourg London EC3N 4HA 

Luxembourg United Kingdom 

Bearer shareholders are asked to submit Coupon or. 12 u> the Paying 
Agents for collection of the dividend. 

May 25. 1994. 


CREGEM Finance N.V. 

flttnatin manor wain 

AmoJm. TVNaApW. 

U.S. $100,000,000 
Floating Rate Note* due 2003 
In accordance with the provision* of 
the Notes, notice is hereby given 
that the Rate of Interest for the six 
month period ending 25th Novem- 
ber. 1994 has been Sxed.at 5.125% 
per annum. The interest accruing 
lor such six month period will be 
U.S. $26.34 per US. $1,000 Bearer 
Note, and US. $26337 per U.S. 
$10,000 Bearer Note and U.S. 
S2A33.68 per U.S. $100,000 Bearer 
Now on 25th November, 1994 
apdnst present a tion of Coupon 

Ohhm Bank of SwttKrfaad 
London Breach Agent Bank 
20th May, 1994 


° P S2 


The 
Top 

lortunities 
:ction 

appears every 
Wednesday. 

For advertising 
information call: 
Philip Wrigley 
0718733351 


Hun MoraacaHur GOMMirr 

US. $400000000 

Roaring Rata No»s Dun August 1996 
In accordance wWi ths terms and 
con a tions of tha Notea. the Interest 
rate for the period 26th May. 
1994 to 20th August 1994 has been 
ftod «4J875% par annotn. The interest 
payable on 28th August. 1994 wtt 
be US. S12AS8333 per US. $1,000 
nomrnaL 

Agent Benk and 

principal Paying Agent 


the— atm of on — At 

QiOO.CXM.000 

Soaring Bate N q— D ue WjW 

tn accordance wfth the pruvhlona of 
the Note*, norice la haredy given tM( 
for ttm Imaraet period from ae«h 
May. 1994 m »«» Au gust. 1894 
the rate of Intan— on rite Notee win 
be S.0826K per annum. The tntareM 
payable on the relevant taterte* 
paymen t data 34th AiyatlW* w« 
Be £T37,60 per CU^OOO Note and 
CU7&03 par £100000 Note. 

Hacaland 

Mndpel Peylng Agent 

ROYAL SANK . 

OF CANADA 


Citicorp Banking Corporation 
U.S. $250,000,000 

Guaranteed Flooring Rate Subordimued Capital Notee 
Due July 10, 1997 ^ 

Uucomfitiosally Guaranteed on “ Subordinated Basis by 

cmcoRpp m 

ia^^maagagga!* : reiP 



i 

I 


CREDIT national 

USS 250,000,000 Boating Rate Notes due 1937 

In accordance with ihe^ Terns and Conritions of The Notes, notice 
is hereby given that for the Interest Period horn May 24, 1994 to 
A ugust 24, 1994 the No©9 wffl cany an Interest Rate of 45625 % 
per annum. 

Tba Interest Amowit payable on the relevant Interest Payment 
Data, August 24, 1994, w8 be USS 11.66 per US$ 1.000 princi- 
pal amount of Note, USS 1 1650 per 
USS 10,000 principal amount TheAgemBenk 

at Note and USS 1.165.97 per «- 

USS loaooo principal § M 1 * K22SSS2Z 

amount of Note. v 


LEGAL NOTICES 


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No. 002239 of 199* 
IN THE HUB COURT OF JUST6CB 
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THE COMPANIES ACT UB 
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1230 

1105 

osao 

11.00 

11.15 

0600 

11.73 

11.10 

0630 

1075 

11-20 

0700 

21.10 

2017 

0730 

2288 

2288 

0600 

2*J7 

4104 

0830 

31JM 

2403 

0800 

3201 

4100 

0930 

3205 

<105 

1000 

3200 

4105 

1030 

3007 

2404 

1100 

3006 

84.12 

1130 

4X40 

8404 


4042 

2406 


4309 

3403 


3107 

2402 

1330 

2407 

2X37 

1400 

2*^5 

2X37 

1*30 

24^4 

2206 

1500 

TAM 

2280 

1530 

TAM 

2208 

1000 

24.45 

2208 

1530 

3057 

2X56 

1700 

4706 

32.79 

1730 

4706 

3278 

1800 

3604 

3104 

1830 

2026 

2207 

1800 

2306 

2233 

1S30 

2X26 

2005 

2000 

2026 

2005 

2030 

2526 

1703 

2100 

22« 

3015 

2130 

3034 

3018 

2200 

4700 

3015 

2230 

4700 

2803 

2300 

3034 

2017 

2333 

2X12 

1270 

2*00 

31.78 

11.15 

rfT 




rim 

1095 

11X0 

11 . 1 * 

1*9* 

140* 

11X0 

1T.17 

114* 

114* 

11.15 

11.15 

1140 

2253 

255* 

<070 

2750 
4073 
*072 
4072 

2751 
204* 

2752 
2752 
2751 
275* 
2553 
2553 
209* 
202* 
255* 
2058 
2556 
*015 
3015 


w no 
2000 
1753 
*U1 
8251 


12.70 

11.15 


wehn aapite Wte par 

sr-sTe. ssrefsiTn. is? 

W i w s eiwnu i n s m o te . ftoteca te — 

d te i i ea te i at p o* pe t H— p ea *a oMfl 

loten cl me teesun pod h ErUnO no Wm 
Thefts* P e m a u tenhte ban ueen»nyc< 
W* — n paem h mpeet el d uhlier 
acted— an — sen feejni Meed miam 

ki—wteftw m t »s« e a— a 



„,,15% 

off electricity 


021 423 3018 

Powerline 


£250400000 
FkMfng Ran No— Dum 1997 
in accordsnca with the arms and 
oomMons of the Notes, ttw fmareat 
nt* for ihe period 2«fi May. WM 
lo 2 4lh Au gust. 8M hae been Ifand 
at 52877% pgr annum. The (rarest 
payable on 2*tfi August, 1994 against 
Coupon 18 wfll be £13127 par CKWOO 
nominal and £133274 pgr £100000 
uomtagl. 

Agent Bank and 
Principal Paying Agert 

ROV541 BANK 
OFCANAO* 


ALCATEL ALS1HOM 

COMPAGN1E GMRALE D , 'ELECrRlCIT£ 

Corporation organicod »nifer French Law (SodM Anooyme) 

Capital : French ftancs 5.738387,400 
Hied : 54, rot II Bottle - 75008 PARIS 
RegisteiEd Head Office : PARIS B 542019 096 

nRST NOTICE 

The balden af 6 U2 % 1990-2000 Bonds of FRF 680 nominal value issued by 
ALCATEL ALSTHOM COMPAGN1E GfiNtPALE D^LECTRICTTE are 
convened to a G eneral Meeting to be held ai 50 nte Tfciibou - 75009 PARIS 
(France) on June 10, 1994 at 230 p.nu in order to consider the following 
agenda : 

- BoirdafDimlw Report 

- Approval of the decisions proposed to the Mixed Meeting (Ordinary and 

Extraordinary) of shareholder, A ut horiz ing the boon! ; 

- U> issuo, with waiver of thdr preferential righi : 

- share warrants, 

- convertible boods, 

- seam tie* which allow, through conversion, exchange, repayment, 
presentation of a warrant or through any other way, to receive 
shares of the company, 

- to provide members of the company or members of the group 
afEHaies, options to subscribe or purchase shares, without any 
prefe rential subscription rigid. 

- to use, in case of public offering to purchase OX exchange shares, the 
HOborreatksK given to it in order to raise the capital. 

- Decision oa die method of recording the doc u me n ts of the General Meeting. 

In order to permit the bondholders to attend, or to be represented at this 
meeting, the Bonds or thesr deposit reedpts must be deposited at Irast five days 
before the date fixed far the meeting, with tare of ibe banka having paitidpaied 
in the placem en t of these Bnwi« and from whom p r o xies or mdmissSoo cards can 
be requested. Hiis meetigg shall be validly held if the hahfcm of *l fcasl twenty 
(ivo per cent of the outstanding bonds entitled to vote arc present or 
represented. 

THE BOARD OF DIRECTORS 




% 


JtUasCopco 

Atlas Copco AB 

Nacka. Sweden 

5:1 SPLIT 

Hie Annual Gnoerai Meeting of Atiaa Copco AB resolved on April 

27, 1994, to change the nominal value of the company's shares 

tom SBC 25 to SEK 5, by means of a 5:1 spot 

TTwfoBowing dates are a ppfcabte In connection with till* change: 

JunaS, 1994 Last day for trading Attas Copoo shares on the 
Stockholm Stock Exchange with a nominal value 
ofSEK25 

June &, 1994 First day for trading Adas Copco shares on tea 
Stockhokn Stock Exchange with a nominal value 
ofSEKS. 

Juno 10, 1994 Otetrfcution of VP- statements of account by the 
Swedbh Securities Register Cantus. 

It Is proposed that the same dates for trading Adas Copco shares 

on the London Stock Exchange wffl apply. 




Nacka. Sweden, May. 1994 
Ath» Copco AB 


J 



Is 

International 
Securities Data 
coming from 

the right 
source? 


I E an uncertain world, there's 

only one place to get your data. Straight 
from the horse’s month. 

As the official body in the market the 
International Securities Market Association 
has more data, more easily available than 
anyone. Onr complete database includes 
daily updates ou 7000 prices, the latest 


Eurobond issues including European 
domestic government bonds, historic prices 
and up to 200 fields of information on 
individual bonds. Ail accessible in printed 
or electronic form. No wonder we’re the 
market's most sought after resource when it 
comes to international securities data. 

Why horse around? 

ISM A 


For further infanmtion send a copy of tins advertisement and your business Cffld to: 
hacnratiorol Securities Ntaict Associsooe LicL, Sevev Limdsuboor, London E149NQ. 
Fax (44-71) 538 9183. Or call (44-71) S38 S656. 


F.T. 


FrestUnkm Corporation 
U.S. $150,000,000 
Floating Bate Nora 
doe 1996 

THe rare of interest per annum 
on Fine Union Corporation's 
U.S $150,000,000 Floating 
Race Notes due 1996 fin- die 
interest period beginning 
24 dj May, 1994, and ending 
24rh August, 1994. che next 
interest payment dan, will be 
4%%. The amount of interest 
payable for such Interest period 

on each U.5. $10,000 principal 
amount of the Noks will 
UU.S. $119.79. 




CtepterJ Iimfan AcotBuk 



I 

I 


Kingdom of Denmark 


USD 250^004100 
Roating Rats Notes due May, 1995 

tn accordance with The Desciption of the Notos. notice b hereby 
given that for the fntwost Period from May 24, 1994 » Novem- 
ber 25. 1994 the Notes win carry an Jntweat Hare of io* pef 
annum. 

The interest payable on the retevart Interest Payment Data, 
November 25, 1994 agtinst coupon No. 19 
wfl be USD 513.89 for each 

USD 10,000 NO®. ililBUllll TtoAoontBank 











23 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


12 


INTERNATIONAL CAPITAL MARKETS 


Bunds fall again as hopes fade of further cuts in rates 


By Graham Bowtey and 
Conner MIddelmann 

bi London and 

Frank McGuriy hi New York 


German government bonds 
suffered further declines yes- 
terday after figures showed 
continued rapid growth in the 
money supply. The June bu n d 
future fell 0.30 per cent to 
94L38. 

The money supply numbers 
fuelled fears that further cuts 
in official interest rates are 
unlikely, although a small 
reduction is the minimum repo 
rate at the Bundesbank’s open- 
market operation today is 
expected. 

“Today has been a continua- 
tion of the sell-off that started 
on Friday for the overall mar- 
ket and of the shift in the yield 
curve that started on Thursday 
afternoon,*’ after comments by 


Bundesbank president Hans 
Tietmeyer, said Mr Karl Heel- 
ing, head of the futures and 
options group at Deutsche 
Bank in F rankf urt 

Mr Tietmeyer’s comments 
were taken to mean that there 
would be no more official Ger- 
man interest rate cuts in the 
near future. 

“Tietmeyer’s comments have 
triggered a big change in senti- 
ment and investors have sold 
the short end and bought long 
because they are expecting a 
slowing down In the easing 
process," Mr Hading said. 

Analysts said that there was 
a lsn gnmp concern about rising 
commodity prices although the 
rises were to some extent a 
bounce-back from very low lev- 
els. 

German M3 money supply 
grew at an annualised rate of 
15.8 per cent in April, up from 


the 15.4 per cent rise seen in 
March and still well above the 
Bundesbank’s 4 to 6 per cent 
target range. 

The bund market took same 
cheer from the announcement 
that today’s allocation of secu- 
rities repurchase agreements, 
or “repos", by the Bundesbank 
will be at variable rather thaw 
fixed rates. A s urvey of Ger- 
man money market traders by 
MMS International forecast a 
three basis point drop in the 
lowest accepted repo rate to 
5-20 per cent from last week's 
5 . 23 per cent 


bonds, has not attracted a 
greet deal of interest so far, 
analysts said, mainly Tyrav ree 
of the difficulty of pricing the 
first convertible gilt to be 
issued since 1S87. 

Analysts said that it was val- 
ued at around 100ft in "when 
issued" trading yesterday. A 
bid-to-cover ratio of about two 
is expected. 


As expected, the French cen- 
tral bank left its key interven- 
tion rate unchanged at 5.40 per 
cent and traders are watching 
the German repo allocation for 
further dues on the direction 
of interest rates. 

However, most were betting 
on only a modest drop in the 
repo rate, offering France little 
scope for further easing. 


GOVERNMENT 

BONDS 


■ UK government bonds also 
fell bade ahead of today’s con- 
vertible gilt auction as the 
market tracked developments 
in bunds. 

Today's auction of the new 
7.0 per cent 1997 gilt, convert- 
ible into 9.0 per cent 2012 


In late trading, the UK long 
gOt future was down almost ft 
points at 104ft. 


■ French bonds caught up 
with Monday’s losses in the 
German market, causing the 
notional government bond 
future to fall Lia points from 
Friday to 120.46. 


■ Japanese government bond 
futures rose, supported by the 
successful auction of the new 
39 per cent 10-year bonds. 

The bid-to-cover ratio of 292 
reflected healthy demand, 
especially from retail investors 
attracted by the issue price 
below par. a trader said. The 
average issue price was 99.44. 

The September JGB fixtures 
contract rose 097 points to 

11290 in Tokyo and climbed to 

11291 in London. 


■ US Treasury bonds rallied 
yesterday morning on hopes 
that an afternoon auction of 
new two-year notes would 
attract reasonable demand. 

By midday, the benchmark 
30-year government bond was 
g higher at 86%, with the yield 
slipping to 7952 per cent At 
the short end. the two-year 
note was ft better at 99ft, to 
yield 5982 per cent 

Although the trading week 
bad begun with a big seli-off, 
the market found room for 
optimism. The solid increase in 
yields the previous day was 
seen as sufficient to interest 
buyers In the Treasury's $17bn 
two-year issue later in the day. 

The last auction had been a 
disappointment and fears of a 
repeat performance sent a 
shiver through the market on 
Monday. Yesterday, the out- 
look was more positive. 


But Monday's sharp Jump in 
commodity prices was even 
more responsible for the 
sell-off. Yesterday the Com- 
modity Research Bureau index 
softened, largely because the 
outlook for grain harvests 
seemed cloudy, bringing a mea- 
sure of relief to Treasuries, 

Concerns over the dollar also 
eased as news that Washington 
and Tokyo would resume 
framework talks on trade 
helped the battered US cur- 
rency gain ground against the 
yen. Foreign exchange dealers 
were sceptical about the pros- 
pects of the dollar making sig- 
nificant headway, however. 

After the two-year auction, 
traders would still face the sale 
of Jllbn in five-year notes this 
afternoon. The reception 
afforded the initial influx of 
new supply was likely to set 
the tone for the second round. 


Increase in 
Portuguese 
equity fund 


By Peter Wee In Lisbon 


Thai group 
calls off 
convertible 


By WWInn Barries 
in Bangkok 


Bangkok Land, the property 
company controlled by the 
Hongkong-Thai Kanjanapas 
family, bag abandoned plans to 
issue US$600m of euroconverti- 
ble debentures. 

The money was originally to 
be used to fund the construc- 
tion of a $L2bn elevated urban 
railway, one of three mass 
transit schemes in the Thai 
capital. 

Bangkok T-and president, Mr 
Anant Kanjanap as explained 
rt»»t international demand for 
euroconvertibles bad softened 
considerably since the rise in 
US interest rates. 

Local bankers have been 
warning for weeks that the 
market was becoming satu- 
rated with Thai euroconvert- 
ibles. 


Institutions on the sidelines 


By Peter John In London and 
Louise Lucas in Hong Kong 


Two large sterling issues 
helped the eurobond market 
creak back into action after the 
widespread public holiday clo- 
sures on Monday. But syndi- 
cate managers found scant 
cheer, noting that the big insti- 
tutional players remained on 
fha sidelines 

Royal Bank of Scotland's 
£15Qm offering of 21-year paper 
soaked up what institutional 
demand there was in the mar- 
ket The bonds were priced to 
yield 125 basis points above the 
9 per cent gOt due 2012, the 
most liquid equivalent bond. 

The issue was aimed at UK 
groups with long-term invest- 
ment needs and represented 
Royal Bank's first foray into 
the eurosterling sector since 
the miriHla of last year. 

Lead manager UBS said a 
“good proportion" of the bonds 
had been placed but they 


would remain In syndicate 
overnight due to volatility in 
the gOt market 
The other big sterling deal 
was carried out by DSL 
finance which issued £ 100 m of 
five-year debt priced to yield 34 
basis points above the relevant 
gOt Traders said the pricing 


INTERNATIONAL 

BONDS 


was too aggressive. They noted 
that the spread on the recent 
Credit Loral offering had wid- 
ened to 40 basis points over 
gilts from a launch spread of 37 
basis points. 

Later in the afternoon DSL 
Bank issued $300m of five-year 
paper priced to yield 22 basis 
points above the equivalent US 
Treasury. 

KfW, Germany’s stateowned 
export financin g and develop- 
ment aid bank, tapped the 
dragon bond market for the 


first time when it raised 3300m 
through an offering of five-year 
bonds. 

Joint bookrunners T-ebman 
Brothers and Deutsche Bank 
said the bonds, which cany a 
coupon of 7 per cent, were well 
received throughout the Asia 
Pacific region and ariri<*i that a 
number of European names 
also took up trendies. 

However, some deal- 

ers said that, although it was 
one of the best-priced deals of 
the day, the yidd spread still 
widened when it began to 
trade. The spread on issue was 
24 basis points over five-year 
Treasuries but widened later to 
27 basis points. 

KfWs closeness to German 
government debt enhanc ed the 
appeal of its bands to Asian 
investors: to date the embry- 
onic dragon bond market has 
largely been the preserve of 
non-corporates. 

A ttractive arbitrage opportu- 
nities encouraged Krediet- 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Price 

Maturity 

FMm 

aptaad Barit runmr 

Borrower 

US DOLLARS 

m. 

% 



% 

bp 

KFW (ltd. Finance^ 

300 

7.0 

9S5SR 

JUL1999 

026R 

+24 (WJJ5Y) OeutfitLAsUAjahman Aria 

DSL Bank 

800 

70 

99.71 R 

Jun. 1989 

0250 

+22 (W.L5Y) Nomura intemafionri 

YEN 

(jmfwtachortfche RtSMtJj 

20bn 

30 

10050R 

Sap. 1998 

CL22SR 

- Nonxra fciMmarional 

Tkreaauiy Carp af Victoria 

10.4*1 

2.55 

1005QR 

MS.199Q 

0.125R 

• IBJ International 

Uny CoTb) 

idbn 

3.7 

1OQ.O0R 

Sep. 1908 

undlacL 

- Tokal Bank Qxcpa 

Bardayn OvgnMS Cap06 

Iflbn 

3.8 

10Q475R 

Sep. 1999 

(L275R 

Man« Lynch ML 

STERLING 

Royal Barit of Scattered 

150 

9525 

99570 

Jun20i5 

0.625R 

+125 (9%-lft UBS 

D3. Finance NV(c) 

100 

800 

9955R 

Aug, 1999 

05SR 

+34 (SK-9ft S.Q. Wnrtxrg 

THFCW 

31.5 

8.62S 

885788 

Nou5Q23 

0525 

+1700*96-17} Samuel Montagu 

CANADIAN DOLLARS 
Mredetbarit WL Ftaanoe(ft 

100 

805 

9B52SR 

Doc.1999 

(L30R 

+30 ^6 96-89) ABN Amro Bank 

ExpomBnans 

100 

8.50 

89.70R 

JuL2000 

0575R 

+34 (ft Paribas Capital Mkts. 

AUSTRALIAN DOLLARS 
Toyota Rrance AustraSa 

100 

7.825 

101.125 

JUL1997 

150 

- Merritt Lynch Ml. 

SWHMSH KRONA 

EUVCflfTHI 

800 

8.75 

99.72R 

JU.1999 

Q5SR 

+50 (1196-99) IBJ tntemaUonal 

Final tome and nan-critatds unless stated. Tha yield spread (ow relevant government bond) at Munch re aupptod by the load 
manager. * Private ptocemant SConvariMe. 4>Wim equity wenanta. ^floating isle note. fSorri-anrenl coupon, ft (bead re-altor priem 

toes are shown at the reoffer LeveL a) Oregon Bond, ft Short first coupon, c} Long tkst coupon ft Over Interpolated ytekt ft ♦ 31 day* 

accrued hterasL Fungible with El 40m deal launched 15003. 





bank, the big Belgian commer- 
cial bank, to launch a CSlOOm 
issue of five-year eurobonds. 
The borrower is believed to 
have swapped the proceeds 
into floating-rate dollars, ach- 
ieving a sub-Libor cost of fund- 


ing. Lead manager ABN Amro 
said the bonds were targeted at 
Belgian retail investors who 
want to roll over their Cana- 
dian dollar investments which 
are due to mature in the next 
month. 


Elsewhere, Enrofima’s 
SKrSOOm launch of five-year 
bonds offered investors cur- 
rent-coupon paper in a sector 
which has seen yields widen by 
around 250 basis points in 
recent months. 


Brazilian utility 
stake to be sold 


A Brazilian state government 
Is to sell most of Its 239 per 
cent stake in Ksplrlto Santo 
Centrals Eletricas (Escelsa), 
the electricity utility, in a 
stock market auction expected 
to raise around 3100m, AP-DJ 
reports from Rio de Janeiro. 

Later this year, Brazil’s fed- 
eral government is expected to 
sell most of the 729 per cent 
of Escdsa’s capital owned hy 
the federal electric holding 
company, Eletrobras. Foreign 
Investors will he allowed to 
participate in the sale. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rad Day's 

Coupon Date Price change 

YWd 

Week 

ago 

Monfr 

*8° 

Australia 

9.600 

06/03 

108.1000 

-0.720 

808 

809 

8.11 

Belgium 

7^50 

04/04 

970000 

-1.140 

700 

7A9 

703 

Canada* 

6300 

06/04 

870000 

-0000 

8.42 

042 

709 

Deranaric 

7.000 

12/04 

950700 

-1050 

706 

702 

708 

France BTAN 

8000 

OSfflB 

1050750 

-0.750 

027 

8.11 

601 

OAT 

5000 

04/04 

900900 

-0070 

001 

602 

AM 

Qremany 

8.760 

05/04 

100.1600 

-1000 

073 

609 

008 

Italy 

8000 

OIAM 

960700 

-0200 

ft28f 

905 

807 

Japan No 119 

4000 

06/99 

1070160 

+0080 

3.13 

321 

3A6 

No 157 

4000 

OM a 

1050740 

- 

3.75 

303 

4J» 

Netherlands 

SJ50 

01/04 

82.4000 

-1000 

605 

609 

072 

Spate 

10000 

10/03 

1060000 

-0700 

902 

903 

929 

UK rats 

1000 

08/90 

93-03 

-13/32 

703 

708 

704 


8.750 

11AM 

90-20 

-28/32 

OIO 

709 

7.78 


9.000 

10/08 

106-28 

-38/32 

8.18 

ai2 

701 

US Treasury* 

5075 

02/04 

91-13 

+7/32 

T.11 

724 

808 


8050 

08/23 

88-27 

+15/32 

705 

7.44 

7.16 

ECU (Frandh Govt) 

8000 

04AM 

9Q0BOO 

-1080 

705 

7.18 

702 


Italy 

■ NOTIONAL ITALIAN QOVT. BOM3 (BTC) FUTURES 
(UFFET Lira 20On lOOta of 100% 


FT-ACTU ARIES FIXED 

Tin 
May 24 


Pitas Indices 
UK GK» 


INTEREST INDICES 

Day's Mo «1 Accrued 
change % May 23 Internal 


xd ecf. 
ytd 


— Low coupon yWd— — Medium coupmyleM — •— tflgh coupon yield- 


May 24 May 23 Yr. ego May 24 May 23 W.ago M«» 24 May 23 Yr, ago 



Open 

Sett price 

Change 

High 

Low 

EsL vri 

Open Int 

1 

Up to 5 years G 23) 

12X32 

-029 

12308 

206 

404 

5 yra 

7.70 

707 

7.15 

702 

7.78 

708 

709 

706 

7.80 


111.45 

11107 

-015 

11104 

111.17 

53547 


2 

5-15 yuan (24] 

14304 

-088 

145.19 

207 

502 

15 yra 

609 

705 

607 

619 

606 

649 

801 

637 

673 


11005 

11068 

-009 

11100 

11000 

2383 

11388 

3 

Over 15 years (3} 

16208 

-101 

16404 

208 

406 

20 yra 

807 

705 

B-9Q 

619 

606 

809 

804 

621 

678 

Dec 


11008 

-009 



O 

0 

4 

bredeemabtee (8) 

18509 

-1-45 

18702 

083 

6.12 

Irrod-f 

611 

709 

563 















5 

Al stocks (B2) 

14105 

-077 

142.45 

202 

4.82 











■ ITALIAN QOVT. BOW (Bn 1 ) FUTURES OPTIONS ftJFFE) Laa200m lOOths of 10096 









Inhattoo 5% — 

— 

— 

Matton 10% - 

— 



Strike 

Mce 

11080 

11100 

11160 


Sep 

223 

1.88 

1.7S 




PUTS 


lodax-Meed 


Deo 

ggg 

288 

278 


Sep 

207 

2J32 

yap 


May 24 May 23 Yr. ago 


May 24 May 23 Yr, ago 


Eat wL KM, CKB 2720 Puts 1284. Ran km days Open K, CM* 7102 ft* OOia 


Doc 

8 Up to 5 yaara(2] 

18501 

-013 

18506 

072 

203 

Up to 5 yra 

302 308 

303 

■ 200 

204 

226 

306 

7 Over S ynera (11) 

17808 

-035 

177.40 

1.14 

109 

Over 5 yra 

308 303 

308 

646 

644 

639 

302 

B Al stocks (13) 

178.88 

-033 

177.47 

109 

1.77 







300 







— 

— SyaaryMd — 

— 

' 18 nw yield — 

— — 

-28 year yiald 


Debentures and Loans 


May 24 May 23 Yr. ago May 24 May 23 Yr. ago Mey?4 May23 Yr.Bflo 


8 Dobs & Loans (78) 131.08 -121 13329 1.93 

Mvegs gras lede up Son yfeta ara ahmi abom. Coupon Bonds Low; 0%-7«W; 


4.92 823 218 200 223 208 

Madura BUM CM K: Htfv 11H mi over, f Nat yWd. ytd Vw to data. 


BAT 217 203 


281 


t Oms pEkfdng wMf MkAq tan at 168 per cent prates by 
Pita* US. UK ki 32nds. oOv* In dadm* 


Spain 

■ NOTIONAL SPAM8H BOW FUTURES (MEFF) 


US INTEREST RATES 


LwMkno 


Mae Mi. 


0no month , 
71* TVamonti . 


Tieanvy Oh and Bond Yields 
301 Two yaw. 


Jiai 

Sep 


Open Sett price Change 
8888 8882 -024 
8824 8289 -210 


8885 

9824 


Low 

9246 

9680 


Eat woL Open InL 
68818 117,171 

402 10883 


FT FIXED INTEREST INDICES 

May 24 May 23 Miy 20 May 19 May 18 Yr ago Hgh* Low* 


CULT EDGED ACTIVITY INDICES 

May 23 May 20 May 19 


May 18 May 17 


Mflnk. 


5h Una m o n t h 
41* Shmonto __ 


Faditndi rf UnvwiUoiu. «% One year. 


4.19 IMa yaw- 
431 Ruayaar_ 
440 10-yew 
522 30-yaw 


188 

127 

888 

7.13 

787 


Gout Seca. (UK) 94.70 9584 9582 9584 95-24 9484 10784 9320 
Fixed interact 11388 11480 114.73 11428 11323 11123 13387 11082 


OB Edged toregaha 


UK 


822 97.7 111.4 1020 924 

827 1027 982 82.0 823 

-brim OwwraradSscaBMHflhStnw c on p ll tu l un; 137.40 (8/1766). low 4616 grt/Wl fbmi kncrcat Wgti tones CBnpMotg 13327 £1/1/84) . km 9013 (2/1/79) . Beale IQOi Grarnnant Securitas 157107 
28 and Fbad MM 1928. SE acnvty hdoaa rabraod 1974 


■ NOTIONAL UK Qfl-T FUTURES (LFFQ* £50.000 32nda of 100% 


BOND FUTURES AND OPTIONS 


Franc* 

■ NOTIONAL BT6WCH BOW FUTWE8 (MATff) 


Open Sett price Charge 
I Jun 105-14 104-14 -1-01 

Sep 104-11 103-12 -1-02 

Dec - 102-12 

■ LOW G2T FUTURES OPTIONS (LPT^ £50 JJOOBWm d 100% 


Ugh 

106-14 

104-11 


Low 

104-10 

103-10 


Eat vol Open tnL 
83215 112158 

3127 4887 

0 0 


FT/ISMA INTERNATIONAL BOND SERVICE 


Used an tha tatatt tetomtotonal bands tor whfcft there la an adequate noonday madoat Latest prfcee at 7WJ pm an Hay 34 
Mart BkS OBw Chg. VMd I a— d BU Oflkr Chg. 


Jun 

Sep 

Dec 


Open Sett price Change 
12050 12248 -1.12 

11264 11262 -1.12 

11262 11284 -1.08 


High 

12278 

11280 

11292 


■ LOW TERM FRENCH BOND OPTIONS (MAT1F) 


Low 

120.14 

EsL voL 
209023 

Open tet 
111008 

Strike 

Price 

Sep 

■ CALLS 

Dec 

Sep 

■ PUTS 

Dec 

11928 

17035 

22050 

103 

201 

3-14 

2-07 

3-54 

11648 

41 

7A3C 

104 

1-63 

2-60 

2-30 

4-26 


108 

1-38 

2-28 

3-12 

64M 


Muad flkf Oflkr Chg. VhU 


08. DOLLAR STRAIGHTS 

Attay Nad Tresaiy 6% 03 — 1000 81% 

AbauPnrtnaftW 800 W% 

Arabia 8% 00 4» 1053* 


Eat. vdL tot*. CWta 37B0 Mi 901. Prwtatw day's tpan hL. CM T70M Pub 9848 


Strike 

Price 

Jun 

- CALLS — 
Sep 

Dec 

Jun 

— PUTS — 
Sep 

Dec 

119 

- 

2.18 

- 

008 

1.88 

- 

120 

008 

102 

- 

nan 

2.12 

- 

121 

0.15 

1.10 

- 

081 

200 

- 

122 

004 

0.71 

. 

1.84 

- 

- 

123 

002 

048 

080 

2.60 

- 

- 


Ba* of Tokyo 8% 98. 

Bripumftgg 

BRZ7%97 


,KU 1031* 
.250 108% 


Bdtt(tt021. 

Canada99B 


. 150 1QZ% 
.1500 10% 


Ecu 

■ ECU BOW FUTURES (MATTF) 


Chong Kang fin 5lj 98 
China 6% W . 


1000 10 *% 


.500 


.1000 


OandBiope690. 


SOI* 

85* 


Eat. ML xx*. Cats 11783 Pub 91A» . Redout dtfs epon W. CM 306.203 Pub 362.101. 

Germany 

■ NOTIONAL GERMAN BUND FUTUHE3 jUFFET DM252000 lOOthS of 100% 


Open Sett price Change 
8756 87.58 -1.02 


Wgh 

8750 


Low 

87.48 


EsL vdL Open M. 
2471 12378 



Open 

Sett price 

Change 

High 

Low 

EsL vd 

Open InL 

Jun 

94.51 

0424 

-044 

9408 

9424 

191149 

147832 

Sep 

9400 

83.75 

-048 

9424 

8675 

11282 

27144 

Dec 

9670 

9648 

-025 

9670 

9650 

192 

0 


US 


■ U3 TREASURY BOND FUTURES (CHT) 3100.000 32nd» of 100% 




EC8C8% SB 

193 

SB 7% 96 

100 

250 



BacdsFhrecaflH 

200 


100 103Tfl 
109 


965, 


Einttnt 9% 98. 


■ BUW FUTURES OPTIONS flJFFE) DM250JW0 points o* 100% 


Strike 

Price 

Jut 

Aug 

CALLS — 
S«P 

Dec 

Jul 

Aug 

PUTS 

Sep 

Deo 

9380 

1.05 

102 

107 

106 

000 

107 

102 

201 

9400 

079 

1.06 

101 

1.73 

104 

101 

106 

628 

9450 

055 

084 

108 

101 

100 

109 

103 

208 

Eat «cL 

tea*. CaC* 3245* Pub 2*02*. Pravtoua day* epan ML. Cote Wise Pub twoaj 




Open 

Latest 

Change 

High 

Low 

EsL VOL 

Open tet 

Jiai 

103-24 

104-06 

+0-17 

104-06 

103-19 

367049 

380081 

Sep 

102-27 

103-01 

+0-10 

10304 

102-22 

82053 

93,884 

Dae 

102-04 

102-13 

+0-10 

102-18 

102-03 

239 

34.068 


Ex-kn BMk JqtWi B 02 . 
Expat Dot Cap 8% 9B . 
Rntond7%97. 


.100 10*1* 
.500 HE 3 , 


finite Expat B% 95 . 


.150 108% 

.200 we% 


FtrdMokrCre<*6% 98. 
o*i Bsc cape* 9% se _ 
GMAC9 1 i SB 


_ 200 10 *% 
.1500 Wig 


Japan 

■ NOTIONAL LOW THU* JAPANESE QOVT. BOW FUTURES 
<UFT^ VI OOm lOOths of 100% 


kidBk.bpeiRi7%87 . 
bS6: Amw Dm 7% 96 — 
My 6% 23. 


.200 


.200 


US’s 

1031* 

1024* 


.200 102^ 


■ NOTIONAL MEDIUM TERM GERMAN GOVT. BOND 
(BOBLXUFfg DMgjMMg TOOgW of 100% 


Jun 


Open 

9256 


S et t price Change 
89.39 -222 


High 

9255 


Low 

9881 


Eat vol Open M. 
321 1458 


Open Closa Chengs high Low Eat- vol Open H. 
Jun 113-48 - - 11264 113.48 389 0 

Sep 11280 - - 11242 11274 2280 0 

* LUTE concocts traded an APT. M Open meamsr floe, we tor prevtoua dqr. 


JapenDnBkS^OI 
Kraal Bee Per 10 96 


.3500 83 


.600 


Korea Bee POtwr 8% 03. 

LTC8RnB97 


.350 108% 


7% 02. 


.1360 
. 200 102% 


I UK GILTS PRICES 3 

— YWd _ „ 1994 _ 

Note* M Rad Price £* or- Ugh Low 

-VWd_ — 1994 _ 

NUre u Rad Prices +w- High law 

— Treed — _ 1994 _ 

Hotoa (11 H Prices +ar- Mgh Low 


Mppan Cnd Bk 10% 95 . 

Namay7%S7 

(Made 7% 03 


.1000 97% 


.150 104% 


.1000 101 % 


OebrKoHbankB^OI 
PWCMl7%95 
PWug«5% 


.3000 


.300 


87% 

8)5% 


200 IOIJj 
1000 67*2 


ISO KB% 
200 8B% 


StMrt^OJwaepbnwVmJ 
Tna& lOpcU. 1994^L— "" 

Each 12*zPC 1994 

TrereBpelS*# 

iZpe 1995 


Eadi 3pc Obi 90-95 
I0%(lcl9®S— 
THHlZVlK 1995ft — 
l4gc199B. 


15Vpo196ftft- 


Dai 13%(K 1998ft. - 
ConRwdaa IOdc 1996. 
Thsb 13Wj 1987ft _ 

Bril 10%ge 1997 

Tries 8%pc 1957ft— 

EwdilBgclOBT 

9%pc1990. 


Tria7%pc 1998ft 

Tim 6%pe 199548ft- 
l4peW-1. 


Tnai1S%pcVaft 

Bril 13c 1998- 


im9>iK 1999ft- 


Fheb lOaaa Yaws 

&ft12%pc19a9. 

Tiaai 10%pc 1999 

Tmafipc 1999ft 

Crarifcfl 10%uc 1999. 



gpeBBOft 

Tnaa 13pe20Q0 

100(2001 

mrWtt 


TpcTh A_ 


9VOC20Q2- 


II || I ! ?I WH vit • in r 
1 0pe 2003 


1000 

- 

inu 

1127 

400 

101% 

804 

UB 

mm 

lira 

5.16 

I04U 

905 

501 

88% 

9.75 

5J6 

105% 

1104 

504 

109% 

lira 

9.16 

1124 

1117 

era 

11® 

11.79 

6.47 

iiza 

135 

608 

I06U 

1104 

706 

11M 

106% 

9.70 

7.12 

a.4i 

7 23 

1044 

1205 

743 

ma 

113 

7 m 

109% 

701 

701 

99% 

133 

701 

97,; 

1107 

7.78 

121 

1286 

703 

128U 

1008 

7.78 

115% 

8S0 

7.75 

tow 

iora 

701 

1174 

900 

706 

1104 

645 

703 

93J, 

902 

705 

109(1 

- 

-MftW 

ara 

70S 

104(3 

1680 

821 

122 a 

61S 

8.17 

109% 

7A1 

743 

709 

802 

ft! 

808 

807 

loss 

6.08 

8.17 3aSd 

902 

60S 

item 


— 102A 
-A 104B 

103B 
-£, 107* 

— on. 

— KJ7B 
t13% 

-A H7A 
-A 1S1U 
-4 117B 
-a ii2i 
-A 121tt 
-A 114A 
-a 110A 
-U 131B 


Treat 11%p( 2001 -4 

100 7ririkigO ll i9e'9M u ». 
101% Gai*enlaa9>ucaOM_- 
]«« iriea8%pc 3004ft 

Trets Wane 2003-5 — 

.JS 7%pc 2006ft 

7,3 6pc200Mft. 


-A 

-A 

4 


114|| 

108A 

102 

131A 

140A 

12SJ1 

11B& 


I15A TBBlUiIlC 2003-7 

112A IMa B%pe 5007ft 

106A 13%pC04-e 

1144 Treat 9K 2009ft 

107A 

1034 

121JJ 


904 

800 

un 

-% 

15011 

1144 

408 

7.18 

75 % 

-a 

664 

724 

SJ0 

&2B 

mas 

-1A 

1254 

107 

7*5 

308 



108% 

«4 

374 

825 

109% 

-1% 

125% 

107% 

1001 

808 

124H 

-1* 

143.; 

123% 

802 

817 

m 

-14 

1191 

90% 

8.13 

809 

96% 

•« 

111% 

983 

907 

80S 

11U 

-1 

1384 

117 a 

800 

619 

102 a 


1194 

lOOfi 

1003 

600 

13113 

“14 

151 & 

1604 

643 

617 

io«a 

“14 

124fl 

104% 


2k *98. 


M 

-|B7fl 


4%KV8ft— 413S4 

2%K *01 (78J) 

2%K‘® (TIB) 

4%peWft__{l3Sfl 
2 kD6 PU) 


Vweia (728) 

2%peni (74ffi 

2%k'u ran 


2%0C'18 (914 

2 l &e‘3Q 93J9 

2%peyft (97 J) 

iitfc’aoft — (1311} 


24G 

282 

no 

3.18 
119 
128 
140 
143 
248 
1 52 
159 
357 
350 


352 199% 
358 1074 
151 1874 

352 164% 
148 111& 

353 1714 
lull 


342 154(1 

35 a iem 

358 132% 

359 140% 
8.71 1354 

3.70 112% 
172 111B 


-% 203% 197Q 
-% 1134 106A 
-% 178% 189% 
-% T73% 163 

-% 118% 110% 
-a 184JJ 171ft 
-% 168,; 164,; 
-% 175% 1604 


149% 131% 


1574 140% 


-j; H2B 134% 


1294 1«4 
-A 1394 ilia 


I radampOon rata on projected Written af ( 1 ) 10 % 


106fi 

96 


119% 


-A 128* 
-IS 1314 
-H 101H 
-4 121S 

*& >m 
-H 1184 

S 13Bfl 

-a 1224 

-H 1064 

-a 101* 

HI 123* 
-» H3B 
1374 



611 

616 

96fl 

“1% 

115ft 

Dree 6 1/40:2010. 

rra 

002 

83JJri 

“14 

BS4 

CDavipcLi2011ft 

638 

610 

107B 

“iJ3 

128(1 

Twa9pc 2DI2ft 

634 

61G 

10793 

-ia 

127% 

TIWI 5%K 2008-4 2tt_ 

7.13 

700 

774 

-a 

93% 

TlSSSBpc 2013ft 

609 

010 

98% 

-1% 

117JJ 

7%pe2012-lSft 

708 

610 

974 

“14 

114% 

Tree 8%|K 201 7ft 

618 

608 

10 ® 

“1% 

128% 

6ftn2pc*13-T7 

687 

808135^9 

“i% 

159% 


96B 

810 

105% 

10515 

73% 


and a 5H. (ft Figures In pro reiri i aaaa riww RPI baca for 
Mmtng (ta 8 months prior to taut} and hose bean actuated to 
redact radaring of RPI to 100 ki Jrinuwy 1987. Conversion factor 
1845. RPI far September 1993: 1415 and freApri 1SB4: 1442 . 


Other Fixed bitarest 


Yield 

ana Red ntceE+tr- 


™18M_ 

m low 


94,; 

1044 

1924 


Mdcai0nri1%2D1D 



CredtFonciBr7%03 
Dwinak6% 08 


B1waii%pe2l3l2_^_ 
kahnd Cap 9%j* TQ_ 

9K Cap 1991 

13psV7-2 


^ CK«to4K 

Si Wvlin3%gcft- 
SJ 0aar3%K'B1NL. 
107% im$c'06A~ 
97A 0saads2%K- 
1 O 8 A ■fm.2%K- 


118 

1Q3 

354 

139 

121 

130 


- 48H 

- 43AM 

- 68JJ 

- 3SB 

- 30 a 

- 30% 


-4 90% 
-fl 6*U 
-% 71 

-4 44% 

-a 38% 

-i* 37% 


46% 

41U 

57H 

34% 

28% 

m 


LWarpod 3%BCkred.- 
LCC 3pc *20 Alt 


Hat Sir. Opel - 


Ifrekto Napa 3%pc zozi . 
4%pc 2.2024 


611 

603 

122ft 

“1ft 

142ft 

12% 

802 

645 

114H 

-1ft 

138% 

112» 

643 

606 

122 

-1 

142 

119% 

619 

— 

103% 

-% 

110% 

10T 

679 

- 

102% 

“% 

103% 

100% 

1109 

— 

112% 

-% 

115% 

109% 

7007 

647 

146% 

'1% 

149}| 

144% 

1001 

— 

132% 

-1% 

149% 

130 

907 

— 

37% 

+% 

44% 

33% 

698 

— 

33% 

— 1 

40% 

23% 

681 

624 

117% 

“1% 

136% 

114% 

400 

700 

68% 

-1 

78 

87% 

— 

402 

136% 

-% 

130% 

135 

— 

4.14 

130% 

-% 

146% 

129% 

1102 

- 

143% 

-1 

169% 

140% 


Dflieoha Bk F*i 7% 03 

BC5C6%» 
ffic 6% 90 
16% 00 


Friend 7% 00. 
My 7% 96 • 


.1500 99% 
.3000 103% 


Noway 8% 98 . 
Onato 8% 04 . 
Sprii7%QS- 

Swedoi897_ 


.5000 102% 


.1500 100% 


1500 83% 


4000 100% 


. 2500 105% 


91% 

ft 

703 

104% 


802 

108 

ft 

701 

104 


644 

109% 

ft 

706 

100% 

ft 

607 

11 

ft 

651 

104% 

ft 

an 

91% 

ft 

624 

86% 

ft 

800 

103% 

ft 

841 

10ft 

ft 

7.18 

97% 

ft 

67S 

704% 

ft 

601 

103% 


era 

103 

ft 

638 

107% 

ft 

686 

108 % 

ft 

708 

105% 

ft 

80S 

102% 

ft 

709 

10ft 

ft 

706 

103% 


8JD 

104% 


611 

97% 

ft 

728 

100% 

ft 

847 

104% 

ft 

802 

183% 

ft 

8J9 

102% 


era 

83% 

ft 

BH9 

106% 

ft 

742 

10ft 

ft 

822 

87 

ft 

686 

103% 

ft 

675 

97 % 

ft 

708 

101% 


630 

ns 

ft 

ass 

97 % 

ft 

700 

109% 

ft 

743 

102% 


6.41 

87% 

ft 

7.79 

10ft 

ft 

7A1 

108% 

ft 

701 

105% 

ft 

679 

108% 

ft 

era 

104% 

ft 

535 

10ft 

ft 

70B 

07% 

ft 

7.12 

104% 

ft 

885 

Oft 

ft 

SM 

toft 

ft 

632 

104% 

ft 

657 

104% 

ft 

as 

88% 

ft 

684 

99% 

ft 

702 

106% 

ft 

7.10 

108 

ft 

60S 

88 

ft 

702 

101% 

ft 

707 

M0% 

ft 

612 

96 

ft 

60S 

102% 

ft 

7.18 

toft 

ft 

601 

100 % 

ft 

641 

*% 

ft 

840 

10ft 

ft 

807 

KB 

ft 

634 

100% 

ft 

60S 

aft 

ft 

7.18 

toft 

ft 

7.13 

108 

ft 

612 


Unfed Kingdom 7% 87 

Itotaangan M Fti 7 03 

_soo 
_ 1000 
2000 


■awn 



Sins FRANC S1RM0HTB 
Aston Dw 8a* 6 10 




Gaud &npe 4% 98 

— 250 







HywddMatarfti8%97 

— TO 


940 











YB/ STRAIGHTS 





_ eaorn 

htar Arner Dev 7% 00 

- 30000 




iwnin 




isnm 

rarefym 

. mm 






mm 

other snuntirs 


Ga*ttrceUn9%39LFr_ 

MrtJBarKBMlft 

Bank Itoor Nad Qem 7% 02 R 
Bugle Bctoar B% 68 fi 

- 1000 
-.1000 
_ 1000 
—.500 


99% 

24% 

83% 


108% -% 
99% -% 
25% 

83% -% 
112 % -% 


7.12 

171 


UiealT%97C . 
MM land 8% 23 E_ 

181 DntwfcB%982 

123 EB W97E 


VftS7£. 


89% 

101 

98% 


KM 

98% 

101 % 


HanaooKft87£ 


£86 HSBC HoUhgi 1158 02 E . 
452 My 10% 142. 


109 


108 

111 % 

109% 


-% 

-% 

-% 


4AS Japan Dev Bk 7 00 2. 
451 Land Sacs 9% 07 £ _ 
554 Ontario 11% 01 2 — 
157 PmregenEft 03£ _ 


109% 4% 


K» 


95% 


111 

107 

104% 

96% 

112 

100 

110 % 


-% 

-% 


527 SareeTrwt 11%99£ 

181 Tokyo Bee Raww 11 01 £ , 
551 40bey Nriond 0S8NZ3- 
534 TCNZFhfl%02N3 


558 CEPI4E K) 95 Fry . 


550 Bee da Force 8% 22 Hr . 

551 SNCF9% 07 FFr 

553 

117 FUMUMQ RATE NOT0 


1000 

96 

96% 

ft 

883 

_wo 

109% 

109% 

ft 

706 

-150 

90% 

91% 

-1 

1610 

-800 

98 

98% 

ft 

708 

-837 

108% 

M8% 

-% 

733 

-too 

108 % 

10ft 

ft 

701 

-BOO 

108% 

108 % 

ft 

era 

-183 

112% 

112% 

-1% 

948 

-400 

112% 

lift 

-1 

615 

-200 

9ft 

04% 

ft 

610 

_ 200 

101% 

101% 

-1% 

631 

- 100 

111% 

111% 

ft 

682 

-280 

99% 

no% 

ft 

801 

-150 

111% 

m% 

ft 

808 

-150 

111% 

11 ft 

ft 

809 

- TO 

84% 

86% 


748 

— 75 

V* 

109 

ft 

707 

2000 

104% 

TOft 

ft 

50b 

3000 

111% 

112% 

ft 

7J1 

4000 

toft 

W% 

ft 

627 


Oder Capn 


86 


110 


UB% 

114% 

107% 

118 

86 % 

107 

115% 

107% 

108% 

114% 

110 % 

104% 


4% 

♦% 

♦% 

4% 

+% 

4 % 

+% 


176 


1 % 

1% 

4% 

4% 

4% 


256 

357 

430 

339 

405 

178 

298 

in 

432 

334 

401 


Banooltoaw098. 

SdnnAWDM 


BFCE-0329B 


BriKnta 110 96 E . 
CwrcJa-%99. 


COCEQOBEcu. 


Qedtftennala A OO . 
Dwmrek-%96 


Form d* St* 0.T0 97 . 
mandOW. 


[BSA85E. 

Mari 096 

My%98 


100 

KB 


AtataPm*miD%9acS GOO 104% 

Sal Canada 10 % 99 CS ieo 106% 

Britt Hum nnCSu^-. no 103% 

08 10% 98 C3 130 106% 

Bac de France 9% M CS ZB 104% 

OsnBKCapMIOBOCS u — 300 KB% 
.400 104% 


101 

in 

kq% 

108 41% 
111% 41% 
104% 


Nippon Til Tai 10% 99 CS . 
OntatoSCQ CS 


- 200 
1900 


106 

84% 


.500 107% 
Odw KenWdH* 10% 99 CS _ 150 106 

Ouab«Ptw10%98C$ 

Bd0rin9%96Ga 


Oaund Biopa 9 01 Ecu . 
OBdtLyemdaOOBEcu. 
110 97 ECU. 


200 106% 
ISO 104% 


Fenodd Stoll 0% 96 Ecu 
10 % 00 Ecu 


1100 106% 
. 125 103% 
,1125 1W% 

.no in 
urn 115 


656 span 096 Ecu. 


TOO 10t% 


IMad Nngdom 0% 01 Ecu — 2750 109% 

ABC 10 89 AS „ WO 106% 

BPAnariea12%98rt 100 107% 


CaimBk#uaarai3%WAS-100 120% 

8qpa8kuns12%tt5AS 75 106 

MGDaitoidaCBnadt1595AS— 100 106% 
NSWTnsajyZwoOfflAS — 1000 10 

R&IBa*7%03A$ 125 90% 

SB AtaT Owl Al 9 OB AS MO 96% 

Unlavar NtttnAa 12 99 AS 160 111% 


W% 

104% 

KJ7% 

101 % 

104 

105% 

106% 

94% 

108% 

108% 

108% 

*04% 

109 

KM% 

108% 

109% 

1ifi% 

101 % 

K£% 

106% 

106% 

120 % 

W6% 

KB 

10 % 


-% 

-% 

i 

-% 


9B% 

111 % 


■H 

-% 

-% 

-% 

-% 

-% 

-% 

-% 

■% 

-% 

-% 

>% 

-% 

-% 

-% 

-% 

-% 

-% 

-% 

-% 


757 

7.12 

7.12 

173 
553 
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A second tranche of the 
Portuguese Smaller Compa- 
nies Fund for institutional 
investors b to be launched <m 
June 7. 

Bear Stem Is lead manager. 
The Portuguese arm of Deut- 
sche Bank and Lisbon brokers 
Midas Investimeato will assist 
in thegSOm placement. 

A first $25m tranche of the 
five-year, closed-end equity 
fond, which is traded on the 
Luxembourg stock exchange, 
was placed in December. Hr 
Jo&o Rendetro. chairman of 
Gerigeste, the fond's manag- 
ers, said it had so far gained 
15 per cent, compared with 4 
per cent for the Portuguese 
equity market as a whole. 

The fond is focused an non- 
flnandal companies. The plac- 
ing will make it the second 
biggest Portuguese equity 
fund after the broader-based 
Capital Portugal Fund. 

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reports from Karachi 


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COMPANY NEWS: UK 


Dawson seeks £45m 
after heavy losses 


By Dsvfd Biackwefl 

Dawson International, the 
E dinbur gh-based textile group, 
yesterday announced a i-for-4 
tights Issue to raise more than 
£45m as it plunged into the red 
after provisions for the closure 
of its US fleece and jersey busi- 
ness. 

More than 39m shares will be 
issued at 120p. Yesterday they 
closed at 150p, up 6p on the 
day. 

Pre-tax losses for tee year to 
March 26 were £95 An, after a 
provision, of £50m and goodwill 
written off of £56.4m. There 
was a profit of £32. lm in the 
comparable period. 

Turnover was £443. lm 
(£431. 7m), inftliirifwp £58.8m 
(£76^m) from the rii«wiHnm»d 
US activities. Operating profits 
of £18.&xi (£37.2m) took account 
of lo sses of £l9.5m (£2. 71m) 
from the US operations. 

Sir Ronald Miller, executive 
chairman. said marirpt ccmdi- 
tions bad been appalling. “As a 
small player we did not stand a 
chance " 

The closure of the division 


soaked up £3Sm of the provi- 
sion. 

The remaining e»w was for 
Dawson Home Fashions, a 
maker of shower curtains and 
bath mats, which was hit by 
imports. The provision would 
cover its sale, which is under 
discussion, or its restructuring 
if the sale Ml through, Dawson 
said. 

Dawson Home Fashions 
incurred its first loss last year, 
of ft? . 9m on sales SSJJSax, com- 
pared with a previous profit of 
£4.6m on sales of £59 .5m. 

Operating profits from con- 
tinuing operations, erahi dfag 
Dawson Home Fashions, were 
ahe ad 17 per cent at £4Llm 
(£85L2m). Sir Ronald said: “We 
can see enormous potential 
coming through.” 

Losses per share were 64. 6p, 
compared with earnings of 
l&Sp. A final dividend of L5p 
is proposed, giving a total for 
the year of 3p (Bp). 

The proceeds from the lights 
issue will be used to develop 
and expand the core busi- 
nesses, particularly the inter - 
national branded clothing buai- 


Automotive Precision 
valued at £40.8m 


».* ■? ■ {, 


_ I 

l 


-* ** - 3 

. i* «• 


By Paul Taylor 

Shares in Automotive Prec- 
ision Holdings, the precision 
engineering company, were 
priced at loop yesterday valu- 
ing the group, which exports 93 
per cent of its production, at 

mam. 

Automotive Precisian, based 
in Tonbridge, Rent, is coming 
to market via a placing of 
10.2m shares with institutional 
investors by Beeson Gregory. 
The shares are due to begin 
trading on May 8L 

The company, which manu- 
factures high precision compo- 
nents for the international 
automotive industry, was the 
subject of a Efim management 
buy-oat from Hunting, the 
defence, aviation and ofl group, 
in December 1690. 

About 80 per cent of its 
export s go to customers in the 
US Including Chrysler and 
Detroit Diesel 

Same 80 per cent of t u r n over 


is covered by rolling contracts 
of between two and four years 
and the customer base has dou- 
bled since 1992. 

Last year the group reported 
profits before non-recurring 
items of £4.99 m (£A2nO on 
turnover of £16. 9m (£17.1m). 
Pre-tax profits slipped to 
£7 -91m (£2J>9m) after remuner- 
ation payments of £3.03m 
(£L24mX 

The bulk of the shares being 
placed, some 9.71m, are being 
sold by the five members of the 
buyout team. The remaining 


500,000 shares are being issued 
by the company to cover the 
Costs Of the placing . 

The management, led by Mr 
Stefan Petszaft, managing 
director, will retain roughly a 
70 per cent stake in the gro u p, 
but flaw to reduce tfa* The 
manag m-H had mffially plarmad 

to retain a 50 to 55 per cent 
stake but scaled down the sale 
because of the c onditio n of the 
market » 


NEWS DIGEST 


Low-level 
response to 
CLS offer 

The intermediaries offer for 
*i* CLS Holdings, the property 
company owned by the Swed- 
ish Mortstedt family, has been 
only 15 per cent subscribed. 

The London-focused property 
investment company bad fully 
underwritten an offer of 45jQ5m 
new shares at lllp, subject to 
clawback to cover applications 
for the lL26m shares offered to 
intermediaries. Applications 
were received for 1.64m shares. 

Archimedes Trust 

Archimedes Investment Trust 
achieved net asset growth of 
4.1 per cent over the six 
months to April 30 from 
676J>4p to 704.07P per capital 
share, compared with only a 
marginal rise In the bench- 
mark FT-SE-A All-Share Index. 

The figure for this split level 
trust 12 months earlier was 
545 -57p. 

, Net revenue for the six 
* months to the end of April was 
. l £154^27 (£170,007) giving eam- 
1 * ings per income share of 12-Kjp 
(l&88p). The interim, dividend 
is being maintained at 9p- 

; Monks Investment 

[ Net asset value per share of 
Monks Investment Trust 
:* I surged from 472. 2p to 59L6p 
‘ aver the year to April 30. 

- Available revenue, however, 
;■ * fell from £6.6Un to £5^m, equal 
| to 7.$? (&S2p) per share. The 
v 4 dividend is stepped up to 7p 
[ i (6.7p) net with a final payment 
; of 5p (4.7pX 

! Rathbone 

* Rathbone Brothers, the asset 
management and private bank- 


ing group, has acquired Even- 
sound, a London-based busi- 
ness comprising Bib introduc- 
tion of private client 
investment accounts and the 
provision of executive services. 

Consideration is via the 
issue of 185,387 new ordinary 
shares, valuing the acquisition 
at £515,000. The purchase will 
boost funds under the manage- 
ment of Rathbone by £3Sm. 

Ocean 

The outlook for 1994 remained 
uncertain at Ocean Group, 
especially in the first six 
months, Mr Peter Marshall, 
rhqim™". told the annual 
meeting. 

The shares reacted with a 
I3p fan to 274p. 

The distribution and logis- 
tics businesses continued to 
find continental markets 
depressed with a consequent 
pressure on margins. 

Andrews Sykes 

Andrews Sykes, which hires 
out and distributes engineer- 
ing, heating and air condition- 
ing equipment, said the 3.5p 
dividend for the six months to 
November 30 1993 on its con- 
vertible preference shares, 
which was sch e d u led far pay- 
ment in December 1998, would 
be paid on May 8L 

A decision on the preference 
div idend due on Ouse 1 will he 
taken later in the year. 

Shires Investment 

Net asset value per share of 
Shires investment rose from 
259.72P to 29241P over the 12 
months ended March 3L The 
fully diluted figure rose from 
250-35p to 284-4P- 

Attributable revenue of 

554.55m compared with £4.4m. 
Earnings emerged at 17.41p 
(17.48PX or 1099P (16J5P) toUy 
Hflirted- A Anal dividend of 4J)p 
makes & forecast 16.8p (18.foX 


DIVIDENDS ANNOUNCED 


Cimnt 

payment 


Date of 
payment 


Corrav - 
pondng 
dMdand 


Total 

for 

yaw 


Total 

test 

year 


AfchkMdM Truat — bnt 

BCT fln 

Caakat« fln 

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an 

08 

5 

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1* 

1.12 

6-7 

2J25 

5 

2A1 

43 

25 

025 

ai 


Aug 5 
Jufy 15 
Oct 3 


July 22 
July 15 
July 20 
July 1 
Aug 5 
July 8 
Aug 2 
AU0 13 

July 20 

Oct 7 
Jiiy4 
July 22 


9 

1.25 

05 

ai 

0525 

0575 

1 

1.12 

5JB 

1.5 

4.7 

2*1 

SJB 

23 

025 

03 


3.25 

1.1 

3 

1.15 


&j82 
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3.44 

16.8 

34 

025 


20 

025 

08 

9 

08 

105 

49125 

3.82 

ai 

53 

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3M 

104 

32 

025 

03 


neSS and the Mnrym fhonnal 
underwear business in the US- 
The group will also reduce bor- 
rowings and redeem up to 
SZIJSm of 9375 per cent ccar 
vertttle preference shares. 

Gearing at March 26 was 67.4 
per cent If the convartible 
shares are treated as ‘tighnwaa; 
37.4 per emt if they are treated 
as equity. Fro forma net gear- 
ing would be 20 J per cent. 

The rights issue would have 

the effect of restoring share- 
holders funds, which fell from 
£163.4m to gns.im at March 26, 
to £160 £m. 

The issue has been under- 
written by Samuel Montagu, 
Goldman Sachs and Noble 
Grossart Broker to the issue Is 
Cazenove. 


The figures are horrendous, 
bat were well flagged at the 
beginning <rf March. It could be 
argued that there is no need 
for the rights issue as the 
remaining operations are cash 
generative. On the other hand 
the underlying businesses look 
undervalued, with pendHed-in 
profits of a little less than 
£3Qm giving a p ro sp e ctive mui- 
tqde of fa the ffaai analy- 
sis shareholders will simply 
have to ask themselves if the 
w>anagigm«Tft that got frntn such 
a mess deserves backing. 


Enlarged 
Casket rises 
to £3. 6m 

By Peggy HoOhger 

Strong demand from abroad 
helped Casket, Britain’s sec- 
ond-largest bicycle manufac- 
turer, boost annual pre-tax 
profits by 27 per cent to £3.6m. 

The company, which claims 
25 per cent of the HE market, 
increased exports by 26 per 
cent Profits for the year to 
end-March were also helped by 
tee £L3m acquisition of a Ger- 
man bicycle company in 
November, which con t r ib ute d 
£395,000 at the prefox level. 
Sales were 8 per cent higher at 
£103£m. 

Mr Joe Swtfh, chief execu- 
tive, said the underlying bicy- 
cle business bad shown Hke- 
for-like growth of 18.5 per cent 
in the year. Demand for Cas- 
ket's range of brands had been 
particularly strong in Ger- 
many, France and Ireland, he 
said. 

The results included the 
final costs of a laug-nunring 
legal action over accounting 
practices at Kingsley A For- 
ester , a clothing . company 
merged with Casket in 1968. 
The group incurred net excep- 
tional costs of £453,000, bring- 
ing the total costs of the six- 
year suit to about £650,000. 

The final dividend is 
increased to 0.7p ma kin g a 
Lip (OJtp) total Ea rnings rose 
by 26 per cent to 3J9p. 


Placing and open offer to fund GBA purchase for up to FFr85. 9m 

French buy for Coutts Consulting 


By Paul Taylor 

Coutts Consulting Group, the 
career consultancy, outplace- 
ment and residential training 
company, yesterday agreed to 
acquire GBA Group of France 
for a maximum FFr85. 9m 
(fiio.im). 

The proposed acquisition of 
GBA, one Of the leading out- 
placement and career counsel- 
ling groups m France with 130 
employees, will consolidate 
Courts’ position as Europe’s 
largest outplacement group 
with 33 offices in six countries. 

Mr Stephen Johnson, chief 
executive, said the deal would 
enable the expanded group to 


serve its mnhjnfttiftWiI riiwils 
across Europe better. He said 
the expansion ctf outplacement 
operations into continental 
Europe bad been a vital ele- 
ment in the strategy for devel- 
oping the groupL 

Coutts will pay an initial 
FFr47.2m, including FFr39.7m 
in cash, with the balance satis- 
fied through the issue of 
971^66 shares to the vendors. 
Op to a further £A5m will be 
paid subject to GBA meeting 
profit targets in 1994 and 1995. 

GBA reported pretax profits 
of FFT7.7m for 1993. 

The acquisition will be 
funded, in part through a plac- 
ing and open offer at 85p 


designed to raise £6-4m includ- 
ing £Um net of new money. 
The shares are being offered on 
the basis of 8 new shares for 
every 29 shares ^ 

13.137 new shares for every 100 
convertible preference shares. 

The 7.56m new shares have 
been conditionally placed with 
institutional shareholders by 
Collins Stewart, subject to 
daw-back. Courts’ shares 
dosed unchanged yesterday at 
91p. 

Part of the proceeds of the 
share Issue will be used to pay 
£730,000 of dividend arrears on 
convertible preference shares, 
enabling the group to resume 
dividend payments on tee ordi- 


nary shares at the interim 
stage later this year. 

The company has undergone 
a substantial restructuring 
over the past 30 months, 
including replacing Mr Barry 
Topple, its chief executive, and 
appointing Sr Kit McMahon, 
former chairman of Midland 
Bank, as nonexecutive chair- 
man. 

Following the acquisition 
and the completion of the sale 
of Winkfleld Place, the group’s 
vacant Berkshire property, for 
£L4jn due at tee end of May, 
the enlarged group will have 
net borrowings of £4m, equiva- 
lent to gearing of about 50 par 
cent 


Fairline powers ahead to £350,000 


By CartAm Southey 

Fairline Boats, the Peterborough-based 
luxury powerboat maker, mare than dou- 
bled interim profits as UK sales rose 29 
per cent and some export markets 
improved. 

Profits rose from £161,000 to £350,000 
pre-tax for the six to tine ^ of 

March. 

Optimistic tha* the half would 
show a gfanUar rate of growth, the com- 
pany declared a 40 per r en t increase in 
tee interim dividend to 5p (3J575p), pay- 
able from earnings pear share of 6.74p (Sp). 
The shares closed up 40p at 435p. 


Sales rose by 18 per emit to £17.6m 
(£l&2m) of which direct exports, up 12 
per c ent , accounted for 70 per cent and 
additional foreign sales by OK distribu- 
tors acco un ted for an estimated 20 per 
cent 

Mr Sam Newington, chairman, said con- 
ditions bad been better than he had expec- 
ted although confidence in same overseas 
markets “is not as strong as we would 
Hie”. 

Although sales to Germany have been 
holding up, tee French Italian market 
had pr ove d “tricky”, he said. But improv- 
ing consumer confidence in the domestic 
market and continental Europe was 


leading to higher sales. 

The company hopes to raise margins by 
reducing the number of models and hold- 
ing down raw material costs which 
account for 60 per cent of production 
oosts. 

The order book stands at about £10m, 
more than 50 per cent higher than a year 
ago. Two new models will be launched at 
the Southampton Boat Show in September 
to supplement the four introduced In the 
last 12 months. 

Increased production is likely to be met 
by reopening of one of the group’s facto- 
ries near Pet e rborough- Net cash at the 
end of the six months was 


Votto-iyneTeas int 

show pence per stare ML tOn increased cwsnL §USM sto^ 

«artar dteributtoo. 


RESULTS FOR THE FINANCIAL YEAR 1993/94 


MARKS & SPENCER 


GROUP PROFIT 
BEFORE TAX 
UP 16% TO A 
RECORD 
£852 MILLION. 


Outstanding Value campaign drives 
U.K. sales growth of 10%. 

Earnings per share up 16%. 

Full year dividend increase of 14% 
proposed. Up 30% over 2 years. ■ 


Copies of the report and accounts for 1993/94 will be mailed to shareholders from the 15th June, 


StTftiehaeL 


«. , 



24 


COMPANY NEWS: UK 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


Restructuring complete but difficult trading conditions persist 

BET ends year £92m in 


£1.97bn, in spite of a £61m 


Thorn EMI at £327m 
and disposals planned 


By Andrew Bolger 

BET, the business services 
group which over-expanded by 
acquisition during the 1980s, 
said its restructuring was com- 
plete, but warned that pressure 

OQ marg ins and difficult trad- 
ing conditions persisted across 
much of the group. 

Mr John Clark, chief execu- 
tive, said: “We expect to see 
earnings improvement coming 
from better productivity rather 
than increased selling prices.” 

BET made a pre-tax profit of 
£92m in the year to April 2, 
compared with a loss of £9-8m 
in the previous year, which 
included £76m of exceptional 
costs. 

Restructuring costs of £42m 
were incurred this time, of 
which £34m had already been 
provided for. 

Turnover fell by 9 per cent to 


By Raymond Snoddy 

Yorkshire-Tyne Tees Tele- 
vision has proposed a program- 
ming-making alliance with 
Thames Television, the inde- 
pendent production company 
now owned by Pearson, the 
media and entertainment 
group which owns ttys Finan- 
cial Times. 

YTT would like to make pro- 
grammes with Thames for sale 
to international markets. 

The Leeds-based ITV com- 
pany, which yesterday 
announced a pre-tax loss of 
£4. 6m (profit £3.6m) for the six 
months to March 31, is also 


favourable currency effect, 
mainly because of divestments. 
The group said a further 17 
non-core businesses had been 
sold during the year, and the 
disposal programme was now 
complete. 

Mr Clark added: “I said when 
appointed that it would take 
three years - and it has. We 
have gone from 160 disparate 
profit centres to a set of four 
focused businesses.” 

BET had net cash of £67m at 
the year-end, compared with 
debts of more than £lbn when 
Mr Clark and his new tram 
arrived. 

The chief executive said his 
priority would be to invest in 
organic growth and “bolt-on” 
acquisitions, although he 
would consider a bigger pur- 
chase “if the right one came 
along". 


Ifnkfng up with large advertis- 
ers to maka prog rammes. 

A new drama series. The 
Wanderer, which was 80 per 
cent financed by Procter & 
Gamble and was turned down 
by the ITV network centre has 
instead been sold to Sky Tele- 
vision. 

Increasing programme pro- 
duction, particularly for new 
markets outside the ITV net- 
work, is one of the strategies 
being pursued by Mr Ward 
Tho mas , YTTs chairman. 

At the same time he is trying 
to increase the company's 
share of ITV advertising. Last 
year its reached a low of 


The group said the speed of 
its success in improving perfor- 
mance would depend on efforts 
to improve productivity and 
marketing skills. Higher pro- 
ductivity would enable it to off- 
set inflation and price pres- 
sure, while the marketing 
programme was aimed at 
developing value-added ser- 
vices in new areas. 

Operating profit from busi- 
ness services rose from £14. Im 
to 23L8m. although the previ- 
ous figure was depressed by 
the £lL5m share of the £76m 
exceptional item allotted to the 
division. BET said the underly- 
ing 24 per emit growth in oper- 
ating profits was helped by 
margin improvements in UK 
c leaning and security services 
and US personnel services. 

Distribution services turned 
in an operating profit of 
£30.8m, against £9.3m, or 


just below 10 per cent 
By cutting costs the ITV 
company, which paid a total in 
licence payments up from 
£15-2m to £30.4m to the Inde- 
pendent Television Commis- 
sion, lifted operating profits 
from £19 An to £24. 7m. 

Mr Thomas said that the 
advertising deal problems were 
now a matter of history. Settle- 
ments had now been made in 
full with all advertisers and 
the company now had an 
ungeared hainnca sheet. 

Analysts were now looking 
at pre-tax profits of between 
£5m to £7m for the ftiH year. 
Mr Thomas said he “looked 


black 

£20An minus £lL5m of excep- 
tional. Underlying growth of 
48 per cent comprised rises of 
£5m from the US, £3m from 
Europe and £2m from Africa. 

Plant services increased 
operating profit to £18An 
(£16.8m), or £26. 5m min us 
£30. 7m of exceptional. Lower 
margins led to the 29 per cart 
fall in underlying performance, 
in spite of a good showing in 
the US. 

Textile services’ operating 
profits rose from £5. 6m to 
£35 .4m, or £28. lm minus £225m 
of exceptionals. BET said 
unproved marg ins from this 
business caused the 26 per cent 
increase in underlying profit- 
ability. 

Earnings per share of 6£p 
compared with losses of 4p last 
time, a final dividend of 2^5p 
maintains the total at 3J25p. 

See Lex 


forward with confidence to a 
measured and improving share 
of the total advertising cake 
and a consequential improve- 
ment in revenue through the 
rest of the year”. 

Turnover fell from £126m 
last time to £107.7m as adver- 
tising revenue dropped by 
£20m. Some of the leeway was 
made up by significant job 
losses. Staff costs fell from 
£ZL9m to £i7-8m- Losses per 
share were 6.1p (3.3p earnings). 
The company is declaring a 
nominal interim dividend of 
O.lp (3-3p). 

The shares closed yesterday 
down 7p at 312p. 


BTR gives 
directors 
up to 17% 
more pay 

By WDDam Lewis 

Directors of BTR, the 
industrial conglomerate, have 
received hagic salary increases 
for this year of up to 17 per 
cent And it has emerged that 
an unusual guarantee has 
been given to chief executive 
Mr Abm Jackson: his salary 
cannot be cut. 

A clause in Mr Jackson's 
contract states that his annual 
pay review “shall not result In 
payment of salary less than 
that paid during the 12-month 
period preceding such review”. 

The rises took effect on Jan- 
uary 1 and so did not feature 
in the 1993 annual report, pub- 
lished last month. 

BTR, which holds its animal 
meeting in London tomorrow, 
reported a 19 per emit rise In 
pre-tax profits last year to 
£L28bn and increased its full- 
year dividend by 13 per cent to 
12.25p. The consensus City 
forecast is for a 12 per cent 
increase in profits this year. 

Ms Kathleen O’Donovan, 
finance director, has the larg- 
est increase. A S30JHK) - or 
17.6 per cent - pay rise takes 
her basic salary to £200,000. 
Mr Jackson has received an 8.4 
per cent rise, taking his 
annual pay to A$1.23m 
(£600,000). ms service agree- 
ment is with BTR Nytex, an 
Australian company in which 
BTR has a 60 per cent stake. 

Mr Norman Ireland. BTR's 
chairman, will be paid 
£213,830 this year for a three- 
day week, slightly less than 
received by Sir Owen Green, 
the previous chairman, in Us 
final year. 

Mr Michael Smith earns a 
basic salary of £281,000 and 
has a contract which guaran- 
tees Mm a three-year notice 
period. This remains in place 
despite recent moves by Insti- 
tutions to limit notice periods 
to one year. Mr Robert Fair- 
dough, whose salary has beat 
increased from $705,000 to 
$750,000 (£500,000), has a simi- 
lar clause but his contract 
runs only untQ September 
1996. 

There is also likely to be 
shareholder concern over a 
$3.5m payment made to Mr 
Edgar Sharp, formerly presi- 
dent of BTR Inc, the main US 
subsidiary. About $lm of this 
was paid to Mr Sharp before 
December 31 1990, with the 
rest going into a pension trust 
which he was eligible to 
receive from January 1 this 
year. 

The company said that the 
payment “has been paid in 
accordance with his contract”. 
Mr Sharp is to remain with 
BTR as a non-executive direc- 
tor after his contract ends in 
June. 

BTR declined to comment on 
the rises yesterday. 


Cassell shares 
placed at 143p 

By Andrew Bolger 

Shares in Cassell, best known 
as a publisher of dictionaries 
and reference books, have 
been placed at 143p, giving the 
group a market ca pitalisa tion 
of £l(L5m - considerably less 
than the figure of £15m 
mooted when the plan to float 
was unveiled in early AprIL 

Mr Philip Sturrock, chair- 
man. said: “We are pleased to 
have got it away in present 
market conditions. I believe a 
lot of floats have been pulled. 
We felt it was better to price it 
keenly and carry on." 

A total of 6.27m Cassell 
shares were placed with insti- 
tutions by Charterhouse Bank, 
with Charterhouse TUney act- 
ing as broker, at 13 times his- 
toric earnings. Trading will 
begin on June 2. 


By Michael SScapinker, Leisure 
Industries Correspondent 

Thom EMI said yesterday that 
it was negotiating to sell its 
security business and part of 
its defence subsidiary. 

A sale of the businesses 
could precipitate a demerger of 
its core music and rental divi- 
sions. 

The group said it was inter- 
ested in entering book publish- 
ing, if it could find the right 
company to acquire. 

Thom yesterday announced 
pre-tax profits of £326.5m for 
the year to March 31. That 
compared with a restated 
£273.5m last time, but fell 
below market expectations. 

The shares fell 28p to £1068. 

Sir Colin Southgate, chair- 
man, said the group was in 
“detailed negotiations” to sell a 
majority stake in its security 
business. Thom would retain a 
minority interest, he said. 

He added that the group was 
negotiating to sell part of its 


By David Blackwell 

Readicut International, the 
household textile, carpeting 
and yam company, lifted pre- 
tax profits by 8.7 per cent to 
£20.9m for the year ended 
March 3L 

Mr Clive Shaw, managing 
director, yesterday described 
ormditimis in the group’s mar- 
kets as “far from ideal". UK 
recovery was irregular, mar- 
gins remained under pressure, 
the US recovery was slow and 
Europe was still in recession. 

Total turnover moved ahead 
from £2?$ Tn to £238m. The lat- 
est figure ineluiles £36.4m from 
discontinued operations, com- 
pared with £439m last time. 

The pre-tax profits included 
£3.9m from the disposal last 


By Raymond Snoddy 

TeleWest Communications, the 
largest cable television opera- 
tor in the UK, has borrowed 
£195m to complete its Scottish 
cable networks. 

The eight franchises in the 
central belt of Scotland cover 
632,000 homes ranging from 
Edinburgh and Perth to Dun- 
dee, Motherwell and Livings- 
ton. 

The loan facility, which 
matures in December 2003, was 
arranged by Canadian Imperial 


which has been on the market 
for several years. 

Sir Colin said the negotia- 
tions were with a continental 
European defence group. Nego- 
tiations with GEC have taken 
place on several occasions over 
the past few years. 

Sir Colin said about £40Qm of 
turnover came from activities 
regarded as peripheral Thom 
was currently negotiating to 
sell businesses representing 
just over half that amount. 
Total turnover for 1993-94 was 
frishn, compared with £4J>bn 
last Hrn». 

Mr Simon Duffy, finance 
director, said the group was 
interested in moving into book 
publishing, a field in which it 
could use its expertise in copy- 
right management. 

He added- “We’re looking at 
opportunities in the book pub- 
lishing business. It’s got to 
be available, it’s got to be 
the right fit and the right 
price." 

The group has renamed its 
rental business Thom Group, 


month of Firth Furnishings, a 
maker of car carpets, and the 
sale last October of Readicut 
Wool, the distributor of rug 
kits, knitting yam and handi- 
craft products. 

This compared with profits 
of £ 4 2m from disposals in the 
previous year, when pre-tax 
profits were £ 19.2m. 

In the key carpet division 
operating profits were up from 
£3.78m to £6.73m on sales of 
£88.4m (28L3m). Mr Shaw said 
profits at Firth Carpets moved 
from £900,000 to £2.1m on the 
back of a 20 per cent rise in 
contract carpet sales. 

The group lifted capital 
spending from £11. 8m to 
£l4JSm during the year, and Is 
planning to spend £15.2m in 
the current year. 


Bank of Commerce and is 
underwritten fay C1BC, Bank of 
New York, The Bank of Nova 
Scotia, British Linen Bank, 
First National Bank of Boston 
and The Toronto Dominion 
Bank. 

The loan is structured in two 
tranches, one of which has 
recourse to TeleWesfs share- 
holders, Tele-Communications 
and US West 

TeleWest said Edinburgh 
was one of its best franchises 
for both television and tele- 
phone services. The other Scot- 


differentiating it more clearly 
from EMI Music. Thom Group 
is run from the UK, while the 
music subsidiary has Its head- 
quarters In New York. 

Sir Colin said yesterday that 
splitting the two divisions 
could only be considered when 
the peripheral businesses have 
been sold. 

Mr Duffy said that once this 
had happened, media or film 
companies which were not in 
the music business might be 
interested in linking up with 
EML 

Operating profits were 
£3S2.5m, compared with 
£379.3m. Music profits were 
£246.1m (81969m) and those for 
rental £l309m <£U5Jm). 

The recommended final divi- 
dend Is 25p, bringing the total 
pay-out to 34p (32p). Fully 
diluted earnings per share 
were 47.7p (43p). 

Sir CoUn said the increased 
dividend reflected the group’s 
confidence in its prospects dur- 
ing the current year. 

See Lex 


Earnings per share were 
ahead from 7.5p to 794p. 
An unchanged final dividend 
of 291p Is proposed, maintain- 
ing the total for the year at 
3.44p. 

• COMMENT 

This was a solid set of results, 
in a difficult year, from a well- 
managed company that has 
successfully got out of Its non- 
core, low-margin businesses. 
Profits this year are expected 
to be about £18 .5m, giving a 
prospective multiple of 15 - 
not cheap, but a good share to 
hold in the textiles sector. The 
unchanged dividend looks a bit 
mean for a group that aided 
the year with net cash of 
ElO.lm. The question now is: 
what is it going to buy? 


tish franchises were bought 
from Post Newsweek late last 
year. 

TeleWest has announced its 
intention to float cm both the 
London Stock Exchange and 
the Nasdaq market in the US 
later this summer. The float 
will be the first by a UK cable 
group and is likely to value the 
company at about £1.7bn. 

TeleWest owns and operates 
16 cable franchises and has 
minority interests in three 
other companies which operate 
seven further franchises. 


B 0 


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Cash-rich M&S earmarks 
£lbn for store expansion 


By NeO Buckley 

Marks and Spencer said yesterday that it was 
accelerating its expansion programme and 
expected to spend more than £ibn over the next 
three years. 

The company said annual capital spending 
would rise from last year’s £28 lm, and might 
reach £450m if the right opportunities were 
available. 

Sir Richard Greenbury. chairman, said: 
“There really Isn't any constraint We have got 
plenty of cash and we are in an aggressive 
mood regarding expansion.” 

Comparatively little would go on new UK 
stores. M&S eventually plans 25 out-of-town 
centres, but already has 17. Rather more would 
be spent on expanding existing town-centre 
stores. 

Sir Richard said stores now needed between 
80,000 sq ft and 1204)00 sq ft of space to accom- 
modate tiie foil range of clothing, food and 
furnishings, but added that many were smaller. 

The second focus for expansion wonld be con- 
tinental Europe, where sales rose 3 per cent last 


year to £243UJm although profits slipped from 
£27.3m to £27.1m In a difficult trading dtomta. 

The emphasis would be on France and Spain, 
with new stores opening on the Rue de ffivoli 
in Paris, and in Valencia. 

The third focus would be east Asia, where 
sales grew 38 per cent to £56.6m, and profits 43 
per emit to £15^m. 

Sir Richard expected his main task as chair- 
man would be building the business in conti- 
nental Europe, leaving east Asia for his succes- 
sor. But the company's stores in Hong Koug 
and elsewhere have exceeded all expectations, 
forcing him to move more quickly. 

In addition to south-east Asia, the company is 
under pressure to take its retaffing expertise 
into Japan and China - in the former from 
trading c ompanies, and in the latter from the 
government. 

Sr Richard said both markets offered huge 
opportunities, but start-up costs were high and 
caution wonld characterise IMS’s approach. 

In the US, the emphasis was on bringing the 
performance of Brooks Bros up to the standard 
of the rest of the group. 


Exceptional treatment revised 


By Andrew Jack 

rut hag a g r e e d to anumH the treatment of 
exceptional items in its 1993 report and 
accounts following discussions with the 
Financial Reporting Review Panel, the UK 
accounts watchdog. 

The effect will he to eliminate a series 
of separately itemised exceptional items 
totalling £76m an the face of the profit 
and loss account and re-allocate them. 

The adjustment comes after discussions 
with one of the largest companies the 
panel has examined. Other large cases 
include British Gas and Trafalgar House. 


The review panel said yesterday it 
acknowledged BET had disclosed the 
nature of the exceptional items in the 
notes to the accounts. However, it “felt 
that this did not fulfil the requirement of 
the standard that these items should be 
shown on the profit and loss account 
undo 1 the statutory format headings to 
which they relate”. 

In a revised note to the accounts, BET 
has had to re-allocate the exceptional 
items between cost of sales and adminis- 
trative expenses. 

The panel is believed to have been con- 
cerned about the presentation of the 


exceptional items in boxes and comments 
in the chairman’s statement winch drew 
attention away from the pre-tax profit 
line stressed in FRS 3. 

BET said last night: “This was a techni- 
cal detail probably of most interest to 
those in the accounting profession. The 
analysts did not ask one question about it 
this morning.” 

It said it had adopted FRS 3 earlier 
than many companies and there was a 
lack of clarity about how it should be 
implemented at the time. It believed its 
original treatment was more helpful in 
showing its underlying performance. 


Yorkshire-Tyne Tees deal with Thames 


lossmaking defence business, 

Readicut advances to £20.9m 


TeleWest takes on £195m debt 
for Scottish cable networks 








"ii f 1 95m 4 
li' networks 




COMPANY NEWS: UK 


25 


Lep may partly float 
US arm to cut debt 


By DavM Wtghton 

Lep Group, the lossmakmg 
freight forwarding and security 
group restructured by its 
banks in 1992, is considering a 
partial US flotation of its 
A merican security business to 
reduce its £400m of debt 

Ur David James, the com- 
pany doctor who was brought 
in as chairman by the banks, 
said he was “mindful of the 
opportunity for a major refi- 
nancing” of National Guardian 
given the "very favourable 
market conditions’*. 

He said that electronic secu- 
rity companies, of which 
National Guardian is one of 
the top four in the US, have 
been accorded high share rat- 
ings on Wall Street, partly 
because of strong market 


growth following the bombing 
of the World Trade Centre. 

He stressed that the group 
would not consider floatin g off 
the whole of the subsidiary 
an d had turned away potential 
trade buyers. 

National Guardian increased 
its operating profit from £i3m 
to £L93m last year, on turn- 
over or £i27An (gino gm) help- 
ing to push the group operat- 
ing figure to ssasm (£24.9m). 
The banks’ debt-for-equity 
swap in 1932 cot Lep's interest 
bill to £37.4zn (£48. im), reduc- 
ing the pre-tax loss from 

£3&3m to £16.6m. 

The freight forwarding 
division made its first 
net profit since I9S8 with 
the North American and 
Asia Pacific businesses 
performing well and signs 


of recovery in Europe. 

The company repeated previ- 
ous warning s that there would 
be no return to div idend pay- 
ments for the foreseeable 
future. Losses per share were 
esut to 2L2p (9. Tp). 

Group borrowings rose to 
£41Qm (£886m) because of crys- 
tallisation of bank guarantees, 
the rise in the dollar and acqui- 
sitions by National Guardian. 
But debt will be reduced by 
£87.5m following January's 
sale of Swiss Ramie House. 

Shareholders’ funds fen to 
£40J3m (£45 .3m) compared with 
a market value of £43J5m with 
the shares unchanged at 4%p. 

Mr James said that the sub- 
sidiaries' profits would have to 
advance farther fin- their real- 
isation price to walra “a signifi- 
cant impact on care debt”. 


Lower interest 
buoys Hozelock 


Metro 
Radio 
doubles 
to £1.65m 

By Chris Tlghe 

Strong turnover growth and 
control of operating costs 
helped Metro Radio Group, the 
USH-quoted radio station 
operator, report pre-tax profits 
more than doubled from 
£797,000 to £L65m ter the six 
months to mid-March. 

The outcome was struck on 
turnover up by 26 per cent 
from £8m to £10llm. The 
interim dividend, which is 
raised from l-5p to Z25p, is 
covered nearly three times by 
earnings per share of 6.4Sp 
(3.13p). 

Advertising revenues were 
up 39 per cent nationally, and 
27 per cent overall. The com- 
pany attributed this to greater 
economic confidence and 
radio's growing credibility as 
an advertising medium. 

The company said the sec- 
ond half had begun strongly 
and it expected the ftiH year to 
show significant growth. How- 
ever, because national adver- 
tising revenue began improv- 
ing to last year’s second half, 
directors said It would 'tie 
unrealistic to expect the toll 
year to show such large per- 
centage rises as the interim 
results. 

Cashflow resulting from the 
growth to profitability in 
recent months has enabled the 
group to reduce its medium 
term loan from £L9m at Mid- 
September 1993 to £lm at 
March 31. 

A further £500,000 wffl be 
repaid on May 31 and Mr John 
Josephs, managing director, 
said he expected the company 
would have no borro w ings by . 
the year end. 

Metro, which operates seven 
independent radio stations to 
north-east England and York- 
shire, said it intends bidding 
ter one of the two new London 
FM licences. 


By David Blackwell 

Hozelock, the garden 
equipment manufacturer, dou- 
bled pretax profits in its first 
half reflecting the. benefits of 
last November's flotation. 

Pre-tax profits for the six 
months to March 26 rose from 
£967,000 to £2.Q2UL 

At the operating level, 
profits were ahead IB per cent 
at £2. 06m, compared with 
£X.7fih. Turnover advanced by 
8 per cent, from £13 .2m to 
£14Am_ 

Net interest payable fen to 
£36,000 (£774,000). The group, 
which realised £4m from the 
flotation after paying back 
debt, ended toe half with net 
cash of £gm. 

Mr Donald Potter, ftaanra> 
director. said the company 
traditionally encountered the 
heaviest demands on working 

capital at the and of Marah 

But it had negotiated better 


By Kentwlh QootSng, 

Mining Correspondent 

The future of Butte Mining, the 
UK company whose main 
activity is prosecuting US law- 
suits - it is seeking damages of 
up to |lbn (£670m) from termer 
managers and promoters - 
looked more secure yesterday, 
the directors stated, after the 
promise of an inflow of fresh 
funds and hopes of a favoura- 
ble US appeals court hearing. 

Butte's former Australian 
subsidiary, Yam, which is now 
called HiUgrove Gold, has com- 
pleted a fund-raising exercise 
which will result in the UK 
company receiving about 
A|500,000 (£244,000) to debt 
repayments. 


payment terms from its 
suppliers, and had brought for- 
ward some payments by cus- 
tomers. 

Shares to the group closed 
yesterday at 2S0p, 2p up on the 
day and level with toe flotation 
pricing. 

Mr David Codhng, chief exec- 
utive, said the group had taken 
a record 67 per cent of the core 
UK watering market, with 
sales ahead 12 per cent The 
aquatics division, which makes 
pond equipment, lifted sales by 
64 per cart. 

The group will move into its 
new factory at Sutton Cold- 
field, West Midlands, in early 
July, giving tt time to settle in 
during the low point of the 

iwnnifarJiirjng y aay . 

Mr Codling described the 
move as “Kke moving from the 
Dark Ages to toe modem age”. 

Earnin gs per share were 5 .3p 
(2-6p). A midden interim divi- 
dend of 23p is declared. 


Mr Graham Andrews, Butte’s 
finance director, said toe com- 
pany also intended to sell 
its remaining 5 per cent 
stake in HiUgrove Gold 
to raise about another 

A$35G,000 (£1?1#M). 

The proceeds would partly 
he used to pay Butte’s farmer 
Australian, legal advisers - its 
last debt not related to toe US 
court cases - and this would 
leave the company with about 
£200,000. 

Mr Andrews said that the US 
appeals court hearing should 
result in the judge in Montana, 
where Butte is prosecuting 
its cases, soon starting 
pre-trial processes which 
might lead to toe full hearing 
in 1995. 


Butte future aided 
by fresh funds 


Chairman reiterates call for small shareholders to reject bid 

Lasmo board comes under attack 



AtoHapar 

Rudolf Agnew: dismissed £l.4bn Enterprise bid as ‘junk paper* 


omy to marked decline,” he it might accomplish”, 
said. As for his own role, he was 

Mr Agnew said he would prepared to leave if that is 
look at the idea of freezing what shareholders wanted, 
directors' salaries, although After all, he Bald, *1 don’t have 
he “was not sure what to work for you.” 


United 
Carriers 
unsettled 
by warning 

By David WIpMon 

Shares in United Carriers fen 
sharply yesterday as it became 
the latest company to issue 
a profit warning shortly after 
going public 

The shares dropped 33p to 
115p, compared with toe 
February flotation price of 
I53p, after toe parcel and 
frelfdit company admitted to 

having suffered an 
“exceptionally tough” April. 

As a result it predicted that 
this year’s profits would be 
“somewhat less” than 1993’s 
figure of £4.lm. Analysts had 
been expecting at least £4JBql 

The group said that trading 
to February and March had 
beat in line with expectations 
bat that in April the parcels 
and freight business had seen 
volumes down by about 5 per 
cent on last year. 

"The tell arose from a 
significant reduction to 
volumes from the underlying 
. customer base as well as a net 
loss of business arising from 
competitive pressures.* In 
particular, tt is thought that 
United lost market share to 
Lynx, the NCF subsidiary, 
after fatting to respond to 
price cuts. 

United said that during May 
tt has gradually begun to 
reduce the volume shortfall. 

In part by securing new 
business. It added, however, 
that it was nnUkely that the 

sho rtfall to flm paTC fj fl and 
freight business will be 

reco u ped during the 
remainder of 1094 with the 
company predicting flat 
volumes compared with 1993. 

Trading in the rest of the 
group, notably in the 
specialist transport and 
distribution businesses, has 
exceeded expectations, but 
this has not been sufficient 

to make up for the shortfall 
elsewhere. 

Directors sold about £4£m 
of shares tn the February 
placing, which was sponsored 
by hazards with UBS acting 
as broker. 


By Robert Cordne 

Lasmo, toe oU exploration 
company, yesterday took Its 
battle to fight off a h os ti le bid 
from fellow explorer Enterprise 
Oil directly to its share- 
holders. 

The prospect that even rela- 
tively small Investors may play 
a decisive role to determining 
Lasmo’ s fate meant that Mr 
Rudolf Agnew, chairman, and 
Mr Joe Darby, chief executive, 
had to be particularly persua- 
sive in convincing those who' 
attended the meeting at Lon- 
don’s Barbican of toe wisdom 
of rejecting Enterprise’s over- 
tures. 

Mr Agnew dismissed as 
“junk paper” the £i.4hn Enter- 
prise bid, which so ter does not 
have a (ash sweetener. 

“The Enterprise bid is anon- 
sense. There is no reason why 
Lasmo’s shareholders should 
give away their bright 
future to solve another compa- 
ny’s internal problems,” he 
said. 

The new chairman also dis- 
missed concerns expressed by 
one shareholder that there 
might be some truth to 
Enterprise allegations that 
Lasmo will remain financ- 
ially weak in spite of 


By Jean Marshal 

Shares to Cementone fell 16p 
to 8Qp yesterday as Mr Alan 
npmprrtg chairman, told the 
atiimaT meeting that first h a l f 
profits would be “materially 
lower than market expecta- 
tions”. 

The specialist paints and 
building chemicals maker 
came to the market to January 
via a reverse takeover of Multi- 
trust, the property investment 
company. Its shares, which 
were placed at 73p, began trad- 
ing ahead of expectations at 
87p. 


its recent rights issue. 

"We’re in good nick,” he 
said. 

Mr Agnew had more prob- 
lems when another share- 
holder recited a litany of 
alleged violations of the Cad- 
bury code on corporate gover- 
nance. 

In a statement which was 
warmly received from the 
floor, the shareholder criticised 
the rolling contracts enjoyed 
by some directors. 

He also questioned whether 
“overtime” provisions ter toe 
nhairmy n and deputy Chair- 
man ammmting to £700 a day 
were warranted. 

* A suggestion, that Lasmo’s 
directors freeze their salaries 
and other terms of compensa- 
tion until the dividend could 
he raised substantially was 
also warmly received from 
the floor. in sharp 
contrast to toe icy glare from 
Mr Agnew. 

He accused the elderly share- 
holder of being an “effective” 
propaganda tool ter toe “oppo- 
sition”. 

He »Tso claimed to st Lasmo 
conformed to the Cadbury 
code, although he made no 
secret of his distaste for many 
aspects of it. “Much of 
Cadbury is linked to an econ- 


Mr Clements said that 
iwtenff* margin pl e asure from 
competitors in conjunction 
with promotional activities in 
both toe paints gad chemicals 
market sectors had resulted in 
a continuing squeeze on mar- 
gins. 

Management had taken 
action, he said, which had 
already resulted to margin and 
profitability improvements. 

Hie was confident that nor- 
mal levels of profitability 
would be restored to the seo 
ond ball For the year to 
December 31 1993 pre-tax prof- 
its were Cl-glm (£935,046). 


NEWS DIGEST 


with the disposal of Montana 
Talc Company for about 314m 
(£9.3m). The proceeds will be 
used to repay debt 

In 1993, toe talc mining busi- 
ness made profits before inter- 
est of gi.Tm and at April 30 had 
a book value of $UL9m. 

Rise at Leveraged 
Opportunity Trust 

Leveraged Opportunity Trust, 
which specialises to US compa- 
nies which have undertaken 
capital reorganisations, 
reported a net asset value - 
with loan stock converted and 
warrants and options uncon- 
verted - of 155 Jp at March 31, 
a rise of 22 per cent over the 
127.4p a year earlier. 

Fully dilated the value was 
143.4P (12L6P). 

The net loss in the six 
months to March 31 was 


Wamford 
declines 
9% to £6.95m 

Wamford Investments reported 
a 9 per cent contraction in 
profits before tax - from 
£7.66m to £6J9Sm - during the 
12 months to December 25. 

Turnover at the property 
investment group dipped to 
£lL4n (£12Jm). After tax and 
minorities, earnings per share 
emerged at 12Jp (13.65p). 

A proposed total dividend of 
5p brings the total for the year 
to 7.75p (7.5p). 

The group’s investment prop- 
erty portfolio was valued, on 
an open market value basis, 
at £104.9m at the period 
end, up from £89.9m a year 
earlier. 


£41,000 (£33,000), giving losses 
per share of 0£5p (0.44p). 

Irish Life sells 
Norwegian offshoot 

Irish life is to sell David, its 
Norwegian subsidiary, for 
I£l2m (£11 Am) to a group of 
savings banks who are the 
main distributors of its prod- 
ucts. 

In addition to the financial 
aspects, Irish Life has acquired 
rights to the David concept 
outside Scandinavia. 

Royal Bank’s US 
offshoot expands 

Citizens Financial Group, the 
US subsidiary of Royal Bank of 
Scotland, has acquired seven 
branch offices and 
3117m(£78m) to deposits bf the 


Leisure wear 
puts Towles 
deeper in red 

Towles, the clothing manu- 
facturer, saw losses increase 
from £146,000 to £236,000 to the 
year to February 28. 

The result was disappoint- 
ing, directors said, mainly 
because of a poor performance 
at HE Godkin’s leisure wear 
activities. 

Godkln was closed In 
November, resulting in total 
costs of £366^00. 

The company was also the 
main factor in group turnover 
falling to £15.7m (£16J2m). 
Losses per share were 7.7lp 
(438p) but the board proposes 
to Tnafritaiw the single, final 
payment of H25p. 


Coastal Federal Savings Bank 
from the Resolution Trust Con 
poration, for 310.7m cash. 

Coastal, which Is based in 
New London, Connecticut, 
went into receivership in June 
1992. 

Princedale ahead of 
budget first quarter 

Results at Princedale Group, 
the USM-quoted marketing ser- 
vices and industrial concern, 
were ahead of budget for the 
first quarter, Mr Stephen Ben- 
nett, chairman, told the annual 
meeting. 

Mr Bennett pointed to a 
brighter economic environ- 
ment and the fact that the 
businesses acquired last year 
“have settled down wen and 
are performing to expecta- 
tions”, as the factors behind 
the current year's progress. 


European 
Colour up 
at £1.22m 

European Colour, the 
Stockport-based chemical col- 
our manufacturer, reported 
pre-tax profits almost doubled 
from £640,780 to £L22m for the 
year to end-March. 

The improvement was 
achieved on turnover up by 
11 per cent from £14m to 
£15.6m. 

Earnings per share emerged 
at 2JKlp (L35p) and the final 
dividend is raised to 03p, mak- 
ing a total erf L15p (0fip)fortoe 
year. 

Interest charges were cut 
from £104JX)0 to £38^)00 and the 
company aided the year with 
zero gearing. 


Deficit at Baris 
widens to £L4m 

Losses at Baris Holdings, the 
USM-traded building services 
company, widened from 
£351,000 to £L43m pre-tax for 
the year to end-February. 

The costs of early commer- 
cial settlements, together with 
the effects of restructuring and 
redundancies, accounted for 
£900,000 of the loss. 

Turnover fell to £14m 
(£20.6m) and losses per share 
worked through at 2Q£p (earn- 
ings 0-2p). 

Non-core disposals 
continue at Costain 

Costain, the construction and 
mining ' group, ban continued 
its withdrawal from non-coal 
mining activities in the US 


Cementone shares 
fall on warning 


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OAS LS 
lAHr WtaftU. 


JFmfMcklCMhTVH 


_ Anglo European _ 
Amalgamation*, Uxaited 



XHftMUGrmr , <r 


ta mOcaj biMiad tat 

of 

AUHAPIAHUMTUD 


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Mftaon MnoW HoMw pit 


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V 





26 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


1 


COMMODITIES AND AGRICULTURE 


12 


Coffee stock sales agreed as surge continues 


By ABson Maitfand 


Coffee 


As coffee futures surged to 
fresh seven-year peaks in Lon- 
don yesterday the president of 
the Association of Coffee Prod- 
ucing Countries admitted that 
prices had become “a fait exag- 
gerated". 

Robusta prices at the London 
Commodity exchange staged 
another spectacular rise, put- 
ting them 100 per cent above 
their level at the start of the 
year. The July contract 
reached a high of $2,480 a 
tonne before closing $52 up at 
$£348. The New York market 
was also buoyant early on, tire 
July arabica price touching 
14L8 cents a pound, but in late 
trading it was 4.15 down at 
cents. 

The markets shrugged off 
news that the ACPC had 
agreed to release the remain- 
ing 50 per cent of stocks held 
back under last October’s 
export retention scheme. 131686 


US Futures (cents per b) 
400 



0 I I, I — l — L_J — L...1 J~ I — t — l l 1 t | | .1 

19737 7 78 79 80 81 82 80 64 65 86 87 88 88 90 91 92 93 94 
Soucee Qatostraan 

2m bags will be released 
between July and September, 
although some may be freed in 
the current quarter to meet 

“We have an interest in 
doing this in the most orderly 
way so as not to create prob- 
lems for the market,” said Mr 
Rubens Antonio Barbosa, pres- 


ident of the association and 
Brazil’s ambassador to Britain. 
% added that the timing of the 
release was up to individual 
countries, although he expec- 
ted the 900,000 bags held by 
central American countries to 
come an to the market first 
Mr Barbosa thought the sup- 
ply shortages that with falling 


consumer stocks, are underpin- 
ning prices, would last “quite 
some time”. So for there were 
□o signs that plantings would 
be stepped up as a result of the 
price rise. 

He stressed the bullish fun- 
damentals for the market but 
added that “the problem” was 
that prices were now being 
driven by speculative buying 
from hedge and investment 
funds. 

Mr Barbosa declined to be 
drawn on what would consti- 
tute a sensible level for the 
market, but pointed out that 
prices were still below half the 
levels they reached in 1986 and 
1987. On Monday Mr Guy 
Alain-Gauze, the Ivory Coast 
commodities minister, told the 
Reuter newes agency that “an 
equilibrium price” for London 
would be around $2,000 a 
tonne. 

The president of tha ACPC, 
which bag about 30 Tn p rnh ws 
representing 90 per cent of 


world production, has 
approached other producing 
countries such as Vietnam and 
Swaziland to encourage them 
to join. 

By abiding by the provisions 
of the export retention scheme, 
the ACPC, created last Septem- 
ber, had shown it “means busi- 
ness", said Mr Barbosa. “As 
time goes by, I think it will be 
fakan increasingly into consid- 
eration as a factor that will 
affect the market” 

Hie two-day meeting of the 
organisation in London agreed 
to set up three groups: to pro- 
mote coffee consumption, to 
coordinate production policies, 
and to handl e organisational 
matters. 

There were no plans to raise 
the trigger prices that dictate 
when export retention stops 
and when stocks are released 
in the light of the vertiginous 
rise in prices, Mr Barbosa said. 
"If prices drop, we’ll see. We’ll 
convene another meeting.” 


Indian tomato experiment ready to bear fruit 

Shiraz Sidhva on a PepsiCo project that is helping Punjabi growers to produce more 


A t Zahura, a village in 
Punjab's Hoshiarpur 
district, PepsiCo fully- 
automated tomato processing 
plant is a riot of red as lorry 
loads of luscious fruit are pul- 
verised into paste. 

This is not only Asia's big- 
gest food processing plant - 
with a capacity of 650 tonnes a 
day - but also a test case for 

the pol»ntifll of India’s na»»gnfr 

food processing industry, 
which has attracted domestic 
and foreign investment worth 
over Rs3Q0bn (£(L35bn) in the 
past two years, mare than any 
other sector except power. 

Pepsi, which started 
operations in India two years 
before the country embarked 
on its liberalisation pro- 
gramme in July 1991, was 
forced to meet a large export 
obligation; and the Amer ican 
mult inational turned that obli- 
gation into an interesting agri- 
cultural experiment that the 
company hopes will yield prof- 
its soon. 

Never having built a process- 


ing plant on such a large scale 
before, the company had to 
devise it from scratch. “We 
went through a very expensive 
and long teaming curve, with 
nn validated data to unlp us,” 
explains Mr R-P.S. Dhaliwal, 
plant manager of Pepsi Foods, 
the company’s Tmtian subsid- 
iary. 

That was five years ago. 
Today, the plant exports 80 per 
cent of its 40,000 tonnes-a-year 
production. It also supplies the 
Indian subsidiaries of Nestle 
and Unilever, for their domes- 
tic ketchup brands. 

When Pepsi started its 
Indian operations it faced tre- 
mendous hostility from politi- 
cians and formers alike, espe- 
cially when the company 
to build the plant in the Pun- 
jab, India’s most prosperous 
agricultural state. Critics felt 
strongly that the multinational 
would exploit formers in the 
region for its own commercial 
gain. Today, however, those 
formers are very happy to sell 
their tomatoes to the factory. 


Mr Hoshiar Singh, who 
forms nearby in Tanda, says 
tomato growers in Sirsa and 
Tohana who supply Pepsi are 
pleased with the way the com- 
pany deals with them. Accord- 
ing to him, the region has ben- 
efltted from better fanning 
tefthniqnas introduced by the 
company. 

“It may be true that a big 
company makes a lot more 
money than we do,” he says. 
“But they have taught us how 
to our yield and the 

commercial gain is bound to 
benefit us alL" 

T he plant i which was 
built quite cheaply, at a 
cost of Rs220m, buzzes 
with activity during the 65-day 
season beginning at the end of 
April, when it runs to full 
capacity. Pepsi’s biggest chal- 
lenge at the moment is to 
make use of the plant’s capac- 
ity outside this short season. It 
is trying to add ten days to the 
season by getting supplies 
from thp mountainous Hima- 


chal Pradesh state bordering 
Punjab and hopes to develop 
new techniques to extend it to 
110 days. Recently it has diver- 
sified into red chilli paste, 
producing £000 tonnes a year 
for export 

The Pepsi Agro Food Pro- 
cessing Research Institute has 
taught its suppliers new culti- 
vation and disease-prevention 
techniques, helping them to 
increase yields from 25 to 30 
tonnes a hectare and ensuring 
that the tomatoes conform to 
international standards of col- 
our, texture and flavour. 

Two years ago. Pepsi, to use 
a senior manager's words, 
“went berserk” trying to work 
out a system whereby formers 
would bring only as many 
tomatoes as could be processed 
e ach day. “They would land up 
at the factory with for more 
tomatoes than we needed on a 
particular day and insist we 
bought them,” says Mr Muk- 
tesh Pant, executive director, 
exports, now in charge of 
Pepsi's Season's Harvest fruit 


juice venture. But Mr Dhaliwal 
says that the problems have 
been overcome. An in-house 
nursery provides control over 
tho phasing of tomatoes. “We 
have fine-tuned ourselves to 
such an extent, that we now 
issue quota slips specifying 
quantities and dates of supply. 
Our payment system ensures 
that formers get paid at their 
homes on every 10th day." 

The company says it is not 
yet making profits. “But we 
have maintained our tomato 
prices over the last two years,” 
says Mr DhaliwaL 

Pepsi’s plans indude using 
the plant to produce apple and 
pear purge when the tomato 
season is over. It has spent 
Rsl5m to upgrade its facilities, 
introducing a small dehydra- 
tion unit for apples and mush- 
rooms. 

The fully-automated plant, 
imported mostly from Italy, 
needs not more than three to 
four people to operate it And 
increased utilisation remains 
Pepsi’s top priority. 


British 
industrial 
fishing plan 
under fire 

8y Alison Maitland 

The UK government came 
under fierce attack yesterday 
for inviting applications from 
fishing vessels to catch cape- 
lin, a small fish eaten by 
endangered stocks of cod, off 
Greenland. 

The National Federation of 
Fishermen’s Organisations 
called the decision “astonish- 
ing” when stocks of white fish 
had reached virtual collapse. 

“This decision is a signal to 
all that the UK supports indus- 
trial fishing and is in direct 
contradiction of the govern- 
ment’s public stance against 
It,” said Mr Richard Banks, 
the federation’s chief execu- 
tive. 

“The wrong signals will now 
be sent to the European Com- 
mission and other industrial 
fishing nations, such as Den- 
mark and Norway, that the 
minister (Mr Michael Jack] is 
the champion of industrial 
fishing.” 

The federation said that 
industrial fishing was widely 
condemned in the UK because 
it denied feedstock to fish and 
birds and caught young fish 
before they bad a chance to 
breed. 

The Royal Society for the 
Protection of Birds called the 
move “a potential disaster for 
wildlife”. It said that Green- 
land cod stocks were at an 
all-time low. 

“The government should not 
gamble with long-term fish 
stocks and important wildlife 
populations for short-term 
commercial gain,” said Dr Pat- 
ricia Bradley, RSPB aquatic 
unit manager. 

Mr fighwipg minister, 
announced the decision last 
week, saying it was in 
response to a request from the 
fleet He said the quota for 
capelin was based on the best 
available scientific evidence. 
“There is no question of over- 
exploitation as the EU*s share 
of the fishery for 1993 was not 
taken,” he said. 


COMMODITIES PRICES 


BASE METALS 


Precious Metals continued GRAINS AND OIL SEEDS SOFTS 


MEAT AND LIVESTOCK 


LONDON METAL EXCHANGE 

(Prices Irani AnWgameted Motel Trixflng) 

■ ALUMMUM, 997 PUWTY (S per tonne) 



Cash 

3 mttn 

CtaM 

1342-3 

1372-3 

Previous 

1346S-7.5 

1376-65 

Hghflow 

1359713*9 

1388/1367 

AM Official 

1349-50 

1379-95 

Kerb dose 


1370-1 

Open faL 

251,840 


Total daljr turnover 

40j084 


■ ALUMMUM ALLOY (S per tome) 


Ctoae 

1345-55 

1350-55 

Previous 

1340-50 

1366-60 

WgftAow 


1387 

AM Official 

1332-62 

1367-82 

Kerb doss 


1355-60 

Open InL 

3,628 


Total daOy tumovor 

745 


■ LEAD (1 par toreis) 



Close 

480S-7J 

604-6 

Previous 

484 £-05 

902-3 

H&iAow 


618/485 

AM Official 

492-3 

5005-10 

Kart) doss 


505-6 

Open InL 

36.835 


Total dafly remover 

6.783 


■ MCKEL ($ per tome) 


Close 

6630-40 

6720-30 

Previous 

6870-6 

8756-80 

WgWtan 


683049600 

AM Official 

6700-05 

6795-800 

Kerb ctoae 


6600-700 

Open H. 

62*77 


Total dafly turnover 

1*502 


■ TM (5 per torma) 



Close 

cccrnc 

•XXXTTO 

6630-36 

Previous 

5890-000 

6660-75 

HgMow 


6780/5590 

AM Official 

9830-31 

5710-16 

Kart) dose 


5625-30 

Open Im. 

16528 


Total dafly twnomr 

3.634 


■ ZMC, apadal ffigh grade (Spar tome} 

CtaM 

968. 5-05 

9945-55 

Previous 

9745-65 

999-1000 

tflgti/taw 

871 

1006/saa 

AM Offldsl 

9705-71 

996-7 

Kerb dose 


892-3 

Open InL 

102.O7S 


Total dally turnover 

17550 


■ COPPBI, grade A (5 per tame) 


Ctoae 

2298-8 

2290-7 

Prwtoua 

2270-80 

2276-8 

tlidillwu 

2320/2318 

233572284 

AM Official 

2320-205 

2320-21 

Kerb dose 


2288-9 

Open M. 

211,443 


Total dafly tumovor 

75,097 


■ LME AM OffidU E/S raBac 1-6061 

UBE Oaring £/* rets UU68 


Spet1Ji053 3nflhrlJ033 6nte1AZ5 9mB*1J020 

■ HWH GRADE COPPER (COMBI) 


Hero 


OflBO 

nn«t glmgB 

Mg h km 

tat Vai 

■by io6jm -am loam unm 

1507 16 

JM 105.75 -085 

W-20 loan 

1,148 2 

M T0&55 -080 107.78 UR8C 39JB9I 382 

flag 104S0 -080 

■ 

494 2 

S«p 10420 -045 

10550 10340 

8574 1900 

Oct 10X50 -025 

- 

228 16 

Itoeri 

U5M 2AM 


PRECIOUS METALS 

■ LONDON fiUUION MARKET 
(Prices Cuppfled By N M ROftiCMfl 


QoU (Tray ot) 
Ctoae 
Opertno 
Morning ftc 
Afternoon ftc 
Day's ttgh 
Day's Law 
Previous dose 


$ price E eqriv. 

saa«Ma&m 

3S7.35-387.73 

388.10 257051 

388450 257.380 

388^800884)0 
386. 00-386 .50 
387.50-3884)0 


■ GPU COfcgX POO Troy S/boy azj 



San 

price 



(fare 

kar U M. 

*•» 

387.1 

-25 

• 

1 2 

Jon 

387 3 

-25 

388.1 

3855 64516 45,413 

M 

3885 

-25 

■ 

. 

Aag 

3905 

-25 

3925 

3885 38.160 12114 

Oct 

3935 

-25 

3855 

3825 5,114 297 

Dae 

TOW 

3985 

-25 

3995 

3855 18,212 24« 
155554 827*8 


■ PLATINUM NYMBC (50 Troy oe.; Vfroy oz.) 


M 

4075 

-a* 

4135 

4065 17572 

4538 

Oct 

4107 

-18 

4155 

4095 

4,187 

137 

J V 

4125 

-18 

4155 

4145 

1540 

10 


4145 

-35 

4175 

4165 

1567 

- 

Trill 





23572 

4583 

■ PALLADIUM NYMEX (100 Troy oz^ SAroy czj 

jm 

13750 

-050 

13950 

13750 

1577 

423 

Sep 

13855 

-050 

13950 

13850 

2799 

*28 

Oec 

13850 

-135 

13950 

13850 

845 

- 

Hv 

13850 

-135 

- 

- 

6 

- 

Triri 





BAZ7 

851 


■ S8.VEH COMEX (100 Troy tgj Ccnta/Troy <aj 


“ay 

558.7 

-114 

5895 

5825 129 

15 


5685 

•185 

• 

3 

1 

Jri 

5825 

•105 

5755 

5365 87587 28581 

■fa 

5875 

■185 

5805 

5615 10033 

848 

Dec 

5755 

-105 

568.0 

5685 15512 

2552 

Jm 

5775 

-165 

- 

32 


Total 




128,138 30741 


ENERGY 

■ CKUDE Ott. NYMEX (42.000 US gate. S/baraQ 


LaM Defs Opts 

pries dungs M* Low tat Ml 

Jri 174(9 -0.17 184)3 174211*996 L399 

17JH -0.18 17.78 1758 51,813 80457 
sap 17-48 -a 13 1734 17.46 30949 24,578 

Oct 1739 -ai3 17.48 1739 214171 8*91 

tor 1737 -0.10 17.40 17JJ7 13/85 3/22 

Oeo 17.33 -Oil 1729 17m 28410 2880 

ToCri 401^0211*414 


■ CRUDE OK. IPEffmareO 



Irian 



Ota" 



price 

<riange 

ffidi 

Uret k* 

1U 

Jri 

1653 

-108 

1140 

1138 84*404 24,630 

tag 

1020 

-an 

1127 

me 33216 

754* 

Sta 

1113 

-110 

1117 

1109 12872 

3581 

Oct 

1109 

-110 

1113 

1856 7,789 

703 

Mm 

18.06 

-110 

1108 

1654 55*8 

487 

Oec 

1104 

-112 

1110 

1102 6534 

1588 

TeM 




13*578 38^701 

■ HEATING OB. NYMEX (42J30Q US cffiS gffis) 


lotari 

Qqta 


0|» 



Price 

ctaage 


m tat 

1M 

Jm 

4755 

•056 

4750 

4755 28A00 

12147 

Jul 

4855 

-050 

4149 

4100 34505 

8532 

tag 

4170 

■0.40 

49.10 

4856 14544 

2480 

ap 

49l75 

-125 

5100 

ms 11957 

778 

Oet 

5075 

-its 

5175 

5175 8545 

218 

Hor 

51.70 

-110 

51 JO 

61.70 5545 

172 

Trial 




124,068 27(033 

m OAS OIL KE p/tame) 




Srit 

0*8 


0 PM 



pries 

rings 

Mgfi 

low tat 

fel 

Jan 

15100 

-3J)0 

151.75 

15100 25,737 

a 5» 

58 

151-25 

-ZSB 15250 15150 19,006 

2868 

AW 

15250 

-275 15173 

1325D 8564 

340 

Sap 

15175 

-225 155.75 154J0 5497 

539 

Oct 

15756 

-225 15850 15725 1448 

139 

Mac 

19125 

•250 15825 15125 2882 

20 

Trial 




89270 10570 

■ NATURAL GAS NYMEX (10000 nnBta; SfeUBb) 


lutie 

Otft 


Om 



price 

ctaage 

HBfc 

low M 

Vai 

Jof 

1538 

- 

1550 

1526 24,478 11.480 

flag 

2500 41002 

2510 

1596 13,113 

2801 

sw 

2545 41008 

2500 

2543 13,100 

1583 

Oet 

2598 41002 

2115 

2596 8573 

844 

Sw 

2200 +0002 

2206 

2190 10548 

515 

Dec 

2503 +0.002 

2310 

2303 14594 

1.382 

Teal 




120572 44578 


Loco Ldn Mean Qoid Lendhg Rata (V3 l!S$ 

1 month .4.01 6 months 4.41 

2 months — . 44)8 12 months <90 

3 months «4.1B 


SBverBx 

pTrey At 

UScteeqdv. 

Spat 

380.75 

57350 

3 months 

38130 

57110 

6 months 

3SCL25 

688.15 

1 yew 

401 SO 

80205 

GaM Coins 

S price 

C equta. 

Knigaraid 

393*398 

281-264 

MapfaLetf 

39140-40055 

- 

New Sovereign 

91-84 

60-83 


■ UNLEADED QASOUKB 
wwk (42,ooq us g*K«uSgau 



Uteri 

Dan 



Span 



pries 

etaega 

MgO 

Low 

tat 

M 

Jen 

5140 

-061 

5220 

5155 

27534 

12882 

JM 

5156 

-OM 


5150 

34570 

12213 

tag 

5150 

-147 

•ao n 

5150 

14502 

3507 

Sap 

3155 

-054 

51 J5 

6155 

10588 

686 

Oct 

4956 

-144 

3110 

4853 

1247 

95 

fee 

Trial 

4170 

-064 

49.10 

4170 

2555 

■35*0 

21B 

31139 


■ WHEAT LCE (E per tonne) 



Sett 

Off* 



om 



Flos 

ctaoga 

ntft 

Law 

tat 

Vri 

Jm 

114.15 

+155 

11450 

11325 

832 

47 

sra 

9115 

-050 

9175 

9950 

516 

5 

Noe 

10050 

-145 

10BS 

10020 

1816 

29 

Jan 

10215 

-150 

10275 

10215 

1,194 

21 

Itar 

lines 

-160 

- 

- 

357 

- 

■w 

10553 

-155 

10650 

105.75 

208 

19 

Tata 





4523 

121 

■ WHEAT CBT (5500bu rrin: cants/BOfa bushel) 

Jri 

32 ae 

-7/0 

3390 

3294)138566 61935 

Sfa 

33S® 

-5* 

340/4 

334/4 42525 10510 

Dee 

347/0 

■6/4 

351/2 

3*8(4 49875 15570 

Har 

350/B 

-6/2 

35MD 

35W4 

3845 

STS 

“W 

346/0 

sn 

350/4 

346ffi 

250 


Jri 

von 

-7/0 

322/0 

320/0 

790 

1G5 

Total 




235578 83AS5 


■ MAIZE CBT (5Q00 bu min; centa/56fc btahal) 


■ COCOA LCEff/tcnna) 



sm 

BffiTs 


Open 


pries i 

tag 


tear U «ri 

May 

1048 

+70 

1053 

1023 30 255 

Jri 

1068 

+68 

1085 

1030 21101 1402 

Sap 

1083 

+66 

1102 

1063 15,120 7588 

Dec 

1099 

+60 

1122 

1085 25,410 5/23 

Sa 

1122 

+62 

1142 

HOB 28552 3882 

■fay 

1135 

+59 

1155 

1130 10830 334 

Total 




1105432BA81 

■ COCOA CSCE (10 tomes; S/tomes) 

Jri 

1378 

-19 

1466 

1370 3171711473 

Sap 

1405 

-10 

1485 

1385 11235 48« 

Dac 

1434 

+15 

1507 

1422 8863 1505 

Km- 

1467 

+15 

1540 

1455 108*2 251 

■fay 

1499 

+15 

1570 

1560 4828 38 

Jri 

1521 

+15 

1593 

1550 2810 65 


TM 87/40424,972 

■ COCOA QCCO) (SOffa/tonne) 


■ UVE CATTLE CME faOQOOtoe: cantartba) 



San 

tafta Om 



price 

donga Hpb lew tat 

Vai 

JH 

63875 

-a*50 95575 63850 24.734 

1210 

tag 

6*825 

-1500 65825 84800 22078 

1782 

Oct 

67.400 

-1325 61300 67550 12840 

3879 

Dec 

88300 

■1125 89A60 61600 1148 

2884 

Feb 

69800 

■ 71050 69825 5,197 

482 

tar 

71500 

-1050 71.425 71800 2808 

416 

Tetri 


77, TM 22860 

■ UVE HOGS Cite (40800bs: cenis/tM} 


Jen 

41225 

-1875 48475 41150 10583 

2,812 

Jri 

48800 

-1.130 50000 41750 9812 

1811 

aw 

47800 

-1.125 41350 47.125 4872 

1.162 

Oct 

43873 

1800 44800 43850 2742 

321 

Dac 

44875 

-1850 45.100 44800 2842 

347 

Mi 

44425 

-1725 41100 44550 618 

26 

TOW 


31504 

«5» 

■ PORK BELLIES CME (40.0001m; cantaAbs) 


Jot 287/2 -84) 2704) 268*646^20188,485 

tap 284/4 -7/6 287/4 263/4172,150 2(815 

UK 258/6 -8/8 282/4 STM 43*205 165*70 

Uar 2B5/2 -84) 2804) 283/4 47,010 13J2S 

toy 260/4 -7/4 27212 208/4 6£10 1/525 

Jri 2714) -7 a 2744) Z7Q4) 13*73 *330 

Total 14014881 

■ BARLEY LCE (E per tome) 


tap 

B9L00 

170 

• 

Rev 

10055 -125 10150 10100 

275 

40 

Jm 

10155 

30 

- 

Mv 

10285 

10 

• 


10485 

5 

- 

Trial 


400 

40 


■ SOYABEANS CUT (EJOOtai Btiq aota/BOft budrfl 


M 6954) -3772 713/0 6834) 3433)15 237 JW) 

tag 081/2 -374) 7094) 890/4 75A46 22*73 

Sep 672/2 -36/2 889/0 8724) 40900 4,680 

IDS 6594) -34/2 8784) 6574)287,130141^25 
Jan 864/4 -33/2 8504) 08*4) 24/300 6,070 

•hr 6884) -33/2 684/4 8894) 9,728 2^60 

Total 78136421^35 

■ SOYABEAN ON. C8T (SOQOOtos: oanta/to) 


Jri 

2953 

-158 

jam 1 

2110 41206 

1278 

Am 

2117 

-1.19 

2170 

2980 16833 

2,512 

tap 

2190 

-152 

2145 

2175 1 1253 

1,739 

Oet 

2882 

-1.41 

28.75 

2BjOO 

7803 

568 

Dec 

27.40 

-180 

28.15 

2745 20825 

1771 

Jm 

2783 

-151 

2780 

2780 

3,110 

92 

Trial 




147872 19877 

■ SOYABEAN NEAL C8T (100 Iona; S/ton) 


Jri 

197.4 

-98 

2010 

1968 35875 

19806 

tag 

1912 

-111 

2028 

1958 

16581 

6863 

Sm 

1948 

•95 

2010 

1948 

1473 

2.175 

Oct 

1925 

-98 

1978 

1928 

0238 

188B 

Doc 

1918 

-98 

1978 

1918 

11146 

10891 

Jta 

1918 

•100 

1978 

1918 

1829 

181 

ToW 





01508 31457 

■ POTATOES LCE (E/toma) 




Jua 

2808 


. 

. 

2 

338 

Dev 

908 

- 

- 

- 

. 

- 

Mar 

mo 

■ 

- 

- 

• 

Z 7 

tar 

1308 

-05 

1288 

1258 

630 

639 

■far 

1408 

- 

- 

- 

• 

• 

Jon 

1078 

- 

- 

- 

. 

. 

Tew 





sn 

89 

■ FRSGHT (BIFFEX) I.CE (SiCUndex potap 


"to 

1475 

•3 

1480 

1475 

901 

89 

JM 

1310 

-20 

1330 

1310 

745 

39 

Jri 

1222 

■10 

1225 

1223 

736 

16 

Od 

12S8 

■2 

1295 

1296 

380 

21 

JM 

1319 

-7 

1320 

1320 

206 

2 


1350 

•10 

1350 

1350 

68 

10 

TeW 

CtaM 

rtav 



3,157 

197 

BH 

1498 

1500 






Minor miTili 

European free market. bom Metal BuOato. S 
por b in warehouse, unless rtherwfae staled 
Oast west's in brackets, where Ranged). Anti- 
mony; 00.816, S per tome. 2000-2000 {2O00- 
2.700). Btamum; min. 9939%, tonne loti 225- 
iM. Cadmium: min. BOS%, 75-85 cants a 
pound. Cobalt: MB tree market, 008%, 2450- 
25.50 (24.20-25.20); 99.3%, ig.sa-20.25 
(19.15-19.SQ. Maretry: min 9099%, 5 per 78 
lb flask, 100-120 (100-110). Molybdenum: 
drammed mafytxOc oxfcfe. 300-300. Srifl- 
tamemki 990%, 300-405, Ttngetan ore: 
■MndNd min. 65%, S per tonne unit (10M 
WO* at. 33-45. Varadkms min. 98%. ell. 
1.40-1.50. Uranium: Nunco ex ch ange vriue. 
7JXL 


■far a 

My 

Price 

. 

Pier, day 
WA 

in rtny iwiyi 

. NM 

HR 

M OOFFHE IXE (J/farmd 



«ay 

2353 

+30 

2495 

2*00 

493 88 

Jri 

2346 

+62 

2*80 

23M 13864 2806 

Sep 

2322 

+56 

ZOO 

2SZ0 

I55T4 2863 

Hrar 

2294 

+59 

2388 

2295 

5888 4S5 

Jen 

2273 

+58 

2366 

2Z72 

1422 618 

Mar 

2220 

♦65 

2310 

2230 

2,424 296 

TOW 





CHOI 7888 

M COPTS •<? CSCE (37800faa; oantaffixO 

Jri 

13110 

-585 

14680 

12880 21032 7562 

Sep 

13035 

-550 

14180 

12880 15512 2598 

Dec 

127.45 

-380 

13755 

12525 

10837 913 

Mar 

12175 

-255 

13480 

12280 

5575 434 

■far 

12*80 

-323 

13355 

12480 

858 204 

Jri 

12380 

-355 

13080 

13080 

91 11 

ToW 





5103312537 

■ COFFEE (XXI) (US cents/pOuncO 


■tap 23 



Price 


Pm. dap 

Coop, dafly 


.12648 


12Q24 

16 day aw 

vaga — 


. 10782 


10435 


■ NOT PREMIUM RAW SUGAR LCE (cents/lba) 


Jri 

1250 

12B 

1248 

1248 

2819 

75 

Od 

1239 

■114 

- 

. 

696 

• 

Jan 

11.82 

- 



. 

. 

Mar 

1186 

■117 

• 

• 

60 

- 

ToW 





3473 

73 

■ WHtTE SUGAR LCE (SAorne) 



tap 

34130 

-280 

35380 

84U0 

11834 

1,670 

Oct 

33.30 

^00 

332-30 32780 

8844 

488 

Dac 

31 7 JO 

-130 

31170 

31780 

664 

17 

Mr 

31680 

•180 

31180 

315-50 

1,7*0 

103 

1 *7 

31100 

-180 

- 

- 

205 

- 

tai 

318.10 

-1JB 

- 

- 

235 

1 

TeW 





22800 2580 

■ SUGAR *11’ CSCE (1 1Z.0005W; eenWtoa) 


M 

1183 

-034 

1258 

1180 4053313^69. 

Oct 

1112 

■120 

1240 

1288 *842910,620 

taw 

11-80 

-115 

iwn 

1159 21^6 1841 

Hey 

11.77 

-112 

1155 

11-81 

3,400 

342 

Jri 

11.75 

■run 

- 

- 

1419 

S3 

act 

1186 

■083 

11-70 

11.70 

SW 

77 

Tew 




ni0t2277>t 

■ COTTON NYCE (50,0001a; oanta/ba) 


Jri 

8388 

■413 

84.15 

83.00 21522 3530 

Od 

7182 

+127 

7780 

7655 

5781 

246 

Dec 

75J8 

+112 

7S50 

7450 21.493 Ijlt 

Rar 

7122 

+106 

7SJ0 

7559 

Z653 

163 

■far 

7889 

- 

7630 

78J0 

1,403 

V 

JH 

7163 

-112 

7680 

7ire 

207 

10 

Tetri 





53471 8,180 

■ ORANGE JUICE NYCE (15.00Oba; censffiK) 

Jri 

9889 

+2J5 

9750 

8380 11964 

581 

scp 

91/0 

+105 

89.75 

9570 

1B52 

306 

tor 

10035 

+250 

10050 

9580 

1589 

7 

JM 

10155 

+195 10180 

9880 

2,485 

38 

Hv 

10280 

+17S 10280 

9175 

796 

83 

Hey 

10480 

+178 

- 

- 

24 

- 

TeW 





22514 1817 


VOLUME DATA 

Open Interest and Vbhm data shown far 
contracts traded on COMEX. NYMEX, CBT, 
WCE. CME. CSCE and PE Crade 01 are one 
day In arreera. 


INDICES 


M REUTERS (Baa* 16/W31o10Q) 

May 24 May 23 mamh ago year ago 
20040 18710 1832.1 I071L5 

■ CRB Future* (8^ 4ffi/S6°100) 


May 23 May 20 
23806 233.60 


UK* All ago year ago 
22229 20928 


Jri 

41400 

-2800 45400 41400 

5848 

2.189 

tag 

42850 

-1875 44826 42823 

1850 

534 

Feb 

52875 

-1500 63575 51.700 

257 

76 

Mv 

51-400 

-1525 51700 51500 

24 

5 

toy 

54800 

-1300 . 53500 

a 

4 

M 

54800 

... 

1 

1 

Triri 



8887 

28» 


LONDON TRADED OPTIONS 

Strike price $ tome — CaOs Pula — 


■ ALUMMUM 


(89.7%) LME 

tag 

Now 

Aug 

NOV 

1326 

70 

102 

26 

37 

1375 

43 

74 

49 

56 

1425 

24 

52 

79 

84 

■ COPPER 





(Grade A) LME 

tag 

Nov 

Aug 

Nov 

2200 

134 

125 

44 

77 

2250 

104 

100 

63 

100 

2300 - 

78 

79 

87 

128 

■ COFFEE LCE 

Jri 

Sep 

Jri 

Sep 

1800 

554 

571 

8 

49 

1B50 

SOT 

532 

9 

60 

1900 

461 

495 

13 

73 

■ COCOA LCE 

Jri 

Sep 

Jri 

Sep 

900 __ — 

166 

186 

. 

3 

S25 

141 

163 

- 

6 

950 

117 

141 

1 

8 

■ BRSfT CRUDE IPE 

Jri 

tag 

Jul 

Aug 

lATTl 

. 

. 

3 

17 

1660 __ 

- 

- 

8 

26 

1600 

54 

- 

22 

48 


LONDON SPOT MARKETS 

■ CRUDE 06- FOB (per bartri/Ji^ +or- 


Dubri. 

s 15 . 0 se. 10 w 

<009 

Brent Send (dated) 

SI 152-686 

-a 10 

Brent Send (Jri) 

SI 8-39-6.41 

-0jD9 

W.Ti (1pm eat) 

S110M82W 

-006 

■ Ol- PRODUCTS NWE prompt defray OF (tonne) 

Premium GssoOne 

$181-183 


Ora OS 

$149-150 

-3 

Heavy Fuel Ofl 

S83-86 

-z 

Naphtha 

$167-16$ 

-1 

Jd Fud 

1180-181 

-a 

Paaotani Arprs Estimates 



■ OTHER 



Odd (par tray 

$388 55 

-1J0 

Stver (per troy o$A 

66480B 

-4,00 

Rathum (per troy oz.) 

$407.80 

+1.40 

PollatSum (per troy cel) 

$137 JO 

*005 

Copper (US prod.) 

III.OOq 

♦4.0 

lead (US pnxL) 

35A)C 


Tin (Kuala Lumper) 

14.40r 

+006 

Hn (Nm YorW 

257 ^0c 

■40 

Zkie (US Prime WJ 

Unq. 


Cottle (Bve weight) t 

12754p 

+0-28* 

Sheep weighqt* 

132.75P 

-18.64’ 

Ptgs (!vq wdghfl 

85.67P 

+405* 

Lon. day aigsr (rwO 

S2S2-2 

+5.7 

Lon. day sugar (wte) 

sxaa 

+&0 

Tata A Lyle export 

C306J) 

+4.0 

Barley (Eng. feeCQ 

Unq. 


Maize (US No3 VeSow) 

$1400 


Wheel (US Dak North) 

EM 85.0 


Rrijtwr (Juri)f 

7CL75P 


Rubber (Jri)f 

71 .00p 


Rubt»r(KL PSS not Ju") 

25100m 

-1O0 

Coconut Ofl phfl)§ 

SBOSUy 

+5.0 

Pakr 0« (Matey. \% 

$505. Oy 

-50 

Copra (PM)§ 

*397.0 

-13 

Soyabeorte (US) 

C185.Qz 

+2 

Cotton Outlook A fcxtex 

8080c 


Wootops (84s Super) 

426p 


C par tvw» wfare nflwn , 4»B 1 

Hod. p praH c 


r rtnggeiQ. m MMyrion Lani/ky. z Juitti. y Jm w Jul 
V Uwdon misled. S C r n areitam. 4 BAn maftac 
doss. 4 Snoop Aim mI 0> prims). 1 Change on aosk. 
pre> 4» I WMl inn. 


Lease rates signal 
puzzles gold market 


By Kenneth Gooding, 

MMng Correspondent 

The gold market is mulling 
over the possible significance 
of a foil in gold lease rates to 
on all-time low of only 0.6 per 
cent 

“The market is sending a 
message - but it is impossible 
to decipher at present,” says 
Mr Andy Smith, analyst at 
Union Bank of Switzerland. R 
may be at a turning paint, he 
says. But whether it is ready 
for another teg of the bull mar- 
ket or whether prices wQl foil 
is not dear. 

He points out the gold bul- 
lion market Is particularly liq- 
uid at present for at least four 
reasons: 

• Much gold was swapped for 
US dollars in advance of what 
was seen as an inevitable 
increase in US interest rates at 
the May 17 meeting of the Fed- 
eral Reserve, the US central 
bank: 

• More central banks are will- 
ing to lend gold and to lend it 
for longer (tending in this case 
mpanfrig that the metal is sold 
for cash while at the same time 
the seller arranges a futures 
contract to buy it back later); 

• Producers, usually borrow- 
ers of gold, have been buying 
back forward sales; 

• And renewed gold futures 
buying by US funds in May ted 


to extra gold lending because 
commercial banks offset 
futures positions by buying 
then lending gold. 

Mr Jeffrey Nichols, manag- 
ing director of American Pre- 
cious Motals Advisors, sug- 
gests in his latest MetalsFAX 
newsletter that net sales of 
gold fast year by central banks 
and other official bodies 
amounted to “a fantastic" 900 
to 1,000 tonnes, up from 653 
tonnes in 1992, a year that 
Included 400 tonnes sold by the 
Dutch central bank. 

His estimate is far ahead of 
that from Gold Fields Minerals 
Services, which in its recent 
annual review put net official 
sales at 475 tonnes. Mr Nichols 
says his estimate reflects “sev- 
eral hundred tonnes of Saudi 
Arabian gold sales in 1890. The 
Saudis have been large-scale 
sellers of gold from Invisible' 
or unrecorded holdings." 

Mr Nichols also contends 
that the quantity of gold con- 
sumed by the jewellery Indus- 
try in the US, and possibly 
other industrial nations, is 
“significantly greater than gen- 
erally believed.” He suggests 
jewellery consumed 2,643 
tonnes of gold last year com- 
pared with the GFMS estimate 
of 2^02 tonnes. 

AfetalsFAX. US$7,000 a year, 
from APMA in the VS an fax 
802 4256304 


MARKET REPORT 

Cocoa hits 6V4-year highs 


London COCOA futures surged 
to 6 ( /4-year highs yesterday as 
investment fund buying 
swamped the market, leaving 
many in the trade wrong- 
footed. 

The July contract closed at 
£1,066 a tonne, up £68, alter 
touching £1,065 at one stage. 
“It looks very, very good. It’s a 
got a strong base and the 
upside potential is a couple of 
hundred pounds," one trader 
said. 

At the London Metal 
Rrrfiang p three months COP- 
PER hit a 16-month peak of 
&335 a tonne in the morning, 


underpinned by speculative 
buying, fund interest and 
short-covering. But profit-tak- 
ing set in and the price was 
trimmed to $2£9&50, up $19.50 
on balance. Most other LME 
contracts lost early gains. 


Compiled from Renter 


UflN WAHDNMH STOCKS 

(Ab at Monday's does) 
tennee 

Akuittflum 

-1.7TS 

to 2.851300 

Atundnlum May 

<560 

to 34,660 

Copper 

-3/200 

to 301526 

Lead 

-300 

to 350025 

rockri 

-324 

to 131048 

One 

+3X25 

to 1,160075 

Tin 

+640 

to 20096 


CROSSWORD 


No. 8,462 Set by DANTE 



ACROSS 

1 Necklines that may bring out 
whistles (8) 

5 Did not see, but beard, the 
spray (6) 

10 Appropriate ceremonial form 
in speech (5) 

11 Van drivers warning on the 
promenade (9) 

12 Artisan, one involved in a 
craftier organisation (?) 

13 They have a central meeting 
place (5) 

14 It gives point to work in the 
theatre (6) 

15 Drag along to wild parties (7) 

18 Make about a thousand to 

burn (7) 

20 Exchanged abase with a 
guard, apparently (6) 

22 unusual romance (5) 

24 Overtime for a publican? (9) 

25 Lay preacher? (9) 

26 Samuel’s teacher turns to 
George (5) 

27 Excitement created by man 
overboard? (6) 

28 Distressed at the end of Ute 

school term (62) 

DOWN 

1 Cow-catcher (6) 

2 I get tea on free treat (9) 

3 Substitutes for missing mem- 
bers (10,6) 

4 Loss of business (7) 


6 Where to obtain counter-intel- 
ligence? (11,4) 

7 Weapon finishes what you are 
doing (5) 

8 Assigned a job and given foil 
instruction (8) 

9 Where the ark went East (6) 

16 I conspire to perfection (9) 

17 Cast one's eyes over neck- 
wear and knickers (8) 

19 Tram the French enter late In 
the day (6) 

20 A muscle unaffected by eleva- 
tion (7) 

21 How to march on foot (6) 

23 In the Oval perhaps a century 
wins such acclaim (5) 

Solution 8,461 


□□QEHDuQilQ QQQHD 
UQUCIHEQE 
□IDQQa □□□□□□□□□ 
DQQQDQDB 
QGKlHlUEJnHBD GDEJQ 
a □ □ a □ d 
HE aQsna lhdqggdo 
□ 
□ 







jrri eS 



i i t 

I, 











"Ivs * 



27 


MARKET REPORT 


Footsie 3,100 lost again on interest rate worries 

Rv Tmtw CMaml - 


: By Tany Byfand, 

UK Stock Maricet Editor 

The Ixmdon equity market, badly 
upset by weakness in US securities 
overnight, made only very little 
recovoy in late dealings yesterday 
despite a brighter opening tn both 
the Dow Average and New Yoris 
Federal bonds. 

The final reading showed the 
FT-SE Index down 19.3 at 3 , 089.1 
only three points above the day’s 
tow, London was Following the clos- 
ing trend in other European centres 
where bonds extended earlier losses 
ahead of the money market repo 
auction at the Bund esbank today. 

The equity market remained ner- 
vous over the outlook for inflating 
and for interest rates, and Mowed 
the downturn in German am* 
French markets as they returned 


from the Whit Monday break to 
react sharply to comments from tbs 
president of the Bundesbank which 
interpreted as indicating 
that mils in German infara gfc rates 
would now be reinfid in. 

At the' same time, the tumble in 
New York bonds reinforced tears by 
many London analysts, fnrTndhig 
Mr Nicholas Knight of Nomura 
Research, that the Federal Reserve 
might still tighten credit policy fur- 
ther, even after last week's decisive 
action. 

Share prices bung fire at first in 
London, which had made its 
response to the Bundesbank inter- 
est rate warning on Monday when 
other leading European markets' 
were dosed. The Footsie dung on 
to the Important 3,100 benchmark 
for the first boor but thm fimwd 
sharply downwards as US trading 


Account PwMlng DatM 

— — 9 - 

Mqr 10 Jun 6 

Jen 20 

Option Psdsrstlues. - 

Jun 2 Jen 18 

Jun 30 

Law OniUaai. 

Jun 9 Jim 17 

Jut 1 

Accoua Oejc 

Jun 13 Jin 27 

JU 11 

Haw rime riaaUnga ouv taka 
feaahawa days aaritac 

niece men nan 


houses began to sell the stock index 
future. 

The slide deepened as markets 
absorbed news that German M3 
money supply had continued to 
grow well outside the Bundesbank 
preferred range tn ApriL After a 
brief pause, the setback was 
renewed as London waited ner- 
vously for New York to open. 

When the Dow Average cama in 
higher, showing a 16 point pin in 


early trading. London tried to rally. 
But shares turned down again when 
UK government bonds extended 
losses to close more then a point 
down at the long end of the range. 

Confidence was not helped by 
company trading reports. Shares in 
Marks and Spencer fell heavily 
despite record profits as the mon- 
arch of the UK high street retailers 
warned, of tough competitive condi- 
tions in Europe and uncertainty 
over the UK consumer recovery. 

Trading volume was not heavy, 
however, with only 555.7m shares 
traded through the Seaq electronic 
network. On Monday, when London 
volume was curbed by the closure 
of most European markets, 417.1m 
shares traded through Seaq, return- 
ing a retail worth of only £983j6m, 
one of the lowest dally totals for the 
year. 


Equity Shams Traded 

Tumovtf by ucAVrte fritfkm). E*dudhtt . 
fciMtafTiRrfcfabt ratoMi n dn i ra tiiaebfere^ 
1,000 


The FT-SE Mid 250 Ind g v , the 
measuring red of the broader mar- 
ket which has been falling steadily 
for the past fortnight, shed a fur- 
ther 173 to 3,691.4. 

Investors Clearly remained cau- 
tious as the market moved into a 
week somewhat lacking in eco- 
nomic pointers from the leading 
economies. US bond markets face a 
series of federal fund raisings this 
week, but economic data will be 
thin until next week when US lead- 
ing indicators, unemployment and 
personal expenditure figures are 
due. 

London analysts were hoping last 
night that US markets, and also the 
dollar, would continue to respond 
favourably to the resumption of the 
US - Japan trade talks which was 
announced just before London 
closed yesterday. 



Source Pi ffesststa 


■ Kay Imficatora 
hificM and ratios 


FT-SE 100 

FT-SE Mid 250 

FT-SE-A 350 

FT-SE-A Ai-Shara 
FT-ffi-A AD-Sham yteM 

3089.1 

3891.4 

1565^ 

1557.62 

3.76 

-1&3 

J173 

-9^ 

-&9B 

P-74) 

FT OnSnary Index 
FT-SE-A Nor Ftaa p/e 
FT-SE lOOFut Jun 

10 yr OIK yield 

Long gflt/equtty yid ratio; 

24455 

19.89 

3097.0 

8.17 

999 

-14.0 

(2CL04J 
+7 JO 

am 

am 

Best performlrtg sectors 

1 Water 

+1.7 

Worn performing Mctora 




+0.5 






™... +04 




4 Baetrieftv 


+04 




5 Other Sarvicaa & Bara 

+02 

5 Printing. Paper & Pcfeg 

— - 1.3 


■1 fills 


fi 




** 


CROSSWORD 




Inflation 
worries 
hit M&S 


Disappointing haarnfnn results 
from Marks and Spencer, 
together with a cautious state- 
ment, saw the shares fan in 
busy turnover of 8.5m yester- 
day. Profits of £851.5m com- 
pared with forecasts of £865m 
contained a surprise Increase 
in the pension contribution. 
Otherwise analysts declared 
themselves fairly satisfied with 


the underlying perfo rmance 

But the shares closed 11% off 
at 412p as some investors took 
their cue from Marks' remarks 
that cost price inflation is 
returning to the retail market 
“Some institutions thfrnft they 
might have a racier ride in 
some of the more undervalued 
and risky stores stocks," said 
one dealer. Analysts kept their 
1995 forecasts in the £940m to 
£960m range, although a num- 
ber did lower their perfor- 
mance rating in the light of the 
company statement 

Telegraph deal 

Shares in the The Telegraph, 
the London-based daily and 


Sunday newspaper group, fell 
sharply to close 17 off at 57ip 
as the Seaq ticker revealed 
that various blocks of shares, 
amounting to around 4.3m 
shares, had been sold into the 

market at 570p. 

The shares represented the 
rump of the big bought deal 
carried out jointly last week by 
Cazenove and Goldman 
in which Mr Conrad Black's 
Bollinger Group reduced its 
hoilcBng in the Telegraph group 
from 66J? per cent to 56L95 per 
cent Earlier yesterday the 
Seaq ticker revealed that 
Bollinger's 12.5m shares had 
originally been sold to Case- 
no ve/Goldman Sachs at 587p a 
share. 


EQUITY FUTURES AND OPTIONS TRADING 


It had previously been 
believed that Cazenove/Go Id- 
mans had placed the majority 
of the HoDlnger shares, last 
Thursday. 

Thom EMI weakens 

Shares in Thorn emt tum- 
bled 29 to lQSEjp as it reported 
full-year profits of £326 -5m 
against market forecasts of 
between £330m and £340m. 
Leisure analysts were also 
perturbed by growth prospects 
in the music division and 
also in the dividend policy. 
Forecasts were reined In by 
around 10 per cent to the 
£40Qm-mark for 1995, with sev- 
eral brokers also downgrading 


TRADING VOLUME 


Stock Index futures remained 
in the doldrums as dealers 
reflected on weakness in 
bonds. Once again volumes 
'n both futures and traded 


options remained low, writes 
JoeUGbazo. 

The opening of the June 
contract on the FT-SE 100 was 
at 3,103 and initially gave 

■ FT-3E IOO INDEX FUTURES (UFTg E26 per fiP hdax pot* {APT) 



Open 

Sett price 

Change 

Hflh 

Low Eat wal 

Open felt 

Jim 

S096L0 

3077 J) 

-13J0 

31Q2J) 

30760 

11732 

50358 

Sap 

31000 

3093.0 

- 12 L 6 

31100 

3097-0 

864 

4376 

Dec 

31100 

3102.0 

-14d0 

31100 

31180 

SO 

201 

■ FT-SE MD 200 INDEX FUTURES QJFPQ £10 par U Indatc point 



Jui 

3706.0 

36700 

-3GL0 

3705-0 

36700 

S42 

43S2 

Sep 

3723.0 

3687-0 

-800 

3723.0 

37020 

528 

0 


■ FT-SE MB> 2S0 MPBt FUTURES (OMLX) CIO par U Index point 

Jun 3,873 3.685 3,885 120 891 

M open bmwt flgma am tar prodoua day. t Boot wMn» shown. 

■ tT-setwecetoimoMfjfvg{^Q9Ctetop»y«uiiwt^Kpofc« 

2900 2060 9000 9000 3100 3150 3200 3250 

CPCPCPC PCPCPCPCP 

Jon no 141 12' Iflh Z 1*2 6 37^ I 60 1* 9S>2 rij l38h 3 181h 

Mi mum znjiwh-nh «s eo w* 83 « i* iWs 

Aug 22* 35 iKfcffh m 01 TW 81*? »h103h 18 132«j 48 1MhMh20Zh 

Sep 234 43 190*2 57 Mi 73h 157 94fe WB IIPz®* 145 IS 174% 47 211 

Dec? 288 76 294V 10% 147 ISPs 100 204% 

Ob &012 PtM 6PW ■ 

■ EURO STYLE FT-SE IX INDEX OPTION QJFFE) £10 par ftp Indax point 

2925 2975 3025 9075 3126' 3175 3225 3275 

•fen mb 8*2 mhish Wa 27>a 47fc 47 28 74h TlfeHOfe 5 152*2 2 Vttk 
WiTOh 141 33 m 47h 78 Oh S»* 94h 120* toh. 18P* u 2B3h 

MkS&zWh 48 12Bh85>2 101 86*2 77 111h 57 14! 4f%174b 38 212 
Z1S>2 45 148 79 82*2 123*2 53 183 

(Mbf 157 113 ■- 134 166 81 21 Oh 

Cafa 072 Pur ijekq * Ihm ump Mb nkn. PrerntaRn Mum n KM u mra ans rl plm. 
t LunQ Mai Mr nMBa. 

a EURO 3T1T^ FT^ IMP 2WIM)EXOimOM{C*«jq CIO per M feKfeBC point 


■M 

ss 

Sep. 


3850 


3780 3780 3800 

Jam 13 22 1 65 112 

QM 0 Mi 0 SMenut prion aod Mtam n Hn at 4JQpm. 


SE Actuaries Share !nd 


3000 3050 4000 4050 


some hope of an improvement 
on Monday's poor session. 

But those soon faded as active 
selling said to have been led 
by Goldman Sachs drove the 
oontract lower. 

The weakness in both UK 
and German bonds followed 
the release of worse than 
expected German M3 data 
and prompted further seffing 
of the contract 

In the afternoon, the bounce 
on Wall Street tailed to Inspire 
a similar response In London, 
and the June contract again 
traded at the lower levels and 
continued leading the cash 
market down. 

K finished at 3,077, down 
8 on Its previous finish but at 
at a 16 point discount to its 
fair value premium to cash of 
about minus 3 points. A slight 
recovery-*! after hours- trading 
saw June end at 3,083. ~ 
Volume at the dose of 
business stood at 11,732 
contracts. 

Turnover in traded options 
remained poor though it 
improved on Monday's meagre 
levels. A total of 24,647 lots 
were traded of which 13,119 
was in the FT-SE 100 option 
and 1,714 In the Euro FT-SE 
Stock 


ASQAOnupt 


S to cks Yesterday 

vs L Ctaaing Chv'i 
com ertaa cuam 


-4* 

-6 


Assoc. &ta Port* 

batIkM- 

BET 

acc 

boot 

8PT 

BTOML 

Bit 

HT f yPsM) 

BIHf 

BtftfcofSooteirft 

ssr* 

BbsCMs? 


Baent 
D o— let 
Brtt-Asmpttv? 
MU Ahaqat 
BrtMi Qssf 
BriMi Land 
MMhfeMt 
Bund 

BuflMh castmff 

Steam 

Cttdont 
Carlton teanat 

Conn VTyatef 
Conan Urtonf 
CocAson 

CnsWart 


Day* 

May 24 chga% May 23 May 20 May 16 


Ymt 

400 


Ok Earn. 
yUdMyMdK 


►\ beries 


P/E Xd ad ToMl 
ratio ytti Rotum 


Da La Rue? 

Dhm 
Eaunm Bad. 
MWMEtal 

nsl^Ms 

FM 

Rscca 

FonSan a OoL LT. 

Fonst 

6en.teS8snij- 

asF 5 * 

Oyn—d 
Osnsdsf 
* IMR-t 


FT-SE IOO 3069.1 

FT-SC Md 250 36SM 

FT-SE MM 250 « few Trusts 370a7 

FT-SE-A 360 1565.3 

FT-SE Ss— MCsp 1016.88 

FT-SE SnsSCsp SR few Trusts 188138 

FT-3E-A ALL-SHARE 1557.82 

■ FT -SR Actuaries AB-Share 


-08 310M 3127a 3122.H 2837.7 
-0 l5 3709-3 3714J 371SJ 3172.7 
-05 3719.4 37233 3723£ 3193S 
-08 1574.6 15824 15808 14102 
-03 192230 182048 192033 1612J3 
-04 188822 1888X8 188800 182884 
-08 1588X8 1573X8 157109 1402X3 


DSlT* 

May 24 chflslt May 23 May a May 18 


Yssr 

■8° 


308 888 

834 5.81 

847 804 

303 843 

200 4.16 

8,05 401 

878 807 

Div. Earn 

i ileti Itf «A^U n/ 

YIBK17D yWPTD 


1700 4079 
2103 4086 
2021 41.40 
1865 1007 
2053 19.16 
27.04 1905 
1818 1848 


114850 

135804 

135832 

1182.10 

147033 

14G4J85 

120807 



IhntBomCrafliid 

M 

Bit 

tadWRwt 


WE 

ratio 


Xd <k& Total 
ytd Return 


2707.52 -0.1 270905 2705.17 270600 2182.10 344 402 29L08 3708 107501 

380606 -03 3920l59 3930l31 3944.78 304400 332 5.06 2880 4339 106810 

266022 40.1264861263701283854 212200 3.47 447 2700 4043 107847 

200707 -13 2033.72 2048572038061381.10 335 133 BOJQQt 1882 118880 


ID MNEML EXHMCT10N(1« 

12 Bdradhi hxt«fttaa(4) 

16 OL Magrandn 
16 01 BetaraMon 8 ProdtlH 

20 OBI MANUFACTURERS?*# 204801 

21 Bi*ln0 & ConstmcUonpl) 1272L88 

22 BuMns Maas & MarchapQ 107800 

23 Cbanfeatapl) 248846 

24 OvsraUad bxftoMsisflQ 2072.12 

25 Bactadc & Beet Equip(M 2102.70 

28 Bwinssrtig(71) 1678BB 

27 Bvbwsrtng. VShlqls9Cl2) 228864 

28 Wktfna Paper a Pohq(S7) 2B08A7 

29 Taxtffta & Ancaralga) _ 1770SZ 


-00208807 207334 207029177130 307 4.41 2828 2407 102703 

-03127841128839127032108900 204 304 3846 1818 96736 

-08199300 201207 2005301717.10 300 3J\ 3404 2879 92137 

-85 248906 251537 252130 211630 870 430 2738 2839 1083.72 

— T.1 209438 2112.19 210800 186030 444 4.43 27.69 3045 104108 

-04 211818210813 2061.71107810 349 816 1881 1200 100637 

-87188205189406189833150230 208 303 3141 20.11 106100 

-10 231107230332 234343170930 437 816 6444 3242 109433 

-1J3 2S393S 2871 34 29C820 229700 236 810 2331 2945 10B876 

-03 177306 177813 1772.77 132870 803 536 2206 2305 98204 


30 C0N8UMB1 00008(99 

31 ft swsri es pT) 

32 SpWa. Winee & CMaratKQ 

33 Food Manufacti**r*<23) 

34 NoueshoU Goodafl3) 

36 HetiHh Csra(20( 

37 PtwraacauficaKlll 

36 Tobsoooffl 


268328 

221878 

295409 

227899 

265704 

170709 

2752.17 

363247 


40 ag H Vic ggp saM 

41 DMObutorapi) 

42 liaisura & HotahPSJ 

43 MedtaGHl 

44 RstsBera. Fcod(17) 

45 (t ala O a n i. Gen*r-I(44) 

43 8*«Jori Servfess(409 

49$»*pMtU9 

51 Other Ssmtem a 


200102 


216038 

304506 

163701 

173508 

164815 

235807 

119202 


rntmunEsm 

e2-aecnfcltyC17) 

OfaMbuUonfZ) 
66^isoon«nuntcadon 

eawstsrfia 


227901 

216705 

188204 

202868 

178843 


-00 260135 270832 272007 268030 
-lO 224507 226816 228803 104400 

-84228802 230871 230904 222130 
-OS 256896 256103 257406 216870 
—13 172806 173838 172866 168400 
+04 273906 273706 276874 313400 
-86 369845 373704 377SJ0 3620.10, 
-1.1 202832 203704 203901 176870 
-81 295201 297466 296868 285840 
-18 220843 223879 223988 173830 
-89 307471 3105.77 310407 228850 

163843 1687.48 164101 160200 

-13 175846 176206 176088 147200 
-0.7 165475 166414 168805 140340 
-88 237100 239877 240801 207140 
+03 118907 1182.78 1107OB 122830 

-81 228100 228738 226850 211100 
+04 215857 2171.07 216819 1712.10 
_1_0 1001.78 100816 1892.18 190430 
-OO 203873 204837 2011.10 190930 
+1.7 175730 173737 171000 168130 


438 

43S 

708 

7.01 

15.16 4449 
1014 1083 

90090 

97346 

NornanBaa 
HoriMni Foods) 

3.71 

6.64 

17.44 

4i.ro 

07728 


4.17 

7X1 

14J4 

42.75 

04051 

PAOt 

043 

7.06 

1096 

4074 

011.04 

E2& j- 

Ptwteirhff 

023 

506 

21.00 

moo 

98009 

405 

708 

1444 47.15 

861.10 


5-60 

008 

12.17 10035 

80088 

tel 

301 

500 

90,3V 

1640 

969.04 


004 

501 

2021 

34.05 

980*0 

Rttandt 

307 

428 

2740 1942 

1051.23 


2.12 

403 

23.71 

34J55 

1060-35 

narsrf 

5^""^ 

308 

209 

060 

600 

12 SI 
2098 

13,72 

11,14 

96034 

91236 

204 

7.10 

16.74 

0L06 

98050 

060 

467 

2446 

15.14 

00065 

4.48 

2.29 

80007 

091 

100046 

BbodWi A Naw.f 


69 M0W-FWAWCtAL3(B31i 


1B87Q9 -86 1897.18 170530 17M37 152457 


7DP**AHCUL5ff 

rt+aHtPI 

73. $Mucanca(17) 

74 yfa Aasuranos(69 
n Mt wl ent BanMfl). 
77 Other RnandMC24) 
79 PropsrtvQg} 


216841 

2781.02 

1263.79 

231892 

286834 

168139 

157877 


447 

024 

15*T 

1453 

05072 

SqOHj*D -Hop 

3*3 

11*7 

1075 

1088 

876JJ0 

Basest 

038 

t 

* 5343 

900.47 

rfisfirSS 

4JX2 

744 

1040 

009 

841*7 


5.17 

1432 

027 

348 


SMTisnapartt 

3.76 

OIO 

1069 

10*5 

1173*5 


<15 

016 

1420 41*4 

847*8 



.07 2181.70 210103 218478 1065.70 
-03 280339 2811O7278139 244230 309 833 1885 5807 

+ i 126820 128245 128801 127000 812 1130 871 2734 

+03 230934 233203 236004 264200 83 6 700 1536 6838 

-10 290932 291009 290732 252200 334 1048 11.10 2336 

-03 186501 186848 190201 141300 338 646 1838 20.15 

_n s 1BH414 ,CBg 0,1 <anBa 0 134840 887 305 31.77 1039 


_te ewaroewr TWgrstjjgL 

6» PT-8&A AU.-3HMWWSQ 

■ Hourly movement* 

00*h 


262200 

155702 


~ or. 18 22264.60 2J7 103 5543 2854 

"-00 158858 157308 157100 140203 878 827 1816 


1800 1810 HtfiMsy LpsbMs j i 


^ 1(LOO 1 t oa 1200 laoo i^o — - ^ — 

30850 soeso soaro soboo 30903 si087 aoeai 

RfcSE IOO 31039 31M3 3W4.5 309« , 38902 38B23 88923 87087 36890 

Free Ud 260 am? wwo **** 16B aa iseso i564o is88i isaso istso is64i 

FR8&A350 15723 15720 15883 W'-s 


Tfe»«t ST-88 V»HVi4Sli«nUM 

AdusrlM 350 Industry baaknts 

^7^900 1030 1130 IUD 1W0 


* FT '** .nnn 1 1 *^ 18« 1830 KM IMP 1*™ <*>» Ctonfls 

ZZ gg gg aass sa ss 

m rnS£ 27184 27150 27041 27288 17 843 17643 17642 17540 ^80 

17503 17583 JSJ S? 28123 2818-1 28213 26181 2815.1 28970 -22.7 

28384 28403 28233 28210 -<»«- 

. hi m asfeSlafemiTtiinrsfimT-lil 


-.h-i-, b- iMs at coMttuai*i m e*Mfe Son The FfroncM Time* 
-^sSIb 8w*». wWoh cows s nnas at atacswito and papM^sasd pmi 

880 and Itis FT-SE AtikssisslAduby 
roa nanhi»8n Max la 



aa» sat, 

2000 403 

2JOOO SB 

2^00 387 -4 

8804000 
143 3GB -8 

1,700 248*2 -1*2 

040 278 -4 

437 MB -2 

48B 280 -5 

1,000 B4B -IS 

2400 433 -3 

4300 128% 

733 427 -« 

788 728 -6 

0.SOB 40t% +3 

1^)00 302 -10 

SBOO 384 -1 

2300 288*2 -1*1 

4300 381 -6 

EM 101 -4 

2300 Ml 

2300 SIB -10 

3300 307 44 

216 303 -6 

878 639 -6 

500 434 -0 

778 473 -7 

6300 387 48 

4600 282 -8 

330 302 -2 

10300 Mill -1 

37 188 -2 

1300 881 41 

50300 SB 44, 

5.300 457 -12 

3300 402 -3 

. t& 303- • 4A 

1300 320 -1 

IjBOO 023 -IS 

779 250 -4 

one 558 -8 

1.400 207 -7 

1«a S27 -4 

IBB 445 -11 

SOB 827 -IB 

881 197 -4 

191 « 2 

179 SB1 +4 

SID <38 -1* 

944 417 -5 

1.700 380 45 

BSD 1B4 40 

1.000 1» +3 

1.700 1<0\ At 

1300 238 .44 

1JOO EBB -10 

WWO 318 -1 

4300 660 46 

006 350 -a 

1.100 508 -6 

2200 *5D*j 

1JU0 613 -1 

IJBOO 188 -0 

1.500 688 -12 

IJOO 480 -1*2 

4300 746 -7 

OH M 4 

4000 261 -8 

4Z00 107*2 -l*a 

1X0 2fla -6*2 

301 170 -1 

47 343 

*70 818 -A 

1.800 4SB -21 

21S 583 -1 

2.100 588 -8 

8 544 -3 

6J900 175*2 -7 

lJfflO 880*2 -e^ 

in no 4 

1J00 438 

BB4 3S4 48 

833 682 -8 

W « 4 

600 507 -2 

1300 143*| -h 

5^00 181 +1 

387 4S3 46 

1.100 163 -3 

86 701 44 

8.100 412 -12% 

224 BOO «4 

806 128 -A 

4M 217 -6 

1-800 481b -4*2 

2ja00 420 -0*5 

820 240 -1 

022 320 410 

332 6M 46 

1.1W0 218 -3 

0 S 820 46 

1.100 ear -10 

MOO 651 -1« 

1^00 186% -1 

1J8D0 400 -7 

4200 295 4fl 

364 007 -16 

2J3Q0 667 « 

586 333 

1,900 405 -12 

200 823 -2 

1.100 sue -a 

588 an -12 

1500 221 -eh 

ZjOQO 474 -3 

1.600 188*2 ■«% 

410 411 -7 

743 EM -if 

ZjOOO 538 

1^)00 BBS 

2500 370 

9500 126 

816 ISO 

779 323 

1,300 918 

1.700 732 

1500 540 

452 230 

55B 497 

6.400 140% 

2.500 401 

2*00 387 


114 807 41 

112 540 47 

3JD00 230*7 -4% 

3.400 228 -1 

510 312 -4 

1/20 225 4 

288 310 -3 

is 

766 431 -3 

3200 167 

4000 221 -2 

1.100 M8 +4% 

2/300 vm -m 

1500 237 -6 

MOO 87 -*a 

867 389 -« 

BBO 1000 -1 

IJOlS 330 44 

3SO 611 -a 

1^00 534 47*2 

70 703 -Ot 

1J0D 567 46 

966 6B9 +16 

157 aS4 +M 

1.100 Ml -11 

MB 667 -3 

1^00 161 -a 

IjOOO 176 -a 

WaMsyt W W -» 

TMcShM Baa. 740 500 47 

VartoMrsintar OB 526 +13 

ZsMost 704 705 -a 

Baaad on feadng uakwe tar ■ aatactian el mapr 
sacnBies dBak noatfi am SEMI ««n 
jiiy iis. 1 — tutiiii j — * ~~ — 

nw n ngoM down T bMfcsta* an FT-8E 
lOOinaesr 


as 

L*dbn**t 

LanaSaoisMHt 

Lsporta 

Lagal a OsnsraTf 

London Baa 

LnM 

Luon 

» Cf 

MR 


Madt* A 


»(Wtei 

wet 

MdVMKBanXt 
NHtanal PMiart 
Nen 

klsMtK IfttoB HkuF 
iWtil new | 


+11 

412 


♦11 

-3 

-13 


TEN 

TIQTOJt 

Tfemasf 

TtoAUts 

l^torwbodnw 

Tssoot 

Thames VNWt 
Thom aft 
IMMt 
TraMgarHoaH 

Hat?..,... 

UCedBUttlst 
Untr 



their stance on the stock. 

Mr Geoff Collyer at NafWest 
Markets, who retained his 
long-term positive position, 
said that the stock was also 
suffering from profit-taking 
after its good run this year, 
fuelled tn part by the publicity 
over multimedia. 

The two Scottish generators 
showed the rest cf the electrici- 
ty/generator sector a clean pair 
of heels as ther market picked 
up hints that the National Grid 
is to allow the two Scottish 
generators, Hydro and Power, 
to export electricity to wn gfomd 
and Wales on a h««i« highly 
favourable to the Scots genera- 
tors. 

Mr Douglas Falconer, a utili- 
ties specialist at Yanudcbi, the 
Japanese-owned stockbroker, 
said the news was a strong bull 
point for the Scottish stocks 
which were among his best 
buys in the sector. 

Water shares, meanwhile, 
extended their recent strong 
performance, reflecting persis- 
tent hints around the market 
that the preliminary “K fac- 
tors” inrflcafcBri to the compa- 
nies by OfWat, the industry 
regulator last Friday, may 
have been better than the com- 
panies expected. Analysts 
warned, however, that the 
negotiating process over the K 
factors will be hard fought and 
not revealed until late July. 

The second line water stocks 
attracted much of the buying 
Interest with Yorkshire, the 
sector’s best performer on 
Monday, lumping 13 more to 
526p. Welsh added 18 at 629p, 
Wessex 14 at 634p and North- 
umbrian the samp to 573p. 


NEW HIGHS AND 
LOWS FOR 1994 

MEW HKH4B (80. 

BLDQ IMTLS A MCHTS (2} Baegeridg* Bdcfc, 
Johrato. O IB MKi M JI n Diunm ii Coleac, 

■ P unn raui nn B rp asm, ow nwie tw 
tn WSstara MHns. CLBCHWC A 0LSCT EQUP 
Pi CML M nwi S ui , BW MM1 W W 
Feaum. Opmmocics. aynondS. exmACTm 
ums 99 KUumOokLm. HEALTH CARE (I) 
Aijo ab. oWBsnaBn' coamtNna n 
UBWniHOIBSdlMttBati.HEDH 
to Mew Rsdta, an, ■fTEORATBD 09 SIMM. 
PanAra. PHTHQL MPGR 1 PACXO (Q 
wyndaham pnsa. RETaiLew, pood n 
RE7ALet& Q2N2RAL r*] SUPPORT sens 

(1) feMT. THANSMRr {IX 
rear lows (107). 

rau* n amwauBs tn onn wna 

BULDRM A CMTRN 0 BUQ MAILS A 
MCHTS (1) Tamwc. CHEMICALS 0 
Mops. CHnanonw tramwiTCMs n 
CMeport Vernon. Optoma. EMtmqXk 
FamtiL taotesps. B WBSHa sets (8 
ELECTRNC A ELECT SOUP n BNOMeBIHa 
H) Btaok a Dectar. Eatt. Ctttara ktstt. SMn. 
EXTRACTIVE WOS (8 FOOD MANUS M 
HEALTH CARE (« Aiontam bA, HoanmaS. 
Uto8etanos*. Naattr-SNA, H0UBS4OLD 
QOdOB H M8URAHCE M GRE, ObsBA, Sun 
AIBmcw WBs Cbnoon, SMBlMBfr TRUSTS 
0*6 M V PW 3 re ir C OM P A 1 6E S (1) HUE A 
HOTEie fi) thMda. LnEASSUUMCC(D 
MfeOAi WE* (8 MBICHAMT 8AMG9 » 
onsm FHANCIAL n PiOWM FhsncU. 
Unfesi, PRIME RARER A MCfOO (4) Craat 
PottofnQ, Da Ls Ran, FW. Plysn, PHOPHTTY 
tq RE»6LBi& reOD M RETAILBK 
a—ML Ol A*awn, Bs u ac^ws. Canton, 
CMMha hex. OS. SoSiaMS, WEW, SUPPORT 
BBW8 (8 UttO 4, IttPBon. TORIES A 
APPAREL p] Harmn u a, Meta*. Sfcttv 
TOBACCO (1) TRANSPORT n AMB0CAM8 M 


Severn Trent was the FT-SE 
100’s best individual performer, 
the shares Taring up 11 to 5l8p. 
North West Water, reporting 
thfa morning and expected to 
announce an eight per cent 
increase in the dxvktend total, 
put on 10 to 520p. 

Services and marketing 
group Inchcape tumbled after 
the chairman warned that first 
half profits for the current year 
would be down on the same 


period a year earlier. 

The company blamed effects 
of a strong yen and the down- 
turn in European car markets, 
along with other factors, for 

t!hp i^0pHtu» 

The shares extended an ear- 
lier decline and were down 26 
at the day’s worst before 
steadying to finish 21 down at 
499p. a six-month low for the 
stock. 

Dealers saw some consola- 
tion in the chairman’s opti- 
mism over second half trading, 
which he said should enable 
maintainance of year-on-year 
profit growth. 

However My Nyran Scott- 
Maiden at BZW said the 
decline in the share price was 
“overdone given that this is 
what we expected for the first 
haff". 

Granada was once again 
undermined by persistent talk 
suggesting problems over the 
merger- with. LWT. The shares 
retreated 9 to 508p. Ladhroke 
suffered for a second session 
following its bearish agm state- 
ment on Monday. The shares 
slid 7 to 175£p. Forte, on the 
other hand, was the one bright 
light in a mahgned leisure sec- 
tor, adding 4 to 236p an turn- 
over of 2.3m. following a posi- 
tive agm the same day. Results 
from FairUne Boats helped the 
shares jump 40 to 435p. 

Negative comment on Better- 
ware results on Monday saw 
the shares come off 14 to 108p. 
Barton Group was said to be 
one beneficiary of switching 
out of M&S, the shares edging 
up three-quarters to 59p. Great 
Universal Stores held up, slip-, 
ping just a penny to 6lSp, on 


renewed hopes of an imminent 
share buy-back. 

Strong two-way trading in 
business services group BET 
after it reported a return to 
profit, brought turnover of 
9.3m. The shares closed 
unchanged at 130Kp. 

A stock overhang was 
reported in both British Aero- 
space and GEN. The former 
eased 7 to 473p, and the latter 
shed 12 to 588p. 

A profits warning from par- 
cel delivery group United Car- 
riers sent the shares foiling 
sharply. They finisiiEri 33 off at 
USp. 

News that Stena-SeaUnk has 
cut its cross-channel ferry 
prices by 20 per cent weakened 
sentiment in rival ferry opera- 
tor P&O. The shares gave up 18 
to 651p, after trade of 3.4m. 

International freight man- 
agement company Ocean 
Grasp eased 14 to 27Sp, after a 
gloomy annual meeting at 
which the nhairmaR repeated a 
warning on the uncertain out- 
look for 1994. 

Bargain hunters for nharanri 
tunnel operator Eurotunnel 
saw the shares bounce 5 to 
360p, in healthy volume of 
1.7m. 

Favourable press comment 
for British Airways’ results 
boosted trading in the stock. 
The shares appreciated 8% to 
387%p, an volume of 65m. 

MARKET REP O R l fcftSa 

Stave Thompson, 

Christopher Price, 

.Joel Kibazo. 

■ Other statistics,' Page 22 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND FALLS YESTERDAY 


Mesa 


Fate 


asms 


■Mr 


■lots 


Opflan 


Jrt Oct Jan 

Jta Oct Jan 

McMpra 

540 

51 56 - 

BH 17 - 

n»«) 

580 

18 28 - 

31*40* - 

Arm* 

240 

15 20* B 12* 18*21* 

ra«) 

280 

• n 18* 25* 29 33 

ASM 

50 

010*11* 

2 4 4* 

r»i 

60 

3 5 6* 

6 9 10 

Brit Alnwy* 380 

32 41* 46 

815* 21 

(W) 

390 

15 25* 30* 

24 30* 35* 

MOBODA 

390 

27 37 45 

13 23* 20* 

r«oj 

420 12* 21* 30* 20* 30* 46 

Boa* 

500 

45 58*80* 

B 15 21* 

C5») 

550 13* to 34* 31* 39 43 


OpHao 


CUh Pots — 

JfealsMfeVM'M 


BriUsh Fulda. 


BP 380 26H 36 43 1DM 18 23 

r«H) 420 T2 21 29 27 34H 3814 

BWtlSM 140 B 14 17 6 12 14 

H41 ) in 3 6Mt «t 22M 34» 28» 

Bast 500 31 43H53H14M2ZH34H 
C-518 J 55D 9K 21 29K 36 51 64K 

ttftAVka 450 MM — - 21 - - 

r<Sfi ) 475 13 - - 36 - - 

Contaokfa 500 34K47M SB 13 22 
(■326 ) 590 16M23MSM 43 50H 57 

COs* (Woo 550 a MM 45 15 2Uk 31 
[•558 ) 600 7M 15 23 48 S9M ,62 

IQ 800 «80MM»20M36H48» 

C82B ) 950 MM 36)4 K47MB4M 73 

KhtfUnr 550 3BK61M « ISM 27 34 
fSB8 ) 600 15 26 46H 44 54K 61 

Lind Saar 050 2254 34 42 21H 26 3414 
P804 J TOO S14M 8 15M 61M 68 

Maria & S390 Z7 3I4I 712H17M 
r«12 ) 420 11 26 KM 22 26H 30 

M6K9 4ZD 4ZH 46 G7M 6 15 ISM 
f4SI ) 480 17 » 96 22M S3H 37 

Unbisy 350 IBM M 3BM T7M 27 32 
(-307) 420 617MMH X 45 SOM 

SM THU 700 4K 8BBBM 8M 18M23M 
(732) 750 IBM 30 9BM 28 43K 48 

Staratnaa 2ZD tt 22 2BK 6 12» 16 
(727 ) 240 BH 13 17 20M24MZ7M 


07 7 — — 6H — — 

109 314 - - 12M - - 

1000 3B56H 74 27M34M44H 
1050 1S3BM 91 5B GO 72 
700 31* 47 67M 21 36 43 
750 11* MK 36 S2M 66M 72 
A* Hon Mi Aug Non nti 


Hrhob 
raw l 

IMS 

n« > 
Local to* 

PfcO 

nan 

radqdan 

PwMtal 

JWi) 

RTZ 

rani 


260 n 15* 10 IDS 
280 4* SH 11* 25 
15412* 16 - 12 

180 4 5* 6* 29* 

160 13* 11* 22 9 

200 5* 12 13* 23 

050 S 50 SDK 27* 
700 14* 26* 38 59 
160 17*25*27* 7* 
200 7* 13 16 19 
280 27 31 S 7H 
300 15 20*24* 18 


16 IS* 
» 32 
14* - 

30* 29* 
16 19 
29 32 
46 S3* 
81 85 
12 15* 
23* Z7 
13* 14* 
23* 24* 


Other Head Marast __ 

Mineral Ex tracOun 

General Manufacturers , 


Consumer Goods . 
Services . 

UWfcm. 


Rnanctata 

fcwastnwnt Treats . 
Others 


Totals 


0 

69 

3 

1 

13 

1 

66 

50 

76 

83 

214 

387 

23 

72 

96 

52 

151 

310 

28 

10 

8 

3S 

147 

195 

10 

126 

325 

22 

TO 

34 

329 

831 

1415 


Data baaad an Sioas ixanpasiaa Mad on the London Stan Santas, 


ran) 

fkaiai brace 

C264) 

Toco 

rzn \ 


rsss) 


860 48* 70 87* 24 45* 53 
900 24* 47* 63 52 71* 79 
500 » 49 51 18 32 38* 
550 12 23 31*50*63* 67 
290 19 27* 34 12* 20* 22* 
280 10* M 25 24 31*33* 
220 14*20* 1* 11 1617* 
240 St1V4 14 22* 28* 29* 
72 13* 23* 30 
38 47 37* 48 55* 
34 ~ MS 16* - 


Last Declarations 
ForeeBtamant 


Sept 1 

sapna 


500 
550 21 
364 28 


41 96 


(*366 ) 


384 11* I* - 26 33 - 


TRADITIONAL OPTIONS 

BrstDeaangs May 23 

UMOealnpB Junal 

Gaia: Corn-Tele, Europe Bwar. LBM& Mirror ftp, Pelican, Racai Boc, UMECOl 
P uts Europe Energy. Lucan Wts, Nam Raa, PaBoan, Smith New CL Pub & CaNa: 
HSBC, HMO Racev Cap, Tarmac. 

LONDON RECENT ISSUES: EQUITIES 

Hue Amt Met Ctaee 

price paid op 1904 price Nat Mir. Ora WE 

p MP (Bn) Ugh law Stocfc p */- <*/. cm. yU net 


rwj 


noon 

Ztmca 

nos) 

Option 


final M* 

430 

41 52 57* 

8* 15* 23 

r»i ) 

480 

17 29 3627* 

34 43 

Ladmfca 

160 21*26* 20 

4* 

8* 10* 

(175) 

TO 11*15* 17 

13 

17 21 

IM Harass 

330 

M 34 41*10* 

21 23 

T338) 

390 

11 25 27* 

28 37*39* 

OPto 


Jtaa 8tp Use Jun Sap Psc 

Hums 

130 

1210*21* 

3 

B* 12* 

H«) 

140 

6H14HT7* 

6 

14 17* 

Option 


Aof Has Mr Aqg Ho* Fab 

Brit fen 

480 

41 Bl 15*2<H 

44 50 

(*«) 

500 

25 45 57* 

47 88* 72* 

aw bn 

420 

38 36 48 

15 

2S 28 

r«s) 

490 

11 21* 28 

38 

40 51* 

Bra 

390 25* 20 31 

15 

24 27* 


Optun 


JH Hot JW JU Oct JU 

_ 

FJ» 

1.34 

10 

9 Abtrus Soot Wrta 

10 






SM 

900 

6T 61 80* 13* 24* 31 

- 

FJ>. 

110 

141 

IX Captoi 

141 


Lf03 

IP 

22 

235 

1*948 ) 

990 

29 SI* 62 34* 47 54 

3250 

FJ». 

1634 

240 

245 DCC 

246 


1034* 

33 

2.7 

12P 

natai wr 

500 18* 27 36* 27* 34 41* 

110 

FJ». 

424 

120 

110 DBS Data £ Has 

IX 

+7 

LM2JJ 

1.1 

2P 

26.8 

ra«> 

GEO 

4 10 M 80 70* 76* 

160 

FP. 

00.1 

171 

IX GRT Bus 

in 


FN33 

3P 

2P 

132 

120 

FP. 

40.7 

128 

122 Qo-Ahead 

IX 


MNLO 

IP 






- 

FP. 

- 

37*2 

X Goman Gbl SI Wl 

37 

-h 





Afebay M 

300 10* 32 41* 5 IB* 21 

185 

FP. 

424 

IK 

IX Hartleys 

IK 


W4J 

2P 

32 

17-8 

P404) 

420 

5 18 27 21*32* 36* 

105 

FP. 

852 

10S 

in HerttKUl 

in 

-a 

WT+LO 

IP 

SJ3 

142 

Amabart 

30 

3* 0 7 1* 3 4 

- 

FP. 

- 

98 

92 kitt Btatach 

92 


- 

- 

m 


(-32 ) 

33 

TH 3* 4* 4 5* 7 

- 

FP. 

“ 

SO 

X Da Warrants 

46 


- 

- 



BscBia 


46 57* 67 2 13 19* 

IX 

FP. 

71.1 

IX 

IX KaAar 

127 

-1 

WNQ4.7 

2.3 

32 

14.7 

C540) 

550 

0* 20 39 IB 30 42* 

in 

FP. 

577 

169 

IX lomhrmJ ha. 

162 


WffJ 

22 

52 

04 

— 

FP. 

221 

1&7 

I5h UdfemdAnsis 

10*Z 


w. 

_ 


_ 

Hue tame 
P30B) 

XD 14* 2334* O 17 a 
330 315*21* 27 35 90 

IK 

FP. 

FP. 

342 

snn 

15 

113 

134» My Khda Town 

IK kfeghUralDht 

14lrT 

113 

+1 

Rax 

2JJ 

3.7 


Brash fiH 

290 

10 ton M 5 12* 19 

X 

FP. 

272 

87 

67 Oxtort Mdeouhr 

74 






C283 ) 

300 

311*14*19*24*31* 

- 

FP. 

280.7 

131 

116 Radmw 

127 

-a 

WM2J 

25 

ZJ 

101 

Dixons 

190 

20 26 29 2 9* 12* 

- 

FP. 

003 

81 


BO 






(197) 

200 

5* 14* 10 0 20 22* 

- 

FP. 

29.4 

133 

IX SpeeWy Shops 

IX 


L2.4 

_ 

23 

. 

HHh 

160 13* 16* 23* 2* 7 8 

188 

FP. 

FP. 

12.6 

BOLO 

XI 

IX 

IX Suporacape VR 

100 TR Euro Qwth C 

238 

in 


- 

- 


- 

n«) 

180 

ZW W* 14 13* T7* 16* 

100 

FP. 

437 

95 


95 






Loortio 

140 

IK 18* 20* 5 13 18 

- 

FP. 

3JJ7 

X 

41 Da Wrta 

43 

-a 

_ 




f*143 ) 

100 

2 8* 13 19 26 25* 

too 

FP. 

54P 

103 

99 UndanmhMd Aits 

ICO* 


_ 

• 



ttati Power 

420 16*23* 37 13* 25* 29* 

IX 

FP. 

41 J{ 

in 

161 vymura 

160 


L4.4+ 

22 

as 

155 

r«a) 

460 

2 U* 20 44* 50 54 












Scot nmor 

380 

26 36* 41* 3* 16* 20 












P379 ) 

390 

0 28 28 16* 32* 96* 












Saon 

n»> 

120 

130 

8 1315* 2 5 7* 

5 7 MK 6* 10* 13 

RIGHTS OFFERS 








Far* 

220 

2828*31* 2 8* 12 

nans 

Amoua Latent 




dosha +or- 

T23B ) 

240 

8* 18* 20* 0* 17* 22 

price 

pUd 

Ranui 

■190* 




price 



Tonic 

P52) 
Tbora EW 


fWB) 

Torntta 

P237) 

Wrikoma 

r 568 ) 

Option 


135 20 - - 

155 6* - - 

1050 41 66 86* 
1100 15* 41* 62* 
200 22 26 32 
220 6* 18 20* 
220 to MSS* 
MO 6*13*16* 
550 26* 55* 67 
600 6*31*48* 
Jet Oct Jan 


1 - - 
7 - - 

15 S3 67 
42*83* » 
IK EH 8* 
6* 13 16 
2 B* 12 
9 16*21* 
11 32* 42* 
41* B1 70 
Jd Od Ja 


MB 


Hgh 


Low Stock 


f3B1) 


420 


to 23* 34* 41* 44* 
BritTrittan 380 « to . to 8*13K1«H 
r3U) 390 13 16*23* 24* 29* 56 
CataySce 490 46* 64* 62 5* 13*13* 


(*495) 


500 20* K 36* 20* 30* 32* 


600 26* « 54 tt 47 54* 
PUT! ) 650 UH M to 71* 30 H 

Bufenaa 480 Wh 50 SB* B* 16 18 

r«B). 500 1127*36* 2734*38* 

as aoo a a si* 7 ii» 19 

P20 ) 330 7 14 17* 2528* SI 


FT GOLD MINES INDEX 


ana son 64 73*10* 8*24*30* 
rs«) 550 31 4M to 27 40 55* 
MKTSPJB 700 75*66* 112 22 39*50* 
(*749) 750 47* » « 43 94 75* 

Man 482 30 30* - 15 27 - 
(*473 ) 475 23MS* - 21* 32 - 

OpBos AW tiw W* 4uB Ww Bib 

n a nm ea ibott* a a 7* ta is* 
ri«7J 200 814* 18 18* at* 26* 

* UnttMna aacntty price, Pi 
baaad on oaring cmr prices. 

Mjy 34. Total 
p£e 119M 


27 

M 

22/S 

7*pm 

IK 

M 

8/7 

10pm 

3 

M 

31/5 

11*jpm 

237 

M 

10/6 

28pm 

270 

Ml 

8 n 

64pm 

500 

M 

26/5 

63pm 

113h 

» 

28® 

3pm 

5 

M 

31/E 

Vpm 

80 

M 

4/7 

11 pm 

24 

ni 

— 

12pm 

125 

Ml 

4/7 

23pm 


<hpm 

18pm 

6pm 

29pm 

49pm 

34pm 

H»pm 

hpm 

11pm 

10pm 

21pm 


Babcock kill 
Btapdan kids 
iBmdomhikJge 
Ctyda Bowen 
Compass 
Oanuont Vfelay 

Feaum Htdpa 
PaBcan 
Unk 
VTR 


6\pm 41 

18pm 

10pm +h 

29pm -A 

52pm -6 

34pm 

3pm 

1 a»n 

11pm 

12 pm *1 

21pm 


3Mj37B 


19.195 



■far *<to 

23 

far n rar 

20 18 60 B 

Onrnmw 

lUItt 


NtokfaW 

157087 +2P 

103144 1882JB 1774P4 

IX 

23W4B 1GZ2JB 

■ Hltfanlbstos 

Afelaa« 

26S3P0 +iS 

251822 2408.40 242224 

453 

344080 190223 

toWMlBB . 

2091 J» +SL3 

2556P1 2512.17 2003P1 

IPS 

301189 1609,10 

NoriNAnriGafll] 

188853 +05 

168154 181 657 1688P2 

066 

2030P6 13B3JD 


FINANCIAL TIMES EQUITY INDICES 

May 24 May 23 May 20 May 19 »My 18 Yr wo Htf) -\sm 

Ordfenty Sham 8445^ 8460LO 2473J 2477^ 2404^ gantlR aatan oatte 

OrxL dhr. ylakj 4.12 4JW 4.03 4JD3 4J6 4^4 4.12 

Earn. yld.9tu 5.SS • 6J51 SA7 &48 5J50 6.15 Sues &82 

FVE rfeBo net 1&90 19-42 19 lB5 19-58 19X6 18J0 3U1 1AM 

P/E ratio fll 1956 20.16 20 j 3O 2032 9ri JQ IB. 06 mm 18lJ5B 

Tor >804. ontbary Ohare Index alnoe u ai p Brtoes Mah 2713* 2KOM\ low 484 3CHWD 
FT OeSnary Share tadan baas data 1/7/33. 

Onlnaiy Shane hourly changes 

open sap moo ii*a tano isjo iaj» iano h^i low 
M565 ZWSJB 24S1.5 2451^ 24S14 2446.1 Z444.7 244L4 2451 ^ 24G&4 2444J 
May 24 May 23 May» May 19 May 18 YTana 


Ccprtft, 17m RmwW Iknas Untfed 1004. 

ta laanlaa thaw nataar of ctanpertaa. Bails UB (Mink Bhi Vifews 100000 81/12192, 
Fiadamaaor Gold Mbtaa tariBE War 2A> 21 7J ; OWfe ahmoae 4dfi patatas Vsw aocMBM t Mti 
UWW petals warn uMWririi tar Wa scBBcrt Canattn mafew etaead S3«B*. 


8EAO bargains 23^61 24^33 24.774 

Eqofly tumowthnlt - 9818 1376.7 

Equity bargainst - 26,775 27J78 

Shares traded (ml)f 433,8 566* 

t CmBuAib klflhmailuA toutineea md omraaes hsnoaor. 


S3J074 

1615.7 

29,177 


atari 27^91 
1662-7 12S6L2 

»-334 32.155 

iPfll 











ft OECimCAL fQPT - Coat 


uuftaYdr 


_: -a 
3 38 


IBM US 
I ton Qv£n 
• Mh W 


m 09 MB 
Ml 14ft K« 


« a ur 

III M II 

ft W UK HI 
m g ur 

-3 3M MS DU 

n nziu 

w in iu 

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H 2S « 

a 58 134 

. su 250 gsi 
ri » 210 TIM 

3ft 31 S3 

4-11] MSt m UN 

92 39 US 

ft -t», m\vp* 
7W . 51011,997 

- 1 * H»H art w 


SB 

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Ifla 

tour CasiSas 
111 33.1 

IS a* 
248 B7J 
2SJ 1X0 
44 340 

22 IU 
1M a* 
31* 125 
G3i na.1 
194 7.14 

330 102 

33 1*0 

288 136.1 
22 898 
78 19* 

46 294 

49 HI 

400 1X4 

174 4U 
134 S3* 

108 14JB 
110 2X1 
924 WO 
281 4Z79 
BV 7*9 
127 389 

114 219 
446 2U 

224 mm 

15i 294 

W 4 1 JB 32 

133 3X7 
227 2W0 

134 WO 

135 993 
409 1140 
424 409 
539 7244 

SS 7.14 
130 329 
M 2 Kfl 
B4 104 
80 UZ 
133 142 

4 s.n 

15 233 

200 7S4 
B4 1179 

K 490 

16 254 
172 571 
119 609 
495 2934 

35 028 

50 UR 
384 mi 
448 4927 
236 8U 
102 474 

115 189 
25 255 

Mi 289 
27S 249 

47 114 
180 M9 
218 729 
261 1079 
178 KB 
160 223 
210 W3 
158 489 

97 071 
34 547 
15 259 
H4 319 
3? 393 
199 740 
75 1024 
31 129 

232 1245 

201 324 
183 919 
24 1X1 
2B5 449 
54 447 
04 379 
14 294 
40 17.1 
70 139 


=3 


-a m 

27 

80 

-2 ZIZ 
-6 1310 

rz K1B 

-1 104 

-4 OJA 
4-1 337 

IU 

-% OJA 
+5 tfi 


+4 8114 

-303 

-6 SS 


162 1289 
81 1581 
44 143 

50 040 

233 28 2 

M 478 
75 
Z18 
1554 
188 
IK 
820 
38 
254 



IN 

W 

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18 

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Grt 

09 

283 

989 

X4 

4S 

149 

X3 

230 

21X7 

49 

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34 

51 

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199 

1ft 

641 

82 

139 

IU 

29 

295 

19a 

XI 

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3X4 

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— 

60 

17.1 

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zn 

157 


44 

57 

a 

204 

02 

130 

259 

4* 

348 

1772 

27 

215k 

31 


44 

254 

MX* 

49 

317 

1961 

39 

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226* 

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72 

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179 

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193 

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— 

273 

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238 

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847 

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154 

694 

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373 

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182 

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149 

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09 

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145 

429 

39 

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69 

153 

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128 

188.1 

87 

112 

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79 

434 

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28 

38 

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— 

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49 

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89 

0 

121 

— 

177 

1,487 

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— 

141 

2259 

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29 

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17 

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34 



CURRENCIES AND MONEY 


FINA NCIAL TIMES WEDNESDAY MAY 25 1994 

" MONEY MARKET FUNDS 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE POUND 


Trade boost for dollar 


CtoalnB Chang* OdfaSer DqtMM On* month Thraa month* OMyw Bate of 
rad-point on ttoy KtmS ttflft to* Bata 94 RA ROW ftPA Beta ftPA Eng. mdw 


Tiie dollar finished higher 
yesterday as markets 
responded positively to news 
that the US and Japan plan to 
resume framework trade talks, 
writes Philip Gaurith. 

The US currency closed in 
London at Y104.445, up from 
T104.400 on Monday and an 
intra-day low of Y103J90. The 
dollar was al so pulled higher 
against the D-Mark, finishing 
in London at DML6478 from 
DM1.6456. 

Analysts cautioned that 
although the resumption of 
talks was positive, it was not 
the same as reaching agree- 
ment But the feeling was that 
it probably underpinned the 
dollar in the short term_ 

Elsewhere, trade in Europe 
was fairly quiet following Mon- 
day's holiday. The D-Mark was 
generally stronger. The Bund- 
esbank announced another 
variable rate repo. 

The futures markets were 
again very volatile, with euro- 
marks regaining some of their 
recent losses, and eurosterling 
losing ground. 

■ The announcement by Mr 
Mickey Kantor, US trade repre- 
sentative, that the US and 
Japan wonld end the three- 
month stalemate in trade taiir* 
is significant. Some analysts 
trace recent dollar weakness to 
the collapse of the trade talks 
in February. 

Although the interim period 
has been chastening for both 
parties - Japanese exporters 
have been hurt by the strong 
yen. while the weakness in US 
bond markets has been linked 
to the ailing dollar - the tenor 
of yesterday’s announcements 
made dear that a difficult path 
lies ahead. 

Amid all the fine words. Mr 

KantOT’S claim that the mintnn 
administration would expand 
trade with Japan, “one way or 
the other”, sounded suspi- 
ciously like a threat. 

The aim of the trade talks is 
to try and reduce Japan's 
$X31bn bilateral trade surplus. 
Mr Kantor said Japan bad 
agreed an the need to stimu- 
late its economy with a “sub- 
stantial" macro-economic pack- 
age, and reiterated a 
commitment to bring about a 
“highly significant” cut in its 
current account surplus. 

Mr Adrian Cunningham, 


Dollar 

Against the Yen per 3) 

114 



Jan 1994 

Sotacn: Datastraam 


■ Pound In Mm York 


May M — 138® — - nw. c taw - 

Eapat ISOM 15070 

1 am 15051 15061 

3 mb 15038 15048 

lyr 15015 15030 

senior currency economist at 
UBS in London, said the 
announcement had “provided 
the dollar with some support, 
but bad not been the catalyst 
to take out key technical resis- 
tance.” He said there were still 
sellers of dollars in the market 

Mr Jeremy Hawkins, senior 
economic adviser at the Bank 
of America In London, com- 
mented: “It will be perceived 
by the market as a further 
indication that US policy 
against the yen h«e changed.” 
He said the dollar was proba- 
bly now underpinned at 
Y10&50, but “you will need to 
see progress before the market 
starts buying the dollar aggres- 
sively again.” Mr Hawkins said 
the lows of Che dollar bad prob- 
ably been seen. 

■ A fairly large drop in the 
German repo today could lend 
more support to the revival of 
the dollar. But analysts are not 
predicting it nor do call money 
rates make it likely. Rates 
firmed to 5.30/5.40 per cent 
from 5/5.1 2 on Friday (German 
markets were dosed on Mon- 
day), driven by tighter liquid- 
ity conditions and the recent 
rise in euromark futures. 

With call money above the 
repo rate of &23 per cent, ana- 
lysts are predicting a fall of 3-5 
basis points in the repo rate. 
Ms Alison Cottrell, interna- 
tional economist at Midland 
Global Markets, commented: 
“After recent Bundesbank 
comments - Le. no continua- 


tion of the step-by-step easing 
for the time being, it would be 
bizarre for Frankfurt immedi- 
ately to sanction a sharp fall in 
the repo rate.” 

The case for lower rates was 
not helped by the release of the 
April M3 figure, showing that 
money supply grew, year mi 
year, by 15A per cent 

■ Ironically, the M3 number, 
which was better than some 
had expected, was cited as one 
reason why euromark future s 
performed better. The Decem- 
ber contract settled 9 basis 
points firmer at 94.77. Volumes 
were again high, with the 
December contract trading 
nearly 604)00 lots. 

Other possible factors were 
short covering and the fact 
that the Bundesbank 
announced a variable rate 
repo. Some had feared a fixed 
rate repo as a means of slow- 
ing the recent fan in rates. 

Analysts were bemused by 
the fan in eurosterling futures. 
The December contract closed 
4 basis points lower at 934)5. 
One possible explanation was 
nervousness ahead of today's 
gilt auction. 

Mr Richard Phillips, analyst 
at brokers GNL said the mar- 
ket was “verging on the schizo- 
phrenic”. “Most traders have 
never known a market like 
this,” he lamented. 

■ In Europe the Danish krone 
finished at DKifl.916 to the 
D-Mark from DKr3.911 after 
poorer than expected inflation 
data. Tear an year consumer 
prices rose by 2.1 per emit com- 
pared to market expectations 
of a 1.8 per cent increase. 

Mr Cunningham of UBS said 
the currency weakness 
reflected the market view that 
Denmark might not be able to 
make the interest rate cuts 
required to stimulate growth. 

Sterling had a steady day. 
rising from DM2.4789 to 
DM2.4856. In the money mar- 
kets the Bank of En gland pro- 
vided £1.016bn assistance to 
clear a £lbn shortage. 

■ oiMtcu iuin cia e 

Kay 24 £ S 

Hmgary 151083 - 155516 102540 - 102540 
KM 263100-284000 174800- 175050 
Hunt 04488 - 04502 02977 - 029B4 

Potent 337641 - 338275 223905 - 224205 
■tall 285300 - 2681.40 180200 - 189750 
UA£ 55381 - 55411 86715 - 35735 


Europe 

Austria 

Betgfura 

Danmark 

Rntand 

Franc* 

Germany 

Greece 

Inland 

inly 

Luxembourg 

Nethnrienrii 

Htxwuy 

Partus® 

Spam 

Sweden 

O w ta nt an d 

UK 

Ecu 

sont 


(Scfy 17.4786 

ft) Sl.MOl 
(OKI) 9.7358 
(FM) 01538 
(FFrJ 85058 
(DM) 2-4858 
(&) 309.792 
<t£) 1.Q220 

W 238058 
IFi) 51.1801 
(R) 2.7379 

WK I) 10.7648 
(Ei) 257460 
(Pta) 201577 
ISM] 11.6815 
(SF4 2.1239 


+00448 702 
♦C-1663 363 
*00389 317 
*00467 441 
*00296 021 
*00067 844 
*•1501 008 
*410103 210 
*4.16 749 


*0763 888 
*0391 48S 
*0.1008 418 ■ 
*00022 227 


m 1748ft? Q2 

01 51,1751 OD 509051 05 
-05 9.751 B -OB 8.768 -00 


Argondna (Pees) 15061 *00021 056 -I 

Brad (Cr) 280158 +48.67 118 - 1 

Canada (CS) 20805 *410039 785 - 1 

Merooo (Maw Paso) 48717 *0003 638-1 

USA (5) 15084 +0-002 080 - ( 

PaCtnc/MMd* EastMMc* 

Australia (AS) 20502 -00014 488 - ! 

Hong Kong (HWS) 115504 +00758 485-! 

India (ft*) 47.3185 +00643 964-! 

Japan (Y) 157.545 +0282 435 - ( 

Malaysia (MS) 33161 *410118 148-2 

Now Zealand (NZS) 25615 *00084 618-1 

mSppines (Peso) 408777 *4X0556 408-1 

Saudi Arabia (SR) 55868 *00076 560-! 

Singapore (S3) 23184 *00013 170 - 1 

S Africa (Cool) (R) 55338 *4X0248 313 - S 

S Attca (finj (R) 75810 -4X0051 440 - j 

Saudi Korea (Won) 121850 +15 560 - ( 

T man (IS) 406740 *4X2208 406 -t 

IhaOand «3t) 373616 *00592 56* -1 

tSOfl rtoa lor May 23. BUtoflar spread* fa Ore Potato Spot 
bur *a IrapM bycuram ■aaraacoH*. SMoBlixhKctfci 
ttw Dour Spot tatae defeat bom THE WWtafTBRS 0 


-065 15065 15014 

- 259 260350 2551.00 


4.9825 45622 




. 

. 

. 

. 

810 

85116 

-00 

85146 

-0.4 

8.4609 

03 

1060 

14864 

-04 

2.4665 

-0.1 

2.4730 

OS 

1230 

1.0223 

-04 

1023 

-04 

10342 

-00 

104.1 

240406 

-20 

241408 

-2.6 

2444.93 

-10 

702 

51.1751 

0.1 

51.1751 

ao 

509051 

05 

115.4 

2.7675 

02 

2.7B72 

ai 

2.7643 

06 

1101 

10.7569 

00 

187715 

-03 

laws 

ao 

850 

258044 

-40 

269089 

-4.5 

- 

- 

- 

205.087 

-3.0 

2OS017 

-2.6 

208087 

-20 

85.1 

11073 

-20 

11.7035 

-10 

11.7925 

-1.2 

760 

2.1223 

as 

2.1161 

1.1 

2.0682 

10 

1170 

. 

. 

- 

to 

- 

- 

790 

1.2916 

-i.i 

1092S 

-00 

10909 

On) 

- 

20822 

-i0 

20654 

-00 

2.1007 

m 

-10 

68.9 

10075 

a.7 

10064 

00 

10044 

03 

650 

20496 

a* 

20479 

04 

2.0469 

00 

_ 

110443 

D0 

110401 

04 

11.6674 

-0.1 

- 

157.13 

30 

156.36 

30 

152.475 

30 

1840 

20638 

00 

20674 

-04 

20739 

-04 

- 

- 

- 


- 

- 

- 

- 


DOLLAR SPOT r OP. WARD AGAINST ; Ht. DOLLAR 


May 24 

Posing 

rad-pant 

Europe 



Austria 

<Seh) 

110875 

Belgian 

(BFr) 

33.9300 

Denmtoh 

PKri 

64544 

Finland 

(FM| 

5.4056 

Franca 

(FFr) 

5b 6390 

Gonnany 

(D| 

10478 

Greoce 

Pd 

245.155 

Ireland 

m 

1.4760 

Raiy 

(U 

159005 

Luxanfaourg 

(LFr) 

330300 

NeOKrtands 

(R) 

10463 

Norway 

(NKr) 

7.1364 

Portugal 

(Es) 

170425 

Spain 

(Pts) 

135025 

Sweden 

<SKd 

7.7244 

Switzerland 

(SFr) 

1.4061 

UK 

« 

10OS4 

Ecu 


1.1688 

SORT 

Americas 

“ 

1.41664 

Argentina 

(Peso) 

O098S 

Brezfl 

(Cr) 

172403 

Canada 

(CS) 

10793 

Mexico (NewPesol 

30960 

USA 

n 

. 

PacMc/BAddta EasUMrica 

Australia 

(AS) 

10592 

Hong Kong 

HKS) 

7.7250 

Indte 

Ps) 

310700 

Japan 

M 

104.445 

Malaysia 

(MS) 

20975 

New Zealand 

(NZS) 

1.7001 

Phfflpptnss 

Paso) 

27.1000 

Seud Arabia 

(SR) 

3.7502 

Sfagapore 

(SS) 

10370 

S Africa (Com) 

( P) 

30688 

S Africa (FbiJ 

(H) 

40800 

South Korea 

(Won) 

806.150 

Taiwan 

(FS) 

260650 

Thailand 

(BO 

25.1800 


Day's odd 

high low 


*08 988 -085 


03985 09961 
172436 172430 


03025 02900 


- 246-255 

- 660- 750 


*01 IDO -200 


tSOR « *r Mv 33. SMMtar apmda in Ite Osttr Spot M4* 
but ■» ImplM by eurwx inmost rates. Ml Maud 6 BCU nq 


1.3633 15584 1.3845 -4.6 

7.7255 7.7245 7.7245 Ol 

315750 315650 31.45 -3.1 

104550 104500 10434 24 

25990 25915 259 35 

1.7015 1.6965 1,7019 -15 

273500 263000 
3.7503 37500 37508 -02 
15380 15355 15363 36 

38705 36530 36843 -5.1 
43000 4.8400 43137 -85 

806.400 B08.10Q 80310 -45 
239800 265600 26385 -39 
253000 25.1700 253525 -35 


110965 

-00 

110103 

07 

103.4 

3308 

-08 

3305 

00 

104.7 

6.4768 

-1.4 

6.4824 

-04 

1080 

5^101 

-00 

5.4231 

-03 

780 

5.6543 

-1.1 


00 

1040 

1.6506 

-07 

1.6444 

00 

1050 

247055 

-30 

249.655 

-10 

68.7 

1.4724 

10 

1.469 

05 

- 

160205 

-3.1 

162305 

-2.1 

78.6 

33.98 

-06 

3305 

00 

104.7 

10504 

-04 

1.8379 

00 

1040 

7.1409 

-03 

7.1164 

00 

95.7 

17301 

-6.1 

177075 

-4.1 

920 

136.7 

-30 

138.6 

-20 

803 

7.7689 

-20 

7.B294 

-1.4 

62.4 

1.4065 

00 

10904 

10 

1030 

1.5064 

00 

10044 

00 

88.1 

1.1658 

1.1 

1.1707 

-Ol 

- 

10845 

-1.5 

10966 

-10 

83.4 

3.2988 

-03 

30062 

-00 

- 

- 

- 

- 

- 

99.9 

10634 

-10 

10617 

-02 

690 

7.727 

-Ol 

7.7412 

-00 

- 

31095 

-2.9 

• 

- 

- 

10301 

2.4 

101085 

2.9 

1450 

20665 

1.7 

20175 

-00 

- 

1.7065 

-10 

1.7282 

-1.7 

- 

3.7528 

-00 

3.7655 

-0.4 

_ 

1036 

00 

1038 

-01 

- 

3.7128 

-40 

3.7893 

-30 

- 

40725 

-70 

- 

- 

- 

61205 

-30 

831.15 

-3.1 

- 

27025 

-09 

- 

- 

- 

2508 

-30 

2506 

-07 

- 


Wow only Ow WKttraa dacknat places, 
uotad in US currency. J3. Morgan non* 


Fanned noaa are not directly quoted to ttw mtat 
to Irrfcaa May 23. Baeaere n fl* 1980-100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


ERAS EUROPEAN CURRENCY UNIT RATES 


May 24 


BFr 

DKr 

FFr 

DM 

K 

L 

H 

NKr 

Ea 

Pta 

SKr 

SFr 

£ 

CS 

S 

Y 

Ecu 

Belgium 

PR) 

100 

1902 

1602 

4057 

1097 

4887 

5047 

2102 

5020 

3880 

2276 

4.150 

1054 

4066 

2948 

307.7 

2022 

Denmark 

(DKr) 

5207 

10 

8.737 

2053 

1050 

2484 

2064 

1106 

264.1 

2101 

1107 

2182 

1027 

2137 

1048 

1610 

1026 

France 

(FFt) 

8017 

1105 

10 

2023 

1002 

2820 

3078 

1266 

3030 

2405 

1070 

2007 

1.178 

2447 

1.773 

1850 

1018 

Germany 

(DM) 

2009 

3016 

3022 

1 

0411 

965.0 

1.121 

4028 

1030 

8200 

4086 

0054 

0402 

0037 

0007 

6305 

0019 

Ireland 

(**5 

50.08 

91526 

8023 

2032 

1 

2347 

2.728 

1053 

2510 

pin? 

1100 

2078 

0978 

2036 

1076 

154.1 

1063 

Italy 

H 

2.133 

0406 

0055 

0104 

0043 

100b 

0116 

0049 

1072 

0529 

0088 

0088 

0042 

0067 

0063 

8 53S 

0054 

Netherlands 

(H) 

1808 

3082 

3051 

0082 

0387 

8600 

1 

3059 

9222 

7308 

4.179 

0782 

0359 

0748 

0041 

5049 

0483 

Norway 

(NKl) 

4707 

9048 

7005 

2010 

0060 

2230. 

2061 

10 

2380 

1801 

1063 

1074 

0029 

1034 

1001 

1460 

1000 

Portugal 

(ES) 

1901 

3.787 

3008 

0907 

0098 

833.1 

1084 

4.185 

100. 

7908 

4031 

0026 

0089 

0009 

0087 

6106 

0502 

Spain 

pta) 

2501 

4.759 

4.157 

1015 

0500 

1173 

1063 

5059 

1207 

100. 

0694 

1.038 

0489 

1017 

0737 

7606 

0631 

4». IM iBtonii 
aJIBUUOSi 

(SKI) 

4303 

8057 

7001 

2.134 

0077 

2058 

2083 

9038 

2207 

1706 

10 

1023 

0058 

1.788 

1094 

1302 

1.106 

Switzerland 

(SFr) 

24.10 

4084 

4005 

1.170 

0081 

1129 

1013 

5068 

1210 

8803 

0485 

1 

0071 

0080 

0710 

74.15 

0608 

UK 

(?) 51.18 

9.738 

6006 

2488 

1022 

2399 

2.78S 

10.78 

257.1 

20*0 

1105 

212* 

1 

2061 

1008 

1570 

1081 

Cattede 

(CS) 

2409 

4.679 

4087 

1.195 

0081 

1153 

1040 

5.171 

1230 

8802 

Sian 

1021 

0081 

1 

0725 

7068 

0620 

US 

(S) 

3304 

6.456 

5041 

1048 

0078 

1581 

1048 

7.135 

1705 

1307 

7.725 

1009 

0663 

1080 

1 

1040 

0856 

Japan 

m 

3250 

6102 

5401 

15.78 

6088 

15232 

17.70 

6802 

1632 

1298 

7307 

1808 

0349 

1301 

8075 

1000 

0197 

Ecu 


39.64 

7041 

6089 

1028 

0792 

1858 

2160 

8035 

199.1 

1580 

8024 

10*5 

0776 

1012 

1.188 

1220 

1 


May 2* 

Ecu cen. 

Rata 

Change 

9**Afh»H 

W spread 

ON. 


ratas 

against Ecu 

on day 

can. rata 

v weakest 

M. 

Ireland 

0008628 

0792556 

*0005139 

-1.99 

5.48 

13 

Netherlands 

2.19672 

218*13 

-000293 

-1.48 

404 

- 

Belgium 

402123 

39.7038 

-00502 

-106 

4.71 

9 

Germany 

104864 

102929 

-000209 

-104 

407 

- 

Franco 

003883 

600268 

-000243 

098 

238 

-6 

Denmark 

703879 

706209 

-000084 

105 

101 

-11 

Spain 

154050 

158020 

-0728 

303 

035 

-21 

Portugal 

192854 

199079 

-0071 

308 

000 

-23 


I T Wed M i Kronor par ■ 


Fftnc, Escudo. LVa i 


I (IMM) DM 125300 par DM 


I QMM) Yen 125 par Yen 100 



Open 

Latest 

Change 

Htfi 

Low 

EsL vul 

Open kit 


Open 

Latest 

Change 

HW 

Low 

EsL vol 

Open biL 

An 

00085 

00066 

4X0020 

06086 

00056 

37,117 

122044 

Jin 

09598 

00614 

*00016 

00631 

00575 

16041 

57.166 


06065 

00058 

4X0020 

06065 

00055 

1052 

1Q0SO 

Sep 

09860 

00681 

+00018 

00686 

00850 

517 

6,157 

Doc 

O60B5 

00085 

4X0018 

00068 

00065 

60 

291 

Doc 

- 

00740 

- ' 

- 

- 

116 

905 


NON EFM MEMBERS 

Greece 264513 283115 -4344 317 -4.42 

Italy 179316 1662.70 +105 384 -0.44 

UK 3796749 3777884 *3003084 -1.13 458 

Ecu canM ratal a*t by 0* Eueprai CmWn Cunoncta ara h deaomfag Mkahrn manga. 
Pwowgag* ehraoaa wake Ecu: a poettwe change delete* a water aarency. Dha r ge KuMnwn re 
i*Ua batman taro wnada; tha par o mtafl* j nean o a bowmen But ncarte mtofcat and Ecu canbte raws 
ter a aaraney, »nfl He maonxirn pang uri pmantoo* dartHon ol the pyranc/a marteto rats Korn fts 
Ecu cerate mm.- 

(T7/B/83 Staring and fatten Lira wapended Irani ERM. Arfaeonent catafatad by 4w Rnendte Thee. 
■ PIOLADBJ>tflASE C/SOrnOfM £31550 (cents per pouKl) 


BANC FUTWS (IMM) SFr 12S0Q0 per SFr ■_* 

37128 37102 -30025 37128 37060 18311 41.750 Jun 

37110 37116 -30019 37122 a7110 205 2.676 Sap 

37145 - 37145 2 338 Dk 


WORLD INTEREST RATES 


MONEY RATES 


IQ RJTUWttB QMM) {02000 par 2 

15060 15046 -30020 15088 15034 10523 44528 

15030 15020 -30028 15038 15020 979 2563 

15040 - - - 12 S9 


i (UFH3* DM 1m potma al 100% 


Strike 

Price 

Jun 

— CALLS - 
Jui 

Aug 

Jun 

- pure — 
Jui 

Aug 

1029 

700 

700 

703 

- 

007 

008 

1050 

507 

509 

508 

- 

009 

008 

1075 

301 

a. bo 

406 

010 

079 

101 

1000 

1-17 

208 

258 

070 

1.70 

231 

1025 

005 

10* 

107 

207 

210 

267 

1050 

- 

005 

008 

407 

406 

504 


May 2* 

Over 

night 

One 

month 

"Three 

mths 

StK 

mths 

One 

year 

Lomb. 

Inter. 

Dfe. 

rate 

Repo 

rate 

Belgium 

54 

5% 

5* 

54 

5ft 

700 

400 


week ago 

Si 

5% 

S* 

54 

54 

700 

400 

- 

Franca 

5fl 

Sfl 

544 

5ft 

58 

500 

— 

075 

week ago 

6* 

50 

54 

5ft 

5ft 

050 

— 

075 

Germany 

503 

505 

508 

5.00 

500 

600 

400 

503 

week ago 

5.43 

603 

503 

406 

408 

800 

4.50 

501 

Ireland 


64 

64 

5ft 

6* 

- 

- 

805 

week ago 

5fl 

54 

6 

64 

84 

- 

- 

R 9ft 

Italy 

Tfl 

7H 

7H 

Tfl 

8 

— 

700 

705 

week ago 

7% 

714 

78 

7* 

Tfl 

— 

700 

210 

Netherlands 

5.1 S 

S.1S 

021 

504 

025 

— 

029 

_ 

week ago 

5.12 

019 

506 

502 

500 

- 

505 

_ 

Switzerland 

4M 

AM 

41* 

4ft 

44 

6025 

300 

_ 

week ago 

*4 

4U 

44 

44 

44 

8025 

250 

- 

US 


416 

44 

4ft 

64 

— 

260 

_ 

wmfc ego 

44 

41* 

4H 

54 

5ft 

- 

200 

- 

Japan 

week ago 

2 

2 

2tt 

2to 

2ft 

2ft 

2ft 

2ft 

2ft 

24 

— 

1.75 

1.75 

: 

■ t LIBOR FT London 








Interbank Bring 

- 

4* 

4tt 

S 

54 

- 

_ 

_ 

week ego 

- 

4% 

4fl 

5ft 

58 

- 

- 

- 

U8 DoBwr CDs 

a* 

4.18 

403 

404 

507 

_ 

_ 

_ 

week ago 

- 

4.18 

4.48 

401 

050 

- 

- 

- 

SDR Linked Da 

- 

3ft 

4 

44 

4fl 

- 

- 

- 

week ago 

- 

3ft 

4 

44 

4ft 

- 

- 

- 



Open 

Sett price 

Change 

HV 

Low 

EsL vol 

Open fat 

Jun 

9401 

9404 

*002 

9406 

9401 

25090 

187634 

Sep 

9404 

9401 

*007 

9403 

9404 

51030 

185800 

Dec 

9407 

94.77 

*4X09 

9400 

9407 

80169 

836827 

Mar 

9405 

94.84 

+0.10 

9407 

9404 

43589 

204248 


I WOKTH UHOUM 0173111 PUTlHUg (UFFE) LIQOOm pointe oMOOft 



Open 

Sottpdco 

Change 

Hgh 

Low 

EsL vol 

Open irn. 

Jin 

9208 

9207 

■001 

9203 

9227 

3261 

31175 

Sep 

9200 

.9202 

*002 

9207 

9200 

4679 

50420 

Deo 

9218 

9215 

*002 

9218 

9212 

3110 

47731 

Mar 

9200 

9107 

*002 

9201 

91.85 

1112 

12793 

■ Ttflt 

■Bsaotrm 

euro sens 

a nunc nmmn (unrej SFrim points at ioo% 


Opai 

Sett price 

Change 

High 

Low 

EsL vd 

Open Ire. 

Jun 

9507 

9506 

-001 

9601 

9505 

2380 

23651 

Sep 

95.91 

9509 

- 

9503 

9088 

4426 

13092 

Dee 

9505 

9500 

*001 

8506 

8500 

1040 

8294 

Mar 

9085 

95.83 

*003 

9506 

9501 

1389 

3317 


PradM day's vaL. Csk 2.1M PM 210S3 . Piw. dav^i apm M. CM* 4S&S7B nos 44S5B7 


INTEREST 


LONDON MONEY RATES 

May 24 OfHf- 7 days Qna Three Six On* 

nigra notice monlh montha momha ywar 

Interbank Staring 6-3 4iJ-4y SAr - «11 5d - Si 6%-fi^ 5% - 6% 

Staring CD* - - 5-4j| 6i-5i5s5-5*trti-S]J 

Treasury BBa - - *%,-*& *% - 4t) 

BankBaa - - 4 fi 40 - 4% 5>a - 5 It 

Local authority dap*. 4S-4£4g-4U 5-4% 51* - 5 5& - 6i 5ft - 5* 

Dtacount Marlat dap* A\ - A - t\ 

UK during bank ban landing rate 5X* par cant from February 3 1994 


Uplol 

1-3 

3-6 

66 

9-12 

month 

imetti 

HMMta 

maattw 

mvtttn 

iJa 

4 

3% 

3* 

31j 


Carts of Tax dap. (C10300Q 1*2 4 3% 34* 3lj 

Carts olTn dap. mdarCinUXIOli Itipc-DepoaTHialtai+mn tor cash Vpa. 

Amo. tanrter nta a I dacount AJ'OQpc. ECQD tad rata Bdg. Export Brw nc* . Uda up day Apr! 29, 
190*. Apaad rata tor parted May 23. IBM to Jun 2S. in*. Sctamaa B & HI ISOpc. nakranoa mi tor 
prated Apr 1. 1994 to Apr 29. 1 «K Sdmaa W IV uaOpe. HnanM Hows Bast Rato B>apa horn 
May 1. 1894 


i MONTH BCU FOTUMn Eeulm points of 100% 



Opai 

Sett price 

Change 

High 

Low 

Est vol 

Open ML 

Jun 

9402 

94.06 

*005 

94.08 

9402 

1894 

9701 

Sap 

94.17 

9404 

*008 

9407 

84.17 

1049 

11607 

Dec 

9408 

94.11 

*007 

94.16 

9406 

537 

7707 

Mar 

9303 

9301 

+0.10 

9303 

9303 

342 

3225 


BCU Uriwd Da arid rataa: 1 Mb! U: 9 mth* ESu 4 wOaz Wt, 1 yean Sfl. * UBOn bnnfarit hhg 
mas we oftaed raroa tar HOTO queaad to the marker by tow ratorancs bnka to 11m each workhg 
d of. Tin banks k Bottom Trust. Bank ol Tcftyn, Bardna and Nttonal W to ntaar. 

MU ratas am Awn lor Die rfflmealc Moray Ran. US SCDs <rt SDR Lhkad Deperiti (M. 

EURO CURRENCY INTEREST RATES 

May 2 * Stan 7 days One Three She One 

months months 


Oefgtan Franc 
Oanlah Krona 
D44ak 
ttrich Gutotor 
French Franc 
Portuguese Esc. 


Starling 
Sobs Franc 
Can. Dolar 
US Dolar 
Asian Lka 
Yen 

Asian SStng 
Shan tarn rataa i 


&1-&4 

ft-ft 
5,1 - BA 
GXd-tHa 
SS-M 
9h.SH, 
7M-73, 
61a -4% 
4*-4ia 
9h-sh 

4 l 4-4l 8 

9-7*2 

2»8-zA 

3% -31* 

• col tor 014 


Wa-P* 5% 
eja-5% sa 
5% -5*4 5*9 

5V-51, SA 

SS - Sfl Gh 
10% ■■ 10% 11% 
7h - 7*2 7% 

411 -4li Si 
4*. 4*| 4 V 

53 -5S 5% 
4fl 

7*I-7U 7^ 

2*1 • 2 it ZA 
3h * 3h 4fl 
U3 Dsatr and Ym 


-Sh rt-6** Sfl 
-Sfl 53 - Sfl 53 

■ sh 5 * 4 - 51 * 6*4 . 
-5*8 S4-6*a 5^* 

■ sfi S3 -Sfl sfl 

- 11^* nta - itrt* iii« - 

- 7h 74| - 7h 7JJ 

-4J1 S*8-5fl 5% 

■4h 4fl< 

■ 5l* 6*1-8 Bi'« • 

■ 4fl 4S» - 8*a 4H 

- 7»* Th-7h 7h 
■ZA Z&-Z& zh 

■A? t 4l*-4% 5A 
gdme two o*ft noocm. 


( One 

lha yoar 

5rt 6^ - 5*2 

5fl S3 -Sfl 
5*f 5A-SA 
5*8 Sfl-SA 
Sfl 5fl-5fl 
10*8 lift -94* 
7fl 7h - 7h 
V* 5^ - W* 
< A 

eA 6% -6^ 
s*a-5^ 
73, 8*a - 7^i 

2A 2% - 2fl 

Si 5JJ-5S 


* LFFE Uuraa traded on APT 


■ THM —OHTW BUBOPOIIJW $1m potnta of 100% 

Open Latest Change Ugh Low BSL vd Open W. 
3m 9532 9533 *301 0SJ£ 93^1 03178 371,819 

Sep 9452 94.64 *302 94.68 9451 123.191 412/93 

Dec 9457 94.10 +303 64.11 9456 176515 406524 

■ 0< TMA8UBY MLL HITUBM (IMM) $1m per 100% 


■ THRU 

MONTH 1 

rhjim 

PUIURU (UFF3 9500,000 points of 100% 



Open 

Sett price 

Change 

Hgh 

Low 

EsL vol 

Opan InL 

Jun 

94.70 

9409 

-002 

94.70 

94.68 

4475 

87320 

Sep 

8408 

8407 

-002 

94/40 

8406 

12392 

92073 

Dec 

9308 

9306 

-004 

04jQ2 

9303 

17170 

122770 

Mar 

9050 

93.41 

-008 

9301 

9308 

6365 

64120 


Traded on APT. M Opan Mareto aga. are far pmtaua day. 


■ MOOT CTMUIHG OPTIONS (UFFSl £500,000 pointa of 10094 


StrSte 

Price 

Jun 

- CALLS - 
Sep 

Dec 

Jim 

“ PUTS - 

sap 

Dec 

9480 

0.19 

013 

Oil 

0 

006 

008 

9475 

003 

006 

006 

009 

044 

086 

0800 

0 

002 

0.02 

001 

065 

107 


Jun 

9501 

85.63 

*001 

95.63 

9501 

6073 

10298 

Sep 

9505 

9508 

*002 

9508 

95.06 

3028 

15075 

Dec 

94.60 

94.63 

*003 

9403 

9400 

2S2 

7/425 


Eto. ML iota, CdflB 4700 Pun <014. Prevtoo day 1 * opan teU C* 179908 Pula 1S7220 


44 Ooan ktamu flat, are to* p n wtauadky 

■ EI«Ol»AWlorn0WS(LffFE) DMim polnta of 10094 


BASE LENDING RATES 


Stake 

Plica 

Jui 

- CALLS - 
Sep 

Dec 

Jun 

— puns -* 
Sep 

DOC 

9476 

9500 

9S2S 

On 

002 

0 

026 

0.13 

006 

nua 

017 

010 

002 

018 

041 

0.10 

002 

040 

026 

040 

058 


i WOKTH PgQB PUTUWB8 (MATF) Patte Irfferttonk oflared res* 


Eat vsL wri. Crib* i2e<a pub nan. preatem dayM apm mu ca 243S9S tea 17970 a 
■ BUIIOeWItaFtUUiCOPTIOItaOJFFQSR-lrnpotriKOtlOtWfc 



Opan 

Sen price 

Change 

High 

LOW 

Eat ws 

Open M. 

StrSe 


- CALLS - 



— PUTS 

Jun 

8408 

9442 

-006 

9443 

9400 

24054 

57022 

Price 

Jun 

Sep 

Deo 

Jun 

Sep 

Sep 

94.45 

9400 

-014 

9405 

9409 

37030 

60060 

9676 

013 

005 

029 

0.02 

Oil 

Dec 

9407 

9440 

-0.17 

94.43 

9408 

22060 

34,427 

9600 

001 

012 

017 

0.16 

023 

Mar 

9425 

9426 

-019 

9420 

94.16 

9,441 

36,025 

9625 

0 

005 

009 

009 

041 









Em. vdL toUL eras 0 Puts a Previous Onto cnwi tot. Ctos *88 Ptoa 960* 

■ THREE MONTH EURODOUAROJFFQ’fini points CM 00ft 










Opai 

Sett price 

Chang* 

Kgft 

Low 

EsL vol 

Opai InL 







Jun 

9522 

9623 

-002 

9522 

9622 

470 

6459 







Sep 

9403 

9405 

-001 

8403 

94.62 

171 

1915 







Dec 

9408 

94.11 

-001 

9408 

9406 

7 

1506 







Mar 

9304 

93.88 

-0.03 

8304 

9304 

38 

1042 








Adan&Conpany.._ 825 

AMadUuMBaik 525 

ABBertr 525 

■Henry Aratrachar 655 

BrrtofBoroda 525 

Banco BBbaa Vbcaya- 525 

Bar* at Cyprus 529 

Baric at Mend 5* 

Bote of Mi ,-525 

Bate ol Scotland -S25 

BadsstoBete &2s 

Bit SkdlAd East 525 
•Brown S4**y & 03 Ud .825 
CLBatetoedwtend 825 
CttateNA — JX28 

Qy OuiUteJ Bate 625 

The COopanM* Bate. 535 

CoutiiOo -526 

CteSLyonmn 526 

Cyprus napte* Bate -525 


% 

Duran Lanria — . 525 

B«terBa*Urr*ed._ 625 
RnancMa Gen Bank- 6 
•ftabert Rarrtno 6 CO 52S 

Ghtoaric -82S 

■GtemanMehon 525 

Hahft Bate AQialch. 525 

•Hwnbraa Baric 826 

Herftatiia 5 Oen kw Bk. 525 

•Hil Samuel. —825 

CHoare&Co -526 

HonghangiSwnghel. 825 
■JUton Hodge Bate.... 83 
WjUpcMJoMph85ans52S 

Lloyds Bade 825 

MoflhrafaatoUd 825 

UdandBete 83 

* Mount eatelng 6 

Nanvesbteistar 825 

■BeaBraOmre 825 


*Rad)ugho Guarantee 
Oerpcmfon LMtod is no 
longsrautfierisadaa 
etwMnginsriWrtn. B 
Royal Bk ofSadtond 525 
•Srrtti & warns* Secs . 83 

TSS... 83 

•Unicod Beal Kuwait— sa 
LMCy Trust Bate ft: — 53 
Western Trust —825 

WhfeMW*yU*2av..-52S 
YartaNraBate n ,„529 

• Mombera of British 
Merchant Banking & 
Securities Houses 


Money Market 
Trust Funds 

am tei ST ta» 

assBisrasaar' , 

BHSIa Elate 

Cant » of P». critt-? «» Biftortt 

-| I SBS 

Money Market 
Bank Accounts 


CoottiliCa 

MMiataNtM 


» " tec, 


MaaauwtoaBcnns 

aai ft mu te ta w a rt ta*tete i —ra 

raiatartwytayywg - t wi^ut 

ssaaissfi^'^is^ 


DlOflO* .... S3 

cip.opi -erwao — «« 
C.WMIMW..., in 
tea m s tewtot- . ... Ml 


tnM>ra.ttatetota;W«to .nitew, 

rraiMO-aaaaa J rn save I . 

rtunoo* itar - _| im Iras j{* CTJ 

Ditto. Ml UaNItal ISO SKI Jj 


- M Hr ud RfSffaHaaCSa? 

tai M tea "C* mnDktaH 


nMMMMtaM 
w rawiw Q ite— * ra*wite | 

] 1H 2iS iql 

ESO.raMteMte.JiOT MM I Sal S 
MMteai ii rt tetolira wM w ra 

sssnsar-ls al m S 


- 388 *73*00 47.1750 - - - - 

- 655 158050 156.530 157.13 32 156.36 30 162.475 32 1840 

-214 302W 30023 - - - - - 

- 673 20676 20560 20838 00 20674 -34 20739 -34 

- 148 41.1530 435783 - - - - - 

-585 86567 86395 - - - - - 

- 198 20208 20112 - - - 

-385 50379 50000 - - - 

- 780 70785 72837 - - - 

- 639 121605 121228 - - - - - 

- 074 43 7700 43 4200 - - - - 

- 067 38.0070 370360 - - - 

act tads attar only tea tea teas dadnat ptaesa. Re are d ranro — not flkaqly Qurnad to m e niartwt 
toctowad by na Bam* of England Baas iwrapa iBBS - 1009UL Olfar am Mtf+stea to boo* Ha and 
I CLOSING SPOT RATES. Sana vtouas m ranted by On FT. 



ikMM Ian 

ncr-la 


JaNanHodg* Bate Ut 

iMWMcaHmlin 1 isi] 
lwMMDaw ta I »n iat( sal 

imntaantoftiMMlin ml utl 


StefterWtoHa* 

130.000-- 


On* month Three month* One year J-P Morgan 
Rate *PA Bata %PA tats HPA tndox 



on-szaos>« 
UP 1H ikady 

430 MB Ml, 

421 U4 My 

M) Ml *« 

SJDO 4JH- UM 

LOO 407 MO 

s.» ur My 


an i.ao a, 

3*1 US Ml 
LSI US HP 
Itt 40J Me 
LIS 03 W 


m ortHMim . 


tssteei 


us motai ism m, leteMHM m 

ruCA K3JSO*) — ^1 # - swral inrB«r 


maea tata MawK . si«aa 

HicASun+i — I* irani 4H I aw* 

Uoydi Brail ~ tomUsnet Aooa—t 
nuawMfttMmappjK Vnaan 
rnoAHaMiam— Tui isa us|m 

130800* [sis iaa iisIm 

cun* I <aa *n an B 

iiojoota 1 4J» us >nIB 


Brak of Intete HtelntenMtCteMp* ft* 
ss-MHaannsteEiite ^etusMau 

nojni+ | urn Lsasi&flMl a, 

CZJD0B-4MW 1 130 LUBluMl W 


MftlWto — iREOPaBI 

a? 

1230000 * Isn in 


» BBKMS- .S S8 8S 

tHjgw- Isos im [ utliB 

eamota [sn lut ih B 

971-401 S440 »— M9 -I U9i*B 

I til a 



LOO 4*0 My 
US 4.75 Mr 

in UP YM% 

U* US My 
415 UD W» 


CJHMUN 1M 74* 334 tot 

rLooo-a«s Las xa us to 

naocMfuM am raw* 

p l ooo re rap ... as* ug «sa m 

mm* tag )• mi or 


raBmu3.NMMie»i Bsoiaszmi 

igteft*i 2 *o iso l 2921 ter 

E2J00-O9M 223 1JS 22/ Ob 

Cmooo-CHJW L79 zoo ml or 

BMW*. Ml u< I usl a* 

BresmSMptor&ColM 

FancM OUT. uxttuy, uertai a=t an-omsms 

rac*— 1 400 loo | *or Or 

PrdDnaMM 1 400 MO 1 40/1 Or 

rrlilnn'sr ~~ 

• SuSoMSteMbBMbBBXPP 031 Ktim 
MU — .1 428 usal -I toady 



IwUiaiUMM 

iWH.LmmtaM3M 
rcwMMt in >9t 
r— * Stem I *se up 

UwtaL. I 423 3.19 


| >7i-snita 

4«| HB 
43B Hi 
4531 Ok 


ndtetPrerotamltoc 

IBB3R. . rat-521 taa 


■raw .OTi-snsara 

-1 323 LSI XteT Mb 
.463 - 421 1 MSI 

.1455 -1 4331 MU 


CstarMaoLM 

ateaeitaite 

y 

Oronrarrauno*- 


araterlMM Bate LWted 

tnmnkiaMrita^ec«M7ni rm-MBaon 

njaa-citaw— — u> sv *a w 

DMUHaUM 430 3J9 430 Mb 

maw-nMaa^...- 473 in u* 1 * 

Cl 00/300* LOO in LIZ em 

3L OCO- SW JOS— US 140 237 l» 

CM.ODO-S0040 0 . 17S 240 2J» M 

31D04W-S10MW— 340 US M4 MS 

T** 1 US AM 340 Me 


no, 000* ... STS 141 3SS Of 

£334*0 - ttSAtg IS 3D Ul tt 

niMD-EZ4a|0-~ 2.73 US 7JI « 

num-nuMl zoo 140 zoz or 

£2400-lMn 1130 1 U 141 Or 


tEsuneditow. 
nrotomw — 


MtoflMixB. MOO: 

... xn ;« ui 

™ 448 - in 

- 441 - 440 


Tmdil Bank idc 

30-33 RHcaaaecMl 


atokreM.bMM mwix 

MSA 13000 lAielil' Tie r L«a 271b 3471 Or 
OMBeuBteHnaao* 3.7W 7413 urn « 
HSHtSWW*. ■ , ■■ 34n 2400 9432 Dr 

MMugomo *— 4000 looo 4sn m 

lyaMIHM 1 4473 - 4447 Or 

UCItaotUnM 

1 0retoQateadaadR, tatoanUrlNTM. OTt-aBIDOO* 
Kl0400-00*teBaOaa.Iin Ms | iBZls-iM 
mBB-HoSateto. 740 943 1 744 1 Mm 

BLOOD -liter -I 725 944 I -I Veatoy 

BnHteDoMWftBTtanM 

raSmatHM^BMOOr 081-447501 

SSSte?"- f1 '. l . ri ."Jfiy5" 548 I 444 1 tt 

J. Hsrey Schrodto- Mooli CO Ltd • 

raonaapaueuadmoavaos em-SBrooM 

tetatataa ura 272 urj ua 

mmadma lira 241 1 3Ui'-.ip> 

MtesraltatMflh Monrat Choquo tee . 
1taMaafMMM.FHBtottn.11SC , 0732204*4 1 
£18400* 473 340 [ 44«l Otr 

auno-oun 4» lss 43t( ok 

E14W-CA4M— — I 4H 3.101 43«l OB 


3031 VkxamFMML ta iaoaci aM. 
ClftOBtMBOU— ■ ■■ — [ 3.50 271 

mmO- ru B JW 373 281 

£l«UKI0-«flS4W— I 340 245 

Tbs C0-*p*naw Bate 
POBB SOL teataaorttaUnga 
TEBW —I L23 


041-34B7TOC 

I SS 

I 340 00 

I SWI Or 


I 341 1 MS 


370[S-M» 
L2S O-Mte 


nsonm* — l«a lib I LWls-wk 

Esruno-eztoLBBa 1 540 us 34z s-am 

EKLOOO-HUn 27S 208 277 8-Mil 

cniMBuns 1231 uni lbIb-hoi. 

imm atea to te HimtlWI 



State Am' _ 
Chum area 


■Mrat stop mm eaa 

Mar. si is na*MK] 


The caauuM Urol for the ktOm Imnur 

Market-Eye 

London stock excmanoc 


Signal 


O 13Q* aoftrtare appfl o od uns O 
O RT DATA FROM S10 A DAY O 
O Signal SOFTWARE GUIDE O 
cal London® 44 + (Q 71 251 3588 
far your guldd end ggnat price 1st 



4 lN> ECUTOataaamC 

J Xfc& L ac 6 Sg" « 

- fri TBWy ’ Tat *71 MB SOBS 


J Whenyoa 

l are trading 
l Mures on 
j your own, 
j nformation 
l isavay 
j valuable 
j cwranodity. 


To DMttmdenr needs far ratal 


iaa iraai^ saaiogy lawroituan, eo - 
creitedoDrliitraAccotnXtadiDgtt | 
- free to sfl new costooran. You get _ 

ComBotayP enp e cdi B charta, a | 


^beocmsanurasucceubitiid- 
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our oxeiatne tekphooe ‘hotfinM,’ " 
with dailT rasdeot sob^sIs sad I 

tndiB^FeissnHiHidatioasftofflatop 1 

mdingadmoc | 

To J»5« badas’ needs fcrinRuna- ■ 


to phcetbem,we wrote *0ider . 
PhcoBent Hade Easy," ahep-by* | 
step guide to the pnxssLAnlwB _ 

sate sore the pnAsskxuh on our | 
Tiade Centre attffproridetiwin^ — 


-from “wafting yea through* bow to 


■ ^havo been senisg Mura tntdas 

I since 1966 -so we know what Had 
of iofisntatuiQiq' need. And m 
■ hBnesttfafishedttenMtmipBr 
I hotitepn^nmintheindnafayto 
■ ratosiwthBjpgetifc 


of in&nnatim they need. And «« All tbehdpjoi need to start cwfiflg 

Ion Mtafafished the moat conutm- on v^r own -ulus EO>70Keoam»- 


« jwir own- plus 60-Mc«ti®8- | 

aMnsa^oga.bn’liiinBy«it«*^ I 

ctoeetafcmUra^WsMock! ■ 


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gtota^BHOaBWII -. • | 


RtenswmgMMi tefe. tatofag tarfeJ 

tarn onrarMilaatoiMlbroMtat nla 
inytHE. tis«inMin.aSM lor smn 


.1 

^ iteen-sw-ocri ■ 

troiraiMgiwt-iite®tift*pBcmB»iamos-iterrat ... 1 1 

LCTO-WALDOCK & COMHWVJ 



PNANCIA L TIMES WEDNESD AY MAY* 


25 1994 


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To conquer the EC 
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Banotok SET 0M4/7$ 

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B 1396* 133X19 tmn 40 


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BBOBlBimft(niAa 155* 15X62 15507 1*32 142 


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baM t*mMd hy.'hMBMl rapmaant th* htfiaat mat tom wlu 
apraMM (feylft. ¥ S*aafe> eMnU MeMndBca 


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2013 2013 2018 

9* 1006 1007 

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36 





4 pm dose Hay 24 


NEW YORK STOCK 


FINANCIAL TIMES WEDNESDAY MAY 25 1994 


COMPOSITE PRICES 


12 


23 

0*4 1 JS A 
1.09 102 


. not TkL w 

n* IMTSUI: h v e 

1ft 1ft AAR 
1ft 13% ALLlhlA 
0ft SAM* 

72V 52V MB 
5 Am 
5ft 3ft ASA X 
3ft 2ft MM. 

1ft iftJWWPr 
1ft 11% Aegncata 
31 ZftMZUf 
12V laVACHenh 
ift ft ACM [ftopp 080 02 
1ft ft ACM GUTSp aw 11.1 
12 ft ACM Bn Se IJD9 11.1 
1ft ft ACM Un 1.08 11.7 
ft SACMUragd072 03 „ __ 

ift ftAaoaOr 044 4.1 13 7B9 ift 

ft ftAowEm s 104 

2ft 23 AESItBl 060 21 14 2 

ft ftAOM 036 42 2 
ift 1ft Mum 117 833 01ft 

Ift iftAteafieri 048 28 0 97 17 

6* 4ft Ad Mod 100 14 1303 58 

M0 114 1112SB3 27 

OIB 10 8 88 ft 

010 00110 34 1ft 

£95 05 11 118 53V 

2.76 5.1 S 1217 S 

048 1.4 14 1188 33 

088 48 


WW 


3 


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6% 5 AenmQp 

20 1ft AttOlPG 
57V 4ft Aegon A0R 
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49% 38%AmC 
39% 31%AMneR! 
26 lftAfcguklc 

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21% AtfTch 
101AWHB.18 
1ft Matts tb 
21V 17V Ahoy tat 
15% 13V Atari 
2ft 19% Abort 
21% 17VAKuhrA 
30% 25% Ate 
2ft 19V Afcnflx 
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22V UAtartl 

24% . 

2ft 2ft Mo? 

Ift 13V AM CM 
2ft ffASoffanx 


048 38487 52 14% 14% 14% 

018 1.4 30 223 1ft Sift 13V 

188 28 23 931 oU 85 85V 

28 1897 55% 55 85 

14 36 4V 4% ft 

280 48 a 783 44% 42% 4ft -1 V 

07S 28 1715383 2ft 2ft 23V ft 

OSD 48 B 20 12% 12% ift 

11 12% 12V 1ft 

648 2ft 28 ZS 

292 10% 10V 10V 

BE ft BV ft 

314 ft dft ft 

271 10 9% ft 

181 ft 9V ft 

SB ft ft ft 


ft 



865 15% 1ft 15% 
30 20% 20 20 


12 1589 1ft 
1 18 2% 

092 12 Z3 4902 42% 

030 08 22 164 37% 

43 194 24% 

184 11 J 12 14 15V 
8118 2ft 

&16 78 
020 18 9 
035 28 30 
020 13 

028 18 13 _ 

028 18 13 62 18V S17V 18 

044 1.8 22 3371 2ft 28 28% 

030 1.4 39 2234 22% 22% 22% 

180 17!«B2308 u58% 58 58 

080 12 4 170 27 2ft 2ftV 

1.00 7.0 26 2032 14V 1ft ift 
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' 184 78 11 487 21% 21 

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098108 186 8% 

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Anfimd 100 03 9 4141 31% 31 31% 


4% 1 % ATkn 
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27% 21% AH Hah 
40V 33%AUSgx 
29% 24 AM Op 

5V ftAfcwtt 
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280 03 15 3074 29% 2ft 28 
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280 08 9 154 25% 28 28 



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12 888 3% 3% 

030 08 ff 2895 56% SB 56% 

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1.44 17 25 2810 54% 53% 54%. 

287108 3 25%d2S% 25% 

17 145 2SV 25% 25% 

044 28 15 20 15% IS 15% 

182 5J 7 3B7 ‘ 

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040 21 23 BBS 
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060 12 23 2713 
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180 10 17 4824ii61% SB% 80% 
10 20 12011% 11% 
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38V 34% BCE 268 

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- B - 

7.7233 1 574 35% 95 

1.1 32 200 ft TV 
<7 81006 114% 4 

24 103 17% 1ft 

23 45 4343 20% 19V 
18 20 270 22(121% 

11 25 61 B 28% 28% 

04 IB 120 13 12% 

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05 5 3 11 11 

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50 347 1% 1% 

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13 1012048 48V 47% 

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12 12 7800 027% 27% 

65 X100 46% 48% 

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28 20 511 
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27 6JE20 21% 21 

17 11 48% 48% 

20 22 260 31V 31% 

1.7 19 2BZ 24% 24 


+% 



TECMMUCT IHKT WORKS FOR URE 



"telephone Answering Machine 
Automatic Paper Cutter 
60 Locations Automatic Dial 




HEcnontcs 



m n ik 
OH % E too* 


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final 4jp 


ft BBmyPar 

SJSSl 


55% 51% 




«^S“ 

gp&Sol 

34% 30% BHEPmq 

a g% g|g« u 

69% 60% BMySq 
74% 5ft Br Air 
54% 42%HQax 
73% 55% BPx 
27 10% BPnadbaa 

71 V 54% BT 




8 GBrmSh 
81% 83% BmftoB 
SfV 24% arftrr 
4% ft BRT 
25% 17VBtnMkx 
17% 13%BmhHM 
41 35% BockBjpPt 
18% ift BunkarM 
1715%BwgvKI 
28% is Bui Can 
6S% 3E% BuM 
48% 4i%aninReK 
19% 17BUrtanlV 


0.7* 20 13 3187 3ft 37% 37V 
036 52 3 19 ft ‘ — 

27B U IB 3337 S3 52: 

Off 24 14 48 18% 18% 1 
278 4.7 28 2381 ' 

080 12 22 392 

084 22 Z7 379 24% 2ft 24% 
UO 7.4 3 57V C57V 57% 

182 4.1 12 497 37% 37 37% 

0.42 18 21 10* 35% 34% 35% 
aM 48 4 474 1 % 5 

048 28 23 680 17% 17 17% 

A* 270154901830016300 
040 44150 <957 inO 
18 2278 30% 

ISO 98 34 2ft 925% 

580 015 4 52% 52% 

040 22 6 2331 18% 18% U% 
1.40 3.0 22 1SZ 46% 45V 46 

31 2419 14% 13% 14 

0.10 06 24 m IE 15% 1ft 
040 18 85 653 29% 29% 29V 
Off i2 16 5676 18% » 18 

&4 12 114 20% 20% 20% 
073 78 204 9% ft 9% 

075 107 1098 7 ft 7 

070 7.7 1340 9% 9 9% 

1.12 27 24 1552 41% 41% «% 
010 04 23 9561 27% 28% 28% 
012 18 44 ft ft ft 

14 82 25% 25 25 

180 23 12 B422 44V 44 44% 

060 28 5 8» 2ft 20% 20% 
008 08 32 1553 13% 12% ift 

081 58353 1471 014% 14% 14% 

030 22 19 3839 13% 13 ift 

175 II 6 34 20% 20% 20% 

060 24 1] 3510 24% 24% 24% 
027 12 685 22% 21% 22% 

240 7.7 7 B5 31% 30% 31 

184 23 13 529 60% 7B% 7VV 

22 3402 27% Zft 28% 
282 14 14 7120 99% 54% 54% 
1.10 20 14 2589 58% 50 99% 

107 7.1 23 14 43 43 43 

22S 11 24 5481 72% 71 V 72% 
091 48 8 413 21% 2ft 21% 
018 09 21 III 21% 21% 21% 
381 12 1 5 827 57% 57% 57% 

185 58 13 G5D 23% 22% 23% 
180 42 97 258 38% 37% 38% 

082 5l2 4 22 6% 

284 12 14 333 09% 

008 24 24 4980 3% 

9 37 4% 

044 18 42 3188 24% 

020 1.1 44 8531117% 

280 78 10 B3 37% 

1.72118 0 193 15% 

186 98 18 18 16% 

14 17B 20>, 

180 2.1 10 855 
055 18 21 2E77 
1.40 78 23 645 18 17% 18 


95? 

i Pm. 

> an 

3 

I 

t 



S 20CBX 
289 CSS X 
V AffmcUH 
25 20% CHS Bl 
82% 82%CNAFb 
50% 44% CPC 
17% HOT Corpx 
92% 71 CSXx 

25% 1ft CIS Carp 
24% 18% CffUWta 
132% 89% Cfflnmn 
K% 48 V Cataffi x 


- c - 

(MB 18 30 238 29V 29 29% 

280 07 13 4193 2740262% 270 

01842.7 0 SO H 

072 12 11 B38 22% 

31 124 8ft 

186 28 18 8688 4ft 

050 17 18 120 15% 

1.7B 14 21 2267 7* 

Off 18 19 34 S% 

029 18 19 528 

24 975 

184 28 25 244 

23% IBVCffatOSSx 018 08203 169 aft 20% _ . 
15% 10% CaffeaDogn 725 4392 15% 14% 14% 

59 3ft CffianWI 104425 40038% 38% 

2% 1% CHIME 020107 2 14 2 01% 1% 

CHgcnQn 018 18 28 21B 13% 13% 

16 310 17 1GV 

0 2415 11% 11 

Off 18 58 107 211 

1.12 38 15 2241 

18 113 

032 28 61 3819 16 15% 

020 08 25 385753% 7321 
080 17 9 1798 29% 29% 29% 
206 13% 12 
5 



ift ift ciEner 

15% 9% CM Fad 
25% 17V CffmntCo 
42% 38VCmpMS 

icampURs 

18% 14VCMPK 
755 G03CapCB 
38% 2ft CopM 
ift 12% CPM12BX 120 9.6 
37% 24(Hpffl18 180 68 
«%25VCaptdMB> 132128 7 



Zft iftCHnmc 
35% 3D%0ffCax 
20% iftCMMna 
H %C*nlcnPe 
13 9% CnataaW 
30 23CKPSL 
68% 58% CpMT 
28% IBCvtartU 
18% MCffGMNQ 
10% ft Caff Anar 
m%88%CnUr 

is iDVcacan 

36% 32% CMkrFff 

S 10%ChCd 
:<v» Cento 
30% 25V Caff Hdan 
S% 21% OUT Lad 
15 1O%CB0rMffi 



181117 1ft 1 
072 11 18 101 

13 201 u2Q' - 
0 332 1| 

020 18 10 506 It 

1.70 78 tl 1012 24% 

Iff 4.1 14 37 59% 

033 1.4 40 701 24% 

086 88 14 28 15% 

005 06 17 134 8% ft 8% 

080 08 IB 8387 111 V 106% 108% -2% 


35 185 14% 1. 
280 68 12 281 33% 

080 7 A 1 1647 10% II 
020 08 10 1844 25 2 

108 12 9 132 28V 2 
1j« 01 13 42 24% 23' 
090 10 B 873 11 


30 24% Omf Naff 048 1.7 22 4 


H% 

s 

25V 

2ft 

24% 


22 iftCwwvra* 
30% 21% CartSW 
27% 21% CHwy Tl 
24% 18% Clrtih 
36 zaampti 
12% B% Onpaml 
15V iftChntHff 


11 % 11 % 
27V 27V 


■% 

1 


1.42 8.5 10 153 1ft 16% 16% . -A* 


££ *5 Si 


3% 1% Qimne B 
18% lOVChrtSr 
12% l2QnnBkC 
34% 30% Chened 
<2%33%ChaBak 
11% 7% I 


1.70 78 13 1284 
032 12 19 349 

62 781 23% 23 

020 06 18 1702 32% 31% 31% 

020 12 64 21 8% 9% 9% 

24 90 12% 12% 12% 

51% 49%Onff!Pffx 385 01 12 50% 50% 50% 

37% 3ft ChueM 1JB 18 19 4888 037% 36% 37 

" 1 21 2 % 2 % 2 % 

102 915 018% 16 18% 

070 5J 0 419012% 12% 

104 58 19 146 34% 34% 

182 4.1 8 6098 37% 38% 

_ . Chan 020 13 5 303 9 8% 

27% 22% Owtfforta 072 16 68 771 26% 

84% 62% Chnm 170 42 22 6411 87% 86% B7V 

” 41 % Okie Find 1.45 10 131 48 47% 47% 

11%CN0rx 020 1J5 14 2731 13 

“ 78 IBB t 

6 505 
49 4881 
1.00 11 717256 
12H 13 20 1581 82% 

104 4^ 21 Z734 69% 

090 11.4 339 7% 

Iff 72 12 31 31% 

080 42 IB 334 16% 

1.72 72 73 5B5 22% 

038 1.B 15 212 20% 

337 1487 3% 

100 72 10 143 
008 04 1510949 
1735630 
060 1.5 1012017 


1 

aV s% node Fit 

37 320011 

32% 24% QxlEOM 
83% 44%Qiy* 

83% 7ftQlffl 
7ft 57 Ogns 
0% 7%ag«HI 
37% 29% CabaipHX 
ift 15% Qm Bril 
2ft 2raocBas 

25% 19%CMHx 
3% 2%CkfftoO 
30% 25% dpxca x 
23 1ft CktMQ 
40% 22% Ctan Ck 
44% 38% CHcpx 
26% 2SCUff&12 128 09 

96 B4% CCpPQAd x Off 7.1 

189% MOepPOMx 7.00 72 
17% 14% C&aUUA 21 

18 HdniUnB 152101 7 

11% 7% OW Naff 064 5JI 31 


. 7% CBy Naff 
23% 12%Orim8i 
ff% 5ft QarfCq 
26% 19% Oqnan Hm 
11% ftCtamenaG 
89 70 Oevs756 

45% 34%OnCVX 
88 74 (told B 

55V 47CIork 

28% 22% Off MBd . 

13 10% CRAknas 14)8100 



10% 10% ■% 
si st 4 


Oil IB 10 7*2 1ft 0121 

27 1095 60 

18 001 20% 

057 IB 63 10% 

7J6 99 5 78% 

120 14 7 92 35% 

7.40 8.7 250 78 _ 

190 15 18 364 51V 5ft 50V 

Off 12 11 B 24V 24% 24% 

48 1ft 10% 1ft 


20% 20% 
10 % 10 % 
d75 78 

35 35% 
78 78 


18% I3%0aachnea« 024 12 7 Z71 13% di3% 13% 
17% 13 CoslSw Off 18 15 221 I * 


33% 37% Coexa x 
44% 33% Coca C 
19% M CocsCn 
16% Cnwr De*i 
C otanan 
CaffV 

11% 9% Cbkxikwi 
_ CokxffH 
7% BVCdonbll 
TVOknWH 


Off 1.4 27 2120 
078 19 2311134 
005 0118* 111 T 
015 09 20 390 1 
21 153 2 
1.4* IS 17 2801 56 
070 69 
060 79 

070 109 127 


« 40% -% 


zft 28% 

. 88 58% 

ff I«% 10% 10% 

* * a 8 


4% 

-1 


058 72 202 7^ 07% 7% 

132 79 9 594 30% 2ft 2ft 

012 03 47 9744 3ft 38% 38% 

036 19 9 230 20 1ft 20 

128 42 10 1452u30% 23% 30% 

098 29 17 10 23% 23% 23% 

83 21% 021% 21% 

510 1% 03 2 

4 23% 023% 29% 

21 22 % €& 22 

9 24 23% 2ft 

S«% 


ft -% 


- %CBIG» 

45% 36%CDWQA 
34% 17VCMk)Ibsx 
30% 25% Cttnarta 

25 18 ConMfie 
29 21% Omni Met 048 13 19 

3V aConmatae 0 

B% 23% C0nniEit1^2 1.43 89 
5% 22Q»ufftf19 1.90 08 

26 23 COtoEdZiJO Iff 04 3 

3ft 28% CftmCd 190 06141 4006 24% 

19 13 Omni) Ptgr 098 16 24 2567 14% 1 

114% 72% Compaq 21 8494<r1iB% 1 1 

1% VfffflpffHn* 1 122 % 

4ft 27% QffAff 0.14 04 18 8131 37% 

44 31%CmnSci 281306 

ft 6%QMDlrTQ> 010 1.1 3 Iff 


% 

% 


30 20% Comal 
29% 25%QiAgra 
31% 2ftCnmelM8 
20 Cenwt En 


30% 12% i 

ns G0Came4j6 

32% 26% Cana* 

75 53% Cat Erf Pf 
26% 21 VCntFrt 
47 3ft Cranffi 
89% 50% DM 
2ft 14% Cmi Stare 
88% «%Coneacn 
60 53% OTMT4.16 
100 B5CPW79G 
10OV 88% Con P798 
ift 7% on Made 
5ft *ft CooIBkPf 
27% 27GadfikPA 
37% 25% CM* 

28% -ifiVOontDi 
io% ftCsnvHds 
ii% io% am h n 

7% 4^Cm«Cga 



074 13 12 1987 

075 18 17 5549 28> 

1.49 09 13 22 

Iff U 15 8 2l!. 

14134 15 14% 14% 

49S 01 5 E8%d57% 57% 

290 79 10 2392 27% 27% 27% 

100 00 10 63% 002 82% 

29 1142 26% 25% 26 

194 5.1 18 755 37% 37% 37% 

Iff 14 103119 5*% 53% 44% 

18 5377 10% 14% 14% 

Off 09 51739 55% 64% 54% 

4.16 79 >90 53% 053% 53% 

7.45 04 (Iff ff » 89 

798 04 2 91 91 91 

24 B25 8V 9% ft 

175 79 7 50% 50% 60% 

125 03 35 27% 27% 27% 

060 19 8 2113 37% ffl) 37 

7 1378 1ft 19% 18% 

133 9% 8 9 


190 05 
004 04 
Iff 119 


UZ 15 13 871 


52% 

29% 23% Cooper TW 022 08 21 1975 
15% 1D%QnM 034 13 10 S3 
Z7% 24% QBX 

sa% 27%ontna 
16% 12% GouMrTn 
19 13% Cou«r& 

1lV 7%CDuoayMr 
17% 15% CenkoPr 
12% H%Cndg 
89*2 S4%D*na 
17 14% Dwitad 
33% lftCrajlh 
49% SftDsBV 
12 ft DM 


251 11 10V 11 

1 30Z 4% d4% 4% 

1 393 1% 1% 1% 

38 37% 37 V 

Iff 49 ID 1*54 27% 28% 

088 2JM74 IDS 33% 33% 

012 19 20 12% 127 

Off 10 5 8500 16% II 

OB* 8.0 50 418 8% 8 

OU 01 37 99 17% 18% 17% 

# 71 12% 11% « 

075 19 15 197 Zft 25% 2ft 

050 11 16 15 19% 16 15 

6 913 20% 20% 20V 

190 14 13 714 48% 47% *7% 

1.18108 13 313 10% 10% 10% 


% 

■H 


IS* 

* into 

OTUqFta 
iBmUonSK 
__ CrtmCS 
9VCR5Skri 
VCWriBr 
a OJC HD 
17% 12% Ota 

G&CuttnEoU 
,4«%CUM& 
13% IftQnnrtHi 
37 33% DW* 

11% BCVBrt 
11% 7VCjcnS<n 
19% 13% CjixSn 
M% ^aOpAov 
17% IftCytoe 


VM. r; 5h 
H I I Nb 
052 00 6 22 
046 1818 322 
17 1200 
012 1.1 31 32 
Off 142 0 9 

38 1452 
Off 17155 2 

SlSO 12 18 

UO 12 Bias 

OS 79 13 38 
190 19 SB 5 
198101 7 98 
b a 
73 758 
090 16 18 2313 
181 


9* 



»% iftDPLHMB Iff 
20 15% Data Sw 
81% 52 Dana 198 

4% X Orator CS 012 

13% iftCkaMbd 018 

io% 6%0SiGn 
7% 4% 

n ft oodtHw os 

81% Bigi DBPBHi 198 
2 VDOLB 
ft ft DeSota OU 
33% 2ft DraFapdix 084 
31% DflKHD 050 
ft 7% OcadNOr 060 
xVoaVDam UO 

1% 12 MVlIFn 

2ft 16% DatafL 194 
57% 3ft DlaUr Off 
12% ft Drin MM x 0*0 
2% V Detox 
38 25% Oakanx 1.** 
101 9OOOE07.45 7.45 
10S 90% DmSdTJB 798 
30% 24%DaO£d 106 
25% 22% DMterDp 088 
20V 17V Dag R«a 040 
47% 39%0U0ri Iff 
so Z3%0taandSx 052 
ift ftWnCop 
43% 34DHx*fX 088 
38% 18%OoBE 
37% 30% DOkd 008 
9% 7%Dkoa9rHY 
48% 39% Oner Off 
3ft 26% Ddefd 040 
4ftS%DO0Anx 154 
6% SDnnarhc 025 
S% 21% Doaridam 028 
31% 28% DonW 056 
66% 52% Dover x 092 
6ft 58% Dana 150 
<1% 3ftOomlna 08* 
20% 17%Dnwr5K. 048 
103 97 0PL7J75 7-38 
34% 29V DOE 
2ft 21% Dlfap 7Up 
13% 10 DtoO 
24% 20 Drmr 

5i 44% Dnyka 
1ft ft DrfnsFdS OU 
11 9% DrtuxBG 090 
11% ftOrtuaSM 073 
7ft UDaBanHi 490 

<3 32% DahafVr 198 
26% 20% Drin Hay 
fi4 55%DoaHrd* 

61% *8% Drfom 
29% Z7%DaqL4.I 
27% 2ft DugralTS 198 
29% 27V DuqsxMJH 100 
29 27DaH4L2 110 

29 2ft DBptM.15 298 
TOO 930oqL7J2 7ff 

44% HDnM 0 88 

1ft aDMMhSr 
16 13 Dynamics 020 


- D - 

S9 M 582 30% a 
19 233 18% 17V 
39 18 680 SVOlV 
09 21 ISO 39% 3ft 
16 28 18 11% 11 
2 124 7V 
5 407 6% 

15 81 38 8% 8 

11 17 3213 80% 79% 



1.68 

062 

096 

076 


Iff 

Iff 

176 

295 


2 103 
U 3 33 
13 17 373 
12 IT 47871 
77 

U 1716753 

1 » „ 

15 10 330 IBS. 

04 61907 4S% 45% 4S% 

3.4 is n 12 n% ii% 

0 4 1% 1% 1% 

53 15 1161 27% 2ft 
U 4 91% 

88 1 91% 

U 73771 2ft 
15 17 246 25 

11 18 38 1ft 

18 18 2073 47 

12 23 S10 24% 

2D 2100 11% 

10 27 400 *3% 

T3 6S6Z 23% 

02 14 4379 32% 

58 541 8% __ 

07 30 4651 43% 42% 42V 
18 20 326 27% 

54 12 1121 39% 

59 8 33 5 

1.4 91164 21% 

10 23 3155 Zft 

1.7 19 1730 54V 
18 29 S391 U67% 

13 24 B2B 37 

15 10 288 T9 
79 340101V 101% K71 V 

5.4 11 161 31% 30V 31% 

17 1316 25 24V 25 

52 5 15 11% HV 
10 12 2100 23% 22% 

18 18 637 4ft « 

79 2U 9% ft 
90 21 10 10 

7.1 115 10% 10% 

98 5 68% 067% 

53 12 1930 36 35% 

8 7 28 1005 B26V 2ft 
48 23 2050 57% 58% 

19 7411089 061% B1% 61% 
7.1 (Iff 2ft 2ft 2ft 

7.7 (100 24% (B4% 24% 

7.1 (100 28% 28% 29% 

7.7 (30 27% 27% 27% 

7.6 5 27% 27% 27% 

7.7 Z20 93 (S3 93 

10 38 7670 43% 42% 43% 

26 73 9 8%. 9 

1.4 20 269 14% 14% 14% 




■V 

-V 


17% 4% ECCM 
19 14% E68G 
4ft 38V fffstm 
Z7V 22V EntUttl 
Z7V 23%EEntp 
46% 39%EWOl 
5ft 40VB(Bdak 
62% 49% Eaten 
35% 24%EeMa 
23% Tft EcoHDlQC 
32% 27% Edam Bra X 
24% 16% Edmmdl 
B% ft Eteo Group 
2*% lftBcarDap 
4% 1% BoctAm 
9% 5% Her 
5 2%BKkd 

a 13% emc Can 

9% 7 V EmoDflmny 
6ft 56%Bnifix 
7V 6% BqxD*.7S 
20% 17% BmpbiDli 
16 8% Bnploy to 
55% 43% Brian AM 
23% 18%ElSltoCD 
31% 23%EagHd 
1ft UBtoBm 
480376% Bxw 1U 
34% 27% Emm 
49% 38% Enm 010 
51 50&WMJE 
W1% 97BwftUPE 
1ft 12%Enmhx 
10% ft EamdiBi 
37% 31% Brkgy 
72 iB%EntanaCo 
10V 9%EDKGKmi 
2V 2%E0KMiy 
28% 21%Eqmxx 
2% i% EdaBHE 
38V32VEQUUMX 
8% 7%Etota 
19% 11% Bhyi 
14 ift Bacn Fd 
16% 8% Bpfli 
17% ift BnUor 
B7V 60% Beam 


- E - 

Off 11155 546 017% 17% 17% -% 
Off 19 10 1092 14%dU% 14% 4% 
Iff 39 11 834 40 3ft 40 

Iff 8.4 9 443 24% 23% 24 •% 

1.40 51 21 212 24 23% 23% 

1.60 14 4195a47% 4ft 4ft 

Iff 14 3210598 47% 4ft 48% 

Iff 21 21 815 55% 54% 54% 

0.7G 19 152*07 28% 2ft 
0.44 10 18 469 n 21 V 
114 *9 12 223 27V Z7% 

Off 10 71000 18% 18V lw. 

81 73 BV 6% 6V 

Off (LB 13 3 2«V 24 24' 

3 145 up 4V 
108 IS ft 6% ft 
81180 2% (2% 2% 

Off 10 a 9871 17% 17% 17% 

0.12 I A 177 ft 8% 8% 

Iff 22 15 3123 6ft 59% 59% 

0.47 7.8 2 6% 08% 6% 

Iff 75 14 1M 17% 017% 1 
IS 928 15% 14% 1 
Off 19 16 195 40% 49% 4 . 

198 10 12 47 21% 21% 21% -% 
OM 19159 778 Z7% 2ft Z7% +% 
Off 19 11 17 14% 14% 14% 

1050 14 10431 V 431% 43lV 

075 14 23 7715 3D% 29' 

012 03 28 353 46 45 . . _ 

in 79 (Iff 50V 50% 50% 

790 79 3 90% 99% 99% 

Off 1A 87 314 14% 13% M 
Off 51143 18 ft «V ft 
Iff 5.8 12 533 S% 32 32% 

26 541 20% ff 20»2 
1.10 106 74 25 S8% 1ft 1ft 
1.104U 7 10 2% S% 2% 

Off 21 33 Z737 a28% 2ft 28% 

Off 214 0 459 1% 1% 1% 

1.14 15 14 718 33 (02% 32% 

1 53 7% 7% 7% 

050 49 16 50U 13% 12% 12% 

Ore 01 204 12V 11% 12% 

79 175 11% 11% 11% 

1.00 03 7 15V 15V 15V 

1U 4J 14 6*97 91 V 81% 61% 


•s 


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ft 

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4% 3%IWkBcr 0LO7 
1ft 13% FT atom 1.12 
18% 12V FkMCmn 0.12 
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89% 75%FaMM 
27% 2ftFMPBd 
21% 17FadamlSg 
20% FadDapISl 
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24% FHCan 
. 9% FHartrt 
33% 2ft FtooBfirt 
"■ 35% Ffaat Am 8 
29% FHBKS 
7% Rnl Bari 
6% M Bos St 
37% 3ZVFhtBmd 
88 86% FriCWCPB 6.00 
51% NFMChACPC 150 
101% BftWOHapC 6ff 
U>2 41% FriCHo 2-00 
47% 42% Fpfld Iff 
37% 33% FM Fd 2.1 X 2.15 
18% 11% FkWFri Off 
8ft 51%FMRlH 
05 62% FtUnt 
17 12VFUIU 
23% IftFriPUF 
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53% 51 V Mt U PI 103 
10% 8% FjUnfl 
38V 32% Flat Wg 
35% 2ft Anted) 

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28%S%Ftan0kX 

33f8 rtertfl 

ffl% iftFUma 
58% 40% Fluor 


50% 45%nccp 

7% 5% FMCGd 
*a 41% Foote OB 
17% 12%FaeH6 
re 33% Rad 
10% B Forts* 
45% 32% Fo*IW&x 
14% 11% Foorayar 


Off 

Off 

1*0 

1.00 

Off 

054 

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0.18 

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1.15 

072 

081 

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0.10 

390 

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078 


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Iff 

0.40 

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51 33% FrtridHS 032 
42% 3ft FraMinr 
ft 4%FftMM 096 
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46% 37% FtoptfcMPF Iff 
21% 16% MUM Iff 
27% 21% FlMCMA 060 
24% 21% FnjmGn 076 
33 238(0X9 

78% WKAIto OU 
18% 13%Fttor6mi Off 


- F - 

29 48 58 3% 3% 

7.7 85 14% 14% 

09 25 115 14 13% 

14 4 U3B% 37 V 

5^ 25 2 7% 7% 

8251018 16% 16% 
11 13 48 8% ft 

19 14 2059 59 58% 

U 63 46% 45 

61 43 181 25% 25 

07118 532 7% 7% 
26 1421 75 74% 

1.7 24 <12 28% 27V 
19 11 4889 8ft 83% 
49 87 1716 23% 22% 

13 15 1307 1ft 17% 

18 4846 22% 22 

19 15 171 28 27% 

20 134 25% 

17 33 8 ft 

06 17 781 Z7% 

4.1 10 1181 B3S% 39- 

39 16 2451 u38l 
99 a 

9.1 72 

09 14 Q 

74 4 

OB 5 

69 16 

3.7 6 35M 

39 9 483 

84 48 

04 310 14% 14 

02 27 2045 50% 56% 
17 12 3440 81% 90% 
19 SO 497 15V 15% 
17 383 20% 20% 

14 10 3936 Iff 47 

7.4 (100 52% ffi% 

59 6 364 7% 7 

13 10 205 38 97% 

16 10 1177 33% 32% 
39 14 1995 39% 3ft 

14 16 623 21% 21 

44 24 1178 24% Ift 

1.1 18 256 37% 37 

73 12 1022 27% 28% 

44 17 188 18 17% 

19 25 4838 53% 51 V 

<3 448 48% 48 

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U 16 44 41% a4l% 

1911 588 12V 012% 

11 4210348 3ft 08% 

9.4 Iff ft B% 
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10 17 60 1ft 13% 
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04 282 II 

74 141 . , 

09 14 2187 35V 35 

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19 6 5 5 

19 9 2 5 5 

49 12 41% 41 

69 <a 35re 18% 18% 
2423 3276 3% 24% 

12 7 201 24% 23% 
11 884 3ft 38% 

1.1 4 64 62% 61% 

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33% 28% GTE 1475 
19% 18% BTEFIff 
12% 1ft GttmlEq 
36% 3% Gator 
ift ilVGaHULw 
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59 60Gai« 
49% 37% feme 
~ J 25% GCQm 
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56 48% GanEtee 
8% 5% Ben (test 


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Iff 39 
190 19 

Iff 89 
2.48 89 
Iff 6.9 
190 89 
Off 29 
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Off 13 
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140 113 
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13 158 39% 
13 148 53% 
18 IS 11% 
30 6521 31% 
9 28% 
S 18 
442 11% 
IS 53 32% 
3 12% 

6 240 IV 
18 2666 51% 
30 3083 46% 
41 175 28V 

98 11% 

7 09 18% 

8 520 13 

08 21 
4 535 43 

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1 1408 ft 


51 51% 
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11 % 11 % 
31% 31% 
06% 26% 
17% 19 

11 % 11 % 
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51% xi V Geracaeii 
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21% U%GmaS8 
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77% 58V&7PP* 
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51% 48%Gecdnl5 Iff 
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31% 23VQCMMF 112 
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17% 17% 
10% 1(1% 
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198 70 18 19 1 
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1 61 
032 19 31 155 
Iff 64 13 224 
196 01 25 33 
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38% 32% ton x 075 10 25 401 .... . 

26% 19Vtonaftad Off 18 1G 357 21% 21% 
ft 1% Hanson WI 2207 2 1% 

22% 18% toXMADR 1.04 5.4 18 862* 19V 19% 

38% 30% HbcDi Off 1.7 16 3U S% 35% 

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53% 43% Hmhy on X 024 05100 1125 u5i*9% 
33*j 20% Hamm lad 18 1« 29% 28% 

25V 19 Hands 0.40 22 281409 19%dT8% 
1.12 25 14 1980 44% 43% 

1.40 1* 12 129 4ft 4ft 

112 *J 53 183 45 44% 

Off 92 32 138 6% ft 

1.44 U 5 16% 18V 

232 72 13 372 32 31% 

Iff 02 19 196 31% 31% 

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53% 43% Hank] fin 
7% 5%H*an 
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97% 72Uuctt 
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17%HmsSMx 


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26 310 33% 33 

16 732 31V 31% 
005 05 21 2D15 11% 10% 
024 09 2B 922 30 2ft 

132 19 15 380* 34% 3ft 
014 09 16 383 27% 261; 
048 19 28 233 27% 


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Iff 15 16 56B0 
04414.7 0 227 
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080100 19G 

053 9.7 713 

087119 93 

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11% 5% Hmdngdan 035 55 11 31 ft ft 

10% ftHnxrtm 098102 87 9% - 


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38% lfttoaito 
22% ift tonal 
15% 12V totem 
13V 8VHUter 
2% 1% Hotel tar 
53 3ft Hous ton 
8% 5% Horn Fan 


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8% ft 

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56% ft 
97% 


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10% ftranrain 
31% 21% PToa 
11V ftKTPrapyx 
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30% 22% UrinPw 
39% 33% ttm Gam 
29 24% Vv»4l42 
49% 44%SM758 

28 2*HPI4ff 

29 34VHPM2 

52% 46HR024 

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52 49IFKN* , S 
22 % 1 ft M> 

50% 44K3 
48% 32%MCFMfl 
11% ftknaDal 
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97% BGhdUVff 
30% I9hdla(m 
23% ifttadEomnr 
21% 12% Mon Fold 
15% 12% tadrssco 
41% 32 V taQflnd x 
37% 29% HdSl 
9V 7% taUrSya 
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42%teteBraFa 
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32% 22% knar Hag 

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3V 2%bXHto 
62% 51% SM 
22% HhffmS 
39% 35% In! FF 
19% 15% HlUt 
77% 60%kxtox 
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11% SVUtenUn 
30% 25^2 HUSVx 
8% 4% MTAN 
34 22% MGVaaT 
19% 13MRadB 
3V ZHTacto 
BOV *2% Met 
2*V 20% town IGSE 
3ft 28% IpalcdEnl 
11% ft kite tan 
12% fttaUFod 
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21 21% ft 
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14% &V JAaraD 

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5012 43% JnBP 
103 99JrejP798 
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96 099 99 
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14 313 23% 23% 
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48% 35% LagoPI* 
25% 18%UmrDp 
4% ftlnrieyFW 
2% iVUmrteta 
11% ftUteVBS 
28 23 % Itaotx Cp 
81V 47% LBf 
22% 18% UBM 
44% 38VLHD0I 
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43% 35% LauM, 

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37V 2BV lama 
18% HLTf 
6% 3% LTVWs 
3ft ff%utoi 
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38V 29VUMMHC 
35% 27%LmBSkk 
28% 20% LytM (DC 
26% 20%LyenWPx 


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23% 22V 23 
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22% 22 22 
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10% 19 19 

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5*V 55% 

17% 17% 17% 
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22% 21% ZlV 
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84% 63% 

42% 41% 

91 90V 90% 
27% 27 27% 

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30% N 30% 
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1.04 1 J 9 20S3 Sft 55% 

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12 73 3V ft 5V 

1 50 17 13 ITS 27% Z7^g 27% 


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29V 17% 

38% 20% 

S% 24% 

29% 23% name 
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10% 7%Mn0te 
25% 24MMBP1X 
6ft S6>2 MteXO 
UV IftUnUr 
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2ft 15% Mart W 
32% 2ft Marti 
88% 80% MUMcL 
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47% 40VMttlMte 
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27% 13V MaacoTaon 
8% 7% Manaad Pt OGB IS 
34% 29% Mxann 2J0 U 9 
2ft 21% IMSd 
176134% Mxtm 

S 26% 20V MUM 
45V 38MmmPI« 

4%MmaflE 
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27 1ft MBMACOP 


8% BV 8% 

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U B 15V 15% 15V 
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Off 11 10 2232 43V - - - 

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22 8% I 8 

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1.18 am 38188% in 
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1.04 IB M BUI 395 3ft 3 
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81% 52%McXm 
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20*2 17% Mantra 
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87% 68% Mam 

5ft 52J 

41% 35i 

10V 10% tom 
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54%MdMd 043 07 20 4801 80% 5ft 

140 19 13 1319 120% 119% 12ft 

132 152U 577 Sft 6ft 68% 

199 13 20 1857 74% 71% 72% -1% 

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044 24 » ff 1ft 10 18% 

8 235 23% 23 23% 

181 79 17 330 3ft 34% 34% ft 

..... 098 09 20 3432 79% 7ft 7ft *4% 

20% Medina Op Off 11 20 299 23% 22% 23% +1 

28% Mason BkH 290 89 32 27% 27 27% ft 

29* 39 12 1609 58 56% 

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2 551 ft 6% 

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8% 5% Man 
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40% 2ftMn*oR! 

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10% ft Mtaftafl 
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3% 17% MkMEU 
7% 3 MM Cop 

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Contfnwd tv no* P*P. 



FINANCIAL TIMES WEDNESDAY MAY 25 1S>9 4 

WVSE COMPOSITE PPircg 


37 


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37? 24? Thai Fate 

r& ““ " 


I DM 


024 38 21 



ib? uVitantai an 27 a 
41? 20? Tinmen M 140 88 15 
23? 19?DdM 
34? 2B?1War 
44? 34? TnWan 
37? 29? T matter x 
37? a?TMnx 
0 ftttancrp 
1ft IITlaaPI 
4? 4T0W8&P 

18? IftTolBRte 
75 60?itataten 
49? 36? Tctaak 
30? 23?Ttom0an> 

35 28? Taco 
29? 22? ToteBta 



a 82? 61? 61? 

a 15? 15 15 

a 37 38? 

on is a 1653 — ' 

on oj a 823 

036-09 7010780 _ 

in 14 24 530 a 
1X0 21 75 7GB 
8 174 

in 84 5 1 

i 2M 

lITWatDCD oa 4.4 a 48 12? 12? 12? 

Telaejn 181 11 J 7 25? 25? 25? 

n 1278 12? Tft 12? 

oa 08 18 10 Q? 93? 83? 

US 18 II 546 
048 21 10 ia 
on 21 11 3587 

- - — . 014 08 38 ... . 

40? 32? MUX 234101 35? 

Ttamtacx 108 ea 10 * 2ft 
100 18 0 2328 S3? 
an 07 13 711 54 

080 18 11 627 1ft 
3 9 

024 1 J 10 96 12? 12? t 
On XB 8 4825 34? 34? 34? 
021 1.7 14 187 14? 14? 14? 
150 12 flOO 34% 34? 84? 

10 117 17? 16? 17? 
UK 13 231010 60 

076 14 185 22? ». 

088 12 « 1413 36? 38? 

088 21 68 370 34 a 33? 

oio 03 a sea a? a? a? 

31 4067 ft O? 3? 
oa 16 a 214 ft 6? ft 
012 12 173 7? 7? 7? 

064 42 4 480 16 14? 15? 

070 17 18 flOO 18? 18? 18? 
040 09 26 828 48? 48? 49? 
010 tl 4 281 8? ft A 
74 a 5? 0 5? 



« 32? Tota- 
ls? 13? Tredegar 
37? 34TtKM16 
2B?1ft1taR 
aiUutex 
a?1WQn 
. 33Trtn»j 
40 3i?Tmoux 
E? 24? 1 



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aoa M. If III Ctm fm. 

urn Um tend nr % 6 109a M* \m Mate Ctem 

. 1.48 BJt 12 aM 2ft 28? 28? 

IftUOEO 024 12 7 468D2D? 19 1ft *1 

ftusuEhcx oasjoeftftftft 
i is?ua« oa loci 1727 17? 17? 17? 4? 

1 X? US US in 10 814® 3S? 3ft 33? 4? 

Cbtai oa 14 18 188 M? 14? W? ft 

91775 178 U 4 27 27 Z7 ■? 

torpx in 84) 14. 5® 26? 28 28? -? 


-V- 

53? 44? V Cp m 27 12 712 

24? 1B?VkrtE OS 16 529 1 

Tft iftDMiMatxaa *a» 65 1 
7 4? VaMBC on 15134 
8? 7?SWMtaM 089125 B 

10? 9? tMCscpUr mils 18 . 

IftlftttptatetaUiaM 75 211 11? 

7 5?«ecnfete 30 234 6 

38? 28? Vsfen 024 08 n 2440 a? 

50? 33?lMQr Z7 2885 39? 

1ft 13? mar in 01 0 37 13? 13? 13? 

wvvKsesnxsn u m a a a 



«>32?1MttU 

25? a Hats (tea 
28? 29? tanks 
94? 73? tamtam 
1410?VMrtaar 
18? 16KSBC&4 
36? 31?tanad0 
Bit 44 ViScflUX 


l 12? HaiMrtUX 056 2.7441 
fttetasco 47 




Titan 
Toons 
ItatetOp 
14? ftTuMteti 
28? 14? Ml CM 
a? IB? Tate Ota: 
®? 44T>eoL 
10 8TjdT 
B? 5T?te 



28? 23?UBfti 

51? 

X 

s? 

ism7?iw. 

10? 5? IDCHBs 
a?U6ltepx 
11? BUHCkc 
Z7X?lMlkc 
17? 14?UMkK 
74? IBUx 
' inuteMV 
. 42? UhCtate 
2B?a?UnCartix 
IS? lOVUdmCtep 

54? aitfisn 
87 57? EtaH 450 
39?30?uac 
67?a?UnPK 
27? 2ft 


-li- 
on u 10 27B a? 

X 3 ft 

4.10 14 8 49? l 

6 378 24 23 

112 42 IS 3387 27 28? 


CSX Confix 175 75 U 50? SO 


3 

ft 



238 1265 121116? lift 
1.58328 4 23 5? tB? S? 
in 6J a 483 20? OD 2D? 

14 64 8? ft 

on 22 16 1201 26? 25? 

OIO 08 T7 a6 IS? IS? 1! . 

280 47 8 2 60 (SO 00 -? 

4W 44 IS 961 104? 103? 103? -1? 
in 14 a 1372 47 45? 45? -? 

075 27 29 3179 28? 27? aft 
18 353 10?tf10? ID? 

an 7J 210 46 d46 40 

450 7.7 Z100 

2X 7.1 12 848 

1J0 17171783 
on 11 10 460 ; 


22 1B?Urtemema 0» 1.1 52 448 18 


VUddRi 
TOUtap 

2?UMCnp 
20?UkHaM 
iftlMtantate 
X? IftWDmteal 
4ft 37?UkMtan 
4Q 33?UtakteXI 

g 5?UUfaduat 
1 


11 


0 II 

177241 78018 11 
a 48 

«M U 18 1198 3ft 33? 33? 

178 12 a 264 15 14? 15 

oa 1JI 17 a 1ft 19? II 
on Ol 1959301148? a 4ft +1? 
IX 79 10 a X 34? aft 
oa 5J) 5 64 5? 5? 5? 
ItaKfrtaiM 015 ** ' ‘ 



UHPteMa 

. . _USM 
1ft 11VUGFU 
ftUSHte 
16? USHgnte 
41? 35? U5UC0X 
19? lltUSStaa 
32? 1S?USSU0 
4ft 3ft USMkat 
72 58UUItax 
14? 11? UteWtlVX 
1ft 13?lMnda 
34? 2ft Uote Foods 
17? 15?UtarHBl 
? AUhMItaL 
12? ftUnhteQp 
a? 17? IteMDp 
X 24? Unocal 


012 

oa 1.6 13 472* 


12 ? 12 ? 


1J ,9 17 3 "5 ”5 "k ^ 

M 0W0 | | 

“? 

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a a 21? 21? a? 

2 163 17? 17? 17? 
1W 15 6 1® »«3B? 

032 UK 642 U19? »' 

OLW 04 5 7806 18? 1 
114 51X3613 4ft ‘ 
in 18 1823a 64? 

082 83 14 X 1ft 
26 S3 15? 

092 18 14 348 3ft 
in 89 11 261 17? 1 
0 3 ft 

oa 10 31 5 10 

on 53 10 194 1ft 
on 16 224281 2ft 


SB 44? UMM CUp On 10 11 3S8B 47? 



19 X 3ft 30? 

8 » 2D? 2ft 
19 2X 23? 22? — 
in 19 a 883 BO? 78? fift *1? 

17 42 11? 11? 11 

18 288 17? 17? “ 

100 59 42 183 35? 35? 

192 29 19 SB 4ft 46 

- w - 

18 X2 21? 01? 21? 

192 6.7 13 76 29 28? S8? 

40 488 17? 17? 17? 

ia 17 11 1287 33 32? 32? 

a 13? 13? 13V 

188 4? 4? 4? 

oa U a 1838 41? 40? 40? 

064 io is ea 32? a? 32? 

017 0.7 21702 23? 23 ZSh 

00* 19 7 2180 ft IE? 3? 

244 15 X 3010 70? Eft SB? 
x in as 25 181 15? 1ft 15? 

122 5J W 186 a SB? X 
mu t TO ®? B? 21? 

«a 19 17 76 233? 232 233 

0.48 1.4 23 IX 33? 3ft 3S? 

3? UMU 008 49 0 43 2 

18? 14?MU9Pa| oa U 15 4X 1ft 
*0? aftteakteranxia ii a a 37? 
n ft Wtewst 081 79 12 46 ft 
OR 19 14 a 24? 

082 17 11 674 ft 

024 09 21 1749 #28? 

in 29 19 ISRinst ISO? IS? 42? 
024 V* 22 1260 17? 17? 17? 4? 
044 29 15 a 22? <C2 22 

OX M 11 02 17? 

747 44? 

13 4a ift 12? i: 

X 1622 14? IS? 1 

oa 08 01 « 2ft 

oa 19148 237 lC4? . 

in 79 10 <30 2ft a? 2ft 
oa 19 M 8000 12? 12? 12? 

032 8.7 0 R A 4? ft 
a 3BS 17? 17? 17? 

OX 11 5 SB Ift IB? 1ft 
1.10 15 40 533 32 31? 31? 

in 18 183882 *3? <2? 42? 

OIO 05 a 1706 ift 1ft 19? 
ia 12 17 3318 Eft 54? 54? 

18 2 12? 12? 12? 

034 12 IS 7X 15? 15? ift 
17 19 14? 14? J. * 

in £3 16 101 2ft 28? 2 
OIO 1.7 12 433 6 

094 10 12 4539 30 

005 09 14 11 . - _ 

oa 19 17 2a TO? 10? ID? 

144 11 14 318 40? 4ft 46? -ft 
33 159 11? 11? 11? -? 
141 69 13 920 2ft 24? 25? +? 
HtacftaSax 1.78 02 11 122 28? Tft a? +1fi 


S! 

17? 1 

.177? WOf 
ift ifttNndta 
25? 22WMC& 
1ft 15?MaateltE 


SAZtitWaaKtet 
24 iftteatkaMa 
34? 26? Warn RBI 

1ft 1 






040 171X B 15? 
in 39 65 27D 3ft 
OB 13 2B14S28 26? 
016 08 12 237 21? 



(115 IS _ 
X? -lie 

21? ft 

1.18 7.1 4 2348 16? 15? 1ft ft 

190 7J 7 1ft 1ft 15? 4? 

IS 71 4? 4 4? ft 

__ , . 048 09 34 562 n? SD? 51? ft 

IftWaunor Oa 1J20 tOi 18? ift 18? ft 

WpmMx 044 29 13 113 22? 21? 21? ft 

-X - Y-Z - 

104?S?ane 100 18 441815183? IK 103? +1? 

54? 5D8aRteil25 4.12 79 3 54? 64? 54? 

SD? 40ttxCt«T)X 056 12 21 2K 48? <7? 4ft -A 

25? atateacGV 1.16 17 11 a 20? 20? 20? 

40 33? Yakut 016 04 18 402 36? 3ft 36? -? 

ay AZtetete 150 S 4? 4? 

13? 72MB 31248 9? ft ft 

24?2ft2MkM 1.00 43 6 45 2ft 23? 23? 

7? 6?2Matacx 082117 10 7? 7 7 

18? 11?2teD 040 13 14 5S 12? 12? 12? 

29? a?2kfHM OB 42 18 B 21? »? 21? 

13? T2?2MdgAted 1.® 02 IX IA 12? 72? 


ft&telBlta 081 88 3B 9? ft 0? 


I 


Pnct <taa imitate tf Mtan 


Yataf taps ml lam to IKSE itaaa ta gated too W 1 law. 

«km a ■« « teod dMdn mimtaB la 25 pasax or aere »■ bmn 
patt tee teteta MteHita mga md tetaM ae tanm ta tea ear art atar 
Itetea aoanki nrtd imeal dtend are aata dtamrt baad a 
tei tart amopen EH apni n atefeta. 

■ te d i ta i tea aart baaa na te teaata pta art MM 
r > | 9 tata B i ld l nte tefretart *<m tartf tac. ertteteta tactaa ar pted 
»i Ptetadtag 12 taertte a i dea ta rarn tea tad etetaa * 196 
eteHtadn an. MMdM actand Mr apteep a tack taMta. F*(- 
dad itad «■ aa atalad. drtnta ar a m item ■ teM dtedHd 
wted i Mtteta ei l actante a pted t* fm, a xatetee bat* xta 
teteta rt te amp mar taaa te tea pta g mate lha Mtataer imae 
kataB tafe tee an d -na*. ite«ta Mr dtataF HE pa»mi*rt dta 
i-atewd actae m pted k m c e te ta n eaten taa tetat added, 
•art teta oiaaea ttata >a daa el aft ta l a intend paid In 
te p «rt ( 12 natei Maa « tap ma a ataddd te or 
I-ta tad rtaaa bated. 



i ii nil tan m niwa 
rarttaaed ad ala ta tdL jtattete 


AMEX COMPOSITE PRICES 


4pmdaaakbf24 


n 9t 

Stack ft. E 100a nob lonCtadBi 
MrHagn «9 X iZ? 12? 12? 
ABtahc 3 63 t? 1? 1? 

Art* tad 2 34 3? ft 3? 

7m Hr Pa 194 12 2 43 43 43 

AratetezeA 004868 104 ift 10? 18 
AndaH 095 2 1509 6? 5? G 
AmEapI 3 253 ^ 

totate-AmA 48 249 

ASRtaa 072 1 X 

Mxtach S 15 

Atari 5 547 

ArttCU B 0 XI 

AutamA 12 87 


BMtateMr 073 18 
BattmTA 


BWOcanOX 0 X 
2 

TA 004 X 49 ... 

Barry RS 19 115020? 1 

BATtad 029 12 314 7? 

BhdaHnx 040153 4 21? 2 
Bio-Rad A 52 75 1ft 1! 




n 


ft E 1ft M* LaerOead Qng 

090 22 4 16? 18? 18? 4^1 



CDtetacc 
Cmpumc 

Coned HjA ... 

CtobsATA 064675 191 gift 18? 17? 
CnmnCA 040 40 Z1 DO 17? 17? 17? 4? 
Crown CB 040 14 19 10? 18? 16? ■? 
Mte OOW 2D 20? ^2D? ft 
CPHonidBr 1* 5 2a <n zr> +* 


DIkdte 12 74 

Dtevrk X 188 

DdGOmnnn 9 12 

Oltetax 046 49 7 



08412 6 34 S3? 34 

U73? 73? 


120 102100 

oa 13 9 11? 

032 71 18 29? 

20 am 
2 10 

on 7 7 24? 

072 13 183 21? 

070 X 3D* 10? 

2 X h 

32 12 6? 

034 22 300 3? 3,’ 




73? 
11 11 ? 
a ra 




028 14 1104 



HeaatiOi 


CHCnrp 
katrenDp 
tat Cam 


n 8k . 

ft E 1ft x^a UteCtamCkteg 

5 44 ft 3? ft 4? 

3 313 U3A 3? ft 

015 42 3 3? dft 9? 

141077 10? 1ft 10? ft 

1 118 5? ft 5? 

012 25 Z100 10 10 10 

4 355 ft 5 5 ft 

1193583025? 2ft 23? +1? 

096 192X8 IA IA 19? -ft 


Jan EM 


KfctetCp 

mw&p 

KB(pEq 

inagp 

lxaartad 

tmPtarm 

UntexkE 



2 22 34? 34? 34? 
044 2* 150 24? 2ft 24? 



02*157 629 33? 32? 33? 
PapawG 040 07 597 17? 


Pertsd 
WH«f 
PM ID 

PStartA 

ar 

PraakkA 


SJWCtarp 

snort 

Start B 

ntn 


H Sta 

ft E WO* tft UtaCkmOBg 

OB 51 57 12? 12? 12? 

18* 14 2 26? 26? 2ft 

023 19 267 80? 6B? 69? 

050 20 24 038 37? 37? ft 
012 281884 2D? 19? 2D 
090 17 a 15? 14? 1ft +? 

oio i x 1 ? i? i? +5 

31 2 2928? 20 

3 17 U7 ft 7 +? 
0 24 IB «? 1» *A 
110 0 5 38? 696? 3ft ft 

17 21 18? 1ft Ift +? 
004 14 207 12? 12? 12? -ft 

21 


TonftS 



87 

Tat Prate* 020 34 2 

TaODM on » 448 

68 435 1 
31 6 

020 21 ex 

TmnOtaY 0 
Titan 10 a ia 

Tata* Max 19 930 ft S . _. 

mafn 097 67 32 16? 18 1ft 

007X7 840 18? 17? 1ft 

020100 ^ ^ 

83 S 27? 27? Z7? 
10 275 3D? 2ft 30? 

2B08 28? 28? 29 

X1300 11? 1ft 1ft 
on 24 313 28? 2ft 28? 
112 19 81 13? 13? 13? 
OB 12 298 2ft 2ft 28? 
Xjttonk 4 92 4 ft 3? 


USCakd 


ft 

3 




N fla 

M A. C tk 

ASSrxte 120 20 17 15 15 X ft 

acc com ox ea m 17 ift u? ft 

AcebUnE . 188738 14? tft 14 

ActlWURi 2D 128 24? 23? 23? 
f-otontp X 875 21? 21 21? ft 
Adrtkcti 159345 IB? 15? 18? ft 
ADCTte* 31 2212 X 36? 37? *1 
AddtegiH 2D IX 15 14? 15 ft 

**i Sere x 0.16 22 70 36? 35? 3ft ft 

AdttaSM 0X 239058 29? 28? 2ft ft 
AikanmC B 300 11? 11? 11? ft 

MrlO* 8 52 5 A 4? ft 

Ad* Polyn 7 45 ft ft 5? 

WTittn X 04 15 14? 14? -ft 

Adana 020 21 1215t*l? 4ft 41? ft 
B 1010 13d11? 11? -1? 

21 540 12{i 12? 12? 
010130 778 12 11? ti? ft 

OX 14 « 21? 21? 21? ft 

290 2D 72 5B? 55? 56? -1 
X 2391 28? 27? 27? ft 
088 16 18D 24? 24 2* ft 

14 118 7? 7? 7? ft 


Afljaax 
AtamrRe 
ApkGa 
AM** 

Aka ADR 
Aides Cp 

AMU 
Aktfl&W 

AtaOigx 052 14 11 XXX 


DwRI 

DpmOadi 


AflMPD 5 720 10? ft fl? ft 

AUOpl. 1J» 13 55 14? 13? 1*? ft 
AldCta on 12 65 14? is? 14 ft 
AtaeOaC OXXZTOO 3? 3? 3? ft 
Art Geld on 7 ix 1? IA i? ft 
Altera Co 30 5458 X? 30? 31-1? 

a™ Barter OX 8 338 22? 21? 22? ft 
AmOyBu 13 2 14? 14? 14? 

Amteamg 2115182 21? 22V . 

Am Had H 13 9D5 9? 9? 9? ft 
AnStehaa 032170 821 5? 5 5? ft 

AmRtays S 406 10? 19 19? 

AmGrtAx 050 183852 28? 26? 2B? ft 
AxMP 1 182 l£ ft ft ft 

AmMta 2W 7 64 *8? 47? 48? 

AmfaaCCtar X 3223 21? 20? 20? ft 
AtaTw 10 T2B 12? 12? 12? ft 
Ampantao 171 2308 «? 44? 45? ft 
AntacflCp 0® 241689 17? 18? 17? 

4 113 9? dS 9 

15 XO 18? 15? 16 -ft 

048 14 501 17 15? T? +1 

ArmgaUa in 15 21 17? 17? 17? +? 

AmkewCp X 1905 X? 34? 36? +2 
Anita An 8 232 15? 15 15? ft 

ApopacEn OX 25 7 12? 12? 12? ft 

APPBta 8 BX 6? B? 8? ft 

Apt*) Mat 29 6748 44? 43? 48? +? 

AppieC 046 2711136 31? 30? 30? ft 

Appfctaes 094 X 806 1ft IS IS 

ArtarDr 024 X 3 18? IS? 16? -? I Esorptav 

Mtkte* OX 21 IX 2ft 2ft 2ft 

Argonaut 1.16 7 90 X 26? 26? -1? 

Amur A! 064 20 10 20? 2D? 20? 

Am* tax 040 18 73 21 X 20? ft 

ASK Grp . 33595 13 12? 128 ft 

AapectTsf X 754 29? 28? X? ft 

AaaocGnma 255 8 X X X ft 

AST RarOi 10T974B 17 15? 16? +1? 

Atanaon 14 113 9? 9 9? ft 

All SEA* 032 19 671 26? 28 a? ft 

048 a 5795 52? 5151? 

13 111 4 3? 3? 

OS2 14 15 7? 6? 7? 


W ta 

tart Dk e urn tat U 

Deb Stapn 020 30 2S 6? 6? 6? ft 
Mad] Efl OS 22 40 15 14? 14? ft 

DakakGix0n48 XX? 32? 32?. ft 
DteCtMKS 044 11 145 22? »? 22 
MbBp 2717719 29? 27? TO 43 
xOI6 IB S3 1ft 15 X 
X 1594 38? X? 38? 
in 8 481100? 29? 30? ft 
oa A 45 ft B? 5? ft 
16 343U20? IB 2DA +£ 
072 7 49? 16 IS 15? 

13 1186 14 13? 1* ft 

72388 M? T2? 13? -? 
7 253 1? 1? 1? 

7 SIS 4 3? 3? 

16 22 33? 33 33? 
DtaeYmx 020975 158 S? ft 9? 
DMARM 11329 4? 4? 4? 

Dota&ix Q20 a 1306 2ft 2ft 2ft 
DHElHb 0L6B 14 21 13?d12? 12? 
EVtcoEagy 14 108 9? 9? 9? 
taamBara 121287 11? 11? n? 
DrayED 02* 19 406 a? 22? 22H 
Dn<] Eopo 0D8 47 353 4? 4? 4? 

OS Bancor 100 18 840 31? 31 31? +1? 
Data 042 11 200 15? 15? 15? -? 
an 24 8033? X? 32? 

11 116 17? 16? 17? 


CWtff 

Depay 

Dnm 

DHTedi 

MB 

Dtp kt 

09 MM 

Dio Sand 

DEg%« 

DtensQi 


ft 

ft 

ft 

ft 

ft 

ft 

ft 

+? 

-A 


tel Bla. E Irti Urt B*a IM 

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KMB 006 12 119 23? 23 23ji -J, 

tancnCp 0*4 S 74 9? ft 9? ft 
fatten Cp 040 14 X Z2? 22? 22? ft 
Ota*)* 5 SHE fl? ft 5? ft 
KrtySex 012 23 342 27? 26? 27? +fl 

xmcky an 9 S2 6? is? 5? 

fatal 084 13 101 24? 24? 24? ft 
taw 12 X ft 6 6 

HUM X 4884 40? X 40? *-1? 
ttstadp 5 323 10? 9? 10? ft 
KdA 1 1781 ? ft £ ft 

XMag be 197 786 22? 21? 21? ft 
KifiekeS 92297 14? 13? 14? ft 


- E - 


&0aFd 

5 

48 

ft 

Oft 

ft 


EaateCp 

2 

663 

ft 

4? 

4? 


PnCtem 

a 

55 

1? 

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1? 

ft 

BQTU 

016 213827 

18? 

15? 


■A 

EoghaM 

81 

4X 

7? 

d7? 

7? 

-? 

BPaaffl 

2 

678 

2? 

2A 

20 

ft 

facasd 

10 

478 

10? 

ft 

10? 

+% 


LSaTart 


Bactate 
EoccnAa 
drtta 
BCAWa 
Ena* Baa 
Oconlnc 
EqoByO* 
BtevC* 
BEdd 
teSttl 


0A 54 X 53? 53? 53? 

2212425 20? 19 10? 

21 6 7 6? 7 

271442 6? d6 B? 

4* 448 13? 12? 12? -1? 

82 X 1? 1? 1? 

21519 S? (E h 2? 

OIO 15 IB 3? 3? 3? 

0571X3857 SD? 48? 49? 

7 8 dB 8 

77 XI 17? 17 17? 

1041® IS? 14? 1$ 

12 303 9? 8? 0 

17 558 23? 22? 23? +1? 

OIO 10 546 17? 16? 16? ft 

21 87 13? 12? 13 


-a 

ft 


ft 

ft 

-? 


ft 

ft 


MGrp 

FdrrCp 


RfM 


IffiTM 
Rtf Off 
HjtaA 


X ft 


ft 

ft 

ft 

ft 

ft 

+1 


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- B - 

BE! E 008 91 4 5? US? 5? 

Brthagw 8 923 10? 10? 10? 
eatartm 401 A ? Jh 

Bata* J 008 121128 20? 19? 19? 
BfanLBx 024 S 8 14 14 14 

BtetaC 15 1480 22\ 21? 21? 
BrtSMb OU 11 IK 18? 18? 18? 
BtedonCp 040 9 154 18? 17? 17? 
Btetaorttixon 11 51 UZ1 20 20 
BprtMrts 020 a 232(03? 33? 33? 

Bank Gao 052 16 251 33? 32? X 
Fx on 14 157 a 25? 25? 
BayHtav on 13 *88104? 22? 2*? +1? 

MD 13 2296 X2? 60? SI ft 
BUST Ho 108 9 890 20? 29? 29? ft 
BEAM 2210209 9? 8? 0? 

OX X 27 13? 12? 1ft 
BenUarry 14 231 14? d!4 14? 
BteEdeyWI 044 U 1® 38? 37? 

BHA&jj 01212 175 8? dB? ft 
BMC 107 18 5? 5? 5? 

BIpB OT2 1B 75 12 11? 11? 

BMayW 008 13 630 12? 12 12 

Btogm 37 2232 3ft 35? 35? 
Burnt 172124 10 9? 0? 

Bbcklbg 10411 a 3 0? 30 30? 
BMCSORm 173003 65? 53? 54? 
BoatmmSxlW 113007 34? 34? 34? +1? 
Bob Emm 027 181164 X? 20? 2D? ft 
Bate IB 14 82 28? 2ft 28? 
Bodnf IS 6734 10? 9? ID? +1 

B0rtaiBkxO7B 5 205 J1 29? 29? +27 
Tc 43 5223 ID? 9? ft A 
BrtdfWA 05B 18 8 *7? 46 « ft 

Branco 020 34 X 10? 10? ID? 
Brans 024 16 414 7? 7? 7? +? 
BSBBnqjx 078 B 227 u27 2S? 26? +? 
BTStdpng 048 7 10 3? 3? 3? 

292033 20 1ft 19? t, 

22 648 12?S12? 12? +? 
a B2S 9? 8? 8? 

62 a 33 32 33 ♦? 
5 23 22? 21? 22? +? 


-c - 

CTac T78 96 2B? 75 75 -1 

Cabottead 8 270 8 7? 7? ft 

CadSdltert 101 17 2K 3030 X? 3? -? 

QtaoCtentem 181847 ui7 15 15? +? 
CanCp 118 209 7? 7? 7? ft 

Ctegane 225 9 7061 15 M? 14? ft 

Cal Mon 19 67 20? 19? 20? +? 

OnEattg 1 B40 IA dl V. +? 

CtetabL 2 280 3? 3? 3? 

Cndes 0 490 2 1? 2ft 

Crnrtkn 000114 5u82? 81? 82? -ft 

Ctanh 1 23 3? 2? 3? 

CVdfM 0.12 25 144 46? 48? 48? 
CtetaCm 003 23 127 28? 28? »? -? 

Oseta* 080 18 30 X? 19? 20 ft 

Casey S 008 Ifi 1122 10?rf10? 10? -ft 

Cdgm 4 IK 6? 6? 6? ft 

CeUte 8 334 10? 18? 19? 

CMCp 16 294 11?d11? 11? ft 
CBrttairte 77 IX 10? 10? 10? 
GMDcnr 51360O14? 13? 13? ft 

CnblAf 1.1211 320(131? 9151? 

CdrtSpr 22 2 11? 11? 11? -1? 

Dante 8 262 4? «? 4? ft 

QtepWI 000 7 701 20? 20? 20? -ft 

ChrtnSh 009 122X0 9? 8? 9? ft 
Chdrtkgn 4? <7 rt? S,*, 8? 

Chentab 15 IX 10?tfl0? TO? 

Ctarart i 280 ? ft ? 

Cteapomr 12 8 3? 3? 3? 

CtdpjSTd 6 304 4? 4? 4? ft 

DdranCp 642974 86? 85? 66? ft 

CtanFh 12812 62 S? 52 52? ft 

CUas Cp 017X 397 32 31? 81? 

□nuatgc 336053 X? 31? 31? 

CE Tech - 140 358 2? !? 2fl 

CkcaSff 1318252 25? 23? 25? 

CIZBancp 108 X 81 2ft 27? Z7? 

Ctai«* a 97 7? 7 7? 

CM Dr 43 7 13 1 2? 12? 

CUhaatm 83211 5 d*i 4* 

CocaCoteB x10D 15 233 25? 2*? 24? 

1X8047 UB? ft 8? 

a a ID? ID? 10? 

CogmaCp X 967 19? 19? 19? 

Cogu X 80 10? ID? 10? 

16 140 13? 12? 13 
90154Z 23 21 22? +1? 

COUGH 128 13 47 20? 20 20 

CoM dp 000 8 24 23? 29? 23? ft 
Canter 024 133563 10? t8? 19? +1 

Com 009 1616400 17? 15? 17? +lS 
QacSASp 009 3B2432S 17? ift 17? -el? 
OmBHuOn 11 614 32? 32 32? ft 
Ccnna 070 92 19 17? 17? 17? 
Canwlta 41B 322 12? 12? 12* 
Canakn 82 B5 13? ift 1ft 
CBOtttt 34 713 3? 3? 3? 
Cotap 128 X 604 X 37 X? 

11 344 8? 7? 7? 

144 18 50261111? 10? 11 
CtaMCaE X 398 1ft 15? 18 
QMMi 16 418 10? ID? 10? 
CtasAX 050161702 19 18? 18? ft 

Copyteto 99 307 10? 10? 10? ft 
Carts cp 22 1660 51? X 90? ft 
Cap«A 411061 15? 14? 15 

EtartarB a® 292096 24? 24? 24? 
CrayCwnp o 214 l£ 1? 1? 


- F - 

11 20 4? 4? 4? 
02414 15 5? 5? 5ii 
OW 51 1485 33 X? 32? 

13 2508 22h 21? 21? 

3 174 3? 2? 3 

1X0 16 411 B55S4? X 
5 566 3? 2? 2? 

024 1 1003 10? 9? 10? 

X 717 Z7? 26? 27? 
Fattens U20 121652 35? 35? X? 
FWAax OW 7 989 31? 31? 3l£ 
FttScOhtex 100 10 42 24? 3? 23? 

000 21 S3 24? 24? 24? 
FtfSKQfX 104 11 821 2ft 28? 28? 
FttTam 108 92307 41? 41 41? 

OX 7 483 9? B? an +i 
052 5 279 23? 23? 23? 

1X 11 107 4ft 48 4ft 
43 16 7? 7? 7? 
a 1311 21 2D? THU 
143477 5? 84? 5 

009 155222 5? d5? 5? 
009587 2077 5? 5? 5? 

IX 10 227 31? 30? 31? 

14 114 14? 14? 14? +? 

PUteBrtC 030 32 259033? X? 33? ft 
Foster A X » 3? 3? 3? ft 

fWlFtex 10411 46 28? 20 20 -? 

1.12532 lB4t£6? X? 28? 

040 8 232 1ft 15? 1ft 
1.18 10 184 B28 27? 27? 

OX X 57 38? X? 35? 

OB 14 90 28? » 26? 

02* 19 151 16 15? 15? 

30 5? 5? 5? 


-L- 

LsddFm 012 51 10 8? 8? 8? ft 

Um Rack 322946 M? 28? 28? -? 

080 X 1038B4 9? 48? 49 -A 
Lane lie 056 17 273 IBtfir? 17? -ft 
undntfph 44 T0S7 »? 32? 34? -el .24 
Lamport 10 217 8? 7? 7? •? 

62 289 5? 5* 5? -? 

LdtteeS HS552 17? 17 17? ft 

ih 04817 13 23? 23 S -ft 

LCDS 27513586 19? 18? 1ft ft 

UUCP OH 7 7 5? 5 5? ft 

Urtkra 14 583 11? 11? 11? 
LagmCp 174X9 28? 27? 28? ft 

UWjMBc 078 13 282 28? 27? 20 ft 

on 15 5 17 17 17 

22 X 4? ft 4? ft 

028 22 204 24 23 23? -? 

97 833115?1M? 118 •? 
OS 14 1608 1S?013? 14? -1? 
14 14 32? 32? 32h 
IMtflrt 024 37 XU 45? 44? 45? ft 
040 18 9 38? 35? 38? ft 

lama Op 006 a 541 22? 022? 22? ft 
Lem Star X 432 aft 8 8 -? 

521914B 88 64? 85? +3? 

LTXCp 2 504 2? 2? 2ft -ft 

LVMH OX 4 146 31? 31? 31? -? 


MCECa 005 2I187X 24? 23? 23? ft 
US Cart 173X5 20 19? 20 +? 

:MH 080 42 132 13? 13? 13? -? 

> ItadteonGE IX 14 91 33? 32? X? ft 

Magna Wr 14 153 31 30? 31 ft 

i Op 078 *2 BX 19? 19? 1ft ft 


LlytodA 

UdBt 

UncrtiT 

UndkyMI 


Fat Waste 

FtekMe 


ft 
-? 
ft 
ft 

ft I Baarv 
HMM 
FOMA 
FQodLB 
ft FoPROt 


ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 


ft 

■a 

-? 


UaS Box 
■ Cp 
iDr 
ICp 


ft 


MartiS 


FstEask 

FHfU 

FatHaosJ 

Fiteerffi 

fldbxfln 

Fogn 

RdBBdADR 


ft 

-? 


GBArt 
GBKStev 
Sartos 
Gamatftr 
Bert Co 


- Q - 

7 4 4? 4? 4? 


007 21 232 14? 14 M 

0 X 3? 3? 3? ft 

10 53 3? 3? 3? 

016156 20 6? 8? 8? 

BardBhdx 040 17 9 16? 18? 16? 

fienlyta 77 128 4? 4? 4? 

5 flK 14? 13? 13? ft 
Start Cp 400 451158 27 26? 26? ft 
rentable in 247 4? 3? 3? -? 
Gerayna 683168 X a 29? 
GkaonBx 040 11 410 16? 18? 18? 

.1012 161278 a? 22 22 
GtartAx 000 16 113 16? 16? 16? ft 
Bkh8km 11 42 5? 5? 5? 
GnxfGta 1*1226 12? 11? ii? 
SMdaPnp 080 18 127 21? 21? 21? 
GrartcSyi * 30 2? 1? 2? 

Q20 89 20 21? a? 20? 
EbaanAPx 021 11 286 1 6? 17? 18? 


12 152 8? 8 8 

a 673 10? 10 10 

13 191 4? 4? 4? 

9 77 40? 39? 40? 

1 IX 2? 2 2>? 

18 57 B 8? Bfi 

MaoMSniAQM 10 IX 10? 10 10? 

OB 12 1483 22? 21? 22? +? 
9 169 6? 8 8 

40 646 XA 51? X? ft 
MndDrre 0 961 6 5? 5? ft 

MdMhR 044 13 50 18? 18? 16? +? 
McCnmlc 048 173418 21? 20? 21? ft 
MrttaC 484858 X? S? X ft 
MBdbBag 0 180 \ ii ft 
;toc 016 15 236 12?fl1? 12 ft 
048 13 463 S? 21? 22? +? 
024 6 47 5? 5 5 

016 45 20 14? 13? 13? 

024 21 5473 11? 10? 11 -ft 
Mena«0 OX 10 1600 19? 19? 19? ft 
Iktct*y6 070 7 249 26? 26? 26? 

IX 11 3715 30? 3(81 X? ft 
161501 10? 16 16? ft 

MMnOaA 0X15 53 15? 14? 15 ft 
IF 020 16 455U11? lift 11? ft 
HchMdS 2003*52963108? 7ft 76-el? 

6 48 4 63? 3? «? 

21 3168 28? 28? 20 +1 

5 IX 5? 6? 5? ft 

16 2003 6? B? 6? ft 

31257 6? 6? 6? ft 

1416649051? 50? 51? ft 
44X67 49? 48? 49? +3? 
040 11 11K 29? 28? 29? ft 
Mtedflnrfn OX 20 X X? X? 32? 

’Hi 05277 596 25? 24 24? •? 
n 2402 X? 21? 22? -el? 

14 65 12 11 It 

MobMM 422810 17? 17 17 ft 

Madam Co 020 18 48 7? 7? 7? 

ModMMTzaS 19 106 27? ZB? 28? +27 

Mata OEM 1725 35? 34? 35? +1? 
Notable 004 281069 37? 35? 37? +1? 

004 18 437 10? 10? ift ft 
MaabanF OX 22 12 X? 28»2 30? +1 
MrCnRae 179780 14? 14? 14? ft 
UTBSW 0X11 73 Z7? 28? 27 ft 
121881 28? 27? X? ft 

4 85 10? 10? 10? ft 


Mks]pab 

Mcrpta 
*8aS 
Ml ABM 


&iracliP6 


Mndta 

on carp 
GBsyreg 


02177 ?* ? ? 

1 472 3? 3? 3? 
650 X 13? 13 13 

6 839 11? 10? 10? 
51190 9? 8 9? 


- H - 

54 SS5 6? 


- N- 

KACIM OIB 13 668 30? 30? 30? 

Maah Frch *072 11 220 10? 16? 16? 

RtePta* ii Hi 5? d5 5 

Hat Coopt OX 78 214 12? 

Eta Sir X on 10 IX 13? 

ter 0 6 17 

NEC 04688 68 57 

f 17 251 27? 

NetwkGeo 


Kemps 


EtartihgA 54 535 6? 6 6 

OW 8 12 22? Zl? 22? 
EterpafSp on 13 9 15 14? 15 ft 

ffiO&CB 016X2160 27? 27? 27? +? 

172469 19? 19? 18? ft 

006 2D S63U12? 12 12? ft 

10 452 7 6? 8? 

12 207 7? 8? 7? ft 
tfadtoger 016 25 600 15? 15 15 •? 

500 inti I#} 10S ft 
HBknTnar 8 80 13? 13? 13? ft 
OR 151862 22? 21 22? +1,4 

HogmSp 015 29 X 6? 8? 9? ft 
46 45 10? 8? 10? ft 
Hama Bart dm 9 3 21? 21? Zl? ft 

Harm EMca OR 25 25T n2f 2D 2D? 

Hon bala z 044 2t 2B3 X 29? 29? -ift 
Hambecfc 182546 16? 1616? ft 
Honarthte 044382 90 3? 3? 3? 
MUX 020 18 1X8 19itidl6? 18? ft 
080 11 1534IC8? 28 25? ft 
Etna CD one 0 63 2? 2? 2? ft 
EWhTtai 54 463 XX? X+1? 

HycorBto • 11 92 5 4? 4? ft 


-? 
ft 

12 12 ? 

13 13 
17 17 -1? 
57 57 
27 27? ft 
232311 18? 15? 18? ft 
84 496 B? 8? 0? ft 

25 3 7? 7? 7? 

027 19 1064 IB? 18? 18? ft 
fatCBrt 080 21 232 20? 19 18 -1 
ftarbiHW 8 575 TO B? 9? +? 

3311257 45? 42? 44? +1? 
NewwtCp 004 12 29 6 5? 6 

IM 214531 7? 6? 7 

056 25 24 56? 55? 56? 

NflHrniK 040 X 5726 44? 43? 43? 

1 12 4 15? IS? 15? 

NStarlEn 4 2D 5? 4? 5? 
HarttnTW 008 131041 41? 40? 40? 

INI A k 


-? « 


•? 

ft 


nsc carp 


ft 

, -h 

151677 14? 14? 14? ft 
30843441 16? 17? 16? +1? 
27 3X0 30? 30 X +? 

10 7 4 4 4 


ft 

a 

-? 

ft 

-A 

-? 

ft 

ft 

ft 

ft 


ft 

ft 

ft 

-A 


HS* 

CS Count 
IS Mel 
fenoucor 


8? ft 

14 ft 

7? ft 
6? +? 
5 ft 


bbgOar 


ft 

ft 


51 62 (8? S 
41 4611 14? 14 

7 422 8A 7? 

X 80 5? d*? 

4 200 6 4? 

knpadBc 040 34 68oT7? 17/* 17? 
lad Banco 1-1819 688(09? 30 30? ft 

tadks 024219 98 15? 15? 15? ft 
WRBB 17 796 14? 13? 14? ft 

193953 16? IB 16? ft 
t* OX 18 277 11? 11? 11? +£ 
335829 28? 27? Z7? ft 
28 97 12 11? 12 

11 321 3? 3? 3? ft 
024 1124*6* 61? 9? 61? +1? 

9 128 2? IS? 2? ft 
032 34 835 2D? 20? 20? 

22 285 10? 8? 10 

024 17 411 13? 13 13? 

3 447 9? 9? 9? 
81068 6? 8? 6? 

Z2D 20 11? 11 11 

20 587 11? 11 11 

1* 34 16 17? 17? 

an 21 ire 3? 3 3? 

4832290 10? 9? 9% 

001 IB IM 28 27? 27? 

1 137 2? 2? 2? 

16 42 18? 18 18? 

IX X 2 20B 206 208 


- o - 

OOartQte 28 400 18 17? 17? ft 

Octal Com 15 0X 20? 19? 2D 

OEWnLg 15 78 14? 14? 14? +& 

OgtebsyNxOBO 8 Z100 25? 25? 25? +? 

OfafaC* IX 5 922 28? 28 20 

OUKta 1.18 11 748 X? 35? 35? ft 

OdNaUB are 16 63 X dX X ft 

Qtamoni 100 7 4» 30? 80? 30? 

On, Mat IS 694 3D 18? 19? ft 

OpaalR 20 251 21? 21 21? ft 

OradBS 4926717 34 32? 33? +1? 

CbtrScate 51200 20? 20 20 ft 

Ortakcb 009 » iSI B? 0 8? -ft 

OrtHSW 9 3M 13? 12? 13? ft 

Oragtafct 031 10 02 5? 5 5? ft 

Otap 3 15 2? d2? 2? 

OaMOAx 0<l 40 99 13 12? 12? ft 

NT OX 11 104 11? io? ICtfl 

OtkrTrte 1R 13 47 X? 2B? 30? +? 


bfeE 
Kan . 
MtaBZ 
kkr Tel 


ft I Manat: 
HDatjOA 

MRS 
tat Total 


Cp 


ft 

ft 

ft 


ft 

*A 

ft 

ft 


ft 

-3 


+? 

ft 

-? 

ft 

ft 


temta 


42 76 6? 6 

22(70 4? 3? 


* ft 
4? ft 


DSC On 
Dert&nu 
DHzSMffl 


-D- 

3116741 40 46? 46? + 2 & 


013 18x100 77 877 77 -? 
9 14 2? 2? 2? 

31 488 7% 7? 7? ft 
Qatanpd 151438 16? 15? IS? -ft 
DaupbtaDp 09 11 437 25? 25? 25? ft 


- J - 

JU Shack 124423 12010? 11 ft 

JKMlac 02B17 14 11? 11? 11? 
JLGW OIO 25 X 28? 28? X? +1 

JtamW SB 112 23? 23 S3? ft 

IH ' 101288 13? 12? 13? ft 

JWrtMad 010 15 732 10?d10? 10? ft 
JHfflCpxinil 151 25 24 24? +? 

JSBfti 084 15 151 24? 24? 24? ft 

JuteUg 028 19 104 IB? 18? 18? -ft 

Jrtth 016 9 582 12?<n2? 12? -? 


-P-Q- 

FBCCVX 100133431 5D? 48? 50? 
PacOuoiop 09 19 127 13? 13? 13? 
PTMCBZ 122 13 182 21?d20? 20? 
PadlEra 23 42 55 54? 55 

3314605 29? 27? X? 
pqcnax oa* 42 279 34? 33? 34? 
PaycoAm 21 3 8? dB? B? 

05042 28 9? 9? 9? ft 
ParrTrtf 9 7 14? 14? 14? 

Para ftp x 10D 34 10 33? 32? 33? +1? 
Petiayte. 220 16 264 30? 29? 29? 

OR 16 96 35? 34? 35? +? 
Prate*) 15 231 0 5? B? 

LX 020 21 8 19? 18 19? +? 

PMptoH 034 13 127DD13? 13? 13? ft 
1.12 IB 2 33? 33? 33? 

Bwrnaey 22 148 8? 7? 7? ft 

Pimrardl 25 289 5? 5 S 

FfcadR 048 4 42 11?ni? 11? ft 

FEehita » 420 12? 11? 12? 

44 4 17? 18? 17? +? 

PUtaa OBD 271250 40? « 40? ft 

nenestfi IU8 25 8088 37? 36? 38? 

0.14 14 551 25? 24? *25? 

S 105 8? 8? 8? 

18 OB 6? «? 8? 

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91 331 25? 24? 24? 

2D 7861 1ft 13? 13? 

38 80 5? 5 5 

IS 21 U9? 9 9? 

Rod Opt 024 22 2 24?dG4?24? 


PkneaS 

PernaFU 


taallM 
freskk 
POQtel 
Praia FBI 


ft 

ft 

ft 

ft 


tart Be. e Uk Mrt law UM cam 

PVlMBx 012 7 528 30? 19? 19? V* 

Pyramid 12 854 8 7? 5ft 

UnMog 12 5 7 7 7 ft 

EbtebaOan 002 72 7 18 17? 18 ft 

Ckal Food Q20 17203? a? 22? 22? ft 

Ebrtflliti 709357 15? 15 15? ft 

OUOkdk 18 20 12? 1ft 12? ft 

«C Italic 211442 31? 31? 31? ft 


-R- 

EkMnw 14 1B9 15? 15 15? ft 
RiDn 6 543 5? 5? 5? *A 

FBaterops 3 3Z7 5? 4? 5 ft 

tynand 24 32 19 18? 18? -? 

Recokn 30 670 3ft 32 32 

AUfe A IB 30 18 17? 17? 

Rapeprn 2 429 4? 63? 3? ft 

Rap talk 5 4 3? 3? 3? ft 

RasdM 14 371 8? 08? 8? ft 

(ton 224 151733 <2? 42? 42? ft 
EtacanJnc 1 300 6? 5? ' 8 ft 
Rnw Fit are io 4 351* »? 35? ft 

FkndteS UO 232078 72 89? 72+1? 

RbMpnt OR 13 77 6? ft 8? ft 
Etoci&lBk 056 3 37D 18? 16? 18? ft 
X015 3 2100 18? «? 18? ft 
Hotel sir on 101049 13? 13? 13? ft 
a 47 21 20? 21 +? 

on 9 802 19? 10 19? ft 
RFM IK. on 21 707 18? 17? 18? +£ 
RSFEn 048 12 16H20? 20? 20? ft 

RyaaiWy 1411327 7? 7? 7? 


106 8 4715 55? 54? 55 ft 

SnteW OX « 159 17? 16? 18? 

StMn*0D4 030 182209 25? Z3? 25? +1 A 
Sd Med L B43U 20? 27? 29? +1? 
SdSyrtm 111188 IS 14? 14? ft 
Sdea 7 153 0? B? 8? +d 

SctK Cp* 0 5* 72068 16? 16 Iftfk ft 

Score Bnl 81525 8 8? B? +? 

UO 47 53 30? 38? 38 +? 

SWB 109500 23? 22? 23? +1 

sere 012 223797 18? H17 17? ft 

SakekB OX 1 88 i? 1? i? 

1.12 14 425 25? 24? 24? ft 
SaquM 68 1 828 14? 13? 13? 
Saquta 33 ISO 4* 3» 3{2 ft 

Gar* Tech 14 247 B? 9? B? 
Santa* 21 4 4? 4? 4? ft 

Sevanaon 18 10* 18 17? 17? 

SMM 084 175641 24? 23? 23? ft 
SH-Sutm 3 1298 7? 7 7ft 

Shonwapri 27 597 18? 16? 18? ft 
ShowblzP 101264 11 10? 11 +? 

Stem On 19 E86 23? 22? 23? +1? 
StenaTbc 2 4 3? 3? 3? 

Spall 033 19 1652 42? 41? 42 +? 

SUwDas 1 547 6? 8 8ft 

snaffle 008 51 104 10? 10 10? ft 
StaMfc 31 7B2 10? 10? 10? 
SEmpacn OSB 24 82 19? CH9 19? ft 
Sntetffl 31 10B 23? 22? 23 +? 

SmpplBBr 65 919 25? 24? 24? ft 

SofemaP 1 687 5? 4? 5? ft 

Scnocox 058 144833 20?d19? 19? -? 
Gouttalx 0B8 102901 n2D? 18? 19? 
SptegrtA 020 482059 23? 21? 23+1? 
St JhWM 040 11 2222 27? 28? 27? ft 
StPafflc OX 10 939 21? 20? 20? 

SkyW 1 174 2? 2? 2A 

Stspktete 442335 29? 28? 29 -? 

State SK OX 171420 Cl? 40? 41? ft 
Sid Mem 11 948 17? 18? 17 ft 

SURaghx 088 14 743 21? 21 21? ft 

State Tec 008 17 1857 18?415? IS? >1 

saftfcusA an 21371 mo? b? b? ft 

148 23 20? 20? 20? ft 
SbwteTO 1.10 12 485 21 20? 20? -? 

SfeucBDy 21 2191 ID? 10? ID? ft 
Sbikar OR 21 2121 2ft? 25? 20? +? 
SdHhrO 22 225 15? 14? 14? +? 
SurtEonoB (UO 25 13 22 22 22 
SnrateS8cteL84 14 G4S 22 21? 22 ft 
SumaKTa X 544 25? 24? 24? -? 

Son Sport 13 158 6 d5? 5? ft 

SunMc 128801 23 21? 21? ft 

Staffl Tra 29 283 26? 28? 26? 

^fttertloc 8111047 53? 50? 53+2? 

Symartec 376093 14? 13? 14 ft 

SynaBoy OX 18 113 18? 18? 18? ft 

Simon 65 108 3? 3? 3? 

Synergan 31214 10? 9? 10 ft 

SymK » 1148 14 13? 13? ft 

SynepOH 187098 20? 19? 20 ft 

^atelSDft 012 152788 13?dI2? ift ft 
SyaamSco 32 Z75 19? 19? 19? 

SytatMd 253074 u6? 8 6? 


-T- 

T-CMSc 7 40 4? 4? 4? 
Tjmafk 002 181287 29? 28? 28? ft 
TBCCp 17 288 12? 12? 12% +A 
TCACteW 044 24 834 20% 10? 20? ft 
TtateDM 112732 1ft T7? 17? -1 

■Bb OX 14 112 X 52? 54 ft 

Tekteac 2 210 9? 9 9? ft 

TtecoSys 8 580(114? 14? 14? +? 
TeteCtanmA 29262DX 20? 19? 2ft +1? 

Tteat* 84056 5? 5? 5? 

I 266733 36? 35? X -1 

Tatar Cp 081 943164 17? 16 17 ft 

Tens Toe 71 71 8? 8? 8? +? 
TwfMDRxOZ7Z34®B 23U22& 22? -& 
taw Com 3716010 55% 53? 54 +% 
TJM 022 331984 23 22? 22? -? 

Tofcne Mod 2 265 4 3? 3? 

IrtypMv 03738 2 64? 64? 84? ft 

TtenBrnpn 70 B40u13? 13? 13? -ft 
ToprtGP 028331 3» 6? B? 6? 

-mem 430000 ft 7? 7? 

Timdd 10 251 11 10? ID? ft 

tartdck IX 11 982041? 41 41? ft 

tan B 57D 2% 2? 2? ft 

tart* 48 M 9? 8% 9? 
TruacoBkC 100 10 6 2D? 19? 20? 

TaangLabxan 132080 7? 7 7? +08 

TirfdA 008 171508 21? 21? 21? ft 


- u - 

ESHbhcr 0081317213 39? 38 38? 

UoBab 2 424 5? 5? 5? 

UCMn&ax 100 13 101 16? 15? 16? +1? 
USW 
EMM St 
UnBog 
IMMlx 

USBtecp 

USEntagy 
LIST Cap 
IWIhW 
UU Tatar 
Ufa 


VhfltdCtel 


war 

Vtanflt 


W0t Tech 
VWwB 


zn 12 350 51 5ft 51 ft 

040 10 142 12? 12? 12? 

020 X 6 26 26 26 -1 

140 21 105 40 3ft 3ft 

086 ID 3800 27 26? reft 

X 13 4? 4 4? +i 

1.12 10 » 13% 13? 13? ft 

11 TBS 7? 7? 7? ft 

10 6D46? 44? 44? ft 

16 129 6? 5? 5? 


- V- 

0X31 113 14? 13? 14? 

66 313 34 33? 33? ft 

191570 17? 1ft 17? ft 
40 2D1 28? 25? 25% ft 
9 395 15 W? 14? ft 

2S 870 20? 20? 2D? +? 
31 1462 14& 13? 14 ft 
084 18 425 99? 98% re? 


- w- 

WhiwBi aiO 21 334 27? 28? 27? ft 

76 50 4? ft 4? 

006 74358 20? 1ft 20? ft 
DhteAdSLOre 9 611 22? 22 22 

022 8 44 23 22? 22? ft 

Warn PM 024 16 281 26?d25? 20 ft 

Wl>40 200 15 192 40438? 39? +1? 

» HO 4? 4? 4? 

OR 12 6X030? 29? 30? ft 
5 622 12 11? 11? ft 

1 217 15? 15? 15? ft 
13 34 3? 3? 8? ft 
on 223701 48? 45? 48? ft 
ttaSanana 75 678 33? 32? 33? +1? 
KfattL 028 12Z100 14? 14? 14? ft 

WfOmgt 040 241813 19? 10? 10? 
WP&Bk UB 24T1874 U3JJ 3 & 

WiwrtfelMO 4 287 ft B? 8? 


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I 




WORLD STOCK MARKETS 


FINANCIAL 


Wednesday May 25 1994 




EUROPE 


Dow rebounds Bourses catch up with losses in bond markets 


after switch in 
domino effect 


Wan Street 


05 stocks rebounded yesterday 
morning in response to a rally 
on the bond market and a 
stronger dollar, writes Frank 
McGurty in New York 

By lpm, the Dow Jones 
Industrial Average was 15.69 
higher at 3,758.06, while the 
more broadly based Standard 

6 Poor’s 500 was u p 2.9 0 at 
456.10 on moderate NYSE vol- 
ume of 161m shares. 

In the secondary markets, 
the American SE composite 
was L41 better at 439.05, and a 
rally by technology stocks 


Deere 


Share price (5) 
95 



75 -r 


Jan 1994 
Source Datastmam 


pushed the Nasdaq composite 
6.54 higher to 73L49. 

Early tn the session, the 
domino effect which has been 
sweeping through the US 
financial markets in recent 
days was moving in a positive 
direction. The previous day, a 
sharp rise in commodity prices 
and a softer dollar had trig- 
gered a big sell-off in bonds 
and a subsequent downturn in 
stocks. 

Yesterday morning, commod- 
ity prices were easing, while 
the dollar was gaining ground 
against the yen on news that 
Washington and Tokyo had 
agreed to resume framework 
talks on trade. In response, the 
benchmark 30-year govern- 
ment bond was retracing some 
of Monday's heavy losses 
ahead of an important Trea- 
sury supply auction scheduled 
for the afternoon. 

The rally in the bond market 
left equity Investors with the 
freedom to concentrate on a 
smattering of quarterly results, 
but the outcome was not uni- 
formly favourable. 

On the positive side, DeU 
Computer posted quarterly 
earnings of 43 cents a share, 
against 25 cents a year ago, 
and its share price jumped $2% 
to $31 ‘A on the news. 

The computer sector was 
generally stronger. IBM, which 
selected Oglivy & Mather as its 
new worldwide advertising 
agency, advanced $1% to $62%. 
Storage Technology was $2% 
better at $31% amid optimism 
over the early performance of 
its Iceberg 9200 disk system. 
Lotus Development led the 
Nasdaq technology sector, 
climbing $2% to $65%. 

On the negative side, Deere, 
the US farm machinery maker, 
posted record net income of 
$2.20 in its second quarter, 


against a restated $L30 a year 
earlier, but the improvement 
failed to feed through to its 
share price. The stock slipped 
$'/i to $73% after an initial 
jump of $1%. 

Among other cyclical issues, 
Caterpillar lost $1 to $119% and 
Ford shed $% to $59%. 

Philip Morris gave back $1% 
to $54% after outperforming 
the market during the previous 
session. With a board meeting 
scheduled for today, the com- 
pany has come under mount- 
ing pressure by Institutional 
investors to spin off its non-to- 
bacco businesses. 

Meanwhile, General Electric 
climbed $1 to $47% after reveal- 
ing that its GE Information 
Services arm had entered a 
partnership with the Great 
Wall Computer Group. The 
deal gives the US group a 
strong position to participate 
in the development of China’s 
teleco mmunications infrastruc- 
ture. 

in healthcare. Medical Care 
America jumped $3% to $27%. 
The company, the largest oper- 
ator of out-patient clinics in 
the US, agreed to be acquired 
by Columbia HCA Healthcare 
In a deal valued at $858m. 
Columbia HCA, a leading hos- 
pital group, dropped $% to $39. 

Merck improved $1% to $31% 
after agreeing to surrender its 
controlling interest in Synetic, 
a supplier of plastic products, 
for $45m. 


Canada 


Toronto was mixed at midday 
in a sluggish market awaiting 
an expected decline in the 
Bank of Canada's key lending 
rate. The TSE 300 composite 
index edged 1.40 lower to 
4,297.00, in volume of 23.76m 
shares valued at C$26lm. 

Losses in gold and silver, 
pipelines and conglomerates 
were offset by gains in con- 
sumer products and real estate. 

The consumer products 
index led with a rise of 105.79, 
or L6 per cent to 6,707.25. The 
soft drink bottler, Cott Corp, 
continued to recover from its 
decline in recent weeks, up 1% 
at 26% on 68,153 shares. Losses 
were led by gold and silver, 
down 99.81 or 0.97 per cent at 
10,165.33. 


Brazil 


Sao Paulo edged higher in lack- 
lustre midday trade as domes- 
tic and foreign investors 
awaited news on the presiden- 
tial race and on the govern- 
ment’s economic plan. 

The Bovespa index was 155 
higher at 21,118 by 1 pm. 

Telebras preferred were 
quoted 0.6 per cent higher at 
Cr59.99. 


Mexico 


Equities began higher, driven 
by foreign demand, the 
strengthening of the peso 
against the dollar and expecta- 
tions that domestic Interest 
rates would be stable at yester- 
day’s weekly auction. The IPC 
index gained 15.86 to 2,447.29. 


Gold price preoccupies S Africa 


Johannesburg was 
preoccupied with gold's inabil- 
ity to break through technical 
resistance levels, and paid lit- 
tle attention to President Nel- 
son Mandela's speech to par- 
liament. 

The overall index finished 7 
weaker at 5,518, industrials 
also lost 7 at 6,633 but golds 
edged 5 higher to L995. 


Remgro remained under 
pressure amid tears of smok- 
ing curbs, cigarette price 
increases and raised alcohol 
prices under the new govern- 
ment It lost R1 to R27.75. 

Barlows lost some of Mon- 
day’s gains, which followed 
half-year figures, losing 25 
cents to R37.7G while Sappi 
added 50 cents to R46.50. 


FT -ACTUARIES WORLD INDICES 


Continental Europe, Milan and 
Madrid apart, came back from 
holiday and caught up with 
some painful events; bond mar- 
kets tell after Monday's losses 
in London and bourses fol- 
lowed suit, writes Our Markets 
Staff. 

FRANKFURT reflected Mon- 
day’s sharp fall in June bund 
fixtures in Ii ondon , from 95.30 
to 94.68 an UFFE, but dealers 
were surprised as the Dax 
index dropped by 5093, or 23 
per cent to 2AS8.T2 during the 
official session. 

Turnover eased from 
DM7 .2bn to DM7bn. Ms Bar- 
bara Altmann, of B Metzler in 
Frankfhrt, said that she had 
expected a fall of around 20 
Dax points to cover the weak- 
ness in bonds following com- 
ments from the Bundesbank 
president, Mr Hans Tietmeyer, 
which were taken to mean, that 
there would be no more official 
German interest rate cuts in 
the near future. However, Ger- 
man equities were probably 
suffering from their outper- 
fbrmance in recent months. 

The Bundesbank added yes- 
terday that April’s M3 German 
money supply grew by an ann- 
ualised 15.8 per emit, up from 
15.4 per cent a month earlier. 
After this, the Dax was unable 
to hold up against a further 
drop in bund futures, indicated 
at 94.41 in late afternoon, and 
the ibis inrW tested its sup- 
port level of 2,180 with a low of 
2,177.72 before recovering to 
close the day at 2,188 j01. 


Germany 


FT-SE Actuaries Share Indices 


indices rebeaed 

105 -3 


FT-AEbrapeacUK 


May 24 
HMfrdUDOM 


THE EUROPEAN SERIES 
1400 1500 Pm 


FT-SE ftrawdcioo 1436.15 H35JB 143&.H 143650 143625 1431 JO 1434* 143677 
FT-SE&mBKk2C0 14SS.1t 145*51 1*53.54 1*54.18 1*51.98 144603 148335 WMB 


95 -l-A-j 


FT-SE Etfnck 100 
ft-se Emm* an 


tm ■ TOBOSSWsa HKPtar- too i«?«i 20 a - ioau imttr ns - louwao . wan 


Jan 1994 
Source: Oatnumam 


PARIS lost a percentage 
point, a little worse than the 
European average, and dealers 
blamed liquidation of positions 
on the last day of the May 
accoant Some of the interest 
rate-sensitive financials took 
more than their fair share of 
the losses as the CAG40 index 
closed 22.11 lower at 2433.32, 
Axa losing FFr39 at FFr1446 
and Suez FFr8 at FFr309.50; bat 
here, too, local professionals 
found a domestic reason: prof- 
it- taking. 

Companies in, or potentially 
in the news were not popular. 
Eurotunnel dropped another 
FFrL65 to FFI3L25; Mr Michael 
Woodcock at Nikko Securities 
said that the market was 
expecting terms for the compa- 
ny’s mammoth rights issue to 
be set today. 

Some cyclicals, meanwhile, 
seemed to see a continuation of 


last week's switching into 
more defensive stocks: Alcatel 
dropped FFr19 at FFr643 and 
Michelin FFr730 at FFr232.60; 
the tyre company was exposed 
to higher US interest rates, 
noted Mr Woodcock, who 
added that the Balladur mea- 
sures to stimulate consump- 
tion were now expected merely 
to advance demand from the 
wnnri half of this year into 
the first, leaving the automo- 
tive industry with little benefit 
over the year as a whole. 

ZURICH fell 15 per cent in 
response to worries about the 
outlook for interest rates. The 
SMI index lost 40.7 to 2^92.0 
although some late buying 
helped the market up from a 
low of 2,681. Sandoz registered 
finished SFx24 lower at SFr692 
after an early SFr680 in 
response to the agreed $3.7bn 
bid for Gerber Products, the 
largest maker of baby foods in 
the US. 

Mrs Birgit Kulhoff at UBS in 
Zurich, who viewed the bid as 
a positive development, 
believed that the link would 
open the US market for Sandoz 


healthcare products, although 
it would not help Gerber to 
enter the European baby food 
market, which was already 
crowded. Gerber would, how- 
ever. benefit from Sandoz’s 
presence in Asian markets. 

Mrs Kulhoff thought that the 
shares had come under pres- 
sure because investors were 
unjustifiably worried that the 
bid price was too high and that 
the deal might indicate that 
Sandoz would no longer be 
concentrating on the pharma- 
ceutical side of its business. 

Roche certificates, under 
pressure twa i npp th after the 
group's $53bn bid for Syntax, 
the US drugs company, Lost 
another SFri05 to SFT6.05Q. 

BK Vision, the investment 
fond controlled by Mr Martin 
Ebner's BZ banking group, tell 
SFr30 or 1.9 per cant to 
SFrl,5l0 following the 
announcement that it recorded 
a SFH0.ua loss in the first four 
months of this year after a 
SFr9.9ra profit during the same 
1993 period. 

MILAN was under renewed 
pressure early in the day as 


foreign and domestic investors 
continued to take profits. But 
local buying emerged late in 
the session and the Comit 
index eased just 2.73 to 7S&24. . 

Fiat was one of the front ran- 
nets in both directions. The 
shares were marked down to 
LA5L0 before rebounding to fin- 
ish L149 higher on the day at 
L633& 

Mediobanca, L501 or 3 per 
cent lower at L16J211, was hard 
hit by newspaper reports that 
the merchant bank knew of 
hidden losses at Ferruzzi long 
before the information was 
made public. 

Fondiaria, the Ferrazxi 
group's insurance arm, fell 
L131 to £45,779 in response to 
news that magistrates had 
questioned a senior executive 
over various property deals. 

Construction stocks 
advanced on suggestions that 
the new Berlusconi govern- 
ment was considering mea- 
sures to free public works pro- 
jects frozen due to the 
corruption scandals and the 
recession. It&lcamentL rose 
L460 to 145^41, Cogeter gained 
L95 to 12337, and Calcestruzzi 
was up I21S at 142,669. 

AMSTERDAM saw early 
losses reduced as US markets 
opened firmer and the AEX 
index finished 4.48 lower at 
40829. 

Chemicals came under pres- 
sure on the view that they had 
been overbought recently, DSM 
falling FI 4 to FI 132.60 and 
Akzo FI 3.40 to FI 209.30. 


Elsevier was FI &20 lower at 
FI 17&90 on profit-taking. 

News of Sandoz’s bid for Ger- 
ber sparked buying In Notrida, 
the baby and health foods 
group that has been viewed as 
a Ukeiy takeover candidate fa- 
some years. The shares, 
marked FI 5 higher at one 
stage, finished FI 250 ahead at 
FI 83.00. 

MADRID saw some late bay- 
ing following an upturn on 
Wall Street, and the general 
index dosed just 139 Lower at 
336 .53. 

However, turnover remained 
subdued at Pta27.3bn and there 
was still more life in secondary 
stocks than In the big blue 
chi ps. 

ATHENS fell another a? per 
cent as investors shunned 
shares and Instead turned their 
attention to bank repos, cur- 
rently yielding around 40 par 

ronf An gjj arming hod a 

The general Index tell 3283 
to 85425 in active volume of 
1.8m shares' - a decline of 10 
per cent since May 13, when 
the drachma came under pres- 
sure and the Greek central 
bank drove interest rates -up to 
defend the currency. 

TEL AVTV dropped again fol- 
lowing Monday’s official inter- 
est rate increase, the Mlsh- 
tanim Index losing 6153. or 3J3 
per cent at 188 l 67 for an aggre- 
gate fell of around 8 per cent 
since Sunday morning. 


ft' 


Bui 
? of 1 


<■- p: 


Written and edited by Ufll&em 
Cochrane and MchMl Moron 


ASIA PACIFIC 


Rising hopes on US trade talks help Nikkei ahead 




Tokyo 


Reports that US and Japanese 
trade officials had agreed to 
resume bilateral framework 
talks encouraged investors, 
and share prices ended a vola- 
tile session slightly higher, 
writes Emiko Terazono in 
Tokyo. 

The Nikkei 225 index gained 
ground for the fifth consecu- 
tive day, rising 53.41 to 
20,622.12 as the Topix index of 
all first section stocks 
advanced L41 to 1,655.62. The 
225 fell to a day’s low of 

20.501.00 in the morning ses- 
sion and peaked at 20,748.75, 
falling short of 20.78128, the 
high for this year. 

Profit-taking depressed share 
prices in the morning session, 
but buying by arbitrageurs, 
along with foreign and domes- 
tic institutional investors 
pushed share prices higher. 
Index-linked selling and profit- 
taking towards the end of the 
session eroded some of the 
gains. 

Volume totalled 550m shares 
against 388m. The Nikkei 300 
index rose 0.17 to 305167 while 
gainers led losers by 621 to 4ZL 
with i.48 unchanged. In Lon- 
don, the ISE/Nikkei 50 index 
rose 2.71 to 1,357.63. 

Traders were encouraged by 
active buying on the part of 
domestic institutions. How- 
ever, a Japanese broker said 
that heavy selling around 

21.000 will make it hard for the 
index to rise much further. 

Nippon Telegraph and Tele- 
phone gained Y15.000 to 
Y842.000, rebounding for the 
first time in eight consecutive 
days. East Japan Railway, on 
the other hand, lost ground for 
the third straight day, falling 
Y1.000 to Y505,000. 

Large capital steels, which 
led Monday’s index rise, eased 
gently on profit-taking. Nippon 
Steel fell Y1 to Y368 and Kawa- 
saki Steel lost Y2 to Y399. 
Banks were lower ahead of 
their earnings announcements 
tomorrow. Industrial Bank of 
Japan fell Y30 to Y3J230 and 
Dal-Ichi Kangyo Bank lost Y40 


to YL990. 

The likely resumption of the 
deadlocked US-Japan bilateral 
trade talks brought investors' 
attention back to the automo- 
bile sector, which is one of the 
central issues on trade 
between the two countries. 
Nissan Motor added Y27 to 
Y884 and Toyota Motor gained 
Y60to Y2JJ90. 

Higher commodity prices 
pushed up non-ferrous metals, 
shipping and shipbuilders. 
Sumitomo Metal Mining rose 
Y16 to Y944, Navix Line by YU 
to Y379 and Hitachi Zosen by 
Y3 to Y563. 

In Osaka, the OSE average 
rose 9L90 to 22,711.49 in vol- 
ume of 27.2m shares. Nintendo, 
the video game maker, fell 
YT90 to Y6.310 on weak earn- 
ings figures released on Mon- 
day. 


national holiday today. 

TAIPEI saw late selling after 
earlier attempts at a technical 
rebound failed, and the 
weighted index ended 48.56 
lower at 5.769-12, off a high of 
5,835. Turnover was a slow 
TS32.67bn. 

The weak performance was 
attributed to local reports that 
the Taiwan exchange planned 
to downgrade eight shares to 
the second category from the 
first because of their poor 
profit performance in the past 
four years. All eight shares 
fell, with Taiwan Paper and 
Oriental Union limit down to 
T$28.70 and T$30.10, respec- 


tively. 

SYDNEY lost some ground in 
afternoon trade as profit-takers 
emerged, but still ended higher 
on the day in response to 
firmer gold and resource 
prices. The All Ordinaries 
index finished 11.4 higher at 
2,132.4, after a high of 2,143.6. 
while the gold marker closed 
59.2 or 23 per cent ahead at 
2^73.3, its highest level since 
March 29. . 

News Corp leapt 29 cents to 
A $9 .29 after announcing a 
$500m joint venture with New 
World Communications under 
which Mr Rupert Murdoch’s 
Fox television network will 


take 12 stations from its three 
network rivals. 

WELLINGTON was helped 
ahead by the commoditios-ln- 
spired rally in Australia, and 
the NZSE-40 capital index fin- 
ished 17.98 higher at 2,15642 in 
moderate volume. 

Carter Holt Harvey, which 
reports annual results today 
added 12 cents to NZ$340 amid 
market expectations for net 
profit of NZ$3i0m against 
NZ$243 .5m a year ago. 

MANILA eased on profit-tak- 
ing after Monday’s strong but 
gdd issues gained on the met- 
al’s sharp rise overnight The 
composite index tost 20.19 to 


2,90148 in volume of l.78bn 
shares after Monday’s 751.4m. 

SHANGHAI’S B share index 
fel 12.46 or 14 per cent to 769J56 
on profit-taking by domestic 
investors after Monday's 4.6 
percent surge. 

SEOUL ended mixed as 
cheaper shares advanced on 
selective buying while blue 
chips continued their consoli- 
dation. The composite stock 
index gained (L39 to 945£9. 

BOMBAY closed lower on 
renewed selling by speculators 
affected by the continuing ban 
on cany forward trading. The 
BSE 30-share index tost 3190 to 
3,70133. 


i m j 


Roundup 


Pacific Rim markets were in 
subdued mood yesterday. 

HONG KONG finished 
weaker on selling triggered by 
the overnight fall on Wall 
Street However, volume was 
thin as investors awaited fresh 
developments an financing for 
Hong Kong's airport and US 
renewal of China’s preferred 
trade status. 

The Hang Seng index slid 
99.67 or L0 per cent, to 9,490,11 
in turnover that fell to 
HK$3.9bn from Monday’s 
HK$4Jbn. 

SINGAPORE was dragged 
lower by big falls in index 
stocks although trading was 
mostly subdued. The Straits 
Times Industrials index closed 
36.45 or L6 per cent lower at 
2^02036. Yeo Hiap Seng, how- 
ever, rose 8 cents to SS4.G8 in 
volume of 5.7m as speculators 
continued to buy ami 6 antici- 
pation of a takeover by Ng 
Teng Fong. 

KUALA LUMPUR was 
broadly lower as investors wor- 
ried about the overnight fell on 
Wall Street and domestic infla- 
tion. The composite index I 
closed 11.84 or l J2 per cent I 
lower at 987.26 although activ- | 
ity was restricted ahead of a 1 



hsas'.ftyw i: 





















mm 




Ills 


I » 


mm 








iHS 






Jointly campled by Hie financial Times LbL Goldman. Sects & Co. end NatWeet Securities Lid in eonhnetan wflh the Institute of Actuates aid the FtoeUty of Actuates 
NATIONAL AND 

REGIONAL MARKETS MONDAY MAY » 190 4 TODAY MAY 20 188* — DOLLAR MDEX‘ 


l®i®S 





Vs- 

■ 


REGIONAL MARKETS 

figures in paramnesas 

show number of Ines 
of stock 


Australia (63) — 178.12 

Austria (17) ISC- 13 

Belgium (42) 178.64 

Canada (106) 131-23 

Denmark (33} 2S6.48 

FrtaYi (23) 155.35 

Franca (98) 177.32 

Germany (58) 146.23 

Hong Kong (561 -391.98 

Ireland M -1*M5 

indy (00) — ‘ — 80-73 

MfltoyahJ (30] ~~ 

Mexico (18) —2088.19 

Nsttertand ( 20 ) zoa - 93 

Now 2edand (14) 88.77 

Manway (23 . 202.88 

SSS*»(44) 951.74 

South Africa (99) 264.18 

Spain (42) 150-21 

sSataiW za.84 

Switzerland (47).—— 1SL24 

United Kingdom (80S) 181.79 

USA gig 1* 1 -” 

EUROPE (724) -171.16 

Nonflc (115) "?1T22 

Pacific Basin (7EQ- ]£-Q3 

aan-PacjfiCfWA) 188.18 

North America (8251 181-37 

Europe Bl UK (519)— —— .- 15S. 95 

Pacific Ex. Japan (261) "*W3* 

World E* US (1857) 17022 

World Ex. UK (1871) 17Z28 

S&S»M*l1g| Ijjg 

wand Be. Japan (1707) — — 184dQ3 

Th. world index t217» 174.01 


229.84 

15024 

181.79 

184.69 


Days 

Chengs 

H 

Pound 

Sterlng 

index 

Yen 

Index 

DM 

index 

Local 

Currency 

Index 

Local 

96 chg 
on day 

Gross 

Ota. 

Yield 

1.7 

17530 

11735 

15239 

15133 

03 

040 

0.1 

17738 

118.87 

154.11 

15334 

03 

136 

0.1 

173.84 

11837 

151-12 

14733 

03 

3-73 

-0.1 

129.15 

8080 

11237 

131.00 

03 

237 

03 

252.41 

16926 

31042 

224.53 

03 

131 

-04 

152.88 

10232 

13231 

17047 

-03 

033 

03 

17431 

117.02 

181.70 

15632 

03 

238 

03 

14093 

8534 

124-25 

124.25 

03 

138 

-07 

38977 

26068 

33936 

38076 

-07 

2.73 

04 

187 A3 

12538 

16234 

18022 

04 

327 

-23 

0938 

5938 

7732 

107.72 

-23 

1.47 

03 

16986 

10438 

130.11 

104.98 

03 

0.77 

-03 

46007 

313.87 

40630 

47000 

-OA 

1.41 

U 

2053.09 

137072 

1784.78 

752334 

03 

133 

03 

20070 

13438 

174.48 

171.87 

0.0 

327 

0.7 

68.68 

4904 

5838 

6231 

03 

330 

Ol 

19937 

13339 

17338 

19010 

03 

139 

-03 

346.10 

232.12 

30033 

24933 

-03 

132 

1.9 

25037 

17432 

22S38 

28233 

13 

3.19 

0.1 

14733 

99.13 

12831 

15435 

-02 

338 

ai 

228.19 

18138 

19064 

26070 

03 

133 

-02 

15071 

10009 

13023 

139.06 

0.0 

1.75 

-O.B 

tears 

12837 

164.09 

18075 

-03 

336 

-04 

181.78 

12138 

16001 

18438 

-04 

230 

-03 

168.46 

112.95 

146.43 

169.79 

-03 

230 

aa 

21094 

14046 

18536 

21028 

03 

139 

03 

10937 

11039 

143.78 

11024 

07 

1.05 

oo 

16948 

11136 

144.74 

13290 

02 

133 

-04 

17050 

11938 

15917 

18037 

-04 

238 

-03 

16947 

10231 

133.42 

141.46 

-02 

029 

o.i 

26138 

16967 

21834 

22945 

-0.1 

230 

ao 

18732 

11233 

14983 

13920 

03 

134 

-ai 

18955 

11338 

14738 

147.78 

Ol 

2.03 

-ai 

17072 

114.45 

14041 

15032 

0.0 

221 

-03 

-0.1 

181.11 

17135 

121.44 

11434 

157.44 

14987 

17925 

15131 

-03 

03 

233 

221 


- TODAY MAY 20 1994 
Pomd 

Staffing Yen DM 

Index Index tad « 


DOLLAR NDEX — 
Veer 


17522 17205 
18004 178.78 


17058 17038 

131.42 12004 


DM Currency 52 waste 52 week 

800 

Index 

Index 

Hah 

Low 

tonxw 

14037 

16005 

18015 

180.19 

134.70 

16439 

15334 

19941 

14014 

14271 

151.11 

14733 

17987 

14132 

14632 


‘v 




mm 


23003 251.89 

15548 163.16 


177.24 174*4 
146.17 14164- 


116.42 161.70 
96*5 124*5 


112.49 1314)0 14531 121.46 12001 

21056 224.53 275.79 207.58 22063 

13050 178.88 156.72 8054 10091 

161.70 16852 18557 14860 150.06 

12455 124 25 147.07 107.59 10922 


367.47 259.10 337.79 391-37 606.S8 2T1AZ 29081 


1S2J3B 17045 *3033 15093 
79.75 109^5 87.78 57.88 


478.15 469^1 


155.68 104.14 


135.70 104.14 16531 
40028 478.83 621.83 


15533 1&9.38 
57.88 72.14 

12434 144.74 


206047 202124 1362.00 176132 746533 2047^)8 1431.17 161934 
203.91 20029 13334 17433 17137 207.43 164.14 164.18 


0930 6004 4632 

20238 199X12 13X13 
332.77 340.40 231.71 
2S0.1O 2S4.41 170.18 

14939 14728 9832 

229.72 225.57 15039 
15933 158.74 10435 

19331 18932 12638 

18043 1S238 12130 


4632 9931 62.70 7739 4057 49.01 

13X13 173.47 196.10 20042 15031 158.11 

231.71 30134 26038 37832 242.46 25239 

170.18 221.70 27091 28020 17533 197.40 

9832 12837 154,56 156.79 11033 12836 

15039 19632 260.78 23135 163.85 16035 

10435 13082 1393S 17056 12057 12237 

12838 16046 18082 214.98 17032 17023 

12130 15071 1(6.43 19004 17036 16Z35 


V 


* 




12130 15071 


17134 16083 11234 147.16 16033 

217A5 21132 14233 186.11 21837 

16733 18430 11034 14939 114*48 

IQS 21 16015 111,14 14432 13236 

18238 17079 11939 18034 16137 

15635 16052 10239 13332 141.74 

25918 25037 16731 21041 229.73 

17017 187.10 111.77 14906 13B.8S 

17237 16935 11021 14733 14734 

173.73 17038 114.11 14839 15030 


16033 17838 14138 14420 
21637 22060 15532 10091 


14432 13238 
18084 16137 
13332 141.74 15737 13237 

21041 229.73 29021 16238 
14966 13985 17231 142.94 
14733 14734 17950 16332 
14839 15030 17058 15900 
15001 17080 10920 10972 


13236 17078 141.98 140.78 
10137 192.73 17907 17832 


'. ’‘a. ‘ 




1B431 18137 12128 
17432 171.07 11433 


12237 124.48 
18238 18035 


■ ■ -t v. 




142.04 14730 

16332 15041 
15900 15000 


148.12 161.47 


10972 187.19 
18917 15917 


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