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FINANCIAL TIMES 


/rope's. Business Newsoai 


TUESDAY NOVEMBER 1 1994 


DS523A. 


tauTch^ofm cable Nabisco to float 19 % of its food business 


television venture 

Tbfi convergence of US tolp mmmuniratU y rrc ands, 
cable television took a further step wfth the forma- 
tian of a joint venture between three r egional Baby 
Bell telephone companies and a leading program- 
ming agency. Bell Atlantic, Nynex and Pacific Tele- 
sis said they were each, investing $\ 0 Qm over three 
years In a cable venture farindrng O vi t a 's 

Creative Artists Agency. The par tner s claim to 
reach 30m homes in the US. Page 21 

Tanker industry warns on new US rules: 

Tough new rules imposing aflmited financial lia- 
bility on tankers sailing into US waters could 
severely damage the tanker industry and halt oU 
ship m en t s to the US, shipowners said. Page 20 

Japan** bad debt cr isi s oagoa; Yasushi 
Mleno, governor of the T^anv of Japan, «mid the 
protracted bad debt crisis experienced by the coun- 
try's banks appeared to be past its worst Page 20 

China publishes money supply figures: 

China’s central bank took a leap into greater- public 
disclosure when it published up-to-date money sup- 
ply figures for the first time since the Communist 
revolution. Page 20 

■awrodl of AHUni John Russian parfiameot 

Sergei Mavrodi (left), 
charged with tax evasion 
and whose MMM pyra- 
mid selling company 
crashed in the summer, 
was elected to theRns- 

^fan pat- Hamen f TT \ p 

Moscow prosecutor said 
the case had begun 
before Mavrodi stood as a . 
deputy and he could not 
daim parliamentary I 
immunity. Page 2. ' 





. Japan and US extend trade talks: Japanese 
and US trade negotiators extended their talks for a 
fldrd day man attempt to reach agreement an 
improving foreign access to Japan's market for 
glass products. Page 6 . 

AlgerfamnoHaces elections: Algerian, 
president TJamtrio Zeroual -announced presi- 

dential elections would i be held before the end of 
' IS95 to an effort to end ocmfftmtetiofi with Moslem . 
fundamentalists in which 10,000 people have died. 

Nwchiefforllong»(ooQstocic4HwhanoQ: 

Edgar Chong W-ai-kin, elated chainnaiwf the Hong 
v " : Sm^gtock'lfes^tangfesafoili&ga&^gl^^teeSad " 
. in sti^ngthraingiise^uality, df^^PWW^anies 
listed ta tteterritoiy tiian iiKTeaahglneirmim.' - 
bas.p8geM, '■ ’ 1 

Hp US personal taoohie .rtsfeis'US personal 

-tnmnrii* rrg » tp September fnrrthn flighjh gucCMStu 
nmnth, tte^mmHwX>^«TtiDent said, but can- 
sumption spending, though still increasing, showed 
- some signs of weakenipgr. Page 4 

Gran d Mbt ftp rafee 0S9Otm Pood and drinks 
.group Grand Metropolitan is to raise 2500m. in the 
US through an issue of perpetual fixed rate pre- . 
Sewed securities, a financial instrument sbnilar to 
preferred stock. PageSO; Lex, Page 20 . 

Tbomaon tp acipdrs Ziff inf orm a tion arm: 

Thomson Corporation, travel and publishing group 
controlled by the Thomson famil y of fjanada, is to 
ac^iria 7ify fifBnniiinira>ti(ii nB subsidiary, Informa- 
tion Access Company, for 5465m. Page 21 

CiAu and 5 Kwmdgn aircraft drab South 
Korea and China agreed a $L5lm deal to develops 
: iOOsefitamcrafttntte latest of several proposed 
. Asian aerospace projects. Page 6 

Havana to seek mom overseas tave slme n l: 

. Cuba plans to open more of its recession-hit econ- 
omy to foreign investment Page 4 

Hungarian sale I nte rests European bankas 

; Three weiiem European banks are considering bids 
. for Hungary's Budapert Bank, one of the country’s 
top four commercial banks. Page 21 

Verto y boys back food Intere s t s: HieVestey 
. family is to buy hack a .large part of food processing 

. and distribution group Unkm International as part 
.. of arestmtfartng of the private Vestey food, ship 


Throat to kidnapped Badtonsr A Kashmiri 
mmtant group hoMtogthree British backpackers 
hostage in northern India hasthrealened to behead 
them if Id c*f their opn-mea arenotfreed from jalL 


I nspir a tions to launch airline: Tnjyi wttiflwi 
toe I® tour operzrior which floated on the Unlisted 
Secoritira Market last .December, is to launch its 
ownairtoe Page 31 : . 


FT-SE EuroftadC lOO _VB7.14 frlO-53) 
FT-SE-Afll-Stare „ — .1,53931 t*<L4%) 

1AM £184.44} 

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Dow Jones taT An _^39232B (-7.40) 

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By Tony Jackson h New York 

BJR Nabisco, the US tobacco and food 
| group, is to float 19 per cent of its Nab- 
isco food subsidiary. 

It will also pay dividends for the first 
time since it was acquired in a $25bn 
leveraged buyout by the Wall Street 
investment house Kohlberg Kravis 
Roberts (KKR) in 1989. 

But the group is to back rat of an 
agreement to buy a 20 pm emit stake in 
Borden, the US food grou p, wh ich is the 
target of a $2bn bid from KKR. It said it 
had been unable to reach agreement on 
accounting and other issues, hut would 
not give further details. 


The flotation, clearing the way for 
demerger, will involve 45 million shares 
of Nabisco stock, priced at between $23 
fmri $26 and carr y ing dividends of 55 
cents a year. This will raise between 
$lhn and $L2bn. 

RJR said it will use the net proceeds 
to pay down bank debt The sell-off will 
value the whole of Nabisco, the biggest 
US biscuit maker, which also owns 
Planters nuts, IifcSavers confectionery 
and Fleiscbm aim’s margarine, at 
between $5.4bn and $&2bn. 

RJR said any eventual break-up would 
not be considered for at least two years. 
Ownership of more than 80 per cent of 
Nabisco is meanwhile required as a con- 


dition for a tax-free spin-off. However, 
KKR said it was “completely committed'’ 
to the Borden bid, despite RJR’s deci- 
sion, and was happy for Borden to con- 
tinue being run by its existing manage- 
ment Borden has been among' the least 


— Page 20 


successful of the big US food companies 
in recent years, and same management 
input from the more highly regarded 
Nabisco had been envisaged as part of 
the deal. 

KKR proposes to pay for the Borden 
purchase with RJR shares. This will 


halve its stake in RJR, in which it is the 
dominant shareholder, to just over 17 
per cent Wall Street analysts said RJR’s 
refusal to get involved with Borden 
could be a show of independence. 

An earlier demerger attempt by RJR, 
valuing Nabisco at $6.7bn, collapsed last 
summer because it failed to protect Nab- 
isco sufficiently from the risk of litiga- 
tion over tobacco. 

Zn contrast to that plan, which left the 
tobacco company with title to Nabisco's 
assets, the new version makes Nabisco 
wholly independent 

Though RJR’s was wel- 

comed on Wall Street, the stock fell $% 
to $6 Vi. Analysts attributed this to news 


that a state court judge in Florida had 
given the go-ahead to a class actios 
against cigarette makers by an smokers 
who were addicted to nicotine and had 
become ill as a result 

Philip Morris, the biggest US tobacco 
company, said it was confident the 
judge’s decision would be overturned on 
appeal, saying it was “contrary to fed- 
eral and Florida law". 

Fitch Investors Service, the US debt 
rating agency, said it was lowering the 
rating on RJR’s $8.4bn senior debt This 
was because RJR’s resumption of divi- 
dend payments, together with a higher 
tax charge, would, Fitch estimated, 
reduce its cash flow by some 38 per cent 


Decision averts damaging political row over Europe 

Brittan to stay on as UK 
commissioner in Brussels 


Bank of Italy 
queries accuracy 
of budget figures 


By Emma Tucker in Brussels 

Sir Leon Brittan averted another 
damaging .political row over 
Europe yesterday by announcing 
his intention to stay on as the 
UK’s senior commissioner in 
Brussels. 

At a meeting of European 
Union foreign ministers in Lux- 
embourg, Sir Leon said be was 
“disappointed" be bod lost 
responsibility for relations with 
east and central Eu rope. But he 
said his drnilnMhad portf olio — 
responsibility for multilateral 
.trade, and relations with devel- 
oped countries - was an “impor- 
tant" ohaltongR. 

' Be pledged to remain in Brus- 
sels to argue for a Europe th»t 
was “open, free-trading, and noa- 
hjtervmtionist, and for « Brifaip 
that Is at the heart of that 
Europe’’. . ■ 

Coincidentally , Sir Leon was 
"ttondfog a meeting between EU 
foreign ministers and their coun- 
terparts from sx countries seek- 
ing membership of the (Mm — 
Hungary, Poland, the Czech 
Republic, Slovakia, Bulgaria and 
Romania. 

Sir Leon was speaking two 
days after he narrowly lost a bat- 
tle to retain responsibility for 
western Europe’s former commu- 
nist neighbours in toe carve-up 
of Commission portfolios 
announced by Mr Jacques San- 
ter, the incoming Commission 
president 

The task of organising the 
early admission of former com- 
munist countries to the Union — 
a central piazzk of UK strategy 
towards the development of the 
ETT — went to Mr Ram Van den 
Broek of the Netherlands. 

Mr Douglas Hurd, toe UK for- 
eign secretary, said he was 
“extre m ely glad” that Sir i 
bad chosen to stay in the Com- 
mission. He was dearly relieved 
that Mr John Major’s government 
would not have to contemplate 
disputes over a successor. 

“Tfoe portfolio Sir Leon has will 
continue to be essential and it is 
therefore very good that this 



Sr Leon Brittan in pensive mood at yesterday's press conference in Luxembourg before be announced he 
would stay as trade commissioner. On toe right is Klaus Kinkel, president of the council of ministers h*** 


important job should continue to 
be in sound and strong hands in 
the Commission," Mr Hurd said. 

Yesterday’s meeting was the 
first in which eastern Europe was 
able to influence debate on EU 
policy, putting views on topics 
from justice and home affaire, to 
thp m wit, education and 

training. 

Mr tagzin Kovacs, the Hungar- 
ian foreign minister, said: “This 
was a very important meeting. 
For the first time we had the 
charw-p to have a certain influ- 
ence on discussions. It helped EU 
ministers to understand our pri- 
orities and aspirations." 

Mr Klaus Kinkel, the German 
foreign minister, reassured toe 
east European ministers that 
progress towards full Union 
membership was not moving too 
slowly. “What we require is a 


realistic and sober approach to 
bringing them into the EU,” he Page 3 
said. “Economic aid at the end of 
the day can only help the coun- B Britts 
tries to help themselves." achieve 

Ministers discussed ideas for _____ 
an accession strategy, in particu- 
lar bringing east European laws 

into line with those in the west 
to allow the six to operate within 
the ElTs stogie market. 

EU ministers have asked Brus- 
sels for a white paper on mea- 
sures east European countries 
must take to prepare their econo- 
mies for EU membership. 

Changes to the Phare aid pro- 
gramme, a main source of EU 
financial assistance to the former 
communist countries, were also 
discussed. The six countries want 
to see the limit on infrastructure 
spending lifted from 15 per cent 
of the total budget. 


■ Brittan finds solace m past 
achievement 


By Robert Qraham in Rome 

High interest rates could push 
toe cost of servicing Italy’s huge 
debt stock well beyond toe figure 
envisaged in the 1995 budget, 
the Bank of Italy warned yester- 
day. 

The warning, in toe bank's 
quarterly economic bulletin, is 
toe most authoritative statement 
so far to suggest budget calcula- 
tions may be flawed. 

It comes as the rigfatwing coali- 
tion government of Mr Silvio Ber- 
lusconi and the opposition are 
struggling to hammer out a par- 
liamentary agreement on the 
budget 

The budget is seeking to find 
LSO.OOObn ($4.47bn) in fresh reve- 
nues and, through spending cuts, 
to hold down the deficit to 
L138,000bn - equivalent to 8 
per cent of gross domestic 
product 

The report uses more cautious 
language than usual after recent 
tension between the bank and 
toe government over the appoint- 
ment of a new director-general at 
toe bank. It suggests, however, 
that the budget may well have to 
he toughened. 

The report also confirms the 
strength of the recovery in the 
Italian economy. However, infla- 
tionary pressures should have 
been checked by the half percent- 
age point rise in the discount 
rate in mid-August 

The interest rate rise, inter- 
rupting a steady foil since late 
October 1992, undermined the 
budget calculations. The report 


points out that short-dated gov- 
ernment bonds are now 2 J per- 
centage points above the 8 per 
cent cefltog targeted for the year- 
end. and forecast to be sustained 
throughout 19%. 

fflmflar considerations apply to 
medium-term treasury paper. 

According to the bank, a 1 per- 
centage point increase in interest 
rates over, the next 12 months 
implies an extra debt service cost 
of L6,000bn, rising to an 
additional LM.ftMbn in the third 
year. The budget forecasts debt 
service payments in 1995 at 
Ll76^50bn. “Only rigorous pur- 
suit of the budget objectives - 

Currencies. Page 38 

World stocks Pane 


eventually toughened because of 
exceeding the ceilings placed an 
interest payments - can reduce 
the risks by altering the percep- 
tions of the financial markets,” 
the report comments. 

The bank estimates that this 
year's inflation rate will be about 
4 per cent against the 3.5 per cent 
target, making the 2A per cent 
objective for 1995 harder to 
achieve. 

As domestic demand picks up, 
pushing GDP growth this year to 
at least 2 per emit (against the 1£ 
per cent forecast), inflationary 
pressures have begun to 
emerge. As a result, the bank 
reaffirmed its determination to 
keep tight control of monetary 
policy. 



GENEVE 


German Cartel Office probes 
insurers’ car rental pricing 


I By Judy De mpse y in Bertln 

Germany's federal Cartel Office 
is investigating the country's 
leading insurance companies, 
which are alleged to hare beat 
running a price-fixing system for 
car rentals in order to reduce 
insurance payouts to their cli- 
ents. 

The price-fixing system is 
claimed to have been set up last 
December when six insurance 
/Ytmpar ries founded a car rentals 
company called Carpaitcer. 

In Germany, insurance pobey- 
hokkrs expect to be able to hire 
immediately a temporary car at 
the insurer’s expense after an 
accident. 

The Cartel Office suspects that 
the system was established to 
reduce car rental costs that 
insurers believed were excessive. 


“The idea was that if you had a 
car accident, you would apply to 
your insurance company for a 
replacement car,” claimed Mr 
Jthgeut Eecker, the spokesman 
for the Cartel Office. 

hi this case, Mr Kiecker said, 
“the insurance companies agreed 
on the car rental prices among 
each other, subsidised the rent 
and generally imristori that thp 
client should rent only from Car- 
partner”. 

The Cartel Office admits the 
arrangement would have had the 
effect of reducing the cost of car 
rentals while the customer’s car 
was off the road: “But that is not 
the issue. The issue is price-fix- 
ing and that is what we are 
investigating" 

None of the insurers was avail- 
able for comment yesterday. 

Some insurers refused clients' 


requests for higher-cost substi- 
tute cars from other rental agen- 
cies. Over time, more than 60 
insurance companies ore said to 
have joined the sebome in an 
effort to reduce their pay-outs. 

The Cartel Office siarted inves- 
tigating Carpartner ’ast Tuesday, 
and the company b:-s voluntarily 
provided docume ats to the 
authorities. 

He would not sav what sparked 
the investigation, but the Cartel 
Office has become more aggres- 
sive in probing price-fbdng alle- 
gations in recen : - months. 

Germany's rental car replace- 
ment market is one of the biggest 
in Europe. Unlike in Britain, 
where the majority of care are 
rented on an individual private 
basis, in Germany about 50 per 
cent or all rented cars are 
replacement vehicles. 



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S-THB HKANCIAli TIMES UMgjP 1994 No 32.512 Week No 44 LONDON ■ PARIS ■ FRANKFURT - NEW YORK • TOKYO 









FINANCIAL TIMES TUESDAY NOVEMBER I 1994 


NEWS: EUROPE 


Mavrodi’s millions pay dividends with voters 


By John Uoyti in Moscow 


Mr Sergei Mavrodi, the 
nndthnUBoiiaire charged with tax 
evasion whose HMH pyramid sell- 
ing company crashed tn the sum- 
mer, has been elected to toe Russian 
parliament, according to early fig- 
ures last night He was hacked by 
Mr Vladimir Zhirinovsky’s ultra-na- - 
tkmalist liberal Democrats (LDP). 

It was the first important by-elec- 
tion for a state duma (lower house) 
seat since last December's poll pro- 
duced a surge of support for the 
LDP. The result was the more 


remarkable state Mr SEavrodt (fid 
not make a single appearance in fats 
Mytishd constituency, an industrial 
suburb of Moscow. However, mon- 
Imre of his staff had worked the area 
for weeks before, promising that 
their boss would spend $iOm of fats 
own money Improving it 
Mr Mavrodi, released from jail 
three weeks ago in accordance with 
the law on elections granting immu- 
nity to candidates and deputies, bad 
told the electors on the eve of the 
poD that "your only solution is to 
elect me because then I will be 
immune Crum further arrest I will 


not have to return to prison". 

However, Mr Gennady Ponomar- 
yov, the Moscow prosecutor, said 
last night that "the legal case 
a prfnst Mr Mavrodi would not be 
terminated automatically". Since 
the case - for tax evasion by his 
Invest Consulting firm - had begun 
before he stood as a deputy, it amid 
continue without an appeal to the 
Duma to remove his immunity. 

According to Mr Sergei Taranov, 
Mr Mavrodi’s spokesman, the new 
deputy would bring together a 
group of members of parliament 
dedicated to “defend toe interests of 


the shareholders of Russia and 
defend them from the uncontrolla- 
ble arbitrariness of government 
bureaucrats”. 

The campaign had been remark- 
able both for the absence of Mr Mav- 
rodi and the presence at the election 
rallies of black-clothed, swastika- 
wearing paramilitaries who turned 
out to greet the candidate of the 
Russian National Unity (fascist) 
party, Mr Alexander Fyordorov, 
with Nam salutes. However, neither 
Mr Fyodorov nor Mr Andrei Sldel- 
nikov. representative of the right- 
wing Derzhava movement led by 


former Vice-President Alexander 
Rutskoi, appeared to have scored 
well. 

The early figures showed Mr Mav- 
rodi capturing around 28 per cent of 
the vote, with Mr Alexander Zharov, 
an official of the local administra- 
tion, taking around 15 per cent, and 
Mr Konstantin Borovoi, a promi- 
nent financier and leads' of the Eco- 
nomic Freedom party, around 14 per 
cent Mr Borovoi had been a particu- 
lar target of Mr Fyodorov’s support- 
ers, who mocked him with anti-Se- 
mitic insults at rallies. 

Though Mr Mavrodi has said he 


does not intend to ally himself to 
any faction in the Duma, his cam- 
paign was partly run by the LDP.In 
return, the party can expect to gain 
access sot just to hfa fortune bat to 
the famed skills of his company’s 
television production studio. The 
latter made the series of advertise- 
ments promoting MUM which per- 
suaded hundreds of thousands of 
Russians to buy Its shares as they 
climbed dizzily earlier this year. 

Turnout at the election was 
around 30 per cent - comfortably 
above the 25 per cent threshold to 
make toe vote a valid one. 


Meciar 
agrees to 
form a 
cabinet 


P r !’! 




Zeiss ‘marriage’ a unification story ending in tears 


TSJSftW Judy Dempsey chronicles the troubled amalgamation of the east 
JaJS&SRnft and west arms of the German optical instruments manufacturer 

Cad Zeiss Jena, toe renewed A 


eastern German manufacturer 
of microscopes, telescopes and 
Optical instruments. 

"We had the name. We had 
the freedom to enter the west- 
ern markets. We were confi- 
dent." 

There is little, evidence of 
that confidence in Jena today 
as the management in Carl 
Zeiss Oberkochen in the 
nearby western German state 
of Baden-WOzttemberg pre- 
pares to cut 2,400 jobs from Its 
13,000 strong pay-roll in its 
west German operations and 
600 of the 2,050 workforce in 
Jena, an old university town 
set deep in the eastern state of 
Thnrmgia- 

The marriage between the 
eastern and western parts of 
Carl Zeiss was arranged by the 
Treuhand privatisation agency 
In late 199L Hailed as an exem- 
plary solution for saving Carl 
Zeiss Jena, Is sought to com- 
bine both enterprises under 
one roof after 45 years of 
enforced separation. 

Under the plan, Oberkochen 


too 51 per emit of Carl Zeiss 
Jena, while the remaining 49 
per cent was placed under Jen- 
optik, also in Jena- Jenoptik, 
which specialises in high-tech 
laser and optical instruments 
and is manag ed by Mr Lotbar 
s pa Mi the former prime minis- 
ter of Badert-WOrttemberg, is 
100 per cent owned by the gov- 
ernment of Thuringia. 

In addition, to save and mod- 
ernise the entire Carl Zeiss 
complex, which before unifica- 
tion employed more than 27,000 
workers, toe Treuhand allo- 
cated DM3.6bn (£L47bn) of tax- 
payers' money to Jenoptik 
with toe aim of guaranteeing 
10,000 Jobs and finding new 
markets. As for Carl Zeiss 
Jena, by toe end of next year 
the Treuhand will have 
pumped la DM587m and kept 
2,050 jobs alive. 

But, laments Mr £2k Lfttow, 
manager of Carl Zeiss Jena, 
“We invested about DMilTm 
on new buildings and produc- 
tion lines and toe remainder 


has been spent on picking up 


Despite introducing new pro- 
duction lines, Carl Zeiss Jena 
hag been making annual losses 
of about DM140m on a turn- 
over of DM2G6m, while produc- 
tivity is still only 40 per cent of 


rial te e. After unification, we 
lost all our east European and 
Russian outlets. Half our cur- 
rent sales to the east - a quar- 
ter of our total turnover - are 
now financed by Hermes [Ger- 
many's export guarantee state 
insurance company].” 


T don’t want to believe that this 
is a struggle between Wessis and 
Ossis. But it is hard to think 
otherwise,’ says the head of the 
Jena workers’ council 


Oberkochen's. 

Recession hzt domestic and 
export mark ets far the group 
products before its top heavy 
management had time to react. 
“Yes, we have over-employ- 
ment,” says Mr Lrttow. "But 
one of the problems Is that the 
expected markets did not mate- 


Mr Littow also concedes it 
had been difficult to Integrate 
Carl Zeiss Jena with Oberko- 
chen. “We are Still making 
some of the same product fines 
although we have tried to 
phase tfiom out”. 

Indeed, the duplication of 
product lines is considered one 


of the main problems in this 
marriage. But these are linked 
to what happened to Carl Zeiss 
after 1945. 

In July 1945. American 
troops, which had advanced 
into Thuringia just before the 
Red Army, whisked away 127 
scientists from Carl Zeiss Jena 
to the western zone, and with 
them, they helped re-establish 
Carl Zeiss at Oberkochen. The 
re main der of the World-re- 
nowned optics and glass enter- 
prise, which bad been founded 
in 1889 by Ernst Abbe and Otto 
Schott, was brought under 
state control once the east Ger- 
man communists consolidated 
their pip over eastern Ger- 
many to 1948. The real struggle 
for the Carl Zeiss name began 
in earnest 

For more than 45 yeans both 
Carl Zeiss' produced the same 
goods. As Oberkochen cap- 
tured the western markets 
with its high-quality micro- 
scopes, telescopes and optical 
instruments, Jena went east- 


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wards with similar products. 

“It was a struggle between 
east and west Germany to pre- 
serve the name and the prod- 
ucts," says Mr DBmeL “Over 
that time, the buyers at Carl 
Zeiss Oberkochen were taught 
to believe they were the real 
inheritors of Carl Zeiss Jena. 
Since unification, we to Jena 
have been trying to rec a pt ur e 
our place on the international 
markets through the marriage 
with Oberkochen," he adds. 

Yet Mr DdmeL believes Ober- 
kochen does not want Carl 
Zeiss Jena to exist “We are 
supposed to be able to market 
our goods through their distri- 
bution network. But we sell 
more products through our 
own outlets than through 
Oberkochen. It's a psychologi- 
cal problem for their market- 
ing people who now have to 
think about marketing the 
Jena products. I don’t want to 
believe that this is a struggle 
between Wessis (west Ger- 
mans) and Ossis (east Ger- 
mans). But it is hard to think 
otherwise, especially since 
Oberkochen makes the deci- 
sions," he says. 

“Look, there was no attempt 
to integrate Jena and Oberko- 
chen and streamline the prod- 
uct fines,” says Mr Willy Their 
acker, a member of 
Oberkochen’s workers’ council 
“There was a duplication of 
product fines. We have been 
warning the management at 
Oberkochen for years to 
restructure. They reacted too 
late. Of course we fear about 
jobs going to the east But we 
don't want to make this into 
an east-west struggle." 

The group’s profit and loss 
account tells just that story, 
however. Of operating losses of 
DMISQm to 1993/94. DM140m is 
attributable to Jena. 

And the east-west tensions 
have been heightened by the 
group's precarious situation. 
Workers protesting at the west- 
ern plants about the restruct- 
uring programme last week 
waved banners proclaiming: 
“Aufhau Ost Abbau West Wir 
sagen nem” (Building in the 
east, dismissals in the West 
We say no). Oberkochen, 
which last year had a turnover 
of DM2.5bn, is now making 
DM4Qm Josses. 

But since It owns 51 
per cent of Carl Zeiss Jena, 
managers at Oberkochen 
believe they will have a 
freer hand to control losses at 
that plant in late 1995 when 
the Treuhand's investment and 
job guarantee contracts for 


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saving 2,050 jobs expire. 

However, Mr Berod Kramer, 
head of the physical technolo- 
gies department at the federal 
ministry for research and tech- 
nology in Bonn, believes toe 
real problem feeing Carl Zeiss 
is its price structure and grow- 
ing competition, particularly 
from the south-Asian markets. 

“Carl Zeiss is definitely 
under pressure from these' 
markets. But anyone baying 
these top-class instruments 
have to find a balance between 
price and quality. Also, if Carl 
Zeiss wants to become more 
competitive, the management 
will have to respond more 
quickly. It is not ye* flexible 
E up ng h in thin field," adds Mr 
Kramer. 


The former Slovak prime 
. minister, Mr Vladimir Meciar, 
formally agreed yesterday to 
try to form a coalition govern- 
ment, a full month after the 
electoral victory of his Move- 
ment for. a Democratic Slo- 
vakia (HZDS), Renter reports 
from Bratislava. 

Mr Meciar made the 
announcement in a letter to 
President Jfichal Kovac, who 
played a key role to his down- 
fall in a parliamentary no-con- 
fidence vote last March- 

The Letter is the latest twist 
to Slovakia's personality-domi- 
nated politics since the elec- 
tions of Septemb er 30 and 
October 1, when the HZDS took 
35 per emit of toe vote and 61 
seals in toe 150-member parlia- 
ment 

Shortly after the vote, Mr 
Kovac appointed tbe HZDS to 
lead coalition talks, but point- 
edly ignored its leader, Mr 


T reuhand and Thorin- 
gtan government offi- 
cials agree. They say 
the difficulties in integrating 
the eastern and western 
operations is partly due to 
inflexible management as well 
as toe problems to marrying 
two companies which had 
developed two different mar- 
keting philosophies over the 
past 40 years. That, however, is 
of little comfort to the tax- 
payer. 

“1 keep firing myself what 
happened to the DM587m of 
tax-payers money," says Mr 
WQfriad Rudolf, a spokesman 
for tbe Tbmtngian govern- 
ment. But he declined to 
explain why tbe state did not 
earlier question the losses 
since it has an indirect owner- 
ship interest to Carl Zeiss Jena 
through Jenoptik. 

“The big deciding question is 
why the management [at Ober- 
kochen] took so king in finding 
a concept", says Mr. Rpath, Dr 
Jobst Herrmann, chairman of 
the Carl Zeiss board, may 
partly have answered fears 
about the quality of group 
management by resi g nin g last 

week, though he Is staying on 
in the job until a replacement 
is found. 

Over the next few days, 
unions and management from 
Oberkochen and Jena will 
meet to decade if the restruct- 
uring plans can be imple- 
mented. But the governments 
of Baden- WQrttemberg, Hesse | 
(which has a Carl Zeiss subsid- 
iary) and Thuringia, are reluc- 
tant to accept more unemploy- 
ment and may extend financial 
aid to both plants. 

“At tbe end of the day, Carl 
Zeiss, and its name, belongs in 
Jena," says Mr DfimeL “Jena’s 
future depends on Carl Zeiss 
remaining here. Full Stop". “I 
wonder if this marriage will 
even survive," says Mr Their- 
acker. “It will," says Mr Kra- 
mer. “But it will need time to 
make it work." 



Vladimir Medan choice as PM 
despite president’s hostility 




, plans to pu bOsha Surveyon 5 


©» Thursday, November 24. 


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Meciar, whose suitability as 
{stole minister he questioned 
during campaigning Mr Mec- 
iar rarely appeared as talks 
dragged on with little success, 
preferring to send representa- 
tives i nstea d. At one point a 
senior HZDS member said Mr 
Kovac should resign for the 
sake of Slovak political 
stability. 

However, last Friday the 
presided finally requested that 
Mr Meciar provide him with a 
list of new cabinet members, 
although he set no deadline. 

. Mr Kovac’s aides said they 
had received the letter yester- 
day by expre ss delivery, but 
that no HZDS representatives 
had yet visi ted th e president^,. 

So for the HZDS has chncb&£ , 
support in forming a coalition 
only from its traditional ally, 
toe extrema nationalist Slovak 
National party, which won 
nine seats. 

Mr Medar’s rihgp«>B of fram- 
ing a stable coalition depend 
largely on whether he can 
strike a pact with the four- 
party grouping. Common 
Choice, led by reformed com- 
munists of Party of the Demo- 
cratic Left (SDL). 

Talks between the two have 
so Ear been inconclusive, leav- 
ing Mr Meciar in limbo and 
forecasting tough political 
timpa ahead. 

“To get a majority in parlia- 
ment we need six more 
votes.. .to seize the challenge 
to solve tbe crisis situation 
coming in 1995," Mr Meciar 
said In an interview published 
yesterday to the daily newspa- 
per, Bepuhhka. 


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FINANCIAL TIMES TUESDAY NOVEMBER l 1994 


sJb' oV- 


NEWS: EUROPE 


THE UNIVERSITY OF JORDAN 

library 

SERIALS No®Va 9 a 


EUROPEAN NEWS DIGEST 


Commissioner claims some credit for E Euri 


warning on 


towards t . jntry 


Brittan finds solace in past achievement 


More than a third of Russia’s industrial workforce is in 
“hidden unemployment’’ and many others are not being paid 
or have had their wages cut, according to a report published 
yesterday by the Intemational Labour Osgamsadkin- More* 
ova 1 , open unemployment in Russia - based on standard 
.international definitions - is at least five times as high as the 
official -figures, based on registrations' of under 2 per cent, the 
report said. 

Enterprises have cut jobs for the fourth year running from 
mid-1993 to mld-ian, by an average of more than a per cent 
However;.® per cent of those still “In work" had no job to do. 
These included those on involuntary short-time working and 
t hose- a fifth of all Industrial workers - on long-term "admin- 
istrative leave" receiving little or no wages. The existence of 
hidden- unemployment was a rational response by managers 


the report’s author, Mr Guy Standing. Even so, nearly half the 
enterprises surveyed by the ILO were in wage arrears and 
more than 60 per cent had not paid wages in futt. Mr Standing 
said official figures showing a rise In average real- wages 
referred to contractual wages and not those actually ppia. 
“Across Ihe board, many workers are talcing hnfnt* less, 
If they are taking home anything," he said. Mr Standing called 
for enfo r ceab le labour contracts and a more comprehensive 
and generous social protection system to aid the process of 
enterprise restructuring and to cushion hardship- Frances WU- 
tiams, Geneva 


By Emma Tucker in Brussels 

It was with a certain savagery 
that Sir Leon Brittan, the UK’s 
senior European commis- 
sioner. yesterday described the 
EU’s progress to date in 
embracing former communist 
countries of east and central 
Europe. 

“We have taken a quantum 
leap towards bringing the 
countries of east and central 
Europe into the European 
Union and it is for me person- 
ally a cause of great satisfac- 
tion and pride that we have 
been able to do so," be said. 

Two days after learning that 
the prize task of negotiating 


Europe's enlargement to the 
east had been lopped off his 
Brussels portfolio, the smart- 
ing commissioner took the 
opportunity of an EU foreign 
ministers' meeting in Luxem- 
bourg - attended by ministers 
from six east European coun- 
tries - to sum up the great 
strides taken since Berlin's 
wall was knocked down. 

No one was left in any doubt 
whom to thank "The reason 
why we were able to have a 
meeting of substance today 
was because of the work that 
has already taken place. . . a 
great deal has been done and 
the countries are now set for- 
mally on the path towards 


membership of the E5U." 

But in spite of his evident 
irritation and disappointment, 
Sir Leon held fire and did not 
announce a resignation. Evi- 
dently friends, supporters and 
most especially the British gov- 
ernment - horrified at the 
prospect of further domestic 
turmoil over Europe - had 
been to work on him. 

As Mr Douglas Hurd, UK for- 
eign secretary, put it “1 am 
extremely glad that he has 
decided to stay an in the Gam- 
mission." 

Sir Leon himself was putting 
on a brave face: “After the con- 
clusion of the Uruguay Round 
of the Gatt negotiation, 1 


turned myself increasingly to 
the affairs of eastern and cen- 
tral Europe of the former 
Soviet Union, so I was natu- 
rally disappointed,” he said. 

“But I have received mes- 
sages from governments ask- 
ing me to stay on," he said. 
"The portfolio l have been 
offered does represent an 
important and major chal- 
lenge. ..lam under no illusion 
about the magnitude of that 
task." 

Mr Hurd and Sir Lean him- 
self were not the only people 
praising the former conserva- 
tive MFs two-year efforts as 
commissioner responsible for 
central and eastern Europe. Mr 


Klaus Kinkel German foreign 
minister, said: "I have thanked 
Sir Leon for the excellent work 
done in producing a strategy 
paper which has In part pre- 
pared the way for accession." 

There were diplomatic 
words, too, from the Polish for- 
eign minister, Mr Audrey Ole- 
chowski. “We were very 
pleased with the work done by 
Sir Leon. We think he was, and 
continues to be, convinced 
about the future membership 
of our country and has done a 
great deal of work and made 
much contribution,” he said. 

But as he tactfully put it, the 
east Europeans were not losing 
a friend as a result of Mr Jac- 


ques Santer's division of 
labour, they were merely gain- 
ing a new one. "We have ao 
reason to think the new com- 
missioner will not be as enthu- 
siastic and able as the other." 

Sir Leon is not a stranger to 
controversial news-shattering 
resignations following his role 
in the Westland helicopter dis- 
pute of the Thatcher govern- 
ment. Yesterday he took 
unkindly to suggestions that 
he should have acted more 
decisively this time round. 
"Maybe you have always found 
it easy to make big personal 
decisions," he snapped at one 
journalist. "Not everybody is 
in that happy situation." 


Milosevic’s wife brings 
their enemies to book 


Yeltsin backs bank candidate 

Mr Boris . Yeltsin has proposed that Mrs Tatyana Paramonova, 
presesufiy aptfog governor of the Russian Central Bank, be 
confirmed in her post He has sent his recommendation on her 
candidacy- to- the state duma for debate nnd ratification in the 
-latter half of this month. Mrs Paramonova, the youngest 
member pf the bank’s senior management and the sole woman 
member, was named acting governor after the resignation of 
Ifr.Vfctor Gerashchenko from the gove rnorship last m o nt h 
following the dramatic fan in the rouble. An investigatory 
coamni^on spedally appointed by the government is due to 
report tomorrow on what caused: the plunge in the Russian 
qioencyi J^IMjyd,MtKcou> 

Ukraine sends reform signals 

Ukrafadan-Preaident Leonid Kuchma yesterday consolidated ; 
his grip on.economic policy by naming a radical reformer, Mr , 
Viktor Pynzanek, as first deputy prime minister for econom- 
ics. The appointment of Mr Pynzanek, who quit the same post 
in frustration last year when Mir K uchma was prime minister, 
undercuts the conservative prime minister, Mr Vitaly MasoL 
Mr Masolwho was strongly criticised by Mr Kuchma y ester 
day ffr trying to obstruct last week’s unification of the cur- 
rency exchange rates, had said any appointment to that eco- 
nomics portfolio would weaken Ms own position. Mr Kuchma 
promised further austerity measures soon and progress toward 
k new constitution. He commented: "Fm ready to compromise 
on all issues except economic reform and executive power." He 
'also urged parliament to ratify the Nuclear Non-Proliferation 
'freatyr because, he said, economic help from both Russia and 
the west depended on tL Matthew KasWtoski, Kiev 

Polish minister thinks again 

Poland’s foreign minister, Mr Andrzej Oiechowskl who 
resigned last weekaftmr tielngidaced an a list of top govern- 
ment offldalsrwiw also hcdd directorships, has suspended his 
resignation wMfe the courts clarify if he was breaking the law. 
A4ted newspaper interview what he would do If the 
oourto derided -agaihst hm or the issue was not clarified by 
the end nf fhe year, he repfied: "I wlR leave.” The list of 68 
senior' officials was published last week by Mr Wlodzlmierz 
justice minister, who argued that they contra- 
a IflfttTflw harming grwBrnmerit nffiriato formr acepptmg 

pay from other sources. Mr Olechowski, who was nominated 
by President Leeh Walesa, has also dented fhat he win run 
; against him in next year’s presidential election. Christopher 
Bobirisla, Warsaw 

HJONOMIG WATCH 


Energy prices hit Oslo’s surplus 

Neriray’aranwjt account surplus for the first eight months of 
IBM fell ttrNKn8.853tm <£Ubn) from NKrl6.757bn in the same 
1993 period, according to the country’s national statistics 
agency. The I7 per cent fell reflected a drop in the value of oil 
and gas exports, to NKr68j6bn from NKrTO.lbn, as well as 
fewer net exports of ships and oil platforms. Imports have also 
risen strongly on thnback of the recovery in the Norwegian 
erohfany, which will grow- by around 4 per cent this year. In 
Augutf. the current account swung to a deficit of NKr570m. 
compared with a Jtfty surplus of NKrL83Sbn. The turnaround 
iraft due fo ofifidd maintmiance^ work which pushed down the 
value of Norway’s August oil exports to NKr6.6bn from 
Nffi&Sa in the same 1933 period. Christopher Brown-Homes , 
Stockholm 

9 Wholesale sales in Germany in September dropped a real 1 
per cent year-on-year and fell a calendar and seasonaDy-ad- 
iwrted real 1 per cent from August 
9 Greek industrial production rose A2 per cent year-on-year in 
August after a 7.1 per cent rise inJuly. 

9 Slovakia's industrial' output in August rose by 5.8 per cent 
tmnpared wfth the same, period last yean foihistrial produc- 
tion rose also by 5A per cent .in August against July. 



By Laura Sifter in Belgrade 

The annual 
Belgrade hook 
fair last week 
awarded first 
EUROPEAN prize to a Uter- 
PROF1LE ary novice, Mrs 
Mira Markovic, better known 
as the wife of President Slobo- 
dan Milosevic of Serbia. 

The award marks the rise of 
Mrs Markovic, who has 
beeome increasingly promi- 
nent In the Serbian political 
scene over the past few 
months. 

Her band can be detected in 
Mr Milosevic’s current moves 
towards peace with Croatia. 
She Is behind Serbia’s 
embargo a gain** the 
Serbs. 

Mrs Markovic had made 
public her aversion towards 
Mr Radovan Karadzic, the Bos- 
nian Serb leader, a year before 
the Serbian president turned 
his bade cm his protege. 

The first lady of Serbia 
makes her views known by 
publishing her diaries in- 
Duga, the most popular Ser- 
bian magazine. Her book, 
“Night and Day”, is a compi- 
lation of these mnsings which 
have heralded the demise of 
many politicians - from Mr 
Karadzic to Hr Vbjislav Seseff, 
the ultra-nationalist MP, who 
last week was sentenced to 
three months in prison. 

While her diaries provide a 
stage for settling political 
scores with her husband’s 
rivals - often erstwhile allies 
-they also ponder the beauty 
of crickets, summertime, and 
ethnic tolerance. 

Her book, said one critic, “is 
polyphonic, a combination of 
scientific analysis and poetic 
sensibility”. 

After his Machiavellian 
turn-around three months ago, 
Mr Milosevic is poised to 
purge nationalists from the 
ranks of Serbia’s ruling Social- 
ists (SPS) - or at least get rid 
of those who had made the 
mistake of speaking too loudly 
in favour of the war in Bosnia. 
This was portended by Mrs 
Milosevic, who attacked Mr 
Afihajlo Markovic, the main 
Socialist ideologue. 

“Mr Markovic betrayed her 
revolution by being too soft 
on the Serbs on the other 
side of the Drina," the river 
which marks Serbia’s frontier 
with Bosnia, wrote the Bel- 
grade journalist Mr Milivoje 
Gfisfo, 

In last month’s column, Mrs 
Markovic warned Mr Mark- 
ovic, her former professor, 
that she “has many comrades 
in the SPS, maybe many more 


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than Mihajlo Markovic. .. The 
only thing that my professor 
may be right about is that be 
should not wage polemics with 
his former students and be 
especially should not get 
angry if they are better than 
him.” 

With her husband abandon- 
ing nationalism, Mrs, Markovic 
bas founded Jnl (Yugoslav 
United Left), a shadowy organ- 
isation including her univer- 
sity students and retired gen- 
erals. Indeed, writes Mr Stojan 
Ceroric, the respected Bel- 
grade journalist, “the literary 
jury this time perhaps did not 
want to reward only the skill 
or the good taste of Mrs Mark- 
ovic In picking her spouse, but 
also her efforts in rallying the 
left". 

Mr Milosevic’s political shift 
has effectively marginalised 


the tiny liberal opposition and 
radicalised the rest even more. 
While Mrs Markovic says she 
supported peace all along, her 
husband was blamed by the 
west for being the chief insti- 
gator of the war. 

His recent moves have won 
kudos from international 
peace envoys and tbe lifting of 
some UN sanctions, which give 
him a freer hand.ln Serbia. 

While Mr Glisic wryly 
expressed relief that the Bel- 
grade book fair was free of 
political Influence, the award 
signalled the extent to which 
the Milosevics rule Serbia. 

“If everything gets worse, 
Mrs Markovic will become all 
the greater writer,” said Mr 
Ceroric, “in the end, perhaps, 
the only writer whose books 
are printed.” 

See Feature 









Mrs Mira Markovic (right) and her husband, Slobodan Milosevic, voting in 
presidential election 


in the 1992 


In 1982 Frank Myers was redundant and flat broke. 12 years later he’s 

bounced back as managing director of his own company which exports ‘Flatcones’ around the world. 

There’s a lot of lolly in cones. The turnover is £3 million per annum and rising. 

So how did he do it? Well, that “Eureka” moment came in 1085 when Frank turned to his 
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even rf it was to be a long one. 

His research identified definite room for improvement. TVadftional cones, he was surprised to discover, were 
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when knocked over). - - 

The ‘Flatcone’ he eventually developed is much safer as it just folds when run over then 
simply springs back into position. He also found a way to produce them very economically by using 
recycled tyre rubber for the base. 

But probably his best idea was using the Patent Office. Thus ensuring his 'Flatcone' idea 
was properly protected. He even registered ’Flatcone' as a trade mark. 

The Patent Office provides protection for all aspects of ’Intellectual Property’- trade marks, 
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To be Frank, we suggest you write or freephone for more information. 


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4 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


NEWS: THE AMERICAS 


Clinton seeks to stem party losses 


By Jurek Martin far Washington 


President. Bill 
Clinton yester- 
day launched a 
week-long 
drive to minim- 
ise expected 
Democratic 
party losses in 
the mid-term 
elections on 
November 8. 
Mr David Wil- 
helm, the par- 
ty's national 
Hiairman, trav- 
elled with the 



US MID-TERM 
ELECTIONS 
Navember8 


president to Philadelphia and 
proclaimed "the tide is turn- 
ing,” But he added that he was 
under no illusion how tough 

the elections would be. 


Indeed, in the first three 
states an Mr Clin ton’s itiner- 
ary - Pennsylvania, Ohio and 
Michigan - polls found Demo- 
cratic candidates falling 
behind Republican opponents 
in seats the party already 
holds. 

In Pennsylvania, a Pitts- 
burgh Post-Gazette survey 
gave Congressman Rick Santo- 
rum, the Republican, a 46-35 
point lead over Senator Hams 
Wofford. Though the poll had a 
small sample, with a margin of 
error of plus or minus 5 per 
cent, and was dismissed as 
unreliable by the senator’s 
campaig n , the two had previ- 
ously appeared neck-and-neck. 

As an indication of the 
importance Republicans attach 
to the state. Mr Santo rum was 


chosen to give the party's offi- 
cial response to the president’s 
regular weekly radio broadcast 
on Saturday. He charged that 
the Democrats had secret plans 
to raise taxes and said "it is 
time for you to tell Washington 
that you want to keep your 
har&earaed income." 

In Michigan Mr Spence Abra- 
ham, the Republican, was 
given a 4634 lead over Con- 
gressman Boh Carr. Another 
survey a week ago had given 
the Democrat a small lead, but 
the popularity of Governor 
John Engler, the Republican 
certain of re-election, appears 
to be pulling Mr Abraham 

along . 

All the recent Ohio surveys 
show Lt Governor Michael 
DeWine with a double digit 


lead over Mr Joel Hyatt, who is 
bidding to succeed his 
father-in-law, Senator Howard 
Metzenbaum. Mr Hyatt has 
started to dig into his own con- 
siderable private resources to 
finanrp a last- minute drive but 
most experts consider it too lit- 
tle and too late. 

But both Mr Hyatt and Con- 
gressman Carr are to campaign 
with Mr Clinton today, in con- 
trast to the president’s previ- 
ous visit, when both shunned 
him. Mr Mark Singel. now 
apparently trailing as the Dem- 
ocratic candidate for governor 
in Pennsylvania, also appeared 
with the president yesterday 
having failed to show up last 
month at a Washington fund- 
raiser on his behalf at which 
Mr Clinton was present. 


The president’s upwards 
move in the polls on the 
strength of foreign policy 
achievements may help his 
party, though by how much is 
unclear. Mr William Schneider, 
political analyst for the CNN- 
USA Today-Gallup national 
poll, said recently that every 2 
point rise in the president's 
popularity was worth a seat in 
the House and every 8 points 
one in the Senate. By that 
logic, Mr Clinton has just 
saved four House seats and one 
in the Senate. 

In New York the Democrats 
were able to take heart Grom 
the latest large sample New 
York TUnes/WCBS-TV poll out 
yesterday which gave Gover- 
nor Mario Cuomo a 44-34 point 
lead over Mr George PatakL 



Clinton: upward move In polls 


Cuba opens up to 
more investment 
from overseas 


Gy Pascal Fletcher m Havana 

Cuba is to open up more of its 
recession-hit economy to for- 
eign investment, including real 
estate, services and sugar pro- 
duction. 

Vice-President Carlos Lage 
told a news conference in 
Havana at the weekend that 
the government was also pre- 
paring a new foreign invest- 
ment law that would give more 
protection to overseas inves- 
tors. who are already active in 
Cuba in activities ranging from 
oil exploration to citrus pro- 
duction. 

Cuba began opening up its 
state-run economy to' external 
investment after Ud9 to offset 
the devastating impact of the 
collapse of its ’preferential 
trade and aid ties with the for- 
mer Soviet bloc. 

"From now onwards, no pro- 
ductive s>:L*tor will be excluded 
from investment by foreign 
capital." Mr tage said. Up to 
now, raw sugar production, 
traditionally the island's big- 
gest export earner, had been 
explicitly closed to foreign 
investment. But the sugar 
industry is in deep crisis and 
has suffered two consecutive 
disastrously low harvests. 


Mr Lage also announced 
that in defiance of a continu- 
ing US economic embargo 
against Cuba, representatives 
of more than 69 US companies 
bad visited the island in the 
first half of this year to discuss 
business prospects. 

In some cases, letters of 
intent for future contracts had 
been negotiated to take effect 
when the US embargo was 
finally lifted by Washington. 

Representatives of two Brit- 
ish sugar companies, Tate & 
Lyle, and ED&F Man, have 
held talks this year with 
Cuban investment officials. 

Shortages of essential inputs 
previously supplied by the fop 
mer Soviet Union, such as fuel, 
spare parts, fertilisers and her- 
bicides, have crippled Cuba's 
sugar production since 1990. 

On Cuba's economy, Mr Lage 
said it was still too early to 
talk of recovery. But he cited 
some positive signs, such as 
the growth of foreign invest- 
ment, particularly in tourism 
and oil exploration, improve- 
ments In construction, rsmwii 
and nickel production and 
progress in the government's 
efforts to stabilise the coun- 
try's internal finances. 


Nicaragua limps back to life 

Edward Orlebar on the first expected growth year since the 1970s 


N icaragua is expected to 
grow this year, a rare 
occurrence for an 
economy that has been in 
almost unremitting decline 
since the late 1970s, as a sem- 
blance of political stability 
gains a foothold. 

But the economic expansion 
rem ains ana emic and there Is 
little confidence that the econ- 
omy has taken a decisive turn 
for the better. Growth is 
unlikely to exceed L5 per cent 
this year, less than population 
growth at around 3 per cent. 
Unemployment is €0 per cent 
Relative peace, and measures 
aimed at developing a market 
economy after the defeat of the 
left-wing Sandinistas in 1990 
have not, so far at least, 
brought the economic benefits 
that the government has peri- 
odically promised. 

Mr Oscar Rene Vargas, an 
economist, points to a drop in 
income per head of 48 per cent 
in the last five years. “This is 
the 'Africanisation' of Nicara- 
gua," he says. “We won’t be 
able to return to the levels of 
1989 for 25 years." 

The country’s foreign debt - 
at $llbn. more than eight 
times gross national product - 
is still a heavy burden. The 
government secured in June 
an Enhanced Structural 
Adjustment Facility with the 
International Monetary Fund, 
which gives it access to $150m 


a year until 1997, and the possi- 
bility to renegotiate debt with 
Paris Club creditors. But about 
80 per cent of liquid foreign 
loans go towards debt service. 

Meanwhile, Nicaragua is 
r unning a large trade deficit, 
has negligible reserves, an 
agricultural sector suffering 
from drought, and a virtually 
non-existent industrial sector. 
Even the manhptee the essen- 
tial tool of any agricultural 


begun to flow towards the 
energy sector, tourism, and 
gold mining. 

The national telephone com- 
pany, Telcor, which has mark- 
edly improved its service, is 
expected to be privatised by 
the end of the year. The sea- 
food industry grew by 60 per 
cent last year. 

“We believe there are signifi- 
cant opportunities here." says 
Mr Eduardo Montealegre, gen- 


fi This is the “ Africanisation” of 
Nicaragua. We won’t be able to 
return to 1989 levels for 25 years’ 


labourer, are imported from El 
Salvador. 

But observers say there are 
some signs of encouragement 
Although, many rural areas in 
the north are still plagued with 
banditry, the last group of 
organised rebels negotiated an 
agreement with the govern- 
ment in April. 

Congress has passed a mili- 
tary code which strengthens 
civilian authority over the 
armed forces and gives the 
president the right to dismiss 
the defence chief. 

Higher international coffee 
prices should push revenue 
above 8100m in 1995 and total 
exports to more than $300m. 
Some foreign investment has 



eral manager of Bancentro. one 
of nine private h anks to open 
since 1991. “We have changed 
the direction of thing s and the 
direction we are going in is the 
right one." he says. 

Some analysts, however, still 
see fundamental change 
needed in other areas: in the 
unreformed public sector - a 
loan to cover this is being 
negotiated with the World 
Rank - and in the financial 
sector, where the state banks 
are in desperate condition. 

Furthermore, though the 
country's political divisions are 
less marked than they 
appeared a couple of years ago, 
there is concern that presiden- 
tial elections in November 1995 


are already beginning to sour 
the political climate. 

A split has emerged among 
leading members of the San- 
dinista National Liberation 
Front between a modernising 
wing of the party and the 
authoritarian leadership of Mr 
Daniel Ortega - a probable 
presidential candidate - and 
other hardliners who have 
maintained left-wing rhetoric. 

One manifestation of this is 
a division within the party 
over a proposed constitutional 
reform intended to make the 
executive more accountable to 
the legislature. The reform 
would among other thing * pro- 
hibit the immediate re-election 
of the president, shorten the 
term from six to five years, and 
ban close relatives from stand- 
ing for election. 

Observers say Mr Ortega 
wishes to negotiate a property 
law which would legalise San- 
dinista ownership of some 
properties confiscated during 
its administration in the 1980s. 
In return, they say, he would 
be wilting to support the 
removal of the proposed bar on 
presidential relatives seeking 
re-election. This would allow 
the man described as Nicara- 
gua's de facto prime minister, 
Mr Antonio Lacayo - the min- 
ister of the presidency and 
President Violeta Chamorro's 
son-in-law - to run for office 
too. 


AMERICAN NEWS DIGEST 

US personal 
income rises 

US personal income rose in September for the eighth month in 
a row, the Commerce Department reported yes terda y, but 
consumption spending, though still increasing, showed some 
sig ns of weakening. Personal income rose by 0-6 per cent m 
September from August to a seasonally adjusted anniml race 
of $5,756.7bn as wage and salary Income continued to advance. 
Disposable income, after deducting tax paym ents and some 
other non-tax payments, also rose by 0.6 per cent. Personal 
cnnsnmptirtn expenditures, however, rose only 0.2 par cent m 
September after gaining 0.8 per cent in August Spending on 
durable goods, which had surged in August, fell slightly as car 
purchases tailed off while spending on services and non -cura- 
ble goods continued to advance. _ . 

In a separate announcement the Purchasing Management 
Association of Ch i ca go said its index of business activity rose 
to 64.3 per cent in October from 63UJ per cent Urn P^Y* 01 ^ 6 
month. The association Mid its index of prices paidby busi- 
nesses rose to 725 per cent from 72.1 per cent in September. 
George Graham, Washington 

Professor ahead in Bogota poll 

A flamboyant philosophy professor appears to have wrestled 
the mayoralty of Colombia's capital Bogota from the nihng 
Liberal party in the biggest upset in Sunday's municipal ana 
provincial elections. Partial results showed Mr An tanas 
Mockus. beating his liberal opponent by a wide margin. Mr 
Mockus conducted an unconventional campaign, placing no 
paid advertising and erecting only four advertising hoardings 
in a city of nearly 7m people. He also cancelled all public 
appearances during the past week saying people were satu- 
rated with elections. , 

Early returns from the rest of Colombia showed the Libera 1 
party holding on to power and remaining the dominant politi- 
cal force in this country of nearly 36m people. However, the 
traditional Liberal and Conservative parties lost a number of 
cities to candidates backed by civic fronts. Santa, Kendall and 
Reuter, Bogotd 

Newport News Greek ship deal 

Newport News Shipbuilding said yesterday it had become the 
first US shipyard since 1957 to win a foreign commercial ship 
order when it signed a contract with Eletson Corp, a Greek 
shipping company, for two 46,000 ton tankers. The contract 
als o include s an option for two more tankers, and follows the 
US Transportation Department's approval of a loan guarantee 
to Eletson. The first of the two vessels, which can carry up to 
343,000 barrels of oil, is due to be delivered in 22 months. 
Newport News has been heavily dependent on naval shipbuild- 
ing orders, but Tenneco, its parent company, has been seeking 
to diversify into commercial shipb uilding . George Graham 

Athlete loses $27m damages bid 

US Olympic athlete Butch Reynolds yesterday lost his bid far 
$27m in damages from the International Amateur Athletics 
Federation for barring him from competition after he failed a 
controversial test for the use of anabolic steroids. Mr Reyn- 
olds. who ran 400m in a world record 43.29 seconds in 1988 but 
was barred from the 1932 Olympics by the IAAF, was awarded 
the $27m in damages by a federal judge two years ago. But an 
appeals court said in May that the US court did not have 
jurisdiction over the Monaco-based federation, Hn d the US 
Supreme Court yesterday declined to review that derision. 
George Graham 


INTERNATIONAL ECONOMIC INDICATORS: PRODUCTION AND EMPLOYMENT 

Yeeriy data (or ratal sales volume and industrial production plus aB data for the vacancy rate Indcator are bi fadex form with 1885=100. Quarterly and monthly data far ratal sales 
and Industrial production do* the percent a ge change over the conespondrg period In Ihe previous year, and are positive unless otherwise stated. The msrrpkrymant rate is shown 
as a percentage of the total labour force. Figures lor the composite K a dfa g Indcator ore end-period values 


■ UNITED STATES 


■ JAPAN 


■ GERMANY 



fowl 

-to 

ratal 

MMM 

tebto 

U— P- 
Yafamt 
tot 

tamey 

Mata 

Patten 

foM 

ton 

rdn 

UM 

teteto 

unv 

faM* 

rate 

ttaonqr 

tea 

lniii nnr 

Mg 

Meteor 

Mfl 

ten 

pmdtcdo n 

UOOTP- 

bparat 

tm 

V*«K, 

rata 

ImArmfrn 

Mata 

1985 

100.0 

100.0 

7.1 

100.0 

102.4 

10013 

100.0 

2.6 

100.0 

96.9 

100.0 

100.0 

7.1 

100.0 

1052 

1986 

105.5 

100.9 

6.9 

98 . a 

107.1 

toa5 

98.7 

23 

94.3 

105.8 

103.3 

1022 

6.4 

136.4 

105.0 

1987 

108.4 

106.0 

6.1 

105.5 

108.2 

iiaa 

103.1 

23 

108.3 

115.1 

107.4 

1026 

52 

149.4 

1069 

1988 

1128 

110.7 

5.4 

106.1 

112.1 

122.6 

113.1 

23 

135.9 

122.0 

1105 

1065 

62 

1645 

1122 

1989 

115.0 

112.4 

52 

99.3 

110.6 

1325 

113.7 

22 

147.0 

124.7 

114.2 

111.4 

5.8 

2 ia 7 

115.0 

1990 

116.4 

112.4 

5.4 

84.8 

106.3 

141.6 

124.5 

2.1 

1496 

121.7 

1235 

1172 

45 

261.1 

1155 

1991 

114.0 

110.3 

ae 

62 2 

111.7 

144.6 

126.8 

2.1 

144-2 

119.0 

130.5 

1205 

42 

270.7 

1128 

1932 

117 b 

112.9 

79 

60.3 

iiaa 

139.9 

119.0 

2.1 

124 2 

1 182 

127.7 

119.1 

4.6 

2802 

106 .D 

1993 

123.8 

117.6 

6.7 

652 

123-3 

131.8 

113.6 

23 

106.6 

1253 

1229 

1105 

55 

198.5 

113.0 

4tti qtr.1993 

S .7 

4.3 

6.4 

69.4 

123.3 

- 5.0 

-22 

2.7 

1033 

125.3 

-55 

- 3.1 

69 

1792 

113.0 

1st qtr.1994 

7.0 

5.0 

as 

719 

1218 

- 3.4 

- 3.1 

2 -fl 

101.7 

130.0 

0.5 

09 

65 

1945 

1182 

2 nd qtr.1994 

0.1 

5.8 

ai 

74.7 

124.6 

- 1.8 

- 1.1 

23 

102.9 

130.8 

- 1.9 

ao 

6.6 

1892 

119.8 

3rd qtr.1994 


8.8 


75.2 



1.6 







1945 


October 1993 

59 

4.1 

a 6 

68.5 

120.8 

- 6.0 

-ao 

2.7 

98.6 

1245 

-35 

- 4.3 

62 

175.9 

1119 

November 

5-8 

4.2 

6.4 

68.9 

122.3 

-63 

-32 

2.7 

111.8 

124.5 

- 4.7 

-49 

0.3 

180.1 

1124 

December 

6.0 

4.6 

69 

70.7 

123,3 

-23 

-33 

23 

99.5 

1253 

-82 

-19 

aa 

1828 

1139 

January 1994 

4.4 

4.9 

as 

66.7 

123.6 

- 2.0 

- 2.7 

2.7 

97.0 

128 2 

0.4 

- 1.7 

a 4 

190.9 

113.8 

February 

7.0 

4.6 

6.4 

72.9 

1235 

-32 

- 1.4 

2.9 

97.7 

127.6 

0.6 

1.0 

6.5 

198.8 

114.8 

March 

9.7 

5.4 

as 

74.3 

123.8 

- 5.0 

-22 

2.8 

110.7 

130.0 

05 

0.7 

6.5 

1965 

1162 

Aprt 

8.7 

5.0 

64 

73.5 

124.3 

- 1.9 

- 2.0 

2.8 

993 

130.6 

- 7.8 

2-B 

as 

1926 

117.7 

May 

5.8 

ao 

ao 

76.4 

124.3 

- 3.4 

- 1.8 

23 

103-8 

130.3 

25 

23 

ae 

187.6 

118.7 

June 

5.8 

6.4 

5.9 

74.1 

1246 

- 0.2 

0-7 

23 

105.1 

130.8 

- 0.1 

4.1 

6.6 

186.7 

1195 

Jtdy 

4.9 

69 

ai 

rae 

124.9 


- 0.5 

33 

38.6 

1312 

- 3.3 

6.4 


190.1 

121.0 

August 

52 

8.8 

6.1 

74.9 

125.5 


16 


106-9 

132.9 

-32 

12 


193.4 

1215 

September 


6.6 


734 



1.8 







1999 



■ FRANCE 


■ ITALY 


■ UNITED KINGDOM 


1985 

100.0 

100.0 

109 

100.0 

1029 

100.0 

100.0 

9.6 

1035 

1005 

1005 

112 

100.0 

1986 

1024 

101.1 

10.4 

107.0 

109.1 

106.8 

104.1 

10.4 

110.7 

1059 

102*5 

112 

iiai 

1987 

1045 

103.1 

10.5 

1172 

108.7 

112.1 

106.8 

109 

1125 

110.7 

1065 

109 

1412 

1988 

107.9 

107.3 

10.0 

1359 

1149 

107.9 

1142 

lag 

117.7 

117.8 

111.6 

8.6 

143.1 

1989 

1095 

111.3 

9.4 

160.6 

113.9 

iia 9 

118.7 

109 

1155 

120.1 

1149 

72 

123.5 

1990 

110.3 

1129 

a 9 

1632 

107.4 

114.4 

11&0 

109 

1120 

121.1 

113.7 

aB 

972 

1991 

110.3 

1132 

9.4 

1282 

108.6 

111.0 

115.4 

95 

114.9 

119.8 

1092 

89 

682 

1992 

1105 

1132 

10.4 

1095 

1065 

116.9 

115.4 

9.8 

111.7 

1205 

109.0 

19 

699 

1993 

110.7 

109.9 

11.7 

90.0 

109.7 

114.2 

112.9 

102 

121.6 

1245 

111.3 

109 

769 


1Q2.1 

105.6. 

110.1 

1085 

106.1 

103' 

108 iV 
H2.y 
121.0 


4th qtr.1893 
lit qtr.1994 
2nd qtr.1994 
3rd qtr.1994 


-05 

- 1.5 

12.3 

80.3 

109.7 

- 6.9 

- 0.3 

10.7 

121.6 

3.7 

39 

10.1 

82.6 

121.0 

1.4 

0.4 

125 

93.6 

112.9 


- 0.9 

11.7 

1232 

3.5 

49 

9.9 

84.8 

123.4 

- 1.3 

3.6 

12.6 

110.6 

114.9 


5.0 

125 

1225 

3.8 

59 

95 

89.0 

123.7 





115.9 





39 



969 



October 1993 

-27 

—4.4 

122 

8X8 

1079 

-5.6 

-19 

ni 

119.8 

32 

22 

102 

80.7 

rwCTrociKJV 

2.0 

-0.1 

12.4 

796 

108.8 

-5.4 

-1.4 

n.o. 

1209 

XB 

X4 

10.1 

8X5 

December 

-0.6 

0.0 

124 

77.5 

109.7 

-9.9 

1.9 

n.a. 

121.6 

4.2 

39 

99 

83.7 

January 1994 

a7 

19 

125 

825 

110.4 

-62 

-35 

n.a. 

1222 

3.9 

4.4 

10.0 

84.4 

Februsy 

1.4 

-09 

12.5 

95.1 

1115 


-02 

ax 

122.9 

28 

3.9 

9.9 

845 

March 

2.0 

0.6 

12.6 

1039 

1129 


1.0 

m 

1232 

X7 

42 

99 

849 

Aprf 

-3.9 

3.6 

12 6 

113.6 

114.3 


as 

na 

123.4 

49 

6.1 

96 

87.4 

May 

3.1 

3.7 

12.7 

1099 

11X1 


28 

hjl 

1232 

4.1 

52 

95 

882 

June 

-2.0 

3.6 

12.6 

100.3 

114.9 


52 

n.a. 

1225 

3.1 

62 

95 

91.3 

July 

-1.8 

5.2 

12.6 

1052 

114.6 


65 

on. 


32 

42 

9.5 

932 

August 

4.0 

52 

12.6 

1096 

114.8 


12.3 

ao. 


39 

4.6 

9.3 

97.8 

September 





115.9 



aa. 


xr 


99.0 


119.3 
119.8 
121.0 
122.1 
123.0 

123.4 
123.3 

123.6 

123.7 
124.2 

124.7 


Al series seasonally adjusted. Stattsttcs for Germany apply only to wostem Ganwmy. Data suyftded by D a tastreom and WEFA RoM soles volume: data from national goverranait 
sources except Japan and Italy (vafuo aeries deflated by OECO uring CPI). Refora to total retag odes except Fiance and Roly (major outlets only} and Japan (department stores ortW 
tndwtfrfal prodjcdore data from ndtonoi government sources. tnefodea mining, manufacturing, gas. electricity and water supply industries except Japan fmlnfiw and manutachafag 
only) and UK (also indudes construction induama). Unemployment rata OECO Oandordoed rate which adjusts as far as posable far the different definitions of imemptayment used 
In official sauces. Vacancy rata Mfoaton refovars vacancy measure dWdod by laid ctvBtan employment, expressed in index farm. Derived from OECO series. US - help-wanted 
advartfalne. Japan - new vacancies. Germany and Franco - al (ote vacant Italy - no data avoSobfo. UK - unfitted vacancies. Composite leading indicator OECD data Each ts a 
eombfadlon of series, cyclical IfucfuuUons In which usually precede eyefieof fluctuations in ganorvl oconmc activity. 



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^inNABTOwii TIMES. TUESDAY NOVEMBER !- 1994 ★ 


A definition of highly available computi ng : 

“The use of redundant components in 
conjunction with appropriate fail-over and 
restart mechanisms in both hardware and 
software to permit event notification of failure 
conditions coupled with application and/or 
database checkpointing and rollback/recover 
algorithms, thus establishing reasonable 
assurance within predicted norms that a 
combination of redundancies will allow a 
confidence factor to exist and that mean 
time to repair shall be a small enough variable 
in conjunction with simultaneous mean 
time between failure of the aforementioned 
redundant components that the overall 
system availability will be significantly above 
normal performance.” ~ The competition 



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FINANCIAL TIMES 


TUESDAY NOVEMBER 


1 1994 


Japan and US struggle to seal glass pact 



By MJchiyo Nakamoto In Tokyo 

Japanese and US trade 
negotiators yesterday extended 
their talks for a third day in a 
bid to reach agreement on 
means of improving foreign 
access to Japan's market for 
glass products. 

The talks were continuing 
nearly one month, after the two 
sides indicated they had 
reached an agreement in prin- 
ciple on opening the market 

Failure to produce an agree- 
ment last week kept negotia- 
tors working in Tokyo over the 
weekend and into a third day 
as yesterday's deadline 
approached. 

Lack of an agreement by the 
deadline could prompt the US 
Into taking unilateral trade 
action, possibly sanctions, 
agains t Japan's flat glass mar- 
ket 

Mr Hideaki Kumano, vice- 
minister for international trade 
and industry, said yesterday 


Japan’s flat glass Imports 

Domestic consumption basis, 1931 


EC OAK 



OtterelOjff* €C1J* 


Canada & 

Motion QA%. 


Japan 04% • US 3^% 


CWwre t.0% 


Etropean 
counties 
11-8*. / 


Japan Q-1% 


Otters 1-9% 


■ Domestic production 87.2% 
Source Ha 

that Japan hoped to settle the 
glass talks by Use deadline. “I 
hope both parties will wrap up 
talks even if discussion is 
extended into the small hours 
of Tuesday,” he said. 

The talks are a remnant of 
the bilateral framework negoti- 
ations under which J apan anti 
the ITS reached a partial agree- 


Domestic pmduetion 95:1% 


ment at the end of last month. 

At the time, the issue of 
Japan's flat glass market, 
together with that involving 
the country’s market for 
vehicles and vehicle parts, 
were postponed when Japan 
and the US announced they 
had reached agreement in four 
of the five priority sectors tar- 


Oomestie production 824% 


geted under the framework 
negotiations. 

An agreement on the glass 
market had been reached "in 
principle." the Japanese gov- 
ernment said at the time, and 
details were to be worked out 
within 30 days. 

Ur Steve Farrar, director of 
international business for 


Guardian Industries Carp, a US 
glass maker, said most differ- 
ences had been resolved. As 
with other US-Japan disputes, 
stalemate has emerged over 
US efforts to pin down spec 
ific criteria to measure prog- 
ress. 

"We want to avoid having a 
situation where importers 
could buy token amounts and 
never become serious custom- 
ers,” he said. “We want to be 
sure that what is being mea- 
sured is substantial business 
relationships." 

The US claims that Japan's 
flat glass market, which is the 
second largest in the world at 
$4.5bn a year, is closed to for- 
eign suppliers. 

This is because of the domi- 
nance of three large domestic 
producers wbich have very 
tightly controlled distribution 
arrangements with the indus- 
try's wholesalers. 

US makers have only a 1 per 
cent share of the Japanese 


market, compared with more 
than 25 per cent in Europe and 
Latin America, the US says. 
Under these circumstances, the 
US would like to see more pro- 
curement of US-made glass for 
facilities owned by the govern- 
ment in addition to greater 
market access in the private 
sector. 

The Japanese side has 
claimed that its market, with 
imports amounting to 12 per 
cent, compares favourably to 
that in the US. where imports 
are a meagre 5 per cent and in 
Europe, where foreign-made 
flat glass accounts for 17 per 
cent of the market 

The Japanese government 
has been reluctant to interfere 
in what it considers a matter 
for the private sector. The 
basic stance of the government 
is that if US companies want a 
larger share of the Japanese 
market they should raise their 
competitiveness. 


China signs deal 
with S Korea to 
develop airliner 


Australia-NZ relations clouded 

Terry Hall and Nikki Tait examine Sydney’s freeze on 'open skies’ 


By John Burton In Seoul 

South Korean and China 
yesterday agreed to develop a 
lOO^eat passenger aircraft by 
the end of the decade in the 
latest of several proposed 
Asian aerospace projects. 

The $1.5bn (£940m) Sino-Kor- 
ean project is meant to meet 
growing demand for regional 
airliners in Asia. Ta<tfhn and 
Indonesia have ^already 
announced similar pro- 
grammes. 

The aerospace agreement 
was signed during the first day 
of a visit byy Chinese premier 
Li Feng to Seoul, following a 
memorandufn of understand- 
ing reached in June. 

China and Korea will equally 
share between 70 per cent and 
80 per cent in a joint venture 
to be formed next year. West- 
ern partners providing engine 
and other advanced technology 
would be given a 20 per cent 
share, while other Asian avia- 
tion companies, possibly from 
India and Indonesia, would be 
granted a 10 per cent stake. 

Samsung Aerospace was 
recently selected to head the 
project’s Korean consortium, 
which also includes Korean 
Air, Daewoo Heavy Industries 
and Halla Shipbuilding & 
Heavy Industries. Chinese par- 
ticipation is being led by Avia- 
tion Industries of China. 

The joint venture is expected 
to select the aircraft type and 
foreign technical partners by 
early next year. 

The aircraft programme has 
been promoted by the Korean 


government as one of the 
nation’s main industrial goals 
over the next decade. 

However. Korean aerospace 
companies and airlines have 
privately expressed scepticism 
about the project because of 
the availability of similar and 
cheaper western aircraft. 

Korean officials argue that a 
domestic airliner is needed to 
reduce the country's depen- 
dence on imports of foreign air- 
craft and parts, which are 
expected to cost $3bn a year by 
1907. 

The project's development 
target date of 1996 is also con- 
sidered unrealistic by some 
analysts because of the lack of 
aerospace expertise, particu- 
larly in Korea. 

China is expected to provide 
most of the basic aerospace 
technology, while Korea's 
contribution will be mainly fin- 
ancing anti production technol- 
ogy. 

But the Sino-Korean partners 
still disagree over which coun- 
try will be responsible for final 
assembly of the aircraft. China 
is also understood to be inter- 
ested in collaborating in a pro- 
posed project to develop a 
70-100 seat regional aircraft 
with Japan in partnership with 
Boeing of the US. 

Indonesia, Malaysia, Singa- 
pore, South Korea, Taiwan, | 
China and Japan have all j 
sought to expand their pres- I 
ence in the aerospace industry 
through increased collabora- 
tion with western manufactur- 
ers as wen as through their 
own programmes. 


T he decision by the Aus- 
tralian government last 
week to freeze moves 
towards “open skies” with New 
Eaaianti underlines the extent 
to which progress in the 
broader trade relationship 
between the two countries has 
stalled. 

I Precisely why the Australian 
authorities chose to deny Air 
New Zealand's right to fly 
domestic Australian routes 
from today, which it was not, 
in any case, planning to do 
immediately, is not clear. The 
official ex planation is that the 
two countries have yet to set 
up the borderless visa and cus- 
toms arrangements which 
were due to accompany “open 
skies" and to reach an agreed 
stance on airline ownership 
and control matters. 

But this is not the whole 
story. One possibility is that 
the Australian government 
wants to protect Qantas, the 
country's flagship carrier, 
before floating its 75 per cent 
interest in the airline next 
year. 

A second view is that the 
Australian authorities are 
more interested in achieving a 
further rationalisation of Aus- 
tralasian air services - perhaps 
via an alliance between Air 
New Zealand and Ansett, the 
Australian carrier that already 
flies domestically within New 
Zealand. This would eytmd the 
duopoly in the Australian mar- 
ket across the Tasman. 

The stalling in the broader 
trade relationship between the 
two countries is in sharp con- 
trast to the 1980s, when big 
steps were taken towards the 
creation of a single Trans- 
Tasman trade bloc. In 1983. the 
two countries signed a “Closer 


Economic Relations" (CER) 
pact under which they pledged 
to create a Trans-Tasman free- 
trade zone Cor manufactured 
goods. 

CER was reviewed in 1988 
and the date for free trade 
brought forward by five years 
to July 1990. At that stage, the 
two countries also agreed to 
free trade in services, except 
for certain exempted sectors 
such as aviation and telecom- 
munications. They also prom- 
ised to deepen the trade rela- 
tionship through the 
harmonisation of business law 
and quarantine/customs proce- 
dures. anti pledged to remove 
technical barriers to trade, 
such as product standards 
laws. Such was the Trans-Tas- 
man enthusiasm, that there 
was even casual taiir of estab- 
lishing a common currency 
and stock exchange. 

Since then, the tempo has 
slowed, leaving some impor- 
tant issues unaddressed. There 
has, for example, been no visi- 
ble progress on key taxation 
matters - such as mutual rec- 
ognition of f ranking credits to 
stop double taxation of divi- 
dends paid by Trans-Tasman 
companies - or on corporate/ 
business law. Action in some 
of the more sensitive service 
areas, such as media and tele- 
coms, has also been lacking. 

Explanations for the change 
in pace are various. First, 
while benefits of CER have 
accrued to both countries. New 
Zealand is widely thought to 
have been the greater benefi- 
ciary. Australia is New Zea- 
land's biggest buyer of manu- 
factured goods, taking about 
one-fifth of its exports. By con- 
trast, New Zealand accounts 
for about 6 per cent of Austra- 


Australla: trade with 
New Zealand 


It will be seen by leading international business people in 160 countries worldwide. 

If you would like to promote your organisation to this important audience please 
contact: 


Alec Krtroeff in Athens tel: (1) 671 38 15, fax: (1) 647 93 72 or 
Kirsty Saunders In London tel: (071) 873 4823, fax: (071) 873 3934 


AS bn 

5 - - 


^^9 Exports 
I I Import * 



1991/92 92/93 93/94 

Source: Department Of Foreign Affairs 
end Trade 


lia's exports. 

Indeed, five years ago Aus- 
tralia's Bureau of Industry 
Economics forecast that New 
Zealanders would get around 
tight times more benefit per 
head than. Australians. 

On a longer-term view, 30 
years ago, Australia exported 
to its neighbour four times the 
amount that it imported. The 
balance has shifted dramatic- 
ally in New Zealand's favour, 
in the year to June, Australian 
exports to New Zealand were 
A$4bn (US$2.9bn) and its 
imports were AS3-2bn_ 

That said, the rate or growth 
in Australian exports to New 
Zealand (about 19 per cent) has 
outstripped import growth 
(15-16 per cent) over the past 
two years. Nevertheless, some 
New Zealanders suspect Can- 
berra may have decided that 
the uneven benefits had gone 
far enough and that, in the 
case of the “open skies" policy, 
sepa rate though it is from 
CER, it was time for redress. 

A second factor is more polit- 
ical. The relationship between 
Mr Paul Keating. Australia’s 


prime minister, and Mr Jim 
Bolger, his New Zealand coun- 
terpart is supposedly cordial. 
Nevertheless, Sir Frank 
Holmes, professor emeritus 
with the Institute of Policy 
Studies in Wellington, thinks 
the last Australian election, 
when the Liberal party 
endorsed much of New Zea- 
land's hard-nosed economic 
reform programme, soured Mr 
Keating's attitude towards 
Australia’s neighbour. There is 
a feeling that Mr Keating 
would now like to widen the 
gap between the two. The 
atmosphere has not been 
helped by New Zealand's trum- 
peting of its recent economic 
performance. 

A third factor may be that 
both countries are looking 
towards the fast-growing Aslan 
markets for further export 
growth. This tends to diminish 
the significance of the Trans- 
Tasman relationship 
although CER has been pro- 
moted as a model for the 
region and there are joint 
efforts to link CER to Afta, the 
free trade agreement between 
the Association of South-East 
Asian Nations. At the same 
time. New Zealand and Austra- 
lia are competing to sell them- 
selves as English-speaking 
gateways into the region. 

In New Zealand there is 
some disquiet. There is talk of 
a new lobby group to give CER 
a new push. Mr Ted Woodford, 
the former New Zealand high 
commissioner in Canberra, 
said recently that CER had lost 
its momentum and that it was 
important for moves to be 
made at a political level to 
reinforce its good features. The 
aviation dispute seems a step 
in the wrong direction. 



FT Surveys 


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Nations queue 
to join WTO 

Three countries have formally applied to join timWori d Tfa de 

(SSSoa even though it has yet to come into existence. 

SbfcifiL addition to the 125 nations which took part m the 

Urctijuay Rmind global trade negotiatltms. Slovem* whtob 

Sethe 124th Sember of the General 

and Trade at the weekend, has already opened f 

join the WTO, which is due to start work on January 1 next 

year. Gatt will be absorbed by the new organisation. . . . 

Croatia, which applied for Gatt membership. tost year.iww 
says it wants to join the WTO directly. And Sudan last week 
became the first country not to apply for Gattmember^Jat; 
STbut to aim straight for WTO entry. WTO membership 
requires applicants to sign up to fair trade roles covenuguot 
cSy goods, as Gatt does, but also services and mWfectual 
property. In addition, members must submit schedules of 
market opening commitments for goods and services agreed 
after bilateral negotiations with trading partners. So* 11 ® 19 
nations are continuing to negotiate Gatt accession, mcwdmg 
fihiwa and Algeria which took part in the Uruguay Jtound. Tne 
assumption is that they will all apply to join the WT O in due 
course, rftma and Taiwan are already ne gotiati ng on services 
anH intellectual property in rea d i ness for WTO membership. 

Among the others, the most advanced is Mongolia, where 
agreement on Gatt membership toms is dose. A four- day 
meeting of the working party considering Mongolia s draft 
protocol of accession starts today. Ecuador has also begun 
tariff negotiations marking the final stage of the Gatt entry 
process. Frances Williams, Geneva 

Apec confident on free trade 

Mr Rush Noor, executive director of the Asia-Pacific Economic 
Co-operation (Apec) secretariat, yesterday expressed confi- 
dence that the November 15 Apec summit in Indonesia would 
help accelerate plans to liberalise trade in the Asia-Pacific 
region, despite the reservations of some members. “There are 
certainly some sorts of concerns [on the free-trade plan] 
among the members of Apec," be said. Although it was not 
possible to »««« the impact of such concerns on the summit 
Apec’s goals of trade liberalisation could eventually be real- 
ised. 

Apec groups Australia, the US, Canada, Mexico, Japan, 
rhina Hong Kong, Taiwan, South Korea. Indonesia, Brunei, 
the Philippines. Malaysia, Singapore, Thailand, Papua New 
Guinea and New Zpglgnri- flhrto will become a fall member to 
November. At the summit in Bogor, Indonesia, leaders of the 
18 economies will discuss ways to remove rules that hamper 
trade. China and Malaysia have said they will not accept a 
binding timetable for free trade, while a Japanese trade official 
has said that although Tokyo basically supports freer trade, it 
is not ready to accept blindly all proposed liberalisation mea- 
sures. Reuter. Singapore 

Coca-Cola tries for trade mark 

Coca-Cola yesterday sought to register its bottle as a trade 
mark on the first day of applications under the UK Trade 
Marks Act 1994. The act allows three-dimensional shapes, 
sounds and smells to be protected as registered trademarks for 
the first time in the UK. Eight years ago, Coca-Cola Called in a 
test case under the old Act to register the shape of its bottle. 
Its new attempt is expected to be accepted. 

In tiie first hoar yesterday at the Patent Office in Newport, 
south Wales, 373 applications were made. They included the 
shape of the chocolate in a Toblerone bar, the red telephone 
and jingle used to advertisements for Direct Line, the British 
insurance company, and the smeU of roses impregnated into 
Sumitomo tyres. In all, about 800 applications were made 
yesterday. Roland Adburgham, Wales and West Correspondent 

Taiwan’s trade deficit jumps 

Taiwan's trade deficit with Europe rose to $L36bn (£L49bn) 
during the first nmp months of this year, compared to $752m 
during the same period last year, sparking concern among the 
island's trade authorities. Exports to Europe from January to 
September fell 3.7 per cent to $9.25bn, while imports climbed 
12.1 per cent to $lL61bn. Germany was Taiwan's biggest 
trading partner. Laura Tyson, Taipei 

Japan probes dumping charges 

Japan is sending two missions to Pakistan to investigate 
dumping charges made by the Japanese textile industry 
against exports of Pakistani cotton yarn, a Ministry of Interna- 
tional Trade and Industry official said yesterday. Miti and the 
Ministry of Finance will saul one mission in November and 
another in December. Both missions will check the accounts of 
Pakistani factories to see whether they are exporting cotton 
yam to Japan at a lower price than that at which it sells 
domestically, the Miti official said. Japan plans to make a fin.nl 
decision on the case in February 1995. Reuter, Tokyo 

Contracts and ventures 

■ Siemens, the German electrical and electronics group, has 
set up a joint venture to Zagreb with the Croatian industrial 
company Koncar Holding to make power transformers and 
components. Siemens will be the majority shareholder in the 
new company, Koncar Power Transformers, and will take a 1 
per cent stake in Koncar Holding. Initially, the venture is 
expected to have sales of DM25m ($16.5m) a year, mainly in 
Croatia and Slovenia. Andrew Baxter, London 

■ Asea Brown Boveri has received an order worth approxi- 
mately S150m to build a further 370MW combined-cycle gas 
and oil fired power station at Bun dang, near Seoul, in South 
Korea. The order was received from Kepco, the South Korean 
national electricity utility. The plant, which will begin operat- 
ing in 1995 in single-cycle mode, will be equipped with three 
ABB type-GTllN gas turbine generating sets and a steam 
turbo set. Reuter. Seoul 

■ A SlOOra contract to upgrade and expand a chemical pulp 
mill at Mdnsteras in southern Sweden has been awarded to 
Norway's Kvaerner group by Sweden's S5dra Cell The con- 
tract conies at a time of rapiding increasing pulp prices and 
rising demand for environmentally friendly totally chlorine 
free (TCF) pulp. The Norwegian company will supply a contin- 
uous digester, a TCF bleach plant and a boiler for the recovery 
of chemicals and energy. The moves will lift TCF pulp capac- 
ity at Monsteras by 200.000 tonnes a year to 535,000 tonnes by 
mid-1996. Christopher Broum-Humes, Stockholm 

■ Spanish construction firm Dragados y Construcciones has 
won a Pta35bn (5278m) contract to expand the Saratov refinery 
m central Russia. The work, to be done over four vears. 
follows two basic engineering contracts. Chemical Bank the 
Russian American Investment Bank and Spain's Banco Cen- 
tral Hispano are financing the project. Reuter, Madrid 

■ Thomson-CSF has won a contract worth Schl^bn (Sll3m) 
to supply 22 radars to the Austrian army. Reuter. Vienna 


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FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


NEWS: INTERNATIONAL 


Pin-up will help re-shape Japan’s politics 

The nine main opposition parties are seeking a new name, writes William Dawkins 


J apanese politics has become 
enlivened by Ms Frame Hoso- 
kawa, a former pin-up whose cur* 
vaceous shape elicits the envy of half 
the electorate and the admiration of 
the rest 

Ms Hosokawa, unrelated to the for- 
mer prime minister of that name, has 
been chosen by Japan's nin e main 
opposition groups to join a panel to 
choose a name for the mega-party 
they plan to form next month. 

They hope it win deliver the final 
blow to the conservative Liberal Dem- 
ocratic party's weakened monopoly 
on power. It may mark a step from 
the present arcane wrangUngs, which 
has left nearly 45 per cent of the elec- 
torate unable to support any political 
party, to a mare coherent balance of 
power between two or three evenly- 
matched players. 

Ms Hosokawa, a television personal- 
ity who whimsically confesses she 
knows nothing of politics, is a 
walk-on player in the newest of the 
series of realignments that have over 
the past 18 months, opened cracks in 
Japan's power structure and let in 
much fresh air in the process. 

The starting signal for the latest 
realignment came on Sunday, when 
the party that triggered the present 
upheavals, an LDP breakway group 
called the Japan New party, dis- 
banded two-and-a-half years after its 
formation, in order to pave (he way 


for a merger with its eight opposition 
allies. 

The marriage of the nine is due to 
take place at what is billed to be a 
spectacular celebration on December 
10 in Mmato Murai 21, a futuristic 
complex around the world's most 
expensive b uilding in Yokohama. The 
organisers no doubt hope it will sym- 
bolise the new party's trend«etting 
aspirations. 

Ms Hosokawa and the other 15 
members on the opposition’s party- 
naming panel are due to announce 
the title of the new group, to an 
orchestral fanfare in Minato Murai 21, 
conducted by Mr Tsutomu Hata, for- 
mer prime minister and karaoke 
supremo. The opposition nine formed 
a parliamentary voting bloc last 
month rpyfar the n afnp of Kaikakn, or 
renovation. They have been provision- 
ally named by the local media as 
Shin-Shinto, or New-New party. 

Nobody has suggested a catchier 
alternative, though a Y 200,000 (£L273) 
mystery gift from the opposition and 
a tour of parliame nt awaits the win- 
ner of a public competition to find 
one. The razzmatazz surrounding the 
birth of the New-New party, or what- 
ever it wifi, be called, is a consequence 
of the sharper competition for power 
emerging ahead of a new electoral 
system and tougher controls on hind 
raising to take effect from January. 

The old system, in which assidu- 


ously cultivated personal relation- 
ships are what counts, is being chal- 
lenged by the vote-catching smile of 
Ms Hosokawa and the public image of 
her professional political colleagues. 
Ideologies on each side are about the 
same, so presentation is what 


A new opposition 
would lead to a 
more coherent 
balance of power 


matters. This is starting to look like a 
US election campaign, the Nihon Kei- 
zsd Shimbun daily complains. 

To accuse Japanese politics of 
becoming like the US may be looking 
a long way ahead. Yet it is true that 
the the present 13-party Babel that 
inhabits Japan's lower bouse of par- 
liament is embarking on the final 
stage of the search for a more orderly 
balance of power. It might even, say 
supporters of reform, pave the way 
for an ideological debate about 
Japan’s future. 

All Involved in Japan's political 
realignment know they must com- 
plete their regrouping soon. This is 
partly because the new system, which 
favours large parties, will take effect 
(barring the unexpected) in two 
months. To add to the urgency. Japan 


faces local elections next April fol- 
lowed by elections for half the upper 
house to July. A general election 
could come at any time, depending on 
the whim of the government and the 
New-New party's skill in wooing 
defectors horn the ruling side. 

So it is that the old and some new 
relationships on both sides of parlia- 
ment have been melted fast by Ms 
Hosokawa' s smile and by the political 
heat to come. Soka Gakkai, the influ- 
ential Buddhist movement, 
announced last week that it will aban- 
don its traditionally exclusive support 
for Komeito. the Clean Government 
party, which Soka Gakkai formed 30 
years ago and is now a mainstay of 
the opposition. 

Mr Koshiro Ishida, Komeito’s 
leader, even said he would support a 
former LDP man as candidate for 
leadership of the New-New party , so 
removing one of the main obstacles to 
agreement on a leader for the opposi- 
tion nine . Main candidates include Mr 
Hata and Mr Toshiki Kaifu, another 
ex-prime minis ter. Both are former 
LDP heavyweights. 

Existing alliance?; are s imilar ly up 
for renegotiation among the three- 
party ruling alliance of LDP, Social 
Democratic party and New Harbinger 
party, former enemies who joined 
forces last June to oust Mr Hata's 
coalition government. The shared 
interests of the three government par- 


Japan’s TV 
ratings row 


Criminal gun rules ‘free’ Cambodia 


worsens 


After 23 years of civil war nearly everyone is armed, writes Jonathan Miller 


By Emiko Terazono m Tokyo 


A row In Japan over television 
audience ratings is set to inten- 
sify with the launch today by 
Nielsen Japan, ^lie Japanese 
arm of the US research group, 
of an automated system which 
measures individual viewing. 

Although Japan has the 
world's second largest televi- 
sion advertising market, mar- 
keting techniques used by 
advertising agencies and corpo- 
rate advertisers are said to be 
unsophisticated compared to 
other developed markets, as 
television ratings have been 
based on viewing households 
rather than individuals. 

Nielsen’s plan, announced in 
August, has met strong opposi- 
tion from the country’s large 
television networks and lead- 
ing advertising agencies, 
which own shares in Video 
Research, a television ratings 
company which has held a 
virtual monopoly of the busi- 
ness. 

Some networks, including 
Nippon Television Network, 
are threatening to end existing 
contracts with Nielsen which 
supplement Video Research’s 
data, unless the ratings group 
backs off from its 
plan. 

Advertisers and foreign 
advertising agencies, on the 
other hand, are supporting 
Nielsen's move. They have 
been frustrated by the lack of 
market research and feel the 
changes, which will give them 
timely data on the age and gen- 
der group of programme view- 
ers, are Long overdue. 

Bates Japan, part of the Saat- 
chi and Saatchi advertising 
group, became the first adver- 
tising agency to subscribe to 
the Nielsen service being 
offered from today. “We simply 
owe it to our clients bo give 
them the most accurate infor- 
mation available about their 
media investment," said Mr 
Khn Walker, president of Bates 
Japan. 


M r Benoit Duchateau- 
Arminjon’s La Casa 
restaurant in Phnom 
Penh set up the Cambodian 
capital's first pizza delivery 
service in September. The trou- 
ble is. last orders have to be 
phoned in well before 8pm 
because even La Casa's pizzas 
are not worth dying for. 

Mr Duchateau-Arminjon 
says it is too dangerous for his 
staff to be out on their Handas 
after eight The pages of the 
Phnom Penh newspapers tes- 
tify to the alarming murder 
rate in the capitaL Just about 
every day people are shot dead 
just for their mopeds. 

Prince Norodom Ranariddh, 
the senior prime minister, has 
tired of what he sees as the 
negative reporting of security 
in his country. He frequently 
lectures journalists on compar- 
ative crime rates around the 
world. Violent crime in New 
York, he asserted recently, was 
10,000 times worse than in 
Cambodia. 

But such dubious statistics 
provide cold comfort to those 
unfortunate enough to be 
caught in one of the capital's 
terrifying regular gun-battles. 
Last month an attempted 
motorcycle robbery erupted 
into a small war outside this 
correspondent's bouse in sub- 
urban Phnom Penh. It was the 
third shooting incident in the 
street in as many weeks. 

For 15 minutes, bullets rico- 
cheted off the road and gate- 
posts. A waiting taxi was 
caught in the gunfire. Its win- 
dows were shot out and It was 
riddled with bullets. Local resi- 
dents who did uot join the fray 
threw themselves down on 
their floors. Amazingly no rmf> 
was hit 

In modem Cambodia, gun 
law rules: nearly everyone 
owns one. and to prove it they 
all fire into the clouds during 
thunderstorms. After 23 years 
of civil war, it is a buyers' mar- 
ket when It comes to procuring 
weapons, ammunition and 
explosives. Anyone can buy a 




fgLyrv y'- : 




.mm,. ■ 




A soldier guards a train at Kampot, southern Cambodia, as passengers get aboard through the 
windows. In rural areas the presence of government soldiers often provokes fear h* 


Kalashnikov assault rifle and a 
clip of ammunition for $50 on 
the black market. 

The United Nations peace- 
keeping mission in namhndia 
finished just over a year ago. It 
was hailed as a success 
because the UN had supervised 
elections which installed a 
democratic government. But 
the UN foiled to deliver on its 
mandate in one vital area: its 
peacekeepers did not demobi- 
lise the four factions, whose 
armies were still armed to the 
teeth. 

The Khmer Rouge have 
returned to the battlefield and 
remain a threat to national 
security. But the Royal Cambo- 
dian Armed Forces - an amal- 
gamation of the three other 
factions - are just as danger- 
ous. Unpaid and undisciplined, 
they roam the countryside, ter- 
rorising villagers, extorting 
money, running protection 
rackets, robbing, looting and 

killing. 

Last month a report by Mr 


John Holloway, the former 
Australian ambassador to 
Cambodia, was leaked to the 
press. In his assessment of the 
security situation he wrote: 
“Rural villagers are more 
scared of government forces 
than they are of the Khmer 
Rouge.” Few informed observ- 
ers would disagree. 

"Power belongs to those who 
have guns," says a human 
rights investigator in Phnom 
Penh. “The military are preda- 
tors in this country: 60 to 70 
per cent of abuses against the 
population are committed by 
Die armed forces, but they are 
outside the law.” 

Earlier this year, a UN 
human rights report alleged 
that the powerful military 
intelligence bureau was 
involved in organised crime, 
contract killing, torture and 
extrajudicial execution in the 
north-western province of Bat- 
tambang- Senior military offi- 
cers were directly implicated. 

None of those named in that 


report was sacked. Human 
rights groups say government 
investigations have been noth- 
ing but whitewash. Their con- 
clusion: that the lack of politi- 
cal will to stop such criminal 
activity reflects the govern- 
ment's fear that it will not 
receive western military aid if 
the allegation stick s. 

The many local and interna- 
tional human rights groups 
operating in Cambodia say the 
army is out of control. Many of 
the reported motorcycle and 
car thefts in the capital involve 
men in military uniforms. Last 
month a Land Cruiser was sto- 
len from one UN agency, rt 
turned up in a villa owned by a 
colonel from military intelli- 
gence. 

What is more worrying is 
that bundles of documented 
circumstantial evidence point 
to the fact that the rise in vio- 
lent crime is being used to 
camouflage politically moti- 
vated killings. The outspoken 
editor of a popular Khmer- 


language newspaper was shot 
dead in broad daylight recently 
as he rode his motorcycle 
along a busy Phnom Penh 
street Local journalists live in 
fear. 

The next day, a car belong- 
ing to a UN h uman rights cen- 
tre employee was stolen at 
gunpoint. The employee’s five- 
year-old daughter was 
abducted and shot in the leg. 
The centre concluded that the 
attack was more than a car 
theft gone wrong. Other 
human rights groups believe 
the incident was in reprisal for 
the centre's report on military 
abuses in Battambang. 

No one has been arrested for 
either crime. "And no one will 
be." says a humata rights 
worker. "Because the problem 
is, they'll say who ordered 
them to do it." There are 
rumours that those behind the 
killings occupy untouchable 
positions within the political or 
militar y hierarchy. 

The hands of police investi- 
gators might be tied, but the 
forces of law and order also 
have a pitiful reputation. The 
police run protection rackets 
too and some local residents 
find they have been mysteri- 
ously burgled when they do 
not pay up. Drunken officers 
are often trigger-happy too. 

Cambodia is one of the poor- 
est countries in the world and 
the rewards of violent crime 
are considered worth the risks 
- which are not so high given 
that criminals can buy their 
way out of a murder charge for 
less than $3,000. The cost or 
hiring a contract killer is much 
less. 

As one Cambodian political 
analyst puts it: “Today we 
have democracy, a free press 
and a free market, but people 
now ask how free we really 
are.” The Cambodian people - 
who for successive generations 
have lived under god kings, 
military dictators, fanatical 
Maoists and communists - 
have been left to conclude that 
liberty is anarchy. 


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INTERNATIONAL NEWSDIGEST 


Kashmiris seize * 


ties are surprisingly strong, thanks hi 
the SDFs decision to dump most of 
its old foreign, defence and fiscal poli- 
cies. Yet, gutted of its core ideologies, 
the SDP now looks ready to implode. 

Mr Tomilchi Murayama, the first 
SDP prime minister in 47 years, 
admitted as much recently when he 
assented to plans by his party’s 
majority right wing to form yet 
another new party. This would 
embrace like-minded politicians from 
government and opposition, of obvi- 
ous interest as a potential ally for the 
new-new party. 

Mr Ichiro Ozawa, power behind the 
scenes of the New-New party, is tenta- 
tively seeking to woo the SDP defec- 
tors to cross the floor of the house 
and rejoin him, just as the SDP did, to 
its regret, in the previous two coali- 
tion governments. 

According to Tokyo political gossip, 
Mr Sadao Yamahana, leader of the 
defectors from the right-wing of the 
socialists, might be offered the chance 
of beco ming prime minis ter of a 
future New-New party government, to 
help him make up his mind whose 
side to join. 

The prospect of a new government 
under a prime minister from the same 
party as the old one might sound fan- 
ciful. Yet it illustrates the high-stakes 
bargaining now under way as Japan's 
fragmented political factions struggle 
to reorganise along clearer lines. 


backpackers 


A Kashmiri militant group holding three ba c kpack e rs hostage 
has threatened to behead them if 10 of their own mra are not 
freed from jail the United News of India agent* sud. Earlier, 
a British Foreign Office spokesman said Britons and an 
American had been captured. He toeth^ 

Paul Ridout of Dorset. Miles Croston of Budonghamshire and 
Rhys Partridge of Suffolk. But hours after the kulnap claim 
was received, police said the American was found near New 
Delhi chained to an iron post, unharmed. Bela Joseph Nuss 
told police he had been kidnapped 10 days before. 

Voice of America radio received letters containing the kid- 
nap claim, accompanied by photographs of the hostages held 
at gunpoint The group, calling itself Al Mid, said tt was 
based in the tribal areas of Afghanistan- Officials smd they 
had not previously heard of Al Hadid, but five of the men. 
whose freedom was sought were from milit a n t groups fighting 
in Kashmir. Reuter, New Delhi. 


Singapore sees cabinet woe 


Singapore’s prime minister yesterday l a men ted the difficulty 
of luring talented people into government jobs. Mr Goh Chok 
Tong told parliament the country's government was in danger 
of slipping into mediocre hands that could imperil its eco- 
nomic success. “The task of cobbling together a good cabinet 
is getting more difficult as competent people prefer to work in 
the private sector for better salaries." he said, when present- 
ing a piatt for big salary rises for ministers and civil servants. 
“Unless we fond several potential ministers ^oon, we will have 
a serious succession problem by 2000.” AP, Singapore 


HK video row hots up 


Hong Kong broadcasting authorities showed their hand in an 
industry argument over how new video-on-demand technology 
should be regulated, saying it did not need to be covered by 
broadcasting laws. Wharf Cable, the territory's exclusive pay 
television licensee, argues video-o n-demand is a public broad- 
cast and providers should be licensed under broadcasting 
laws. Mr Alex Arena, director-general, telecommunications, 
raid video-on-demand was considered a point-to-point service 
and not a public broadcast “Our present thinking is that it is 
not appropriate to apply broadcasting regulation to a point-to- 
point service specifically controlled by the customer, 1 ' Mr 
Arena said. “The content of transmission should fell in the 
ambit of broadcasting regulation only if transmission is meant 
for general reception.” Reuter, Bong Kong 


Costliest jadeite necklace 


» The Mdivani jadeite necklace remained the 
costliest piece of jadeite jewellery ever sold at 
. auction when it realised HK$33m <£2.6m) at 
: Christies Swire in Hong Kong yesterday. The 
: 27 brilliant green beads are of exceptional size 
and purity, and are believed to have been cut 
from the finest gem ever found. Fashioned into 
a necklace by Cartier for Ms Barbara Hutton, the Woolworth 
heiress and valued by Cartier at $500,000 in the 1930s, the 
necklace was sold from the estate of the Princess Nina Mdi- 
vani at Christies Geneva in 1988. Yesterday it was sold by a 
South-East Asian collector to Mr Sammy Chow of the Hong 
Kong jewellers Trio Pearls. Susan Moore, London 


US-China arms talks progress 


Talks between the US and China on arms control had helped 
to narrow differences, the QS side said yesterday. Mr John 
Holum, director of the US Arms Control and Disarmament 
Agency, said he had invited vice-foreign minister Liu Huaqiu 
to Washington in the spring for more talks. One of the issues 
discussed in detail was reaching an early agreement on a 
comprehensive test ban treaty. He repeated US concern, about 
China's testing, which included the second test blast in four 
months at the beginning of October. Other issues discussed 
Included starting negotiations on a fissile material cut-off pact, 
an idea from President Bill Clinton that calls for all countries 
to cease production of plutonium or highly enriched uranium 
for weapons purposes. Reuter. Beijing 


Australian budget deficit 


Budget twianoe (ASbn) 


Australia posted a budget deT- 
Australia icit of A$4511bn (£2.G5bn) for 

the first three months of the 
Budget balance (ASbn) fiscal year to June 30. 1995, 

5 . . against AJ2.962bn for the 

il ^ same period a year ago. 
Finance Minister Kim Beazley 
0 said. “The relatively high 

S« nfl ill ‘ cumulative deficit to the Sep- 

tember quarter of A$4.5llbn 
5 reflects lower revenue 

W jjjfl j||| collections, largely due to 

1|| timing factors," Mr Beazley 

„ 10 m3 said. Spending for the year to 

■ Hi m date was AS3L619bn, up 4.5 

PI per cent from a year ago. The 

1990 si 92 93 94 May budget forecast of a full- 

95 of ASlI-Jlm 

assumes full-year spending 
growth of 5.7 per cent Three-month revenue to September was 
AS27.108 bn, down 0.7 per cent, compared with 8.4 per cent 
budgeted growth. Reuter, Canberra 


1990 91 92 93 94 

- 01 - 02 - 93 - 94-95 
Source; National Government 


Japan building orders fall 


Orders received by Japan’s 50 main construction companies in 
September fell 7 per cent from a year earlier, the first drop in 
three months, the Construction Ministry said. Reuter. Tokyo 


Solomons without a premier 


The Solomon Islands was without a prime minister yesterday 
after Mr Francis Billy Hilly resigned 18 days after refusing to 
step down when sacked by the governor-general. It is unclear 
who will become the new prime minister. The former Prime 
Minister Solomon Mamaloni had been sworn in as a caretaker 
premier on October 25. But it was unclear if Mr Mamaioni's 
caretaker role remained valid. 

Governor-General Moses Pitakaka was yet to make a state- 
ment on Mr HlUy's resignation, and is now expected to call for 
nominations. Political analysts say Mr Hilly's stance against 
alleged exploitation of tropical forests by foreign logging com- 
panies had caused his loss of support. His resignation ended 
almost three weeks of political crisis, which at times meant 
the country bad two prime ministers. Reuter, Honiara 




\V- 






Sak 


mure 


trial 
in r 







FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


INTERNATIONAL 





! h 

k 


India aims 
« to curb 
currency 
inflows 


By Stefan Wagstyl 
In New Delhi 

India has ordered companies 
raising funds on international 
capital markets to keep the 
money abroad until it is 
needed for specific projects, in 
a move designed to curb a 
huge foreign currency flow 
into the country. 

Groups will also be banned 
from issuing warrants, instru- 
ments which give investors the 
right to buy shares at a fixed 
price at a future date, to 
increase the authorities' con- 
trol over Euro-issues. 

The policy announced at the 
weekend comes after an 
unprecedented surge in India’s 
foreign exchange reserves from 
about $lbn (£6l7m> at the time 
of the 1991 balance of pay- 
ments crisis to $19bn. The 
inflow has been primarily 
caused by foreign fund manag- 
ers investing funds in the 
Indian stock market and in the 
overseas stock and bond issues 
of Indian companies. 

While the reserves, covering 
the cost of nine months' 
imports, have given India a 
v valuable cushion against 
shocks in on and other interna- 
tional markets, the rush of 
money into India has fuelled 
domestic inflation. 

The annual rate of increases 
in wholesale prices has fallen 
from a high of about 11 per 
cent earlier this year to 9 per 
cent, but the finance ministry 
wants it below 7 per cent 
Indian companies, which 
raised $l.4bn in the year to I 
March from international I 
equity offerings, have collected 
a farther Sl.lbn in the first six 
months of the 1994-95 financial 
year. Applications for issues 
worth another $5bn are 
waiting for government 
approval 

A finance ministry official 
said the new rules would 
enable India to manage its bal- 
ance of payments more easily. 

A senior official said the coun- 
try was importing inflation 
through the sustained inflow 
of foreign exchange from Euro- 
market issues. In future a sud- 
den rush of issues would no 
longer affect the foreign 
exchange accounts. 

The ministry, which 
approves issues under guide- 
lines established in May. said 
companies would be required 
to submit quarterly audited 
statements on their Euro- 
issues and the uses to which 
the funds were being put This 
is to prevent money being 
diverted for unauthorised pur- 
poses such as financial market 
investment 

As for the ban on warrants, 
officials said the restriction 
was being imposed because 
tight rules had recently been 
established on the domestic 
issue of warrants to prevent 
business families, which con- 
trol many Indian companies, 
issuing warrants to themselves 
at low prices. The ban on over- 
seas warrant issues would pre- 
vent companies circumventing 
the domestic rules, said the 
officials. 

In a separate measure, the 
ministry relaxed a ban on 
financial institutions tapping 
the international markets, giv- 
ing long-term development 
banks the right to make issues. 

• India plans further to ease 
foreign currency dealing rules 
and cut more of the red tape 
that has deterred some foreign 
investors. Renter reports from 
New Delhi. “We may introduce 
new products for dealers to 
manage their foreign exchange 
risk," Mr OJ?. Sodhani. execu- 
tive director of the Reserve 
Bank of India, said, mentioning 
cross-currency options as the 
broad area in which changes 
were desirable. India switched 
to market-based foreign 
exchange dealings in 1992 by 
making the rupee fully con- 
vertible on the trade account 
under a three- year-old eco- 
nomic reform programme- 
See capital markets 


Wary businessmen welcome 



Casablanca talks offer good contacts, but doubts remain. Julian Ozanne and Francis Ghiles report 


I nternational businessmen 
and bankers yesterday 
lauded recent political and 
macroeconomic changes in the 
Middle East but delivered a 
hard-headed assessment of fur- 
! ther reforms needed to open 
economies and stimulate large 
flows of investment into the 
region. 

While more than 1,000 busi- 
nessmen have come to the Mid- 
dle East and North Africa Eco- 
nomic Summit in Casablanca, 
most are likely to go away 
with a pile of business cards 
and the seeds of future invest- 
ments rather than signed con- 
tracts. "We've made some good 
contacts here, though whether 
anything will actually tran- 
spire only time will tell " said 
Mr Abraham Glezeman, presi- 
dent of Inter-Power, a US com- 
pany seeking to develop a 
power plant in the Gaza Strip. 
“But it exceeded my expecta- 
tions." 

For most businessmen at the 
Casablanca casbah. peace 
moves in the region are a nec- 
essary but not sufficient condi- 
tion for greater investment and 
better integrated economies. 
They want further reforms, 
including speeding up stalled 
privatisation programmes, 
removing trade barriers - 
among them the Arab eco- 
nomic boycott of Israel - abol- 


ishing excessive import restric- 
tions and laws which restrict 
foreign equity holdings, rein- 
forcing intellectual property 
rights, guaranteeing full repa- 
triation of profits and divi- 
dends, granting better tax 
holidays and ensuring interna- 
tional mechanisms For the res- 
olution of disputes. 

Mr Tom Vaughan, a director 
of Unilever, said: “Most busi- 
nesses have many places 
where they can invest their 
money and they are looking for 
a business environment of rea- 
sonable risks and good returns. 
It's still too early for specific 
deals but its very good to see 
Arab and Israeli delegations 
together talking about busi- 
ness, trade and economics." 

Mr Sandy Allan, president of 
Coca-Cola Middie East, said his 
company had invested S350m 
in the region in the past five 
years and was seeking further 
expansion: “There are prob- 
lems but the potential for prof- 
itable businesses in the Middle 
East and North Africa is still 
excellent." 

Some bankers said they were 
enthusiastic about the 
strengthening of emerging 
markets in the Middle East 
especially in Morocco. Jordan 
and Israel. Mr Daniel Smaller 
of Union Bank of Switzerland's 
emerging equity markets divi- 



King Bassan greets Warren Christopher, US secretary of state, at his palace in Casablanca 


sion, said the conference “sup- 
ports the view that these are 
exciting markets going 
through positive changes. For 
the first time the additional 
risk of geopolitical instability 
has been reduced, so price/ 
earnings rations are expand- 
ing, providing investors with 
opportunities to participate." 

However, Sir William Ryrie. 
executive director of Ea rings, 
said that of a total §62bn. of 


equity' flows into emerging 
markets last year, only $200m 
went to tiie Middle East. “The 
peace process slightly 
improves our type of busi- 
ness.” he said. “But the Middle 
East is way behind the game." 

It emerged yesterday the 
first merchant bank to be set 
up in North Africa has just 
received approval from the 
central bank in Tunis. Interna- 
tional Merchant Bank will 


have capita] of between S3m 
and $5m find brings together 
individual shareholders from 
North African countries, insti- 
tutions like the World Bank’s 
International Finance Corpora- 
tion which has contributed 
$300,000. and two European 
commercial banks - Societe 
Marseillaise de Credit and Cre- 
ditanstalt Finanziaria, the Ital- 
ian subsidiary of Austria’s Cre- 
ditanstalt Bankverein. 


But potential investors in 
the tourism sector are most 
likely to leave Casablanca with 
real deals in their pockets. 
Unfolding Middle East peace 
has increased public percep- 
tions of regional stability, 
opened borders and unlocked 
the development of multi-desti- 
nation packages. Delegates are 
expected to establish a regional 
tourism promotion and mar- 
keting body. 

Mr Basil Jardaneh. chairman 
of Royal Jordanian, Jordan's 
state-owned airline, said it was 
adding 20 flights next month. 

Mr Peter Till, a vice-presi- 
dent of Marriott, said he was 

spending time at the confer- 
ence consolidating a planned 
project in the Gaza Strip for a 
hotel with a private Palestin- 
ian company. He said Marriott 
was aggressively seeking 
opportunities in Israel and 
looking at other Middle East 
countries. "We are seeing 
increased stability and an 
improved business climate and 
we want to do more business.” 

Some companies 3 re con- 
cerned about appeals by Israeli 
and Palest inian leaders for the 
private sector to alleviate pov- 
erty' in Palestinian areas. “How 
do we square this with seeking 
good returns ou investment?” 
asked Mr Peter Peterson, chair- 
man of the Blackstone 


investment bank of the US. 

The extent of the difficulties 
ahead for the Middle East in 
attracting private capital was 
demonstrated by the absence 
of Japanese companies. Mr 
Rild Kogure, head of Middle 
East division of Itochu, the 
large trading house, said only 
1.2 per cent of total Japanese 
investment overseas went to 
the Middle East, largely due to 
a cultural gaps between Arabs 
and Japanese and the absence 
of high-level political links. 

Japanese and other foreign 
companies will be critical to 
financing and executing the 
multi-billion dollar infrastruc- 
ture projects being put forward 
at the summit. Mr Anthony 
Pellegrini, manager of the 
World Bank infrastructure 
unit, said money from domes- 
tic budgets and concessional 
finance was “nowhere near suf- 
ficient ro deal with the infra- 
structure needs of the region”. 

Mr Eberhard von Koerber. 
president of Asea Brown 
Boveri. the Swiss -Swedish 
engineering combine, said the 
region needed SSObn over 10 
years to meet basic power gen- 
eration needs alone and 
warned: “If the regulatory 
environment does not allow 
capital to make adequate 
returns, then we have to be 
very - cautious." 


Bakhtiar The M340 has 

Al* The 4340 is lire longest rang 

Alim llvl netwnrfc for flip, world’s airlines. 


trial starts 
in Paris 

By John Ridding in Paris 

The alleged assassins of Iran's 
former prime minister, Mr 
Shah pour Bakhtiar, will go on 
trial in Paris tomorrow in a 
case which is likely to further 
strain relations between 
Prance and Iran. 

The trial will focns on 
whether Mr Bakhtiar, the last 
prime minister of the late 
Shah of Iran, was killed on the 
orders of Tehran's Islamic gov- 
ernment. Three Iranians, 
including a relative of Mr Ali 
Akbar Hashemi Rafsanjani. 
the country’s president nil! 
answer charges for the 1991 
assassination. Six others will 
be charged in absentia. 

The Iranian government has 
denied any involvement in the 
fri llin g , which was one of doz- 
ens of assassinations of oppo- 
nents of the Tehran regime 
over the past decade. Bat Mr 
Jean-Lonis Brngutere, a senior 
investigating judge, claims 
that Iran's secret services 
were involved in the crime. 

The French government has 
implemented tight security at 
the Palais de Justice, where 
the trial will take place. The 
case, to be heard by seven 
magistrates, is expected to last 
about a mouth. 

Relations between France 
and Iran have been damaged 
by Tehran’s support for Mos- 
lem fundamentalists seeking 
the overthrow of the military- 
backed regime in Algeria, a 
former French colony, and by 
a French crackdown on 
Islamic f undam entalism . 

Following the assassination 
of five French nationals in 
Algeria in Augnst, the French 
interior ministry introduced 
sweeping stop-and-search 
operations and interned 26 
suspected Moslem militants. 
Last week the government 
said it would enforce a ban on 
wearing Islamic headscarves 
in secular state schools. 

Twenty-five students have 
been expelled from French 
schools for wearing head- 
scarves. Mr Franpois Bayrou, 
the education minister, said he 
had ordered schools to bar 
"ostentatious religious sym- 
bols" and said there were few 
alternatives to expulsion when 
persuasion failed. 

The move has brought an 
angry reaction from Iran and 
from other Islamic countries. 


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10 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


NEWS: UK 



Pressure for compromise on Post Office sell-off 


By Kevfei Brown, 
Poetical Correspondent 


Mr Kenneth Clarice, UK chancellor, 
is under pressure from senior minia- 
tes to accept compromise proposals 
for Post Office commercialisation 
within the public sector. 

They hope to agree a plan in time 
for a bill to be included in the 
Queen's speech an November 16 set- 
ting out the government's legislative 
programme for the coming parlia- 
mentary session. 


The cabinet's industry committee 
is expected to meet tomorrow to 
decide how to give the Post Office 
greater freedom without risking 
defeat at the hands of backbench 
Conservative rebels opposed to pri- 
vatisation. 

Ministers hope the cabinet will on 
Thursday be able to approve a par- 
tial sale. But a decision may be put 
off until Thursday next week if the 
committee Mis to thrash out a com- 
promise. 

Mr John Major is understood to 


have told ministers that, if neces- 
sary. the Post Office bill could be 
held back from the Queen’s speech 
and introduced later in the parlia- 
mentary session. 

Mr Michael Heseltme, trade and 
industry secretary, remains commit- 
ted to the sale of 51 per cent of the 
Post Office, which, he believes would 
send a powerful signal of the gov- 
ernment's continuing commitment 
to economic reform. 

But the government's business 
managers have warned ministers 


that privatisation would be opposed 
by up to eight Tory backbenchers, 
implying certain defeat for the bill 
unless some of the nine Ulster 
Unionist MPs abstained. 

Mr Heseltme will meet the rebels 
tonight in a final effort to persuade 
them that fears for the future of 
rural post offices and the universal 
pricing system have been overstated. 

The compromise proposals focus 
on the sale of a minority sharehold- 
ing combined with freedom from 
government borrowing controls. 


Such a structure would keep the 
Post Office hi the public sector while 
satisfying management demands for 
greater freedom to compete. 

There is substantial support for a 
compromise among senior ministers, 
many of whom doubt the wisdom of 
risking a parliamentary defeat in 
pursuit of privatisation. However, 
the option of commercial freedom 
within the public sector has been 
vigorously opposed by Mr Clarke on 
the grounds that state-owned compa- 
nies cannot be excluded from the 


public sector borrowing require- 

Other compromises being dis- 
cussed include a phased sate of a 
majority holding, which would 
ministers time to convince bact- 
benchers that privatisation need not 
threaten rural services. 

Rebel backbenchers said they 
would vote for a minority sate. Tfly 
main concern is to keep the Royal 
Mail in the public sector," said Mr 
Stephen Day, Conservative MP for 
Cheadte. 


Milk price 
rises after 


industry 

shake-up 


Deregulation, of the UK milk 
market has already hit con- 
sumers with an increase of 2 p 
(3c) per pint in some doorstep 
deliveries yesterday and a sim- 
ilar rise today in some super- 
markets, Alis on Maitland 
writes. 

Tesco. the supermarket 
group, announced that a pint 
of fresh milk would go up by 
2p, or 7.7 per cent, to 28p 
because of the rise in the cost 
of raw milk resulting from the 
marketing arrangements 
which take effect today. 

It said it would keep cheese 
price increases to 5 per cent in 
spite of a 20 per cent rise in 
wholesale milk prices to cheese 
makers. 

British Cheddar will rise 
shortly by lOp a pound to £2.05 
and butter by about 8p a pound 
in a few weeks. _ : 

Tesco blamed the * 

on “inflationary p: 
caused by the new 
system, which replaces the 
statutory Milk Marketing 
Board with a voluntary produc- 
ers’ co-operative, Milk Marque. 

The British* government 
argues that, the new system 
will lead to a shake-out of 
excess capacity devoted to low- 
value commodity products 
such as. butter and skimmed 
witlk powder. This will create a 
more efficient industry and 
benefit consumers by reducing 
Britain’s reliance on high val- 
ue-added dairy imports, it says. 



Engineers from English Heritage and contractors John Mowlem Construction yesterday started work on the £i4m restoration of the 
19th century Albeit Memorial in Kensington Gardens, central London. The centrepiece is an 18ft statue of the Prince Consort ap 



Lex, Page 20 


IRA accused on road checkpoints 


Sir Patrick Mayhew, the senior 
UK minister responsible for 
Northern Ireland, called yester- 
day for an urgent police report 
amid claims that armed and 
masked members of the Irish 
Republican Army mounted 
checkpoints on roads, in the 
city of Londonderry over the 
weekend. Sir Patrick said he 
viewed the claims “extremely 
seriously". 

He gave the firm impression 
that tiie results of the police 
investigation, and continuing 
IRA punishment attacks in 
nationalist areas of Northern 
Ireland, could have a bearing 


The stock exchange and the 
headquarters of the Lloyd's 
insurance market were among 
potential London targets for 
an ERA bombing camp ai g n 
planned for earlier this year, a 
jury at the Central Criminal 
Court was told yesterday. Lists 
of military, political and eco- 


nomic targets were found writ- 
ten cm cigarette papers inside 
the wallet of a college lecturer, 
a senior government law offi- 
cer stated. A plea of not guilty 
to plotting to cause an explo- 
sion was entered on behalf of 
Mr Feilln O’Hadhmaill, aged 
35, of Accrington, Lancashire. 


on whether preliminary talks 
between UK government offi- 
cials and the Sinn F6in party - 
the political wing of the IRA - 
start before Christmas. 

There were several reports to 
police on Friday and Saturday 


night that armed and masked 
men claiming to be from the 
IRA set up checkpoints and 
stopped motorists. 

Mr Martin McGuinness, a 
senior member of the executive 
of Sinn Ffin, claimed that the 


actions were “Hallowe'en 
pranks". Police said they veri- 
fied reports of masked men 
stopping motorists, but only 
one anonymous report that 
they were armed. 

• EU foreign ministers yester- 
day approved a £ 12 m rise for 
the International Fund for 
Ireland over the next three 
years, taking the total to £48m. 

The increase was proposed 
by EU Commission President 
Jacques Delore soon after the 
IRA ceasefire and nodded 
through by the ministers meet- 
ing in Luxembourg. Euro-MPs 
must now give their go-ahead. 


Fayed attacks 
minister again 


By Robert Poston 


Mr Mohamed Fayed yesterday 
renewed his onslaught on Mr 
Jonathan Aitken, a junior min- 
ister at the Treasury, by alleg- 
ing that there were "discrepan- 
cies” in Mr Aitken's account of 
how he settled his Fr80l0.90 
bill for a weekend at the Ritz 
Hotel in Paris. 

Mr Aitken last week faced 
allegations that he had allowed 
a businessman. Mr Said Ayas, 
to pay just under half the cost 
of his stay, without declaring 
this alleged gift 

He then attempted to defuse 
the allegations fry saying that 
the bill bad been settled in full, 
but in two stages. An initial 
payment of Fr4257.00 in cash 
had been made by his wife, 
who had not been staying with 
him at the Ritz, when Mr Ait- 
ken checked out of the hotel. 

She had paid less than the 
foil FrSOlO.90 because of a bill- 
ing error, Mr Aitken said. The 
balance was then settled by Mr 
Ayas, to whose hotel bill the 
costs of Mr Aitken's stay had 
been transferred. 

Mr Aitken said that once he 
realised that his wife had paid 
too little, he paid Mr Ayas 
what be owed him. 

However, Mr Fayed, who 
owns the Ritz and is conduct- 
ing a campaign to destabilise 
the government, yesterday 
attempted to pick holes in Mr 
Aitken's explanation in two 
respects. 

He said he had checked with 
the cashier at the Ritz 
and had been told that the 
“brunette lady" who settled Mr 
Ayas's hoi with a cheque for 


Frii7,008 "was the same per- 
son who paid the cash sum Mr 
Aitken says was paid by bis 
wife". 

This “brunette lady” also 
said to the cashier that she bad 
been paying "other bills at the 
George V and the Interconti- 
nental". Mr Fayed continued: 
“Unless Mrs Aitken was also 
paying the other cheques to 
the other hotels, the brunette 
in question was working on Mr 
Ayas’ staff". 

Mr Michael Cole, speaking 
for Mr Fayed, said there were 
also peculiarities about the 
documentation Mr Aitken had 
produced as evidence that he 
had paid the balance to Mr 

Ay as. 

Last Friday, Mr Aitken 
reproduced copies of a cheque 
for £426.88, roughly the amount 
owed, which was made out to 
Mr Abdul Rahman, an associ- 
ate of Mr Ayas. 

However the details on the 
cheque did not appear to be a 
perfect match with details on 
Mr Rahman’s hank statement, 
which was reproduced in the 
Daily Man last Saturday. 

The statement of Mr Rah- 
man's account at the Arab 
Bank (Switzerland) says that a 
cheque “du 31-3-94” was paid in 
to Mr Rahman's account This 
seems to imply that the cheque 
was dated “31^94", though Mr 
Aitken's cheque is in feet dated 
“2L2.1994". 

The statement also appar- 
ently says that the amount 
deposited was £426.80 - 
though the final “0” is rmrlrtflr 

on the reproduction - com- 
pared with the £426.88 of the 
cheque. 


EU backs 
£176m f 
assistance 
for region 


By tan KamfftonFazsy, 
Worthem Corres p onde n t 


A £176m ($278m) package of 
European Union and UK public 
and private sector spendfog on 
780 projects to start reviving 
the flagging Merseyside econ- 
omy will be announced by the 
British government today. 
More than. 400 projects in the 
deprived region of north-west 
England were rejected. . 

The money opens a £L6bn 
programme over six years, 
underpinned by £63Qm of EU 
grants under Objective One 
status. This entitles Mersey- 
side to special help because its 
output per head is less than 75 
per cent of the EU average. 

The £l76m - made up of 
wsm each from the European 
Co mmissi on and UK public 
sector and £26m from industry 
and commerce - will go to pro- 
viding 25,000 training places, 
3,900 new fobs and 341,000 sq ft 
of modem industrial space, as 
well as preparing 291 acres of 
land for development 

The EU grants are split 56 
per cenl-44 per cent between 
regional development and 
social funds, a marked shift 
from government proposals 
earlier this year which, would 
have used most of the money 
for social purposes, mainly 
training. The Commission 
thought not enough was being 
done to create jobs. 

Projects include: 

• A £43m programme to 
improve industrial estates and 
£3m for the port of Liverpool. 

• A grant of £lm will help 
fond an initial £2.78m cam- 
paign by a partnership of local 
authorities, universities, col- 
leges, industry and commerce 
to improve Merseyside’s poor 
national and international 
image. 

• More than £4m will be spent 
on an area of Liverpool city 
centre blighted for more than 
20 years by aborted prpperty 
development schemes. 

• Nearly £2.5m will improve 
the A565 trunk road linking 
Liverpool, the docks at Bootle 
and the. coastal commuter 
towns of Crosby, Formby and 
Southport 


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12 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


NEWS: UK 


Banks criticise EU capital directive 


By Norma Cohen, 

Investments Correspondent 

Trading investment banks in the City 
of London fear that a European Union 
directive aimed at cushioning securities 
firms against shocks in the financial 
system will force them to hold more 
capital than their competitors in other 
countries. 

They are asking the Treasury to 
interpret the Capital Adequacy Direc- 
tive, which takes effect in January 1996, 
in a manner which will allow some 
firms to hold less capital than that 
required by Brussels. 

“These issues are particularly acute 
for London given the nature of the busi- 
ness here,” said Mr Kit Farrow, direc- 


tor-general of the London Investment 
Banking Association, whose members 
are the City’s biggest firms. “It is in Die 
UK where the, trading activity is more 
developed. Even Continental banks 
fend to run their trading books out of 
London," he said. “It may not be very 
difficult for them to book the business 
elsewhere rather than in London." 

London firms have been particularly 
critical of the CAD, which they claim 
reflects a political compromise between 
member 1 states where securities indus- 
tries vary greatly. It is understood to 
have been heavily influenced by the 
German universal banks which typi- 
cally have much more capital than is 
required by regulators and which do 
not take large trading positions. “It’s 


like trying to devise a set of traffic laws 
for countries with high-performance 
sporfo cars and those which only use 
bicycles," said the finance director at 
one investment bank. 

The CAD says that the “trading 
book” of an investment hank should be 
separated from the “banking book” 
with a more liberal regime applying to 
the former. However, current UK rules 
do not make any such distinction, but 
view tiie risk activities of investment 
banks in their entirety. 

In particular, the London Investment 
Ranking Association is concerned about 
CAD rules which, unlike those now 
applied by UK securities regulators, do 
not lower the capital requirements for 
firms with diversified portfolios. Also, 


the CAD does not reduce capital 
requirements for holding securities 
which offset each other's risks. The 
association will today receive a boost 
from publication of a Bank of England 
quarterly report highly critical of the 
CAD. The Bank (the central bank) will 
release its own interpretation of how 
the CAD will apply to securities activi- 
ties of banks at the end of November. 

Mr Dale argues that “the idea of 
segregating one part of a bank's busi- 
ness - its securities trading operations 
- and applying separate and distinct 
definiti ons of capital and capital ade- 
quacy to the different parts, appears to 
make little prudential sense.” 

Lex, Page 20 


Bonuses give 
strong boost to 
directors’ pay 


By Robert Taylor, 

Labour Correspondent 

Britain's top company 
directors are continuing to 
enjoy earning s rises substan- 
tially higher than either the 
rate of inflation or the 
increases awarded to their 
employees, says a survey pub- 
lished today. 

The number of UK compa- 
nies where the chief executive 
earns more than £lm ($1.58m) 
a year doubled from eight to 16 
in the pest 12 months, accord- 
ing to the study by Monks 
Partnership, the independent 
remuneration adviser. 

It found that the highest-paid 
directors in the country’s big- 
gest industrial companies ? 
with annual turnovers of mqfe 
than £400m - secured &0-i>er 
cent median earnings rises, 
three times the level of rises 
received by the employed 
workforce as a whole. 

While the best-paid chief 
executives in the financial sec- 
tor enjoyed total median earn- 
ings increases, worth 7.3 per 
cent, rises of 5.8 per cent were 
recorded fojr top directors in 
companies,' in industry and 
commerce taking 1 their remu- 
neration from £130,000 to 
£137,000 a year. 

The survey points out that 
fche rate of increase in execu- 
. tree pay in the industrial sec- 


tor has slowed to its lowest for 
five years. More than a quarter 
of commercial and industrial 
best-paid directors received no 
rise at all - on the other hand 
the top quarter enjoyed total 
earnings improvements worth 
at least 18.9 per cent 
The growth in executive pay 
reflects an increase in bonus 
payments. In companies with 
annual turnovers of more than 
£400m these amounted to rises 
of 4J per cent In enterprises 
with turnovers £30m and 
£10Qm they were 1.1 per cent 
Bonus payments make up an 
average 18 per cent of fixed pay 
and contribute just over 15 per 
cent to the earnings of the 
best-paid directors. In the 
finance sector they amount to 
22.4 per cent of fixed pay. The 
survey reveals wide differences 
in executive earning s increases 
between industrial sectors. 

The biggest earnings growth 
has been in tha retail and dis- 
tribution sector with a 9J per 
cent improvement in aamtngs 
(6.0 per cent in fixed pay plus 
3.1 per cent from bonuses) fol- 
lowed by electrical engineering 
and electronics with 8.4 per 
cent and leisure and services 
with 7.7 per cent 
The smallest gaming s rises 
were found in the building 
materials and construction, 
where top executives averaged 
only 2.7 per cent increases. 


BT to cut personnel staff 


British 
Telecommuni- 
cations is cut- 
ting its 4,000- 
strong person- 
nel staff by 

/ *-'■ "Y/ nearly 50 per 

v f' cent. our 

Labour Editor 
writes. The 
heaviest cuts 
will be in the areas of training 
and general administration. 
Some less specialist training 
functions will be contracted 
out to outside training provid- 
ers, and line managers will 
take on Car more personnel 
functions. 

Under the reorganisation. 
Which the Company ha« named 
Break-out. BT departments are 
required to test what they are 


contributing to the company 
and assess whether It would be 
better contracted out. 

“We thought for a long time 
that we should be able to run 
at about half of our current 
size," said Mr Peter Archer, 
head of personnel at BT. “We 
then had extensive discussions 
with our internal customers 
about what they wanted from 
us and what they were pre- 
pared to pay for, and we have 
decided that a cut of between 
40 and 50 per cent is about 
appropriate." 

He said that specialist train- 
ing would remain in-house but 
“generic” training such as 
welding or computer skills 
could be done more effectively 
by external trainers. 

The personnel function has 


played a leading role in the 
overall reduction in BT’s 
employee numbers from 
230,000 in 1990 to 148,000 now. 
The company has said it will 
seek to avoid compulsory 
redundancies, and fras so Ear 
done so. 

BT has said that it is 
keen to retain national rules 
on principal issues such as pay 
and redundancy procedures, 
but union officials say that 
there is a growing tension 
between the centre and the 
divisions. “There will be some 
tension but I think it is gener- 
ally a healthy one.” said Mr 
Archer. “The personnel func- 
tion may have been too domi- 
nant in some areas.” 

Baby BeDs venture. Page 21 


Rover workers accept 10.7% 


Workers at the Rover car 
company have voted narrowly 
to accept a pay deal that will 
give most of them a rise of 
10.7 per cent over the 
next two years, union officials 
announced yesterday, our 
Labour Correspondent writes. 

The vote in a postal ballot was 
11,993 to U.10Q for a package 
seen by many observers as 
over-generous and a dangerous 
pointer for pay oiatms else- 
where. 

The unease reflected by the 
result seems likely to add to 
wage pressures at the UK fac- 
tories of Nissan and Peugeot- 
Talbot, which are about to 
negotiate deals with their 


Unions and management at 
the Jaguar car company, a 
Ford subsidiary, believe that a 
strike can be avoided even 
though a ballot is being held 
among workers who have 
rejected an offer of a 7.5 per 
cent pay rise over two years. 
Farther talks will be held 
about the offer before the bal- 
lot result is declared 

employees. “The closeness of 
the result reflects the complex- 
ity of the deal and the frustra- 
tion among the workforce still 
undergoing major changes", 
said Mr Tony Woodley, 
national officer for the car 


industry with the Transport 
and General Workers' Union. 
An official at Rover, an off- 
shoot of BMW of Germany, 
said the company “welcomed" 
the result 

The deal provides a 3.7 per 
cent general pay Increase from 
next month and either a fur- 
ther 4 per cent in November 
next year or an amount equiva- 
lent to the rate of inflation, if 
that Is higher. But most Rover 
workers will gain extra pay as 
a result of changes in grading. 
Unions have calculated that 
this will prodace increases of 
about £5 (37.90) a week in the 
first year and a further £1.86 a 
week in the second. 


UK NEWS DIGEST 

Inflationary 
pressures 
gather pace 

Further signs of UK inflationary pressures 
yesterday increased speculation that Mr Eddie 
George, governor of the Bank of Rn gfand (the 
central bank), will argue tomorrow for an 
increase in base rates when he merf* Mr Ken- 
neth Clarke, the chancellor of the Exchequer. 
Expectations of a rate rise helped sterling 
climb against the dollar and the D-Mark, with 
the pound reaching its highest level on a 
trade- weighted baas since the end of Febru- 
ary. 

Two economic indicators published yester- 
day - the narrow measure of money supply 
(M0) the purchasing managers’ index — 
appeared to point to an inflationary build-up. 
M0 grew at 12, per cent in the 12 months' to 
October, its fastest annual rate since January 
1989, while a survey of purchasing managers 
found that 50.4 per cent said they paid higher 
prices for their manufacturing purchases in 
October. 

Berth measures have previously been cited 
by the Rank of England as cause for concern. 
When Mr George met Mr Clarice to discuss 
rates early in September, the governor cited 
the purchasing managers* survey as an argu- 
ment for increasing rates. The chancellor sub- 
sequently raised base rates from 5.25 per cent 
to 5.75 per cent 

The Bank’s latest inflation report will be 
published today and will be scrutinised for 
further clues to the likely future path of inter- 
est rates. The governor has argued in recent 
speeches that the bond markets are overesti- 
mating the potential for a rise in inflation. 
“There are relatively few immediate signs that 
inflation is about to pick up strongly” he said 
Last week. 

Hospital agreement 

Health Care International, the private hospital 
near Glasgow in Scotland which last month 
encountered a financial crisis only three 
months after opening, yesterday announced 
agreements with two Middle Eastern govern- 
ments on providing medical services. It has 
agreed terms for giving medical t reatmen t in 
SmHanii to em plo yees of the Egyptian defence 
minis try and th ei r dependants. It has also 
signed a contract with Lebanon’s health minis- 
try for treating Lebanese citizens. The con- 
tracts came as the company ramtinuas to talk 
with banks and investors on recapitalisation. 

Drug tests for soldiers 

All British soldiers will face random drug tests 
fr om the middle of nert month in a drive 
against growing drug abuse in the army. The 
move would bring the British army into One 
with US forces. “Drug abuse is on the increase 
in society generally," said a defence ministry 
official. “As we recruit from society, it Is inevi- 


table that our concern should consequently 

^Utitil^now tests have been given only to 
people suspected of taking drugs. Dru g abu se 
ST soldier could lead toa pnamsentence 
and digmW from the service. QIB dajs 
random testing would eventually be extended 
to the Royal Navy and Royal Air Force. 

• Two men aged 25 and 26 appeared m court 
yesterday accused of attempting to murder 
two unarmed undercover policemen shot dut; 
ing a crack cocaine raid to Bi rmin gha m last 
week. They were also charged with carrying a 
firearm with intent to commit an offence. A 
third man aged 24 was accused of supplying 
crack cocaine and possessing herbal cannabis. 
The two policemen were still in hospital yes- 
terday. 

Curb on superstores 

Further construction of out-of-town shopping 
centres and superstores should he restricted to 
protect the landscape, the House of C ommon s 
environment committee will recommend 
today. Its proposals will mark a further attack 
on large developments in the countryside 
which encourage greater use of cars. 

They will follow last week's report by the 
Royal Commission on Environmental Pollu- 
tion which recommended a doubling of petrol 
tax halving of spending on new roads in a 
bid to avoid unacceptable levels of environ- 
mental damage. The environment committee 


win nail for stronger curbs on out-of-town 
developments which damage the environment 
anti take trade away from town centres. 

It recommends that government planning 
guidance should be amended “to indude a 
presumption that siqrerstores are best located 
in or on the edge of town centres unless there 
are very strong indications to the con tra ry." 
This would go further than government advice 
to town planning authorities to July. 

Lecturers under stress 

College lecturers are being driven to the verge 
of nervous breakdowns by stress and over- 
work, s«id the National Association of Teach- 
ers in Further and Higher Education, a trade 
iminn “Ov erw orked stressed-out staff cannot 
deliver the education j students deserve and 
their future employers need,” said Mr Derek 
Betts, the union's head of policy. 

He was commenting on research by the 
National Foundation for Educational Research 
which pointed to mounting pressure, with 
nearly eight out of 10 lecturers feeling they 
were working under unacceptable stress lev- 
els. One in four lecturers surveyed said they 
had taken time off for stress-related illness. 
Most blamed new styles of administration and 
excessive workloads. 

Scottish exports rise 

Manufactured exports from Scotland rose 19 
per cent at current prices in the 199344 finan- 
cial year to reach £lL5bn.(31&2bn), accounting 
for 103 per cent of the UK’s manufactured 
exports. Exports by Scotland’s large electron- 
ics sector grew 4L5 per cent while whisky 
exports rose 7 per cent and exceeded £2hn for 
the first time. Scotland’s single biggest export 
market was France, replacing Germany which 
hplri that position in the previous year. 


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FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


★ 

TECHNOLOGY 


13 


Cast in a new 
strength 

Deborah Shapley looks at a 
method of reinforcing ceramics 


C lay has been fired into 
many different objects 
since ancient times. But 
even the loveliest Greek 
urns were of limited use because 
ceramics, although hard, 
chemically stable and heat 
resistant, lack toughness. Ancient 
I urns did not corrode as they lay 
under the sea or buried on land, 
but they broke, so that 
archaeologists often find them as 
pieces. 

Modem science has improved on 
the ancient days, but in 
manufacturing, ceramics are still 
passed over for metals which are 
rarer and more costly hut 
stronger. 

Aluminium does not oxidise, or 
rust, under normal conditions. But 
it can be oxidised into bard, 
irregular blobs when it becomes 
molten, under certain conditions 
In a furnace. In aluminium 
smelters these are sometimes 
found as coral -like growths along 
furnace walls. Furnaces have to be 
shot down while the blobs are 
drilled off. That is the rub: the 
oxidised al umin ium Is 
transformed into a tough ceramic. 

In the 1970s, Marc Newkirk, a 
young engineer working in his 
father's furnace-making business 
in New England wondered if this 
natural growth could be directed 
to produce the ultra-strong 
ceramics long sought by science. 

Newkirk created the Lanxide 
Corporation in 1983. Today it 
makes items for industries 
including electronics, steel 
processing, mining, 
semiconductors, sports and 
automotive. The group is 
capitalised at $350m (£219m) and 
sales in fiscal 1994 were $20m. Its 
partners include Alcan and Du 
Pont 

Lanxide's work, presented in 
Washington recently at a 
symposium* on materials, is one 
of the leading US advances in 
ceramics. 

Newkirk first directed the 
oxidised al uminium growth 
through ceramic fibres, making a 
ceramic version of fibreglass. He 
then tried to make blocks of 
cheaper reinforcing material such 
as silicon carbide, placing them 
nwrt to the aluminium and 
heating both. He discovered that 
the hot aluminium oriifispH into 


and through the reinforcing 
material, filling all pores like a 
glue. 

When cooled, the block of 
silicon carbide had become a 
reinforced ceramic, with particles 
dispersed throughout, 
strengthening it uniformly. 

Coatings for the reinforced 
materials were discovered that 
stopped the oxidation process at 
the boundary. These processes 
opened the way for largescale, 
cheap production of tough ceramic 
items in very precise shapes. By 
varying the reinforcing material 
and metal (titanium works, too), 
“engineered ceramics” can be 
produced to predetermined 
weight and strength. 

The second important invention 
came hum a foile d experiment, 
when a Lanxide Inventor heate d 
aluminium next to a ceramic 
preform In an atmosphere of 
nitrogen inafawd of air. The metal 
failed to oxidise. Instead it shot 
quickly into the adjoining 
ceramic. This proved to be a 
remarkably simple way to make a 
ceramic-reinforced aluminium. 

Among many objects, fjirnridw 
now casts avionics chassis for US 
military aircraft in a single piece, 
which are a third the weight of 
ordinary aluminium ehawrfa — the 
reinforced material is actually 
heavier, but because it is stronger, 
it can be crafted into much 
smaller components. 

T -amririp spins Off fl ppliflatfonq of 
its core processes into separate 
businesses with partners who 
bring resources and experience. 

Alcan of fiawada was Lanxide’s 
first important partner, Alanx, 
makes pumps and ceramic 
“chokes" that link pipes carrying 
slurry from mines, which the 
company says last eight times 
longer thaw standard ceramic pipe 
chokes. In Japan, Lanxide and 

Kangmate w fnrmpd KTanririp RK ) 

as the focus of future business 
there. Talks are under way” with 
possible European partners, adds 
Newkirk. 

•Seminar sponsored by the 
Okinaga Foundation and the 
National Association for Science. 
Technology and Society: Pam 
State Uni v ers ity . State College, 
Pennsylvania, 1680Z 


A fter 30 years as a general 
practitioner in Britain’s 
National Health Service, 
Michael Shapland is still 
developing new skills. He has to 
respond to medical and pharmaceu- 
tical developments, to health ser- 
vice reforms and, not least, to the 
demands of patients in his Oxford 

practice. 

In Shapland's consulting room, a 
box of patient notes is cm the desk 
next to the computer, ready for 
afternoon surgery. His computer is 
a standard PC, but it supports a 
system called Horizon, which runs 
the practice. 

Shapland still uses paper records 
but patients coining into his room 
are likely to find Char records an 

screen. These can be updated with 
any Information, such as about a 
smoking habit, that has changed 
since their fosfr visit. Referrals or 
other relevant details are also in the 
system. 

Shapland's portable laptop com- 
puter is a vital source of informa- 
tion on emergency visits. Hie data 
it holds on pharmaceuticals and 
prescriptions alone forms a vast 
database, including all the generic 
and proprietary drugs in the CP's 
compe ndium 

U nlike most software built for 
GPs, the “intelligence" built into 
Horizon cross-references any drug 
to the individual patient, alerting 
the prescribing doctor (who may 
not be the patient’s usual physi- 
cian) to allergies, side-effects, or 
reactions to other medication. The 
combination of warfarin with aspi- 
rin, for example, throws up an 
alar m- both drugs thm the blood, in 
different ways. 

The system also deals with 
adminis trati on , hwTndrng statistical 
returns to the Family Health Ser- 
vices Authority and repeat prescrip- 


SOFTWARE 

AT WORK 


tions for tiue 4£QQ patients cared for 
at the Donnington Health Centre, 
where Shapland’s practice is based. 
Three practices share the centre, 
along with its nurses and other clin- 
ical resources. 

Horizon's imimtal dynamic facil- 
ity means the the system can 
"learn" from changes in a pattern. 
For example, it can note the sudden 
popularity of a newly-prescribed 
drug, and add it to the list it pres- 
ents as optional treatments for a 
particular condition. 

This artificial Intelligwifp k ty ra n t 
as a neural network (because it 
Tnimiin tha way the human brain 
makes connections), makpg the sys- 
tem attractive to researchers and 
hospital clinic ians, who make up 
the majority of Horizon’s 100 or so 
users worldwide. The system is 
available in several languages. 



Claire Gooding looks at a computer 
system that helps doctors offer 
patients a better service 


records 


OohSm 

GP Rfichael Shapland at Ms soon- to-be paperless computerised sugary in Oxford 


In Switzerland, Horizon is used 
for reporting on epidemiological 
studies and for microbiological 
research. Kurt Eggenhergar, a pae- 
diatrician in private practice in 
Yverdon, outside Lausanne, uses 
the system in his own clinic, and 
for research into viral and respira- 
tory infections in children, working 
with research groups in Geneva. 
“Nothing else I have found can 
carry out such versatile clinical 
analysis, and report on disease 
occurrence in this way,” he says. 

At their Oxford practice, Shap- 
land and his partner David Thur- 
ston cover areas including Little- 
moor and the Blackbird Leys estate, 
where there have been big job cuts 


in the car industry. 

“Unemployment has nansgri mnw 
hardship. The computer doesn’t 
improve your gut feel after 30 years 
here, but it enables you to analyse 
it and produce real figures to prove 
your case,” says Shapland. 

Thurston says Horizon has helped 
with his special interest in psycho- 
logy. For example, an analysis of 
suicide rates showed him that of 65 
intentional overdose cases, more 
than half were aged b e tween 14 and 
30. Nearly twice as many of them 
were female as male, about 16 per 
rpnt are unemployed, and a high 
percentage live on the Blackbird 
Leys estate. 

A seasonal pattern emerged: 


extremes of weather trigger an 
upturn In suicide attempts. *3fcings 

that may not seem obvious become 
significant as you play with the 
data,” says Thurston. "Once you 
have spotted a pattern, you can do 
something about tt, Eke monitoring 
vulnerable partonta more earaftilly 
in July and January.” 

The system also enables the prac- 
tice to verify its targets under 
National Health Service reforms. 
These include preventative mea- 
sures, such as checks on people 
over 75 years old, immunisation for 
infests, and cervical smears. Tar- 
gets are based -on. percentages: a 50 
per cent read! for cervical smears 
earns less far the GP than the gov- 
ernment's 70 per cent target Scaled 
payments to GPs are based on per- 
formance. 

Shapland also , tons for 

asthmatics and diabetics. Wftha 
few keystrokes, he shows a list of 
asthma patients and a graphic 
breakdown, by age, showing the 
percentage of the 2S5 sufferers that 
are in the toddler to teenage range. 

ft was this complexity and power, 
coupled with simple access, that 
impressed Shapiand when he saw 
tiie Horizon system at a medical 
computer show in 1989.- 
■ “I realised I wouldn’t have to lose 
my staff for endless weeks of train- 
ing because tins system tells them 
what to do as they are doing it” 

Horizon replaced a Meditel sys- 
tem, in use 1988. ft operates 

on four linked - or networked - 286 
PCs. The systen sells cm a “turn- 
key" baas with hardware, software 
and support in a provided package 
by the Leicester-based developer 
Horizon Software. It costs the prac- 
tice £3400 a year on a lease basis, 
plus a £1,600 yearly maintenance 
charge. 

Linda G ar dn er , the practice man- 
ager, sees time-saving as the great 
est advantage. "It’s invaluable for 
the annual statistics we have to 
return every June,” she says. “You 
could never plough through all the 
notes by hand, tut we can analyse 
our patients' records from any 
angle, which is invaluable." 

Horizon, users can access records 
by patient name or names, or 
addresses, useful where a family 
has several surnames under one 
root There is a record at medica- 
tion, whether the patient lives 
alone, and a notes section for any 
extra information. Drugs and dis- 
eases are coded fra: quick anwy and 
analysis, so that users rarely have 
to type in complex names. 

For the sector as a whole, Shap- 
land believes the NHS iw« takwn a 
piecemeal a pp r na/4t to computerisa- 
tion, slowing the move towards 
umbrella sy s tems that would enable 
GPs and hospitals to exchange 

info rmation tria >-nmpiTter «i and tele- 
phone-linked networks. Not one UK 
hnapitai in his opinion, has a really 
good alLembracmg system in place. 


a costs 


P atients in the UK are getting 

used to seeing a computer on 
their doctor's desk. Eighty 
per cent of general practices in 
Britain have a computer to hdp 
manage patient records. 

While some sorts of data have 
always been demanded by - 
authorities - on the occurrence of 
certain, diseases, for example - 
additional requirements have 
resulted bran the costoonsoons 
reforms of the 1980s. The NHS had 
formerly required few costs 

measurements, and doctors were 
inexperienced in “budgeting” 
patient care and drag costs. Almost 
overnight, a new market for 
software suppliers appeared, 
selling systems to doctors who 
were novices at both computers 
and h mriiMwadwilidg tgfttinn. 

Doctors suddenly had to monitor 
easts, especially prescription 
expenses, an exerdse that would 
have been impossible based purely 
on paper-based notes. 

Many doctors installed their first 
systems in the late 1980s, aware of 
an increasing need to measure 
drug-related costs, and other 
resources used by patients. The two 
most widely add sy stems. Vamp 
Health (2,000 sites) and AAH 
Meditel (L289 sties), were both 
developed by British co mp a nie s 
that were acquired by 


The recent emphasis on 
preven tati ve medicine has put 
extra tasks do the doctors' agenda. 
Their pay levels are now linked to 
f talfllHng preventative duties. 
Including immunisation, cervical 
smears and check-ups on the 
elderly. Doctors must be able to 
satisfy their local Family Health 
Service. Author i ty t h at they have 
; percentages of their 
pattenf^SQk to qualify for 
ited pay. 

Pndkev cfe now apply for 
fundholder statins, which allows 
doctors abtipferpaltati care, 
and givto them control of how it fs 
allocated. To qualify for fondholder 
statins, doctors mnstbe able to 
deliver the appropri a te statistics, 
which means computerisation must 
take place at least a year 
beforehand. 

GP fundholders get all software 
expenses and 75 per cent of 
hardware costs reimbursed by the 
FHSA! Non ftuadholdere get iq> to 
half of entire system costa, 
Ind udfaig maintenance. 


CONTRACTS & TENDERS 


NATIONAL BANK 
OF GREECE 

Summary of Invitation to Tender 

Call For Bids No. 24153 

In order to upgrade the level of service to customers Ihc National 
Bank of Greece is interested in cooperating with a Greek or 
foreign consulting company for the redevelopment of its 
infoimatkm services. 

The parties concerned may receive the relative, detailed call for 
bids, an working days and during working bouts, from the Banks 
Organization and Data Processing Department at 377 Syngron 
Ave., 175 64 Athens, Greece. Foreign films may send a written 
request to receive the detailed call forbids by mail or by fax. 

Proposals must be delivered in a sealed envelope to the above- 
mentioned address on November 30, 1994 between 0800 and 
1530 hours, or mailed to the same address and postmarked not 
later than November 30, 1994. 

For further information please call Mr Ecooomopoulos on +30 - 1 
- 334.4761 or Mr Marinakis on +30 - 1- 334.4631. 


LEGAL NOTICES 


1W THE UKHl CO Ifgr or JUSTICE 
caaacsRYjBgMoa 



ns THE HK7H COURT Pf JUSTICE 
CHAKCEKT MVBgPW 


IN THE MATTER OF 
CAREUKFLC 


IN TUB MATTER Of 
ooMMUwmr health services 
LIMITED 


IN TUB MATTER OF 
TUB COMPANIES ACT IMS 

Mueiitnl^iraWiRiiinma L 2 zb 
October IM4 p ma i a t to Her MoJestyH High 
Court or Jfeitco Cor I be coafnauoa of ibc 
i at (1» ibc capital at Ibe above uml 

'tmnsn5njn tats man ami 

rzj lie Stare Plenum me at too Company 
bravwoK. 

And Notice is farther gives dal toe said Petition 
ii directed to be beard before Mr RCftinrar 
Buddey n lie Ron] Gants of lu s tier, Stood. 
Laodoa WC2A 3U. M Wedaealn Ibe to of 
Nove m ber 1994. 


capital and ibe Mid reduction of Stare 
auim Account dacujd appear n Ibe Me of 
tog la peesoa dr by Coni tor that 
A copy of Ibe raid Petition will be 
^ I » any ««* piwg.j tong the mac 

Lhe regulated charge lor toe aaae. 


Vatand Nehamou 
HSMtoShri 
, WIXSCT. 


IN THE MATTER OF 
THE COMPANIES ACT MS 

Notice is hereby nvea tea a tetooavas oa mb 
October 1994 pcootied to Her Majcov'a FB*tr 
Court oOestioc te Ibe coaftnotinu of tor (Ii 
reduction ot ibe capital of tbe above oatoed 
Company fnm CUMUXU 10 11.440, TO and (Zl 
ibe caocdlition of toe 9m Piuuaaa tom 

of tbe Company. 

And Nodce ii bather gb-es that the uod ft*»a 
a directed to be beard before Mr Registrar 
B ul ky at The Royal Coma of fastis. Stood. 
LoodwWCEA HXoaWcdosdsy toMd 
No. cm her 1994. 


Order foe *e 
or capital usd the 
Ptti 

Ibc bearing ia pec 
porgMc. A copy. 



peyereataf 


Tet 0TI 49J 

Ref lA/TYMJCZSWl 

Sotiatoa br ihr above named Coogony 


ADVERTISEMENT TO CREDITORS 
TO SUBMIT CtAJMS 
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Grounds For 
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This magnificent Victorian mansion and its shinning 
grounds is the ultimate business venue. 

The elegance and tranquillity of our 26 conference 
rooms, 103 spacious bedrooms and Isoautiful period 
lounges provides tho ideal setting for your confer- 
ence. Coupled with that, our indoor and outdoor 
leisure facilities offer you and your guests the per- 
fect way to mix business with pleasure. Just 40 min- 
utes from London we invite you to visit us. 

Down Hall Country House Hotel, h h h it 
Haifie U .Heath, Bishops Stortford, Herts CM22 7AS 
ToL 0279 731441 Fax. 0279 730416 




14 


FINANCIAL TIMES TUESDAY NOVEMBER 1.1994 


MANAGEMENT: THE GROWING BUSINESS 



W hen Robin Enderby 
was phoned by the 
Department of Trade & 
Industry to ask if his 
company would take part in a pilot 
programme intended to encourage 
innovation, be was sceptical. 

"I detest red tape, bureaucracy, 
planning departments, consultants 
and banks,” says Enderby, chair- 
man of Blow Moulding Controls, a 
Gloucestershire manufacturer 
employing nearly SO people and 
with annual sales of 23m. “I was 
very reluctant to get involved - I 
was the last guy in the world who 
wanted to know about it” 

The DTI caller, Doug Ponsfbrd, 
persuaded him that a company 
could be transformed by the pro- 
gramme's method of waiwg hi g con- 
tinual jniTflmPiihil rtiang a In 
consequence, Enderby's company 
was one of 12 in Gloucestershire to 
participate in the pilot. Profit from 
Innovation, funded by the county's 
training and enterprise council at a 
cost of nearly £50,000. 

At a DTl-sponsored seminar in 
Cheltenham last month, Blow 
Moulding Controls and five other 
companies reported back in such 
positive terms that the Tec, proba- 
bly in conjunction with two other 
southwest Tecs, will fund another 
programme thiq month. It will also 
dforauy togwhfrng more trainers to 
expand the regional coverage, and 
tha dti innovation unit wfli shortly 
consider promoting the programme 
to Tecs cel a national basis. 

Thfi Subject of Hia anHimriimni is 

essentially a simple concept It aims 
to improve a company^ competi- 
tiveness by involving its fn 

Srium H f y Tn g Ilia naa H for innovation, 

a mi then in im piania nti Tig the nec- 
essary changes. It was devised by 
Clive Jones of Mantra, an innova- 
tion management expert and Paul 
Ryan of the consultancy Business 
Logistiz. Jones told the seminar “In 
too many companies, change is an 
announcement from the managing 
director, 'As from tomorrow. . 

The programme consists of six 
sessions to teach techniques to 
senior managers on how to run staff 
workshops, followed by support vis- 
its to the company. A “driver” in 
each workshop encourages a flow of 
ideas to identify threats and oppor- 
tunities, while a “scribe” uses flip 
charts to record these and also 
keeps discipline. 

Techniques n Hiring people 

to list all conceivable faults of a 

product, and than s timulating - sug- 
gestions for putting these right. 
Another approach is to forecast 
“supertankers” - such as social 

changes affecting & market - and 

“blockbusters” - described by Jones 
as “a supertanker that comes in a 
hurry”. 

All this sounds sensible bat is it 
effective? Enderby said the package 
“seemed to boQ down to one mas- 
sive questioning technique”. It had 


— In a — . 

Nutshell;; 

The cheque’s in 
the wild excuse 

Ton have heard of the excuse 
that tiie cheque’s in the post 
But what about “the cheque's in 
the goat”? 

Pressed for payment one 
Sooth Wales engineering firm 
told the insistent caller from a 
factoring service that its 
invoices and cheques books had 
been eaten by a goat that had 
climbed. Into the building. 

The story comes from 

Barclays Commercial Services, 
the factoring and invoice 
discounting subsidiary of 
Barclays Bank, from a list of 
imaginative excuses Offered it in 
30 years of collecting payments. 

Other evasions included “my 
mwwgfng director fa nhiH^ 
down our budding for charity, 
can he call back tomorrow?”, 
and Tm sorry no (me can help 
yon, the accounts department 
are cm a credit control course”. 

Then there were the cads 
indicating all was not well: *Tm 
sorry, the finance director has 
taken the cheque book to pay 
the ball of the sales director." 

The most outlandish excuse 
came from an independent 
financial adviser who claimed 
that “the budding was 
ram-raided last night and our 
accounts records are under a 
Ford Cortina in the front office”. 

Price of turning 
green 

The British Chambers of 
Commerce estimates that 
businesses with up to 50 
employees are spending uwto 
£l.85bn a year betweealnem 
complying with environmental 
legislation. These costs are not 
bring offset by efficiency 
savings, according to Richard 
Brown, deputy, director-general 
of the BCC. i 

The estimate Is drawn from a 
survey which shows that 
smaller companies are turning 
greener because of legislation 
rather than market pressure. 

*Envarmment - The View of the 
Small Firm, from the British 
Chambers of C omm erce. Tel 071 
222 1555, price £6H 



: 2 



Richard Gourlay on the start of an 

umbrella advice organisation 

Business Link 
for London 


1 . 4 , 


l 3- / 

.V' V ‘ 

*-r -a'* jeer 



G reater London’s 200,000 

businesses are about to get 
their own Business Link 
organisation after more than a 
year of acrimonious turf battles 
between the agencies supposedly 
supporting them. To be precise, 
the capital is likely to be getting 
10 Business links. 

On November 23, a national 

assessment panel will review the 
first bid, for Business Link 
T/iwiiwi, whic h will act like its 
counterparts in England and 
Wales as a on&stop shop 
providing advice and support 

services. Business Link London 
will act as an umbrella over nine 
inrui Business rinks throughout 
the capital 

The case for a unified Business 
Link system bringing together the 
myriad support agencies in the 
capital was forcefully articulated 
last week by Earl Ferrers, the new 

mwiig tar for small hnsinasaes. 

“hi London there are 33 
chambers of commerce, 26 local 
enterprise agencies, nine training 
and enterprise coupcils, 82 local 
authorities and all the DTI 
support services,” Lord Ferrers 
told the Chamber. “All of 

that can be pretty daunting to a 
hnmhip minister one wonders 
if it is not pretty daunting to tiie 
customers too” 

These “customers" have not 
been uppermost in the minds of 
all support networks as they 
g Vmpod R immpwi T.tnlr Ifflirtim. 

The partnership has been 
fashioned against the wishes of a 

number of ffhamh ws nf c ommer ce, 

fearful they might lose members 
and their raison d’etre. And some 
Tecs are only on board after the 
DTI wielded a stick and refused to 
let them provide their support 
services Independent of a Business 
T.rnfc organisation. 

One ctf the philosophical debates 
concerned whether London’s 
Rmangra T.iwkfi should be hel ping 
regenerate economically depressed 
areas, as some local authorities 
wanted. Brian Wright, chief 
executive of the London 
Enterprise Agency, says the 
opposite view has prevailed - that 
Business Links should be 
concerned with supporting 
businesses with growth potential. 

Irrespective of which 
organisations wither and which 


iff 


' ■St 3 ' ' 


Derolc Morris, chrirman of DM Fmmdrtes: 'We’re plagued by consultants who think they know it aL But we were amazed 7 

All change at 

the factory 

A DTI project to encourage innovation surprised 
companies with its success, writes Roland Adburgham 


decreased his business’s qualify 
problems and increased profitabil- 
ify. 

“By involving all tiie workforce, 
we had guys coming forward with 
lots of ideas - some of them very 
good.” One outcome was that his 
company had rethought its US mar- 
keting stra teg y. 

Derek Morris, chairman of DM 
Foundries, with 25 staff and a turn- 
over of nearly £lm, had been as 
dubious as Enderby. “We're plagued 
by consultants who think they 
know it all. But we woe amazed.” 
His foundry worked in a difficult 
environment. In which many cus- 
tomers had gone bust, and staff 
thought they were used to problem- 
solving. But the workforce came up 
with “tremendous” suggestions. In 
mw example the cause of a rapid 
production drop in one section was 
resolved. 

A.T. Poeton, an engineering com- 
pany with 100 employees and £ 3 .5m 
sales, also suffered In the recession. 
“We tnaHo considerable efforts to 
find new customers but we didn’t 
do so fast enough,” Anthony Foe- 
ton, manag in g - director, says. “Turn- 
over dropped as did the profit to 
sales ratio.” The package had made 
a tremendous difference. New mar- 
kets had been identified and profit 


to sales improved. 

In contrast, success caused diffi- 
culties at Invertec, which makes 
transport lighting equipment. 
Charles Valentine, manag in g direc- 
tor, said its sales of £3m were up 100 
per cent in two years. “The main 
problem hit us earlier this year 
when our order book exploded and 
we weren’t ready for it" 

I nvertec found the programme 
“incredibly useful”, be said. The 
company realised it had poor 
communications with its customers 
and internally. “We needed to listen 
to what the shopfloar and junior 
management were saying. I used to 
have a plaque in my office saying: 
‘As manag in g director Tm entitled 
to my bigoted opinions.' I now lis- 
ten to people and have thrown the 
plaque away.” 

One identified weakness was that 
Mvertec’s information technology 
was “woefully poor”. The company 
was now investing in an integrated 
software package. The “super- 
tanker” technique had helped to 
analyse other issues such as the 
impact of transport air conditioning 
on its products. 

Brian Bennett, managing director 
of Piaster International, a recycling 
company with 35 people and a £5tn 


turnover, said it too had rapidly 
expanded. When his telephone call 
came from Ponsford, he said: “I was 
probably the most sceptical - I felt 
we didn’t have time, and would it 
really benefit us.” But in the work- 
shops, he raid, there were “stagger- 
ing comments”. 

The management discovered, for 
example, that staff did not feel moti- 
vated by the bonus scheme - which 
has now been scrapped - and did 
not understand the business. “The 
techniques improved our ability to 
identify problems and make deci- 
sions." Productivity had risen and 
there was a different attitude by 
both management and shopfloor. 

Enderby voiced one concern, 
shared by others, about how to 
maintain the Initial enthusiasm. 
Jones acknowledged not all 
companies gained equally - for 
example, when management tried 
to institute big changes first, rather 
than small changes where 
employees could see immediate 
results. 

The attitude at the workforce was 
crucial. “Some took to the 
programme immediately,” he raid, 
“but a lot were very, very 
suspicious and almost hostile. But 
once we started and the ice was 
broken, it went very well" 


have a dears* idea where to turn 
for advice by next July when 
Business link London hopes to 
open its doors. 

As tiie proposals currently 

stand, the London-wide 
organisation wifi have 
responsibility for those-support 
areas where local dup licati on 
would not be cost Active. So, the 
Business Link London will look 
after information services and the 
new information technology 

network which wiHiequire 
oYfptvm ra in v e s tment Sp e c ia lis e d 
services, such as export support, 
will also be organised centrally. 

At the local level, the Business 
T.iwkfi will look after the personal 
business advisers who visit 
«wnparnes . assess their needs and 
refer the businesses to a specialist 
These local operations will also 
develop local specialities -a. 
knowledge of the rag trade in the 
east of London, for instance. 

David Grayson, chairman of the 
national assessment panel for 
Business Links, believes London's 
businesses will finally receive the 
kind of customer-focused service 
they require if they are to be 
internationally competitive. 

One area t hafe wrig iit suffer in 
Business link’s new world are 
start-up companies' and other 
micro-businesses; while there will 
be exceptions, the Business links 


with 10-200 employees. 

Wright agrees -tids is potentially 
a problem. But he believes these 
companies cart be served by Local 
Enterprise Agencies. 

This may be possible for 
o rganisations «nrfi as the London 
Enterprise Agency, which are 
partly funded by private-sector 
sponsors and have freedom to 
decide winch start-ups to support. 

But many Enterprise Agencies 
are on funding from 

tiie government’s Enterprise 
Initiative programme and as a 
result mainly support businesses 
started by the unemployed. 

from next year, the budget for 
this initiative will disappear into 
the government's new single 
regeneration budget for inner 
cities. Enterprise Agencies 
recognise their start-up s up port 
programmes may receive meagre 
rations from this pot 


BUSINESS OPPORTUNITIES 


AIRCRAFT FOR SALE 


FFTTV 


•r'lVr.—A. 


Business Opportunity - India 

We are a reputed En gineerin g Company in India bating spare c ap acity far 
iiuwiAfiiitf of High Rreaamn A mcnbOcs foe engineering and 

electronic infeatris. 

Wo can provide long teiiu luuipdiireo and rcfiaWe source. Our facili ti e s i n e fa de 
Computer aided engineering and m a unfa c tnri ng. CMC technology, efficient 
processing cent r e s etc tedndrag gold plating. We have edeqnatc facility for 
research and deveiopmeat and a team of enwaln oced engineers and teefnik la iw 
Pi cscmly wean; riw* ty 

and oo wnaat lcation elec tronic r o m po nra ta 

We are open lo dbcnsakm far sourdag of components, hug tom strategic 
■ iliann e,lednrfcalcoObboiatlq« niHi«eulilp and bey back arran g em ent. 

Please writ* UK 
MB. RAMESH KUMAR 
CHIEF EXECUTIVE 
l atB nu rin w l Operation! 

FtaNa+91 II 461 5204 


HOTEL COMPANY 

Re-financing of £7.5m required over 3 years term. 
Security over properties. 

All replies treated in strictest confidence. 

Write to Box rte B3424 RnancM Times, 

One Southwark Bridge, London SE1 SHL 


WITH A MAJOR UK INSTITUTION, WK WILL CONSIDER 
QUALITY FINANCING PROPOSALS. INCLUDING: 

• Commercial & Residential Property • Noising Homes, Hotels and RefaS 
* RestrBCfnreand Refinancing * International Trade Ffeaoce 

fcfigh qnaKty of service torn loog-esabhriied Ran, based in Central London, 
Write »: Bar B2303. Financial Hues, One So uth wa rk Bridge, London SSI 9HL. 


Selling your Business? 


Wc have the skills and experience to achieve the best price for your 
business and struclure the deal io achieve maximum fax efficiency, 
[f yon are considering a sale and your turnover exceeds £lm, 
we would like to talk to you. 

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


Blackstone 

Franks 


ItlilL-kstulU- I' I'UJlk.i (. or| 
Old Stri-d. [.undo 
Tel: DT I 25') .OWI 1 


irate I manve 


Doing business in Russia? 

"CSE-INVEST" 

Russian Investment Bankers with 
Russian licence 

Consulting, Russian Law, Stock Exchange Activity 
Some Risks - High Pi uftts 


Ph.:007095 921-6324 


Fax: 007 503 956-3176 


FOR SALE 

IBIZA 

The Magic Island (Spam) 

Residential Golf 
Course Property 

8000 m? residential land 
within the 27 hale go(f cour- 
se of Roca Llisa. Beautiful 
views, subdivisible into 4-6 
stands, to build for yourself 
and your friends, or to re- 
tain as capital Investment. 
Fully serviced and ready to 
be developed. Price Sfr. 
125.- pro m*. Can be dealt 
with and financed through 
Switzerland. Ibiza is highly 
recommended. 29% more 
visitors than in 1993. 

An excellent investment 
opportunity! 

RESIDENZA AG 

Talacker 50. CH-SOOl ZOrich 
TeL: 0041 1 221 3395 
Fax: 0041 l 221 03 84 


OFFSHORE 
COMPANIES] 
cV TRUSTS 

From USS250 

Various Jurisdictions 
lnformatioii/inunciliate scn/ice: 


nSS J MBESB ESi 


SERVICES (UK) LIMITED 


Stantfcroofc House, 2 - 5 Old Bond 


Street. LONDON. W1X 3TB. 


*** * IMPORTERS 

-0»s fribatotsl- 

I 1 

Witt IK pew BUSMESS DEPT) I 


BUSINESS GROWTH 

Your company can achieve additional gr o wth hr 1996 by adtfing proven 
products, processes and technologies sourced by atn flagl c partnerships with 
sucoeasM compa n ies in Japan, MAmerica and ahewtiere. 

Wb research high quafity opportunities for companies and provide a fuH sendee 
inducing opportunity identification, market research and agieanenl negofiaScn. 
Many PLC» and companies have achieved success wWt ota- pro^afrane since 
1S7B and Udetab are BvaSobte from: 

Dr Dank A Newton, Director - SP A TECHNOLOGIES LTD 
18 Aiflngton Avenue, Lnamingtoa Spa, Warwtdahtre, England, CV325UD 
TO 0826 332228 Far 0B2B 33G6S7 


Established Events and Marketing 
Communications Company^. 

based in central London with highly experienced team and 
prestigious blue chip dient base seeks to expand by merger 
with similar business or acquisition by larger organisation with 
the view to becoming a dedicated marketing and 
communications division. 

All enquiries welcome, please write to Box No: B3425 Financial limes. 
One Southwark Bridge. London SB1 9HL 



TRAVEL AGENCY 

Sprcfalkiag in Exclusive 
Tailor Msdc Holidays 

Bmbtished Business 
Investment Sought 
To Finance Growth. 

Flew wriie to: Martin Stone, 
FMf!R M j mM j rmp n t fhwml t j ntt I til 

Hatbnwiy Roose, Pope Drive. . 

Fmchley. London N310P 

Tel: 081-346-6446 Rue 081-349 3990 


TOP CLASS RACEHORSE 
FOR SALE. 

Winner of 9 races. 

Win have x favourites rfmraw of 
winning the 

Mwfcesoa Cold Cop at Chcindam 
next mouth. 

For details TeL 0981 22363 


. | H i i n R t ) H i . ta n| 


CHANNEL ISLANDS 

Of&bore Company Formation 

and A ri mln j ffiifiof i Also ! Apri l. 

P anama & BVI etc Total offshore 
facilities and services. 

For d et a ils Bed i p p eiu nra write 
Cray Tlwrt Lid, Bdmool Hook, 

2-6 Befauel Bd. S« Hefler, Jeacy. C.L 
Tefc 0534 7877*, Fib QS3* 35401 
Tl* <192227 COFORM C 


COMPUTERS 

W€ Buy A Sdl aU Makes 
Small, Medium. , Large Qty’s 
Extern, Used, Liquidated 
Working, Non-Working 
Complete, Incomplete 

Call 0527-574611 


Finance and Rnandal expertise 
sought for North London based 
book distributor and pubftshar. 

Projected turnover 
£1ro-£1 J5m per annum. 

Please writs to Box B34S9. Fktandal 
Times, One Souttmarif Bridge, 
London SET AM. 


OFFER FOR SALE OP RASTER 
LICENCE on terms to tro agreed. To 
poraon or company *rfth exportise lo 
d raa top tee nwtet potendaJ ot a gales of 
Invent i ons rotating la tha Packaging 
Indu s try. Reply Boa B3486. Financial 
Tknna, Ono 9outtmwk Bridge. London. 
SE1 SHI- 


SOUTH AMERICA ■ Import/Export. UK 
company *Kh ntabOatisd p r o a on c o In 
lucrative mart so ot MERCOSUR Is 
aaaMng katiter po d u co lo promofia. Send 
kd datfeto Bax B342B, HnondU Tknos, 
Ono Scutimortt B ridge. London SElflW. 

COMMERCIAL FINANCE Ntankas CapM 
MBaHe from £26,000 u p wards. SensHe 
Ratos, S o na B j Io Fees. Broker onquOteo 
w sl co mo. Anglo American Venturas Ltd. 
Tefc fDBH) 201305. Fax (OSK) 201377 


AUCTIONS 


NEXT AUCTIONS 

of lift bio in see policies 
(or in vu T m c nt wOlbebeidiM 
3 and 17 November in Loadon and 
10 November ia Barrmnoutii 
Telephone 

HJEL Foster & CraOeU 
0171-tin 1941 forodslogae 

Bcsnlakd by feaoeal bmatnoil AeAorfcy 


LEGAL NOTICE 


IN TOE MATTER OF MKCOAS MIDDLE 
EAST CONTRACIINC ASSOCIATES LT9 
ARP 

m TUB MATTER OFTHE 
ernus COMTAraZS LAW CAT 1U 
Notice fat hereby grrea tbs fee ocdSon of fee 
■bovc-aimed co spiny wifcfa b being 
voh a nr ay 'mmoirntu naked aa er beta 
fee in fa* at Deanier tW» la nd le feok fidl 



The affordable 
executive jet option 

from The London Jet Share Company 

• Guaranteed Operating Costs 

• Low Management Input 

• More Useful. More Convenient, More Flexible 

• All the benefits of your own private jet 
... for only 33% of the capital 


|| The ONLY partial jet ownership company I 
with aircraft available NOW 


For more information, a brochure ot to view our aircraft 

call Mike HamHn nr Krith Tomlin 

on 01582 26760 Fax 01582 27135 

TM: The trade maifc juSftsre is owned by the toodon Share Company Ltd 


The British Folk) Fellowship was 
granted a Street Collectian in the 
Metropolitan area an Saturday 16 
July 1994 and also in tiie CSty of 
London on Friday 2 September 
1994. As required by the 
Regulations governing Permits, 
we are pleased to announce the 
results as follows: 


I ■■ 'l- 0 1 m r-ii • »0 rTMl 


Income £12,159.28 
Expenses 18748 
Net Result £1L971B0 




Income £4,600.14 
Expenses £186.55 

Net Result £4,413.59 

The British Polio Fellowship 
records its earnest gratitude to the . 
members of the public for their 
generous support and its 
appreciation to all collectors who 
made this voluntary effort 
posable. 



X5SS 


BUSINESSES 

WANTED 


A PUBLICLY 
QUOTED COMPANY 
specialising in niche financial 
products is Beeking to acquire 1 
similar financial services | 
businesses up to 
OQminsize. 

Write Box: B3430 
Financial Tunes, 

One Southwark Bridge, 
London, SE1 9HL 


SMALL LISTED PLC 

SEEKS £1M + PROFITS 
BUSINESS FOR 
REVERSE TAKEOVER 

CALL 0825 840047 
BUSINESS WANTED 

Private individual seeks a 
business in tight engineering 
with do in access of £lm. 
Reply In Confidence to 
Wood & Leig/t, 

16 Coalfield Road, 

London SW7 400 


BUSINESS WANTED 

BUILDING MATERIALS 
AND RELATED SECTORS 

An excellent opportunity for shareholders to exit 
from a private company (perhaps an earlier MBQ/MBI) 
or for a group to seH a non-core division/subsidiary. 

Our dient, a quoted UK group, supplying goods and 
services to the construction industry, wishes to add a 
major new division by acquiring a business which; 

• is involved in similar and related activities 

• is preferably a manufacturer 

• has a turnover to £40 million (or possibly higher for 
the right opportunity) and is profitable 

• Is UK based, but has an export capability 

• has a management team looking to continue. 
Vendors and their advisers should telephone either 
Patrick Groarke or Marcus Moir on 071 388 4242 in 
absolute confidence. Your identity will not be revealed 
to our dient without your permission. 

Livingstone Guarantee pic 
Acre House, 11-15 WiHiam Road, London NW1 3ER 


; U V I N G S T 0 N E GUARANTEE 


THE ACeUIStTIQN ft DISPOSAL SPECIALISTS 
SFA Member 




ac EE 


Power Supply Manufacturer 
Turnover £l-£3 million 

Wric la Box B3SI9. Pimadal Tfaacs, One Saatinmfc Bridge. London SB1 9HL 


&*■ 


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FINANCIAL times 


TUESDAY NOVEMBER 1 1994 


nk | 

n i 

I 

. i 

. . j 


BUSINESSES FOR SALE 



<53 1 (Jr®* 



15 


MONACO SJLM. 
COMPANY 

For sale from Owner to Owner 

immediately available, shell 

5ssaL-ja,55-ia 

msrahjement activities, 
P^^f^^enquirieatQ: 

B3S20. Ffeandai Ttowa, One 

Sorthwertt Bridge, London S61 9HL 
/^cD«RswfeajrassurBd 


S- r . ! 
C^l 




FOR SALE 

. . Industrial Equipment Soppli» 
asd Toot Hire Business 
with DIY and Leisure Divisions 
Midland based with 
tfoof£l.5m. Profitable 
Wri te to Bat Nu B3498 Fwmaliw. 
One Sowbwaric Bridge London SE1 9HL 


mjsimbss opportunity log 

aa row amftec and op rackra detaita me 

• *eetfew*btfLi 4 nM«l«a a 
" Catspoaica taTVnbio 
•AdoOms 

•tdhtuh rflUe 
M*tHyaacwadtHfadBidi with 
wta* bnten pcc^c fa abtf 
lanonbof Cos. and caotica ii cadi lone. 
.Td: 071-353 3003 Rue 071-353 3004 


*- ‘n. 




• -v; 


EFTOEm- S awmill 
in Estonia. 

FuSy ranawad, 2 framesaws, own 
drtar, small planer, fortdift, 4 trucks, 

. efo Production 6000 m* a yssr. 
Price £150.000. 

Enquiries tax +358 97 510210. 

Tet ■+ 358 57 5T 0200 



Tuson Limited 
Peakdale Garages Limited 

Tony Thompson and Mike Seery. the Joint Administrative Receiver®, oner (or sale 
39 a going concern. In whole or in part, the businesses and assets of the above 
two companies. 

The companies operate car retail dealerships and other related businesses from 
three sites in the North west of England. 

Principal features Include: 

■ Three trading sites; in Gtossop, Hyde and ChapeterHe-Friih, 
including showrooms, service areas, bodyshop ate; 

■ Current turnover of some £10 million; 

■ 24 hour petrol forecourt selling 2 million litres a year; and 

■ Car hire fleet at an three sites. 

For further information contact the Joint Administrative Receiver. Mite Seery, 

KPMG Peat Marwick. Edward VII Quay. Navigation Way, Ashton-Orvftibbta. Preston. 
Lancashire PR2 2VF. Tet 0772 722822 Fate 0772 736777. 




IVf /rlU 



MAJOR EAST ANGLIAN CAR AND TRUCK DEALERSHIP 


* 


" LANCASTER HOUSE 
PUBLICATIONS LTD 

Prestigious name and tax losses of 
£6000, Offers in excess of £15,000 will 
be considered. 

One book at abort stories entitled 
■Northern light!'. Published. 

Contact David Scott 
Tal 0282 33377 er Fax 02X283 1205 


FOR SALE 

Wear Midbods based process 

engmeraing and. fabrication 
company. Serves water, sewage and| 
chunks! sectors. Patents pending. 
'Hu. UK agencies. 

Turnover - £0.6 to £L2 millioa 
Reply to Fax No: 0622764506 


FOR SALE 

Nbnta biggest Yacht Chandler with 3 
6000 sq fta haw magia LondOB. POdc 
A Sodtamptoo. Tbrnmerat end of 1993 
£4j6M: PoHColoar Mall Order 
CMafegoc with Dnflmg EEst 
Sn q niri c a lP .Bon No: B3427 Ffaaacial 
Tboe* One Sanlfcraik Bridge. . 

• London SEl 9HL 


KINMAIN 

CONSTRUCTION LTD 

The joint Administrative Receivers, Hedley Brum and Philip Lyon, offer 
for sab, as a going concern, die business and assets of the above. 

Ml One of the Midland's (West Bromwich) leading civil engineering 
contractors. 

■ Approved contractor for many local authorities. 

■ Annual turnover in 1993 approximately £3 million. 

■f 20 drilled employees. 

■ High quality freehold office, workshop fecifiries and store plus 2.1 acre 
secure yard. Separate freehold industrial unit of 3000 sq. ft. 

■ Extensive plant & equipment - JCBs, road vehidcs, hoists, compressors, etc 
For further details oontacn Hedley Brunt or Nigd Spearing, Kkhons Lmpcy, 
Bank House, 8 Cherry Street, Birmingham, B2 5 AD. 

Teh 021 631 2631 Fas 021 631 2632 



Group Turnover Approx. £50 million 
Net Assets at 30 September 1904, £1.4 million (unaudited) 



rli 


A member of HLB I wu i miwd 



Fotowing fho tarmkKtton of Is deotasWps txi subsequent granting 
of new VbuxtaB deafeships lo tie JoW AfWnisWIve Rashers; 
Jonafun M Sisson and Ammda S. M. Robertson alSrtor&fete 
tus&wssandoss8isaf^tolk»^Gc^6roi|)Con^xBi^ 

Gales of Becdes 

• Vouxftafl Dealership 

• Leyland Daf Truck Sendee Pdrt 

• LDV retail dealership 

• extensive freeflow property 

■ cgjprox, car unBssokl: 300 retail, 1000 used, 1600 flee! 

• approx van irate sold: 200 retail, 400 Seel 

■ approx. Annual T/o £33.3 mlffion. 

Gales of Diss 

• Voochdl Dealership 

• freehold property 

• esfobfehed toed customer base 

• epprax. car unte sold: 300 relaD, 450 used 

• approx. Annual T/o £7.7 mil Bor. 


Gales of Wymondham 

• SeddonAMnsonDfefffcutore 

• Bedford Setvfcss and Parts Date 

• FtatucvdeatefsWp 

• truck servicing and new/used sales 

• leasehold property 

• S5tQOBshsd/^kxi(daitfomerbose 

• approx. Annual T/b fil .8 ireHlon. 

Master Vehicle Contracts 

• contract Wre ofcais and Hghf commercial vehicles 

• estabfished regfonal customer base 

• leasehold property 

• approx. Annual T/o £7.2 mllBon. 

For further infannalQn, please contort Jonalhan Sisson or 
Stephen OfcffieW af Coopers & Lybranct, The Afrtum, S( 6eorgas 
Street. Norwich NR3 1AG. Telephone: (0603) 615244. 

FODC (0603) 631060. 


Coopen A Lybaod is authored by the InMitutr of Chartered Anmvinantt in England and Writs to caff, on [nvcsunenl Burinca. 


Our South of England 

Based client offers an established 
aerospace approved engineering 
company for sale. The key features 
of ikwi business are: 

* Turnover in excess of 
£1^00JMM 

” FWI order book 

* i rtng established trading name 

* Highly skilled and stable 
workforce 

■ Full in-house service including 
ap prov ed u— c m shops. 

* Premises available for safe or 
rent 

Interested parties should apply 
In writing Ur David Lee, 

Ross Brooke A Co, 

39 London Road, Newbury, 
Berks RG13 1JL. 


/= 


MPANY 

3 TICE 


a 


FOR SALE 

Shirt and blouse manufacturer 
and distributor 


• Turnover of around £35m 
-• Esteblfehedl00)«axs 

• Manufacture ancTcEstnbution ot weDlurown " 

. , branded product in the UK- . ■ 

Far Eastern and European licensing operation 

• Two freehold factories undertaking CMT wodc 
•. Further investment properties •' 

For. sale as a going concern 
. JbQormng thedeath of the principal shareholder 

■ ' Rjr further information please contact 
. DM Farquharsoa Binder Hran^yn 
; «•' “T Victoria Square, Victoria Street 
St Albans AL1 3TF 
JeL- 01727 836363 Fax 01727 840993 

Binder Hamlyn 


Coopers 

&Lybrand 





The JoW AdmWsfrattve Receivers, T R Harris and N J Vooght. offer for sale the 
business and assets d the above company. 

Principal features of the business include: 

• toag established business 

• noted for quaffiy of service 

• turnover of £420k 

• Ml range of catering equipment and hfra stock 

• strong customer base. 

Please address ail enquiries to Adrian Hawtea at Coopers & Lybrand, HlUgate House, 

26 Old Bafley, London EC4M 7PL Telephone: (071) 583 5000. Rnc (077) 2126800. 

Coopers* Lyfcrnd n tudi oriae d by the tosrimre of amaed Aeawuanu tai EagtimJ md Wales m ,-any i>o 
liWlilnuW Bwinrw 


o0006rs 

&Lyorand 


SANQUHAR, DUMFRIES & 
GALLOWAY 



#■; 


als i 
TORS : 



. The jobu Recehnts, Frank Bln and Ian RanUn ol Coopers & Lybrana. 
Giosgow, altar tor sole the buttress and assets of Ws company. wKcfr 
spedaftses to Rw taAstsfeg md dyeing of corpet yam. 

Pripdptd featares of fee tnsfeen ioefade: 

• Spoce Dye Pncess FadBy. wflh sapetba machines 

• established qtiaffly customer base 

• modem leased urtt of iwxoximaMy 70,000 square tee* 

1994 twnow hi «cess of SI 2 mUflon. 

Rjfflufterlntotiiiafiba^a^ 

ter ftanJdn or OeiekFaisyihatf Coopers ft LybraridL Khfyre House. . 
SO0 m 6ecxge Sfrat Gtasgc w G2 2LW. Telephone: (041) 248 2644. 

CBOoef»il.yb»aatlbaoiliorimdbyitelnalweofQ««r«1A«onBi«Bi«in 

: Ei^baJ and Wales to cany oo T . n ■ 




BUSINESS SERVICES 


Bournemouth International Airport 
and associated land 

Bournemouth Borough Council and Dorset County Council, lha shareholders ol 
Bournemouth international Airport, have appointed KPMG Corporate finance to 
market their interest in Ute business and the associated land 

Salient features include: 

■ Used by scheduled, holiday charter, commercial and freight operators. 

■ Net assets of £24 million; 

■ Turnover in excess of £5 million and profitable; 

■ Industrial estate generating income of £1 million, and 

■ 80 hectares ol development land :oned for industrial developnwnt 

For former information pfease coniacr Andrew Carr or fioDert Haycock ...n 
(01703) 631465 or atthd following address: KPMG Corporals Finance. Dukes Keep. 
Marsh Lane. Southampton S0 14 3FX. 


irfUMO tat HumiI. >Mt> ■ 



m 



Save on 
International 
Phone Calls! 


USA bnfr 24p por min 

AttstraHa40ppermia 

No VAT 

Ash about oar tow rates 
■ to other countries. 



back 


CitilUSA 1 -206-284-8600 
Fax USA l-206'282r66S6 

AaSccpadAw. V^Swnfe.W93U9USA 

:HMLeY_ ST8EET BUSINESS 

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■ fius pee jDeasspir'tBWnS- For furfoer 
oadUftnogntersaas.. 


CALL USA 
ONLY 17p/min 

AUSTRALIA 

ONLY29p/3VHN 

First 30 mins FREE 
Dial Int. Telecom ; 
Tel: 081 490 5014 
Fax: 081 568 2830 


FOR SALE 

Northern Based 

■ Radio Cbmnunricarioas Buriness. 
CeOntar, P.M~R_ Sales, Service, 
ReataL5srADstied25yis. 
Blue dap cHests milium 
plus taniover reasonable pxo&xs. 
owner wisfaiiK to retire. 


Write to Box B351Q, Fmanrlat tfeae*. 
One Soatbwsrk Bridge, 
LBJdoeSH9HL. 


1DO+ UVE BUSINESSES FOR SALE 
aaSestnct as se t s tsvt fftt f on 2 EB 11 M 
FfecQ7t 7CB 3484 


MANITFACTURJNG BUSINESS 
FOR SALE 

Oar is a welt-esublisbed, proTiUbtt Northtm hafeJ irunufj^tuntij; cvnipan) 
. ^■. ra r in g primarily in Ihe office furniture and melamine panels market. They have 3 
broad UK ensoraer base and operate from a modem fjcimy wiiha worifoiwef 25. 
The sbareboUen dow w»b » make a compkic Jupjsal of the svmpany although 
openiioaal Dunagemeni can irmain. 

The is otperiewing rapid growth anil have lecmilv iMn.Hlm.eil new products 

ID provide « ptedbrm for eomlaoiag prognevt borh in I he UK and Kurope Prircipab 
only aboDfe write »: 

Mrs SJ Hudson ALA 
G S Pearson Co.-poraie finance 
Opcosiead Cuuri. Nonh Lunr. 
fieadingfey. I eetri LSh 11 1 h 


OFFICE EQUIPMENT 



' ' . * :. AwewfemB Hrandal Tfeiw^ 
-TffonTtwdays, Fridays axf Stfwriays. 

:- ;2-. j: 2 : tad«r infomnUan 

:.ortoadv«tt»&i t«s section 

. ■ ' -■ : :, -p»a|ttP«n‘ aCt 

KerfLosmtanort 44471 8734780 

v Br lesfey Swwwr 

- ' m.+4471 8733308 

- - ■ JSir.-: • ' ' - — 



OFFICE FURNITURE 


VVe have - (feed from the manufacturer - 
■ new high Quality executive and system ranges 
- conference and receptions. Large choice of veneers, 
metemirt&aivVor laminate finishes 


with discount of up to 40% from R.R.P. 


London Showroom for viewing: 

Ami House, 78 Charlotte Smet, London W1 Tet 0374 741439 
. Fuff camcad and planning services. 


LINEABURO LTD Tel: 0992 503313 


PMC PAGES 


Businesses & Property in Receivership 


me 

FuUy blwll ww*)y gmM to co'S n Kquriaoon A nrovwriWp. ea's 
In MtCfe. Insolvency aututm. Dusfeeasos lor New Sccdors 
Prefeaohwicy & LPA Beccwasrups. 

me UK piUe » convnerciaP pnjpwty ti recehefship J"0 la safe • 
100‘s of property Bsgains Howls. Nursing Homes. Lmd. Others. 
Raot A industrial pretru**. Development tvpdrtunitin eft- 
Sanpli TOpifw 

Tel: (0273) 626G81 Fax: B38681 


PROPERTY 

PAGES 


TOILETRIES 

Large capacity modem 
process and mixing plant for 
all types of liquids, creams, 
lotions and pastes plus tube 
and bottle tilling lines. 
Fax Loudon: 081 961 6853 


FOR SALE 

TRAVEL COMPANY 
WITH TAX LOSSES 

Write u» Box Np BT42ft rijuncj.il 

Times, One Souihu.-irl BriJgj*. 
Lundiin | v] ii. 


/T 


Coopers 
& Lybrand 


PARW1DE LIMITED 

& H0LMESQUEST HOLDINGS LIMITED T/A 



The Joint AdminisiraSvB Recofvas. offer for safe As business and asssts ol Ihe abava Companfos. 
Pfloctpd Irafavs of foe basteess taefods: * 

• total estataappraxfriKdeiy 1,070 acres on River Wbvnwy,btaween6isafyaTiiwulhnid Becdes 

• three 9 hois gaff couisre; pflch & puft par 3 and toil 3,400 yards. Pemtisston to exlend par 3 and 
tong courses 

• riding and eques&kn locfWes, Inchidlng Rvety 

• ite Half itS8ffvrifh a bar, two restauanis and office fkxfflfes 

• arable kmd - approximately 200 acres 

• reed beds oral marshland - appradmafley 300 acres 

• commerce woorSato - oppraxfenafety 285 acres. 

For tether datotis, ptaose corriocf Joncfiian Sisson or James Moritn at Coopers & Lybrand. The A&lum. 
ST Georges Street Namfcft, Moribft NR3 TAG. Telephone: (0603) 615244 Fax: (0603) 631060. 

Cbapen A Lybrend if Mlnriaed by Ihe Iminate orCtancred Accountunto in England ood Wulex >o carry ou 
Invgtmcul OrwintM 


Coopers 
& Lybrand 




CHEMICAL MANUFACTURER 



The Admtais&trior D J Sates, oflere for safe fee bustoess and assds ottais chemical manufbetarer. 
Principal features of the business Include: 

• manufacturer of cresyfic adds, aesylic creosotes and <^ier phenolic products, principally 
for export 

• distillation and blending facilities 

• modem leasehold factory In Sheffield, dose to Ml 

• turnover of qjproximatety £1 .0 motion 

• good order book. 

For further idormafion, please write to David Stakes a! Coopers ft Lybrand. 1 East Parade, 
Sheffield SI 2ET. Telephone: (01 14) 272 9141 . Fax: (01 14) 259 6202, or coMod 
Nigel Bedford at the Company's premises on telephone (01 14) 256 1676. 

Cropci* A Lybnrel is authorised by Ihe ImUUc of Chartered Accountants in tincfotl and Walts la cany oa 
hnvsmeni Buuoca 



Motor Dealership 

The Jotnl Administrative Receivers otter lor sale the assets and goodwill 
of Sharman and Ladbury Limited, a Ford Dealership located in Mellon 
Mowbray. Leicestershire. 

Principal features include; 

■ Leasehold site of 1.49 acres incorporating showroom, offices, workshop 
and bodyshop of approximately 29,500 sq.ft. Freehold available. 

■ Located close to Metton Mowbray town centre on main Leicester Road. 

■ Experienced work torce. 

■ Current lurnover of approximately £12m per annum. 

For further information contact the Joint Administrative Receiver. 

Mick McLoughlin, KPMG Peat Marwick, St. Nicholas House, 31 Park Row, 
Nottingham NG1 6FQ. Tel: 0115 935 3535 Fax: 0115 935 3500. 




mi Wm%J! 


Vehicle Contract Hire 


Small Vehicle Contract Hire 
Business - 140 vehicles - good 
residual values - profitable - 
Blue Chip clients - unutilised tax 
allowances - subsidiary of group 
wishing to concentrate on 
core business. 

Write to 8m B3499. Financial Times, 
One Southwark Bridge, 
London SEl 9HL 


RESIDENTIAL PROPE RTY S ALES, 
MANAGEMENT & LETTINGS 
ft South EroJ Luoifea 
h Ten years prufilaMe trading 
* 4 branches, strong branding 

•.'« c.l5H properties ander management 

i- T/O c T750L. ptc mydra wings 
profits c. CMMk 
* Retirement sale 

Caaiafl; Jack iSpAu. Boric Water, 
Amtrej Hear. IM0 BJy Fleet, 
fierfu f» IN 6SK. ttt K?l -Of IIII 

ItjJ ,nJ al Wdouan «e biuWiiM BOH 


FOR SALE 


RESIDENTIAL HOUSE BUILDING COMPANY 


* Family business established 1987 

* Substantia/ tax tosses avaflable 

* Asset values in excess of Elm 

* Prospects for future growth 

Contact 
Patrick Loftus, 

BINDER HAMLYN, 1 Norfolk Street, Manchester, M60 
8BH Tel: 061-831-7121 


FOB SALE 


LONG ESTABUSHB) COMPANY In the 
environmental cleaning market, manufacturing a comprehensive range 
ot air and grease filtration products with a £B.5ra turnover and 
excellent profits. The company specialises in the manufacture of 
products in the expanding field of carbon filtration, and therefore has 
good prospects tor future growth. Convenient for M25. 

Write. Bra B3421, financial Tams, One Soaftwart Bridge. London SEI 9HL 



16 


FINANCIAL TIMES 


TUESDAY NOVEMBER t 1994 


BUSINESS AND THE LAW 


Court rejects 
tractor appeals 



EUROPEAN 

COURT 


The Court of First 
Instance has dis- 
missed the appeals 
of three tractor 
manufacturers 
against a 1992 
European Commis- 
sion decision con- 
demning the UK 
Agricultural Tractor Registration 
Ex chang e agreement. 

The Commission said exchange 
of information on tractor registra- 
tions infringed Treaty of Rome 
competition rules, because it 
resulted in an exchange of infor- 
mation identifying sales of indi- 
vidual competitors, dealer sales 
and imports. 

The agreement concerned an 
information system based on UK 
Department of Transport tractor 
registration data. In the UK, all 
vehicles must be registered for use 
on public roads. Systemattcs Inter- 
national (SIL). a data processing 
company responsible for process- 
ing and handling registration 
application forms for the depart- 
ment, was permitted to send cer- 
tain information to the parties to 
the agreement 

The Commission said the infor- 
mation sent to members of the 
agreement could be divided into 
three categories: 

• Aggregate industry informa- 
tion, including aggregate industry 
sales broken down by year, quar- 
ter, month or week; 

• Information on each member's 
sales, including number of units 
sold by each manufacturer and 
market share for various geo- 
graphical areas; and 

Information concerning sales 
made by dealers in each member’s 
distribution network, in particular 
Imports and exports in their 
respective territories. 

Until September 1988, parties to 
the agreement received part o^the 
registration application forms 
filed by independent importers 
horn SIT.. Thereafter, the Commis- 
sion said they continued to receive 
sufficient information to enable 
parallel imports from other mem- 
ber countries to. be identified, 
mainly through the use of tractor 
serial numbers: Dealer territories 
could be identified because the 
registration procedure required 
customer postcodes to be given 
and the manufacturers defined 
territories by postcode. 

eight agreement companies 
about 87-88 per cent of the UK 


The 

\j£* 


tractor market, the Commission 
said. It refused exemption from 
the competition rules largely 
because the information exchange 
system did not benefit consumers 
but exclusively suppliers. 

The Commission claimed it had 
never accepted either that 
exchanges of recent and detailed 
information were indispensable to 
achieve the commercial objectives 
of the members of the agreement 
or that such exchanges offer 
advantages, in particular for third 
parties, which would compensate 
for their restrictive effects on com- 
petition. 

The CFI rejected the tractor 
manufacturers' arguments that 
the agreement did not restrict 
competition or affect trade 
between member countries and, if 
it did, it should have been 
exempted. 

The Court said the provision of 
the information to all suppliers 
joining the system presupposed an 
agreement, or a tacit agreement, 
between the parties to define the 
boundaries of dealer sales territo- 
ries by reference to the UK 
postcode system, as well as an 
institutional framework enabling 
information to be exchanged 
between the parties through then- 
trade association (Agricultural 
Engineers Association). 

The Court said the frequency 
and systematic nature of the infor- 
mation also enabled a trader to 
forecast more precisely the con- 
duct of its competitors. 

The Commission’s decision was 
the first time it had prohibited an 
information exchange system con- 
cerning a single-product market in 
the absence of directly related 
anti-competitive conduct, such as 
price fixing. However, the CFI con- 
firmed the Commission had 
applied the same criteria it always 
applied. 

The CFI agreed with the Com- 
mission that in a narrow oligopo- 
listic market, where four compa- 
nies had a dominant market 
share, the exchange of confiden- 
tial information restricted the hid- 
den competition which would oth- 
erwise mast in such a market and 
formed a barrier to new market 
entrants. 

T-34 and T-35192, Fiatagri UK, 
Ford New Holland and John Deere 
v Commission, CFI 2CH, October 27 
1934. 

BRICK COURT CHAMBERS, 
BRUSSELS 


F or many of the top commer- 
cial law firms the recent 
recession had little impact 
on gross revenues. That has 
been particularly true for firms 
with strong insolvency, banking 
and internationally based practices. 

Inevitably, however, the economic 
downturn threw up its fair share of 
casualties on both sides of the 
Atlantic. Some films' troubles were 
more public than others. In the US, 
Boston’s Gaston & Snow went to 
the wall In the UK, DJ Freeman 
was one of the first to acknowledge 
publicly that it had financial prob- 
lems - difficulties which, by all 
accounts, are now behind it. 

For others the pain is not yet 
over. Much has been written about 
the problems of City law firm 
Turner Kenneth Brown and its fail- 
ure to clinch a merger with Alsop 
Wilkinson. And in the US last 
month. Lord Day & Lord Barrett 
Smith, one of New York’s oldest law 
firms, dissolved its partnership. 

Rumours continue to circulate in 
London about the precarious finan- 
cial health of several well-known 
City law firms. But although many 
firms were open about laying off 
staff during the recession, few are 
prepared to follow DJ Freeman's 
example and acknowledge financial 
difficulties in public. 

That is understandable, says Mr 
Christopher Honeyman Brown of 
accountants Binder Hamlyn. “There 
is tremendous prejudice against 
professionals unable to manage 
their affairs, to the extent that they 
get into a money muddle. Accoun- 
tants would certainly be discred- 
ited. Lawyers probably also,” he 
says. 

Fear of publicity also appears to 
have prevented many firms from 
confronting their financial difficul- 
ties and attempting to restructure. 
"People do tend to bury their heads 
in the sand, especially partnerships 
with problems. They just hope they 
will go away,” says Mr Steve Hill of 
accountants Coopers & Lybrand. 

Part of the reason why partner- 
ships in financi al trouble prefer to 
soldier on rather than confront 
their problems is that, until now, 
they have had little incentive to 
restructure. 

When the 1986 Insolvency Act 
introduced new rescue procedures 
for companies and individuals, part- 
nerships were left out But this gap. 
long criticised by insolvency practi- 
tioners, is about to be filled. 

On December 1, the Insolvent 
Partnerships Order 1994 will extend 
the rescue culture to partnerships, 
allowing those in financial difficulty 
to make use of voluntary arrange- 
ments and a dminist ration orders for 
the first time. 

Under the old rules, an insolvent 
partnership could only be liquidated 
compulsorily or wound up by the 
partners' trustee in bankruptcy. 


Pain- saving 
incentives 

Robert Rice on the latest insolvency 
rules for partnerships 



Therefore, partnership rescues that 
have taken place tended to be 
through the use of serial individual 
voluntary arrangements (TV As) for 
the partners. 

Under an JVA, any individual 
owing money can propose a scheme 
to their creditors to pay off their 
debts in whole or in part. For a 
voluntary arrangement to be 
accepted, 75 per cent by value of the 
creditors need to agree to it. 

This procedure has been used suc- 
cessfully for some partnerships, 
says Mr Hill. Serial IV As were used 
for the partners of the London and 
Oxford branches of UK accountants 
Halpero & Woolf, now merged with 
Casson Beckman. But in general 
they are too cumbersome for all but 
the smallest partnerships. 

“The Halpem & Woolf case would 
probably have been easier, cheaper 
and smoother under the new sys- 
tem,” he says. 

According to Mr Chris Hughes, 
head of Coopers' insolvency prac- 
tice, the new law will make it easier 
to help medium and large partner- 
ships, allowing some to survive 
which would not have done so 
before. It will aid professional part- 
nerships such as solicitors, accoun- 
tants and estate agents, where the 


main asset of the business is the 
ability to earn future profits. Such 
businesses are worth for more alive 
than dead. Mr Hughes says. 

But he adds the courts should 
allow the use of IVAs for small part- 
nerships to continue, rather than 
force insolvency practitioners to use 
the panoply of corporate procedures 
for the husband-and-wife comer 
shop. That would be costly and of 
no benefit to creditors, he says. 

M r Hughes is also con- 
cerned by the Depart- 
ment of Trade and 
Industry's insistence 
that partnerships should be treated 
in exactly the same way as compa- 
nies. so far as is possible. An admin- 
istration order - an interim 
arrangement to give a company pro- 
tection from its creditors while it 
reorganises (often combined with a 
voluntary arrangement whereby 
creditors agree to compromise their 
claims) - does not provide any pro- 
tection for individual shareholders. 

By implication, orders against 
partnerships will not provide any 
protection for partners either. But, 
he says, shareholders do not need 
protection, as 'they are not person- 
ally responsible for the companies' 


debts. Partners are. however. 

Ihe other big change concerns 
the ranking of creditors. For more 
than 200 years, when a partnership 
has gone into liquidation or bank- 
ruptcy. each partner's private credi- 
tors have to be paid in full before 
any of their assets can be used to 
meet partnership debts. 

From December 1. as recom- 
mended by the Cork Committee as 
long ago as in 1982, the deficit in a 
partnership will now be a claim m 
each partner’s own bankruptcy, and 
rank equally with the partner’s pri- 


vate creditors. 

Mr Hill says the effect of this 
change could be dramatic and pri- 
vate creditors may no longer get 
paid in full. “It means the local 
plumber is going to have a lower 
chance of getting paid if be deals 
with a businessman who is in part- 
nership than he would if he dealt 
with a s imilar businessman who is 
a company director." he says. 

So tiie new rule will favour credi- 
tors of the business over those of 
individual partners. Bat, Mr Hill 
says, that may be the incentive 
needed to keep the business alive. 
In the case of solicitors, where 
hanks anri landlords tend to be the 

main creditors, it may help to per- 
suade hanks not to pull the plug on 
financially troubled law firms. 

Will the new procedures work or 
be much used? If they give a part- 
nership with a viable underlying 
business time to cut out dead wood, 
tighten cash management and pres- 
ent itself as a suitable candidate for 
merger, then they could prove valu- 
able, says Mr Honeyman Brown. 

Mr Hill says it is difficult to gauge 
how much use will be made of the 
new rules. Insolvency practitioners 
are aware of several professional 
firms still in some difficulty, so if 
the new procedures get positive 
results, "we may find, by demon- 
strating we have more strings to 
crur bow, that we encourage some 
partnerships to confront their finan- 
cial problems and use the new pro- 
cedures to restructure”. 

Others are not so convinced. Mr 
Alan Perry, a partner of D J Free- 
man, says that any whisper of insol- 
vency in a professional firm in the 
past has tended to lead to the rapid 
collapse of the business. “Apart 
from isolated cases, 1 think the jury 
is still out on whether, and in what 
circumstances, a s ubstantial profes- 
sional partnership could go through 
an administration or a voluntary 
arrangement and survive” Mr 
Perry says. 

There is also the hint that, with 
the recession over, the timing of the 
Introduction of the new roles 
smacks of shutting the stable door 
after the horse has bolted. Mr Hill is 
not sure that matters. “There's defi- 
nitely less insolvency about. But 
that gives us plenty of time to de- 
bug it before the next downturn.” 



LEGAL BRIEFS 



Canary Wharf to 
appeal against TV 
reception ruling 

C anary Wharf, the London 
Docklands development 
company, Is to appeal 
against a High Court ruling earlier 
this year in an action brought by a 
group of Docklands residents 
claiming damages for interference 
with television reception. 

Canary Wharf mainhiinc that 
interference with television 
reception should not be an 
actionable nuisance under English 
law. If the ruling is allowed to 
stand it could result in similar 
actions against exis tin g 
developments, and could t h reaten 
urban regeneration and city-centre 
developments, the company rays. 

It says interference with 
television reception is analogous 
with loss of view, citing an 1881 
case that there is no right to a view 
under English law otherwise *111618 
could be no great towns”. 

Higher salaries 

S alaries for assistant solicitors 
in London have risen 
strongly, according to legal 
recruitment consultants Quarry 
Dougafi. For firms with more than 
25 partners, solicitors qualified for 

foot years can earn up to £52,000 a 
year and those qualified for eight 
years, £83,500. 

Solicitors’ PR 

T he Solicitors Trust, a new 
solicitors' network, farmed 
in association with Brewin 
Dolphin Bell Lawrie, the UK 
private client stockbroker, is to 
spend £10,000 a week on a national 
press advertising campaign to 
dram up business for its members. 

The network, which wDl be 
restricted to 200 firms, each 
operating within an exclusive 
geographical area, will concentrate 
on personal finance planning, 
general management of clients’ 
investment portfolios and 
stockbroking. 


PEOPLE 



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A Member of 5FA 



Pru picks Sir Martin 
from its board 


The Prudential Corporation, 
the UK's largest life Insurer 
and biggest investment institu- 
tion, is expected to announce 
shortly that Sir Martin 
Jacomb, one of the City's best- 
connected merchant bankers, 
will take over as its non-execu- 
tive chairman following next 
May's annual general meeting. 

The expected choice of Sir 
Martin, chairman of Postel 
Investment Management and a 
director of the Bank of 
England, means that the Pru- 
dential is reverting to its tradi- 
tional habit of picking a chair- 
man from its outside 
non-executive directors. 

Sir Brian Corby, 65. the cur- 
rent chairman, is unusual in 
that he joined the Pru in 1952 
and worked his way up to be 
group chief executive, before 
becoming chairman in 1990. Sir 
Brian's two predecessors were 
Lord Hunt of Tam worth, a for- 
mer Cabinet Office secretary, 
and Lord Carr, who had been 


Non-executive 

directors 



Paddy Linaker (above), former 
managing' director and deputy 
chairman of M&G, the City 
fond manager, is taking over 
as non-executive chairman of 
F1SONS as from yesterday. 

He replaces Patrick Egan, 
64, executive chairman, who 
in March signalled his inten- 
tion to step down and was 
known to have been keen to 
step down as soon as a replace- 
ment was in place. 

Stuart WalUs, 48, the chief 
executive since September, 
takes over executive control of 
the company. His predecessor. 
Cedric Scroggs, was sacked in 
December and the company 
since shed jobs and sold off 
some businesses. 

Fisons says the changes are 
ere taking place with immedi- 


Sir Edward Heath's Home Sec- 
retary in the early 1970s. 

Although Sir Martin, who 
turns 65 next week, is a more 
traditional type of insurance 
company chairman, he differs 
from his predecessors at the 
Pru in having strong ties with 
the City. He worked as a bar- 
rister before joining Kleinwort 
Benson in 1968 where he rose 
to be vice-chairman and was 
often regarded as a contender 
for the chairman’s post. 

In 1985 he quit the family- 
dominated merchant bank and 
was' appointed a deputy chair- 
man of Barclays Bank. He was 
the first chairman of Barclays 
de Zoete Wedd and is credited 
with making BZW one of the 
more successful merchant 
banking operations of the big 
clearing banks. 

When he took on the chair- 
manship of the British Council 
in 1992 there was speculation 
that Sir Martin was preparing 
to bow out of City life slowly. 


ate effect because “the hand- 
over to Wallis has gone excep- 
tionally smoothly”. 

Linaker, 60, joined the 
Fisons board in July as a non- 
executive director after he left 
M&G. He is also a non-execu- 
tive director of the TSB Group. 

■ Basil Selle rs has resigned 
from GESTETNER 
HOLDINGS. 

■ Stephen Barclay at UPTON 
& SOUTHERN: Alan Jones has 
resigned. 

■ Janet Cohen, a director oC 
Charterhouse Bank, The 
Yorkshire Building Society, 
and BPP Holdings, at JOHN 
WADDINGTON. 

■ Robert Wade, chairman of 
Leeds Group, at LEEDS & 
HOLBECK BUILDING 
SOCIETY; Olav Arnold has 
retired. 

N Paul Baddiley, former 
finan ce director, at the 
HOLLAS GROUP. 

■ Sir William Gray and David 
Peart at HARTLE POOLS 
WATER COMPANY; Laurence 
Bridgewater has retired. 

■ Mobd Aminuddin Ronse. 
Freddie Pang Hock Cheng and 
Tan Kim Poh at ROSSMONT. 

■ Sir Wilfrid Newton, former 
chairman and chief executive 
of London Regional Transport, 
at MAUNSELL. 

■ David Appleby at TREATT, 
from which he has taken early 
retirement as manufacturing 
director. 



He stepped down as deputy 
chairman of both Barclays 
Bank and Commercial Union 
at the end of last year and his 
term as a Bank of England 
director expires at the end of 
next February. 

However, he joined the board 
of the Pru last March and 
retains a clutch of non-execu- 
tive directorships which 
include Marks and Spencer, 
RTZ, and The Telegraph. He 
also took on the chairmanship 
of Delta last year and was last 
week appointed to the Nolan 
committee set up to examine 
standards of conduct in public 
life. (See Observer) 


■ lan Bankler, a former senior 
partner of McGrigor Donald, at 
STAKIS. 

■ Felda Hardymon, a partner 
of Bessemer Venture Partners, 
at LBM5. 

■ Guy Whalley has resigned 
from HIGGS & HILL. 

■ Sir Russell Fairgrieve. a 
past chairman of the Scottish 
Conservative Party, as 
chairman of BAIN HOGG in 
Scotland and Northern Ireland. 

■ Ian Hartigan. retired md of 
BP Shipping, at BABCOCK 
INTERNATIONAL GROUP. 

■ David Wydenback. retired 
deputy chairman of BACS, at 
ACTlve (COMPUTER 
SERVICES). 

■ Tom Drake, chairman of 
Drakes International, at 
TANIK INDUSTRIES. 

■ David Michels, chief 
executive of Stakis, at 
ABERFORTH SPLIT LEVEL 
TRUST. 

■ Harry Westropp, chairman 
of Britton Group, as chairman 
at ABACUS GROUP on the 
retirement of Peter Grundy. 

■ Ron Mason at M&P Group. 

■ John Ward, chairman of CBI 
(Scotland) and a former 
director of IBM's Havant plant. 
atCALLUNA. 

■ Barry Dale, chairman of The 
Littlewoods Organisation, at 
TRIPLEX LLOYD. 

■ Gerald Leahy, director 
general of the Association of 
Corporate Treasurers, at 
DAIWA EUROPE BANK 


Bodies politic 

On the day that the new Coal 
Authority took over from Brit- 
ish Coal the responsibility for 
owning and licensing Britain's 
coal assets, the government 
announced who the Authori- 
ty’s members are to be. 

They include Roy Lynk, the 
former president of the break- 
away Union of Democratic 
Miueworkers from 1987 to 
1993, who was himself a coal- 
face worker for nearly 30 
years. Others are Leslie Ren- 
deil, .the retiring director of 
planning and transport of 
Warwickshire County Council, 
Tom Slee, the finance director 
of Plttencrieff Resources, an 
Edinburgh-based oil and gas 
company, John Cunliffe, a for- 
mer senior legal adviser 
within The Royal Dutch' Shell 
Group of Companies, and Eric 
HassaU, a qualified chartered 
engineer who is currently 
chairman of Wardell Arm- 
strong, mining consultants. 

The Mansfield-based author- 
ity Is headed by Sir David 
White, the chairman of Mans- 
field Breweries. 

■ Malcolm Argent of British 
Telecom; Tom Hollobone of the 
International Association of 
Underwater Engineering 
Contractors; David Jones of 
the National Grid; Anthony 
McGrath of Baring Brothers; 
Roderick Paul of Severn Trent 
Water; Sue Rogers of the 
British Aerosol Manufacturers' 
Association; Jeffrey Rose of 
the RAC; fan Sp ratling of 
Wolff Steel; Simon Wilkinson 
of the London Stock Exchange; 
and Phillip Wright of Sheffield 
Forgemnsters have joined the 
national council of the 
CONFEDERATION OF 
BRITISH INDUSTRY. 

■ Hugh Cade, senior partner 
of the leisure consultancy of 
Touche Ross, has been 
appointed chairman of 
FOODSERVICE 
CONSULTANTS SOCIETY 
INTERNATIONAL in Europe. 

■ Peter Davis, chairman of 
Reed International has been 
appointed a trustee of the 
VICTORIA AND ALBERT 
MUSEUM. 

■ Stephen McQuillin, formerly 
regional controller in Bristol 
for the Department of the 
Environment, has been 
appointed director of the 
government office for DEVON 
AND CORNWALL. 

■ Graham Negus, a director of 
Ken Negus, has been appointed 
chairman of the STONE 
CLEANING AND SURFACE 
REPAIR Committee of the 
Stone Federation or Great 
Britain. 





i 1- 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1 994 


The Romantic 
spirit revisited 

Opportunities have been missed in this rehang 
of German art, writes William Packer 


ARTS 


T here is usually 
nothing more 
tedious than to 
review a show 
twice, for all that it 
might be currently the most 
brilliant thing in the world. 
But there are exceptions, espe- 
cially in those cases where 
doubts or questions were 
raised by the initial experi- 
ence. Autres temps, aulres 
rnunr. a show rehung is in 
many senses a new show, and 
to give such a one the benefit 
of those doubts is no bad thing . 

I first saw The Romantic 
Spirit in German Art 1770-1990 
at Edinburgh in the s ummer , 
and found it something less 
than the sum of its parts, fasci- 
nating and beautiful though 
many of those parts undoubt- 
edly were. It was a case. I felt, 
of curatorial ambition over- 
reaching itself. Two hundred 
years’-worth of any nation's art 
would be problem enough in 
the simplest chronological pre- 
sentation, let alone in the sus- 
tained exposition of a dense 
and complex argument What a 
brave idea it was and, in the 
event, what a fru strat e d oppor- 
tunity. 

The move from the grand 
and ample Classical spaces of 
the Royal Scottish Academy to 
the more tortuous and con- 
stricted plan of London's Hay- 
ward Gallery, was bound to 
entail a certain concentration 
of material and trimming 
down. Would it bring with it a 
refocusing of file show's essen- 
tial rationale, and with it a 
more comprehensive and inte- 
grated view of the subject as a 
whole? Not at alL 
Too late, of course, to expect 
that any of the more obvious 
and inexplicable gaps would 
now be plugged (we knew 
there was to be no Beckmann, 
no Schad, no Hubbnch, no Cor- 
inth, no Menzel) but surely 
some of the more obvious and 
direct comparisons across the 
period, which the very premise 
of the exhibition invites, would 
now be made - Beuys with 
Klee. Dix and Radzlwfll with 


Rethel Baselitz with von 
Marges and Bocklin, the Bau- 
haus practice with the early 
theorisings of Goethe and 
Range. Not a bit 
But scholars and curators 
are stubborn beasts, for whom 
any kt£e fixe is fixe indeed. The 
bare feet is that not a single 
concession has been made, in 
terms of editing or reconsidera- 
tion, in what was manifestly 
the weakest part of the Edin- 
burgh showing. There the 
work of the last 30 yean, repre- 
sented by a mere six artists, 
was shown apart In the Fruit- 
market Gallery. At the Hay- 
ward these same six have been 
given the entire mezzanine and 
the entrance gallery, which 
must amount to nearly 30 per 
cent of the area available for 
exhibitions. Small wonder then 
at what else has been left out 


W hat this says 
of the judg- 
ment and pri- 
orities of the 
organisers 
shouts for itself It is but the 
current orthodoxy that a room- 
size sculptural installation by a 
Beuys or Polke must take pre- 
cedence over any other consid- 
eration. even in so historical a 
context as this. I would only 
say that the showing on a sen- 
sible scale, and in a proper con- 
text, of Beuys, Kiefer and Base- 
litz, would have been entirely 
justifiable. As it is they stand 
with their three fellows as 
thnugb there V»*>« hwn nl» other 
Deutsche Roman tik art in a 
generation - nothing of recent 
East German realism, for 
example. 

All that aside, the show 
holds many beautiful and 
rewarding thing s, albeit fewer 
of them, from the Friedrich 
landscapes at the outset, so 
eloquent in their gentle melan- 
choly. to the abstracted, lively 
refinement of the Beuys draw- 
ings at the end. The run of 
early 19th century self-por- 
traits and small paintings - 
Janssen s tripped to the waist, 
Friedrich's wife l«ming out of 


the window, Kerstmg's pretty 
“wreath-maker" sitting sad 
beneath the trees - is a 

delight. 

And what does all this teD us 
of the romantic spirit in Ger- 
man art in all this time? That 

there was ever a soulful yearn- 
ing for the ineffable, the 
unreachable, the sublime? 
That the fond quest for purity 
and perfection took with it, 
too, a more douhtftil sen se of 
destiny and foreboding? That 
in the dark night of the soul, 
darker and more troublesome 
spirits walk abroad - Bocklin's 
shaggy unicorn deep in the for- 
est. Dix' s ravens that tumble 
from the winter sky? What 
quite does the nymph fear, in 
von Marties’ painting, from Ore 
horseman who turns away to 
pluck the fruit from the dark 
tree? 

Such questions are proposed, 
but no answers offered. Same 
paintings of the Nazi period 
are shown, but only a few, a 
mere gesture towards a subject 
that try now requires proper 
treatment. Co n t ro v e rsy flared 
briefly on the matter, as 
though by Friedrich's noble 
yearners we might see that the 
enormities of Hitlerian barba- 
rism were inevitable. Non- 
sense, of course, in any partic- 
ular sense, bat more general 
questions remain. What, if 
indeed it exists at all, is this 
peculiar quality of national 
sensibility, this soulful contra- 
dictory agonising and self- 
searching, that digHngrrighpg 
the German from the Romantik 
of other kinds? This exhibition, 
over-ambitious yet stretched as 
it is so thin, does little more 

than ask. 

The Romantic Spirit in Ger- 
man Art 1790-1990: the Hay- 
ward Gallery. South Bank 
Centre. London SE1, until Jan- 
nary 8, then on to the Hans 
der Konst, Munich: sponsored 
by Deutsche Bank, Siemens 
and Urenco, with assistance 
from Lufthansa: part of the 
Sooth Bank’s D eut sche Raman- 

Festival 



Yearning: The Woman with the Spider’s Web’, woodcut 1801 by Christian Friedrich after CJD. Friedrich 


Concert/Richard Fairman 


Recital/ John Allison 


British fanfare for Beethoven 


U nder orders to help pro- 
mote new music, the Lon- 
don orchestras have each 
come up with their own 
solution. The Philharmonia has 
introduced a series entitled “Music 
of Today" timed at 6pm before the 
evening's concert - a clever idea, as 
it can draw on a captive audience, 
while leaving the orchestra free to 
programme the standard classics in 
its main concerts. 

So fer the new music seems to 
have been concentrated on week- 
ends. On Saturday a reasonable 
number of Beethoven-lovers, gather- 
ing for the start of the symphony 
cycle that night, was attracted to the 
earlier event three short pieces by 
British composers all in their ndd- 
30s. An opening fanfare was pro- 
vided by James MacMillan. Then 
came Mark-Anthony Tumage’s jazzy 
romp. Release , and Steve Maitland’s 
Shoulder to shoulder, a more disci- 
plined exercise in post-Stravtnskyan 
rhythmic battery. Each was a useful 
thumb-nail sketch of its creator, 
though not more. 


None of them will have stolen the 
thunder from Nikolaas Harnon- 
court's Beethoven cycle, which 
started its two-week journey that 
evening. For the Philharmonia, 
which went down in history as the 
orchestra that marked the Beeth- 
oven bicentenary with a symphony 
cycle under the revered Otto Klem- 
perer, this was quite a jump. 

On the face of it Harnoncourt is 
the antithesis of everything Klem- 
perer stood for a former stan- 
dard-bearer of the “authentic" bri- 
gade, tireless In overturning 
accepted ideas, controversial, 
dynamic. His Beethoven with the 
Chamber Orchestra of Europe, both 
live here in London and on record, 
has made a name for itself with its 
drive and clarity. Teamed with the 
full-size Philharmonia. Harnoncourt 
is able to replicate the drive, but the 
clarity does not come so easily. 

The First Symphony opened with 
two unexpectedly thick-sounding, 
heavy movements. Then the scherzo 
and finale exploded with energy. 
“Authentic” Beethoven conductors - 


especially Norrington - have found 
a Haydn-hke humour in t his early 
symphony, but as far as Harnon- 
court is concerned, Beethoven bursts 
forth fully-formed, a tempestuous 
symphonic composer heading for 
battle. 

The “Eroica" is more Harnon- 
court's piece. He relishes its determi- 
nation to fight until the issues are 
resolved. Some of the climaxes 
reached a high pitch of intensity. 
Al t hough there were rough patches 
of playing, one can imagine Harnon- 
court in rehearsal knowing exactly 
what he wants and going over every 
passage until he has stamped his 
authority on each note. His Beeth- 
oven is entirely his own, which 
should maico the rest of this cycle 
one to recommend. In that respect 
he is as worthy a successor to Klem- 
perer as the Philharmonia could 
have found. 

Beethoven symphony cycle at the 
Royal Festival Hall in London and 
Symphony Hall in Birmingham 
until November 13. 


Olga Borodina sings Tchaikovsky 

O lga Borodina’s all-Tchai- house rapt, in spite of the relatively helped by the flexible, fluent accoz 
kiovsky programme at the unvaried programme. She has the pnnimenfai of Semyon SHgin (repla 
WIgmore Hall on Tburs- burnished Slavonic glint that distin- ing the announced Larisaa Ge 
day launched the Maryin- gtdshes Russian singers, but nothing gjeval The “Gipsy girl's song” wj 


O lga Borodina’s all-Tchai- 
kovsky programme at the 
Wigmore Hall on Thurs- 
day launched the Maryin- 
sky-Kirov series of recitals that will 
ran there until the middle of next 
year. like the parallel Royal Philhar- 
monic Orchestra-Maryinsky series, 
also under the artistic directorship 
of the Kirov's chief, Valery Gergiev, 
it is a celebration of St Petersburg’s 
cultural heritage, past and present. 

On Thursday the “present” was 
personified by Bonxfina, who along 
with the soprano Galina Gorchakova 
(to appear later in the series) is a 
leading lady of the Kirov Opera. In 
the space of a few years she has 
established herself as one of the 
most exciting mezzo sopranos 
around today, not only in the Rus- 
sian repertory in which she e x cels; 
as her recent Cenerentolas at Covent 
Garden testified, she is not an artist 
to be pigeon-holed. 

Borodina possesses an individual- 
ity of voice all too rare among her 
co nt empo raries. The sheer beauty of 
her tow was enough to hold the full 


house rapt, in spite of the relatively 
unvaried programme. She has the 
burnished Slavonic glint that distin- 
guishes Russian singers, but no thing 
of the “edge” that can detract from 
some of them; she also boasts admi- 
rable dynamic control with wispy 
pianissimos and reserves of power. 

Even so. the first pert of her 
recital was a little short on commu- 
nication: perhaps she was relying 
too much an the lustre of her voice, 
but the dark and wonderfully lugu- 
brious sequence of songs needed 
greater definition. “None but the 
lonely heart” - the most famous 
Russian song, ironically a transla- 
tion from Goethe - cried oat for 
legato phrasing: even when notes 
were joined, Borodina did not always 
seem to be thin king in long lines. 
She redeemed herself with seamless 
legato in her first encore, Pauline's 

aria from The Queen of Spades. 

There was more variety to the sec- 
ond half Of Borodina's pmg wrwiTm* - 
virtually a repeat of the mezzo's 
recent recital disc for Philips - and 
she found the mood of each number, 


helped by the flexible, fluent . accom- 
paniments of Semyon SHgin (replac- 
ing the announced Larisaa Ger- 
gieva). The “Gipsy girl’s sang” was 
sultry, “Gentle stars were shirring 
for os" evoc ati ve; she caught the 
bursting emotion of “The first meet- 
ing” a nd tiy» exoticism of The sun 
has set”. Borodina put her all into 
the concluding “Again, as before. 1 
am alone” - Tchaikovsky's last 
song, whose hannting strains reveal 
almost as much about the compos- 
er’s mental state during his final 
months as does the whole of the 
Pathttique Symphony. Performances 
of fids stature make the case for 
Tchaikovsky as a major song com- 
poser, one which unfortunately still 
needs arguing. His output of over 
100. songs is undeserving of its con- 
tinuing and condes cending neglect . 

The Marjdnsky-Kirov Series, spon- 
sored by the Regent Hotel, London 
and British Airways (St Petersburg), 
continues with recitals by Valentina 
Sedipova (November 16) and Irina 
Arkhipova (November 24). 


Recital 

How to 
play 
second 

fiddle 


D isarmingly, the 
great Itzhak Perl- 
man’s Barbican 
recital on Thursday 
began not with a solo violin 
sonata, bat with a keyboard 
sonata “with violin accompa- 
niment”. That was Mozart’s 
IL296 in C, from the transi- 
tion-period in the late 1780s 
when composers were starting 
to Tmflg iwp that a single violin 
might actually do more than 
just accomp a ny a harpsichord 
or piano. 

It might have made too tame 
a start, or have seemed at best 
a relaxed way for Perlman to 
play himself in. The result was 
quite different- The violin's 
ride Is indeed subordinate to 
the piano's, and with the 
admirable Bruno Canino at 
the latter instrument there 
was not the slightest chance 
that it would dwindle against 
his “accompaniment”. But 
Perlman gave us a miraculous 
ohjeettesflon in how to play 
second fiddle: never overween- 
ing, always answering to the 
pianist - hot rewarding him 
with the most subtle and 
richly varied responses, even 
in the mostly 3-note descant of 
the Andante hi* scrub- 
bing, ducking accom panimen t 
in the Rondo. 

The sonata acquired vital 
depths and breadth beyond 
anything one expected. As it 
turned oat, the real partner-so- 
natas that followed - Fame's 
op. 13, his First, and Poulenc's 
only one - were less wefl bat 

r l, though entirely engag- 
Per Lilian was faultlessly 
stylish and easy; Canino, 
whose pianism is quick, 
UghhAngered and very spar- 
ing with the damper-pedal 
(which Foolrac loved to 
excess), sounded appreciative 
but distinctly spidery. There is 
as much San vital in Fanrifo 
sonata as in the tenons First 
Piano Quartet that came on its 
beds; tee, we mtated any real 
thrust from, the bottom, of the 
keyboard, and therefore same 
of the sonata’s radiant, impor- 
tunate drive. % 

There was still plenty of art) 
as also in the Poulenc. The 
composer aimed to write some- 
thing that would do justice to 
Ginette Neveu’s tigress-pow- 
ers; bat tigerishness was never 
in Us nature, and Neven bad 
to be content (we don’t know 
whether she was, but Poulenc 
Mimwif was dissatisfied) with 
Iris racketty, mercurial operet- 
ta-style in the outer move- 
ments, and measured senti- 
ment in the Intermezzo. 
Though Cairinn was too 
wary to allow full resonance 
to the piano-sound, everything 
he did was impeccably pointed 
• - and Perlman devoted him- 
self to realising the exact char- 
acter of every movement, 
rather than exploiting their 
virtuoso potential 
On paper the programme 
looked short, and it was. Peri- 
man was reserving a surprise, 
however after the Poulenc, 
without much feinting, he 
launched briskly into five 
encore-size pieces - evergreen 
Sarasate, Kreisler and Hrifetz, 
haunting Farad and Stravin- 
sky (the Berceuse and the tit- 
tle “Chanson russe”)- We had 
to be delighted, and were 
almost satisfied. 

David Murray 


INTERNATIONAL | 

A 

R 

rs 

Gi 

m 

D 



■ AMSTERDAM 

Conoertgebouw Tonight 
Mendelssohn’s Elijah. Tomorrow, Fri 
(KJeine ZaaJ): Melos Quartet plays 
string quartets by Haydn, Janacek 
and Dvorak. Thurs evening. Sat and 
Sun afternoons: John Sot Gardiner 
conducts Royal Conoertgebouw 
Orchestra and Chorus in works by 
Debussy, Kurtag, Bartok and 
Kodaly. Thurs, Sat (Kleine Zaal): 
Vermeer Quartet. Fri: Hubert 
Soudant conducts the Brabants 
Orchestra In Brahms, Bruch and 
Beethoven, with violin soloist 
Theodora Geraets. Sat evening: 
Andrew Uoyd Webber’s Requiem. 
Sun evening: Ivo Fogorelich piano 
recital (24-hour Information service 
020-675 4411 ticket reservations 
020-671 8345) 

Spurs van Beriage Tomorrow, 
Thurs: Jac van Steen conducts 
Motherlands Philharmonic Orchestra 
In works by P%)er and Ravel, with 
piano soloist Ronald Brautigam. Fri, 
Sat Philippe Enfremont conducts 
Netherlands Chamber Orchestra in 
Britten, WaB, Eteler and Anthefl. 
gpn; Rubin Quartet plays string 


quartets by Bartok, Beethoven and 
Debussy (020-627 0466) 
Muaieidtwter Tomorrow: 
Netherlands Opera gives world 
premiere of Louis Andriessen’s new 
opera Rosa, with scenario and 
production by Peter Greenaway, and 
cast headed by Lyndon Terracini, 
Marie Angel and Roger Smeets 
(repeated Nov 5. 8, 11. 14. 17, 20, 
22, 25 and 28). Thus, Fri: Jean 
Cocteau's 13m Beauty and the 
Beast, with live accompaniment by 
the Philip Glass Ensemble {020-625 
5455) 

■ BASLE 

Stadtcasfino Tomorrow, Thurs: 
Ronald Zollman conducts Basle 
Symphony Orche s t ra in works by 
Liadov, cT Albert and Musorgsky/ 
Ravel, with ceflo soloist Antonio 
Manases. Sun: Christian Zacharias 
piano recital (061-272 1176) 

■ BRUSSELS 

Pates des Beaux Arts Thurs: Maria 
Joao Pares piano recital. Fri: Yuri 
Simonov conducts Belgian National 
Orchestra in works by Rakhmatenov, 
Prokofiev and Beethoven {02-507 
8200) 

■ CHICAGO 

MUSIC 

Lyric Opera MireSa Freni and 
Placido Domingo star in Giordano's 
Fedora tonight (repeated on Fri, next 

Mon and Thurs with Jos6 Cura in 
the tenor role). This month’s 
repertory also includes II barbiere di 
Sivigita with Frederica von Stacie 
and Rockwell Blake, Capricdo with 
Feficity Lott and Canbdide directed 


by Harold Prince (312-332 2244) 
Chicago Symphony The next 
concerts are on Nov 10, 11 and 12, 
when Lawrence Foster conducts 
works by Lindroth, Beethoven and 
Enescu <312-435 6666) 

THEATRE 

• The Sisters Rosansweig: the 
national touring production of 
Wendy Wasserstein’s hit Broadway 
comedy about the mid-fife reunion 
of three Jewish sisters from 
Brooklyn. Final week (Shubert 
312-902 1500) 

• Angels in America: Tony 
Kushner’s two-part epic is directed 
by Mchaei Mayer, with Jonathan 
Hadary as Roy Cohn (Royal George 
312-988 9000) 

• The Winter's Talec Shakespeare 
Repertory has the Chicago market 
cornered on productions of the 
Bard's works. Artistic director 
Barbara Gaines has a go at his late 
romance (Shakespeare Repertory 
312-642 2273} 

• Laughter on the 23rd Floor Neil 
Simon's newest comedy, about the 
golden days of five TV comedy, is 
currently enjoying an open-ended 
run (Briar Street 312-348 4000) 

■ GENEVA 

Grand TMStre The Bartered Bride 
opens next Mon for six 
performances. B^ah Mosfrinsky’s 
ENO production has been restaged 
by David Riteh and wB be 
conducted by Bohumil Gregor. The 
cast is headed by Valentin Prate*. 
Gwyrme Gayer and Kristirm 
Sigmundsson 9)22-311 2311} 

■ THE HAGUE 


Dr Anton PKHpszaal Tomorrow: 
Netherlands Wind Ensemble plays 
works by Mozart and Keuris. Sat 
evening, Sun afternoon: Leonid Grin 
conducts Hague Philharmonic 
Orchestra in Bruch and Dvorak, with 
violin soloist Yayot Toda. Next Mon: 
Ivo Pogorefich piano recital (070-3®) 
9810) 


■ ROTTERDAM 

De Doelen Tonight Vermeer 
Quartet Tomorrow: Yevgeny 
Svetianov conducts Russian State 
Symphony Orchestra in works by 
Liadov, Tchaikovsky and Skryabin. 
Thurs: Ivo Pogorsllch piano recital. 
Fri: Yoef Levi conducts Rotterdam 
Philharmonic Orchestra in Weber, 
Hindemith and Brahms, with piano 
soloist Emanuel Ax. Sat Carlo 
Domertconi guitar recital. Mom 
Combattimerrto Consort plays 
baroque and early music (010-217 
1717) 


■ VIENNA 

• Rkxartio Muti conducts Roberto 
de Simone’s production of Cosi fan 
tutte at Theater an der Wien torH^rt, 
Thurs. Sat next Mon, Wed and Fri. 
The cast features Barbara Frittoll, 
VesseSna Kasarova. Ceeffia Barton, 
Michael Schade, Boje Skovhus and 
Alessandro CorbeflL The State 

Opera Is dosed for technical 

alterations tffi Dec 14 @8885) 

• Nevflla Mariner conducts the 

Academy of St Martin in the Fields 
and Vienna Singverein in 
Beethoven’s Missa Solemnis tonight 
at the Muakvoretn. The soloists 
Include Jean Rigby and Anthony 


Rolfe Johnson. This week’s concert 
programme also includes redtate by 
pianist Andrei Gavrtiov, the 
Cleveland Quartet and tenor Deon 
van der Waft (505 8190) 

• Vienna’s contemporary musk: 
festival, Wien Modem, runs tflJ Nov 
28, with dafly performances at a 
variety of venues around the city. 
This year’s featured composers are 
Morton Feldman, George Crumb, 
Helmut Lachenrnann, Karl Schiske 
and G Enter Kahowez. Claudio 
Abbado conducts an orchestral 
concert on Sun, indudtng a Kurtag 
world premiere (7124 6860) 

• Giorgio Strehter directs a new 
Burgtheater production of 
Pirandello’s The Mountain Giants, 
opening Nov 15 (514440 


■ WASHINGTON 

KENNEDY CENTER 

• This week’s National Symphony 
concerts are conducted by Marin 
Alsop and Zdenek MacaL Aisop 
conducts tonight's programme of 
Schumann and Tchaikovsky, with 
cello soloist Gustav Ravinius. Macai 
conducts Rands, Mozart and 
Beethoven on Thurs, Fri, Sat and 
next Tues, with piano soloist 
Alexander Patey (202-467 4600) 

• Washington Ballet gives 

perform an ces tomorrow, Thurs, Fri . 
and Sun afternoon. The pro gra m me 
consists of choreographies by 
Balanchine, Goh and Lustig 
(202-467 4600) 

• Washington Opera opens Its 
new season on Sat with Gounod's 
Faust, with Jianyl Zhang in the title 
role and Jeffrey Wefis so ■ 
Mephistopheles (repeated Nov 10, 

13, 15, 18, 21 and 2 6). The second ■ 


production Is La nazze di Figaro, 
opening Nov 12 (202-467 4600) 
THEATRE 

• CUd Tones: Washington Stage 
Guild presents Harold Pinter's play 
about power within relationships. TV 
Nov 20 (202-529 2084) 

• Duet Otho EsWn’s play about 
what might have happened tt Sarah 
Bernhardt had met.Beonora Duse. 
This week only at Fdger 
Shakespeare Library (703-549 0002) 

• Henry IV: an adaptation of Parts 
I and B of Shakespeare’s history 
plays. A Shakespea re Theater 
production at the Lansbugh. Final 
week (202-393 2700) 

• Artificial Jungle: the last play 
written by Charles LudJam is a 
hBarious spoof on marriage in 
Jeopardy. Opens next Mon at Woolly 
Mammoth Theater {202-393 3939) 


■ ZURICH 

Opemhaus The main event this 
week Is the revival on Fri of 
Gounod’s Rom6o et Juliette, 
conducted by Serge Baudo and 
staged by Bernard Uzan, with a cast 
headed by Isabelle Ray and 
Francisco Arafca (repeated Nov 6, 9, 
11. 17, 20). Ruth Berghaus’ 
production of Katya Kabanova 
receives its final performances on 
Thus and Sat, with cast headed by 
AnaPusarand Peter Strata. The 
Zurich Baflet presents 
choreographies by Be, Bienert and 

Van Manen on Sun, and Alban Berg 
Quartet gives a recital next Mon 
(01-262 0909) 

TonhaQe Wolfgang Hotzmair gives a 
song recital tonight (01-281 1600) 


ARTS GUIDE 

Monday: BerSn, New York and 
Paris. 

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

Thursday. Italy , Spain, Athens, 
London, Praoue. 

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 
(Central European Time) 
MONDAY TO FRIDAY 
NBC/Super Channel: FT Bosf- 
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; 








18 


FINANCIAL TIMES TUESDAY NOVEMBER l 1994 


\ UK politicians 

I r~f have recently 

vrfjjLJ begun debating 

L ifg fzz the economic 
?pB theory of 

“endogenous 
Persona / srowth . For a 
VtFw econo- 

— * — mist from the 

US. it is bard to know which 
side in the discussion to prefer. 

The Labour party's shadow 
chancellor, Gordon Brown, 
seems serious in his attempts 
to understand and apply the 
idea. However, he uses it in a 
confused way to rationalise 
government intervention in 
the economy. 

On the government side, 
chancellor Kenneth Clarke 
dwells on the funny sound of 
endogenous growth and 
depicts it as some sort of 
econo-babble that he need not 
try to understand. I suppose if 
it really were "indigenous 
growth”, as he recently joked, 
he would be correct 
With some temerity, I ven- 
ture to explain the origins of 
endogenous growth and its 
relation to the older neoclassi- 
cal theory of economic growth. 

The neoclassical model, 
developed in the 1950s and 
1960s, assumed that technologi- 
cal change was needed if 
growth of income per head 
were to be sustained in the 
long run. Without it growth 
would slow as the returns on 
capital such as machines, 
buildings Or Skills rirniinishuH 
The rate of technological 
progress, however, could not 
be explained by the theory, so 
it was treated as an exogenous 
influence. This was not as a 
matter of principle but because 
the necessary theoretical 
advances bad not been made. 
As a consequence, the econo- 
my's long-run growth rate was 
exogenous: the theory could 
not explain what drove it 
There was a role in the neo- 
classical model for investment 
and government policy in stim- 
ulating economic growth. 
Growth can be increased for a 
long time by more investment 
and better policies such as 
lower mar ginal tax rates, more 
productive infrastructure, 
ter enforcement of laws and 
contracts, price stability: But 
in the very long run. the neo- 
classical theory cannot explain 
what drives growth. 

in the late 1980s, Paul 
Romer, an economist at the 
University of California at 
Berkeley, came up with a the- 
ory that appeared to explain 
the factors- behind technologi- 
cal advance. He postulated that 
it was commercial research 
and development which led to 
ih e discovery and adoption of 
Lew technologies, products and 


Party politics 
of growth 





Brown (left) and Clarke: debating endogenous growth theory 


ideas. By explaining the rate of 
technological progress in eco- 
nomic terms, the factors 
behind a country’s' long-run 
growth rate were endogenous, 
contained wi thin the model. 

A crucial element in techno- 
logical progress in this theory 
was the reward given to inno- 
vators. In the absence of some 
prize, would-be entrepreneurs 
have no incentive to carry out 
costly and often unsuccessful 
research projects. Typically, 
the reward is a temporary 
period of monopoly power, dur- 
ing which a new product or the 
fruits of an improved technol- 
ogy can be priced above the 
competitive level. 

This process is clear for 
pharmaceuticals, where discov- 
eries are protected for a period 
by patenting - a fact that 
appears to escape US health 
reformers such as Hillary Clin- 
ton. She wants to force compe- 
tition on pharmaceuticals com- 
panies that produce successful 
drugs without worrying about 
whether any new drugs would 
ever be developed. 

In Homer's model, the 
growth rate may be lower than 
is desirable and there may be a 
role for government in promo- 
ting growth. Many observers 
have taken this conclusion as a 


licence to advocate govern- 
ment intervention, such as 
trade restrictions, support for 
favoured industries and regula- 
tion of the labour market 
In fact, the main policy 
implications from the endoge- 
nous growth model are that 
the government should support 
basic research (especially that 
by economists at American 
universities!) and take a more 
favourable view of monopoly 
in high-growth sectors. 

S ome analysis by endog- 
enous growth theorists 
suggests that many 
kinds of government 
intervention - such as indus- 
trial policies aimed at picking 
and subsidising technological 
winners, distortions of interna- 
tional trade, and restrictions of 
labour markets - are espe- 
cially damaging because they 
reduce long-term growth rates. 
Endogenous growth theory 
cannot be used to justify mini- 
mum wage rates, strong labour 
unions, housing subsidies or 
large welfare payments. 

From an empirical stand- 
point. the most successful 
framework for understanding 
growth has proved to be a com- 
bination of the new, endoge- 
nous growth theory with the 


older, neoclassical model The 
new theory explains the 
growth performance of techno- 
logical leaders; In particular, 
why these countries - and 
therefore the world as a whole 
- can grow for very long peri- 
ods without tending to slow 
down. The older model shows 
how Lagging countries can 
catch up by nrpumniating capi- 
tal and copying the new tech- 
nologies developed elsewhere. 

Statistical analysis of data 
from about 100 countries from 
1960 to 1990 reveals a number 
of variables that influence the 
growth rate of real GDP per 
head. The growth rate tends to 
be higher if the government 
protects property rights, main- 
tains free markets and spends 
little on non-productive con- 
sumption. Also helpful are 
high levels of human capital m 
the forms of education and 
health, and low fertility rates. 

More public investment in 
infrastructure such as trans- 
port and communications may 
be useful. But the present evi- 
dence indicates that returns 
are typically no higher than 
those from private investment. 

if two countries pursue simi- 
lar policies, the country that 
starts with a lower level of real 
GDP per head is likely to grow 
foster. In other words, if a poor 
country can maintain good pol- 
icies and accumulate a reason- 
able level of human capital, 
then it tends to catch up with 
the richer countries (as has 
happened with east Asian 
tigers such as South Korea and 
Taiwan). However, countries 
are Likely to remain poor if 
their governments distort mar- 
kets and foil to maintain prop- 
erty rights. 

Overall, the new theory and 
empirical work on economic 
growth supports the general 
thrust of the economic policies 
such as privatisation and 
deregulation undertaken by 
the Tories during their long 
tenure in office. Thus, it is all 
the more surprising that chan- 
cellor Clarke chooses to ridi- 
cule this recent research with 
anti-intellectual jokes. 

Even worse are the remarks 
of UK trade and industry secre- 
tary Michael Heseitine, who 
apparently referred to endoge- 
nous growth as Balls, in a ref- 
erence to Edward Balls, Gor- 
don Brown's economic adviser. 

1 suppose that I will never 
understand British humour. 

Robert J. Barro 

The author is professor of eco- 
nomics at Harvard University, 
currently on leave as HaubUm- 
Narman Research Fellow at the 
Bank of England 


Joe Rogaly 



For more than a century and a half. Patch Philippe lias been known as 

the finest watch in the world. The reason is very simple. It is made 

differently. It is made using skills and techniques that others have lost 

or forgotten. It is made with attention to derail very few people would 

notice. It is made, wc have to admit, with a total disregard for time. If 

a particular Patek Philippe 

movement requires four 

years of continuous work to 
■» 

bring to absolute perfection, 
we will take four years. The 
result will be a watch that 
is unlike any other. A watch 
that conveys quality from 
first stance and first touch. 
A watch with a distinction: 
generation after generation 
it has been worn, loved and 
collected by those who are 
very difficult to please; 
those who will only accept 
the best. For the day that 
you take delivery of your 
Patek Philippe, you will have 
acquired the best. Your watch 
will be a masterpiece, quietly 
reflecting your own values. 
A watch that was made to 
I be treasured. 




High noon for the 


PATEK PHILIPPE 

GENEVE 


|-'.\rlii.iivi* Patrk JTiilipfiC .-iiimriMim: Ti \riv ilnml Sini-l. I .(indtiii- A- jiivj. I(m \r\i fimii Smi-f l.ntiiloti 
Cumin I Sc Cii Lul. IK? Hrjrmt Sinvt. UhiiIiiii- finiw- l , ni*ni« , H \In»ni Sinvi. Siniifuni-iifKin-AviHi 

1 UiiiiiUwi & luring f.iiL ft? Ourpc SlPTt, Kilinlmrsh* 1 leilicli I .id. 1 Kinif Stni-f. Jcr-ev Quinni'l Mauds 
Jnlm 1 1. 1 .win 1 jd. Oiiivh\s Amu b:. IMfit-i • ft'nr Sc Sms ( ,i«|. < imfnm Sinri. !-."J \\ Sln.i‘1. DiiliHn 

Vtuirlus, urSttilwrfaini - Srlirliii IJniniin— Viiinimir 


One day our 
elected repre- 
sentatives will 
decide that 
Britain's news- 
papers and 
broadcasters 
are getting. too 
big for their 
boots. The worms will turn. We 
may then see a protracted 
struggle, as with the trade 
unions in the 1990s, designed 
to put the media in their place. 
A future government - it could 
be the Conservatives, but it is 
more likely to be Labour - 
might mani pulate cross-owner- 
ship roles, codify the activities 
of self-regulatory bodies. 
Impose a right of reply, or 
introduce laws safeguarding 
individual privacy and impos- 
ing severe penalties for Jour- 
nalists who obtain information 
by deception. Blueprints for 
such legal weapons, and oth- 
ers, lie in Whitehall files. T hen- 
deployment is the stuff of poli- 
ticians' everyday fantasies. 
Only the courage is lacking. 

Not everyone sees a need to 
crunch us. The most skilful 
practitioners understand that 
we are easily seduced. Mr Tony 
Blair, the Labour leader, is a 
sophisticate who knows how to 
influence reporters and com- 
mentators alike. So do some 
Conservative bigwigs such as 
the foreign secretary and the 
chancellor, neither of whom 
could argue convincingly that 
the prime minister is a con- 
summate master of the art. 
Against that, your average 
run-of-the-mill Labour politi- 
cian deeply mistrusts the 
media. Most Conservative 
members of parliament are 
angered by what they regard 
as its muck-raking. 

Certain ministers are afraid 
of what we might say, some of 
them with reason. Since Mr 
John Major became prime min- 
ister his colleagues have 
clunked over like ninepins, 
usually following the publica- 
tion of details about this or 


that lapse and always after a 
period during which No 10 
Downing Street had intimated 
that so-and-so had the personal 
backing of the PM. (tee or two 
ware fired simply because they 
were bad at their jobs. 1 would 
not seek to differentiate 
between these categories! Most 
of those concerned were small 
fry, their IQ fortune best forgot- 
ten. Yet some - Mellor, Lam- 
out, Patten, to take but three - 
live on in our memories. 

What Knira them all, sharks 
and piranhas niifcp, is that they 
can be said to have been 
“brought down by the media.” 
I place the phrase In quotation 
marks, because It was of 

course their 

own behaviour, _ _ _ 

or inept man- PolltlCia 

agement of use 3™ 

their depart- . J 

ments, that I3.W US 1 

destroyed their behind 

careers. It is , . , , 

true that Mr tUtie Clei 

Major’s main in 

excuse for dis- c _ 

missing Mr JMJriOITJ 


Politicians would 
use any privacy 
law as a shelter 
behind which to 
hide derelictions 
in the 

performance of 


the demands of the right and 
the Eurosceptics against his 
comprehension of what the 
electorate expects. Conserva- 
tive newspapers that helped 
him to victory in April 1992 
have turned 1 against him. 
Some, such as the Sun, occa- 
sionally appear to he flirting 
with Labour: others, such as 
the Sunday Telegraph, hold 
him in contempt 
The primacy source of the 
most recent spate of discomfit- 
ing stories about the Tory 
administration has been The 
Guardian. In pursuing one 
inquiry, Mr Peter Preston, Us 
editor, used doctored parlia- 
mentary notepaperas a subter- 

frige, to protect 

S1 his sources. No 

IS would deception was 

nrivaev involved, he 

privacy ^ ^ 

Shelter ton acknowi- 

rhich to 

. , . day that It 

UlCtiOUS would have 

(10 been better in 

» retrospect to 

ance OI have used 


Norman Lam- their public duties another head- 

imft oa nhanAnl- rrur An fha nrtfn. 


oat as chancel - r 

lor was the lab 
tor's lack of presentational 
skills, but is an exception. 
The junior ministers lost to the 
public service over the past 
fortnight were undoubtedly 
dismissed by the media. The 
first resigned voluntarily, 
acknowledging fault The sec- 
ond was obliged to go, in 
response to accusations said by 
the government to he zmszib- 
stantiated and unfounded. 

The prime minister’s defence 
of his ministry might have 
been, more robust if he bad 
commanded a three-figure 
majority, or if his party 
enjoyed more public support 
Alas, the Conservatives’ over- 
all lead in the Commons is 
heading for the lower teens 
and sinking. In consequence, 
disgruntled back-benchers 
exercise disproportionate 
power. Mr Major must balance 


mg on the note 
mmmmmmmmm paper”. The 
Speaker of the House has 
asked for a report Labour says 
that The Guardian was wrong. 
The Tories have gleefully 
pointed their fingers at its edi- 
tor. Even the mortally 
wounded may strike back 
when, they see a weak spot in 
their opponent's defences. 

Yet it would be surprising If 
this rimgi«» incident became the 
trigger for a government 
attempt to roll back the power 
of the media. Earlier this year 
the Sunday Times used Its own 
tricks of the trade to e nt ra p a 
pair of minnows, both back- 
bench Conservative MPs, tn an 
inquiry into the receipt of cash 
for asking parliamentary ques- 
tions. its methods were upheld 
by the newspaper industry's 
self-regulating Press Com- 
plaints Commission. Against 
that, a recent poll by the Asso- 


ciation of British Editors indi- 
cates some 80 per cent of back- 
benchers of all parties t hink 
the PCC is a failure, while 
more than half would replace 
it with a statutory body. 

My own view has changed- 1 
have previously argued in 
favour of a privacy law. Incor- 
porating Article 8 of the Euro- 
pean Convention on Human 
Rights - “Everyone has the 
right to respect for his private 
and family life, his home and 
his correspondence.” Canada. 
France, Germany. Denmark 

and the Netherlands have such 
laws. Wronged individuals 
would be able to sue, as they 
do now for libeL There would 
be a public interest defence. 
Acceptance by the media of 
such a bill could be traded for 
a Freedom of Information act 

T hin argument has -been 
eroded by the cooperation of 
many individuals, from royalty 
downwards, in the destruction 
of their own privacy. Never 
mind the public interest 
defence. Politicians would use 
any privacy law as a shelter 
behind which they could hide 
derelictions in their perfor- 
mance of their public duties. 
The freedom of information act 
is wishful thinking. The Con- 
servatives refuse It, and while 
Labour promises one we must 
await the fine print before pro- 
nouncing it worthwhile. 

It would, however, be a mis- 
take to conclude that because 
n» government tum not so for 
put forward a press control bill 
it will never do so. Sir David 
Calcutt, who offered a list of 
proposals in an official report 
four years ago, recently ques- 
tioned whether there was any 
political will to implement his 
recommendations. He remem- 
bers the statements of past 
ministers, the warning that the 
media was In “last chance 
saloon”. It may not be there at 
the moment, not while our 
gunslingers have the saloon 
surrounded, with snipers on 
every roof. But one day. . . 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 
Fax 071 873 5938. Letters transmitted should be dearly typed and not hand written. Please set fox for finest resolution 


Unwelcome 

.local 

surprise 

From Mr Mike Hancock. 

Sir, You are guite right to 
report that the Local Govern- 
ment Commission's proposal 
for a unitary council for New 
Forest came as a surprise - an 
unwelcome surprise. 

Your report perhaps ids us 
guess at how the commission 
came to make what, on any 
reasoned consideration of the 
facts, seems completely the 
wrong decision. 

You report Sir John Ban- 
ham, the commission chair- 
man, as saying that members 
were swayed by “overwhelm- 
ing support for a unitary 
authority independent of 
Hampshire, with 60 per cent of 
residents in the New Forest in 
favour of this option”. He must 
have meant “respondents" - 
those writing to the commis- 
sion with views - because 
there Is no “overwhelming sup- 
port”. 

About 6 per cent of the New 
Forest electorate sent com- 
ments to the commission. 
Some 4,700 people, 3.5 per cent 
of the electorate, supported the 
commission’s second-choice for 
an all-unitary structure of local 
government replacing county 
and district councils through- 
out Hampshire. A separate sur- 
vey for the commission 
showed, from a sample of New 
Forest residents, that a third 
wanted no change and only 37 ; 
per cent, not 60 per cent, 
wanted a unitary structure. 

The changes proposed by the 
commission would add up to 
£5m a year, every year, to the 
cost of running focal govern- 
ment in Hampshire. That is 
what it costs to run two big 
secondary schools a year. On 
top of that, council taxpayers 
would have to find up to £12m 
to pay the one-off costs of mak- 
ing the change. That Is more or 
less what it costs to build a 
new secondary school. Ami the 
commission's report accepts 
the problems the councils will 
face in trying to prevent ser- 
vice quality foiling. 

If Sir John and the commis- 
sion have so misinterpreted 
the data before them, it is no 
wonder we have a recommen- 
dation which many Hampshire 
residents find so unacceptable. 

The simple facts are that of 
the 55,000 comments made to 
the commission, more than 
half supported the commis- 
sion’s earlier proposal for no 
change except in Portsmouth 
and Southampton. Another 
8,500 wanted no change at afl. 
That, Sir John, is the voice of 
the dear majority! 

Mike Hancock. 
leader, 

Hampshire County Council, 

The Castle, 

Winchester S023 SOf 


Sharpening of public 
scrutiny is vital 


From Jon Stem and 
Richard Price. 

Sir, The Fundamental Expen- 
diture Review of the Treasury 
has inevitably generated wide- 
spread debate. As ex-Treasury 
micro-economists now working 
as economic consultants in the 
private sector, we strongly 
endorse your concerns (Leader, 
October 20) about the implica- 
tions for public expenditure 
controL 

In essence, there are two 
ways of effectively controlling 
public expenditure. 

The first is the traditional 
British way in which a central 
agency (the Treasury) controls 
all aspects of public expendi- 
ture by active and detailed 
monitoring and control over 
the composition, as well as the 
volume, of all public spending 
programmes. 

The second way is to decen- 
tralise. setting overall ftnanrini 
targets but opting out of moni- 
toring the composition of 
expenditure. This requires set- 
ting and enforcing hard budget 
constraints on all public sector 
bodies. Those that cannot 
cover their costs from the reve- 
nues allocated from the centre 
then have either to cut back 
their activities, to increase rev- 
enues, or to borrow on capital 
markets without central gov- 
ernment guarantees. This is 
the model on which states and 
local authorities operate in the 
US and the Lander operate in 
Germany. 

As a relatively centralised, 
unitary country, Britain has 
consistently opted for the for- 
mer model and the Treasury 
has traditionally been its stron- 
gest advocate. Tim Fundamen- 
tal Review, however, marks a 
significant shift towards the 
decentralised model. The main 
worry must be that devolving 
responsibilities as proposed 


will not, in practice, be accom- 
panied by an effective harden- 
ing of budget constraints on 
government departments, 
agencies and quangos. 

Your leader is also right to 
point to the Treasury's role in- 
dealing with departmental 
advocacy of vested interests. 
Your recent article (“Helicop- 
ter makers in a spin", October 
6) on important forthcoming 
defence procurement decisions, 
demonstrated the pressures 
that powerful industrial groups 
can wield. 

The Treasury has played an 
important role in forcing 
proper examination of the eco- 
nomic choices underlying such 
decisions. It would he a big 
loss If the proposed Treasury 
functional and staff cutbacks 
led to a reduction in the power 
of the appraisal process and an 
increase in the influence of 
“do-it-yourself" economics. 

As the chancellor has 
accepted the review as the 
basis for action, the key ques- 
tion is how to ensure that 
these potential dangers are 
minimised. The answer must, 
involve increased public scru- 
tiny. In particular, the role of 
systematic evaluation becomes 
even more important in the 
new Systran, both in assessing 
the economic effectiveness of 
programmes and in comparing 
outcomes against their objec- 
tives. 

Progress in public scrutiny 
win be a big factor in deter- 
mining how for. private sector 
financial disciplines can be 
applied to the public sector, 
including the decentralised 
bodies developing in areas 
such as health and education. 
Jon Stem and Richard Price, 
National Economic Research 
Associates, 

15 Stratford Place, 

London WIN SAF 


An unpalatable fix for 
some European regions 


From Mr Roddy Campbell 

Sir, Christopher Jackson, 
(Letters, October 26) correctly 
states that moving to irrevoca- 
ble fixed exchange rates is a 
more attractive option in many 
ways than moving straight to a 
single currency. Cocaine is also 
a lower health risk than 
heroin, and I suspect he 
would find the medium-term 
effects of either fix unpalat- 
able. 

The basic economic argu- 
ment is dear, and cannot be 
repeated too often. It is that 
fixed exchange rates In an 
environment of than free 
capital and Labour markets, 
both in mobility and price, 
worsen regional recessions. 


Europe’s labour markets are 
far from free, and we are fac- 
ing a big employment chal- 
lenge now and for the foreseea- 
ble future. 

The introduction of fixed 
rates can only make that chal- 
lenge harder. 

As German; will not accept 
a common currency, but would 
accept fixed rates, I expect 
we will get them, and the 
unemployed somewhere in 
Europe will be paying 
for Mr Jackson’s “relief from 
the cost and fuss of changing 
currencies”. 

Roddy Campbell, 

50 Leamington Road Vidas, 
London, 

WIl 1HT 


Government 
of UK is out 
of the loop 

From Judith Church, MP. 

Sir, Your article, “France 
ponders superhighway gam- 
ble” (October 27), raises impor- 
tant issues which need to 
be addressed in this 
country. 

France T&ldcom’s reluctance 
to accept the central ffnamdal 
role recommended ' in Mr 
TWIT'S report is in direct con- 
trast to the position of British 
Telecom, which is one of the 
leading players in the informa- 
tion superhighway dialogue in 
the UK and has already made a 
commitment to a ElSbn 
investment in the infra- 
structure. 

The technology, the financial 
means and, crucially, the 
vision to develop a UK pic 
information superhighway 
exist, but our main obstacle is 
the government’s lack of a 
strategic policy. 

As stated in the trade and 
industry committee’s report on 
optical fibre networks, pub- 
lished in July: “There appears 
to be little sense . of 
urgency and a Lack of a clear 
sense of vision about what 
broadband communications 
could do for the UK and Its 
people.” 

We need urgent action to 
address the implications of the 
developing global information 
infrastructure and the role of 
the private sector in this pro- 
cess. Removal of the asymme- 
try principle is one example of 
what Is needed. 

The telecommunications 
industry waits for no person. 
Labour recognises that govern- 
ment has a crucial responsibil- 
ity in propelling UK pic into 
the lead in the development of 
a European and global Infor- 
mation infrastructure. At the 
moment it’s on everyone’s 
agenda except this govern- 
ment’s. 

Judith Church, 

House of Commons, 

London SW1A OAA 

A nod does 
not suffice 
as the law 

From Mr KS Francis. 

, Sir, Surely if Lloyd's is to 
recove monies receivable by 
Names arising from successful 
court cases against member’s 
agents, and so forth, it should 
not be permitted to do so on 
the nod of the secretary of 
state for trade and industry 
but only following new legisla- 
tion and proper open debate? 

K S Francis, 

51 Sole Farm Road. 

Great Bookham, 

Surrey ET2S3DQ 





eii 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


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FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Jet 071-873 3000 Telex; 922186 Fax: 071-407 5700 

■ Tuesday November 1 1994 


Mandate for 
no change 


In a week's time, Americans will 
go to the polls after the moat 
.mean-spirited mid-term . elections 
in living memory. 'The signs are 
that, thanks to President Bill Clin, 
totfs recent successes abroad, the 
outcome for the Democratic party 
wilI T be less cataclysmic than 
many, feared. But the Congress 
that emerges looks unlikely to he 
equal to the challenges faring the 
country in the years ahead. ■ 

A month ago, many were pre- 
dicting historic victories for the 
Republican party in the elections 
on November & Party leaders 

spoke, not only of re gaining can- 
trolof the Senate, but of overturn- 
ing the Democrats’ 50-year-old 
majority in the House of Represen- 
tatives. The elections, they 
claimed, had become a. national 


M 


referendum on Mr Clinton, and 
the president - and his party - 
were losing. 

Mr GHnton’a creditable showing 
in the Middle Bast and elsewhere 
appears, to have turned the anti- 
Democratic tide a little. But it is a 
reflection of the low expectations 
surrounding the campaign that 
retaining control of the House - if 
not- fiie Senate - would now be 
seen, as something of a victory for 
thp Democrat camp. 

ft is bard to pin the voters' dis- 
content on the economy. Three 
aud a half years into recovery, the 
country is materially better off 
than# has been for same time.Yet 
rather than reward Democrats for 
this performance, the electorate 
has seemed determined to ptudsh 
than for the government’s inabil- 
ity to solve the country's deeper 
social problems,, such as the high 
crime rate and the dismal state of 
the inner cities.. 

to the face of this anti-govern- 
ment mood, Mr Clinton has. 
increasingly turned towards for- 
eign policy in recent months: the 
ane^tioDUffii in which government 
activism- is .sot now associated 
with failure. Candidates in the 
field have not had this q^ioiL FOr 
the . most' part, they have simply 
been driven to trying to convince 
voters that fitey are as down on 
Washington as fife country at 
large is-.. ' , . - : V • 

UncoBiproniiang climate 
Clearly; Incumbent Democrat 
itors and congressmen fare - 
in .such linmm p m mify - 
ing climate. .But so does anyone' 


with a moderate, more pragmatic, 
conception, of what government 
might hope to achieve through 
social and other legislation. In 
many regions, the candidates that 
have thrived have bean those on 
the extreme right, who reject mod- 
erate sedations out of hand. 

Bipartisan coalitions 

This kind of polarisation was 
already much in evidence this 
summer, in the Tto p u Mfcy™ * com- 
prehensive blocking of health care 
legislation. But, judged by the 
campaign, the 104th Congress will 
be even less inclined to form 
bipartisan coalitions to get legisla- 
tion passed. 

What does this imply for the 
rest of the world? In the short 
term, the events of the past few 
months make it even mare crucial 
that the “lame-duck" sitting of the 
current Congress, in the period 
just after the election, is able to 
ratify the outcome of the Uruguay 
Round of the Gatt Whatever the 
difficulties this presents, muster- 
ing the required votes next year 
could be harder stilL 

In the longer term, there is still 
a chance that Mr Clinton will 
return to the question of health 
care reform. But be will have little 
chance of passing the kind of com- 
prehensive reform be promised in 
1982. More incremental measures 
may be possible, along, perhaps, 
with a package of welfare reforms 
which might muster sufficient 
Republican support 

The true casualty of these elec- 
tions, however, is the prospect for 
reforms in areas of US govern- 
ment which require more ambi- 
tious bipartisan coahtion-buildlng 
in Congress: above ah, the coun- 
try’s bloated system of entitle- 
ments. Neither the Republicans 
nor the Democrats have proposed 
s ug gestions for reforming that sys- 
tem during the campaign which 
make any sense. Yet without fun- 
damental - and politically 
unpopular - tax increases and 
cats in spajdmg; the federal bud- 
get deficit will begin to rise again 
in only a few years 

The US electorate has spent 
recent months bemoaning the fafl- 
ings of “Wg" goveramait For all 
that, they seem determined to 
elect a new Congress which is sin- 
gularly ill-equipped, either to 
make it any better, or to make it 
any smaller. 



defence base 


»S 


t : U' 


■!l t' 




From the British ministry of 
defence comes the sound of arms 
being heavily 'twisted. Both Brit- 
ish Aerospace rad CSC are lohby- 
ing har d for, thrir respective bids 
for the Y BRl ; submarine yard in 
Barrpw-to receive official backing. 
BAe’s.case is that,- since it does 
iwtcurrenflyownasl^»yanl,it3 
bid presents ' no competition diffi- 
culties. However^ .It thinks that 
GBCTs bid would generate an 
unnecessary monopoly, since GEC 
owns Yarrow on the Clyde, the 
only 1 other bog warship yard in the 

uk.- v . . • 

GBC argues that, in practice, 
the pattern of warship orders 
llkely 'over the next TO years 
means that there would be little 
competition even ff the two yards 
were owned -by' different compa- 
nies. S therefore makes HttiecHf- 
forenra if the too yards are owned 
by one company.'' ■ 

The ministry, of -ctefence’sposi- 
tionis disturbingly obscure. It has 
quite rightly championed the 
cause of competition , in defence 
procurementfor fhepast- decade, 
saying fifet the policy is "funda- 
mental -to achieving value, for 
monsy’VUntll recently tt was also 
saying privately that it would not 
look favourably on a GBC bjdJor 
VSEL for pteirfSely those reasons. 

As som as the bids appeared, 
however, the ministry became 
coy. An it will say is. tisa t {he issue 
wffl be decided by the competition 
authorities - in: this case the 
Office of Fair Trading -radthat 
its submissions to the.QFT. will be 
confidential .Yet since theMoD j» 


the only UK defence customer,: its 
view will- decide.' the issue. So; 
rmhappa^ . Sflftrwt submissions to 




the C®T may, or may not, mask a 
policy on competitio n in pro-, 

curement-, ■■---■ ..... 

Monopoly suppler 

ha deddingltsposition the nrin- 
fetry wHl have to wd^t the ettenf 
to-vti^ebihe .necessary consolida- . 

the defence imhwtry.M- 
tewSag:ti» &ad cold war 
shwaflfe balanced against main- 
tainfegas ffiUCh CQB^etifettL4«sl 
fipssffile^Intiie narrow case of the . 
bkfa,;-fer tiw . case for . a 

in competition to not 
obsSSttSfifece (SEC wBT undoubt- 
edly g u ar an ta e the future' 

of botii Jmdft creatiHg a mam- 
oiy SOTpServ^aot leadto mtton- 
alisation a^dvcbst savihgs. The 
MoD tiia^^sHittle reason to' 


upend its arguments in favour of 
maintaining competition by aSow- 
ing the GBC bad to proceed. 

The underlying problem fe that 
the MoD, rather than seizing the 
initiative, is allowing defence com- 
petition policy to evolve in a 
purely reactive fashion. The rapid 
decline in US and European 
defence spending requires a dras- 
tic change in the structure of 
defence industries. This is already 
happening in the US, but is prov- 
ing regrettably slow to materialise 
in Europe, largely because Euro- 
pean governments are reluctant to 
allow, croseborter ra tion alis ation . 

• Argue strongly 

' The UK is uniquely well placed 
to influence this process. If it 
chose, if could argue strongly with 
other ED governments for a more 
: open market for Europe’s defence 

- manufacturers, giving them the 
freedom to choose how to rational- 
ise ln a market almost as large as 
that of the US. Instead, the MoD 
has sat back and argued that the 
market should decide. 

The trouble is that the market 
‘ m defence pnxraement is far from 
. - free. If Jt woe, many companies 
; would probably opt to rationalise 
' within business sectors. That 
might produce fewer, Europe-wide 
missile, aircraft and electronics 
Tnann fa r h i mm , rather than thinly - 
spread 'national. companies. Pro- 
vided su ch specialist companies 
'were prepared to follow commer- 
cial logic in flinty rationalisation, 
aa opposed to political pressure, 
they could operate at lower deist 
ib«n: pfltfonal defence champions. 
They might ^also^ become gentinely 
; competitive against -the giant US 
firms now emerging' in contiast 
With the current situation in 
which uncompetitive and under 
resourced "national companies are 
awarded contracts for purely petit- 
'had ends; : 

. The MfoD’s conipetitioa policy 
over the past 10 years points 
dearly- towards a rationalised 
ISuropean defence industry with 

- increasing two-way competition 
■_ between .US and European pro* 

nets. The risk of the cunenE drift 
to UK policy is that ad hoc do* 
sions on ‘specific" cases vdR give 
■ rise to anUI-conceived, nationally- 
based industrial structure. This 
will neither give the MoD best 
:vahfa ‘for mousy xnr be able to 
compete successfully anrthe world 


W henever the fight- 
ing in former 
Yugoslavia sub- 
sides. more com- 
fortable parts of 
the world forget about it with rehet 
They have largely done so since 
February, when a ceasefire brought 
a irommum of normality to Sara- 
jevo. 

But in the last few days, that 
complacency has been shattered. In 
its most spectacular offensive since 
the war in Bosnia-Hercegovina 
began nearly three years ago, the 
Moslem-led government army has 
burst out of its position near the 
enclave of Bihac and captured over 
100 square miles of territory. 

It has put to flight thousands erf 
Seri) soldiers and civilians, and 
threatened the Serb-held towns of 
Bosanska Krupa and Bosansld 
Petrovac. There have also been Bos- 
nian government offensives to the 
south ami west of Sarajevo, and the 
city's suburbs have again been 
shdled. 

UN peacekeepers have come 
under shellfire from government 
soldiers who refuse to leave the 
strategic Mount Igman, outside 
Sarajevo. From the Serbs, they have 
farari kidnappings and the obstruc- 
tion of fuel deliveries to eastern 
Bosnia. 

UN officials - who need a mini- 
mum of cooperation from an par- 
ties to function effectively - admit 
to being near the the end of their 
tether. Yet winding down their 
giant operation in former Yugo- 
slavia, which involves 40,000 troops 
flrom 36 countries, may turn out to 
be more disastrous than retaining 
It 

“Our peacekeeping effort has con- 
tinually been tested by the warring 
parties, and in recent weeks the 
conflict has intensified," says Mr 
Michael W illiams, ^hief spokesman 
for the UN in Zagreb. 

In theory, the peacekeeping oper- 
ation was given more teeth by the 
UN, which last week agreed tougher 
procedures for air strikes with 
Nato, which is responsible for poho 
ing the Bosnian skies. But Nato’s 
insistence that any bombing raids 
be on a much larger scale than 
before could maim UN commanders 
more reluctant to invoke air power. 
And it would be almost impossible 
politically to use Nato aircraft 
against the Bosnian government 
army, which enjoys strong US sup- 
port 

In the diplomatic arena the pic- 
tore is scarcely more encouraging, 
with divisions between the five 

natfnng in the infpmafrinnaf contact 

group on Bosnia which is iaa«wr>g 
efforts to arrange a peaceful settle- 
ment The key to progress was sup- 
posed to be the unity of the group’s 
members: the US, Russia, the UK, 
France end Germany. 

But now they are divided over a 
US-sponsored resolution in the UN 
Security Council that wo old author- 
ise arms supplies to Bosnia in six 
months - unless the Serbs accept a 
peace plan. If the resolution, is 
pushed to a vote, it will he blocked 
by UK and French abstentions and 
possibly a Russian veto. 

Worse diplomatic disarray has 
been avoided with the dropping of 
Washington's dpmand for an imme- 
diate lifting of the arms embargo 
against Bosnia. But the ability of 
the five to act together with credi- 
bility has already been compro- 
mised. 

Both the renewed fighting, and 
the crumbling of international con- 
sensus, bring closer the spectre that 
haunts every actor in the Bosnian 
drama: a UN pull-out in what mili- 
tary planners euphemistically 
describe as “nonbenign” conditions 
- under fire from one or more of the 
warring factions. Nato’s plans for 
this scenario run to thousands of 
pages; they remain secret, but are 
assumed to envisage hundreds of 
casualties and the temporary 
deployment of up to 20,000 extra 
ground forces to cover the with- 
drawal 

It is hard to imagine how Nato 
could assemble such numbers at 
speed without including some US 
troops. It is, however, even harder 
to imagine how the US could agree 
to the inclusion of their armed 
forces in view of the American elec- 
torate’s acute reluctance to accept 


Steady Eddie 
vs Villains 

■ When win Britain nest raise its 
interest rated? The financial 
markets were badly caught out by 
September’s rise - so they will be 
watching tomorrow's meeting 
hetwwi K enneth fOarifo, chancellor 
of the exchequer, and the B«nV of 
England's Eddie George with more 
than usual interest 
. Bui City analyste might just as 
weD look to football team Aston 
Villa's score sheet for guidance, 
judging by Eddie George's 
- comments to a CRT darner in 
Birmingham last week. 

The Bank’s economists appear to 
have moved on from testing 
correlations between productiv it y 
in the Black Country and the 
performance c£ the region’s premier 
foothall team. They are now 
cmMjentr atrng pn the faffnence of 

the Villains (as the team is known) 
on UK monetary policy. 

Three years ago, Eddie George's 
predecessor noted that he had 
reduced interest rates more times 
than Villa had won home games. 
Now George has hinted there will 
be no interest rate rise until Villa 
wins a home game. 

Assuming tonig ht's wnateh 
(against Trahzonspor) does not 
count - because it is a non-league 
gamo - the next key date is Sunday, 
when Villa meets Manchester 
United. On past form that should 
mean little chance of any monetary 








A turn for the 
worse in Bosnia 


Bruce Clark explains the UN dilemma 
and the diplomatic disarray provoked 
by the Moslem army offensive 



losses to foreign wars. 

Either way, a bloody withdrawal 
fTOm Bosnia could shake both trans- 
atlantic relations, and the interna- 
tional order, to their foundations. 
This, in turn, would cloud prospects 
for concerted diplomatic action over 
a host of other regional problems, 
from Iraq to Indochina. 

The pull-out of UN peacekeepers 
could also leave behind a bloodbath 
to flpgnia in which the ife»th toll 
would far exceed the 200,000 or so 
already chalked up. 

If the events of recent days do 
portend a serious turn for the 
worse, it is quite possible - strange 
as this may sound - that historians 
will view the last eight months as a 
period of success in international 
policy towards the region. 

While each of the outside powers 
involved in Bosnia has its own stra- 
tegic aiTnR, there are four goals to 
which all are committed: 

• The prevention of a humanitar- 
ian catastrophe by distributin g aid, 
and sheltering civilians from the 
worst effects of the war. 

• The geographical containment of 
the fighting, so that tt does not 
spread through ex-Yugoslavia and 
the Balkans. 

• The avoidance of any breakdown 
in relations between the world's 
leading powers because of disagree- 
ment over Rnsnia 

• The creation, if possible, of con- 
ditions for a long-term settlement 
which is viable and not too unjust 

The four objectives have been dif- 
ficult to pursue simultaneously, 
because they often point in contra- 
dictory directions. It is not p^ggihlp. 
for example, to feed dvDtans with- 
out feeding armies, which prolongs 
the fighting. 

However, if there is no progress 
towards the fourth aim of a settle- 
ment, the successes on the first two 
will be compromised, because the 
political will to maintain the huge 
h umanit arian relief effort and vig- 
orous preventive diplomacy will 
start to flag. Conversely, if one out- 
side power intervenes unilaterally 
to promote the fourth goal - by 
altering the battle imps and impos- 
ing what it considers to be a just 
outcome - the other three goals 
could be left in nuns. 

That is what the British, French 
and Russians will be telling the US 
at this week’s Security Council 
debate: far from bringing peace to 
Bosnia, the creation of a “level kill- 
ing field" through arms deliveries 
to the Bosnian government could 
trigger a new humanitarian night- 
mare and bitter international 
rec riminat ion 

Compared with the disasters 
which might have occurred, the 
world community has achievements 
to its credit, at least on the first 
three goals. With the completion 
last week of the 10.000th aid flight 
to Sarajevo, the UN can point to 
some success in meeting the first 
objective. 

There has also been success on 
the second front thanks to (mainly 
US) diplomacy, the Serb-Moslem 
stand-off in Bosnia has not so far 
triggered an even bigger conflict to 
the south between the Serbs and 
t he mainly Moslem Albanians. 

Last July, when the five contact 
group nations threw their weight 
behind a new peace plan for Bosnia, 
they were ostensibly pursuing the 
fourth objective, a long-term settle- 
ment. Yet in practice, the peace 
plan - which would allocate 51 per 
cent of Bosnia’s territory to a Mos- 
lem-CTOat federation and the rest to 


the Serbs - had much more to do 
with the third goal of maintaining 
international consensus. 

Rather than having any practical 
effect, the peace proposal has 
served as a kind of totem to which 
all the outside powers can pay hom- 
age, and a standard by which the 
good intentions of the parties on the 
ground can be judged. 

Serbia’s President Slobodan Mil- 


The renewed fighting 
and the crumbling of 
international 
consensus bring the 
possibility of a UN 
pull-out closer 


osevic has emerged triumphantly 
from opprobrium by accepting the 
plan, while his rival, the Bosnian 
Serb leader Mr Radovan Karadzic, 
has fallen further into disrepute by 
saying no. 

Few close observers of the con- 
flict see the slightest chance of the 
warring parties agreeing to imple- 
ment the plan, which would require 
the Bosnian Serbs to give up 20 per 


cent of the land they have staked 
out and largely “ethnically 
cleansed” of non-Serbs. 

Bosnia’s Moslem leaders have 
accepted the map, albeit reluc- 
tantly. But they admit that they 
have accepted it only because they 
see no risk of having to implement 
it: their Serb adversaries were 
always bound to say no. 

There is little prospect that out- 
side powers will come up with a 
new map. The best hope is that the 
parties will agree among them- 
selves on adjusting the plan, after 
exhausting all military options. 

But even if the contact group’s 
peace plan is dead, there have been 
some encouraging hints of progress 
towards a comprehensive settle- 
ment in the former Yugoslavia. 

One sign is the covert diplomacy 
that has been going on since the 
summer, including a secret meeting 
between army commanders from 
Belgrade and Zagreb. 

Efforts towards a peace settle- 
ment in Croatia - based on frill dip- 
lomatic recognition between Bel- 
grade and Zagreb, and some 
autonomy for the Serb-dominated 
areas of Croatia - appear to be mov- 
ing into higher gear. After months 
of intricate negotiations, involving 


Observer 


tightening for at least a week. 

Then a gain, as Goldman Sachs’ 
Gavyn Davies found to his cost 
seven weeks ago, sticking one's 
neck out on Interest rates can be a 
foolish business when dealing with 
Steady Eddie. 


Chimes at midnight 

■ Something seismic seems to be 
under way in London. First some 
areas round Heathrow start to 
collapse, resulting in underground 
trains not stopping at terminal four 
for the next few weeks. 

Now one of London's best-known 
landmar ks, Big Ben. has slipped, 
albeit almost imperceptibly. A 3mm 
shift on the clock's east face has 
been detected by electronic sensors, 
caused by the natural sway of tall 
buildings and by tidal movements 
on the river Thames. 

With all this talk of 
(metaphorical) cracks appearing in 
the fabric of the UK establishment, 
it’s just a trifle spooky to see some 
real ones too. 


Railroaded 

■ Running a company during a 
heated takeover battle sure is 
stressful It seems to have taken a 
particularly tough toll on Drew 
Lewis, chairman of Union Pacific, 
battling to win control of rival US 
railroad operator Santa Fe Pacific. 

On Sunday, after raising its bid 
for Santa Fe to 83Bbn to top 



I’ve written my memoirs’ 

Burlington Northern’s rival offer or 
53.2bn, Union Pacific announced 
that Lewis, a former transportation 
secretary in the Reagan 
administration, is taking a leave of 
four to six weeks to enter an 
alcohol-treatment programme. 

Will this affect the outcome of the 
bid struggle? Union Pacific will 
clearly miss him; no fewer than 
three senior executives are taking 
on Lewis’s duties in his absence. 


Sporting life 

■ US sports hacks are having a bad 
time. What with industrial disputes 
prematurely ending the baseball 


season and scrapping the ice 
hockey, what do they cover? 

In place of the World Series, 
Sports Illustrated splashed the 
Japanese baseball championship. 
Better than a previous edition, 
packed with 11 pages of . . . rodeo 
clowns. Television is hit hardest 
ESPN, the sports network, has been 
reduced to dog shows, ten-pin 
bowling and surfing from Hawaii. 
The barrel has now been scraped, 
with the American Double Dutch 
Rope Jumping championship. 

What’s left? Goldfish racing from 
El Paso? 


Puffed out 

■ When visiting Japanese emperor 
Akihito, please remember not to 
take him a carton of duty-free 
cigarettes as a token of your 
esteem. The anti-smoking lobby 
persuaded the imperial household 
that recipients oC Japanese national 
awards should no longer get 
cigarettes but instead a coffee-table 
book of photographs of Akihito and 
other members of the imperial 
family. But isn’t the horse-trading 
involved in such awards conducted 
- as anywhere - in the proverbial 
smoke-filled rooms? 


PIA pressure 

■ When will the Prudential 
Britain's biggest life insurer, end Its 
splendid isolation and apply to join 
the Personal Investment Authority 


19 


the US and Russian embassies in 
Zagreb and envoys of the European 
Union and the UN, it was 
announced last week that Zagreb 
rad Belgrade will hold regular 
meetings at foreign minister level 
SeTOGroat reconciliation does not 
automatically bring peace In Bosnia 
closer. Whenever Serbs rad Croats 
talk, the Moslems become nervous. 

On the iraflaretanriah le gro und that 

the most likely subject of these dis- 
cussions is carving up Bosnia. 

But for the present, the Croat- 
Moslem federation agreement 
stitched together last February 
under strong international pressure 
is holding. In Master, which had its 
Moslem eastern half subjected to a 
ruthless siege by the Croats last 
year, about SO hard-pressed bureau- 
crats from the EU are working, with 
modest success, to promote recon- 
ciliation and ensure that basic 
municipal functions are carried out 
In return for international 
respectability, Croatia’s leaders 
have set aside aspirations to carve 
out a slice of Bosnia for themselves. 
President Milosevic, for similar rea- 
sons, seems willing in principle to 
reco&dse the territorial integrity of 
both Bosnia and Croatia. 

A dvances such as these 
have made the recent 
French proposal for a 
meeting between the 
presidents of Bosnia, 
Croatia and Serbia more plausible. 

This would not moan an Inafcanfr end 
to all fighting; but if it allowed the 
broad lines of a settlement in for- 
mer Yugoslavia to be laid out, it 
would be a big step forward. At the 
very least, the diplomatic efforts of 
recent months hare put in place 
building bricks for a settlement to 
be constructed. 

The latest upsurge in fighting 
might scupper that process. How- 
ever, It miifet just conceivably help 
it along. The Bosnian Serbs’ current 
reverses could make them more 
willing to sue for peace on terms 
acceptable to the rest of the world. 

Some observers in Belgrade 
believe that Mr Milosevic would not 
be too unhappy to see the power 
base of his rival Mr Karadzic, con- 
fined to eastern. Bosnia. This could 
happen if the Bp$nian Serbs contin- 
ued to suffer military defeats in the 
far north of the' 'republic, and the 
political friends. & 'Mr Milosevic 
gained the upper hd&d jn the Serbs’ 
stronghold of’ Banja Luka. 

A bleaker scrjiario^ however, is 
that the Bosnian Serbs will be so 
badly humiliated that .politicians in 
Belgrade, and per baps Moscow, find 
themselves under irresistible moral 
pressure to come to their aid. . 

Since his apparent converston to 
the cause of a peaceful settlestoent 
last August, Mr Milosevic has awed 
his authoritarian state machine, 
ami his control of the mediaA to 
insulate himself from natio nalis t 
pressures to support the Bosnian 
Serbs. But the commanders of the 
Serb-do minated Yugoslav army may 
not be prepared to stand by indefi- 
nitely if their brother officers in the 
Bo snian Serb forces are subjected to 
a series of h umiliating se tbacks. 

Another imponderable is the 
political balance in Russia, where 
the government might be tempted 
into pursuing a more stridently pro- 
Serb policy as a way of parrying 
hard-line nationalist opposition to 
its economic programme. 

That would end aU hope of keep- 
ing the contact group together. The 
outside powers involved in Bosnia 
might then find the only thing they 
could agree on was the level of mili- 
tary support each gave to its own 
friends: the US to the Bosnian gov- 
ernment, the Russians to the Serbs. 

The last such agreement was in 
1989, when Presidents Bush and 
Gorbachev settled on the deadly 
principle of “positive symmetry" - 
or balanced arms supplies to their 
proteges - in Afghanistan. 

As a means of settling a civil war, 
that is not a happy precedent While 
the deal helped take the Afghan 
issue off the international agenda, it 
also stoked the fighting that 
reduced much of Kabul to smoul- 
dering rubble. And unlike the con- 
flict in Af ghanistan, an escalating 
war by proxy in the former Yugo- 
slavia would be hard to restrict to a 
single country. 


along with the rest of the UK life 
insurance industry? 

The question is prompted by the 
news that Sir Martin Jacomb, a 
member of the City’s great and 
good, is expected to take over as 
chairman of the Pru next year. Sir 
Martin Is a director of the Bank of 
England and a former deputy 
chairman of the Securities and 
Investments Board, and can 
generally be relied upon to toe the 
establishment line. 

Sir Martin was a member of the 
board when the Pm insisted on 
exercising its right to be directly 
regulated by the Securities and 
Investments Board and the Pru does 
not sound as though It is bracing 
itself for a shift. Even so if the Pru 
is a member of the PIA a year from 
now it will be a sure sign that its 
robust chief executive Mick 
Newmarch is no longer being 
allowed to have it an his own way. 


Shop early 

■ Mohamed Fayed’s war with John 
Major’s government has the oddest 
consequences. 

Many of Westminster's 
well-heeled Tory MPs might expect 
to do some Christmas shopping at 
Harrods, the famous Knightsbridge 
stare. Which is of course owned by 
Fayed. Hardly the done thing, 
perhaps, to be spotted crossing 
Harrods’s threshold at the moment. 
It might be construed as an act of 
gross disloyalty to the prime 
minister. 





20 





STAYING AWAY 
MADE EASY 


FINANCIAL TIMES 

Tuesday November 1 1994 


Coastguard insists on unlimited cover for spills ( China 


Tanker rules threaten 
oil shipments to US 


By Charfes Batchelor, Transport 
Correspondent, In London 


Tough new rules imposing 
unlimited financial liability on 
tankers sailing into US waters 
could cause severe damage to the 
tanker industry and halt oil ship- 
ments to the US, according to 
shipowners. 

The regulations were first pro- 
posed after the s inking of the 
tanker Exxon Valdez off Alaska 
in 1989, and repeated appeals to 
the US Coastguard to relax the 
new rules or delay their introduc- 
tion have failed. 

A decline in domestic oil pro- 
duction has made the US more 
dependent on imported oil, with 
about half of its total needs com- 
ing from the Middle East and 
other overseas oilfields. 

Owners of tankers entering US 
waters after December 28 will be 
required to show they can pro- 
vide unlimited compensation in 
the event of an oil spilL Although 
this deadline is still two months 
away, vessels are often chartered 
well in advance. 

In return for proof that they 
could meet a clahn, shipowners 
will be issued with a “certificate 
of financial responsibility” by the 
Coastguard. 

The conventional method by 
which shipowners arrange insur- 


ance cover, through protection 
and Indemnity (P&I) clubs of 
owners who share risks, cannot 
be used because tbe P&I clubs 
are unwilling to take on unlim* 
ited liability. 

"Hie Coastguard has created a 
claim structure which is unsus- 
tainable with existing insurance 
systems, 14 said Mr Miles Kulu- 
kundis. chai rman of Intertanko, 
representing many of the world's 
tanker owners. 

So far only 41 tankers, all 
American and including Mobil 
Oil Corporation’s 24-ship fleet, 
have obtained certificates to 
allow them to sail into US 
waters, Intertanko said. 

But at least three other ship- 
owners, facindtng Knock Tank- 
ers, an Oslo-based company with 
13 vessels, have announced their 
intention to withdraw from the 
US trade. 

The total world oil tanker fleet 
is more than 7,000 vessels, of 
which at least 1,000 serve US 
ports. The loss of US business 
would be a severe setback for 
tanker owners. 

The International Chamber of 
Shipping, a London-based ship- 
owners' organisation represent- 
ing more than half of the world's 
merchant tonnage, said it was a 
matter of “deep concern” that the 
Coastguard had “not attempted 


to solve any of the serious prob- 
lems” posed by its rules. The 
shipowners believe the P&I clubs 
should remain the main method 
or covering risk, but said they 
“unreservedly” supported them, 
in their refusal to take on the 
risk of unlimited liability. 

Other options such as surety 
bonds, self-insurance and finan- 
cial guarantees required the ship- 
owner to provide large amounts 
of collateral and were only an 
option for the largest corpora- 
tions, the chamber said. 

The alternative for most 
smaller shipowners was insur- 
ance but there were no insurance 
schemes available which could 
provide the cover needed. “In the 
absence of insurance cover, oil 
shipments in US waters will 
largely cease as from December 
28," Mr Chris Horrocks, sec- 
retary-general of the interna- 
tional chamber, warned. 

The requirement for certifi- 
cates of financial responsibility 
forms part of the Oil Pollution 
Act of 1990, which will also pro- 
gressively require tankers to be 
doubled-huiled to reduce the risk 
of pollution. 

A US court recently awarded 
SSbn in punitive damages ag ains t 
Exxon following pollution of the 
Alaskan shoreline by the Exxon 
Valdez in 1989. 


fails to 
hold back 
monetary 
growth 


By Tony Walker In Beijing 


Worst of bad-debt crisis over, 
says Bank of Japan governor 


By Gerard Baker In Tokyo 


Mr Yflsushi Mieno, governor of 
the Bank of Japan, said yesterday 
that .the protracted bad-debt cri- 
sis rxperienced by the country’s 
bapks appeared to be past its 
worst 

In a speech at the bank's Insti- 
tute for Monetary and Economic 
Studies, Mr Mieno, who retires 
next month after five years as 
head of the central bank, said 
banks had made significant prog- 
ress towards lifting the burden of 
bad debts produced by the col- 
lapse of property and other asset 
prices in the past few years. 

Mr Mieno has caused surprise 
in financial circles in the past six 
months with his insistently 
upbeat assessments of Japan's 
economic prospects. Yesterday 
that optimism was focused on the 
overall health of the hanking sys- 
tem. though he criticised hanks 
for their slowness to face up to 
their bad debts. 

"We may no longer have to be 
concerned about how much fur- 
ther the problem of non-perform- 
ing assets is going to develop 
since the outline of the problem 
has now become fairly clear,” Mr 
Mieno said. The bad debt burden 
has made Japanese hanks wary 
of new lending, in particular, in 
tbe international market 

Mr Mieno was careful to avoid 
claiming that the total number of 



Yasushi Mieno: upbeat 
assessments of Japan’s prospects 


bad loans had peaked, stating 
only that the “pace of increase in 
non-performing loans” seemed to 
have slowed. 

Figures published in the banks' 
annual reports in May supported 
the proposition that the total had 
peaked. Disclosed bad loans at 
tbe nation’s 21 largest commer- 
cial banks fell by 1.3 per cent 
between September 1993 and 
March this year to Yl3,600bn 
($140.14bn). 

But these figures include only 
loans to bankrupt companies and 
loans in arrears by six months or 


more. In Japan, unlik e most 
other countries, banks are not 
obliged to give figures for loans 
where interest rates have been 
cut to keep a borrower afloat, nor 
those an which no interest has 
been paid for a period up to six 
months. 

Most analysts estimate that 
adding in these loans . would 
almost double the bad loan book, 
and would suggest that the total 
is still rising. 

Mr Mieno was critical of the 
pace at which the bad debt prob- 
lem has been addressed. He 
described the painfully slow prog- 
ress by the banks in acknowl- 
edging, and then writing 
off, their non-performing loans 
as a typically “Japanese 
approach". 

He said this had resulted in a 
delay in the improvement of bal- 
ance sheets. He added that the 
delay may have had a negative 
effect on the macroeconomy. 

The governor said it was neces- 
sary to strengthen Japan's finan- 
cial system by promoting faster 
deregulation, and by encouraging 
banks to be more innovative and 
to discard their natural tendency 
not to step out of line with each 
other. They should also work to 
improve their risk management 
systems. 


Pin-up will belp shape Japan's 
politics, Page 8 


China's central bank yesterday 
took a leap into greater public 
disclosure when it published 
op- to-date money supply figures 
for the first time since the Com- 
m nnis t revolution. 

These revealed that the 
broader M2 measure of monetary 
growth accelerated in the third 
quarter in spite of the govern- 
ment's proclaimed tight credit 
policy aimed at calming an over- 
heating economy and curbing 
inflation. 

The People’s Bank of China, 
through its in-house journal, the 
Financial News, reported that 
M2 grew by 37.1 per cent year- 
on-year in the September quar- 
ter, compared with 29.7 per cent 
in the second quarter. The target 
for 1994 is 24 per cent. 

Sir Dai Xiangloug, a deputy 
governor of the People’s Rank, 
expressed concern about the M2 
outcome . “This shows that 
money supply is accelerat- 
ing. ..and inflationary pressure 
Is growing,” he said. 

He attributed the excessive 
monetary growth to high capital 
spending by state enterprises, 
lack of budgetary restraint, a 
rise in government employees' 
salaries and increased payments 
to farmers. Sir Dai made a plea 
for restraint, saying that for 
monetary policy to work in the 
fight against inflation, govern- 
ment departments would have to 
curb expenditure. 

One of the bank's motives in 
breaking with tradition by pub- 
lishing timely money supply sta- 
tistics seems to be to strengthen 
its argument for restraint The 
bank is seeking to transform 
itself from a passive state insti- 
tution into a leader in the fight 
against inflation. 

Consumer prices nationwide 
were op 27.4 per cent in Septem- 
ber compared with a year ear- 
lier. This was in spite of mea- 
sures adopted earlier this year to 
stiffen price controls on basic 
commodities and services. The 
bank also published figures 
showing narrow M0 money sup- 
ply growth of 26.4 per cent in the 
third quarter, and MI growth of 
32.5 per cent 

It reported foreign exchange 
reserves of $39J8bn at the end of 
September, an 87 per cent 
increase ou 1993. This was partly 
attributed to an improved trad- 
ing performance, with exports 
exceeding imports by $1.38bn in 
the first nine months. 

Mr Dai said the decision to 
release the data was part of the 
bank’s attempts to bring its 
operations into line with similar 
international institutions. “This 
will help the opening up and 
reform of our financial system 
and make for better interna- 
tional exchange [of informa- 
tion],” he told the Financial 
News. He indicated that publica- 
tion of money supply figures 
would become standard practice. 


FT WEATHER GUIDE 


Europe today 


Northern Europe will be unsettled with 
steady rain from southern Scandinavia to 
western Russia. The snow zone will move 
north over Scandinavia as moist, warm air is 
drawn in from the south. Rain or drizzle is 
expected from the Baltics to the Alps and 
central France but conditions will improve 
during the day. The British Isles and the 
Benelux will be dry but cooler. Odd showers 
are Dkefy over the Netherlands, northern 
Germany and Denmark. The Mediterranean 
will be warm, dry and mainly sunny. 
Afternoon temperatures around 21C will be 
found as far north as Romania 


10 , 00 f VT \ 4 






\HK3H ’ 


Five-day forecast 

A complex series of low pressure areas over 
Scandinavia wffl move east, causing rain 
over north-east Europe. High pressure over 
western France will make central Europe 
warm and settled. A deepening low west of 
the British Isles wffl draw cooler air and 
unsettled conditions into Spain on Friday 
and other areas of western Europe during 
the weekend. 


1020 .19 


V 21 ^ ^ MBH 




1-. 23 

7) -S'-,' -22:v> 

HIGH ; 


. HIGH 


J r.- T ^_1020 25 ■ - 

/ Warm «nnrt JLA. CoM from 4L. A- Wind spied In KPH 


Situation af IS GMT. Terrpcrafum maximum fordny. Fbroca rt s by Mateo Conarff of the Nothertands 



Maximum 

Be#ng 

sun 

IE 

Caracas 

{dr 

31 

Faro 


Crttslus 

Bfldnst 

showw 

10 

CORflff 

loir 

11 

Frankfurt 

Abu Dhabi 

fair 

33 

Befgrndo 

sun 

20 

Casablanca 

sun 

21 

Geneva 

Accra 

ttiund 

31 

B«fln 

dowdy 

13 

Chicago 

sun 

9 

Gibraltar 

flgtas 

cloudy 

23 

Bermuda 

cioudy 

26 

Cologne 

Mr 

13 

Glasgow 

Amsterdam 

si lower 

12 

Bogota 

shower 

22 

Dakar 

sun 

29 

Hamburg 

Athens 

sun 

23 

Bombay 

cloudy 

34 

Dallas 

sun 

22 

Helsinki 

Atlanta 

tat 

15 

Brussels 

fair 

13 

DeH 

sun 

30 

Hong Kong 

B. Aires 

fair 

22 

Budapest 

fc* 

17 

Dubai 

Wr 

32 

Honolulu 

ELftam 

Mr 

12 

C.hagen 

shower 

11 

Dublin 

fa* 

11 

Istanbul 

Bangkok 

cloudy 

33 

Cairo 

fair 

27 

Dubrovnik 

sun 

22 

Jakarta 

Barcelona 

fair 

19 

Cape Town 

sun 

27 

Edinburgh 

fair 

11 

Jersey 


Our service starts long before take-off. 


Lufthansa 


Karachi 

Kuwat 

L. Angeles 

Las Palmas 

Lira 

Lisbon 

London 

Lux.boug 

Lyon 

Madeira 


22 Madrid 
14 Majorca 
14 Mafia 

21 Manchester 
11 Manda 

11 Melbourne 

3 MexicoCfty 
27 Miani 
31 Milan 

21 Montreal 
33 Moscow 
13 Munch 
35 Nairobi 
35 Naples 

23 Nassau 
25 New York 

22 Nice 
20 Nicosia 
13 Oslo 
IT Pans 
16 Perth 

23 Prague 


19 Rangoon 

22 Reykjavik 

23 Rto 

11 Rome 
32 S. Free© 

12 Seoul 

23 Singapore 

26 Stockholm 
17 Strasbourg 

6 Sydney 
6 Tangier 
15 Te! Avw 

28 Tokyo 
21 Toronto 

29 Vancouver 
17 Venice 

IB Vienna 
28 Warsaw 
5 Washington 

13 Wellington 

27 Winnipeg 

14 Zurich 


lair 34 

cloudy -I 

shower 25 

lair 22 

rain 17 

sun 17 

shower 32 

rain 8 

cloudy 15 

shower 22 

fair 22 

fair 31 

cloudy 19 

isfn 7 

lair 9 


fa* 17 
fa t 17 


shower 15 
fair 23 
doudy 14 
ran 7 


y^3> o-! 




THE LEX COLUMN 


Kicking tobacco 


Nine years after RJR bought Nabisco 
and five years after the combined 
entity was acquired by KKR in a mas- 
sive leveraged buy-out, RJR Nabisco 
appears to be returning to its roots. 
Yesterday's announcement of a partial 
float for Nabisco could mark the start 
of a split into its original food and 
tobacco divisions. Meanwhile. RJR's 
decision not to take part in KKR's 
$2bn bid for Borden, a food group, 
looks like an assertion of indepen- 
dence from the buy-out group. 

RJR Nabisco's rating has been 
tainted by its perception as a tobacco 
stock - something re-emphasised by 
yesterday's go-ahead by a judge for a 
class action by smokers in Florida. By 
giving the food side greater visibility, 
the partial float should benefit both 
Nabisco and its parent. If it can be 
ring-fenced from tobacco liabilities, 
Nabisco should find it easier to raise 
debt and ultimately equity for acquisi- 
tions. RJR will be hoping its own rat- 
ing will be boosted by Nabisco's 
higher valuation, since it will still own 
80 per cent of the company. 

By backing out or the Borden bid, 
RJR has caused KKR something of a 
headache. Under the original deal, a 
complicated share swap between Bor- 
den and RJR would have have reduced 
KKR's costs and enabled the transfer 
of assets to RJR. There was also the 
possibil ity t hat Nabisco could have 
helped KKR manage Borden, which 
has had a poor record in recent years . 
One might have thought that KKR. 
which owns 35 per cent of RJR Nab- 
isco. would have been in a position to 
tell the group what to do. But. with 
that stake halving as part of the Bor- 
den bid. that is presumably no longer 
the case. 


FT-SE fntfex: 3097.4 {+:i3.6) 


Dairy groups 


Share prices relative to the 
FT-SE-A An-Share Index 

130 •- 

VK, -L JMwflfe 


1992 

Source: FT Graphite 


hirers' scope to pass on cost increases 
of up to 20 per cent Fresh milk Is not 
threatened to the same degree by 
imports, and the dairies have already 
pushed through higher prices. Despite 
Tesco's decision yesterday to mark up 
the price of milk by 2p a pint, the 
brunt of the price rises will fell on 
consumers who have their milk deliv- 
ered at home. Higher prices for the 
traditional pinta will accelerate the 
sharp decline in this high-margin seg- 
ment of the market. 

Long term, the Milk Marque regime 
may benefit the larger dairy groups. 
They will get greater flexibility in the 
sourcing of milk. They will seize the 
opportunity to rationalise their manu- 
facturing operations, for example, by 
cutting excess capacity. But the transi- 
tion to a new order is likely to be a 
turbulent one, and during that transi- 
tion shares in Unigate or Northern 
Foods will tempt only the brave. 


Hmpc less than for loans with similar 
risk, so banks will be encouraged to 
develop securitised, lending over tradi- 
tional loans. This was gradually hap- 
pening anyway, but it remai ns unsa- 
tisfactory that a significant 
acceleration should be the unintended 
result of regulation rather than mar- 
ket forces. 

Tbe directive's eventual impact will 
depend on the authorities' interpreta- 
tion and implementiaa. The UK looks 
set to reinforce its record of adopting a 
legalistic, hair-shirt approach to Euro- 
pean legislation through “super-com- 
pliance" - insisting on capital ade- 
quacy and documentation even i 
greater than that required by the 
directive. This would increase costs 
and disadvantage London as a finan- 
cial centre. Within the directive, there 
is scope for discretion. The industry's 
regulatory bodies should use it 


Milk Marque 

The move today to a new marketing 
regime for UK milk parallels the expe- 
rience of eastern European countries 
forced to switch overnight from cen- 
tral planning to a free market The 
transformation will be traumatic, and 
the consequences will be unfathom- 
able. 

In the short term, the impact of the 
change on big dairy companies such 
as Unigate and Northern Foods looks 
wholly negative. Milk prices will rise 
and the food processors will find it 
impossible to pass the full increase in 
raw materials costs to customers. This 
is especially true for products such as 
cream, yoghurt, cheese, butter and 
milk powder, where the ready avail- 
ability of imports will limit manufac- 


Capital adequacy 

Creating a level regulatory playing 
field for banks and investment groups 
throughout the European Union is a 
laudable ambition. But the capital ade- 
quacy directive, due to take effect in 
just 14 months, is flawed. One problem 
is that the directive fails to achieve its 
main objective of ensuring fair compe- 
tition between non-bank investment 
groups and h anks ' securities subsid- 
iaries. The h anks ' securities busi- 
nesses will still be subsidised by cheap 
capital from deposit bases - less costly 
because, in tbe last resort, they are 
guaranteed by governments. 

Worse, the new regulations distort 
the market. The capital requirements 
for securities will, on occasions, be 32 


Preferred securities 

For Grand Metropolitan, the benefits 
of its 8500m issue of preferred securi- 
ties are clear. The cleverly-structured 
issue is in line with the group’s strat- 
egy of reducing its dependence on 
short-term debt The cost of financing 
the new instrument is likely to be 
4950 basis points higher than that cf 
30-year debt - a price well worth pay- 
ing -for an instrument which approxi- 
mates to equity, and is viewed as such ! 
by the rating agencies. Moreover, the | 
securities enhance accounting mea- 
surements of performance such as 
interest cover and gearing while being 
tax-efficient Despite the instrument's 
attractions, preferred securities are 
aimed primarily at US retail investors. 
The appeal of the financing technique 
to other UK blue chip companies may 
thus be limited to those like GrandMet 
whose products are already familiar to 
the US consumer. 


Heron 


Fees for refinancing near-bankrupt 
Heron International have reached an 
astonishing £S 0 m. Bondholders, who 
saw most of their investment wiped 
out in last year's foiled restructuring 
and will face a farther diminution if 
tbe latest plan is approved, must feel 
bitter. A particularly gripe - as with 
other refinancings such as Queens 
Moat Houses - is that some fees have 
gone to Heron's bank creditors. It 
seems inappropriate for one class of 
creditors to receive fees from a strug- ; 
giing company, so reducing what is | 
available for the rest. 




The Busiest 
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in the City. 








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Hie No JL platform for shunting stock. 
And shares. 


Authorised Rir.rlli.-r 


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ftfosto^feg cattle in central Queensland: after a 


A ^political rallies go. the 
recent; gathering lh 
Cfabrattiatta, one of Syd- 
ney's western suhtffbs. was a 
haw-key affair. A few hundred 
people; perhaps two- thirds 
■Vietnamese, gathered in the 
locatparii to hear speeches and. 
- stQg:stiajgs- A sotttary police- 
maii-'ta^ed Ms foot In time to 
Ifce.jiiiisic. ‘ 

'■? IJut ; tbe'tiitit - that it occurred 
at/afi rwas estraorthhary. a lew 
days earlier; thetocal/state MP 

. ■ -O --J »■ - - . — ... I .. .- 


of ftndamentW change the chafenge for the Government ta to Keep the people moving In the light direction Picture: Ross Bray 


Bumpy ride to a new identity 


demonstrate - the area’s real 
fedings. 

It -would be easy to get 
nahr amatta out of proportion, 
lit truth, there -are not many 
streets in Australia where 


Changes in Australia’s ethnic make-up, its international orientation and 
economic culture are a test of its political maturity, writes Nikki Tait 


decade. Australia has been 


Etox^pean' script is barely vjsi- ' engaged hi a process of fimda- 


- ble.The suburb’s electorate is 
amongstv tlie -nation's' most 
diverse, almost one-fifth Viet- 






■ apd-ah. -c«ftspb^n ogiKtoebt- of . ; namese, hut with other large 
Asian: gangs who" had .inffl- immigrant i-~- communities,, 
toatod-ihe area,- had been shot . / drawn from both Asia and 
.'iJeadi White ihe rea^ns fttchis Europe. . AifetraEa, meanwhile, 
kfflmg’hayeyet tnbereyeated; - reanams metre remarkable for 
the "local hfedia quickly ■ the r accessibility end informal- 
declared this to^be. Austxalia’s -ity wtdcti surrounds its public 
first poEtical assassinations ii/s figra^. "V' : . v 
' - The racist tone op subse- • AH that said, Cahramatta’s 

queni public reaetkm on ; radio . recent experience, and the pre- 
dmt-slwwswdttl^ Mmmtfirity v«ynceptions and responses 
leaders,' had they'jt^Wcd ft S which tt . unleashed, ' do high- 
badtla^^cmH be. fcB^stalled - h^ toe &ey qiiestion which 
pm K^-tt'Was'h^d, would.. confrqntor-w - nation. For a 


mental change, encompassing 
everything from the country’s 
trade focus and its wage-bar- 
gaining mechanisms, to its cul- 
tural priorities and racial mix. 
Key objectives have been (and 
remain) a closer integration 
with Asian neigbours and a 
more competitive business 
environment at home. 

But how East this restructur- 
ing can, or should be, pushed 
is an extremely difficult issue 
- and one which gets no easier 
as the changes dig more perva- 
sively into everyday lives, and 
trade-offe between political 


consensus and what is optimal 
from an economic standpoint 
become inevitable. 

Mr Paul Keating, prime min- 
ister, made reference to the 
issue during his keynote 
speech to delegates at the 
recent Australian Labor Party 
conference. “We are in office. 
We are doing what we do best 
- which is making the 
changes, preparing Australia 
for the future.'’ he said. 

"And we are bringing the 
people with us," he continued 
in a slight departure from the 
prepared text. “That’s the 
important thing, they’re com- 
ing with us." 


From a political perspective, 
the prime minister's assess- 
ment seems correct Since win- 
ning the supposedly “unwinna- 
ble” election in early 1993, 
when recession was biting 
hard and dissatisfaction rife, 
the froating adminis tration has 
established a clear lead over its 
opponents in the opinion polls. 

A Newspoll survey published 
in late-October, for example, 
suggested that if an election 
were held today. 46 per cent 
would vote for the Australian 
Labor Party versus 41 per cent 
for the Liberal/National coali- 
tion. On polling day in 1993, 
the same survey showed the 


two votes neck-and-neck. 

The government’s edge does 
owe something to the leader- 
ship turmoil within the liberal 
Party, the larger partner in the 
coalition, and to the opposi- 
tion’s policy confusion in the 
wake of its unexpected 1993 
election loss. Moreover, the 
ALP's ascendancy in federal 
politics is not mirrored at state 
or territory level, where only 
Queensland remains in out- 
right Labor control This situa- 
tion, in turn, makes for tension 
and confusion in key areas, 
ranging from Aboriginal rights 
to labour relations. 

But it is also arguable that 


one major factor in Labor's 
successful retention of popular 
support at federal level has 
been its astute but cautious 
timing of the reform process - 
a sharp contrast to New Zea- 
land, whose Easter restructur- 
ing has provoked a political 
backlash. In Australia, where 
the electorate is generally con- 
servative, the Keating govern- 
ment has shown a marked will- 
ingness to adjust the tempo in 
sensitive areas, ensuring that a 
majority is kept on board. 

But while tide careful pace of 
change has so for bought polit- 
ical stability, it is possible that 
problems are being created on 
the economic front 

On a short-term view, there 
seems little cause for concern. 
Growth in GDP is forecast to 
run out at around 4J5 per cent 


in 1994/5, and then at perhaps 
four per cent in the following 
year, figures which compare 
favourably with any other 
“western” economy. 

The inflation outlook has 
begun to look a little less 
favourable hi recent months, 
in part because of the potential 
long-term implications of the 
current drought which has 
crippled key agricultural areas 
on the east coast 

Nevertheless, the situation is 
not all that alarming.The con- 
sumer price index is forecast to 
rise by just H per cent this 
year, and perhaps K5-4 per cent 
in the following 12 months. 
Moreover, a larger-than-antiri- 
pated one percentage point 
jump in interest rates in late- 
October suggests that the 
Reserve Bank of Australia, the 
central monetary authority, is 
firmly determined to keep 
price rises under controL 

□ Continued on Page 4 




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TUESDAY NOVEMBER 1 1994 



Brisbane's Myer shopping centres rising from recession 

■ ECONOMY 

It’s getting 
stronger 


AUSTRALIA 2 



Mines survive new land rules, says Bruce Jacques 

The lining is golden 


O n a short-term view, 
the Australian econ- 
omy looks as palatable 
as the country's awesome 
beaches. On medium-term 
view, condit ions a re less cer- 
tain, writes NIKKI TAIT. 

About a year ago, the coun- 
try started to pull out of reces- 
sion with unexpected strength. 
Annual growth In gross domes- 
tic product hit the five per cent 
mark early in 1994, before eas- 
ing back to 43 per cant in the 
second quarter. Inflation 
remained (and remains) low: 
the annual increase in the con- 
sumer price index ran at 1.7 
per cent in the same period. 

Moreover, while consumer 
demand was the driving force 
in the recovery's early stages, 
thin is finally generating a 
pickup in business confidence. 
As a result, the government’s 
crucial target for business 
investment - a 145 per cent 
rise in 1994/5 - seams more 
attainable. There was a "high 
probability” of this increase 
being reached or even sur- 
passed, remarked Ted Evans, 
one of the treasury’s senior 
officials, in September. 

So, with some justification, 
Mr Ralph Willis, Australia's 
unassuming treasurer, has 
been able to declare that bis 
country has never looked bet- 
ter placed to achieve a pro- 
longed period of economic 
growth. 

But even Mr Willis would 
not pretend that the skies are 
cloudless. 

The most immediate concern 
is the severe drought which 
has hit key agricultural areas 
on the east coast The effects of 
this are still felt widely, and It 
Is hard to assess the final 
impact 

But, already, production of 
wheat, a si gnificant export cat- 
egory for Australia, is forecast 
to almost halve from around 
17m tonnes last year to 10.4m 
tonnes in 1994/5. Feed costs for 
livestock producers are 
increasing, and prices of both 
animal and grain-based prod- 
ucts could rise. Rural hardship 
cases are fairly widespread, 
prompting the government to 
announce a A$164ra package of 
emergency aid measures, 
spread over two years. At pres- 
ent, official estimates suggest 
that around half a percentage 
point may be knocked off the 
nation’s growth rate as a result 
of the drought 
Secondly, in spite of the 
strong growth rate, Australia's 
unemployment situation 
remains grim. A year into the 
recovery, the jobless rate 
stands at 9.5 per emit anf l the 


ftTnpbasia which the corporate 
sector is still putting on pro- 
ductivity improvements sug- 
gests that any rapid decline is 
unlikely. Some forecasts have 
indicated that a national 
growth rate of around 3J> per 
cent for the rest of the decade 
would still leave the jobless 
rate at seven per cent by the 
year 2000. A growth rate of 
4fe5 per cent might get unem- 
ployment down to five per 
cent 

Such predictions encouraged 
the federal government to 
launch a A$6.5bn “jobs pro- 
gramme" Mrliw Wife year. Its 
initiatives were various, but 
inrhirted the offer of either sub- 
sidised employment mainly in 
the private sector, or work 
experience and training to all 
long-term unemployed people 
of 18-plus. 

The package was given the 
best possible gloss, and much 
of the cost Is actually spread 
over a four-year period. Never- 
theless, while it was quickly 
judged to be politicafly-astute. 
the business aTtf * ffrnanrial com- 


munity was less impressed. In 
spite of government reassur- 
ances that it was sticking to its 
deficit reduction strategy - 
which aims to cut the deficit to 
around one per cent of gross 
domestic product by 1996/7 - it 
would have preferred a faster 
rate of reduction, and more 
margin for error. 

T hese calls were revoiced 
by Mr Beraie Fraser, the 
Reserve Bank governor, 
in September and Mr Willis 
has suggested that they win be 
borne in mind in ahaprng the 
next budget 

Thirdly, there is the tnafftw 
of Australia’s external account 
Australia's current account 
deficit has stabilised at around 
four per cent of GDP in recent 
years, but the concern is that 
the balance of trade could go 
out of kilter as business invest- 
ment gets under way and 
imports of plant and maefain- 
ery surge. 

Many analysts do predict 
some worsening of the current 
account: Bankers Trust, for 


example, recently predicted 
A$22bn deficit in 1995/6, or 45 
per cent of GDP, although it 
adds that such a level "will not 
pose a serious problem for the 
economy”. Since then, the 
August trade figures have been 
released - and the larg- 
er-than-expected current 
account defeat fuelled the pes- 
simists’ worst fears. 

The authorities' response, 
meanwhile, centres on the 
huge effort to promote Asian 
trade; and encourage Austra- 
lian exports to the region. This, 
it is hoped, could offset the rise 
in imports. 

But most pundits also 
acknowledge that that there is 
an element erf guesswork in all 
of this. No one yet knows how 
strongly-sustained Australia's 
export performance will be, 
nor (he extent of any import 
surg e. If the current account 
does "blow out”, it is widely 
assumed that interest rate or 
tax increases might have to fol- 
low - the political hope pre- 
sumably hriwg for the latter — 
and that this could occur after 
the next federal election, in 
1996. 

Finally, there is the question 
of internal “structural" 
reforms. Ministers frequently 
point to the progress made by 
Australia over the past decade 
- in terms of the steady lower- 
ing of tariff barriers, the move 
to replace centralised wage 
agreements by enterprise- 
based bargains, the reduction 
in the number of industrial dis- 
putes, the introduction of com- 
petition into key sectors such 

on. There is, moreover, an 
ongoing effort to posh the pro- 
cess further, especially at state 
leveL 

But the outside world, 
including the all-important 
Asia region, is sometimes less 
appreciative. It still tends to 
see sporadic, but high-profile, 
national strikes (in the coal 
and shipping industries, for 
example); Australia's low 
savings ratio, contrasting 
sharply with that of its north- 
ern neighbours; and the 
nation’s egalitarian culture 
which distrusts commercial 
success. 

One recent survey of interna- 
tional competitiveness, by the 
Tntamarinrmi Institute of Man- 
agement Development, pnt 
Australia In 15th place, 
roughly level pegging with the 
UK and Canaria. Sing a p ore, by 

contrast, ff*ww in aaranri to the 
US, Hong Kong was fourth, 
and even Malaysia and Taiwan 
managed 17th and ujth places, 
respectively. 


F or the Australian mining 
industry the much feared 
“era of Mato” has begun 
without interrupting the 
long-standing trend of steadily 
increased production and 
export revenue. 

Mabo is tbe popular tag 
given to a watershed High 
Court decision given legisla- 
tive effect late in 1993 through 
the Native Title Bill. Tbe Bill, 
which broadly gives Austra- 
lia’s Aboriginal people title to 
large tracts or the country, 
had drawn dire predictions 
from the mining lobby, mainly 
reflecting concerns about 
exploration and development 
access. 

However, in 1993-4, the 
industry has again overcome 
weak world demand, histori- 
cally low prices for many key 
commodities and unfavourable 
exchange rate movements 
marginally to lift export reve- 
nue to almost A$30bn. 
accounting for better than 35 
per cent of the country’s total 
export receipts. 

Figures from ABARE, the 
Federal Government's com- 
modities research arm, show 
that Australia's mineral 
exports have risen in all bat 
one year of the past decade 
The latest total represents 
more than double the coun- 
try’s then record AS14.9bn 
mineral exports in 1986. 

While this performance jus- 
tifies the industry's world 
leader status, demonstrating 
its inherent strength and 
diversity, closer inspection 
reveals some weak spots 
which threaten to reduce 
momentum later this decade. 

The industry acknowledges 
that the effects on production 
and revenues may not be felt 
for some years, given the lead 
times involved in major pro- 
jects. But mining executives 
see Mabo as part of a long 
term pattern of adversity 
which includes the rise of 
environmental issues, compen- 
sation claims from landown- 
ers, unfavourable tax treat- 
ment and vexatious litigation. 

Mr Geoffrey Ewing, of tbe 
Australian Mining Industry 
Council (AMIO. says the min- 
ing industry has long been a 
leader in negotiating with 
Aboriginal communities. “Our 
argument is not with the con- 
cept of native title, but with 
the way the Bill produces an 
unwieldy system for explora- 
tion and development access,” 
Mr Ewing said. 

“Any real Influence on pro- 
duction and exports is obvi- 
ously some years off. In fact, 
our annual financial survey. 


due out later this year, will 
probably show a lift in explo- 
ration spending in the latest 
year. But our information is 
that the spending is mainly on 
what could be described as 
'brownfields’, sites which are 
free of any native title 
claims.” 

The Australian mineral 
industry’s overall performance 
in the latest year was also dis- 
torted by near boom condi- 
tions in one commodity - gold 
- where export value rose by 
more than 26 per cent to 
A$5.42bn, masking some seri- 
ous declines in other commodi- 
ties. 

Gold’s resurgence echoes its 
historical position as one of 
the main populators of fledg- 
ling antipodean colonies more 
than a century ago. The met- 
al’s more recent Australian 
history is scarcely less impor- 
tant to national fortunes. 

From a position of decline in 
the 1970s, when many of the 
country’s biggest mines faced 
closure and annnal output ran 
at less than three tonnes, Aus- 
tralian gold production has 
rallied close to 250 tonnes in 
the current year, ranking it 
third in the world after South 
Africa and the US. 

And new projects already 


under way mean that produc- 
tion will keep rising strongly, 
barring a collapse in the all- 
too-volatile gold price. Mr 
Robin Widdup, gold analyst 
with J. B. Were & Son, the 
Australian stockbrokers, told 
the Financial Times World 
Gold Conference in June that 
Australia's annual gold pro- 
duction was likely to top 300 
tonnes by the tom of the cen- 
tury- 

V igorous exploration and 
new mine development 
has transformed the gold 
industry from the 1980s pic- 
ture of short life, shallow 
oxide open pits, to large long 
life mines in the 1990s,” Mr 
Widdup said. “The 1990s Aus- 
tralian gold rush has seen 
geologists, armed with new 
geochemical and geophysical 
techniques, unearth a series of 
large new gold discoveries 
beneath sand cover. 

“This breakthrough in tech- 
nology has lifted exploration 
expenditure — and the rate of 
success shows no sign of slow- 
ing. A group of 10 to 15 new 
mines should lift Australian 
production by 40 to 50 tonnes 
over the next five years.” 

If gold fulfils these expecta- 
tions, it could replace coal as 


Australia's number one export 
earner around the torn of the 
century. Gold's export jump in 
the latest year compared with 
a corresponding 5 per cent fall 
to just under A?7.2bn for coaL 

Several other major Austra- 
lian minerals recorded solid 
export revenue gains in 
1993-94, including alu min iu m , 
up 5 per cent to ASl-SZbn and 
iron, steel and ferroalloys, up 
22 per cent to A$l.4bn. But 
mi c exports fell 22 per cent to 
A$795m. 

Sticking to a familiar pat- 
tern, Australia’s higher over- 
all export receipts were 
achieved despite markedly 
lower average commodity 
prices received. ABARE's min- 
eral export price index 
slumped from 99.7 to 91.9 over 
the year while the index of 
min e production rose from 
105J2 to 107. 

Australia is, quite simply, 
continuing to sell more miner- 
als for less money- The finan- 
cial performance of its leading 
commodities companies 
remains volatile. It’s a habit 
that win prove hard to kick 
while tin industry remains a 
price taker, hostage to a small 
local market and heavily 
exposed to the vagaries of 
international trade. 



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May 1994 



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FINANCIAL TIMES TUESDAY NOVEMBER I 1994 



in 


AUSTRALIA 3 






P ersonalities, not policies, 
have dominated Austra- 
lia’s federal politics of 

i| late-. 

Perhaps the strongest spot- 
jp light has fallen on leadership 
machinations within the Lib- 
eral Party, the dominant oppo- 
sition party. Back in early 1993, 
when the recession was biting 
badly, Mr John Hewson, its for- 
mer leader, lost a seemingly 
unlosable election to Paul 
Keating's incumbent Labor 
Party. For over a year, Hewson 
then limped on as the wave of 
destabilising rumours and 
speculation swelled around 
him. He finally threw in the 
towel last May, calling for a 
party-room ballot. 

The showdown eras surpris- 
ingly neat Two aspiring candi- 
date - Mr Peter Costello, a 
Victorian lawyer in. his late-30s 
and relative newcomer to fed- 
eral politics, and Mr Alexander 
Downer, Hewson’s treasury 
spokesman - collaborated to 
present a joint “youth ticket". 
It won comfortably with Mr 
Downer, whose blue-blooded 
Adelaide family has been 
involved in politics for three 
generations, taking the senior 



Nikki Tait explains why the opposition parties keep changing their leaders 

Era of the personality cult 


Prime minister Paul Keating: 
ahead by a solid margin 

job. Mr Costello became 
shadow treasurer. 

But matters soon became 
messy again. Mr Downer, hav 
mg enjoyed an initial “honey 
moon” in the opinion polls 
made a series of public gaffes 
the most serious of which con 
cerned opposition policy 


towards Aboriginal native title 
rights. The recent decision by 
Mr Andrew Peacock, the vet- 
eran Liberal politician, to quit 
the federal scene has not been 
helpful either: while Mr Pea- 
cock has reaffirmed his sup- 
port, speculation over his suc- 
cessor in the blue-ribbon seat 
of Kooyong has provided an 
opportunity for gossip-monger- 
ing to restart. 

In the meantime, the opinion 
polls have switchbacked, and 
now give Labor a clear edge 
over the opposition. Mr Keat- 
ing, who has never ranked 
highly in the personal popular- 
ity stakes, leads Mr Downer as 
preferred prime minister by a 
solid margin. 

But while the Labor side of 
the equation has been better- 
organised, it has not been with- 
out its own personality 
upheavals. In early 1994 - and 
for a wide variety of reasons - 


the Keating government lost 
four ministers, including John 
Dawkins, the former treasurer, 
and Graham Richardson, who 
held the health portfolio and 
was one of the party's key 
backroom players. 

Since then, the cabinet has 
stabilised, but there has been a 
not-so-subtle lining-up of 
potential Keating successors. 
No one believes that the prime 
minister is set to depart in the 
short-term. But there is a 
school of thought which sug- 
gests that if he wins the nest 
election, due in 1996. he could 
then step down midway 
through the next government's 
term of office. 

So Mr Gareth Evans. Austra- 
lia's foreign minister, has 
arranged to move from the 
Senate (parliament's Upper 
House! to the House of Repre- 
sentatives. This would allow 
his hat to go into the ring. Ms 


Carmen Lawrence, the former 
Western Australian premier 
who took over Mr Dawkins' 
seat and Mr Richardson's port- 
folio. is another posable con- 
tender. Mr Kim Beazley, 
finance minister, and Mr 
Simon Crean, employment, 
have also been touted as candi- 
dates. 

All these comings and goings 
have tended to mask the legis- 
lative vacuum. The Keating 
government pushed through 
key measures, such as the 
Native Title legislation and a 
contentious Industrial Rela- 
tions act, during its first 12 
months of office. This was 
often uphill work: the govern- 
ment lacks a majority in the 
Senate, and the Democrats and 
a couple of Green Party sena- 
tors who hold the balance of 
power there caused difficulties. 

More recently, however, the 
Keating regime has cooled the 


tempo. The most conspicuous 
feature of its last finance pack- 
age, for example, was the 
absence of any significant new 
measures. Opponents spoiling 
for a fight were left flailing in 
thin air. The overall result is 
that the profile of the minor 
parties has fallen significantly. 

But perhaps the central 
question now hanging over 
Australian federal politics is 
whether the opposition can 
find a package of policies 
which differentiate it suffi- 
ciently from a 
“middle-of-the-road” Labor gov- 
ernment, and yet offers greater 
appeal to the electorate. 

This is not an easy task. Dur- 
ing the past 10 years. Labor 
has followed a moderate 
reform path. 

This has involved putting a 
programme of tariff reductions 
in place, nudging the labour 
movement towards enterprise- 


based deals, deregulating key 
industrial and financial sec- 
tors, pushing the Asia-Pacific 
links, and so on. With a fair 
amount of skill, and helped by 
a weak opposition, the govern- 
ment has been moving at its 
own pace. It has thus retained 


The key issue is whether 
the opposition can offer 
policies more attractive 
than those of a centrist 
Labor government 


a broad measure of consensus 
support. 

The fate of Mr Hewson. 
whose “Fightback” package 
would have pushed the reforms 
further and faster, suggests 
that the Australian electorate 
will not be wooed by a more 
radical economic agenda. So 


the Downer team is talcing a 
different tack. 

Its first effort has been a 
broad “strategy" document 
called “The Things that Mat- 
ter”. This sets out the main 
policy areas which the party 
plans to develop in more detail 
during the run-up to the next 
election. “Four key issues 
define what we believe should 
be the major priorities of Aus- 
tralia: the creation of jobs, the 
strengthening of families, the 
empowerment of communities 
and the restoration of national 
cohesiveness and indepen- 
dence” it reads. 

The jury is still out on the 
wisdom of this approach. Many 
commentators have found little 
to quarrel with in the docu- 
ment, which is also skilfully 
packaged. But the big question 
is the extent to which govern- 
ment niggling will mean that 
the rather bland generalisa- 
tions have to be turned into 
detailed costed policies. 

That is when the Labor guns 
will really fire - if only to 
divert from a certain lack of 
new initiatives on their own 
side. The next IS months could 
be interesting. 


.-•rr*** 


- ft 

"■•'-•"ac & 


Shaking up the big state monopolies remains an urgent priority, writes Emilia Tagaza 

A long haul to greater efficiency 


— tan; 


— S 


CO vs 


vv 


I 


ONE of the greatest pieces of 
infrastructure redevelopment 
in Australia is arguably the 
conversion of rail freight lines 
connecting the mainland capi- 
tal cities into a single, stan- 
dard-gauge network. 

By toe middle of 1995, and 
for the first time in the coon- 
try’s history, goods being 
transported from one state to 
another will no longer be 
delayed by differences in rail 
track widths. 

Until 1982, a. journey from 
Brisbane on the east coast, to 
Perth, on the west, involved 
five changes of gauge, shifting 
from narrow to standard to 
broad and back to narrow. To 
move goods across, bogie 
exchanges were installed to 
change bogles underneath the 
waggon and enable toe trans- 
fer of containers. 

Over recent years, standard 
tracks have gradnally been 
installed across borders so 
that today toe Melbourne to 
Adelaide corridor is the only 
miss ing link in a standardised 
national system. This is now 
being rectified, with the con- 
struction expected to be fin- 
ished by May 1995. 

The system’s inefficiency 
has long bedevilled Australian 
business, which has borne the 
cost and consequence on its 
competitiveness. The Bureau 
of Industry Economics, which 
has examined the performance 
of Australia’s infrastructure 
against world competitors, 
says that Australian rail 
freight charges are at least 
twice as high as its cheapest 
competitor. Its productivity 
was only 27 per emit of the 
world’s best performer in 
1991-92. 

The state of the nation’s rail- 
way system reflects bow prac- 
tices and institutions estab- 
lished by individual colonies 
in the 19th century have con- 
tinued beyond the federation, 
toss presenting a sudor obsta- 
cle to a single, national and 
competitive economy. It is no 
wonder, then, that the rating 
Labor government has made 
state enterprises the target of 
the latest phases of its macro- 
economic reform. 


During the last ID years, the 
federal government’s reform 
programme has seen the 
deregulation of the financial 
and labonr markets. Today, 
reform is aimed at state corpo- 
rations and authorities, which 
have almost total control over 
i nfr a s tructure facilities. 

Earlier this year, the Com- 
monwealth government 
adopted an internally-gener- 
ated report on national compe- 
tition policy, the so-called HU- 
mer Report, which 
recommends that state govern- 
ment enterprises be opened to 

It is estimated that reforms 

in state utilities such as 
power and transport would 
increase national output by 
$5.5bn a year 

free competition. Also being 
freed-up are statutory market- 
ing bodies and unincorporated 
enterprises, such as the profes- 
sions, particularly the legal 
sector. These three areas have 
untD now been immune to the 
Trade Practices Act . . 

Infrastructure costs are over 
10 per cent of the Input of all 
of Australia’s industries. The 
Bureau of Industry Economics 
stndy has found that in terms 
of price, reliability and effi- 
ciency, Australian infrastruc- 
ture was below world best 
practice, in some cases sub- 
stantially so. 

The government estimates 
that reforms in state-run utili- 
ties would increase national 
output by A*8bn (US$5fibn) a 
year. 

Although the state govern- 
ments have generally agreed 
to Implement the Hilmer 
Report, it is nevertheless an 
arduous task for the Common- 
wealth government. It is deal- 
ing with eight states and terri- 
tories. all fiefdoms with 
different politics, different 
views of competition, and 
where business enterprises 
have different structures and 
are covered by different laws. 

The first hurdle has already 
appeared. This is the issue of 
compensation for the state 


who stand to lose “monopoly 
rents” provided by the enter- 
prises. When these are priva- 
tised, the income will flow 
directly to the Commonwealth 
government as company tax. 

At a meeting in August 
between the Commonwealth 
and state governments, the 
heads of states and toe prime 
minister, Mr Paul Keating, 
were deadlocked on the level 
of compensation. Understanda- 
bly, the states wanted to get 
more, whereas the Common- 
wealth wanted give less. 

A Commonwealth bureau- 
crat said that some states jus- 
tified their high demands by 
pointing at toe steeply-rising 
revenues from state enter- 
prises. He said it was nuclear 
how much of the increases 
were due to excessive charges 
or to the increasing proportion 
of profits paid to states as divi- 
dends. 

The issue was resolved with 
toe states asking the Industry 
Commission to examine the 
yearly increase in Common- 
wealth revenues as a result of 
the reform. A commonly- 
agreed formula will then be 
set for splitting revenues. 

The states have widely dif- 
fering approaches to imple- 
menting the programme. Vic- 
toria has been implementing 
an aggressive privatisation 
team since the liberal govern- 
ment took power three years 
ago. 

Mr Alan Stockdale, the Vic- 
torian treasurer, showed a 
hint of concern that privatisa- 
tion already accomplished may 
be excluded from the revenue- 
sharing. “The Industry Com- 
mission is working with a 
brief from toe state treasurers 
and it will clearly consider all 
relevant issues, including ret- 
roactive compensation," he 
said. 

Queensland, meanwhile, 
resists the sale of public 
assets, claiming that, unlike 
Victoria, it does not carry a 
debt burden and therefore 
does not need to have a fire 
sale. 

However, it has in recent 
years introduced a “corporate 
culture” in state enterprises, 


r a - .-n S 


Nikki Tait studies the rise of the gambling dens 

Wheel of misfortune 



If the growth in visitors to 
Australia is a pretty sight, the 
development of the country's 
casino, industry - a key factor 
in the tourism equation - 
looks increasingly ugiy. 

It has been estimated that 
revenues from Australian casi- 
nos could double over the next 
five years, to around ASl_25bn 
per MTinnm- as new properties 
in Cairns, Brisbane, Melbourne 
and Sydney come on stream. 

. This will be the third phase 
of the industry’s development. 
While casinos have been oper- 
ating in Tasmania and the 
Northern Territory for several 
decades, these have always 
” been small-scale operations, 
with aggregate annual reve- 
nues of less than A$50m- 

It was only when the Bur- 
' swood casino got going outside 
Perth in. 1985, followed by Jupi- 
tars on Queensland’s Gold 
Otest, that the dollar signs 
started to dock up. Burswood 
has around 116 tables, and 
Jupitets almost as many. The 
other, seven casinos sprinkled 
across Australia are only in 
double-digits, and Alice 
Springs* has fewer tha n 20 
tables. Burswood alone 
accounted for 40 per cent of the 
industry's A$657m revenues in 

. Today; there are two princi- 
pal reasons why other big 
states, such as Victoria and 
-New South Wales, are clamber- 
.. mg on to -toe same bandwagon* 
The first, is an acute desire to 


attract the Amen tourist dollar 
- or, at the very least, not to 
lose out to competing cities 
and states. According to projec- 
tions from the NSW Casino 
Control Authority, toe number 
of international visitors to the 
Sydney property could top the 
znOhon-mark by the year 2000, 
compared with 1 . 1 - 2 .2m domes- 
tic visitors and 6.7.5m local vis- 
itors or day-trippers. 

Secondly, state treasurers, 
eager to relieve their budget- 
ary pressures, see tax revenues 
from gaining dollars as a fairly 
efficient means of raising new 
funds. Consultants say that the 
substitution effect - the drop 
in raring-related revenues, for 
example, as punters adjust 
their activities - is relatively 
modest , 

But as the stakes are raised, 
the disquiet is growing. In Mel- 
bourne, where a temporary 
fflgmfl opened early this year, 
there have been reports of a 
proliferation of “gambling 
problems”. Pawnshops are said 
to be seeing a surge in busi- 
ness, ami financial difficulties, 
notably within the city’s large 
Asian community, are rife. 

Meanwhile, the Sydney 
casino development has degen- 
erated into a dirty brawl 
between the business interests 
of Mr Kerry Packer, the Aus- 
tralian businessman who 
already Las a significant stake 
in the Melbourne operation, 
and a consortium of Showboat, 
the US casino group, and 


Leighton Holdings, the Austra- 
lian building company. 

Leighton-Showboat appeared 
to win toe right to build and 
operate the Sydney property 
earlier this year, outbidding 
the Packer consortium, which 
also inducted the US's Circus 
Circus, by offering an upfront 
payment of AS376m. 

But since then, the Packer 
ramp has Hnlflaswi a barrage of 
accusations about Showboat’s 
probity. Mr Bob Carr, the NSW 
Labor opposition leader, has 
levelled some of the more 
detailed allegations, which 
hang on fairly tenuous links 
between Showboat and a 
Louisiana mob figure and seem 
to baffle US analysts. Confiden- 
tial US police reports have 
been leaked; public relations 
advisers and lawyers spurred 
into action. 

The CCC, having assured 
everyone that extensive pro- 
bity checks had been carried 
out before the Leighton-Show- 
boat choice was made, has set 
up an inquiry to look into the 
allegations. 

Sydney residents, mean- 
while, tend to view the whole 
business with a mixture of con- 
tempt and cynicism. Two pre- 
vious attempts to award a Syd- 
ney casino licence - in 1986 
and 1987 - went awry when 
individuals or companies 
involved in the winning bids 
ran into controversy. It is now 
a question of whether the third 
time is any more lucky. 


which has resulted in some 
efficiency gate. Western Aus- 
tralia alone has refused to sur- 
render its ntillties to a 
national competition law. 

But Mr Stockdale said the 
different approaches are a nat- 
ural part of the co-operative 
process. “There are some dif- 
ferences but 1 believe everyone 
is genuine about their commit- 
ment to national competition.” 
he said. 

Mr Stockdale. who is recog- 
nised as the architect of the 
Victorian privatisation pro- 
gramme. considers the elec- 
tricity industry as deserving 


the top priority for de-regula- 
tion. He said Victoria has 
slipped from the lowest cost 
electricity supplier in the 
1960s to the most expensive on 
the eastern seaboard. 

He would like to turn that 
round to regain competitive 
advantage. 

The first sale, that of a 
power generator, is dne next 
year. The government expects 
that before 1996 there will be 
free competition for genera- 
tion and distribution In the 
state. The core transmission 
grid will remain a state 
monopoly. 



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IV 




FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 




AUSTRALIA 4 




Pacific is now the main focus, writes Emilia Tagaza 


Trade wind shifts 


Mr Paul Keating. the 
Australian prime minister, is 
trying to transform the Asia- 
Pacific Economic Co-operation 
(Apec) forum from a talking 
shop to an effective grouping 
of countries that feel they have 
been the victims of strong-arm 
trade tactics. 

His latest mission has 
Involved weeks of intense 
negotiations aimed at getting 
Apec members to establish a 
free trade zone in the Asia-Pa- 
cific region by 2020. 

There is a hint of impatience 
in Mr Keating's time-frame He 
would like an agreement to be 
reached in principle during the 
Apec leaders' November meet- 
ing in Bogor, Indonesia. 

If he succeeds, Apec would 
become more than an obscure 
acronym for another bloc of 
countries trading primarily in 
raw materials. 

For Australia, a completely 
liberalised trading regime 
would further strengthen its 
presence in the region. 

Companies hope free trade 
will also lead to a freer invest- 
ment climate, thus opening 
opportunities for greater par- 
ticipation in Asia's booming 
equity markets. 

Mr Bob r.wn , director of eco- 
nomic analysis at the Business 
Council of Australia, the main 
employers' body, says uniform 
rules will provide a quick way 
to the regional securities mar- 
ket. “Australian companies 
will be more comfortable with 
greater transparency and dis- 
closure rules, and with uni- 
form accounting and other 
operating s tandar ds," he says. 

Mr Keating's free trade pro- 
posal has been received favour- 
ably among the Association of 
South-East Asia Nations 
(ASEAN). An internal Apec 
committee had originally rec- 
ommended a start-op date 10 
years later than Mr Keating's 
proposed 2010. 

President Soeharto of Indon- 
esia, who will chair the 
November meeting, has 
pledged to place the issue at 
the top of the Bogor agenda. 

Indonesia , which tra ditionally 

had the tightest trading regime 
among ASEAN members, 
acknowledges that only by 
opening up its trade and 
investment doors can his coun- 
try's economic growth be sus- 
tained. 


Mr Goh Ctaok Tong, the Sing- 
apore prime minister, who is 
an avowed free trader, favours 
an even earlier date - 1998 - 
for introducing free trade in 
the region. 

The Canberra-based ASEAN- 
Australia Business Council 
said the Apec move will push 
forward the ASEAN Free 
Trade Agreement (AFTA). 
which began Last year. 

“The time-table for Apec's 
phase-in roughly corresponds 
to that of AFTA, and the wider 
Apec membership will bring 
greater advantages to ASEAN 
countries,” the council said. 

The accelerated time-table 
has a built-in sweetener for the 
developing member countries. 
According to the Business 
Council, the preferred Apec 
schedule Is for developed coun- 
tries to dismantle all barriers 
by 2000, newly industrialised 
countries, such as Singapore, 


Keating wants to rally a 
group of countries tired 
of being pushed around 


by 2005. and developing coun- 
tries, such as Indonesia, by 
2010 . 

The idea of Apec was first 
proposed in January 1989 by 
Mr Bob Hawke, the former 
Australian prime minister, and 
Mr Keating, then federal trea- 
surer. The politicians, with 
tacit backing from Australian 
business, have decided to link 
Australia’s future economic 
prosperity and political stabil- 
ity with development in Asia. 

The increasingly strong ties 
with the region have helped to 
cushion the decline in Austra- 
lian trade with traditional part- 
ners in Europe. 

The Asian members of Apec 
have absorbed an increasing 
proportion of Australian 
exports. Last year, more than 
60 per cent of Australian 
exports went to these coun- 
tries, compared with only 28 
per cent in I960. Exports to the 
European Union nations have 
declined to 13 per cent of total 
exports last year, from the 50 
per cent level in the 1960s. 

The agricultural subsidy war 
between the EU and the US, 
which could not be controlled 
under Gatt, also had serious 
Implications for Apec. Austra- 


lia and other agricultural 
exporters have been thwarted 
by the high protective wall 
built around the EU and the 
US. 

Australia was vulnerable 
because the subsidies had 
encroached on its traditional 
outlets for wheat, one of its 
largest foreign exchange earn- 
ers. 

Using whatever influence it 
had, the Australian Labor gov- 
ernment had sought to get 
together some of the trading 
underdogs for a more effective 
collective lobbying. It was 
instrumental in the formation 
of the Calms Group, which 
consists of non-subsidising 
exporters, mostly from devel- 
oping countries. 

The Cairns Group secured a 
hearing during during the Uru- 
guay Round of the Gatt talks, 
but by the close of the 1980s it 
was obvious that the US and 
Japan also bad to be involved 
to make an impression on the 
Importing countries. 

The historic deal struck last 
December at the end of the sev- 
en-year Uruguay Round pla- 
cated, albeit momentarily, the 
free traders. Australia stood to 
gain an additional A$5bn 
(US$3.7bn) in annual exports 
from the range of subsidy and 
tariff cuts agreed upon. 

Mr Keating, at the time, 
claimed the agreement would 
result in an ASlbn increase in 
agricultural exports. Wheat 
sales were expected to rise by 
A$250m because the deal would 
slash the amount of subsidised 
wheat on world markets by 
nearly 50m tonnes between 
1995 and 2000. 

However, the recent delays 
in the ratification of the Gatt 
accords has a gain underline d 
the need to strengthen Apec. 

Mr Keating moved quickly 
and spent much of August and 
September cajoling important 
Apec players to give a political 
commitment to the promotion 
of the free trade. 

On a visit to Tokyo last 
month, Mr Keating appealed to 
the Ideological leanings of Mr 

Tomiichi Murayama, Japan’s 
new socialist prime minister, 
in order to win a half-nod. 

Mr Murayama reacted by 
offering to back regional free 
trade. However, he pragmati- 
cally advocated extreme cau- 
tion. 



Hayman L resort, Queens la nd: foe Pacific is foe world's fastest growing tourist ; 


Picture: Ross Bray 


Japanese tourists flock in, reports Bruce Jacques 


Harvest in the hotels 


The growing importance of 
tourism to the Australian 
economy was underlined in 
1994 by recognition of the 
diverse and complex sector as 
a leading stock exchange 
investment indicator. 

The pooling of nine leading 
toorism-related companies 
into a single indicator, the 
Tourism and Leisure Index, 
represented a coming of age 
for a sector which has had 
more than its share of credibil- 
ity problems with investors. 

While the index will help to 
make a fragmented industry 
more accessible and easier to 
analyse, it will reflect merely 
the tip of what is a very large 
and growing iceberg. By Sep- 
tember this year, companies 
included in the index boasted 
a market capitalisation com- 
fortably above A$3bn, or 
around one per cent of the 
benchmark All Ordinaries 
index. 

Bnt the new index sits atop 
a sector which now makes np 
more than 5.5 per cent of Aus- 
tralia's gross domestic prod- 
uct, employs almost 6 per cent 
of the country's workforce, 
generated foreign exchange 
earnings exceeding ASl0.7bn 
and accounted for expenditure 
estimated at 826.21m last year. 

Although the bulk of that 
expenditure total - A$18.4bn - 
came from domestic tourism, 
inbound tourism is expected to 


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be the major growth area for 
the rest of the century, 
boosted by Sydney's capture 
last year of the 2000 Olympic 
Games. 

This climate of growth has 
already catalysed strong 
investment. The Australian 
Tourism Commission (ATC) 
has identified tourism-related 
accommodation projects worth 
almost AS5bn scheduled for 
completion by 1996, including 
two new casinos. 

The activity has also thrown 
up plans which will test equity 
markets, including a float of 
the Federal Government’s flag- 
ship airline Qantas, possible 
refloating of the rival private 
airline, Ansett, and privatisa- 
tion of the country’s airports. 
These proposals could call on 
markets for around A$7bn 
over the next five years, pro- 
viding a keen indication of 
investor attitudes to the tour- 
ism sector. 

Some see even more at 
stake. Many analysts see tour- 
ism performance as an acid 
test of the wider Australian 
economy's ability to compete 
internationally into the next 
century. A recent study by 
ANZ McCaughan, the Austra- 
lian stockbroker, says tourism 
growth will largely reflect the 
country’s ability to win an 
increasing share of the global 
tourism market, clearly one of 
the world’s biggest industries. 

ANZ McCaughan quotes esti- 
mates that tourism accounted 


for around 5.5 per cent of 
world gross national product 
in 1993, with more than 500m 
tourists spending almost 
A8325bn. Tourism is widely 
forecast to create one in nine 
new jobs in the world next 
year, rising to one in eight by 
the turn of the century. 

Australia bas one crucial 
advantage in capturing more 
than its share of this growth - 
Its location in the Asia-Pacific 
region, the world's fastest 
growing tourist area. ANZ 
McCaughan says in the 12 
years to 1992, tourist arrivals 
in the region grew at an 
animal average of almost 9 per 
cent, more than double the 
world average. Continued 
regional outperform ance is 
forecast for the next decade. 

Australia has more than 
matched this regional growth 
over the past decade, with 
arrivals increasing at more 
than 9 per cent annually. This 
record, plus the boost expected 
from the Olympic Games, 
recently led the ATC to con- 
firm its estimate that 6.8m 
overseas tourists would visit 
Australia in the year 2000, ris- 
ing to 8.4m by 2004. This com- 
pares with 3.2m actual arriv- 
als in 19934. 

These forecasts reflect an 
estimated 2.1m overseas visi- 
tors generated directly over 
the next decade by the Sydney 
2000 Olympics, with the bulk 
of business coming from Asia 
as slow economic recovery and 


key facts 


Area 


Population . — 
Head of State 


...... 7,682^00 sq km 

"T. , - :_'17.06 mfflon 


Currency .......... 


HM Queen Elizabeth 11 

....Australian dollar (A$) 


StaSo'SS "Z" — g 

_ Sep. 1994 $1=1 .3514 A$ 


ECONOMY 


1893 


199A 


Total GDP (A$bn) 


Real GDP growth (%) * 

Components of GDP (%) 

Private consumption — 

Total investment 

Government consumption......—. 

Exports 

Imports. .... 


412.4 

2:7 


431.6 

4.2 


62.6 

19.6 

1&3 

19.3 

-19.8 


62.1 

19.8 

16.4 

19.2 

--19.5 


Annual average % growth in 

Consumer prices (%) *■ 

Ind. production (%) *. — - 

Hourly earnings (%) K 


Share price growth (%) 
At De& S3, SepL 94w 


Unemployment irate f%) 

Official can rate 


3 month biter-bank rate (%) 

Govt bond yield (%) 

Official reserves (At bn) 4 . 

Trade (ASbn) a . 


Current account balance — — 

Merehancfse exports 

Merchandise imports 

Trade balance. 


Main trading partners (%) *. 

Japan.... ...... 

USA. 

Singapore 

Korea 

UK. 


EC 


1.6 

1.6 


. 1.7 

60 


2.8' 

2J2 

1 • 

35.1 

- 4r2 

% 

10.7 

9.3 

• 

4.00 

5.45 • 


4.86 

623 


666 

10.33 


20.9 

20.5 


-167 

-62 


62.1 

32.0 

I::*"- 

62.4 ' 

32 M 


-0.4 

-0.4 

V- •. 

Exports - 

Imports 

■ £■ 1- 

25.2 

161 


8.7 

22.8 


6.5 

2.4 

a • 

6.2 

2.7 

* 

3.9 

60 

. . 

17.6 

20.1 

V; - 


(1) First half of 1994 annualised. ( 2 ) First half of 1994 only. 

(3) Growth over 12 months to end Dec S3, end Sept 94 . 

(4) Reserves Dec 93, August 94. 

(5) Percentage shares of trade in 1992. 

Sources: IMF, BU 



■ 


t; 


¥ 


intense competition curb traf- 
fic from Europe and the US. 

Japan remained the largest 
single source of Inbound tour- 
ists to Australia in 1993, 
claiming 22.4 per cent of the 
total. This was shaded by com- 
bined visitors from other 
Asian sources, which took 22.7 
per cent. New Zealand pro- 
vided another 16.6 per emit of 
visitors, file US 9.4 per cent, 
UK/Ireland 8.1 per cent and 
other European countries 10.5 
per cent 

While less numerous than 
their Asian counterparts, UK/ 
Ireland and other European 
visitors probably contributed 
more to the Australian econ- 
omy because their average 
stay was around 40 nights 
compared with just nine 
nights for Japan and 32 nights 
for other Asian countries. The 
main reason for the discrep- 
ancy appears to be that UK/ 
Ireland and European visitors 
come mainly to see relatives 


while most Astana come pri- 
marily for holidays. 

ANZ McCaoghan's analysis 
concludes that Australia's 
inbound tourism record over 
the past decade largely reflects 
the emergence of the country 
as an inexpensive place to 
visit. A weakening currency 
has helped, but the brokers 
calculate that the cost of tour- 
ism related services in Austra- 
lia are now among the lowest 
in the industrialised world. 

’‘Australia’s tourism infra- 
structure is generally ade- 
quate for present needs and 
there is every indication that 
it can respond quickly to 
actual and estimated changes 
in to urism plans,” the analysis 
said. “The national attractions 
of Australia are such that 
great opportunities exist In 
the growing eco-toorism mar- 
ket, reflecting in part the pref- 
erences of travellers for more 
active, participatory or experi- 
mental travel experiences.” . 


V 




;ffV 


•9 


More bumps on 
road to reform 


□ Contd. from Page I 
It is over the medium-term 
that the clouds start to loom. 
Unemployment has been slow 
to fall in Australia, and is 
expected to average a little 
under 10 per cent in 1994. The 
government responded earlier 
this year with a comprehensive 
package of measures, including 
a promise of subsidised 
employment or training for all 
long-term unemployed. It was 
costed at A$6.5bn over the next 
four years. 

But rather than fund the 
package with new tax mea- 
sures, which could have been 
politically troublesome, minis- 
ters chose to utilise the 
“growth dividend” - the 
higher than expected tax 
receipts flowing from the coun- 
try’s rapid economic recovery. 
That, in turn, meant that there 
was no scope for accelerating 
the government’s deficit reduc- 
tion plan in the 1994 budget, 
which repeated the previously- 
stated aim of cutting this to 
one per cent of GDP by 1996-97. 
More recently, there have been 
suggestions that fiscal strategy 
may be reviewed next year. 
But analysts are sceptical 
An even larger cloud on the 
horizon is the current account 
situation. This bas been a bug- 
bear for Australia In the past, 
with an upturn in domestic 
activity tending to lead to a 
surge In imports - in part, to 
meet capital Investment 
requirements. As the trade bal- 
ance has gone out of kilter. 
Interest rates have been forced 
up. and a “boom and bust” sce- 
nario has developed. 

This time, the anticipatory 
response has been twofold. 
There bas been an all-out effort 
to promote Australian exports, 
most notably to Asia, which 
now accounts for over 60 per 
cent of the country’s trade. 
And there is an attempt to lift 
the country’s low saving rate, 
through changes to the pen- 
sion/superannuation system. 

It is in the context of the 
former strategy that Austra- 
lia’s desire to establish a “free 
trade” zone in the Asia-Pacific 
region assumes considerable 
importance. The Asian Pacific 
Economic Cooperation group is 
due to meet this month to con- 
sider a report seeking the goal 
of free trade in all goods and 
services by 2020, with more 
developed nations lowering 
their barriers at a relatively 
faster rate. Australia Is expeo 
ted to push the proposal hard. 
At this stage, It would be a 


brave individual who tried to 
predict whether enough 
change had been wrought to 
break the previous cyclical pat- 
tern. Government ministers 
say yes; some local business 
leaders, and many Asian com- 
petitors, say no. 

"Reviewing the scorecard, I’d 
give us about five out of 10 for 
our current policy mix," 
remarked Don Mercer, head of 
the ANZ banking group, earlier 
this year. “Unless we commit 
ourselves to picking up the 
reform agenda, we stand a 
pretty good chance of wasting 
the best opportunity in decades 


to secure the sustained recov- 
ery we deserve to have". 

Perhaps all that can be said 
with certainty is that the bal- 
ancing act is a delicate one on 
which political fortunes will 
undoubtably ride. 


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A decade of 
economic growth: 
PAGE TWO 


V 






FINANCIAL TIMES SURVEY 


GREATER ATLANTA 


Key facts and 
visitors’ guide: 
PAGE EIGHT 


Tuesday November 1 1994 


T he essence of other cities 
may be culture, high 
finance, beauty or glam- 
our. But Atlanta has 
commerce in its heart. 

The city prides itself on 
being a place where people can 
succeed, and where business 
success is prized above all. 

“The whole tone of the city 
is one of aspiration." says Mr 
Alf Nucifora, a top local mar- 
keting consultant, who came 
from Australia some 20 years 
ago and rose to prominence. 

While dreadfully prone to 
boosterism, Atlantans say their 
hometown is characterised by 
a “can do” attitude. Defeatism 
and "thinking small" are 
anathema here. 

Although the heart of 
Atlanta is business, it is not a 
city that is money mad. It is 
more that Atlantans are sin- 
gle-minded in the pursuit of 
“making it," whether it be a 
successful dry cle aning shop or 
a leading worldwide television 
network - CNN. 

Atlanta's attitude, is perhaps 
a product of its history. Origi- 
nally a simple railway town 
known as Terminus, it 
changed its name in 1845 to the 
grander-sounding Atlanta. 

After being razed by Union 
Gen. William Tecumseh Sher- 
man near the end of the Civil 
War, it rebuilt itself from the 
ashes to once again thrive in 
the late 19th century as a rail- 
road town. Fittingly, Atlanta’s 
symbol is the Phoenix. 

Entrepreneurial spirit 
always seems to have powered 
the town. In the 1880s, a 
shrewd businessman by the 
name of Asa Candler saw the 
immense possibilities of mar- 
keting sweet fizzy water and 
built the foundation of the 
Coca Cola empire. Coca Cola’s 
worldwide headquarters 
remains here today. 

It has been the leading busi- 
ness city of the South for sev- 
eral decades, but it now aspires 
to more. It wants international 
status. Although some snigger, 
Atlanta wishes to be the “next 
great intematianal city." in the 
same league as New York or 
Los Angeles, London or Rome. 

The 1996 Olympics, which 
will be held here, are widely 
believed to be the lever for cat- 
apulting the city to interna- 
tional standing. Arid. Atlanta is 


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City skyflne: originally a simple railway town known as Terminus, it changed its name in 1845 to the grander-sounding Atlanta. Today its economy is expanding rapidity - see report, page two 

Where business success is prized above ail 

Atlanta has been the leading business city of the American South for several decades, but it now aspires to even greater things. The 
1996 Olympics are widely believed by Atlantans to be the lever for catapulting the city to international standing, writes Barbara Harrison 


putting every ounce of its 
energy into trying to make the 
Olympics a marketing opportu- 
nity for the city as well as the 
state of Georgia, of which it is 
the capital. 

Since August 1993. the 
Chamber of Commerce has nm 
an international advertising 
campaign using the Olympics 
to boost the city on CNN Inter- 
national The ads are part of a 
five-year. SlOm-plus marketing 
program by the Chamber. 

. Mr Nucifora. is also trying to 


raise $5m for another cam- 
paign to market Atlanta in the 
run-up to the Olympics. He 
hopes the theme of the new 
campaign will replace the old 
slogan “The City Too Busy To 
Hate ” which has endured 
since the days of the struggle 
for civil rights and is now 
clearly outdated. 

The new slogan will be about 
aspirations and dreams, a 
theme endorsed by nearly 90 
per cent of those he has que- 
ried. 


At the same time, the Gover- 
nor of Georgia. Mr Zell Miller, 
has appointed a group of busi- 
ness leaders to orchestrate a 
high level, individually target- 
ted marketing effort called 
"Operation Legacy." It is host- 
ing a series of invitation-only 
tours of Atlanta for top compa- 
nies and individuals which 
might Invest here. The best 
prospects will be invited back 
to attend the Games. 

While not yet of interna- 
tional stature. Atlanta has 


much to boast about. Already 
home to representative offices 
of more than 730 of the For- 
tune 1.000. it is consistently 
rated as one of the most desir- 
able cities in America in which 
to relocate a company or start 
a new business. This year. 
Altanta was the winner of the 
‘Best Cities for Small Business' 
award by Entrepreneur Maga- 
zine. It also topped the World 
Trade Magazine’s recent list 
for the best ten US cities for 
global companies. 


Good location and transpor- 
tation facilities continue to be 
Atlanta's main economic 
attractions. By air, 80 per cent 
of the American population 
can be reached within two 
hours. Atlanta’s Hartsfleld 
International Airport, with 
over 1,500 daily flights, includ- 
ing some 300 international 
flights a week, is rated the 
world’s second busiest. An 
average of 50m passengers a 
year pass through Hartsfleld, 
which has just opened a new 



international concourse that 
can process 6,000 passengers 
an hour. Although mired pres- 
ently in downsizing. Delta, one 
of America's top three air car- 
riers, calls Atlanta home and 
accounts for about 80 per cent 
of the airport’s passenger traf- 
fic. 

Atlanta is also a leading dis- 
tribution centre for goods mov- 
ing over land. Three interstate 
highways intersect the city. 

Continued on page two 


Atlanta’s preparations for the 1996 
Olympics are well advanced 


IN THIS SURVEY 


□ Investment keeps the 
economy bubbling: Atlanta 
is pinning many of rts 
economic hopes on what 
the 1996 Olympics will 
render, reports Barbara 
Harrison. 

□ City’s influence on 

regional politics PAGE 2 

□ Banking: big regional 
contrasts. 

□ Preparations for die 
1996 Olympics; personality 
profile, Billy Payne, an 
Olympic altruist — PAGE 3 

□ Property market trends. 
G Transport and tourism 
developments ........ PAGE 6 

□ Company profile: 
Coca-Cola, the world's 
best known trade mart*. 

□ Telecommunications: 
decade of growth for 
Atlanta-based BellSouth. 

□ New Opportunities for 
minority-owned 
businesses ... — PAGE 7 

□ International spotlight 
on the Carter Centre. 

□ Aggressive expansion 
by CNN television network. 

□ Visitors' guide: key facts 

about metropolitan 
Atlanta PAGE 8 

Editorial production: 
Michael Wiltshire 


m | 

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ISCURCE J 
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FORTUNE Magazine, CEO Survey , 1993, #1 
Baring Advisors Consensus Forecast, 1994, #1 
Entrepreneur Magazine, Best Cities for SmaBB Business, 1994, #1 
World Trade Magazine, Top 10 American Cities for Global Companies, 1994, #1 


M etro Atlanta leads the nation in u host of key economic indicators. During HW2 and W93. n>eii<> Ml.mu 

r-;ls first in the number of new jobs created and new housing permits fosucU. In national am! .n&^rn.iii> *n.sl 
surv ey after .survey. Atlanta comes out on top its ihe liest market m locate a new busmen tmi'm ■ >1 u> 
expand an existing enterprise. 

"Atlanta's unmatched accessibility, affordability and attractiveness make it the city to heal in the I A- 
home of the Centennial Olympic Games. Atlanta is undergoing a S’hiliinn rcr..iiv>ancc <-f private and pubis, 
investments to prepare the region, to host the world during tire summer of 19*X>. 

Beating existing records by almost every measure 
—Join the momentum!!! 

For^nore information (404) 586-8440 


DURING 1993: 

\.tHi,n Ir.kkl in .)••!■« iv.HM’ii v. ill ■ Hi.'NM'i nel new j«»bs 

Yiiu.n - Uader in II- -living IVhiiik ■iVM — uh highest numlier in L .S. history 

I ->• * \|.i|i>i < ■ -i j« <r.Ue i'nirie- in MW 

S-iniiln -n -i|n.ur kvt <'1 • ■line -pace .ilwiibed 

.s .- million n. ue I eel iinitislri.il >p:tvv ' 1 'hcd 

EVEN MORE IN 19941! 

I. .1 . »p -will pn i]e«. led Ix l w evn « 1' i - ' « " » » 

l.mu m. - Migii-*! — -- I iotiMng Pennies 

l.um.in •*.« pMnlvr — « ner 1^" M.ijm » !. iq> mite Fn tries in M^A 

| . 1111 . 1. 1 1 '. • N.-pl«.T libel — J " il.illi- Ml *.[11.1 IV led "I « iftiCO spJKV :iKsoriK*d 

l.inu.uA - v.-[ ik-ml k. 1 — ".^-million vjn.nv- led iil industrial space .ihMuiied 


I^HKn oHiao>y »•! I'lf-nniatinn svnic*."*. Ii». 


FORWARD 


Chamber of Commerce 




Sf-r; ». • 






II 


FINANCIAL TIMES TUESDAY NOVEMBER l 1994 


GREATER ATLANTA 2 


The city’s prosperity has lured more and more companies to ‘Hotlanta,’ as the boosters are fond of calling it 

Favoured US venue for business relocation 


Continued from Page 1 


For rail distribution, CSX 
and Norfolk Southern Rail- 
roads operate 80 freight trains 
in and out of Atlanta daily, 
Telecoms capacity is high, 
with more fibre optic cable laid 
than any city in the US. Bell- 
South, one of the leading Baby 
BeOS, has its headquarters in 
Atlanta as does Turner Broad- 
casting' and Turner’s world- 
wide news network CNN. 

If short on sophistication. 
Atlanta ’s quality of life is high 
at a modest cost compared to 
other large cities. Housing is 
moderately priced. Recre- 
ational amenities include an 
ample supply of golf courses, 
tennis clubs and city parks. 
Nearby, Lake Lanier is used 
for water sports, and the south- 
ernmost Appalachian moun- 
tains offer great hiking. 

Its attractions have made 


Atlanta a boom town. The 
prosperity has lured more and 
more people to “Hotlanta,” as 
the boosters are fond of calling 
it Between 1984 and 1993. 1.506 
new companies, including 361 
foreign firms, have relocated to 
Atlanta, investing $80bn and 
helping to create a net Increase 
of 487,600 jobs. Between 1960 
and 1990, Atlanta's population 
grew 32L5 per cent to 2£3m. 
Last year, an estimated 8&00Q 
people arrived in metro 
Atlanta, driving up housing 
construction by about 40,000 
units. 

Even with all of the city’s 
appeal and formidable energy, 
there are still some wbo worry 
that the 1996 Olympics may 
not bring the glory to Atlanta 
that is expected. These sceptics 
say that the Olympics may 
prove that Atlanta lamentably 
believed its own hype and 
over-reached ItselL A city of 


Atlanta's size with a more 
modest opinion of itself would 
probably have never even 
attempted to lure the Olympic 
Games. But Atlanta dared and 
won. And for the moment, the 
$L9m worth of Olympic prepa- 
rations are reported to be on 
Rrhpdiiip and mi budget. 


Perhaps because so many 
have come here and done well, 
Atlantans feel a deep affection 
for the city. This has in turn 
led to one of its greatest dis- 
tinctions: the business comma- 
nity is perhaps the most civicly 
active in America. They not 
only give money to community 
causes, they give time and 
energy. They chair arts and 


community development com- 
mittees, raise money for chari- 
ties, clean up public parks, and 
volunteer for The Atlanta Proj- 
ect, the local anti-poverty pro- 
gramme of the former US pres- 
ident, Jimmy Carter. 

It is a point of pride for busi- 
ness and professional people to 


be involved in community 
affairs. Mr Wyck Knox, a 
senior partner at the Atlanta 
law firm of Kilpatrick & Cody, 
has civic commitments that 
require a significant amount of 
his thne, but he observes: “Peo- 
ple in business and profes- 
sional circles are interested in 
matring thing s happen here.” 

He admits civic involvement 


is also good for business - and 
he adds that "it’s important in 
Atlanta to be perceived as 
doing something useful for the 
community." 

Another of Atlanta's distinc- 
tions U Its ability to maintain 
racial harmony when so many 
other American cities have 
been riven by racial animosi- 
ties. Despite the fact that the 
central city is predominantly 
black, while the larger metro 
area is predominantly white, 
Atlanta's black politicians and 
white business elite long ago 
recognised the value of racial 
harmony for economic growth. 

While all Is not sweetness 
and light between blacks and 
whites, Atlanta's mayor, Mr 
Bill Campbell, who is black, 
says, that race “has not been a 
hin drance to finding common 
solutions or trying to work 
together." Black- white rela- 
tions have been helped by the 


presence of a very large black 
middle class. With the biggest 
concentration of top black uni- 
versities in America and an 
affluent black business com- 
munity, Atlanta is considered 
a 'Mecca' for ambitious young 
blacks throughout the US. 

In addition, as the birthplace 
of Dr Martin Luther King Jr M 
Atlanta proclaims itself the 
cradle of the civil rights move- 
ment The King Center, which 
attracts nearly a million visi- 
tors a year, is receiving a face- 
lift in anticipation of the Olym- 
pics’ year. 

The 1996 Olympics will allow 
Atlanta to be on the interna- 
tional stage, at least temporar- 
ily. But whether it stays there 
will depend on whether it car- 
ries off the event with matu- 
rity and aplomb or overdoes its 
self-promotion. IF it makes the 
latter mistake, it may simply 
look tastelessly opportunistic. 


Between 1984 and 1993, 1,506 companies, including 
361 foreign groups, set up bus'mess in Atlanta. 
Britain and Japan are leading overseas investors 



g ABania to the state capital of Oeottfa.Conv«uton wig tra de ahowa 

bring in $1bn armualy to the metropoBtan area. It to a baaing 

distribution centre in the US for goods nwring over land. Th ocdyhas 

representative offices of mom ttan 730 of the Fortm© 1JO0 <*»npteitea. 
Atlanta has 19 career consulates and 32 honorary conmdates; 13 foreign 
chambers of commerce; and 32 foreign owned banks. 

□ For more key facta on Atlanta, see page eight of this survey. 




Diversity of business sectors has helped Atlanta weather financial setbacks 


Investment keeps the economy bubbling 


Atlanta is pinning 
many of its economic 
hopes on what the 
1996 Olympics will 
render, reports 
Barbara Harrison 

T he economic outlook for 
Atlanta Is as cloudless as 
its best summer day. The 
1996 Olympics have only 
strengthened what already was 
a strong positive trend. 

"The Atlanta economy con- 
tinues to expand at boom con- 
ditions with no evidence of 
serious slowing," comments Mr 
Don Ratajczak, director of the 
Economic Forecasting Center 
at Georgia State University in 
Atlanta. 

Atlanta suffered only the 
mildest of downturns during 
the 1990-1991 US recession. 
Although the collapse of East- 
ern Airlines helped produce a 
net jab loss of 20,500 in 1991, 
that has been the only nega- 
tive figure for jobs in the entire 
decade between 1984 and 1993, 
see table below. 

In the ten years between 1984 
and 1993, 487,600 net new jobs 
were created in Atlanta, 


including 83.500 in 1993. (And, 
throu gh the first six. months of 
this year, Mr Ratajczak says 
that job growth was 89,300 
above the previous year). 

The diversity of Atlanta's 
economy, « uy vTrn p ag *^ 7i g trans- 
portation, automotive manu- 
facturing, wholesale distribu- 
tion, ample retail, conventions 
and tourism, biotechnology, 
and telecommunications, has 
helped it weather the setbacks 
of any particular segment. 

Furthermore, its attractive 
local business conditions have 
proven a magnet for invest- 
ment In the period from 1984 
to 2993. 1,506 companies, 
including 361 foreign busi- 
nesses, have relocated to 
Atlanta and brought $80bn in 
investment 

Between January and June 
this year, 83 more new compa- 
nies, inolnriing 13 fore ign busi- 
nesses, expanded or relocated 
in Atlanta. According to the 
Atlanta Chamber of Com- 
merce, they represent a real 
estate investment alone of 
nearly S6Qm. 

Compared with the rest of 
the state of Georgia, metro 
Atlanta has b een th e over- 
whelmingly preferred site fra 1 
relocation of foreign compa- 
nies, which have more than 


Atlanta’s industry mix 

Employment by sector 
Retail trade 18% 


Services 26% 


Government 

15% 


Construction 

4% 


S Hnanoa. 

insurance, 
met estate 7% 


ManunctiffiRQ 

12 % 


Wholesale trade 9% 

Souc« Georgia Department of Labor 

$10bn invested in Georgia, 
according to a recent survey by 
KPMG Peat Marwick. 

The survey of 741 foreign- 
owned companies In Georgia 
found that the top three inves- 
tors were the UK with 82.3bn, 
Japan with $2.2bn and the 
Netherlands with $L5&n. 

A Lou Harris poll last year 
found that Atlanta was the 
first choice for locating a new 
facility by executives from the 
International Fortune 1,000. 

The city’s relatively low 
operating costs, excellent tran- 
sport facilities, reasonably 


Transport, comrrurtcabons. 

utitties 9% 


priced ^wiring an h man y ame- 
nities have helped it consis- 
tently rank among the top 
choices for relocation by US 
rnmpanips. Atlanta and Geor- 
gia also offer a number of tax 
ami other incentives that inaVa 
the choice more attractive. 

While investment has kept 
Atlanta’s economy steadily 
bubbling, the Olympics has 
helped it become positively 
effervescent 

More than 3600 m in Olympic 
construction is helping to drive 
a construction boom that was 
already under way in housing. 


Summary of Atlanta’s decade of economic growth 


1984 

1985 

1986 

1667 

1968 

1969 

1990 

1991 

1992 

1993 

Total 

New iota created* 

97,500 

68,700 

61,000 

S2J900 

46£00 

28400 

30,700 

00300 ) 

38J00 

85400 

487,600 

No. of announced protects 309 

515 

4 37 

sea 

675 

407 

26 0 

186 

123 

134 

3,523 

Value of announced 
projects, SbiBon** 

10 

12A 

8.6 

15.6 

143 

9.1 

34 

3.1 

2-0 

1j4 

80.0 

Office space ki 
mlBonesqlt 

48 

48 

24 

35 

30 

17 

6 

7 

0.7 

05 

21 6£ 

Hotel rooms bunt 

11,040 

11,025 

10,156 

8,378 

3£42 

3£50 

2309 

775 

330 

0 

51,505 

Potenttoi employment*** 

233/127 

250,110 

186£32 

244£Q0 

235400 

109304 

236327 

42,091 

25A18 

18*36 

1,581,746 

Now companies located 

168 

226 

180 

146 

123 

150 

130 

129 

125 

129 

1,506 

■nwmaBonai 
compantaa Included 

In the above figures 

46 

50 

38 

27 

50 

30 

36 

28 

23 

28 

361 

Indicates actual net Increase (decrease) in the metro workforce, according to the Georgia Department of Labor; “Many of these projects wffl be developed In 
phases over several years. The M estimated bukt-out vafcre is listed In the year in which the project wn announced and not repeated in future years. 
•“Estimated potential employment, using Industry avenges if all projects are built to fufl expectation at the time of the announcement. 

Source: Atlanta Chamber of Commerce. 


Another 3150m in city infra- 
structure improvements 
approve d in July will push con- 
struction even higher. 

Home b uilding has risen not 
only with the drop In interest 
rates, but because Atlanta is 
drawing more people to it from 
other regions than any other 
city in America. More than 
86,000 new people arrived in 
Atlanta in 1993. leading Mr 
Ratajzcak to predict that 
nearly 40,000 new households 
will be built this year and next 
Some analysts have even 
suggested that speculative 
commercial building, which 
flooded downtown Atlanta 
with office space during the 
1980s, could start again as 
early as next year. 

Vacancy rates are headed 
down and real estate invest- 
ment is looking up. In a survey 
of large institutional Investors, 
the Real Estate Research Cor- 
poration recently rated Atlanta 
the top investment market 
The Olympics co-incided 
with what was going to turn 
around, anyway," observes Mr 
Andy Krikelas. a regional econ- 
omist at the Federal Reserve 
Bank in Atlanta. 

A tlanta's key transporta- 
tion industry is showing 
strong gains despite con- 
tinued lay-offs by Delta, the 
third largest US airline which 
has its headquarters in the 
dty. However, innovative air- 
lines such as Kiwi and ValuJet 
are helping mitigate the 
effects. 

The important business of 
trade shows and conventions - 
Atlanta ranks as the fourth 
largest convention centre In 
the US - has improved this 
year. And, according to Mr Kri- 
kelas, there may even be 
potential for more retail devel- 
opment now that “consumers 
are coming back." He believes 
Atlanta’s economy is “pretty 
strong right now - and we 
expect it to remain strong 
through the Olympics." 

Although healthy growth 
seems assured through the 
1996 Olympics, there are ques- 
tions about what will happen 


afterwards. Measuring by the 
usual business cycle, it would 
be time for a recession. 

But some expect that Atlan- 
ta’s economic fizz wiQ not stop. 
The city’s mayor, Mr Bill 
Campbell, says that many 
infrastructure projects will 
extend past 1996 and will help 
keep some bouyancy in the 
local economy. Mr Ratajzcak 
also believes that construction 
will have a post-Olympic “soft 
landing” because commercial 
real estate will once again just 
be picking up. 

Yet, Atlan ta is pinning many 
of its economic hopes on what 
the Olympics will render. Vari- 
ous campaigns to market 
Atlanta using the Olympics are 
underway and are largdy dedi- 
cated to winning international 
investment 

“if Atlanta pulls off the 
Olympics and does well, we’ll 
get a lot of free advertising," 
says Mr Krikelas. But if the 
event comes off badly, he 
warned that the city could be 
beaded for a painful hang-over 
after the party. 

Trends in the commercial 
propert y market see page 8 


Atlanta’s symbol is foe Pheonbc the area was rebuilt 
Gen I Wte n Tectunseh Sherman m the CM War 


being razed by 
HcbMKArtqrAdMood 


TRADE BOOST: Maty Robinson, katamfs president, mat termer US president Jimmy Carter at the Carter 
Center In Atlanta this month - see ateo the report on the Carter Center, page eight President Robinson, who 
also attended a b rea k fast with local businessmen at the Atlanta Chamber of Commerce, aimed to promote 
trade rotations and economic support for the peace process in Ireland. noun by Jean lOM^nmiur 


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REGIONAL POLITICAL SCENE 

City’s influence is still dominant 


A tlanta’s local political 
scene can be a little con- 
fusing at first glance - 
“there is no such thing as an 
Atlanta government,” says 
Tim Crimmins, a Georgia 
State University history pro- 
fessor and local political ana- 
lyst 

The reason is that metro 
Atlanta, with 2.9m inhabit- 
ants, is composed of the dty id 
Atlanta, a relatively sma fe sh 
c e n tral dty, and ten for larger 
surrounding counties. And, 
just to complicate matters, 
another eight counties are con- 
sidered by the US federal gov- 
ernment to be within Atlanta's 
metropolitan statistical area. 

Each county has its own 
governmental structure intact 
and no intentions of consoli- 
dating into a metropolitan 
government Instead, Atlanta’s 
various political entities coor- 
dinate their policy-making on 
issues such as water, transpor- 
tation and tourism through 
toe Atlanta Regional Commis- 
sion and, most importantly, 
try to speak with one voice for 
the purpose of drawing outside 
investment 

“Co-operation has lessened 
the need for consolidation,” 
said Mr Harry West, the 
Atlanta Regional Commis- 
sion’s chairman. But the city 
and the surrounding county 
governments compete fiercely 
for the prizes of economic 
development. And political 
tensions would no doubt be for 
higher If Atlanta were not the 


economic juggernaut that it is. 

Over the last few decades, 
the mty has been losing more 
and more of its share of incom- 
ing investment to the sur- 
rounding suburbs. The shift 
has oc cu rred over the last 30 
years as the predominantly 
white, middle class suburbs 
have vastly grown, leaving the 
dty of Atlanta with a predomi- 
nantly black - and relatively 
poor - population of less than 
400,000. 

A political change has 
accompanied the population 
shift The city remains a Dem- 
ocratic party bastion, while 
the suburbs are increasingly 
Republican and conservative. 
The leading right-wing Repub- 
lican congressman, Mr Newt 
Gingrich, who repre s e n ts some 
of Atlanta’s northern counties, 
exemplifies the suburbs’ politi- 
cal tenor. 

Yet, despite some erosion of 
its power, the city’s political 
influence is still dominant. It 
continues to be run by a work- 
ing alliance of the white busi- 
ness elite and the black politi- 
cians wbo have held control of 
City Hall for over 20 years. 

The city’s mayor, Mr Bill 
Campbell stffl plays the most 
crucial role in representing 
Atlanta. And Us is a juggling 
act says Prof Crimmins. While 
the mayor symbolically repre- 
sents one of the most prosper- 
ous metropolitan areas in the 
US, he roles a central city that 
suffers from all the problems 
of crime, crumbling infrastruc- 


ture, poor schools and insuffi- 
cient revenues that besiege 
most of the big American 
cities. Fortunately, he seems 
especially apt at having a foot 
in both business and political 
worlds. A graduate of Vander- 
bilt and Duke Universities, 



Atlanta's mayor, ta BH C am pbei. 
plays the most crucial role h 
represent i ng the city 


two prestigious schools of the 
South, and a successful lawyer 
with a large Atlanta law firm, 
Mr Campbell Is a generation 
away from the civil rights 
struggles that shaped the life 
of his parents and their con- 
temporaries. 

His two predecessors, Mr 
Maynard Jackson and Mr 
Andy Young, who had ruled 


City Hall successively from 
1973 to 1993, are of the earlier 
generation. Both men broke 
colour barriers for public 
office. Mr Jackson was Atlan- 
ta’s first black mayor, and Mr 
Young was the first black US 
Ambassador to the UN. Mr 
Campbell’s talk now is mostly 
about “running city govern- 
ment like a business.” rather 
than racial issues. In this 
sense, be seems a man well- 
suited for the fiscally straight- 
ened 1990s - “we have to find 
ways of doing firing s cheaper 
and with fewer people,” he 
says. Having only been in 
office ten months of his four- 
year term, Mr Campbell says 
he has already shrunk the 
city’s bureaucracy by 400 jobs. 

The 1996 Olympics will 
assist Mr Campbell in dealing 
with some of the city's fiscal 
problems. Additional tax reve- 
nues will come in and the 
lion’s share of Jl-5bn in Olym- 
pic investment will be in the 
central dty, helping to keep 
unemployment low and 
Improving several of the poor- 
est neighbourhoods through 
Olympic-related construction. 

Adding to the construction 
boom, Mr Campbell won voter 
approval in July for a Sisom 
bond issue for much needed 
city infrastructure improve- 
ments. He says that roughly 30 
per cent of the projects, espe- 
cially those related to streets, 
bridges and parks, should be 
completed by 1996. He also 
wants to put more spark In the 


city's finanrfal management — 
“there is vast creativity in the 
financial world and we need to 
be less stodgy,” be says. One 
new fi nancial tool that he has 
heartily supported is the sale 
of tax Hens to a private collec- 
tion agency. 

Mr Mitch Skandalakis, the 
chairman of the governing 
commission of Fulton County, 
wherein the City sits and 
which collects its taxes, initi- 
ated the tax lien measure. 
Recently approved by the com- 
mission, it will bring S75m 
immediately into the comity’s 
coffers, 20 per cent of which 
will go to Atlanta. 

Mr SfcanMiatnirtc, who is run- 
ning for re-election this 
month, says that if reelected 
he will restart talks that he 
began recently with Mr Camp- 
bell about el iminating duplica- 
tion of services between the 
city and the county so that 
both canid save money. 

Mr Skandalakis, who is 
white and conservative, also 
juggles political and economic 
interests, given that his 
county includes Atlanta and 
some of the northern suburbs 
that want little to do with the 
dty. Despite their differences, 
Mr Skandalakis gives the most 
compelling reason for political 
cohesion in metro Atlanta. He 
says he wants to help Mr 
Campbell succeed as mayor 
"because if Atlanta fails, the 
whole area fails.” 

Barbara Harrison 




GREATER ATLANTA 3 



ant 



FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 * 


O*' 


(II 


VENUE FOR THE 1996 OLYMPICS 


* 


A once-in-a-lifetime opportunity 


Atlanta stands to prosper 
much from the Olympics. In 
return, the guardians of the 
Olympic movement know 
they will get a superbly 
organised sporting 
extravaganza, delivered via 
the latest technology to 
several billion homes around 
the globe, writes 
Patrick Harverson 


A fter visiting Atlanta for 
even a few short days, it 
is impossible not to mar- 
vel at the feat achieved four 
years ago. when the Interna- 
tional Olympic Committee was 
persuaded to award the centen- 
nial games to this thriving, but 
in many ways unremarkable, 
American city. 

In September 1990. most 
observers believed Athens 
would be chosen as host for 
1996. Given the historic ties 
between the Greek city and the 
Olympics - the first modem 
games were held there in 1896, 
so there would have been a 
perfect symmetry in returning 
a century later - the allure of 
Athens must have been power- 
ftzL Atlanta, in contrast, was a 
city best known for having 
been razed to the ground dur- 
ing the Civil War. How could it 
possibly win against Athens? 

Mr Billy Payne, the Atlanta 
lawyer whose idea it was in 
the first place to hid for the 
Olympics and who spear- 
headed the cam p ai g n to win 
the centennial games, is still 
not quite sure exactly how it 
happened. Suffice to say, he 
remembers the vote for 
Atlanta in_1990 as a “miracle." 

At the time, there was much 
cynical carping about how 
Atlanta won the games 
because, like Los Angeles in 
1984, it would generate huge 
profits for the Olympic move- 
ment. Or because Coca-Cola, 
the tong-time Olympic sponsor, 
was based in the city. Or 
because only American organi- 
sational know-how could cope 
with the logistic nightmare 
that the games bad become. 

However, Mr Payne, who is 
now president of the Atlanta 
Committee for the Olympic 
Games (ACOG), insists that 
Atlanta’s victory had nothing 
to do with money, or corporate 
influence, or notions of compe- 
tence - “we had a strate- 
gy... that at this most impor- 
tant time in sports history, the 
people who had the power to 
award the right to host these 


games would do so to people 
that they trusted and that they 
liked. So we set about to do 
nothing more complicated than 
to assure them that they could 
trust us to take the Olympic 
movement into our custody at 
this important time, and do it 
great honour and justice. It 
was just that simple.” 

It was also a simple fact back 
in 1990, however, that Atlanta 
stood to prosper hugely from 
the Olympics, and the Olym- 
pics from Atlanta. 

The latest economic Impact 
study estimates that Atlanta 
and the state of Georgia will 
benefit to the tune of 80 . 0 GQ 
jobs and $5.1bn in direct and 
indirect spending, with a mini- 
mum $200m in incremental 
sales tax revenue pouring into 
state coffers. In return, the 
guardians of the Olympic 
movement know they will get 
a superbly organised sporting 
extravaganza, delivered via the 
latest technology, and with the 
backing of some of the world's 
largest companies, to several 
billion homes around the 
globe. 

All of the money needed to 
run the games will come out of 
private sector pockets 
(although a small amount of 
public funds will be be spent 
on areas such as security, 
transportation and street 
repair). Yet, in spite of the 
financial success of the Los 
Angeles games, Mr Payne says 
that raising $1.6bn has not 
been easy - “we started in a 
very difficult economy in 1990, 
and so it's happened a little bit 
slower than we wanted it to. Of 
the $1.6bn, between the 
amounts already under con- 
tract through television reve- 
nues and sponsorships, and the 


amounts that will come later 
from tickets, merchandising 
and concessions...we're about 
92 per cent complete. So we've 
got to raise another $l50m, and 
we’ve already got the compa- 
nies and product categories 
targeted." 

Construction of the new 
Olympic stadium and the ath- 
letes village is well under way 
and on target to meet the com- 
pletion deadlines. Of the $l.6bn 
that will be spent on the 199S 
games, about 35 per cent of the 
money will come from televi- 
sion (NBC paid a record 5456m 
for the US rights), another 
approximately 35 per cent from 
corporate sponsors (such as 
Coca-Cola, IBM, Visa Interna- 
tional and Matsushita), 15 per 
cent from ticket sales, li) per 
cent from licensing and related 
merchandising sales, and a 
final 5 per cent from the sale of 
Olympic-related assets after 
the games are complete. And 
in theory, when it is all over 
the Atlanta games should reg- 
ister a profit 

I nevitably, the people of the 
Atlanta, its community lead- 
ers and its politicians are 
keen to know what how they 
will profit from the games. 

Managing civic expectations, 
in fact, has been one of 
ACOG's toughest tasks. In 
1990, it was hoped that consid- 
erable Olympics-related money 
would be spent on improving 
conditions In Atlanta's 
blighted inner city areas. 
Although some spending on 
infrastructure and services is 
planned, and $8.1m has been 
pledged from the Woodruff 
Foundation to help spruce up 
some neighbourhoods, many of 
those expectations have not 


been met Over the past few 
years, the Corporation for 
Olympic Development in 
Atlanta (the body created by 
the former mayor. Mr Maynard 
Jackson, to lead the city's 
efforts to leverage the games) 
has identified $238m in public 
works that it believes are 
needed in the city. 

Yet. private sector funds 
have not been forthcoming for 
those works, which has created 
some bitterness within the 
community. Pressure groups 
like the Atlanta Olympic Con- 
science Coalition, which wants 
to see housing and develop- 
ment in the inner city neigh- 
bourhoods tied to the games, 
want the Olympics to do more 
for Atlanta's neediest commu- 
nities. 

While Mr Payne says that 
hopes were too high from the 
start, he admits that the city 
and the organisers were slow 
to address the needs of the 
local community - “there was 
originally an anticipation that 
it would not get done unless 
the Olympic committee paid 
for it. That was an unrealistic 
expectation," he says. 

"Now, however, we have a 
very pro-active mayor, a state 
that is beginning to feel the 
Olympics extend beyond 
Atlanta, and a private commu- 
nity that supports the projects 
like the park [the $50m, 60-acre 
Centennial Park that will be 
constructed in downtown 
Atlanta for the games]... but 
the Olympics are not a cure-all 
for every social issue that pos- 
sesses this urban environ- 
ment." 

Arguments over who should 
benefit from the Olympics and 
how to divide the spending pie, 
however, are as old as the 



One of several sports facBttas on a grand scale: Altanta’s soccer venue 


Moves to counter an encroachment by the Carolina giants 

Regional banking contrasts 


The banks have benefited greatly 
from the. robust health! of the 
regional economy, which survived 
the 1990-1991 nationwide 
recession virtually unscathed, 
reports Patrick Harverson 


T o the dismay of same proud Geor- 
gians, three of the Jive biggest banks 
in the A tlanta region hail from North 
Caro lina. Of the three outrof-state banks, 
two are based in Charlotte (Nations bank 
and First Union) and one In Winston-Sa- 
lem (Wachovia). Hie tone Atlanta banks 
are SunTrust (which owns the venerable 
Trust Company of Georgia franchise), and 
Bank South, the smallest of the big five. 

The supremacy of the Carolina banks is 
a relatively recent phenomenon. In 1984, 
when the south-eastern compact - a series 
of agreements between states in the south- 
east to block takeovers of local institu- 
tions by banks from outside the region - 
was forged, Atlanta was the region’s busi- 
ness capital, and its banks appeared well- 
placed to prosper accordin^y. 

However, over the following decade 
while Georgia banks were stifled by the 
weight of cumbersome and antiquated 
state hanking regulations, North Carolina 
hanks were expanding rapidly through 
aggressive acquisitions made possible by a 
much more flexible regulatory, environ- 
ment :■ 

By the early 1990s, consolidation among 
hanks in the south- east had created a new 
breed of “super regionaLs,” and three, such 
gfanta - : Maf| f ipoRflntt r First Union and 
Wachovia - wore firmly encamped on 
Atlanta banks’ turf. 

. -The largest- Atlanta-based bank before 
consolidation was the C&S Corporation. 
After a series of strategic blunders, it was ' 
taken over by NCNB of Charlotte in a deal 
that created NationsBank, now, the biggest 
super regional in the US. First Union and 
Wachovia also, bought banks ftom Georgia . 
and other south-eastern states. 

The contrast between the development 
of banking in , North Carolina and Georgia 
explains bow- the A+kmt« banks lost their 
way, says Mr John Coffey; a bank analyst 
at Ihe. Atlanta securities firm of Bobinson- 
■Bnhgflhmy, . 

■■ “North Catriiiwfl is almost a laboratory 
for basking. It's been so progressive. The 
-ifortA itKP ff looks like what banking in the 
US- will- prn ferhty look like in 30> or 20 
-yeaii- There are three big players who 
controls percent of the market, and they 
are another SQLwho control the remainder. 
In Georgia; there are 300 banks, yet it's a. 
simHar-sited market to North Ca ro lina." - 


The encroachment of the Carolina 
giants, however, does not mean that 
Atlanta's two surviving big banks have 
languished these past few years. Quite the 
opposite. The conservatively-run SunTrust 
has become one of the most profitable 
banks in the country, and Bank South has 
performed a remarkable comeback from 
loan problems which at one point looked 
as if they might overwhelm the hank in 
1991. 

Both banks, as well as the three from 
North Carolina, have benefited greatly 
from the robust health of the regional 
economy, which survived the 1990-1991 
nationwide recession virtually unscathed, 
and which continues to post above-average 
growth. 

Mr James Williams. SunTrust's chair- 
man, attributes a great deal of his bank’s 
successes to the strength of the local econ- 
omy. Under the stewardship of its safety- 
first management. SunTrust has achieved 
the remarkable record of never having 
reported a decline in annual earnings. In 
1993, the bank earned 5474m, 17 per cent 
more than in 1992, and this year SunTrust 
is on target to record earnings growth of 
10 per cent 

A lthough the bank's assets have 
grown from $5bn to S40bn in the past 
10 years, Mr Williams says only half 
of that growth has come from acquisitions 
- the remainder has been derived from 
internal growth. 

Remaining true to its conservative phi- 
losophy, SunTrust sticks to what it knows 
best loans to mid-sized companies; its 
long-established trust business, which 
serves the needs of many of Atlanta's rich- 
est fam flies; retail hanking and mortgage 
lending; and ftmd management The bank 
also owns a big stake In Coca-Cola which 
it has held since helping the company go 
public in 1919, and which is now worth 
$Ubn. 

Typical of the SunTrust strategy is its 
recast move into the mutual fund busi- 
ness. Since its entry last year, the bank 
has built up a stable of 19 mutual funds 
with assets of $i5bn- The funds are prov- 
ing popular and profitable, and the bank’s 
chairman admits they were a bit tardy in 
exploiting the mutual fund boom - “we 
■should have been in earlier,” says Mr Wil- 
liams, “but we got in carefully. When we 
did it, we did it right, and we are now 
highly successful- ” 

In sharp contrast to SunTrust’s steady 
but unspectacular progress. Bank South's 
recent , history resembles a rollercoaster 
ride. In 1991 the bank was dose to failure, 
burdened by too many problem property 
Trans, but new management arrived that 
-year uniter the leadership of several for- 
mer C&S executives, including turnaround 


expert Mr Patrick Flinn. 

With Mr Flinn as chairman. Bank South 
cleaned up its loan book, and rebounded 
strongly, forging a name for itself as 
Atlanta’s community bank. With more 
than 80 per cent of the bank's business in 
the Atlanta metropolitan area, it fully 
deserves that title. As Mr Coffey of Robin- 
s on- Humphrey explains: “They're the local 
independent bank that is more willing to 
serve you than those Yankee interlopers 
from North Carolina. That's the way they 
position themselves.” 

An aggressive and innovative marketing 
campaign, some astute acquisitions in the 
metropolitan region, and several fast-grow- 
ing businesses including mutual funds and 
discount broking, have all helped turn 
Bank South into Atlanta's premier retail 
bank. 

The successes of SunTrust and Bank 
South means they are regarded as juicy 
targets for takeover by larger banks in the 
region, or from outside the south east <the 
region’s compact is in the process of being 
dismantled, and interregional banking will 
soon become the norm). 

For Bank South, the prospect of being 
taken over does not seem to have quelled 
its appetite for expansion - “of all of them. 
Bank South is probably the most acquisi- 
tive.” says Mr Coffey. “They will probably 
continue to cement their franchise in 
Atlanta. At the same time they are the 
most often-mentioned takeover target, just 
by virtue of their size. As a result, their 
stock price reflects it." 

The analyst, however, does not think 
that anyone will make a move on Bank 
South soon - “no one could buy them 
without incurring significant earnings 
dilution. Their [defence strategy] is inde- 
pendence through performance, rather 
than through size.” 

Size, however, may prove a good defence 
for SunTrust. That at least is the belief of 
its chairman Mr James Williams, who says 
the bank's size (assets of S6.6bn), plus the 
pr emium that any acquirer would have to 
pay, makes SunTrust too much for most 
banks too swallow. 

A merger of equals involving SunTrust 
is seen by analysts as a more likely out- 
come, and Wachovia of North Carolina is 
regarded as the bank that would make the 
snuggest fit For the moment, however. 
SunTrust is concentrating on growing its 
earning s an d com p letin g a massive share 
buyback programme - it has already spent 
S300m on acquiring 7m shares and has the 
approval to buy another 5m - and shying 
away from talk of acquisitions and merg- 
ers. 

Mr Coffey says of SunTrust's manage- 
ment; “I think they see more value in 
paying for their own stock than someone 
elseV 


games themselves. Ultimately, 
few in Atlanta are likely to 
complain that the Olympics 
should never have arrived on 
their doorstep. For a place that 
has been proclaiming itself as 
“the next great international 
city” for the best part of 50 
years, the games are a once-in- 
a-lifetime opportunity to make 
an impact on the world stage. 
Atlanta, a city that does not 
exactly suffer from a lack of 
self-confidence, is primed to do 
just that. 



Model of the 1996 Olympic Stadium, showing a rear view 


Personality profile: Billy Payne, an Olympics altruist 

A man with a message 


It might be going a bit 
far to describe Billy 
Payne as an Olympic 
evangelist, but not too 
far, writes 
Patrick Harverson 


W hen Billy Payne, the 
president of the 
Atlanta Committee 
for the Olympic Games dis- 
cusses the centennial games to 
be held in Atlanta In 1996, he 
speaks with the passion of a 
preacher. When he steps out of 
his office on to his balcony 
with Its view of downtown 
Atlanta, and spreads his arms 
wide to describe the planned 
layout for the new Olympic 
park, he looks as if he is ready 
to deliver a sermon to an 
assembled flock below. 

Seven years ago, Payne cer- 
tainly needed a strong sense of 
belief in himself - if not a 
higher being - when he came 
up with the idea of launching 
an Atlanta bid for the 1996 
games. Most people at the time 
thought he was mad. Even 
three years later, when the 
city's highly professional bid 
had been submitted to the 
International Olympic Com- 
mittee, few thought he stood 
much of a chance of succeed- 
ing. 

However, since that day in 
September 1990, when the IOC 



Bitty Payne: optimist 

upset the odds and picked 
Atlanta over the sentimental 
favourite Athens, no one has 
made the mistake of under-es- 
timating Payne again. 

A 46-year-old attorney and 
former star college American 
football player, Payne shares 
the lofty ideals and cheerful 
optimism of another Georgian 
who burst on to the world 
stage from relative obscnrity - 
former president Jimmy 
Carter. And like Carter, Payne 
places a lot of faith in his abil- 
ity to get people to trust and 
like him. The secret to Atlan- 
ta’s successful bid in 1990, 
says Payne, was the fact that 
IOC members trusted and 
liked Payne and his team. 


They most have also liked 
what he had to say - that 
Atlanta would do more than 
just put on a highly efficient 
games - “organisationally, 
logistically, technologically, 
we're going to be the best that 
the world has to offer. And 
yet. that's not a big enough 
goal. The Olympic movement 
is not about objective achieve- 
ments, it's not about saying 
our venues were the best or 
oar transportation plan was 
the best. It's about whether or 
not we advance that which is 
good about the Olympic move- 
ment” 

Furthermore, it is proof of 
the power of co-operation and 
friendship that Payne sees as 
the Olympics 1 lasting legacy. 
As he puts it: “I am unaware 
of an international idea that 
has ever been articulated that 
has the potential and the 
power of the Olympic move- 
ment” 

That potential, of course, 
has not always been realised 
in past games - boycotts in 
Moscow and Los Angeles, ter- 
rorism in Munich. So when 
Payne spoke to IOC members 
about Atlanta's bid, he said of 
the Olympic movement: “It 
has often been abnsed and 
misused, and it's been 100 
years boys, so let’s get it 
straightened out now." 

Today, the preparations cer- 
tainly seem straightened oat - 
most of the money for the 


games is raised, construction 
of the Olympic stadium and 
the athlete's village is well 
under way. In spite of having 
to overcome some early politi- 
cal hurdles, Payne says he was 
always confident that Atlanta 
could put on a good show. 

“The second we were 
awarded the games, and the 
words came out of President 
Samaranch's month - The 
city of Atlanta 1 - the success 
of these games was absolutely 
assured. There is now way the 
United States of America 
would not do whatever it took 
to meet or exceed the expecta- 
tions of the world.” 

Atlanta, of conrse, shonld 
benefit hugely from the Olym- 
pics in terms of the local econ- 
omy and the region's image in 
the US and the wider world. 
For this, Payne is a hero to 
many Atlantans, and people 
say that after the summer of 
1996 he could run for, and 
win, political office in Geor- 
gia. 

Billy Payne, however, is 
very much the altruist Like 
another former president he 
asks not what the Olympics 
can do for Atlanta, but what 
Atlanta can do for the Olym- 
pics - “if success is measured 
only in what Atlanta gets out 
of it then these games will 
have been a horrible failure. 
We have got to give something 
back to the Olympic move- 
ment.” 




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in a hotel that specializes in 
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dataport and voice mail 

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• Full business services such 
as photocopying and faxing 

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to mid-size groups 

• Swimming pool and 
exercise facilities 

• Full-service restaurant 

and lounge 

• Points for merchandise or 
airline mileage that guests 

can collect through the 
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A ROOM 

in a distinctively designed 
hotel offering a superior standard 
of amenities and services. 
Located mainly in key business 
areas of major cities and 
at international airports. 
Holiday Inn Crowne Plaza ® 
hotels offer: 

• Superior, well-appointed 
spacious rooms with 
in-room dining 

• Superior hotel dining 

• Concierge service to assist 
with a variety of guest needs 

• Extensive business services 

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as points for merchandise or 
airline mileage that guests 
can collect through the 
Holiday Inn Priority Club 
programme 



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you— to provide the rigWf^qtel at the bright prices, 
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FINANCIAL, ti mes TUESDAY NOVEMBER 11994 

GREATER ATLANTA 6 



First National Bank in Broad Street, Atlanta 


Atlanta commercial property markets 


A Occupied Q Vacant of total) 
Office (Sqftm) 


Industrial (Sq ft m) 
11-5% 


Figures for year-end 1993 
Retail (Sqftm) 



Rec-o-vj; 

mj’I'T 


[- ■ : 


11.5% 


8-9% 


CrmfT-.tsxty 


EUilk warehoust 


&a% 


Nc.sntcn.rtiOO'l n.-vl *tnp 


13% 


11.7% 


1 "is" 

Q 10 20 30 « 

Soupmc Jamtton Research 

SO 

1 

0 25 90 75 

100 125 100 

1 i 

0 5 10 15 

30 25 

30 35 

■ OFFICE 
MARKET 

MBBon 

1993 

sq ft 
1992 

m INDUSTRIAL 
MARKET 

Million 

1893 

sq ft 
1992 

■ RETAIL 
MARKET 

MMon 

1993 

sq ft 
1992 

Total market 

6&2 

874 

Toferi market 

261.0 

255.1 

Total market 

82.1 

7&2 

Vacancy space 

1A5 

17JB 

Vacant space 

22.4 

25.4 

Vacant space 

BJB 

9.5 

Under construction 

OX) 

0.4 

Under conaticn 

ZB 

2.3 

Under constrcn 

1A 

2.7 

New space added 

0A 

3J> 

New space added 

BJ9 

3B 

New space added 

3J9 

0J9 

Net absorption 

&0 

ZB 

Net absorption 

BA 

7 S 

Net absorption 

4.6 

1.4 

Vacancy rata 

1R8% 

20.3% Vacancy rata 

&6% 

10.0% Vacancy rate 

10.7% 

12.1% 


Transactions In Itie the Industrial properly market involved 25.1m sq R in 1993. compared with 22.9m aq R In 1992. 

Sublease space hi the office market m 1993 was 2.4m sq tt hi 1993 compered with VChn sq It In the pieviaus year. Data sources. 
Jamteon Re sea rch Inc; Carter Onoor International 



Shopping venue: the Peachtree Centre in central Atlanta 


£ 

«* 


TRANSPORTATION 

Fanfare for new airport facilities 



Terminal buildings at Hartsfield International Airport which Is sad to be the second busiest: airport In the world, 
handBng 50m passengers a year and an average of 1,5 00 flights a day verarfca oma 


O n September 21. Harts- 
field Atlanta Interna- 
tional Airport opened 
its new $305m international 
facility - Concourse E - with 
as much fanfare as it could 
possibly muster. 

Hartsfield ’s managers had 
good reason to create as much 
hoopla as possible, for the facil- 
ity's opening was the first posi- 
tive news at the airport in a 
long time. 

From 1992 until just two 
months ago. when the name 
Hartsfield appeared in head- 
lines it was more often than 
not accompanied by the words 
"scandal” and "corruption." 
An investigation had uncov- 
ered corruption in the airport’s 
concession business. Some of 
the leading figures in Atlanta's 
city council, including Mr Ira 
Jackson, tbe former aviation 
commissioner whose responsi- 
bility it was to run Hartsfield, 
were found to have accepted 
bribes from a company which 
had been awarded valuable 
contracts to run some of the 
airport’s concessions business. 

Since that investigation. Mr 
Jackson and several other 


defendants, including the oper- 
ator of the airport’s Paradies 
c hain of shops, have been con- 
victed of various bribery, fraud 
and conspiracy charges. 

The concessions scandal did 
more than just sully the air- 
port’s and the city's reputa- 
tion. The slow progress of the 
investigation and the court 
cases delayed the r aising of 
new funds for the airport and 
the completion of important 
projects, including the con- 
struction of Concourse E and 
the building of a huge new 
atrium at the main terminal. 

Ms Angela Gittens, who was 
given the task of restoring 
Hartsfield ’s reputation when 
she was appointed Atlanta's 
aviation general manager in 
November 1993, admits that 
morale at the airport was very 
low when she arrived - “we’d 
been wallowing for quite some 
time . . . decisions were not get- 
ting made. We couldn't go for- 
ward [with the new concourse] 
because the principal conces- 
sionaire was involved in the 
scandal. It held up lot of 

thing s," 

The delays set back the 


international concourse proj- 
ect, and the cost of the facility 
ballooned from an originally 
projected S244m to more than 
$300m. Consequently. Ms Git- 
tens made opening Concourse 
E on schedule her top priority 
last November. It was a strug- 
gle at first, she says - “it was 
about dealing with all of the 
pieces. To finis h the terminal 
we had to get the financing. To 
sell the bonds we had to get 
[certain] agreements with the 
airlines. To get the agreements 
with the airlines, several 
issues outstanding had to be 
settled ... we moved forward, 
piece by piece." 

The airport's managers, how- 
ever, now believes the worst of 
tiie scandal is behind them, 
although there is still some 
controversy over the fact that 
the company at the heart of 
the corruption scandal - Para- 
dies - continues to operate its 
Hartsfield concessions. Under 
Ms Gittens. however, the sys- 
tem for awarding concessions 
contracts has been changed - 
"we are now looking for busi- 
ness acumen [from bidders], 
not political Influence,” she 


says. Ultimately, the hope is 
that the opening of Concourse 
E and the completion of the 
main terminal atrium will 
focus attention on Hartsfield’s 
future, not its past 

Concourse E is both an 
impressive sight - it is tbe 
largest international airport 
terminal in the US - and an 
important addition to Harts- 
field, which had outgrown its 
previous international facili- 
ties. It has 24 gates with room 
for another ten, and it can han- 
dle up to 6,000 passengers an 
hour, compared to just 3,400 in 
the old concourse. 

Hartsfield needed a new 
international facility because 
its non-domestic traffic, cur- 
rently five per cent of total pas- 
senger traffic, is expected to 
grow in coming years, espe- 
cially to and from Latin Amer- 
ica. This is primarily a reflec- 
tion of the airport's reputation 
as an excellent connecting 
hub. Traditionally, Hartsfield 
has handled more passengers 
joining connecting flights than 
"origin and destination” pas- 
sengers, but that is changing. 
While origin and destination 


passengers accounted for just 
26 per cent of total traffic four 
years ago, today they account 
for 40 per cent - “we’re no 
longer just an airport where 
people change planes," says Ms 
Gittens. In some ways, Harts- 
field is a microcosm of tbe US 
commerical aviation business. 
In 1991, the economic recession 
and the financial crisis among 
many domestic carriers led to 
a sharp drop in passenger traf- 
fic and revenues, especially 
after Eastern Airlines, which 
used Atlanta as a hub. went 
out of business. 

Yet. the industry - - and with 
it Hartsfield - has been slowly 
recovering from the losses and 
turmoil of the early 1990s, 
aided by the growth of the 
local economy and the arrival 
of a number of new. predomi- 
nantly Low-cost airlines. The 
business which was lost when 
Eastern collapsed has been 
more than recouped with busi- 
ness from new start-up carriers 
such as ValuJet, Air South and 
National Airlines, ail of which 
fly out of Hartsfield. 

Ms Gittens says that "in 
some ways. Eastern's demise - 


while unfortunate In terms of 
the economy of the area and 
jobs - created some opportuni- 
ties for other carriers, and for 
more origin and destination 
traffic. And it offered the 
Atlanta-area flying public some 
opportunities for lower fares." 

Hatsfield has been fortunate 
in that it has not borne the 
brunt of the downsizing by 
Delta. The financially-strapped 
airline is headquartered in 
Atlanta, uses the airport as its 
main hub, and is the region's 
biggest private employer. 
Although Delta is in the mid- 


dle of a huge cost-cutting pro- 
gramme, Ms Gittens says the 
carrier has been expanding its 
operations at Hartsfield 
recently. 

For now, Atlanta's airport 
looks well set for the future. 
The Olympic games in 1996 
will give it a chance to grab 
the spotlight, and see bow well 
its new international con- 
course handles a sudden inflow 
of overseas passengers. They 
are likely to be Impressed. 
Hartsfield is user-friendly, with 
well-designed terminals con- 
nected by an efficient under- 


ground rail system, and linked 
to Atlanta by a fast and cheap 
rapid-transit line, the Marta. 

These assets have not been 
overlooked by passengers. For 
the past four years, Hartsfield 
has been selected the best air- 
port in North America by read- 
ers of Business Traveler maga- 
zine. With its new 
international concourse, and 
soon a handsome new atrium 
in the main terminal. Atlanta's 
airport is aiming for five in a 
row. 

Patrick Harverson 


i. 

V 


«£\ 


When you’re visiting 

ATLANTA 

here are some of the newsstands 
in the area where you can buy 
the Financial Times: 


Atlanta 

Ritz Carlton 
181 Peachtree St 

Eastern News 
Peachtree Center 

Eastern News 
133 Peachtree St 

Eastern News 
Equitable Bldg. 

WH Smith 
210 Peachtree St 

WH Smith 
265 Peachtree St 

US News 

1100 Peachtree St 


Barnes & Noble 
Bookstores 
•2900 Peachtree 
Road, NE 

•4775 Ashford 
Dunwoody Road 

Borders Books 
3655 Roswell Road 

Oxford Bookstores 
•2345 Peachtree St 

•360 Pharr Road 

•1201 West Paces 
Ferry Road 


FT 


Alpharetta 

Harry’s Farmers 
Market 

Duluth 

Harry’s Farmers 
Market 

2025 Satellite Blvd. 

Marietta 

Walden Books 
1197 Johnson 
Ferry Road 

Newscenter 
667 S. Marietta 
Parkway 

Harry’s Farmers 
Market 

70 Powers Ferry 
Road 


FINANCIAL TIMES 

TO SUBSCRIBE, or for further information, contact your nearest Financial Times office: 


NEW YORK 
Tel: 800-628-8088 
Fax:(212)308-2397 


FRANKFURT: 

Tel: +49 69 156850 
Fax: +49 69 596 4483 


TOKYO: 

Tel: (813) 3295 1711 
Fax: (813) 3295 1712 


Coming soon: The ‘Gone With The Wind’ theme park 


Bringing a legend to life 


T here is little in Atlanta 
that would call to mind 
the legendary Tara plan- 
tation of Gone With the Wind. 
Historians are fond of noting 
that the sprawling, becol- 
nmned southern mansions of 
the type made famous by Hol- 
lywood never existed this far 
inland. Even the ramshackle 
house where Margaret Mitchell 
penned her famous book has 
been destroyed by fire. 

Tourists, take heart: after 
years of residing only in the 
pages of Ms Mitchell's novel 
and on the silver screen, Tara 
- and Its sister plantation. 
Twelve Oaks - will at last 
have a home in Atlanta - or at 
least close to Atlanta. A Calif- 
ornia company has announced 
plans to build a "Gone With 
the Wind Country" theme park 
near the tiny village of Villa 
Rica, about 32 miles west of 
the city. 

Scheduled to open in the 
spring of 1996, a few months 
before the summer Olympics, 
tbe $50m park will be aimed at 
a mature audience interested 
in how the film was produced. 
Developers hope the main 
attractions - replicas of the 
Tara and Twelve Oaks film 
sets - will draw S50.000 a year 
of the more than 16m tourists 
who visit Atlanta annually. 

The park, expected to 
employ between 150 and 300 
people in Its first year, will fea- 
ture horseback riding, a 510m 
golf course, a $35m hotel and a 
$l7m condominium develop- 
ment, bringing the overall cost 
of the complex to more than 
51 00m by 1997. 


The citizens of Villa Rica, a 
community of 4.000 on Atlan- 
ta's "forgotten" west side, 
already are seeing dollar signs. 
The town describes itself in 
tourist literature as a "City of 
Gold", and with the construc- 
tion of Gone With the Wind 
Country in their back yard, 
residents believe they may 
finally have struck tbe mother 
lode - "property values are 
already going up,” says Jeane 
Williams of the Villa Rica city 
council. Her concern is 
whether the town is ready to 
cope with the increased traffic 
and congestion the 1,200- acre 
park will bring to this rural 
community, which until now 
had largely escaped develop- 
ment. 

Neal McCreary, a Villa Rica 
property agent, says that Ms 
Williams has nothing to fear 
except the loss of some of Villa 
Rica's small-town charm. 

“All the revenue the park 
will generate doesn't represent 
any strain on our Infrastruc- 
ture ” he says. "The park itself 
wilt not put one additional 
child in our schools. That's a 
good type ol revenue to have 
coming in." 

A ndy Henshaw, city man- 
ager at the city hall, pre- 
dicts that the park will 
double tax revenues to the 
town within three to four years 
- "everyone is elated that 
we're getting the Gone With 
the Wind theme park. The city 
council has been supportive, 
and most of the citizens can’t 
wait until it’s built," 

The city’s business commu- 


nity is also eagerly awaiting 
the development of the park 
-“this is a dead town," says 
Grady Vickery, manager of 
Danger's Feed & Seed. “There’s 
nothing here to attract people. 
An attraction like [Gone With 
the Wind Country] isn’t going 
to hurt anything.” 

He expects the park to give 
an immediate lift to local 
hotels and restaurants, and 
hopes that he can cash in. too 
- “it’s Tara, right? They might 
have to have something like 
hogs on that farm. Those ani- 
mals have got to eat." 

Whether Gone With the 
Wind County will share its 
riches with the likes of Mr 
Vickery, remains to be seen, 
but Mr Henshaw believes tbe 
park will turn Villa Rica into a 
land of opportunity - “a lot of 
our citizens are under-em- 
ployed to some degree.” he 
says. "What we hope to do is 
provide good-paying jobs so 
they can support their fami- 
lies." 

The cost to the city for the 
park and the opportunities it 
may bring is estimated at 
$316,000 for extension of water 
and sewer services. Acquisition 
of right of way for new roads 
may add to that figure. 
County, state and federal gov- 
ernments are pitching in for a 
highway overpass in an incen- 
tive package valued at more 
than $3m. 

Snags In the bigbway over- 
pass cons miction deal have 
already delayed ground-break- 
ing on the park by about a 
year, according to local news- 
paper reports. But park devel- 


oper Mark Driscoll says the 
project remains on schedule 
for a 1996 opening, the year the 
of the centennial Olympics. 

And Mr Driscoll hopes Gone 
With the Wind Country will be 
able to capitalise on the allure 
of a state that is already sec- 
ond in the South in terms of 
tourism, (behind Florida) and 
fourth in the country in con- 
vention attendance. 

Mr Driscoll is a former 
employee of Landmark Enter- 
tainment Group, which has 
designed and produced theme 
parks for MCA/Universal Stu- 
dios, Busch Entertainment, 
Caesars Palace and Six Flags. 

He formed Georgia Holdings 
with Gary Goddard, Land- 
mark’s chief executive, and 
began searching the Atlanta 
metro area for a home for Tara 
in 1992. Turner Home Enter- 
tainment. which owns rights to 
the film, has licensed Mr Dris- £ 
coll to develop a park using 
Gone With the Wind as a 
theme. C 

It is a theme that vividly 
defines the American South in 
the minds of many people 
across the world, including 
many Southerners. But pri- 
vately. some local residents of 
Villa Rica worry’ that the 
park’s portrayal of an era 
rooted in slavery might lead to 
racial tensions. 

For his part. Mr Driscoll has 
promised to feature the contri- 
butions of African Americans 
to Southern culture through 
such facilities as music (the 
blues) and food, (barbecues). 

David Morris 



Atlanta in flames - a scene from MGM’s classic film. Gone with the Wind 


Komi ccencMfi 


1 


f 





FINANCIAL TIMES TUESDAY NOVEMBER l 1994 


GREATER ATLANTA 7 



VII 


It all began in Atlanta 
- Richard Tomkins 
, . looks at the remarkable 
* story behind the world's 
* best-known trade mark 


Soft drinks company is at the forefront of Atlanta community projects 

The home of Coca-Cola 


G oca-Cola may not be the 
biggest company in 
Atlanta; in terms of 
sheer head count. Delta, 
AT&T, BellSouth and. Lock- 
heed employ more people. Bat 
H is the company most com- 
monly associated with the 
city, and without doabt the 
one with the strongest histori- 
cal links to iL 

Indeed, the company's best- 
selling product, the Coca-Cola 
soft drink, was born - in 
Atlanta more than a century 
ago. According to legend, the 
first Coca-Cola syrup was 
brewed up in the city on Hay 
8, 1886 by Dr John Pemberton, 
a local pharmacist, in a 
three-legged brass pot in his 
backyard. Dr Smith carried a 
jug of the product down the 
road to Jacobs' Pharmacy 
where It was tasted, pro- 
nounced good, and placed on 
sale as a soda fountain diink 
at 5 cents a glass. 

Coke has come on a bit since 
then: today, it is the world’s 
j most nbiqnltons consumer 
* product, the world's best- 
known trade mark and by far 
the world’s best-selling soft 
'J drink. If yon include the com- 
pany’s other products - nota- 
j. bly, Fanta and Sprite - Coca- 
£* . Cola accounts for nearly half 
the world’s annual consump- 


tion of soft drinks. 

How did Coca-Cola do it? It 
helped that people liked the 
drink (ingredients of the early 
version included coca leaves 
and cola nuts, producing an 
exhilarating cocktail of 
cocaine and caffeine). But 
there was more to it than that. 

finch of the company's early 
growth was attributable to the 
business acumen of Asa Can- 
dler, an Atlantan who bought 
the business from Dr Pember- 
ton and greatly expanded it 
through innovative advertis- 
ing. Then, in 1919, the Candler 
family interests sold die com- 
pany to a syndicate led by 
Ernest Woodruff, another 
Atlantan, for 825m - at the 
time, the biggest financial 
transaction the south had 
seen. 

Before long, however, the 
company was in trouble. There 
were legal disputes with bot- 
tlers. sugar prices were turbu- 
lent, imitators were rampant 
and sales were down. There 
was even talk that the com- 
pany could go under. But in 
1923, Ernest’s son, Robert 
Woodruff, was elected presi- 
dent. This highly successful 
businessman was to lead the 
company for the next six 
decades. One of Robert Wood- 
raff’s most astute moves was 
to embark on a big intema- 


gets about 80 per cent of its 
operating profits from outside 
the US, while the figure for 
PepsiCo's beverage division is 
barely 16 per cent 

Although Coca-Cola is easily 
the world's biggest soft drinks 
company, and growing bigger 
by the day, it cannot afford to 
relax. Recently, competition 
from private label colas has 
been an irritant in the US, 
Canada and the UK, and in the 
US Coca-Cola is having to 
react to the rapid growth of 
alternative beverages such as 
iced teas and fruit jnice 
drinks, introducing its own 
range of “natnrar drinks. But 
the company’s strong profits 
growth suggests it is doing the 
right things: last year, net 
income rose by 19 per cent to a 
record S2.2bd, excluding 
unusual Items. 

For Atlanta, it is just as 
well. Apart from the fact that 
Coca-Cola and its bottling 
affiliates provide employment 
for nearly 8,000 people in the 
city, the company has a repu- 
tation for being Atlanta's lead- 
ing corporate citizen, pursuing 
a long-standing strategy of 
philanthropic involvement in 
tbe community. 

This philanthropic involve- 
ment began with Robert 
Woodruff, whose contributions 
to Atlanta's arts, to cultural 





Coca-Cola’s headquarters complex in Atlanta: the company has the world's best-known trade mark aid is 
easily the biggest Internationa! soft drinks company - and growing bigger by the day 


organisations and to educa- 
tional communities amounted 
to hundreds of millions of dol- 
lars over Ms lifetime. 

The tradition has been con- 
tinued by the company itself - 
not least through the creation 
in 1984 of the Coca-Cola Foun- 
dation, an organisation dedi- 
cated to supporting excellence 
in education. 

Examples of the founda- 
tion’s work in Atlanta over the 
last year or so Include a $2m 
contribution to Clark Atlanta 
University to support teacher 
eduction and to develop a 
School of Public and Interna- 
tional Affairs; a contribution 
of Sim to Morris Brown Col- 


lege to support faculty Mr 
endowments and the Presiden- 
tial Scolars Program for Afri- 
can-American students; and a 
Sim gift to Georgia State Uni- 
versity for tbe renovation of 
the Rialto Theatre and two 
nearby buildings to help 
revive the historic Fairtie-Pop- 
lar district 

In the arts field, Coca-Cola 
makes contributions totalling 
more than Sim a year to about 
40 organisations. It recently 
pledged $500,000 to tbe Martin 
Lnther King Jr Center which 
aims to advance the non-vio- 
lent philosophies fo Dr King iu 
the ares of training, research 
and education. And it made a 


Sim commitment to tbe 
Atlanta Project, an initiative 
established by the former pres- 
ident Jimmy Carter to fight 
poverty and hopelessness in 
the inner city. 

Atlanta's business leaders 
are unstinting in their praise 
of Coca-Cola's contribution to 
the city - “if every company 
were as community-minded as 
Coca-Cola, we would have a 
Utopian city here," says Mr 
Gerald Bartels, president of 
the Atlanta Chamber of Com- 
merce. “They are always in 
the forefront of any commu- 
nity project with their money, 
with their leadership, with 
whatever it might take.” 



Where tt aB began at five cants a glass Jacobs’ Pharmacy in 1886 


tional expansion for Coca- 
Cola. To a large degree, toe 
foundations for this expansion 
were laid during the Second 
World War when Woodruff 
declared it bis objective “to 
see that every man in uniform 
gets a bottle of Coca-Cola for 5 
cents wherever he is and what- 
ever it costs the company." 

The result was that 64 bot- 
tling plants were shipped 
abroad and billions of bodies 
of Coke were consumed. 

The reason this proved so 
important was that the pres- 
ence of Coca-Cola did more 
than lift the morale of the 
troops. In many areas, it gave 
people their first taste of Coca- 


Cola. - a taste they obviously 
enjoyed. And when peace 
returned, the Coca-Cola sys- 
tem was poised for the rapid 
international growth that con- 
tinues today. 

This explains one of the big 
differences between Coca-Cola 
and its rival PepsiCo, tbe US 
manufacturer of Pepsi-Cola. In 
toe US, Coke struggles to out- 
sell Pepsi. But in toe rest of 
the world, the only big mar- 
kets which Pepsi has been able 
to dominate are tbose from 
which Coke was at one time 
excluded for political reasons, 
such as the former Soviet 
Union and the Middle East. 

The result is that Coke now 


Decade of growth for Atlanta-based BellSouth 


Largest of the Baby Bells 


% 

9 



W hen American Tele- an aggressive move into the BellSouth's chairman describes 
plume and Telegraph wireless cellular phone, paging the experiment - which the 
(AT&T) was broken and mobile data businesses company hopes will be 
up in 1964 and its local phone (especially overseas, where the approved by federal regulators 
companies divided into company is now the world’s later this year - as “a fully 
regional operating com panies, largest cellular operator), and interactive, fibre-optic system 

the Atlanta-based BellSouth a more cautious foray into the carrying communications and 

was. the largest, and fastest- cable television market, where video programming into the 
growing, of the seven “Baby the company hopes to benefit home.” 

Bells.” . from the much talked-about Prime Management, tbe 24th 

Today, with annual revenues convergence of the telecommu- largest cable operator in the 
of more than $L6bn and assets mcatlans, computer and enter- US which has been 22.5 per 

of $40bn, it remains the largest tafafnant industries. ' cent-owned by BellSouth since 

and fastest-growing Baby Bell. Of BellSouth's careful entry last year, is a key partner in 
an indication that BellSouth into the cable television bust- the Atlanta test operation, 
has not wasted’ the opportunity 
during its first decade to build 
on the strengths evident at tbe 
company’s birth. 

Chief among those strengths 
was the potential , of its local 
markpf BellSouth has had the 
good fortune to serve nine 
states hased in- the country’s 
fastest-growing region, the 
southeast While much of the 
rert of the US endured a reces- 
sion in 1990-1991, and a subse- 
quent -slow and uneven recov- 
ery,.' the southeast sailed 
through the stormy waters of 
the period relatively unscathed 
and today continues fo lead the 
nation in the pace of its eco- 
nomic expansion. 

Buoyed by an influx of both 
residential and business cus- 
tomers moving into the region 
from other parts of the US, 
growth, in Bell South’s access 
lines - toe typical measure of i 
phone company's growth - has 
been the best to the Industry. 

The company added 665,000 
access lines in 1993, a rate it 
expects to fop this year. 

"The population migration, 
into the southeast has been 
pretty steady for last couple of 
decades, and we get a direct 
benefit from that because peo- 
ple 'want communications," 
says Mr John Clendenin. chair- 
man and .chief executive of 
BellSouth since its inception. 

‘ The company has spent a lot 
of money over the years on its 
plmne system in the region, an The headquarters of BellSouth in Atlanta which has the good fortune to 
investment in technology sanre nine states based tn the country’s fastest-growing region 
which Hr deaden in regards as 

crucial if BellSouth is going to ness, Mr Clendenin says: which Mr Clendenin hopes will 
mgrintatfl its growth rate. “We're a very active partici- reveal the technology's poten- 

Between 1 988 mid the end of pant in the explorations going tial - “we’ll learn a lot about 
Tftcfy the company spent a total on. AH of the Baby Bells are what the customer wants, 
of $L8bn on modernising its getting their feet wet in this, what they'll pay for, how 
phone system. This year. We have not gone into cable they’ll use it it will become a 
another $3bn is scheduled to be overseas the way some have, platform for wider deploy- 
spent on upgrading the sys- but we are trying to team the ment" 
tern’s technology. same lessons.” The partnership with Prime 

Heavy expenditure on tech- Its first lesson will come is typical of the BellSouth pol- 
nology Is just one element of a from a planned deployment of icy of seeking partners when- 
three-part strategy BellSouth is video technology to 12,000 ever it explores new markets, 
pursuing - the others involve homes in the Atlanta suburbs. This strategy is readily appar- 
ent to many of the company's 
wireless businesses - such as 
its cooperative ventures with 
Intel, RAM Mobile Data and 
Ericsson GE to market mobile 
computing and cellular-paging 
products - but it is probably 
nowhere more evident than in 
its fast-growing overseas busi- 
nesses. 

-Outside the US. BellSouth 
has concentrated its energies 
in developing a significant 
presence in an eclectic mix of 
national cellular markets. 
While the company will be the 
fourth largest cellular operator 
to the US when the BeO Atlan- 
tic-Nynax union is completed, 
it is the largest global cellular 
..operator based in the US. 

BeDSouth has been pursuing 
its aggressive international 
strategy once the mid- to late- 
1980s, starting in Latin Amer- 
ica and later France, Germany 
and other parts of Europe. The 
company is also moving into 
the near east (Israel), and the 
Far East - most notably China 
- and has long had a sizeable 
stake in Australia and New 


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Zealand. In most instances. 
BellSouth shies away from 
wired telecommunications 
systems because it believes the 
cellular business offers a much 
more secure foothold in foreign 
markets. As Mr Clendenin 
says: "Cellular in many of 
these countries has been a god- 
send. The telephone system in 
Caracas [Venezual] was so bad 
that you couldn't get a call 
through even if you were the 
president. Cellular came in and 
bypassed the local system, and 
performed marvelously as a 
substitute for local phone ser- 
vice.” 

BellSouth's most exciting 
overseas adventure is arguably 
in Australia, where it supple- 
ments its cellular business 
with Us partially-owned subsid- 
iary Optus Communications, 
the country's second largest 
long-distance and business net- 
work service operator. The 
company is also moving into 
the currently undeveloped 
Australian cable television 
market with its usual team of 
local partners. 

In some ways, BellSouth 
appears to be using Australia 
as a telecommunications labo- 
ratory. As Mr Charles Coe. 
president of BellSouth Interna- 
tional, says of the company’s 
business there: “It will define 
the fUll potential of the rela- 
tionship between telephone 
and cable TV operators." He 
has such high hopes of the 
Australia operations that Mr 
Coe expects revenues from the 
country to reach Slbn by 1996. 

E xpansion overseas, big 
spending on technology 
at home, and new invest- 
ments to the cable business - 
none of this comes cheaply, 
and like most Baby Bells. Bell- 
South has been working hard 
to contain its escalating costs. 

The company, in fact, has 
been paring its payrolls since 
1987, and last year that process 
c ulmin ated in the announce- 
ment of a plan to reduce the 
total workforce of about 80.000 
by 10.200 before the end of 
1996. 

The cuts in tbe plan, which 
should realise annual savings 
of $600m, come on top of previ- 
ous workforce reductions total- 
ling 6.500 jobs. To pay for some 
of these moves, the company 
took a restructuring charge of 
Sl.lbn last year. 

BellSouth, however, faces a 
tough task subduing cost 
growth because its core busi- 
ness - providing phone ser- 
vices in the south-east - is 
expanding so fast. 

“We have an unusual prob- 
lem - a big growth 
rate... which has complicated 
the downsizing [process],” says 
Mr Clendenin. “We have to 
downsize with a scalpel - we 
can’t not be there to provide 
service when you move into 
your home in Tuscaloosa.' 

Mr Clendenin. however, says 
that the company’s target of 
reducing the workforce by 
10.200 within the next two 
years could increase if circum- 
stances dictate. 

How this will affect the 
Atlanta-area - where 16.000 
BellSonth employees work - Is 
uncertain, because BellSouth 
has not provided a breakdown 
of where the cuts will be made. 
The company, however, is 
happy to point out that its 
business contributes an esti- 
mated $2.5bn a year to the 
city’s economy. 

Patrick Harverson 


Public contracts are vital 
to the success of 
minority-owned 
businesses, reports 
David Morris, but local 
competition 
remains intense 


O ver the past decade, the 
C D Moody construction 
company has worked 
on some of Atlanta's biggest 
building projects: Underground 
Atlanta, a large shopping mall 
and tourist attraction in the 
city centre, the Georgia Dome, 
site of the 1994 Super Bowl, 
and the new atrium at the 
ever-expanding Hartsfield 
International Airport. Not bad 
for a seven-year-old, black- 
owned company with only 47 
employees on the payroll. 

David Moody, the architect 
who incorporated the firm in 
1988, believes Atlanta's pro- 
gressive public policy has 
helped him to succeed. 

“The city- of Atlanta's minor- 
ity participation program was 
a great help." says Mr Moody, 
whose company will generate 
S8m in revenues this year. 
“They are serious about 
it... Because of it. I've beeu 
able to get my foot in the door. 

Mr Moody's experience sup- 
ports the argument or many 
economists that Atlanta is 
among the best places for Afri- 
can American entrepreneurs to 
do business. 

But whether or not Atlanta 
is an oasis of black entrepre- 
neurship depends to some 
extent on who one asks. Some 
Atlantans say the notion of the 
city as a 'Mecca' for black 
entrepreneurs is a myth and 
point to statistics that show 
Atlanta lagging behind other 
metropolitan areas in minority 
business success. 

According to a recent study 
by researchers at Clark 
Atlanta University. Atlanta 
barely makes the top-10 list of 
leading metropolitan areas in 
terms of black business 
growth. 

Washington D C. Houston 
and Sacramento beat the city 
in terms of black businesses 
per 100.000 African Americans. 
And black-owned companies 
produce only l per cent of the 
Atlanta metro area jobs and 
less than 3.2 per cent of its 
business receipts. 

Bob Holmes, a state legisla- 
tor from Atlanta and co-author 
of the study The Status of 
Black Atlanta, says the idea of 
Atlanta as a benign incubator 
of black businesses is “over 
hyped" - the product of an 
effective but misleading public 
relations effort on the city's 
part. Most black-owned busi- 
nesses in the city are marginal, 
he says, and points out that 
the African American share of 
total business receipts has 
fallen since 1977. 

Moreover. Atlanta's black 
entrepreneurs face the same 
obstacles as black entrepre- 
neurs anywhere. Most business 
growth is inthe suburbs, away 
from black population centres, 
and discrimination means 
black businesses have more 
trouble securing loans and 
doing business within the pri- 
vate sector. 

According to the study, dis- 
crimination against black- 
owned businesses comes in 
many forms, showing up in 
“bonding, price differen- 
tial . . . refusal to use [minority | 
subcontractors, bid manipula- 
tion . . . double standards in 
performance and qualifica- 
tion . . . slow payment and non- 
payment” and “exclusion from 
the 'Good Old Boy Network’ in 
subcontracting.” 

The report acknowledges. 


MINORITY-OWNED BUSINESSES 

Catalyst for economic 
growth in black areas 


however, that great gains have 
been made in opening up the 
public sector to minority- 
owned businesses, and many 
black firms are thriving in the 
rich Atlanta market. 

Mr Moody's ability to build 
his business on lucrative gov- 
ernment contracts is evidence 
of this, as is a study by Georgia 
Tech economist Thomas Bos- 
ton now under way. Mr Boston 
argues that Atlanta, while not 
a Mecca, is a thriving centre of 
black industry and commerce. 

“There is probably not 
another metro area in the 
country with as many pro- 
grams for minority entrepre- 
neurs.” says Mr Boston, who 
cites contracting policies that 
require a minimum percentage 
of government business to be 
set aside for minorities. 

Set-asides are mandatory for 
the city of Atlanta and Fulton 
County (in which the city is 
located*, the Atlanta transit 
authority, and the Atlanta 
school board. Voluntary pro- 
grams are in place at the 
Atlanta hospital authority and 
in neighbouring DeKalb 
County. 

But black contractors still 
find it hard to break into the 
private sector. According to 
the Clark Atlanta study. Atlan- 
ta's minority contractors get 93 
per cent of their revenues from 
the public sector and only 7 
per cent from private markets. 
In contrast, white contractors 


generate 80 per cent of their 
sales from the private sector. 

Mr Boston maintains that 
public contracts are a vital 
engine for growth among 
minority-owned businesses. 
“These programmes allow mar- 
ket penetration by minori- 
ties . . .in areas that were here- 
tofore closed to them,” he says. 
This, he adds, enables minority 
businesses to build strong rev- 
enue bases from which to 
launch ventures into the pri- 
vate sector. 

Meanwhile, Mr Boston 
argues, tbe atmosphere for 
black business in Atlanta is far 
better than the Clark Atlanta 
study suggests. First, he says, 
according to his own research, 
arbitrary census criteria for 
black-owned businesses have 
left nearly three black-owned 
firms not counted as such for 
every one that is recorded. 
Thus, he says, “the capacity of 
black-owned firms is greater 
than is commonly perceived.” 

I n terms of average revenue, 
the rate of revenue growth 
and the start-up rate. 
Atlanta ranks first among lead- 
ing metropolitan areas. 

Most agree that there is a 
trend toward greater business 
growth in the suburbs at the 
expense of the city centre, 
where Atlanta’s black popula- 
tion is largely concentrated. 
That business growth includes 
high-revenue black-owned 


businesses, the presence of 
which in the suburbs parallels 
a movement by more-affluent 
blacks away from the city cen- 
tre. But regardless of where 
they are located, black-owned 
businesses are a catalyst for 
economic growth in the black 
community, no matter how dis- 
persed that community is 
becoming. 

“Black-owned businesses on 
average have 85 per cent black 
employees. ” Mr Boston says. 
Atlanta's black entrepreneurs, 
like minority business people 
across the country, face signifi- 
cant problems in the area of 
financing and credit, he adds. 
The amount of start-up aud 
Improvement capital available 
to black businesses is limited, 
according to the Atlanta Eco- 
nomic Development Commis- 
sion. 

In this sense, the city is a 
victim of its own success: the 
sheer number of businesses 
competing for loans often 
makes it difficult to secure fin- 
ancing. That, according to Mr 
Moody, should not be a deter- 
rent to ambitious black entre- 
preneurs. If he had to start all 
over again in business, he 
says, he would do it in Atlanta. 

“Construction is a tough 
business, and minority con- 
tractors have to prove them- 
selves constantly. But as tor as 
the public market is con- 
cerned. we’re on an equal 
playing field now.” 


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VIII 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


★ 


GREATER ATLANTA 8 

Ambitious goals include conflict resolution in the world’s trouble spots 

Spotlight on the Carter Centre 


T he Carter Centre sits 
atop a hill overlooking 
downtown Atlanta, and 
the objectives of the institution 
set up by former president 
Jimmy Carter match its lofty 
location. 

The centre, backed by mil- 
lions of dollars in funds from 
individual donors, corporations 
and private foundations, is 
dedicated to "fighting disease, 
hunger, poverty, conflict and 
oppression through collabora- 
tive initiatives in the areas of 
democratisation and develop- 
ment global health and urban 
revitalisation." 

Although it has been pursu- 
ing these ambitious goals since 
1982 when it was established 
alongside the Carter presiden- 
tial library and museum, its 
work did not begin to attract 
much attention until more 
recently, when Mr Carter's 
high-profile role as a freelance 
foreign policy trouble-shooter 
focused the spotlight on the ex- 
president and the Carter Cen- 
tre. 

So active has Mr Carter been 
in ta ckling political problems 
around the world from his base 
in Atlanta that some foreign 
policy pundits have dubbed the 
Carter Centre the “State 


Department of the South " The 
nic kname , however, is not 
likely to be popular at the cen- 
tre, which goes out of its way 
to emphasise that it has no ties 
with the federal government 

Its non-governmental, non- 
partisan status, in fact is the 
institution's greatest asset 
when it comes to meeting its 
most challenging objective - 
conflict resolution. 

Its independence from offi- 
cial political and diplomatic 
structures enables the centre 
to become Involved in disputes 
without taking sides, and it 
allows the staff and Mr Carter 
to negotiate with political and 
military leaders who may be 
persona non grata in Washing- 
ton and other capitals. As Mr 
Carter explained, to an audi- 
ence at his Centre last month: 
“I deal with the people the 
United States considers unsa- 
voury." 

Aside from Mr Carter’s role 
last month in helping to facili- 
tate the peaceful removal of 
the military government in 
Haiti and his efforts earlier in 
the year helping to cool ten- 
sions between North and South 
Korea, he and the Centre have 
been involved in less-publi- 
cised work in strife-tom coun- 



Back from Haiti: Carter speaking 
at a White House news conference 


tries such as Ethiopia, Liberia 
and Sudan. Mr Carter also 
keeps a line open to Fidel Cas- 
tro, Cuba's isolated leader. 

The centre's international 
role does not stop at conflict 
resolution, however. Its also 


helps countries hold elections, 
draft new constitutions and 
manage the transition to 
democracy. Additionally, the 
centre and its staff run pro- 
grammes in the developing 
world aimed at improving agri- 
culture and food production, 
disease prevention and the 
quality of health care. 

While much of this work is 
conducted away from the pub- 
lic eye, the diplomatic initia- 
tives. particularly those 
embarked upon by Mr Carter 
personally, have often come 
under intense scrutiny. The 
response to these efforts has 
not always been favourable. In 
the past Mr Carter has been 
criticised for interfering with 
US foreign policy, and some- 
times for undermining or con- 
tradicting that policy. 

The former president's rek- 
nowned ability to see some- 
thing positive in almost every- 
one he meets has also left him 
vulnerable to attacks that he 
coddles dictators and terror- 
ists. As one State Department 
official put it recently: "Some 
tyrant will say. ‘I don’t have to 
listen to the American govern- 
ment representative, because I 
can always call Atlanta and 
get a better deaL'" 


It was recently discovered, 
for example, that Mr Carter 
tried in 1991 to persuade for- 
eign leaders to not back Presi- 
dent Bush's coalition to liber- 
ate Kuwait from Iraqi control 
because he believed he could 
act as a mediator between the 
US and Saddam Hussein. 

Although they conform with 
the Carter Centre's broader 
mission to "wage peace" 
around the world, some of Mr 
Carter's forays into foreign pol- 
icy situations are not necessar- 
ily part of the Centre's official 
work - much of which is con- 
ducted in. less glamorous are- 
nas, both abroad and at home. 

On the domestic front, the 
centre and its staff devote a lot 
of energy on improving condi- 
tions in the nation's inner 
cities. The Atlanta Project 
(known as TAP) is probably 
tbe centre's best known domes- 
tic programme. Launched in 
October. 1991. TAP helps com- 
munities in Atlanta's 20 poor- 
est neighbourhoods tackle 
their problems, among them 
crime, homelessness, drug 
abuse, teenage pregnancy, 
unemployment, and poor 
health. That help involves pro- 
viding each of the 20 Atlanta 
neighbourhood "clusters" with 








/ 

& 


The Museum of the Jimmy Carter Centra, Atlanta, provides a glimpse of the American presidency 


corporate sponsors (Coca-Cola. 
Bell South and Marriott are 
among the TAP supporters), 
recruiting a force of local vol- 
unteers to work in the commu- 
nities, and enabling the clus- 
ters gain access to federal or 
state funds. 

So far. TAP's work has 
ranged from somewhat vague 
initiatives such as a survey of 
residents's views on bow to 
tackle crime, to more tangible 
problem-solving efforts such as 


a massive child iimoc ulation 
drive and a successful cam- 
paign to make it easier for 
Atlanta families to the apply 
for public financial assistance. 

TAP has Its critics, including 
those who say its impact upon 
local communities' problems 
depends too much on the level 
of commitment from each clus- 
ter's corporate sponsor, and 
those who have chided the 
project's director for being 
insensitive to Atlanta’s black 


community ("sensitivity train- 
ing" was subsequently 
arranged for TAP participants). 
There has also been some disil- 
lusionment over the lack of 
more noticeable progress in 
improving the life of the urban 
poor. These criticisms, how- 
ever, have not prevented the 
Carter Centre from planning a , 
national version of TAP, called ^ 
The America Project 

Patrick Harverson K 


Aggressive expansion by CNN television network 


A leader in global TV 


Along with the movie Gone 
with the Wind. Martin Luther 
King and its baseball team the 
Braves, Atlanta is probably 
best known throughout the US 
as home to CNN. the all-news 
cable television network which 
sprung to national - and inter- 
national - prominence several 
years ago with its coverage of 
the Gulf War. 

Yet. the benefits CNN bring 
to the city go beyond the kudos 
of national name-recognition. 
The network, which is part of 
the giant entertainment group 
Turner Broadcasting System 
owned by Mr Ted Turner, is 
also a leading employer in the 
metropolitan area as wefl as a 
considerable tourist attraction. 
The CNN Centre in downtown 
Atlanta is visited daily by 
many hundreds, eager to see at 
first-hand the production of 
CNN's television program- 
ming. 

The network has come a long 
way from the early 1980s, when 
it was widely derided as 
“Chicken Noodle News." The 
brainchild of Mr Turner, who 
foresaw a demand for 24-hour 
television news long before 
anyone else, CNN is regarded 
as an Important news source 
for a hardcore audience of US 
viewers, and as essential view- 
ing in times of national and 
international crisis by many 
more. 

However. CNN’s ratings 
have never been that large - it 
typically attracts about 400,000 
viewers in the US - and 
recently its ratings have begun 
to slide. In the first quarter of 
this year, CNN’s ratings in the 
US were down 25 per cent on 
the same period of 1993, and in 
the first six months of this 
year lower ratings contributed 
to flat advertising revenues. 
Without continued growth in 
CNN International, the net- 
work’s non-US operation. CNN 
would have reported a decline 
in revenues for tbe first half of 
1993. 

Yet. some of the decline in 
ratings cannot be blamed on 
CNN itself - like any news ser- 
vice, it needs big news events 
to keep viewers tuned in, and 
during the first half of 1994 a 
lack of big news, combined 
with improving competition 
from local newscasts and spe- 
cialist news magazines, took 


their tolL (Although the dou- 
ble-murder story involving 
sports star OJ Simpson was 
huge news in the US, CNN 
faced stiff competition from 
local news purveyors and spe- 
cialist channels such as Court 
TV). 

The recent weakness in 
domestic ratings, however, 
cannot obscure the fact that 
CNN remains a handsomely 
profitable business for its par- 
ent TBS. Last year, it gener- 
ated an operating profit of 
$231m on revenues of almost 
S600m. 

Moreover, CNN’s ratings 
have always moved with the 
news cycle, and the third quar- 
ter of 1994 produced two big 



Sporting a CNN teesHrt, this 
youngster i3 one of hundreds of 
daBy visitors to the CNN Centre in 
Atlanta, eager to glimpse the 
production of TV programmes 

stories with a strong US and 
international dimension - the 
crisis in Haiti and the threat of 
another invasion of Kuwait by 
Iraq - could pay off in the form 
of higher viewership for the 
second half of this year. 

Furthermore, the maturing 
of its domestic market need 
not be so worrying as long as 
CNN continues to build reve- 
nues from its international 
operation. After years of losing 
money. CNNI is now in profit 
and the fastest-growing arm of 


CNN. Its revenues last year 
totalled about Sioom, and this 
year CCNI is expected to earn 
between $5Qm and $80m on rev- 
enues of 8113m. That is a con- 
siderable improvement from 
four years ago. when CNNI lost 
a little over $3m on revenues of 
just 813.6m. 

This growth has come from 
aggressive expansion into new 
markets in three main regions 
- Latin America. Europe, and 
Asia-Pacific. It has been accom- 
plished mostly by adding new 
satellites that carry larger 
"footprints" which enable 
CNNI's programmes to be 
broadcast on a more powerful 
signal to homes in a much 
wider geographic area. As a 
consequence, as of this sum- 
mer, CNNI was transmitting to 
an estimated 80m television 
households in more than 210 
countries via a network of 13 
satellites. 

To improve CNNI's news 
programming, CNN has built a 
new Slim production centre in 
Atlanta to complement its 
existing European regional 
centre in London, and it will 
soon open a new Asian 
regional centre in Hong Kong. 
Each centre will produce a ver- 
sion of CNNI programming 
geared toward its region’s 
viewers. 

In South America, CNN has 
no English-language competi- 
tion. but faces a threat from 
several Spanish-language net- 
works run by Reuters, the 
Mexican television group Tel- 
evisa. and the US network 
NBC. 

CNNI competes indirectly 
with them through the four 
half-hour segments of Spanish- 
language news it broadcasts 
every day. but clearly could 
lose ground to the native-lan- 
guage news services because 
the number of fluent English- 
speakers in the region is so 
small. 

In Europe, CNNI’s largest 
market, the principal competi- 
tion comes from Mr Rupert 
Murdoch's Sky News channel. 
Although Sky is very UK-ori- 
ented. Mr Peter Vesey. head of 
CNNI, admits: "On some sto- 
ries with a particular Euro- 
pean interest, they can be very 
competitive with us in serving 
their UK-based audience." 

Another competitor Is Euro- 


news 


news, which was set up by a 
political mandate from the 
European Community and 
broadcasts news In five differ- 
ent languages - "it's a wonder- 
ful technical achievement.” 
says Mr Vesey, “but It's not. 
from what ( hear, a very 
watchable product." CNN 
could also face competition 
soon from the BBC, which has 
talked of moving into the Euro- 
pean market on a subscription 
basis with a version of World 
Service TV. 

CNN also competes indi- 
rectly with the BBC in the 
Asia-Pacific region, as it does 
with Star TV satellite system, 
which is the largest in Asia 
and which may eventually be 
part of a global sattelite news 
service alongside Mr Mur- 
doch’s Fox Television in the 
US and Sky News in Europe. 
Mr Vesey says of CNNI's global 
competition: "As you can see, 
the field is kind of crowded.” 

In future, however, CNNI 
may be competing more with 
native-language broadcasters, 
although here the network has 
tried to hedge its bets through 
its occasional Spanish-lan- 
guage broadcasts and a joint 
venture with German broad- 
casters in Germany called n-tv. 

Mr Vesey says: “We will see 
more regional competition, but 
I don’t think it will be English- 
language competition. If I was 
to spend a ton of money on 
bringing you Asia every day, I 
would probably choose to do it 
in Chinese, or maybe Japanese. 
That is one of the biggest 
dilemmas we have classically 
faced. English is the best lan- 
guage to be in - on a world- 
wide basis - but you're really 
limiting yourself in terms of a 
mass audience, and there's no 
way around that. The way to 
extend and expand beyond that 
is to go the n-tv route in 
Europe. If you’re going to take 
it into the region and tell peo- 
ple about things that are most 
important to them, you've got 
to make the decision to do it in 
their language." 

The CNNI chief, however, is 
confident that its head start erf 
15-years experience in global 
news production should allow 
it to stay ahead of the interna- 
tional field. 

Patrick Harverson 


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Georgia’s State Capitol, one of two US capitals whose dome is sheeted In gold - brought from the Northeast Georgia mountains 


Facts about 
the area 


■ Area and population 


Area. Metropolitan Atlanta. 5,147 sq. miles 

City of Atlanta 131 sq. miles 

Population, Metropolitan Atlanta 2.9m. 

City of Atlanta 394,017 


■ About the city 


□ Atlanta is the state capital of Georgia. 
Convention and trade shows bring $1bn 
annually to the city. 

□ $1.5bn worth of Olympic preparations 
for 1996 are reported to be on schedule 
and on budget. 

□ More than 16.5m tourists visit the area 
every year. Atlanta has more than 55,000 
hotels rooms. 

□ Atlanta is the birthplace of Dr Martin 
Luther King Jr. The city proclaims itself 
the cradle of the civil rights movement. 

□ The Mayor of Atlanta, Mr Bill Campbell, 
was elected in November 1993. He took 
office in January this year. 

□ Newspapers include: 

The Atlanta Constitution, (morning daily). 
The Atlanta Journal, (evening daily). 


■ Useful contacts 


Atlanta Chamber of Commerce, 235 
International Boulevard, .... (404) 880-9000. 
Atlanta Convention and Visitors Bureau, 
235 Peachtree Street. NE . (404) 521-6600. 
Georgia Council for International Visitors, 

999 Peachtree St (404) 873-6170. 

Thomas Cook Foreign Exchange, 245 
Peachtree Center Avenue, Marquis One 

Tower. Gallery Level (404) 681-9700. 

Georgia Department of Industry, Trade 

and Tourism 656 3545 

Multi-lingual visitor assistance .... 873 6170 

Travelers' Aid -. 766 451 1 

History Center, details .. 238 0655 

Lennox Square, welcome 

centre 266 1398 

Underground Atlanta, welcome 

centre, see shopping details 577 2148 

Peachtree Centre, welcome 

centre 521 6688 


■ Getting about 


Atlanta’s Hartsfidd International Airport is 
foe second busiest airport in the world; 
foe airport claims to have foe largest 
passenger terminal in the world, handling 
50m passengers a year, with an average 
of 1 ,500 flights a day. By air, 80 per cent 
of foe US population can be reached from 
Atlanta, Hartsfietd airport, telephone (404) 
530-6830, is 13 miles - and 20 minutes' 
ride - from central Atlanta by taxi, (except 
during rush hours]. The flat rate taxi fee to 
downtown hotels is $15 for one person. 

Si 6 for two people and $18 for three. 

The Atlanta Airport Shuttle (404) 768-7600. 
costs $8 one way to downtown hotels and 
Si 2 one way to suburban areas such as 
Lenox Square. 

The Marta (Metropolitan Atlanta Rapid 
Transit Authority) rail system takes 12 
minutes and costs SI .25 one way to 
downtown locations. 

Subway and bus schedules 848 4711 


AAA Airport Shuttle 934 8003 

Atlanta Airport Shuttle 524 3400 

□ Main airlines include: 

American 800 433 7300 

America West 800 247 5692 

British Airways 404 559 9641 

Continental 800 525 0280 

Delta ......800 221 1212 

JAL .. 800 525 3663 

KLM 800 556 7777 

Lufthansa 800 645 3880 

Northwest 800 225 2525 

Sabena 800 645 3790 

Swissair 800 221 4750 

TWA 800 221 2000 

United 800 241 6522 

USAir 800 428 4322 


D Car hire services include: 


Avis (800) 331-1212 

Budget. (404)530-3000 

Dollar (404) 766-0244 

Hertz (404) 237-2660 

National (404) 530-2800 


□ Taxi services: visitors can haul a cab 
quite easily in the central and Buckhead 
areas. The larger taxi companies include: 

Checker Cab (404) 351 -1111 

London Taxi (404) 681-2280 

Style Taxi (404) 455-8294 

Yellow Cab (404) 521-0200 

□ Rail: Atlanta is served by Am Irak via 

Peachtree Street Station, 1688 Peachtree 
Street (800) 872-7245 


■ Banking 


Banks in Atlanta include: 

Bank South, 260 Peachtree St (404) 

681-9529. 

NationsBank, 600 Peachtree St, NE .. (404) 
581-2121. 

Trust Company of Georgia, 25 Park Place, 

NE (404) 588-7711. 

Wachovia Bank, 2 Peachtree St (404) 

332-5000. 


■ Hotels 


Larger hotels include: 

Omni at CNN Center, Marietta St and 

Tech wood Drive (404) 659-0000, 

fax (404) 659-1621. 

Ritz-Cariton, central area, 181 Peachtree 

St. NE (404) 659-0400. fax (404) 

688-0400. 

Westin Peachtree Plaza, 210 Peachtree St 

(404) 659-1400. fax (404) 589-7586. 

Hffton S Towers, 255 Courtland St, NE 

(404) 659-2000, fax (404) 222-2868. 

Hyatt Regency downtown, 265 Peachtree 

St, NE (404) 577-1234. fax (404) 

588-4137. 

Ritz-Cariton Buckhead, 3434 Peachtree 

Rd. NW (404) 237-2700, fax (404) 

239-0078. 


■ Eating out 


A selection of international restaurants 
indudes: 

Bones restaurant, specialising in prime rib 
and seafood, 3130 Piedmont Rd, 

Buckhead (404) 237-2663. 

La Grotta. (Italian food). 2637 Peachtree 

Road. NE (404) 231-1368. 

Mtofflfs Root (Russian food), Courtland & 

Harris, NE (404) 659-2000. 

The Country Place (continental). Colony 

Square. 1197 Peachtree St (404) 

881-0144. 

The Dining Room (American). 3434 


Peachtree Rd (404)237-2700. 

Hedgerose Heights Inn, (continental), 490 

East Paces Ferry Rd (404) 233-7673. 

Savannah Fish Company, Peachtree 

Street & International Boulevard (404) . 

589-7456. 4 

The Restaurant, (French), 181 Peachtree 

Street (404) 659-0400. 

Kamogawa (Japanese), 3300 Peachtree 

Rd (404) 841-0314. 

McKinnon's Louisiana (Creole, Cajun), 

3209 Maple Drive - (404)237-1313. 


■ Shopping 


Atlanta's shopping centres are usually 
open Monday to Saturday from 10 am 
until 6 pm; and Sunday noon until 5 pm. 
Many stay open until 9 or 9:30 pm on 
weeknights. 

Underground Atlanta, at Martin Luther 
King Jr Drive and Peachtree Street is a 
downtown complex featuring specialty 
boutiques, department stores and 
merchandise kiosks, as well as restaurants 
and nightclubs. The shops are open 
weekdays until 9 pm and Saturday and 
Sunday until 10 pm, while restaurants and 
nightspots stay open much later. Other 
shopping centers include Phipps Plaza, 
Lenox Square, The Galleria, and Peachtree 
Center, see telephone numbers above. 


■ Leisure 


* 

Ik- 


Tourist events, details 800 283 6699 

The Robert W. Woodfruff Arts Center / 
houses the Atlanta Symphony Orchestra, ' 
(404) 892-3600; and The Alliance Theatre, 
(404) 892-2414. 

The Fox Theatre offers touring Broadway 

shows (404) 249-6400. 

Atlanta Ballet performs at various venues . 
(404) 892-3303. 

Omni Coliseum, 100 Techwood Drive, NW, 
(404) 249-6400 is home to the Atlanta 
Hawks basketball team. The Atlanta 
Falcons football team plays at the Georgia 
Dome (404) 223-8000. 

□ Museums include: 

High Museum of Art, 1280 Peachtree 

Street, NE (404) 892-3600. 

Museum of Atlanta History, located in the 
Atlanta History Center, 3101 Andrews 

Drive (404) 814-4000. 

Apex Museum of African American 
History, 135 Auburn Avenue, NE (4041 

521- 2739. 

SciTrek. The Science and Technology 
Museum, 395 Piedmont Avenue (404) 

522- 5500. 

□ Also of interest: 

World of Coca-Cola Pavilion. 55 Martin 
Luther King Jr Drive at Central Ave ... (404) 
676-6074. 

King Center, 449 Auburn Ave (404) 

524-1956. 

CNN Center, dally tours of the broadcast 

headquarters (404) 827-2300. 

Atlanta Botanical Garden, 1345 Piedmont 
Avenue. NE (404) 876-5858. 


■ Climate 


The regional climate varies from mild 
winters with temperatures ranging from 
zero to 15 degrees Centigrade, to hot and 
steamy summers with temperatures 
ranging from 17 to 31 degrees. 
Fortunately, spring and autumn are long 
and pleasant 

Sources: Rivka Nachoma with additional 
data by Barbara Harrison. 




t 



i 


* 




21 


oV- 


CONTRACT HfRE 

SELL AND LEASE BACK 

CONTRACT PURCHASE 


NORTH 0191 510 0494 
CENTRAL 03^5 585S40 
SCOTLAND 01738 62S 031 


BRIEF 


UBS to fall short 
611993 record 


Union. Bank of Switzerland has «»M its 1994 net 
income will be lower than the record SFr2L27bn 
it made last year. Page 22 

Setbacks for Accor 

The past two months have brought a series of set- 
backs to Accor which the hotel group's founders 
and co-chairmen would probably prefer to forget 


Time Warner appoints deputy 

Thne Warner, the world’s largest entertainment 
group, has appointed a banker to its number two 
spot Page 24 

American Barricfc rises 3% 

American Barrick. the Toronto-based gold producer, 


higher output at the flagship Goldstrike mine in 
Nevada, and a contribution from recently-acquired 
Lac Minerals. Page 25 

Soap war starts afresh 

Procter & Gamble continues the Great European 
Soap War with the launch of Ariel Futur, to attack 
Unilever’s Persil and Omo Power detergents. 

PBge 25 

Japan paper companies lilt earnings 

Japan’s leading paper companies continued to suf- 
^ fer from exits in paper prices because of stagnant 
demand, but restmeturing and coat cutting at the 
fop two companies lifted earnings on the current 
leveLPage26 

Broken HD I cuts Woodside tiros 

Broken Hill Proprietary, Australia’s largest com- 
pany, has cut its ties to Woodside Petroleum, the 
energy group which is the main participant in the 
Northwest Shelf gas project Page 26 

Newitawon China 

Dr Edgar Cheng Wai-kin, who yesterday was 
elected chairman of the Hong Kong Stock 
' Exchange, is more interested in stren gthening the 
quality of Chinese companies listed in the territory 
than increasing their n umber s Page 26 

AH-dmngo for Indian GDR Issues 

The Tntfign government’s announcement at the 
weekend that it was changing the rules for compa- 
nies issuing international equity may mean the . 
market for global depositary receipts issued by 
Indian companies is about to enter a new phase. 
Page 28 

GrsndMet to tap OS for $500m 

Grand Metropolitan, the food and drinks group, is 
to raise $5D0m fr the IJS through an issue of perpet- 
ual fixed rate prefiured securities, a financial 
instrument similar to preferred stock. Page 30 

Btotochnotogygrotips undergo chsch-iqro 

TheUK biotecfanologytiKhistry"Iooks wobbly. With 
losses moimtmg and ^oducts years away from the 
market, companies seeking cures for the sick are 
under pressure to prove their own health. At least 
for British Biotech, the first chnicalTrials of its new 
£ cancer treatment have showed that the fo-ug has no 
significant side eSectsand triggers apotentiafly 
useful reaction in volunteers. Page 31 


Companies In this Issue 


Abtrust New Thai 
Accor 

American Barick . . . 

Axa 

BHP 

BMW 

BNP 

BaiAManBc " 
Bta oompattblea tntt 
Bradford Prop Trust 
British Biotech 
British T e l e com' 
Budapest Bank 
Buford Holdings 
CRA 

Cable and Wireless 
Caledonian Pub 
Campbell & Armstrong 
Carl Zees 
Cavwtiafe Group 
ChaSenge Bank 
CocaCota 

Command Petroleum 
Credt Suisse 
CrtdftAgricote 
Oafahowa Paper 
Oanka 

EcSnburgh Inca Trust 

FafrBrfar 

Raona 

Ford 

GBE Mamatfonaf 
Grand Metropolitan 
HNV Acquisition 
Harbama Tenants 
Heron 

Heron i nternatio nal 
Honshu Paper 


ING Bank 

.Information Access 

Inspirations 

InterpubBc 

Inti Comm ft Data 

Lowland Investment 

MiM 

Macro 4 

Maaifan 

Now Oft Paper 

Newport HokSnga 

Newt Corporation 

Nexagen 

Nippon Paper kids. 
Northumbrian Foods 
Nynax 
OMBectric 
Ofives Property 
Pacific Teteste 
Panther Securities 
Paacoa's Group 
Procter ft Gamble 
PrudentW 
FURNabbco 
- Rackwood Mineral 
Samax 
Shlsrado 

Southern Copper 
Souza Cruz 
Thomson Corporation 
Toye & Company 
UBS 
(JnSevar 

Van Dfoman’s Land 
Vestar 


Western Infl Metfla 
Woodside Petroleum 
Ziff Communications 


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FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED 1994 


Tuesday November 1 1994 


Mercedes 

Rental 


Available from only 
£64 per day at your 
nearest dealer 




Baby Bells in cable TV venture 


By Tony Jackson In New York 

The convergence of telecommunications 
and cable TV took a further step in the US 
yesterday with the formation of a joint 
venture between three regional Baby Bell 
telephone companies and a leading pro- 
gramming agency. Bell Atlantic. Nynex 
and Pacific Telesis said they were each 
investing 5100m. over the next three years 
in a venture including Ur Michael Ovitz’s 
Creative Artists Agency. 

The partners, who claim to reach 30m 
homes in the US. said they would establish 
two new companies, one handlin g pro- 
gramming and the other technology. The 
first, provisionally known as the media 


company, will begin by buying pro- 
grammes to feed through the partners’ 
cable network, then develop Its own pro- 
grammes. It will also produce video on 
demand, and finally interactive pro- 
grammes such as home shopping and 
games. 

The technology company will develop 
systems and standards for the new ven- 
ture. It will receive existing technical 
assets from the three partners, such as 
Bell Atlantic's digital imaging laboratory 
in Boston, Virginia. Such assets will form 
part of the SlOQm contribution from each 
Baby Bell partner. 

Under US legislation, there are restric- 
tions on local telephone companies enter- 


ing the cable market and vice versa. How- 
ever, several states have recently relaxed 
these regulations. The partners denied yes- 
terday that the venture faced any regula- 
tory problems. 

Bell Atlantic and Nynex cover the north 
eastern seaboard of the US, while Pacific 
Telesis Is based in California. The media 
company will be based in Los Angeles and 
New York, while the technology company 
will operate from San Francisco and Res- 
ton, Virginia The partners denied that 
there was any intention to move towards a 
full merger. However, Bell Atlantic and 
Nynex already have close ties in mobile 
telephony, and 10 days ago formed a part- 
nership to bid for new personal communi- 


cation service (PCS) licences along with 
two other regional companies. 

Mr Ovitz said “this is a tremendous new 
opportunity for the creative community. 
As the partnering companies make the 
merger of technology, information and 
entertainment a reality, our challenge is to 
help s timula te the creation and marketing 
of programming that will engage the con- 
sumer." 

The partners said commercial trials for 
video an demand would begin in early 
1995. Eventually, they said, the venture 
would offer advanced interactive services 
such as on-line games for numerous play- 
ers, personal news services and interactive 
advertising. 


Kenneth Gooding looks at the market’s rows with Chilean and Chinese customers 

Global problems follow 
LME to its new home 




T wo items of unfinished 
business failed to spoil the 
celebrations yesterday as 
the London Metal Exchange 
started business in its new home. 
The LME prides itself on being a 
truly global exchange and, as if 
to emphasise this point, it finds 
itself In conflict with customers 
as far away as Chile and nhina. 

The difficulties go back to the 
turmoil in the LME's “fla g shi p " 
copper contract last year. Prices 
slumped by one quarter in only 
five weeks, reaching in May their 
lowest level for five and a half 
years. Then came a severe supply 
“squeeze” when, in spite of lack- 
lustre world economic conditions 
and LME copper stocks reaching 
a 15-year, peak, the copper price 
rose strongly. The L4fE board 
issued two public warnings about 
the squeeze and eventually took 
emergency action to unwind it 
This was a market only for 
brave and truly professional trad- 
ers. It was a market of large prof- 
its and losses. Among the losers 
was Codeleo (Corporation 
National del Cohre de Chile), the 
state-owned Chilean ' group. 
Codeleo says Mr Juan Pablo Dav- 
ila, its chief futures trader, lost 
more than $200m. Mr Davila and 
his two immediate superiors 
were charged with, deception and 
Mr Alejandro Noezzti, Codelco’s 
president, resigned. Codeleo and 
the Chilean gov ernment are seek- 
ing to lay farther blame - partic- 
ularly in the London metal trad- 
ing community. 

Another loss-maker. Citic 
Shanghai, a subsidiary of China 
International Trust and Invest- 
ment Corporation, owes about 
$40m to LME brokers who 
extended it credit and is rfannfag 
it cannot meet these debts in ML 
The problems of both Codeleo 
and Citic Shanghai can be traced 


;>Y3 T4 


to an esoteric LME trading prac- 
tice known in the jargon as “car- 
ries at historical prices”. In prac- 
tice this means that Instead of 
paying up at the end of a con- 
tract, it is rolled forward again 
but at the original price rather 
than the price prevailing in the 
market. There are genuine rea- 
sons why some customers want 
to make use of this system but 
traders suggest it can also be 
used to disguise, temporarily. 


Copper 

LME 3 month position (E tonne) 
1,700 — — 


1.400 — 1- 



1993 94 

Soueo: Otiastreom 

loss-making positions. 

LME brokers prefer not to give 
these “carries” because they tie 
up credit lings and take some fin- 
ancing. So the service is provided 
only to substantial customers 
with deep pockets. Both C-odelco 
and Citic Shanghai come into 
this category because they are 
state-owned and traders assume 
that ultimately their govern- 
ments stand behind them. 

Codeleo and the Chilean gov- 
ernment have been excoriated by 
their domestic press and have 
been pressing for the maximum 
punishment for those they claim 


are responsible - without much 
luck so far. Mr Davila and his 
two superiors were released from 
prison in May when the Santiago 
Appeals Court drastically 
reduced the charges against 
them. No longer are they accused 
of defrauding the state (maxi- 
mum sentence five years) but 
instead are charged with causing 
the company losses by deception 
( maximu m sentence 541 days). 

Meanwhile, Mr Juan Villarzu, 
Codeleo ’s new president, says an 
investigation by accountants 
Ernst and Young showed “the 
existence of systematic deceit 
aimed at distorting the economic 
outcome of copper futures trans- 
actions, creating fictitious profits 
and postponing losses”. But he 
stressed this (fid not necessarily 
mean that LME brokers had 
deliberately colluded with Mr 
Davila. The LME has agreed to 
investigate “unusual transac- 
tions” between Codeleo and sev- 
eral brokers. 

At the LME’s annual dinner 
last month. Mr Villarzu made it 
clear that he feels there must 
have been some collusion 
between his company's trader 
and some counter-parties in Lon- 
don. “Had you the opportunity to 
examine the trading contracts 
which Codeleo entered into dur- 
ing 1993, you would have been 
amazed at the number of transac- 
tions whose prices had no direct 
relationship with the market 
prices ruling at the date and time 
of the transaction." he com- 
plained. 

Mr Raj Bagri, LME chairman, 
promised that if any exchange 
member had transgressed, “we 
will not hesitate to take the 
appropriate action". However, he 
echoed other traders' assertions 
that poor management controls 
were mainly responsible for 


Thomson to acquire Ziff 
information arm for $465m 



By Louise Kehoe 
in San Francisco 

Thomson Corporation, the travel 
and publishing group controlled 
by the Thomson family of 
Toronto, Canada, is to acquire a 
Ziff Communications subsidiary. 
Information Access Company, for 
$465m. The deal is the second 
step in Ziffs plan to divest all its 
assets. Last week Ziff, a private- 
ly-held US publishing group, sold 
the biggest segment of its busi- 
ness. Ziff-Davis Publishing, to 
Forstmann Little, a New York 
investment group, for $L4 bn. 

IAC, based In Foster (Sty, Calif- 
ornia, is a leading provider of ref- 
erence and database services to 
libraries and businesses. K offers 
business, . legal, healthcare, 
h umanities , computer and gen- 
eral interest information services 


in several electronic formats, 
including CD-ROM, on-line data- 
base access, and magnetic tape. 

More than 20,000 US public and 
academic libraries, as well as 
10,000 corporate libraries sub- 
scribe to IAC services. 

The acquisition is seen as a 
move by Thomson to expand its 
North American publishing activ- 
ities, which are among the most 
profitable parts of its business. 

Thomson was one of the losing 
bidders for another database 
company, the Lexls/Nexis elec- 
tronic-pub fishing arm of Mead of 
the US which was bought for 
$1.5bn by Reed Elsevier, the 
Anglo-Dutch publishing group, 
earlier this month 
With 1993 sales of S5.9bn, 
Thomson is a l eading publisher 
of specialised professional and 
business reference materials. The 


group also owns regional newspa- 
pers in North America and the 
UK including its flagship publica- 
tion the Toronto Globe and Mail. 

Thomson’s Information/Pub- 
fishing Group accounted for 
&8bn in sales last year. In the 
UK, Thomson has extensive lei- 
sure travel operations, including 
its holiday tour business. 

Mr W. Michael Brown, Thom- 
son president, said LAC made an 
“excellent fit" with Thomson's 
existing publishing operations. 

The Ziff family put its busi- 
nesses up for sale in June, hiring 
hazard Freres. the investment 
banking group, to find buyers. It 
still has to sell its trade show 
business and the Interchange 
Network unit, established to sup- 
port Ziffs plans for a computer 
on-line service geared to personal 
computer owners. 


Heron rebels vow to fight on 


By Christopher Price m London 


Dissident bondholders opposed 
to the sale of Heron Interna- 
tional, Mr Gerald Hanson’s pri- 
vate UK property company, have 
vowed to fight on against the 
purchase plans by HNV Acquisi- 
tion, the US investment group. 

Following publication of the 
formal offer document, Mr Gary 
Klesch,' managing director of 
Klesch & Co, which has been 
opposing the deal, said: “This is 
highly, highly, highly condi- 
tional. There’s the litigations, 
the valuations and other things 
besides. Nothing we have semi 
has changed oar minds over this 
deal” 

HNV, led by US investor Mr 
Steven Green, made its initial 
offer several weeks ago, during 
which time the group and its 
advisers have been negotiating 


with some of Heron's 82 creditor 
banks in order to gain accep- 
tance. The US group is offering 
£142m (S224m) in cash to the 
bank and bondholders who hold 
around £37 4m of debt 

Swiss Bank Corporation, 
HNV’g bankers, has already 
secured the agreement of around 
half of Heron’s creditor bankers, 
which are owed some £200m. 
Hist debts are secured on prop- 
erty in the UK ami Spain. The 
document shows the UK proper- 
ties as having assets valued In 
excess of £200m. However, the 
Spanish business has only net 
assets of £400,000. Under the 
terms of the agreement, HNV 
will put ap to £17m of capital 
into the Spanish operations. 

The document also shows Mr 
Benson’s salary package for the 
year to March 30 1994 at 
£1,049,000, down from £1,537,000 


In 1993. Under last September’s 
refinancing, Mr Ronsoo agreed a 
five-year £800,000 per annum sal- 
ary package and the fall from 
the previous year reflects the 
lower remuneration. Mr Ronson 
will continue as chief executive 
under the HNV plan, a move 
which has caused some conster- 
nation, particularly among rebel 
bondholders. Tm staggered by 
wbat they are continuing to pay 
that guy," said Mr Klesch. 

The offer document includes 
details of litigation in which 
Heron Is involved, including an 
$88m lawsuit relating to the pur- 
chase of Pima, a US financial ser- 
vices group, and a S39m suit out- 
standing brought by another US 
group. Stratagem. There are 16 
outstanding litigation cases 
against Heron, or its directors. 
Lex, Page 20; Background, Page 
30 





Tony Amfrws 

Trading places: the London Metal Exchange's new home yesterday 


Codelco's losses. Mr Bagri said 
the breakneck speed at which 
derivatives and futures trading 
had taken root and spread across 
the financial and commodity 
markets “has in many instances 
left managements far behind in 
having in place adequate, effec- 
tive and timely supervisory mea- 
sures to monitor and control 
risks”. Nevertheless, the LME 
hoped to implement by early next 
year measures “to limit any per- 
ceived dangers of historical price 
carries". 

Opinion is split among LME 
members about whether inci- 


dents such as these involvmg 
Citic and Codeleo are damaging 
to the exchange's image. Yester- 
day’s move to another premises 
in London's financial district was 
in part prompted by a fourfold 
increase in turnover in the past 
six years. So the LME - trading 
primary aluminium, aluminium 
alloy, lead nickel, tin and zinc as 
well as copper - is now the sec- 
ond-largest futures exchange in 
the UK and the seventh largest in 
the world. It will trade futures 
and options valued at nearly 
J2,D00bn this year. 

Commodities, Page 32 


Hungarian 
sale stirs 
European 
banks 


By Nicholas Denton In London 

Three western European hanks 
are considering bids for Hunga- 
ry's Budapest Bank, one of the 
country’s top four commercial 
banks, in a display of renewed 
enthusiasm for acquisitions in 
the former communist bloc. 

Credit Suisse and ING Rank 
are understood to have emerged 
in the past few weeks as poten- 
tial contenders for a substantial 
stake in what would be one of 
eastern Europe's biggest bank 
privatisations. 

They join Ctedit Agricole, the 
French co-operative bank, which 
has for several months shown 
interest, in taking a stake. It is 
the only main contender to have 
conducted a “due diligence” 
investigation of the Hungarian 
target 

A stake in Budapest Bank 
would provide Credit Suisse with 
a means of expansion to the east 
after the failure of its approach 
to Creditanstalt of Austria. 

Hungary expects to name a 
preferred bidder or bidders on 
November 17. which gives Credit 
Agricole a time advantage. To 
open up the race, the state bank 
and its advisers have granted the 
last-minute bidders another fort- 
night to prepare proposals. 

The successful industry inves- 
tor is expected to pair up with 
the London-based European 
B ank for Reconstruction and 
Development. The most likely 
option is that together they 
would hold a majority. 

Creditanstalt, one of Austria's 
leading banks, explored an offer 
for the h ank but management 
divisions are understood to have 
inhibited an approach. 

The sharpening rivalry for 
Budapest Bank marks a shift in 
western banks’ strategies in east- 
ern Europe. 

State banks in the region have 
shown a strong propensity to 
make bad loans and the pre- 
ferred means of establishing a 
presence has been to set np 
stand-alone branches. 

But In two deals in the last 12 
months ING Bank and Bayer- 
ische Landesbank took 25 per 
cant stakes in a Polish and a 
Hungarian bank respectively. 

Budapest Bank has total assets 
of Ftl56.6bn (S1.47bu). and a 
Hungarian official hoped for a 
purchase price of up to 8100m. 

The Hungarian government 
has spent over more than $3bn, 
or 9 per cent of GDP, bailing out 
technically insolvent state banks 
and the privatisation of Buda- 
pest Bank is the first fruit of the 
rescue programme. 



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22 


FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


★ 


INTERNATIONAL COMPANIES AND FINANCE 


UBS ‘unlikely’ 
to match last 
year’s record 


By lan Rodger in Zurich 

Union Bank of Switzerland, 
which is in the midst of a 
proxy battle with its largest 
shareholder over its business 
strategy, has said its 1994 net 
income will be lower than the 
record SFr2.27bn (S1.8bn) it 
made last year. 

“Last year’s excellent result 
is unlikely to be reached,” 
UBS, Switzerland's largest 
bank, said in a statement on 
third-quarter trading. Earlier, 
it bad left open the possibility 
of matching the 1993 result 

The bank blamed unfavoura- 
ble market conditions for a 
decline in third-quarter profits. 

No figures were given, but it 
said both net interest income 
and trading income were 
down, although the trading 
result was "substantially 
higher” than in the previous 
quarter. 

Fee and commission income 
were said to be "excellent", 
marking the only contrast with 
the third-quarter report of 
Credit Suisse which said last 
week its commissions business 
suffered a "slight downturn”. 

UBS said commissions from 
its corporate finan ce business 
were unsatisfactory. 

Expenses were down notice- 
ably. As in the case of Credit 
Suisse, bad loan provisions 
were reduced but remained at 
a high leveL 


UBS has called an extraordi- 
nary general meeting of share- 
holders for November 22 to 
vote on its proposal to convert 
all registered shares into 
bearer shares. The par value 
on the registered is one-fifth 
that on the bearers, giving an 
investment in them much 
more voting power than the 
same stake in bearers. 

The proposal is opposed by 
BE Vision, an investment fund 
which has a large holding in 
the registered shares and Is 
seeking to rally a majority of 
votes to make substantial 
board changes at the next 
annual meeting in April 
• Operating profit at Hacu- 
lan, the Austrian construction 
group with large operations in 
eastern Germany, plunged in 
the first half by 42 per cent to 
SchS1.7m (97.69m). It also fore- 
cast lower net income in the 
full year. 

Turnover was up 14 per cent 
to Sche^bn, due to a 19 per 
cent increase In Germany, 
which accounted for just over 
half of group revenue. 

The group said the decline In 
operating profit was partly due 
to delays in Russian housing 
projects for returning soldiers. 

The extra costs in the Rus- 
sian projects will be borne by 
the customer but this will be 
reflected only in next year's 
earnings after they are com- 
pleted. 


BNP in plan to shed 
Banque Nagelmackers 


By Andrew Jack In Paris 

Banque Nationale de Paris, one 
of France's leading banks and 
privatised last year, is selling 
Banque Nagelmackers 1747. 
Belgium’s oldest h ank. 

The h ank, in which BNP 
became the majority share- 
holder four years ago. is to be 
sold to P and V Assurances of 
Belgium. The sale will also 
apply to a related concern, 
Nagelmackers & Company. 

BNP stressed that the sale 
conditions would guarantee 
the bank's development and 


the service to its clients, and 
that Nagelmackers would con- 
tinue to market BNP products. 

BNP bought the majority of 
the shares in Banque Nagel- 
mackers in 1990, with the 
remaining stake held by the 
Nagelmackers family. 

This August it acquired 
nearly all the remaining shares 
when Fmancfere Lecocq, a co- 
shareholder with which it 
made the original takeover, 
exercised its option to aelL 

BNP earlier this year denied 
suggestions it was planning to 
sell Banque Nagelmackers. 


Accor pulls the shutters down 

John Ridding and Michael Skapinker examine the group’s position 



Gerard PfiHison (left) and Paul Dubrule: No fear of takeover 


M r Gerard P&lisson 
and Mr Paul Dubrule 
have seen many 
more ups than downs in the 27 
years in which they have built 
Accor of France into one of the 
world's largest hotel and travel 
groups. 

The past two months, how- 
ever, have brought a series of 
setbacks which the group's 
founders and co-chairmen 
would probably prefer to for- 
get. 

In September, Accor was 
defeated by Forte of the UK in 
a fiercely contested battle to 
win control of Meridien Hotels, 
which had been put up for sale 
by Air France. A few weeks 
later. Mr Mlisson and Mr Dub- 
rule became entangled in a 
wrangle with Suez, the finan- 
cial and industrial group 
which is Accor's largest share- 
holder. 

Last week, the group 
announced its first-ever loss, 
saying it had incurred a net 
half-year deficit of FFr264m 
($5im), compared with a net 
profit of FFrl09m for the same 
period in 1993. 

The financial performance 
and signs of shareholder disaf- 
fection raised important ques- 
tion about the group's pros- 
pects and strategy. They even 
prompted some to consider 
whether France's flagship lei- 
sure company be taken over. 
Could a successful predator 
break up the group, finding 


buyers for some of its assets, 
which range from the Novotel 
hotel r.hain to the Europcar car 
rental business to luncheon 
vouchers? 

Analysts were particularly 
intrigued by the apparent 
breach between Accor and nor- 
mally loyal French institu- 
tional shareholders. 

Last month, after protracted 
discussions, Accor said it had 
broken off negotiations aimed 
at increasing Suez’s 12.4 per 
cent stake, held through its 
subsidiary Sodete Generate de 
Belgique. Accor cited "unrea- 
sonable” demands by Suez, 
which it claimed was seeking a 

si gnifi cant m anag ement role 

and the right to select a succes- 
sor when the co-chairmen 
stand down. 

Messrs Dubrule and Pfilisson 
have little time for speculation 
about instability on the share- 
holder register. "We have no 
fear of a takeover. SGB has 
said it would keep its bolding 
and "we have faithful long 
term investors", said Mr Pelis- 
son, citing Societe Generate, 
the French b ank, and Union 
des Assurances de Paris, the 
insurer. The Caisse des Depdts 
et Consignations, the French 
state financial institution, has 
also distanced itself from spec- 
ulation that it might sell its 
6.14 per cent stake in Accor. 
An additional reason for cau- 
tion concerning the emergence 
of predators is that both the 


group and industry analysts 
t hink Accor's situation is bet- 
ter than might have been 
expected. 

Accor itself is sanguine in 
the face of last week's loss and 
is upbeat about prospects for 
the rest of the year. The com- 
pany points to improved oper- 
ating results, arguing that 15 
of its 18 principal profit centres 
were ahead at the nine-month 
stage compared with the same 
period in 1993. They explain 
that much of the reason for the 
loss at the net level in the first 
six months was the absence of 
exceptional gains from dispos- 
als. First-half profits of 
FFrlQ9m in 1993 were achieved 
only after capital gains of more 
than FFr400m during the 
period. 

T his perspective is shared 
by many industry 
observers. “I was not 
surprised by the loss.” says an 
analyst at one French mer- 
chant bank. He, like many 
industry observers, was also 
encouraged by the chairmen's 
optimism fallowing the 
announcement of the results. 
Mr Peiisson said: "The bad 
news is the loss. The good 
news is that over the past sev- 
eral months we have seen a 
substantial improvement in 
the hotels business." 

Nevertheless, there is still 
concern about the group's 
prospects and strategy. Most 


immediately, the company con- 
tinues to struggle under a defat 
burden of about FFr22bn, 
about one and a half times 
shareholders' equity. 

Hie rise of the debt reflects 
the aggressive expansive strat- 
egy pursued by the company, 
notably the acquisition of the 
Motel 6 chain in the US in 1990 
and of Wagons-Lits, the Bel- 
gian travel group in 1991. 

"The debt situation is a con- 
cern," says one Paris-based 
analyst But he believes that 
the company is now taking 
active steps to improve its 
financial position. 

This sentiment is shared by 
investors who have pushed 
Accor’s share price up by 20 
per cent since the announce- 
ment of the first-half results, 
recovering from the sharp 
losses prior to the news. The 
COB, the French stock-market 
watchdog, is investigating the 
falls over the previous two 
weeks. 

The strong rally reflects a 
belief that the company will 
now focus on core businesses 
and reduce its debts. 

Accor has identified FFr5bn 
of potential assets it could sell 
from which FFi2.5bn worth of 
receipts are expected by the 
end of 1995. The group is 
looking for an investor in its 
Sofitel luxury hotel chain after 
Its failure to win control of 
Meridien. Accor wants to con- 
tinue running the r4»»n L but 


would like an investor to take 
a majority stake in the assets. 

Mr Paul Slattery, an analyst 
at Klein wort Benson, says: 
“That's going to be a tall order. 
Sofitel Is a very tired brand 
ih at haa suffered from under- 
investment.” 

One solution may be Prince 
A1 Waleed of Saudi Arabia. The 
prince gave financial faackmg 


to Accor's bid for Meridien. 
Last month he took a 25 per 
cent stake in Four Seasons 
Hotels, the Toronto-based lux- 
ury hotels c h a in . 

Neither chairman would be 
drawn on the prince's possible 
interest But one industry ana- 
lyst said: “He is a definite pos- 
sibility. Hie has capital and he 
isn’t hostila” 


Vestey buys back most of Union Int’l 


Axa to invest $10m in Turkish 
investment fund venture 


By Paul Taylor In London 

The Vestey family is to buy back a 
large part of Union International the 
food processing and distribution 
group, as part of a restructuring of 
the private Vestey food, shipping and 
property business empire. 

Under the terms of a proposed deal 
the Vestey Trust will acquire Union 
International's food trading and dis- 
tribution businesses in Australia and 
Asia and its farming and property 
Interests in Venezuela. 

Hie deal worth a maximum of 
£100m including up to £24m of 
deferred payments for the Venezuelan 
property, paves the way for the liqui- 
dation of Union International a Ves- 
tey subsidiary which has been operat- 
ing under a standstill agreement with 
its banks pending debt restructuring. 

Union International is asking its 


banks to extend the standstill agree- 
ment by six months to mid-1995 by 
which time the company is expected 

to have elimina ted its rem aining debt 
and pushed ahead with the sale of its 
remaining assets which include the 
Dewhurst, Matthew's and Baxter's 
butcher shop chains, its British Beef 
businesses, its North American trad- 
ing arm and some property interests. 

Hie operations being acquired by 
the Vestey Trust represent the core of 
Union's food business with a com- 
bined profit before tax and interest of 
£11. 7m ($18.5m) last year. In the first 
six months of this year their profit 
contribution rose to £8.6m from £5.8m 
in 1993. 

The Australian and Asian food 
operations are considered to have 
strong potential and, together with 
the Frederick Leyland shipping busi- 
ness, will form the basis of a 


slimmed-down Vestey empire. 

The deal is subject to approval at a 
meeting of shareholders and prefer 
race shareholders on November 18. 
The Vesteys own all of Union Interna- 
tional's ordinary shares through their 
holding company. Western United 
Investment, and about a third of 
Union International's outstanding 
preference shares so the outcome of 
the meeting is not in doubt 

The buy-back is a blow to Mr Terry 
Robinson, Union International’s chief 
executive, who had been seeking a 
management buyout. Under him. 
Union's debts have been cut from a 
peak of £420m to £124. 6m at the end of 
last year. Mr Robinson confirmed yes- 
terday that the proposed deal with the 
Vestey Trust, coupled with the 
planned sale of the group's Australian 
property interests, should eliminate 
the group's borrowings. 


By Amfrew Jack in Paris 

Axa, one of France's largest insurance 
groups, is planning to start operations 
in Turkey next year as part of its 
policy of international expansion. 

The group, which bucked the trend 
in the French insurance sector by 
recently reporting half-year net group 
profits up 26 per cent to FFrl.5bn 
($29Gm). plans to invest $10m in a 
joint venture with Oyak, the Turkish 
investment fund to begin in April 
next year. 

The investment is one of several 
designed to broaden the group's inter- 
national basis, said Mr Claude Tondll 
director in charge of international 
development. 

The company is also set to launch a 
direct marketing company to sell 
insurance in Germany. "Germany is a 


more difficult market to penetrate 
than Japan,” said Mr Tondil referring 
to the group's recently-boosted 
operations In Asia Pacific. 

While other French insurance com- 
panies are holding back from addi- 
tional international investment, Mr 
Tondil said Axa was looking for new 
acquisitions in Europe, Asia and 
North America. 

He said about 60 per cent of Axa’s 
premium income was generated in 
Franca 

Mr Tondil said he was also looking 
in the UK for additional property and 
casualty interests, but British insur- 
ers were too over-valued. 

In North America, he said Axa was 
interested in expanding only cau- 
tiously. avoiding the natural-disaster 
prone regions, such as Florida and 
California. 




i 

V 


iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiii 

End of Month S.G.Warburg Warrant Valuations 

as at 31st October 1994 



TYPE 

CURRENCY 

spot 

STRIKE 

PUCE 

EXE IRY 

Stogie Stocks 







BHP 

OB 

AUD 

20.69 

iwa 

2.16 

29thJhm9S 
23 ed Nor 95 

Cot™ Myer 

OB 

AUD 

4.18 

4.10 

M0 


OB 

CW 

1265 

1250 

27 JO 

20th fan 96 
2nd Aug 96 

Dnui 

OB 

CHF 

1530 

1600 

26X0 

Qnng Kona 

OB 

HKD 

37 JO 

39.80 

085 

80s Mur 96 

China Light fle ftrtrer 

on 

HKD 

40 JO 

413)0 

087 

2nd fan 96 

Duo Hco« Bank 

Ofl 

HKD 

25 JO 

32.00 

0J5 

25th iu 96 

Hoag Eng Electric 

on 

HKD 

24.40 

29.20 

0.32 

6th Mr 96 

Horn KotwTeJecom 

OB 

HKD 

16.60 

15.60 

029 

24th Nor 95 

Hafcfflwn wluyu. 

OB 

HKD 

35.80 

36.00 

0.71 

21a Dec 95 

Hwaa Dndapeni 
t&kymBub 

Son Hung Kai Praprrttd 

OB 

on 

HKD 

HKD 

20.60 

I7A0 

17.00 

13.05 

5X5 

6.14 

6th Sep 9S 
21a Doc 95 

OB 

HKD 

59.30 

SOON 

1.76 

2nd bn 96 
31 k Oct 95 

Mcta%c*dkdutt 

CteB 

DM 

156 

250 

1J9 

Http Elcaro met 

on 

NIC 

55.80 

54.18 

7.18 

8th Sep 95 

Mandadori 

on 

m. 

14025 

16830 

226 

22nd Dec 95 

TeZcani hob I 

Capped OB 

rn. 

3288 

4246 

42 

30th Mir 95 

OU 

m. 

4210 

3832 

928 

14th fan 96 

Telecom tali* 2 

on 

m. 

4210 

5237 

280 

2Sth Inn 96 

Slet 1 

OH 

ITL 

4648 

4725 

644 

14th Sep 95 

Steel 

on 

m. 

4648 

6770 

205 

28th fan 96 
17th Jan 96 

lURuan Buds 

an 

no 

175 

IZ7M 

68-20 


Baskets 


AonoBon hratooc 

OB 

AUD 

103 

101 J7 

1.69 

3 id Jan 96 
3rd Feb 95 

European Airfare* 1 

OB 

£ 

418 

320 

1028 

European Airfares 2 

Cal 

£ 

418 

468.91 

45)1 

9th Mar 96 

European MllU-MndU l 

Oil 

£ 

2071 

2028J7 

2.10 

28th Sep 95 

European Multi-Media 2 

OB 

£ 

2071 

2475 

086 

2Sdl Sep 95 

European Seech 

on 

DM 

3973 

2550 

144 

IZifa bo 95 

German Mcdoncal Ena 

OB 

DM 

2695 

3000 

2.21 

3rd June 96 

UK Banka 

OU 

£ 

103 

114.73 

036 

Injun 95 
20th Mar 96 

UK hraaw 

OB 

£ 

87.15 

86.00 

1-38 

UK Food Retain 

CiD 

£ 

103.20 

106215 

1.16 

9th Nut 95 

UK Fharnaamicab 1 

Oil 

£ 

96 

98.03 

0J6 

26th Jan 95 
20th Nor 95 

UK Huuiuatuitkalt 2 

OU 

£ 

96 

87 JO 

1.68 

UK Support Service! 

UK Water Coroponkt 

Italkn faducerialt 1 

OU 

£ 

32-30 

107 JO 

009 

2nd Aug 95 

OU 

£ 

101 

104.7J 

046 

Sri. May 95 

OU 

m. 

1B594 

19665 

244 

Jin Ann 93 

Italian India* tilth 2 

OB 

m. 

18594 

24549 

61 

31st Aug 95 

Italian fadwriab 3 Moon-tod: Ofl 

ITL 

18594 

20410 

83 

18th Apr 96 

lulwa RccomnnscUtxm 

OB 

ITL 

367557 

489229 

223 

13tfa Oct 95 

SwoJigh Cyital Goody 

OB 

5EK 

106298 

112054 

1236 

20th Oa 95 

European fo HBoddin 

Ofl 

USD 

4062 

3600 

9.06 

1 0th fan 96 
Stfa Dec 95 

Indo^una 

Ofl 

USD 

0.95 

1.00 

0.11 

Korean Blue Chape 

OB 

USD 

KW1362I 

KW9000 

7j60 

22nd Dec 95 

Singapore Property 

OU 

USD 

SGD10-30 

SCDIOJM 

1-64 

19th Apr 96 

Soya pore S3 ■ , orrir 

Taipa Property 

Tauwaneae Blue Chip 

OU 

USD 

SGD9J2 

SGD 10-00 

1.04 

14th Not 95 

OU 

on 

KID 

NTD 

1055 

1201 

800 

1000 

447 

268 

2nd Jan 96 
30th Mar 95 

Tarwaacxt finance 

Indices 

Ofl 

NTD 

994 

950 

268 

26th Oct 95 

FTSE Mid-250 Index 

OB 

£ 

3SI7 

2900 

6.46 

17th Mar 95 

FTSE Mid- 250 Index 

on 

£ 

3517 

3470 

L89 

17th Mar 95 

FT5E Mid-250 badat 

OR 

£ 

3517 

3670 

0.95 

17th Mar 95 

FT5E Mid-250 Index 

on 

£ 

3517 

3900 

034 

17th Mar 95 

FTSE Mid-250 Index 

on 

C 

3517 

3945 

1.49 

I7th Jan 96 
17th Mar 95 

FI5E Mid-250 Index 

Put 

£ 

3517 

2900 

005 

FTSE Mid-250 Index 

Phi 

£ 

3517 

3470 

1.67 

17th Mat 95 

FTSE Mid-250 Index 

Put 

£ 

3517 

3270 

089 

17th Mar 95 

FTSE Mid-250 Index 

Put 

£ 

3317 

3900 

4J5 

17th Mar 9S 

BO-30 

OB 

DEM 

14.40 

16-94 

1-65 

19th Jan 96 
19th Jan 96 

BCM0 

Put 

DEM 

14.40 

16.94 

335 

Relative Performance 

Uncnor/Coic Hnhfagc 

OB 

SEK 

-3.82% 

«/■<>% 

I 23. BO 

2Ut Dec 93 

lawcntnAJMX 

OB 

SEK 

-0S7% 

W-0% 

125.80 

Zlct Dee 93 

Vobo/OMX 

OB 

SEK 

*31313% 

-10% 

407.00 

23 ni Feb 95 

VohroJOMX 

OB 

SEK 

*313)3% 

*A0% 

31930 

23 nJ Feb 95 

VoIto/OMX 

OU 

SEK 

*3103% 

*10% 

24 L30 

23 id Feb 95 


S.GWarburg 

S.G.WARBURG GLOBAL 
EQUTTY DERIVATIVES 

FOR INFORMATION CONTACT JUSTIN CHITTENDEN ON 071 4K0 0517 REUTERS PACE: WARA 

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THE HSBC CHINA 
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share as at 28th 
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US$1.79 



*, 15 % 

off electricity 

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Cl OK por rn cntJr or rr c re on doctric-ty. 
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021 423 3018 

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Sovereign (Forex) Ud. 
24hr Foreign Exchange 

Margin trading Fedby 
Competit i v e Prices 
My Fax Service 
*±071-431 9188 
fee 07 J -931 7114 
43b ■addngfaaa Asian Bond 
tendon SWIWQg 


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nfodde at bgpas duo other Dra in lie 

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loggers hnr no (puliirt 4 km destroy Ag 
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WWF 

World Wide Fund For Nature 

tfndfVUIViA&MO 
[jxem+xd Surtta*, IW-GtaiSnawtui 


This announcement appears as a matter of record onty. 

THE BANK OF NEW YORK 

is pleased to announce 
the establishment of a 


SPONSORED AMERICAN DEPOSITARY 
RECEIPT (ADR) FACILITY 

for 


LAGARDERE 

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YORK 

For further information regarding The Bank of New fork’s ADR Services, 
please contacr Kenneth A. Lopian in New >ork (2L2) 815-2084, or Michael 
McAutiflc in London (071 ) 322-6336. 


V Ito Financial Timas 
plans to publish a Survey on 


t • 

o it Tuesday, November 29 


Bristol 


Published bi Tokyo, New York, Frankfurt, ftoubaix and London, It win be read by 
senior businessmen and government officials In 160 countries worldwide. It wfll 
also be of particular Interest to the 139,000 senior businessmen in the UK who 
road the weekday FT*. If you wish to reach this Important audience with your 
services, expertise or products whHst maintaining a high profile In connection 
with Bristol, cafl: 

C8ve Radford on 


0117 9292565 or Fax 0117 9225974 
*Scm«K BBS 19B3 


FT Surveys 


9 


7 


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FINANCIAL TIMES TUESDAY NOVEMBER I 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Alarm bells ring over Telebras tariffs 

Brazil has returned to interventionism, reports Patrick McCurry 

T he Brazilian govern- tainty led Telebras's share Telebras for Telefonica de Arge 

ment’s recent decision price to Fall sharply after the and Si, 000 for Telraex. 

to cut telephone rates announcement. adh* price tS) The lack of revenues 


T he Brazilian govern- 
ment's recent decision 
to cut telephone rates 
for local, long distance and 
international calls set alarm 
bells ringing. 

Not only was there investor 
concern about the effect on the 
profits of Telebr&s, Brazil’s 
most traded stock, but more 
Importantly the government 
seemed to be returning to its 
interventionist ways. The gov- 
ernment, however, insists it is 
committed to tariff reform. 

The rate cuts were spurred 
by competition from the 
so-called US call-back compa- 
nies, which charge much 
cheaper rates for international 
calls by channelling them 
through the US, and by politi- 
cal expediency. 

Mr Jonathan Morris, an ana- 
lyst at La tin vest Securities in 
London, says that, after 
announcing a more pragmatic 
tariff policy at the end of 1992. 
“this looks like the govern- 
ment is returning to the bad 
old days of political interven- 
tion in tariffs". 

Analysts maintain ed that the 
move has failed to reform an 
artificial structure in which 
cheap local calls and standing 
charges are subsidised by an 
expensive long distance and 
international service. 

As for Telebras, the govern- 
ment-controlled phone com- 
pany. the effect on its revenues 
is hard to gauge. 

Est ima tes range from neu- 
tral to a fall in revenues of up 
to S200m next year. The uncer- 


tainty led Telebrds’s share 
price to Fall sharply after the 
announcement. 

Hie reductions, which come 
into effect today, involve a 5 
per cent cut in local rates, a 17 
to 20 per cent reduction in 
international tariffs and higher 
discounts for off-peak national 
long distance calls. 

The cut in local rates, which 
are among the lowest in the 
world, is regarded by the mar- 
ket as a populist measure by 
President Itamar Franco and 
an attempt to try to keep down 
prices as part of a government 
anti-inflation plan. 

The price cuts for interna- 
tional calls, which make up 10 
to 12 per cent of Telebras’s rev- 
enues. are a reaction to the 
“call-back” companies. 

Telebras says the reductions, 
which follow price cuts of 41 
per cent since August last 
year, make Brazil’s interna- 
tional rates comparable with 
those of overseas phone compa- 
nies. However, call-back com- 
panies say their prices are still 
significantly cheaper than 
those of Telebrds. 

For example, the call-back 
companies charge $1 to $1.50 
per minute to most European 
countries while, after the 
reductions. Telebras will 
charge S2.35. 

Mr Marcelo Vainstein. an 
analyst at Baring Securities in 
Sao Paulo, estimates the cuts 
in local and international rates 
will lead to a fall in revenues 
of nearly SlOOm next year. 

Increased discounts for 


ADR* price ($) 
70 



Jan 

Somes: FT Graphite 


*Ons ADR si .000 shares 


national long-distance calls, 
which make up half the compa- 
ny's revenues, could mean 
another SlOOm in lost reve- 
nues. But he sal’s it is difficult 
to predict the effect on the 
national long-distance market 
because of a lack of informa- 
tion on the proportion of calls 
made during off-peak hours. 

In total, the price reductions 
could mean a fall of perhaps 
$80m in Telebras's expected 
after-tax profits of around 
8600m next year on revenues of 
some Sb'bn, he says. 


T his loss could be partly 
offset by increased vol- 
ume but analysts' most 
optimistic view is that the 
price reductions will have a 
neutral impact on revenues. 
They say Telebrds 's interna- 
tional calls are still compara- 


tively expensive and long dis- 
tance traffic is largely made up 
of business users, whose tariffs 
have not been reduced. 

For Telebras's future finan- 
cial health an overhaul of the 
tariff structure is essential. 
The government has only 
partly implemented a restruct- 
uring announced in December 
1992 under which the cross 
subsidy of local service by long 
distance and international 
rates was due to be phased out. 

In addition, the government 
has not implemented the deci- 
sion to increase charges for 
basic services: Telebras's 
monthly standing charge is 44 
cents, compared with $4 in 
Mexico and $5.50 in Chile. 

The effect of this tariff struc- 
ture is that Telebras’s reve- 
nues per line are less than 
$500. compared with about S800 


for Telefonica de Argentina 
and $1,000 for Telraex. 

The lack of revenues puts 
pressure on Telebras's capital 
investment, which stand at 
about S3bn a year, half what is 
needed to cope with demand 
for lines, given that waiting 
times are up to two years. 

But Mr Renato Guerreiro, 
head of the government’s 
phone tariffs department, says 
the government was still com- 
mitted to the tariff reform, 
which was suspended in July 
when Brazil's new Real cur- 
rency was launched. 

He maintained the the gov- 
ernment was “waiting for the 
right moment politically”. But 
Mr Guerreiro said regardless of 
when the reform takes place, 
international calls would fall 
further because Telebras's 
rates were still higher than 
call-back companies. 


I n the longer term, most 
analysts expect tariff 
reform to be carried out 
following the election this 
month of Mr Fernando Hen- 
rique Cardoso, who has said he 
favours liberalisation of the 
government’s telecom monop- 
oly. 

The recent tariff cuts, how- 
ever. will not please investors 
in Telebrds. says Mr Morris of 
Latinvest. “It appears that 
while investors have been 
expecting a more pragmatic 
approach to telecommunica- 
tions in Brazil the government 
is busy paddling in the oppo- 
site direction." 


Time Warner appoints president 


By Patrick Harverson 
in New York 


Time Warner, the world's 
largest entertainment group, 
yesterday appointed Mr Rich- 
ard Parsons, 4j. the chairman 
of New York savings bank 
Dime Bancors, as its new pres- 
ident. He tikes over from Mr 
Gerald Lrvin, who remains 
chairmen and chief executive. 
\ Although the appointment of 
a banker to the number two 
sot appeared to be an unusual 
aove. Mr Parsons has been a 
member of the group's board of 
directors since 1990 and has 
also worked on the boards of 
TriStar Pictures and the cable 


group American Television & 
Communications. 

He is also a respected figure 
in local and national politics, 
having previously worked with 
New York Mayor Mr Rudolph 
Giuliani, and in Washington in 
the administrations of former 
vice-president Nelson Rocke- 
feller and former president 
Gerald Ford. His ties to the 
political, banking and Wall 
Street communities are 
believed to have played a key 
part in his appointment. 

As president at Time 
Warner, Mr Parsons will be 
responsible for many of the 
day-to-day administrative func- 
tions of the group, including 


the running of all corporate 
financial activities (with the 
help of new finance chief. Time 
Warner senior vice-president 
Mr Richard Brassier). legal 
affair s staff management and 
corporate communications. 

In a separate development. 
Time Warner was expected 
yesterday to announce the 
appointment of Mr Danny 
Goldberg as the new chairman 
of its Warner Brothers Records 
unit, the world's largest record 
company. 

Mr Goldberg, currently head 
of Time Warner’s Atlantic 
Records label is expected to be 
asked to take over the helm at 
Warner Brothers. 


Avenor moves steadily 
back to profitability 


By Robert Gibbens 
in Montreal 


Avenor. the big Canadian 
forest products group, is mov- 
ing steadily back towards prof- 
itability with higher prices and 
surging demand for pulp, 
newsprint and white papers 
and a lower Canadian dollar. 

Third-quarter operating 
profit was C$33.5m (USS24.8m), 
against an operating loss of 
C$42 .3m a year earlier, a turn- 
round of C$76m. However, 
after interest and special 
items, there was a loss of 
C$16.6m, or 25 cents a share. 


against a loss of CS12.3m, or 20 
cents, on sales of C$488m. up 
40 per cent. 

The nine-month final loss 
was C$6 1.3m. or 93 cents a 
share, against a loss of CS125m, 
or CS2.16. on sales of C$1 JSbn. 
up 21 per cent. 

Avenor said newsprint price 
increases went through in the 
third quarter and its machines 
are running flat out. Manufac- 
turing cost is down nearly 9 
per cent. US consumption will 
rise further in the fourth quar- 
ter and anotber price increase 
has been announced for 
December 1. 


A 1 00% increase in net profits. 
And we're only hall ■ done. 


Tl*e Financial Times 
plans to pobHaba 
Survey on 


Bolivia 


UNAUDITED FINANCIAL RESULTS (PROVISIONAL} OF SIX MONTHS ENDED 30.9.94 iR*. Million) 


oo Wedne sd ay, 
Novemb er 9. 


PARTICULARS 


Net Salo 
Other Income 
Total Expenditure 
ImereMinen 

Gra» Profit after interest but 

before depreciation and taxation 

Depreciation 

Pro* isinn for taxation 

Net Protit 

Paid-up equity -hare capital 
ReMfixe- excluding revaluation re>erve> 
tax per baljnve -.beet of previou> veuri 


SIX MONTHS ENDED 

YEAR 

FAIDFn 

30.9.94 

30.0.93 

uv L/uiy 

31.3.94 

3637 

3066 

6352 

2$ 

19 

54 

3285 

2833 

5868 

136 

138 

262 

244 

114 

276 

34 

43 

Mi 

f.5 



145 

71 

210 

IS9 

16! 

161 


i 

506 


With ovar tan ynn of 
o co now lc and poMcal roftwra to 
Its credit and the recent 
Inauguration of Its third 
succeiilve democratic 
government. Bolivia ts an 
Increasing strength In Latin 
America. The survey wO report on 
the country's economy, poBtfcal 
scene, financial markets, 
privatkatton policy and more. 

For more Information on 
editorial content and detafla of 
admrttafag oppertonRIea avagaHe 
In tMa survey, pteasa contact 


I Thi fisur*. he (he .14 inonih- tfiuktl ,.i) iw.es iivIumI c nl the 1 'iuurv- rolalnw h- the rr -While liiiiia Hjrd Mcl.il > Limited which uj\ 
•iiiidlfjfiuinl wnh 1 he C>«n|un> « 1 ? I Im Xpnl. I'W.i tide .wVt Oiled 2Sih April. I 1 *- «il 'he B.«ocJ Mr InJu-m.il jnJ Fiiuntul 
Rei'ifi-InKiHin 


Penny Scott In New Yoriu 

ret' i 2 in eas moo f»- 12121 6 ss K 2 -> 

Samantha Borg In London 

Tel: (-4J 71>973 4816 
1*44 71i873 3M5 

FT Surveys 


lih.re.iM.- m -lure eupiLi) ha- re-ulivd in»m ihc-mno-inn nl Pjii B i.i the 1 y, Hxunl pjjiK cmeiUNe Jeheniure-nn 22 nd May . |<w 
Reieienoe In "R. ' i* in 'Indian Rupee-.' 

Shi ir.en Inlu-tnul Knierp,i-c- Limned 


Dated. 2". H« 


Siddharth Shnruni 
Chainiun 4. Moaipag Duet lev 


Net profits up bj oxer 100*r. 

Annualised EPS up from Rs. 9.53 to Rs. 15.65 


Increasing shift to high operating margin 
businesses — sugar, air-conditioning & refrig- 
eration and chlor-alkafi 


Rights issue of.NCDs I with warrants) for Rs. 943 
million oversubscribed 


Euroissue of GDRs (with warrants) for US $ 40 
million placed 


Sugar 

- Capacity expansion of 5000 TCD to be 
completed in two phases in 1995 

- Takeover of The Cawnpore Sugar Mills 
accepted by BIFR. Current capacity of 5400 
TCD to be doubled in due course 

- Other groxxth plans on the anvil 

Airconditioning & Refrigeration 

- Significant capacity expansion for compressors 
by 1995 

Chlor-alkali 

- New plant bring set up in Punjab 


H wnnwdlfy & Ktaandal 
Ixtory on Compact 

hr innuil roniic- fwnx- 

lmtrrn j| inli*mjlH-n 

l« ji j.mrfinccmp-' B» 

Up u-u nml in uof 
.•T.ih bclp» -..a perl Mini 
•uunti > tartUMvc. 
prr«ncnidD- and lots nn . 

A9 YE XPi> OF HISTORICAL PRICES FOR 
CASH. FITL'RES. OPTIONS AND 
INDEX MARKETS 

.Vi X EARS OF RMUMENT XL INFORMATION 
ON OXER KUCTJSRMJITOES 
Similai iu Use BliirmiiMi iiuniJ in the CRD 
Cumm-In- Y eta Bunt. the fciNc ,4 1 hr 
Intuit- UKkrlr- In *kbtua h. 
tuuorul O iu CRB brfc.Teih jh ■ jtn it hln dulr 
pn-i optUu- -u KK-Oifc'K. Knidt(-R*Uci'. 
vtn*m -pr-ilirallt dc-icncdl.' 
ikmalmj tad rruf* in nuhtibi prur* 
Jucx. 1 l- mu tutu daufcju- 
IN FORMATION Dmitri X'jUI 
KR ■> FVn Srrcn LnnJna EC-IV IIIY 
TrL.4ifiii'|i-J;4l»t.i 


NEWS DIGEST 


Lower financing 
costs help lift 
Nampak in year 


was floated in April 1993. ’The increase m net 
profit was influenced to a large extant by the 
effects of the flotation on net incomin g inter- 
national revenues,” the company said. 


Shau prks (Rand) 
17 • 


Nov 93 1994 Oct 

Scares: FT Graphite 


A lower effective tax 
Nampak rate and a reduction in 

financing costs allowed 
Sha* puce (Rand) Nampak, the South 

17 - African paper and 

A packaging group, to 

1(1 . increase its attribut- 

15 lu I able profit for the year 
14 m "Vi f ended in September by 
If fU 14 per cent to R350.9m 

13 - - I I ■? ($100. 2m) from 

12 . |J R307.9m. writes Mark 

IT Suzman in Johannes- 

11 f burg. The results do 

10 f not include a further 

V, i Rio. 5m in abnormal 

So. 93 Oct Profit aristog tram the 

disposal of the Klipn- 

Sotrea: FT Graphite ^ farown paper 

machines. Operating profit rose by only 6 per 
cent to R549.7m from R5l7.9m on the back of a 
modest 5 per cent increase in turnover to 
R4.79bn from R4.5bn. However, a 6S per cent 
reduction in interest paid to Rl0.3m from 
R32.lm. combined with an almost unchanged 
tax bill at R20L4m compared to R197.9m previ- 
ously. helped improve the bottom 
line. 

The group's balance sheet remains healthy, 
with borrowings at Rl51.4m. down from 
R228-8m, representing a gearing ratio of 9 per 
cent 

Mr Brian Connell an. chairman, attributed 
the results to improved productivity, and “the 
first, albeit hesitant, signs of economic recov- 
ery". 

However, although he said that the group's 
gross margins had improved slightly to 115 
per cent of sales from 1 1.4 per cent previously. 
Mr Connellan observed that there has not yet 
been any significant increase in real private 
consumption expenditure. 

Of the group's divisions, Bevcan and the 
glass and plastics division improved profits, as 
did Divpac. Flexible and Polyfoil and most 
operations in the paper and printing sector. 
However, both Liquid Packaging and Foodcan 
reported reductions in profits. 


Malaysia to get first 
tyre cord factory 


Trinidad telecoms group 
18% ahead for year 


Seven Network to put 
A$225m into Optus 


The Telecommunications Company of Trini- 
dad and Tobago, in which Cable and Wireless 
of the UK has a a 49 per cent interest, recorded 
a net profit of TTS252m iUS$45m) for the year 
ended March 31. writes Canute James in King- 
ston. This was 18.1 per cent higher than the 
previous year's figure. 

The company, which has a monopoly on 
telecommunications services in the Caribbean 
country, said that, as in the previous year, 
there was no tax liability as a result of accu- 
mulated tax losses being brought forward. 

The profits were affected by the 25 per cent 
depreciation of the Trinidad dollar when it 


Seven Network, one of Australia's commercial 
TV station operators in. which both Telstra 
and Mr Rupert Murdoch's News Corporation 
hold minority stakes, said that it expects to 
contribute about A$225m (US$167m) to the 
Optus Vision joint venture, which was formed 
last month to develop a broadband cable net- 
work in Australia, writes Nikki Tait in Syd- 
ney. 

Optus Vision has suggested that it expects to 
spend more than A$3bn on the project over the 
next four years. 

Seven, which is taking a 15 per cent interest 
in the project, said the first injection of capital 
was likely to be in first quarter next year. 


Thi- adxrnixrmcai i- i-«utd m compliance null ihe rr<|uirrnienii ot l lie linrnuiional Muck Lxetunw of the United 
Kingdom jnri i he Kepnhlic uf Ireland Limited nhe "London Stock t\duii^'i. It due- not con-iiiuic an after or 
inxitJiion iu the public to luhvcribo for or purtha-e 4tl> -hare-. Application ha- been made lu the London Stock Fxchange 
for all i lie Ordiiurt Share- nl'ijpeaeh and U'arranis nf.XhtniM Latin Aini-ricau Inxe-imriil Tru-i PLC i— urd and lobe 
i— ned ptir-uanl to the placing to b-‘ admitted m the Ollicial Um. It is expected ihat li-tiug will become elleciice and 
-rparaic Hralinc- in the Ordnurt slum-- and Warrant- will coinnirncr on -lilt Nuieniher 1*194. 


ABTRUST LATIN AMERICAN 

INVESTMENT TRUST PLC 

• lmn,,h,rji»-d ill t.uulan-J and " J— under die l oujpiuir- Aa l9Sj with mci'l>-l*r1 uumle-r JOTK’iJli 

Placing by 

de Zoete & Bevan Limited 
of 

20,000,000 Ordinary Shares of 25p each 
(with Warrants attached on a I for 5 basis) 
at an issue price of lOOp per share payable in full on application 


Xui li'ni..-l 

Minmijt V-ilnr NiiiiiIkt 

Xit.limi.iJIF i .‘bMUW 


Share Capital 


l lniin.irt -lure- nl Jjp i-ji |i 


I— ned and in he i— urd full- paid 
Nuniin.il Vjlur N'umhrr 
t'.i.iMMI.ieui Jii.ritiii.lilili 


\hini-i I.Jtm Vi"*, h an fi.-e-m.eni Tni.i Fl.l ..ill -eek ... a. hn-.r |.,n K ienn capiial erowih h- m-e-tiuu i,t Lann Xi.ien.-a. 

IViail- nl ihe PI. are dairri S|.i ,fc-,..ln-r l*ri| uhirl. ha, been appn.ted In i|* Lund.... Mu.k 

Lxt luiu-e a, I |unn ul.tr- pljimi; n. Abio.-i Uun Xmeri.ai, line-< M n-iil Tm-t PI.*, nln- -LL-nnB Panirnlar. - l Copie- 

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; . .V m'i. , ; n>pjn ' r 1 *• r L,,,,d ,M N ** l r^-e. r ..M < uvn . .dl Manhulom.--. Lanr. Lmd.rn 

H -N till and -In.ii.L- Haul I „|. a,ul tut linliHB I III. N.nenil«-r I'.iwt Ir-.in: 


\liiiu,, I ami Vinrtii* an ln>e,uuei 
III yil-rih l-n*',- 
V«-> |M| 


de /■■eie Brian Limned 
Ehlntuir H.-n-r 
1 Mian Lane 
Lund- hi Lf -IR ITS 


WOOLWICH 

- Building Society - 


S2iXi.000.OTH) 
Floating rate notes 
due 1998 


FINANCIAL TIMES 

FINANCIAL 

REGULATION 

REPORT 


■Voncv ts hereby guvn ihat 
the notei will bear interest at 
6. IQ"- per annum from 'M 
Ocfotvr to Jtl January 

1095. Interest payable on 30 
January 1995 will amount to 
5157.10 per S 10 0P0 note and 
S 1.571) 9C per SHhi.000 mote. 


Agent: Morgan Guaranty 
Trust Company 


Financial Regulation Report n a 

monthly serv ice from the Financial Times. It provides 
subscriber, with up-to-date and (borough inrnnnation 
on u-nrlduidc rcjtulaiiirx dex clopmenu and ihcir 
implications lor ihe financial services industry. 

To ravive n FREE \ain/ i/ c - co/i y contort: 

nJTS ,IJ "v '' U ^' IJ| J‘ mw ' NL '’" kM " r ' Marker.., ; j rH.-p.trime.it. 

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Harbin Power plans to 
increase capacity 78% 

Harbin Power Equipment, one of the 22 compa- 
nies in the second batch selected by the Chi- 
nese government to seek overseas listing, 
plans to increase Us annual production capac- 
ity by 78 per cent to 6.400MW by 1998. AP-DJ 
reports from Hong Kong. 

The manufacturer and exporter of power 
plant, equipment said it wanted to take advan- 
tage of the planned major expansion in the 
country’s power generation capacity. 

Currently, the company and Its subsidiaries 
have an annual production capacity of 
3 800MW. It plans to expand its annua l produc- 
tion capacity for thermal power plant equip- 
ment to 4#»Mw by 1998 from 3.000Mw. 

Production capacity for hydro power plant 
equipment is also scheduled to increase to 
l.OOOMw annually In 1995 and then to 1,600 to 
L800MW by 1997 from 600Mw. 


Andayani Megah. an Indonesian tyre cord 
man ufacturer which is part of the Gajah Tung- 
gal Group, and a unit of Malaysia’s Hicom 
Holdings Berhad are setting up a joint venture 
to build Malaysia’s first tyre cord manufactur- 
ing plant, writes Mannela Saragosa in Jak- 
arta. 

The US$60m tyre cord plant, which will also 
manufacture nylon, rayon and polyester tyre 
cord, is expected to be completed by 1997. 

The joint-venture company operating the 
plant will have a starting capital of $75m and 
will be 45 per cent owned by Andayani Megah 
and 55 per cent owned by the Malaysian party. 

According to the agreement, the joint-ven- 
ture company will start marketing Andayani ’s 
tyre cord products in Malaysia prior to comple- 
tion of the plant. 

Hicom Holdings Berhad is a listed Malaysian 
investment holding company partially owned 
by the Malaysian government. 


Ilfs Brazil 

* *in third L 


’&G. L nil 


»ap wars . 

Barker >dii 


■a?:-*:' : . . 
oner > P&* > . 
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Klein wort Benson Private Bank announces ih.it with effect 
fn.m IM November IWJ the Mortgage \1 fl rui K ement Account 
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INTERNATIONAL COMPANIES AND FINANCE 


Barrick advances 
* 5% as Goldstrike 
output improves 


By Barnard Simon 
in Toronto 

American Barrick, the 
Toronto-baaed gold producer, 
raised third-quarter earnings 
by 5 per cent due largely to 
higher output at the flagship 
Goldstrike property tn Nevada, 
and a contribution from recent- 
ly-acquired Lac Minerals. 

Barrick’s per-share earnings 
were diluted however, by the 
Issue of 66m common shares as 
part of the Lac purchase price. 
The Lac deal closed on Septem- 
ber a 

Net earnings climbed to 
US$6L3m, or 20 cents a share, 
from $5&3m> or 21 cents, a year 
earlier. Revenues advanced to 
$2i&n from $i78m. 

Earning s growth has been 
dampened by rising explora- 
tion expenses, as Barrick 
spreads Its wings in Latin 
America and Asia. Exploration 
spending is forecast' to 
rise to ISOm next year, 


more than double 1994 levels. 

Lac’s properties in North 
America and Chile contributed 
about 80,000 ozs to third-quar- 
ter production, which totalled 
560£00 OZS, up from 418,800 ozs 
a year earlier. Output from 
Goldstrike’s Betze-Post pit rose 
to 466,500 ozs from 368,000 ozs. 

Barrick, which is now the 
largest gold producer outside 
South Africa, forecast 1994 out- 
put from its eight mines at 
more than 2&n ozs. 

Cash costs averaged $153 per 
oz in the third quarter, down 
from $202. Overall operating 
costs dropped to $168 per oz 
from $170. 

Mr Bob Smith, president, 
told analysts yesterday that he 
will be disappointed if all the 
company's advanced explora- 
tion targets on the El Indio belt 
in central Chile are not con- 
verted into proven and proba- 
ble reserves. Barrick had previ- 
ously set a target of about SO 
per cent. 


BAT’s Brazilian unit 
* falls in third term 


By Patrick McCurry 
kiSao Paulo 

Companhia Souza Cruz, the 
Brazilian subsidiary of British 
American Tobacco (BAT), 
announced a fall in third-quar- 
ter accumulated profits after 
tax to R$62.14m ($61m), from 
R$139 J2m for the same period 
last year. 

Much of the profit was 
thanks to -a sister company, 
Aracruz Celulose, which con- 
tributed R$32£5m. This was a 
result of the effect of the over- 
valued Real currency on Ara- 
cruz’s dollar debt and a recov- 
ery in world pulp prices. 

Souza Cruz’s profit from cig- 
arettes and tobacco was 
R$i5-24m, basically due to 
exports, compared with 
R$137.45m last year. 


The company, which has an 
80 per cent share of the local 
cigarette market, blamed the 
fail in profits on a 10.3 per cent 
reduction in the cigarette mar- 
ket, “si gnifican t" levels of con- 
traband cigarettes and a reduc- 
tion in tax payment periods. 

However, analysts say the 
company’s performance has 
been improving since the 
launch of Brazil’s Real cur- 
rency in July, which increased 
consumer purchasing power. 

Optimism that the Real will 
lead to increased cigarette 
sales has pushed- up Souza 
Cruz’s share price 28 per cent 
since August 20; during the 
same period Sao Paulo’s main 
stock index foil 4 per cent 
During the nine-month 
period net sales were R$740-8m 
compared with R$945.7m. 


P&G, Unilever 
, soap wars leave 
market spinning 

Consumers have yet to pick a 
winner as P&G launches a new 
detergent, writes Roderick Oram 


Interpublic to acquire media-buyer 


By Richard Waters 
hi New York 

Interpublic, the US advertising 
group, said it would acquire 
Western International Media, 
the country's largest indepen- 
dent media-buying company, 
in a deal which appeared to 
signal a consolidation of the 
US media-buying industry. 

Hie deal could also indicate 
a push by the US group into 
media-buying business in 
Europe, which is currently 
dominated by locally-based 
groups. Western's customers in 
the US include such interna- 
tional names as Walt Disney, 
Visa Interna tional and BMW. 

Media buyers purchase 


advertising space in bulk and 
sell it on to advertisers, either 
directly or through other agen- 
cies. The greater bargaining 
power available to big buyers 
has already prompted a consol- 
idation in the European indus- 
try, with specialist buying 
companies, some of them 
owned by advertising groups, 
growing at the expense of indi- 
vidual agencies’ buying depart- 
ments. 

The acquisition of Western, 
which claims to buy $1.6bn of 
air Unw and other advertising 
space a year, could indicate an 
acceleration of the same trend 
in the US. It represents the 
first big acquisition by Inter- 
public, which hr»5 annual bil- 


lings of $15bn and whose agen- 
cies include McCann-Erickson, 
Untas and the Lowe group. 
These agencies each currently 
buy their own media space. 

The planned deal prompted 
other advertising industry 
executives to suggest that 
Interpublic was preparing to 
merge all its activities in this 
area into one company, creat- 
ing a giant in the US media- 
buying industry. 

However, a spokesman for 
Interpublic denied that the 
Western acquisition would lead 
to a merging of the media-buy- 
ing operations.- “We have no 
intention of combining them. 
It’s a free-standing acquisi- 
tion.” 


This was interpreted in part 
as an attempt to calm concerns 
of the smaller US advertising 
agencies for whom Western 
currently buys space. 

European-based advertisers 
have also been exploring ways 
of expanding their US media- 
buying muscle. Saatchi & Saat- 
chi, which in 1989 wwibinpd its 
European media buying activi- 
ties in a single company. 
Zenith, is currently studying 
whether to adopt the same 
course in the US. 

Together with the acquisi- 
tion of an independent media 
buyer, Saatchi estimates the 
consolidation of activities in 
Zenith has given it about a 
sixth of the European market. 



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US biotech groups merge 
as similar moves loom 


By Daniel Green 

Two US biotech companies 
announced their merger yester- 
day, a move which could her- 
ald a series of similar moves 
from the cash-strapped sector. 

Nexagen of Boulder, Colo- 
rado, and Vestar of Sag Dimas, 
California, will merge to form 
Nexstar Pharmaceuticals. 

Nexagen was floated earlier 
this year and, althou gh it has 
the smaller market capitalisa- 
tion, appears to he the senior 
partner In the deal 

Hie new headquarters is in 
Boulder, and the nhairnian and 
chief executive of the new com- 
pany are from Nexagen. 


The transaction will be 
effected through an 
exchange of 0.88 shares of Nex- 
agen for each Vestar share. 
Nexstar will have a market 
capitalisation of about 
WMm. 

Mr Viren Mehta, of biotech- 
nology specialist research bou- 
tique Mehta and Isaly, said 
that the merger was ‘indica- 
tive of the financial pressures 
in the sector and on these two 
companies”. 

He said that Nexagen’s tech- 
nology showed more promise 
than Vestals even though Ves- 
tar already haad a product 
approved and on sale In 
Europe. 







U nder harsh artificial 
sunlight, deep inside 
Procter & Gamble’s 
laundry laboratory in Brussels, 
there seems no doubt; Arid 
Futur, P&G’s ripost in the 
Great European Soap War, and 
launched today In the UK, is 
superior to Unilever’s Persil 
and Omo Power detergents, 
f» wwing for their textile-damag- 
ing side-effects. - 
Be it blood, oil or other 
nasty, staining substances, 
Arid Futur, cleans best, c l a im 
P&G stafl But the reality of 
the £8bn ($&5hn) marketplace, 
they acknowledge, is more 
complicated than life in the 
laboratory. Consumers, bom- 
barded by clf»tnB and counter- 
claims by the two companies, 
are 'confused. . 

Unilever launched its Power 
products this spring, hailing 
them as a leap forward as sig- 
nificant for detergents as tran- 
sistors. were for electronics. 
P&G. hit back with assertions 
that Power damaged clothes, 
and showed tattered - under- 
wear to prove it. Independent 
arbiters failed to settle the dis- 
pute: wmsnnwr associations fn 
some countries slammed Uni- 
lever’s new detergent, while 
others endorsed it 
Both stops riaiwi they have 
increased the- market shares of 
their ranges of detergents dur- 
ing the Sommer. But Unilever 
admits that Persil and Omo 
Power gghw have fallen after 
every bout of bad publicity, 
and have had to be rebuilt 
through extensive promotions 
and advertising; 

Into this bruising world of 
no-holds barred marketing, 
P&G is launching Ariel futur 
(as spelt tin Continental pack- 
aging; it is called Future for 
the British). Futur “represents ' 
a considerable technological 
advance inwasbing powders” , 
says P&G. 

With its manganese catalyst 
"accelerator” in Power, UnK 
fever "stuck a rocket motor on 
a Ford Cortina. The detergatf 
can’t take 'the power”, a P&G 
spokesman said during fee 
Power fttrorc this summer.. 
”W fih Fating we've redesigned 
the car ftom fhe wheel nuts 
UP"’ *' ' 

More enzymes have been 
added to-' Improve - stain 1 




removal and an inhibitor helps 
prevent dyes transferring from 
one garment to another in the 
wash. A new bleach and water 
softener complete the formula. 
It incorporates U new technol- 
ogies and has taken five years 
to devise. About 25 per cent 
less soap powder is needed per 
wash compared with existing 
detergents, reducing packastofi 
by 30 per emit Unilever makes 
similar claims for Its Power 
detergents. 

TO substantiate its tn-house 
findings; P&G commissioned 
three independent, anonymous 
test institutes to compare 
Futur with Omo Power. Over- 
all Futur was better than 
Power at removing food, body 
soil goneral soil and grease 
stains but worse at cleaning 
drink stains. 

- But close reading of the 
results shows that the compet- 
ing powders are more evenly 
matched, making it hard for 
consumers to decide which one 
is superior tn the kitchen, 
rather than ideal laboratory 
- conditions. 

Taking a wide range of 
stains, one institute scored 14 
“wins” for Futur ever Power, 
six draws where neither was 
better and two losses to Power. 
The other two Institutes scored 
11-5-2 and 14-11-2 respectively. 

“Power is about the best of 
competing products,” a P&G 
executive acknowledges, but 
its Achilles heel is the catalyst 
P&G says despite lower con- 
centrations of the catalyst in 
the current version of Power, it 
is still attacking a wide range 
of dyes. 

Unilever says all detergents 
damage textiles and Power’s 
adverse effects will only 
become apparent outside the 
normal lifespan of a garment 
Meanwhile, it is searching for 
a way to stop the catalyst 
reacting badly with some dyes. 
'• Tutor was launched in its 
first market, Germany, some 
six. weeks ago. Officially 
launched in the UK today, it 
'wifi, hot hit shop shelves until 
January, accompanied by a 
£7m television advertising 
campaign. P&G promises no 
braking copy- 

Nevertheless, Unilever is 
bracing itself for further 
bloody encounter. 


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26 


FINANCIAL TIMES TUESDAY NOVEMBER 1 .994 


INTERNATIONAL COMPANIES AND FINANCE 


HK bourse chief to focus 
on quality of Chinese stock 


By Louise Lucas in Hong Kong 
and AP-DJ 

Dr Edgar Chen? Wai-kin, who 
yesterday was elected chair- 
man of the Hong Kong Stock 
Exchange, said that under his 
stewardship the exchange 
would continue reaching out to 
China but that he was more 
interested in strengthening the 
quality of Chinese companies 
listed in the territory than 
increasing their numbers. 

He said he would strive to 
ensure that the Chinese com- 
panies already listed in Hong 
Kong would provide bench- 
mark examples of good gover- 
nance. “Obviously, I would like 
to continue to see Hong Kong 
as a strong capital formation 
centre as well as a major trad- 
ing centre for Chinese securi- 
ties." 

Dr Cbeng, son-in-law of the 
late business tycoon Sir Y. K. 
Pao and chairman of World- 


Wide Investment, a non-listed 
part of Sir Y. K.’s business 
group, was elected chairman 
initially for one year, but if re- 
elected could serve three terms 
- as did Dr Cheng’s predeces- 
sor, Dr Charles Lee. He there- 
fore stands to steward the 
exchange through the colony's 
return to Beijing rule in June 
1997. He has strong connec- 
tions with Chinese officials, 
and is a Beijing-appointed 
Hong Kong affairs adviser. 

Dr Cheng is active in busi- 
ness circles in Hong Kong and 
Singapore, and for the past 
three years has served both the 
stock exchange and the futures 
exchange at committee level. 

Relations between the colo- 
ny's two exchanges were hurt 
last week when the futures 
exchange unveiled plans to 
launch futures contracts on 
selected equities, a move for 
which it secured government 
blessing but omitted to consult 


the marketplace in order to 
ensure confidentiality and a 
competitive edge. 

The stock exchange, saying 
the move posed questions of 
added risk and volatility, 
believes the market (including 
itself) should have been con- 
sulted. 

Dr Cheng's appointment, 
which takes effect immedi- 
ately. follows a week of council 
elections that spumed many of 
the colony's big broking 
names. 

Mr Alan Murray, director of 
Jardine Fleming, the brokerage 
jointly owned by Jardine 
Matheson and Robert Fleming, 
lost his seat, while Mr Philip 
Tose, founder and chairman of 
Peregrine Investments - one of 
the most successful local secu- 
rities and merchant banking 
houses - and Mr John Mul- 
eahy. managing director of 
UBS Securities in Hong Kong 
failed to secure representation. 


BHP cuts ties with Woodside 


By NiMd Tait 

Broken Hill Proprietary. 
Australia's largest company, 
yesterday cut its ties with 
Woodside Petroleum, the 
energy group which is the lead- 
ing participant and operator of 
the North West Shelf gas proj- 
ect, through an institutional 
placing of its remaining share 
interests in the company. 

Late yesterday, BHP 
announced that it had sold the 
28.3m shares in Woodside 
which it owned directly at 


AS4.765 each, raising AS 135m 
ttJSSiOOm). It also said that a 
further 76.8m shares owned by 
North West Shelf Develop- 
ment, a joint venture company 
held equally by BHP and Shell 
Australia, had been offloaded. 

The second tranche of shares 
was disposed of at the same 
price, raising AS366m in total 
Shell said the latter sale did 
not affect its "long-term com- 
mitment to Woodside”. in 
which it still holds a 34-27 per 
cent interest, and to the North 
West Shelf project. 


BHP also said it retained 
some links to the North West 
Shelf project through a 16.67 
per cent Interest in the LNG 
export project, and a 8.33 per 
cent share in the domestic gas 
phase. The BHP-related shares 
were sold to Were Stockbrok- 
ing, which planned to place 
them with a range of institu- 
tional and portfolio investors. 

Woodside shares closed 7 
cents higher at AS5.02 on the 
Australian Stock Exchange 
yesterday. BHP shares gained 
12 cents to A420.64. 


CRA blocks copper plant upgrade 


By NikM Tait 

The Southern Copper refinery 
and smelter at Fort Kembla In 
New South Wales may be 
closed permanently. This fol- 
lows the announcement by 
CRA, tbe Australian resources 
group ^controlled by Britain's 
RTS, that it was refusing to 
support a A$230m (US3170m) 
upgrade of the facility unless a 
jew partner was brought into 


the project to ‘'substantially” 
reduce CRA's stake. 

CRA currently holds a 60 per 
cent interest in the project, 
alongside two Japanese inves- 
tors - Furukawa with 30 per 
cent and Nissho Iwai Corpora- 
tion with 10 per cent Just over 
half the investment relates to 
environmental upgrading and 
the rest to expansion "to 
achieve a viable scale of opera- 
tion', and would have taken 


place over the next two years. 

CRA's move foLlows four 
weeks of strike action at the 
plant. Over 300 employees 
walked out on October 4 in pro- 
test at management plans to 
cut 40 jobs from the workforce 
of around 440. There has been 
minimal production since then. 

A decision on the plant's 
future is to be made by the 
Southern Copper board this 
month. 


Oki Electric 
returns to 
black but 
skips payout 

By Micfuyo Nakamoto 
in Tokyo 

Strong demand for 
semiconductors and 
telecommunications 
equipment, coupled with a 
restructuring programme, 
helped Oki Electric, the 
Japanese electrical machinery 
maker, return to profitability 
in the first half of fiscal 1994. 

Oki beat its own 
expectations and boosted 
lion-consolidated sales in the 
period by 6.6 per cent to 

Y273.1bn (US$2. 8bn) from 
Y256Jbu last year. 

The company recorded 
Y24.7bn in recurring profits - 
before extraordinary items 
and tax - compared with a 
loss of Y6.8bn previously. 

Buoyant demand for 
memory chips, particularly 
from the computer industry in 
overseas markets, and strong 
orders for telecommunications 
equipment from NTT, the 
Japanese telecommunications 
group with which Oki has 
long-established ties, were tbe 
main factors behind the 
company's improved 
performance, it said. 

Oki also benefited from a 
cost-cutting programme it 
implemented at the beginning 
of the term. Net profits 
totalled Y22.1bn against a loss 
of Yl2.4bn. 

However, tbe company, 
which still had an 
accumulated loss of Y16.5bn at 
the mid-term, passed its 
dividend. 

The company forecasts sales 
of Y530bn in the full year, 
compared with an earlier 
forecast of Y527bn. 

Recurring profits are 
expected to total Y30bn, rather 
than YlObn and net profits are 
forecast at Y27bn, rather tban 
YBbn. 


Correction 

Toshiba 

Toshiba forecasts sales of 
Y3.300bn in the year to March 
1995, not Y2,440bn as reported 
last week. 


Cautious nod for News Corp stock 


By Nikki Tait In Sydney 

The Australian Stock Ex- 
change's indexation depart- 
ment yesterday gave only a 
qualified nod to the new pre- 
ferred limited voting ordinary 
shares which Mr Rupert Mur- 
doch's News Corporation plans 
to issue this month. 

it said it would include the 
shares in the calculation of 
Australia's All-Ordinaries 
index, the stock market's main 
marker, for at least three 
months, but review the situa- 


tion after that initial period. 

If the new shares were well- 
traded and performed in line 
with the existing ordinary 
shares, they would remain in 
the index. If they traded in sig- 
nificantly different fashion, 
however, they would be 
removed. 

The shares are being issued 
by way of a one-for-two scrip 
issue, and it is expected that 
trading will start on Thursday. 

News Corp's decision to 
issue the limited voting shares 
has been the focus of much 


attention because of Mr Mur- 
doch's apparent desire to raise 
new capital without diluting 
his family's control of the com- 
pany any further. 

If investors can be persuaded 
that the limited voting shares 
are roughly equivalent to the 
existing ordinary shares. News 
Corp would be able issue more 
of this class of stock without 
undermining the Murdoch vot- 
ing position - except in a very 
limited range of circumstances. 

Last month, in a move 
designed to appeal to investors, 


News Corp announced that it 
would amend its articles at a 
future extraordinary meeting, 
so that the limited voting 
shares are promised a dividend 
premium of not less than 20 
per cent over the dividend on 
the ordinary shares, and ore 
ensured similar treatment' as 
the ordinary shares in the 
event of a bid for News Corp. 

Nevertheless, some, sceptics 
still believe that the limited 
voting shares will trade at a 
discount to the existing ordi- 
nary stock. 


& 


Japan’s paper groups mixed 


Paper 


By Emiko Terazono 
in Tokyo 

Japan's leading 
paper manufac- 
turers contin- 
ued to suffer 
from cuts In 
paper prices 
due to stagnant 
demand, but restructuring and 
cost-cutting efforts at the top 
two companies lifted earnings 
at the current level. 

Benefits from mergers 
boosted interim profits at Nip- 
pon Paper industries and New 
Oji Paper. 

New Oji was created through 
a merger between Oji Paper 
and Kanzaki Paper in October 
last year, while Jujo Paper and 
Sanyo-Kokusaku Pulp merged 
to form Nippon Paper in April 
last year. 

Earnings were also helped by 
a fall in import raw material 
costs due to the strong yen. 
Sales for the industry declined 
in spite of a rise in sales vol- 
umes due to sluggish product 
prices. 

Nippon Paper, however, said 
unconsolidated after-tax profits 


1994 Interim results (Ybn) 

Company 

Safas 

Change on 
year (%) 

Recurring 

profitst 

Change on 
year (%> 

Nippon Paper 

316.2 

-0.7 

5.6 

+39.8 

New Oji Paper 

270.3 

+25.1 

6.6 

+31.6 

Honshu Paper 

182.2 

-2.0 

3.2 

-11.2 

Daishowa Paper 

141.3 

-2.4 

-6.9 

“ 

f De^im wrpaonururr aara and id 


Sourco- Co-nparv mparn 


fell 26 per cent to Y4bn 
tS-ll.lm) as income from securi- 
ties sales fell to Y300m. 

Daishowa Paper, which, is 
currently undergoing finan cial 
restructuring from the mount- 
ing losses on stock and real 
estate investments, managed 
to reduce losses at the recur- 
ring level - before extraordi- 
nary items and tax - from 
Yll.4bn last year. 

It reduced operating costs by 
Y2bn for the first half and cut 
Interest bearing debts by 
Yll.5bn from last March to 
Y423.1bn. 

Honshu Paper blamed its 
profits decline on falling paper- 
board prices. After-tax profits, 
however, rose 2.6 per cent to 
Yl.4bn due to a fall in depreci- 
ation costs. 

For the full year to next 


March, the companies are 
expected to see a rise in sales 
in tandem with the rise in 
industrial production and 
hikes of paper prices. 

Nippon Paper revised up its 
unconsolidated earnings fore- 
cast for the full year and now 
expects a 21 per cent rise in 
recurring profits to Yll.Sbn on 
a 2.1 per cent increase in sales 
to Y640bn. 

New Oji expects a 43.8 per 
cent rise in recurring earnings 
to Ylo.lbn on a 12 per cent 
sales increase to Y545.3bn, 
while Daishowa sees a recur- 
ring loss of Y12.8bn on a 32 
per cent rise in sales to 
Y284bn. 

Honshu sees current earn- 
ings falling 13.9 per cent to 
Y6.8bn and sales declining 0.6 
per cent to Y366.6bn. 


New lipstick line boosts Shiseido 


By Emiko Terazono 

A new smudge-free lipstick has 
made an impression on profits 
at Shiseido. with tbe leading 
Japanese cosmetics manufac- 
turer posting a moderate rise 
in interim recurring profits. 

Non-consolidated recurring 
profits - before extraordinary 
items and tax - for the first 


half rose 0.9 per cent to 
Y15.9bn (US$163mj, while over- 
all sales edged down 1.5 per 
cent to Y196.8bn due to a sharp 
decline in sanitary products 
sales. After-tax profits 
advanced 1 per cent to Y7.8bn. 

Sales of Shteeldo’s new lip- 
stick line, launched in July, 
totalled a record 22m units in 
the first two months, helping 


sales of the company’s cosmet- 
ic's division rise 1.5 per cent to 
Y140.7bn. Revenue from its 
beauty salons, foods and drugs 
division fell 1.8 per cent to 
YlZSbiL 

For the full year to next 
March, Shiseido expects parent 
recurring profits to rise 02 per 
cent to Y32.5bn, and sales to 
Increase 02 per cent to Y392bn. 


NEWS IN BRIEF 


Challenge Bank 
advances to 
A$40.3m 

By Nikki Tait 

Challenge Bank, the Western 
Australian banking group, yes- 
terday announced a profit after 
tax and ab normals of A$40-3m 
(US$29 -9m) in the year to end- 
September. This compared 
with A$21.4m last year. Operat- 
ing profit, before abnormals 
and tax. rose to AS65.4m from 
A$32.4ml 

Challenge attributed the 
improved performance to the 
diversity of its business and 
the relatively buoyant Western 
Australian economy. - 

MEM signs gold pact 

MIM, tbe Queensland-based 
metals group, and Haoma 
North West, a smaller Austra- 
lian minin g company, have 
signed an agreement to 
develop the Nolan's gold proj- 
ect in North Queensland. The 
total capital cost of the project, 
in which MIM has a 50.1 per 
cent and is manager, is put at 
A$47m- 

Rawa deal agreed 

Command Petroleum, the Syd- 
ney-based company, said that - 
together with three other joint 
venture partners - it had fina- 
lised a contract to develop the 
Raws oil and gas field In the 
Bay of Bengal. Partners are 
Videocon Petroleum. Rawa Oil 
(Singapore) and the govern- 
ment-owned Oil & Natural Gas 
Corporation. 


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Austral ia and New Zealand Banking Group Limited 
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Banque Nationale de Paris 
Baverfschc Vereimhank AC 
Boatmen’s Bankot'Kansas City 
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FBS Ag Credit, Inc. 
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FINANCIAL TIMES TUESDAY NOVEMBER ! 1994 


INTERNATIONAL CAPITAL MARKETS 


US Treasury prices fall back on profit-taking 


By Frank McGtrty In New York 
and Conner MkkMmann 
In London 

US Treasury bond prices fell 
victim to profit-taking yester- 
day morning as traders reacted 
to the first in a series of impor- 
tant economic reports due out 
this week. 

By midday, the benchmark 
30-year government bond was 
% tower at 94&, with the yield 
rising to 7582 per cent At the 
short end, the two-year note 
was down A at 100£. to yield 
7562 per cent 

After the market rang up 
solid gains on Friday, prices 
receded in early trading yester- 
day. With the long bond Jump- 
ing by about a point to close 
last week's action, traders pru- 
dently decided, to stop back a 
little. 

to spite of the retrenchment, 
the positive mood appeared to 

Electricity offer 
in Thailand 
oversubscribed 

By WHIam Barnes in Bangkok i 

The first flotation of part of 
T hailand ’s electricity industry 
has attracted funds worth 
□early S8bn - driving the offer 
price of the Electricity Genera- 
tion Co (Egoo) to Bt22 a share. 

“It’s getting to be quite unbe- 
lievable - we knew the share 
would be popular but this has 
surprised us,” said a member 
of the Jardine Fleming team 
co- managing the offer. 

The indicated price range 
had been Btl7-Bt20 but this 
was lifted Because the local 
portion of the offer - a total of 
147m shares -* was oversub- 
scribed at lease 50 times and 
the international tranche of 
the remaining shares over- 
subscribed mote than 20 times. 

At Bt22 a gftare Egco's mar- 
ket capitalisation is nearly 

BtSbn. 7 


hold. The shift in sentiment 
suggested that the market may 
have touched bottom before 
Friday’s disclosure that the 
economy had expanded in the 
third quarter at an annualised 
rate of 3.4 per cent, much 
stronger thaw analysts had 
forecast 

Although the headline figure 
could well have rattled the 
inflation-sensitive tong end, 
bonds held steady chi Friday 
and then climbed in relief over 
the initial cairn reaction. Dur- 
ing the session, the yield 
slipped below 850 per cent, an 
important psychological mark 
broached a week earlier. 

Yesterday, however, trades 
were looking ahead for fresh 
guidance. The first piece of 
news in this week’s busy 
schedule came at ntid-morotog. 

The Purchasing Management 
Association of Chicago 

nnnmmrflri alight g a in s to both 


its October Index of business 
activity and the prices-pald 
component of the monthly sur- 
vey. The mildly unfavourable 
developments bad little impact, 
however. 

Instead, attention was 
directed at today’s national 
survey of purchasing managers 
and Friday's crucial report on 

GOVERNMENT 

BONDS 

conditions in the labour mar- 
ket. In general, the reports 
wav expected to be benign for 
bonds. 

■ European government bonds 
drifted lower in moderate vol- 
ume, dragged down by weaker 
US Treasuries. With France 
closed for the day and market 
participants to other countries 
winding down for today's All 


Saints' holiday, Hows were 
thin and dealers reported little 
investor activity. 

■ After opening on a stranger 
note, German bunds ended the 
day nearly % point tower, slip- 
ping on a bout of fixtures sell- 
ing which pushed the Decem- 
ber bund fixtures contract on 
Ufle as tow as 9858, down 0.41 
on the day and close to the 
8950 level considered to repre- 
sent key technical support 

The slippage was attributed 
to the weakness of US Trea- 
suries and to dealers paring 
back long futures positions 
established last week. 

Adding to the softer tone 
was the Bundesbank’s 
announcement that ft plans to 
issue a new 10-year bund on 
November 8 and 9. After its 
recent floating-rate issue, it 
has returned to its more tradi- 
tional fixed-rate bonds. 


■ UK gilts also slipped in light 
trading, shedding some of the 
gains posted on Friday. Weak- 
ness in neighbouring bond 
markets and slightly stronger 
than expected money supply 
data fuelled the profit-taking, 
which pushed the December 
tong gilt fiifures contract down 
g to 100ft. 

The short end of the yield 
curve came under particular 
pressure from reviving talk of 
an imminent increase in base 
rates. 

Interest rate jitters have 
turned the market's focus to 
today’s release of the Bank of 
England's quarterly inflation 
report and tomorrow's meeting 
between Mr Eddie George, the 
governor of the Bank of 
England, and Mr Kenneth 
Clarke, the chancellor of the 
exchequer. The December 
short sterling fixtures contract 
fefi 0.11 to 93.47. 


■ Swedish bonds opened tower 
after Moody’s Investors Ser- 
vice, the international rating 
agency, said late on Friday 
that it was placing Sweden's 
foreign currency debt on 
review for downgrading on 
concerns about the country’s 
public-sector deficit 

However, with few foreign 
Investors left in the Swedish 
market and domestic investors 
reluctant to sell, prices held up 
relatively well and ended the 
day only slightly tower. 

The market remains par- 
tially underpinned by wide- 
spread hopes for a “yes” vote 
in the European Union referen- 
dum on November 13. 

Moreover, Moody's threat to 
downgrade Swedish debt may 
serve Finance Minister Goran 
Perason as a tool to help push 
budget cuts through parlia- 
ment In January, observers 
said. 


NTT finds strong UK demand for $300m deal 


By Graham Bowfey 

Japan's Nippon Telegraph and 
Telephone yesterday launched 
a $300m offering of five-year 
bonds priced to yield 24 basis 
points over US government 
bonds. 

The deal, NTT’s first offering 
in the dollar sector for almost 
two years, met strongest 
demand from UK institutional 

INTERNATIONAL 

BONDS 

investors, joint lead manager 
JP Morgan said. Bonds woe 
also sold to Japanese accounts 
in London, non-Japanese buy- 
ers In the Far East and inves- 
tors in Switzerland and Ger- 
many, JP Morgan raid 

The offering, which' was 
believed to have been swapped 
into fixed-rate yen, was well 
received by other syndicate 


managers, who the bonds 
were fairly priced. 

One syndicate manager in 
London said: “The bonds could 
have been priced slightly 
tighter than they were bid: to 
get deals away at the moment 
you have to maka sure they 
are priced attractively ." 

Recent five-year offerings by 
Triple A credits like Japan 
Development Bank and Oester- 
reichische Kontrollbank are 
now trading at around 20 haute 
paints above US Treasuries, 
which makes the NTT bonds 
attractive to investors on a 
yield basis, JF Morgan said. 

The launch spread was main- 
tained after the bonds were 
freed to trade. JP Morgan said 
that the offering was one of 
only a few recent dollar (teals 
in which the pricing spread 
has not widened out immedi- 
ately after being launched. 

Interest in the US dollar sec- 
tor has picked up recently, par- 


NEW INTERNATIONAL BOND ISSUES 



AllMUlt 

Coupon 

Price 

Maturity 

Fees 

Spread Book nerar 

Hammer 

US DOLLARS 

ITL 

% 



% 

t>P 

Sanwa Finonce Antbaf 

400 

w 

100 

No«3004 

Undfaio. 

Same kdL 

Nippon Telegngh & Tetaphone 

300 

7.76 

S9^495R 

Nov. 1999 

025R 

+24 f7Kr%-99) XP-MorgarVPsribas 

VBI 

SmtanderML* 

30bn 

4.70 

100.22R 

Fotx2000 

Undhec. 

Dgbn Europe 

Cofiri IntL* 

Ifitro 

120 

100.00 

NOVJ2004 

umsac. 

Dalwa Bsope 

D-MARKS 

Food QnadR Europe 

200 

730 

9933H 

Dec. 1999 

120R ■ 

t46(6MK-99) Dresdner Bar* 


Rnal mom and nan-eatable unbm stated. The ytafcl spread (over relevant government bond) at launch la suppled by the load 
manager. MJidtaad. jHo a U n g rate note. Ft feted re-ofler price; fees tee shown at the ra-oflar level a) Coupon pays B month Libor + 
25bp irrtfl 16/11/99 then pays 60bp thereafter. 


ticularly from institutional 
investors in the Far East, and 
spreads in the dollar secondary 
market have tightened, traders 
said. 

In the D-Mark sector, Ford 
Credit Europe launched a 
DM200m offering of five-year 
bonds targeted at retail inves- 
tors. 

The bonds were priced to 
yield 45 haste points over the 
equivalent German govern- 


ment bonds and the proceeds 
were believed to have been 
swapped into floating-rate 
D-Mark. The spread widened 
slightly to around 49 basis 
points over after the bonds 
were freed to trade. 

The offering was launched 
following the success of a simi- 
lar issue by BMW in Septem- 
ber, Lead manager Dresdner 

Rank said. 

The prospects for the D-Mark 


sector are encouraging, one 
trader said. Retail investors, in 
particular, are being attracted 
by the relatively high yields 
and current low German infla- 
tion rate, he said. 

The yen sector saw two new 
bond issues, targeted almost 
exclusively at institutional 
investors in Japan, including a 
Y30bn offering of bonds due 
February 2000 by Santander 
InternationaL 


GDR issues in 
India about to 
enter new phase 


By Martin Brice 

The Indian government’s 
announc ement over the week- 
end that it Is changing the 
rules for companies making 
international equity offers may 
mean the market for global 
depositary receipts issued by 
Indian companies is about to 
enter a new phase. 

The move was prompted by 
large inflows of foreign capital 
- about £Ubn of Indian global 
depositary receipts (GDRs) 
have been issued so far this 
year - and the Indian govern- 
ment has acted on two fronts. 

First, it has said companies 
no longer need to use capital 
within 12 months of raising it. 
However, to stow the flow of 
funds into fndia, proceeds, 
must now be kept abroad until ■ 
they are needed. 

Second, the government has 
banned the use of warrants, 
which give investors the right 
to buy shares at a fixed price 
In the fixture. Issuing warrants 
was sometimes used to make 
offers more attractive, since 
they could be priced more 
cheaply than' existing shares. 
“You tended to use warrants 


when yon needed to get the 
issue away," said one banker 
involved with GDRs. 

Finding the use of warrants 
is likely to mean a two-tier 
market emerging for GDRs, 
some bankers believe. First-di- 
vision companies will be able 
to raise capital successfully 
with GDRs but second dxviston 
companies may struggle. 

Blue-chip companies like 
Bajaj Auto, the highly-success- 
ful Indian scooter maker, will 
always have a following among 
investors. However, GDRs 
issued by second-tier compa- 
nies may join the .85 per cent of 
Indian GDRs trading at a dis- 
count to the local shares. 

“There is a flight quality 
and liquidity^ ; said one 
banker. •' '*■*.+ ^i 

Ironicafly. bankers agree 
that the need for.;' action was 
- prompted bylhe^saccpfis of the 
Indian govexmmflxt’si-Jiberalisa- 
tiom programme; as- companies 
have moved'to take -advantage 
of access to freemarket inter- 
national capitaL “This Is a gov- 
ernment is .hot ffrdte sure 
if the market should rate or 
whether It wants to Control the 
market,’' said a banker. * 


Merrill opens in Jakarta 


By Manueta Saragosa 
in Jakarta 

Merrill Lynch has set op a 
joint venture with Indonesia's 
FT Persada Dan Fasti Lestaxi, 
making it the first US-based 
securities firm to open an 
office in Jakarta. 

“We have clearly identified 
Indonesia as probably one of 

the best opportunities in the 
world, if not the best opportu- 
nity, for our industry,” said Mr 


David . Komansky, executive 
vic^president of Merrill Lynch. 

The office will deal with cor- 
porate finance, trading, under- 
writing, asset management and 
; research, and, wiH be headed by 
Mr Mitchell . Shivers, who is 
moving from Merrill Lynch’s 
Nbw York office. 

. Merrill Lynch will own 80 
per cent of FT Merrill Lynch 
, Indonesia .while the Indonesian 
- company wifi own the remain- 
ing 20 percent . 


GOVERNMENT BONDS 

Hod Day's 

Coupon Pats Pries change YMd 


Weak Month 


4VuatraBa 

fedgtan 

/Canada' 

; Qsranak 
Fiance 

Germany Tim 

K*ny 

Japan N 


SjOOO 09AM 
7.750 10AM 
0500 05/04 

7.000 12AM 
STAN 8.000 05/88 

OAT 5.500 04AM 

7.500 Q9AM 


-0280 1053 1017 1030 
-0180 8.40 047 058 

-0250 8.10 9.11 092 

-0170 099 a 80 007 

- 7.53 7-58 

- - BJS 824 

-0430 734 736 7.03 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND 0IP) FUTURES 

(UFFQ* Lira 200m TOOBm of 10016 

Open Sett price Change Ugh Low Ed. vol Open M. 
Dec 10081 99.80 -087 10087 99.72 27718 89401 

Mar 9938 99.06 -063 9026 8026 100 5216 

■ ITALIAN QOVT. BOND (BTP} FUTURES OPTIONS (LHTQ UraBOOm IQOths of 100% 


FT- ACTUATES FIXED INTEREST INDICES 

Price IncScee Mon Day's Rl Accrued xd ad 

UK 6Ha Oct 31 ctumge % Oct 28 Interest ytd 


— Low ootgjon yMM— — Median ooMpon yield- — 'High emvon yield — 
Oct 31 Oct 28 Yr. ago Oct 31 Oct 28 Yr. ago Oct 31 Oct-28 Yr. ago 


8300 

08AM 

813000 

-0.770 11.73f 

1134 

1134 

nice 

Dee 

• CALLS 

Mar 

Dec 


4300 

08/99 

102.7480 

+0.100 4.10 

4.14 

334 

Mar 

4.100 

, 12AJ3 

919510 

- 4.74 

4.71 

4.61 

9950 

138 

233 

• 098 

177 

7350 

10AM 

973400 

-0.180 7.61 

736 

7.63 

10000 

133 

2.10 

133 

334 

2000 

06AM 

813600 

-0310 1135 

1131 

1132 

10080 

079 

190 

1.49 

334 


USTraeauy* 


6.000 08/99 

6.760 11AM 
9300 1QAH 
7.250 08AM 
JJSOO rt1/B4 
8300 04AM 


ECU (French Govt) „ OOOO 04AM 
London CKMing, "New Yak ertd-dof 
t On* Pnduafeig » *N «**v tax at izs par 
Pitos* us, UK In raids. afem ki dodmd 

US INTEREST RATES 


Ore manlh . 
7*t Itnnwfe. 

S Dm moan 

SunaH_ 
• Onieor— 


RxLtexb at lotmenOorL. 


. 99-24 -8/32 .836 830 8.74 

86-30 -10/32 0.72 8.73 832 
102-16 -11X32 8lOS &71 &88 

96-01 -M2* 724 7.83 7.08 

04-12 -S/32 630 632. 7JB7 

83.1300 - - ..966 -630 . 8.76 

..YMdK inert Mat feM. 

OMt payst* by noratadanti) 

aouoK IMS Mmamr 


Treasury BSs and Band YMdi 

454 Itaayw 

525 TTwejer 

6.18 Hnyaar 

170 linear 

110 »y«ar 


BOND FUTURES AND OPTIONS 
France. * 

■ NOTIONAL FRENCH BOND FUTURES (MATTF) October 26 


at WL Mrt. Can 2 mb Pun 824. p rentes dot* open kit, CM* Men Pun 3C3B6 


Spain 

■ NOTIONAL 3PAW3H BOND FUTURES 9*EFf) 

Open Sett price Change High Lew Eat vnL Open bit 
One .* 87.37 816* -061 87-42 8158 33982 73,485 

Mr aaoa s slot -are aooa mm 107 107 


■ W0T10WAL UKQTRITURBSCLIFFg* E9Qro032ndsof 100M 

Open Sett price Change Ugh Low Eat vat Open ht 
Dec 101-03 100-19 -0-12 101-03 100-15 29764 108334 

Mr 100-00 99-22 -0-12 100-00 10080 1 47 


■ LONG CAT FUTURES OPTIONS 0JFFQ £60,000 64tha of 100M 


1 Up to 8 years (24) 

2 6-15 yeere (23) 

3 Over 15 years (6) 

4 Li o d oo rr w Wea (B) 

5 Al stocks (81) 


8 Up to 5 year* (2) 

7 Over 5 yews f1 1 ) 

8 AI stocks (13) 

Dabantr o ee and Loans 

9 Debs & Loins (77} 
Aseagofenes isaw n rrcn jk 


11194 -008 119.04 

13132 -025 13167 

155.12 -030 15538 

174.83 40.10 174.66 

13176 -020 13103 


18189 -0-01 18171 

172.63 -0.03 17268 

173.10 -003 17115 


127.09 -020 127 JO 


963 5 yra 
1130 15 yra 
1057 20 yra 
1247 hredf 
1086 


8.68 &66 120 1' 

867 154 7.09 &; 

152 149 7.18 . &: 

066 167 730 

Wtatton 6% 

Octal Oct 28 Yr. ago 


143 189 

7.22 8.94 

7, 20 182 


184 157 

-830 7.42 

178 7.44 


5.07 Up to 5 yra 
436 Over S yra 
4j41 


4J71 234 

189 .114 


Motion 1t>% 

: Oct 3t ■ 00 ^ 28 ^ Yr. itgo-j 

" -237 "Z85 ' T.52-''' 
170 170 297 . 


SyeeryWd — — IS year yWd — ~ 28 yaw yWd— •— 

Oct 31 Oct 26 Yr. ago Octal Oct 28 Yr. ago Octal Oct 28 TT-ago 

173 170 7JM 9.68 034 115 163 S39 126 '9 


1 ne shown stave. Coupon Bands: Lour 0M-7W1kj ModknK SM-IMM; Hgfa: 11M and owsr. T fta yMd. yU Ifea- » dsts. 


FT FIXED INTEREST INDICES 

Oct 31 Oct 2B Oct 27 Oct 26 Oct 25 Yr 1 


High* Low* 


GILT EDGED ACTIVITY INDICES 

Oct 28 Oct 27 Oct 28 


Oct 26 ’ Oct 24 


Goat Satan (UK) 81.04 9131 9058 90JJ8 8040 10236 107.04 6834 GB Edged bragafeM 727 81.1 909 873 * 643 

Hurt Interset 107.74 10731 10634 107.08 107/48 12436 13337 10160 S^lay average 793 814 84.4 : * 84.T •’ 843 

Mar 1004. Oowment Sscutiias ISgh rtics coopasllon: 12740 pn/39. low 48.180/1/72 Rrad Wsresi high slnos oomplsdon: 13337 (2VU99 .tar 9093(1/1/79. Barts 100: OouMniisiit6scuWss 1V1 IV 
26 and Red Moran 1020. SE adMy indesa itasssd 1974. 


FT/ISMA INTERNATIONAL BOND SERVICE 


Intanrlonil bandfe ferntfch tne 8 an adoquas secondly nraMLI 
Issosd BM Oftir Ct«. YMd 


I prion at 7»0 pan n OcWier 31 

























t- 


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i 1 i ; k u:m -I ssA mi ■ s*jp 

« -£Wt; sm 


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solutions of unusual depth. 


Fixed Income trading floor, MHan 



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G 1994 J.P. Morgan & Co. Incw peroted. J.R Morgan SeewitBl Inc. Mwntwr SIPC. 

















financial times 


TUESDAY NOVEMBER 


1 1994 



COMPANY NEWS: UK 


GrandMet taps new 
market for $500m 


By Richard Lapper 

Grand Metropolitan, the food 
and drinks group, is to raise 
SSOOm (£3 16m) in the United 
States through an issue of per- 
petual fixed rate preferred 
securities, a financial instru- 
ment similar to preferred 
stock. 

The issue, one of the biggest 
In the US preferred market this 
year, is part of the group’s 
efforts to reduce its short-term 
debt and diversify funding 
sources. It follows a ?L2bn zero 
coupon bond and a $600 m. 
Eurobond issue earlier this 
year. 

Part of the attraction is the 
tax advantages linked to the 
way the deal has been struc- 
tured. A new subsidiary set up 
as a limited partnership in the 
state of Delaware, will issue 
the securities and then lend 
the proceeds back to the UK 
parent. 

The coupons on the inter- 
company loan will be tax 
deductible. Delaware company 


law allows businesses to be 
classed as partnerships for tax 
and companies for reporting 
purposes. 

"We have developed a struc- 
ture which provides the eco- 
nomic equivalent of a parent 
issue of preferred stock at an 
attractive cost.” explained Mr 
Nick Rose, group treasurer of 
GrandMet. "It will further 
lengthen the maturity profile 
of our Funding and will 
improve gearing and interest 
cover." 

Mr Calum Osborne, execu- 
tive director, capital markets, 
at Goldman Sachs, co-lead 
manag er of the Issue and book- 
runner, said the deal could be 
a model for other companies 
seeking to raise capital in the 
US. 

Although the new securities 
will be classified as "minority 
interests" and give the com- 
pany a similar degree of flexi- 
bility as an equity issue, fund- 
ing costs will be lower than an 
issue of preference shares and 
only slightly more expensive - 


40 basis points more according 
to Mr Rose - than an issue of 
debt 

UK and other European 
companies have ventured into 
the US preferred market over 
the last five years, but 
this is the first time a UK 
group has issued preferred 
securities. 

“Preferred securities are low 
cost, non-voting securities, 
[and] represent an attractive 
and important scarce of non- 
dilutive, quasi equity capital, 
which to date have been 
unavailable to UK corpora- 
tion," said Goldman Sachs, 

GrandMet also hopes to 
widen its investor base in the 
US, arguing that the paper 
should prove attractive to 
retail investors. 

“Jt is an important develop- 
ment in the evolution of UK 
and other foreign issuers to 
access the fixed rate preference 
share market", said Mr Bruce 
Macfarlane, a managing direc- 
tor at Merrill Lynch, the other 
co-lead manager. 


Acquisitions help Danka 
advance 58% to £21. lm 


By Richard WoHfe 

Danka Business Systems 
yesterday announced a 58 per 
cent rise in interim pre-tax 
profits as the office equipment 
supplier continued its expan- 
sion across the US. 

The company, which is 
quoted in the UK but operates 
mainly in the US, reported pre- 
tax profits Of £21.1m (£13. 3m) 
on turnover up 67 per cent to 
£236m (£141. lm) In the six 
months to September 30. 

The sales increase was 
underpinned by 17 acquisitions 
costing $2lm f£13m) in the first 
half, and organic revenue 
growth, of 14 per cent ' 

Mr/ Mark Vaughan-Lee, 
chafrman , said Danka now 
held a 2.5 per cent market 
share in both the US and the 
UK, with the latter expected to 
double in the short-term. This 
year the company alma to 
establish operations in conti- 
nental Europe and expects a 5 
per cent market share within 
five years. 


"If you are operating in 
Houston or London, the copier 
industry worldwide is abso- 
lutely standard. We feel our 
formula can be carried Into 
any area." he said. 

Overall profit margins were 
maintained as the company 
passed on manufacturers’ price 
increases of about 5 per cent 
Margins on which stand at 
roughly 50 per cent 
Supplies and maintenance 
accounts for almost half of 
turnover and the company 
claims revenue of $1,200 a 
month from the latest genera- 
tion of colour copiers, com- 
pared with $80 from 
black-and-white copiers. Cus- 
tomers typically sign a one- 
year maintenance contract, 
which can be cancelled after 
three months’ notice. 

Net interest costs rose 46 per 
cent to £l.B3m (£l.25m). 
Long-term bank loans rose 42 
per cent to £62.5m (£44_2m) at 
September 30, when gearing 
stood at 134 per cent 
Earnings per share rose to 


7.5p (5.5p) and the interim divi- 
dend is 0 Jp (0.75p). 

The company also 
announced the acquisition of 
American Business Equip- 
ment, an Ohio distributor of 
Sharp equipment, for $7.6m 
satisfied by 1.62m shares. 
American reported pre-tax 
profits of Sim on turnover of 
$16m last year. 

• COMMENT 

Danka has a consistent tra ck 
record of boosting profits and 
turnover through ac qnfgitinns 
in the fragmented US market. 
While the European photo- 
copier market is just as frag- 
mented. few US companies 
have achieved growth on the 
continent through acquisitions. 
Analysts forecast pre-tax prof- 
its ranging from £41m to the 
house broker’s £45m this year, 
but these could fluctuate 
according to the strength of 
the dollar. The upper figure 
gives a p/e of 19, which is high 
considering the risks of the 
expansion strategy. 


£5.2m purchase for 
Olives Property 


By James Whittington 

Olives Property Is continuing 
its restructuring with a further 
acquisition and a rights issue. 

The company yesterday 
announced It had agreed to 
buy a portfolio of properties 
from Burford Holdings for 
£5Jhn, of which £4£m will be 
paid in cash and the rest in 
shares. 

The five retail warehouse 
and retail properties in the 
north west of England, which 
are all let, produce a total 
rental Income of £471,650 a 
year, representing a net initial 
yield of 8.8 per cent. Total 
rental income, before the 
acquisition, was running at 
£L86m a year, said Mr Tony 
Grant, Olive's chairman and 
joint chief executive. 

In May, the company com- 
pleted a £10-3m rights issue 


with which it acquired Huby 
Estates, a property investment 
concern in the north of 
England, and Zhicshire, a pri- 
vately owned property invest- 
ment company with properties 
in Swindon and west London. 

The latest buy will increase 
retail warehousing as a propor- 
tion of Olive's portfolio from 3 
per cent to 14 per cent Net 
portfolio worth after the acqui- 
sition will be £25m. 

Olives recently reported pre- 
tax profits of £224,404 on turn- 
over of £753,558 for the six 
months to June 30. Net assets 
increased from £5.51m to 
£l5.5m, principally because of 
the rights issue. 

Meanwhile. Olives 
announced it had appointed Mr 
Geoffrey Lawson to its board 
as a non-executive director. Mr 
Lawson has extensive experi- 
ence in the property sector. 


C&W confirms 
£40m purchase 
of BT Marine 

By Alan Cane 

Cable and Wireless, tbe 
UK-based telecommunications 
company, confirmed yesterday 
that it is baying the offshore 
cable-laying division of British 
Telecom, one of its biggest 
competitors. 

C&W (Marine) will pay 
about £40m for BT (Marine). 
BT will remain a ship owner 
in the Atlantic Cable Mainte- 
nance Agreement 

BT (Marine) operates six 
ships and employs 450 people 
with a turnover of some £68m. 
C&W (Marine) has 740 staff 
and a turnover of around 
£80m. Its fleet of nine includes 
the world's largest cable-lay- 
ing vessel, the Cable Venture. 

BT is disposing of non-core 
activities in order to concen- 
trate on global telecommunica- 
tions services. 


Samax 
seeks £ 16 m 
in issue 
and placing 

By Kenneth Gooding, 

Mining Correspondent 

Samax, which is developing a 
graphite mine in Tanzania and 
a gold mine in Ghana, bopes 
to raise about £l6m this 
month with an issue and plac- 
ing of new shares, which will 
be floated on the London Stock 
Exchange. 

The company was set up in 
1989 by Mr Michael Marti- 
ueau, its managing director, 
and Mr John Park, operations 
and finance director, who each 
have more than 25 years expe- 
rience in the minerals busi- 
ness. partly with British Petro- 
leum and more recently with 
Cluff Resources. 

Samax's activities so far 
have been financed primarily 
by the Addax & Oryx Group, 
described in tbe pathfinder 
prospectus yesterday as a pri- 
vate, Europe-based group 
involved in trading and 
related operations in Africa. 
Addax will remain a substan- 
tial shareholder after the plac- 
ing by stockbrokers Credit 
Lyonnais Laing. 

Mr Martineau said: "The flo- 
tation will give Samax access 
to capital and a higher profile. 
Exploration is the excitement 
for our future; our portfolio is 
already valuable and a higher 
profile will increase the num- 
ber of projects offered to us." 

The prospectus says that 
both the graphite mine, at 
Merelani, some 14km south 
west of Kilimanjaro airport in 
Tanzania, and the gold mine, 
at Prestea In south west 
Ghana, are scheduled to begin 
commercial production in the 
first half of 1995. 

The pre-tax net present 
value of the group's interest in 
these mines is calculated by 
independent consultants to be 
about £33m. 

Samax also has Interests in 
mineral exploration projects 
in Tanzania, Ghana, Congo 
and Senegal. Mr Martineau 
said these projects were typi- 
cally In areas where there was 
previous evidence of gold min- 
ing and where there was 
potential for economically 
recoverable reserves. Not 
enough work has been done on 
these projects for any value to 
be ascribed to them. 


Heron’s creditors stifle a yawn 

Christopher Price finds financial interests have overcome apathy 


Plight of the Heron 

a August 1001: Gerald Ronsort. ft™*"* 
pHed for six months and fined £5m tor his 
part in the Guinness fraud trial. 

9 October 1991: Bonds. wWCftHeron^«d v 
extensively, reach trading taws bZuncft. 

• January 19» Ronson admits toalra*ime 

£200m on US property market hi past four 
years. 

9 March 1992: Debts reach £1 «4bn on net 
agaets of £585m. Heron asks banka and 

bondholders for afl debts to be 
rescheduled. 

9 Apri 1902: Results to Mwch 30 show fast 

loss - of £1 00m - in the company's 2S 

year history. 1 

9 . April 1993: Lord Boafdman becomes 
Heron chairman; Ronaon remataa chief 
executive. 

9 May 1993: Ronson agrees £4m five-yew 
salary package with Heron. 

9 September 1893: Debt rescheduling 
agreed- Ronson’s ownership dBuied from 
100 to 5 per cent 

9 April 1994: Heron defaults on payments to 
bomtaoldefs. 

9 May 1994: Bondholders demand payment; 
restructuring plan tails; Heron pot up far 
sale. 

9 IBMe HNVA. run bv Steven 





B oredom has been among 
the biggest problems 
laced by the corporate 
financiers trying to stitch 
together the offer for Heron, 
which was published yesterday 
after five months of careful 
negotiations. 

“Heron has been through so 
many crises, restructurings 
and meetings over the past 
three years that everyone 
involved is frankly bored to 
death with it,” said one banker 
close to the negotiations. 

"They just want the situa- 
tion over with." 

Not that any apathy over the 
proceedings interfered too 
greatly with the various par- 
ties’ financial interests. Heron 
creditors are split into two 
basic groups. First, there are 
those who were the subject of 
yesterday’s offer from HNV 
Acquisition - namely creditor 
h anks , numbering around 30, 
several thousand bondholders 
and other shareholders of 
Heron Group. These are owed 
a total of £374m. 

The second group comprises 
creditors of Heron’s subsid- 
iaries, who are owed around 
£22dm. HNV’s bankers have 
secured the agreement of this 
group to the Heron restructur- 
ing. provided the main Heron 
creditors accept the offer on. 
the table. 

This group is divided into 
UK and Spanish property inter- 
ests. There are about 35 credi- 
tors to the UK side, owed in 
the region of £120m. The 18 
creditors to tbe Spanish inter- 
ests are owed the balance. 

The UK creditors to the sub- 
sidiaries were the easier of the 
two to bring on board, accord- 
ing to sources close to the 
negotiations - partly because 
their loans are secured on a 
strong portfolio of properties. 


and also because several bank- 
ers belonged to both sets of 
creditor groups. 

The offer document puts pro 
forma net assets for the UK 
business at £202m. However, 
the net asset figure for the 
Spanish side only reaches posi- 
tive territory after an agreed 
Injection of some £17m from 
HNV on completion of the 
deal. 

Negotiations on this part of 
the deal were politely 
described as “strenuous" by 
one of the bankers present: 
“The Spanish were worried 
that they might lose money on 
this. There was some tough 
talking." 

That done, the deal must 
now be sold to the bankers, 
bondholders and shareholders 
of the parent company, some of 
whom face a second dilution of 
their investments in just over 
a year. Under a £l.3bn refinan- 
cing agreed in September 1993, 
the banks and bondholders had 
their debt converted into 
senior and junior debt. Tbe 
senior bank debt is about 
£120m. while the senior bond 
debt amounts to £18Qm. There 
is also some £74m of junior 
debt. 

HNV is offering £450 in cash 
or 300 HNV shares for every 
£1.000 of senior bonds, £60 or 40 
shares for every £1.000 of 
junior bonds and £7.50 or five 
shares for every 1,000 common 
shares. 

HNV says it is “optimistic” 
partly because tbe banks con- 
cerned have been aware for 
some months of the terms pro- 
posed. A steering committee of 
the frontline lenders has been 
authorising Heron's banking 
facilities. 

It has also had access to the 
mam de tails of the offer since 
the first document was pub- 


lished five weeks ago. 

The attitude of the bond- 
holders is less predictable. It 
was their decision last April- 
insisting that Heron make a 
payment previously defaulted 
on - that precipitated the fail- 
ure of the refinancing and the 
company being put up for sale. 

"We will definitely be analys- 
ing this document and letting 
bondholders know exactly 
what they are getting out of 
this offer," said Mr Gary 
Klesch, managing director of 
Klesch & Co, an investment 
group. 


“It still doesn't look very 
attractive to us." 

However, there are signs 
here too of weary Investors 
wanting it all to come to some 
sort of conclusion. "Heron has 
been leaking so much money 
in fees while all this has been 
going ,on. I'll be glad to get any- 
thing out of it," said one bond- 
holder yesterday. 

Privately both Heron and 
HNV are hoping, in the 
absence of more positive 
approval, that the apathy fac- 
tor will play an important part 
in gaining approval. 


Rise and fall of a colourful empire 


Mr Gerald Ronson built up the Heron 
empire from the 1960s. first through a 
move into petrol retailing and then into 
the UK property market in the 1970s. A 
colourful character, he was renowned for 
his charitable causes. He moved into the 
US property and financial services busi- 
nesses a decade later and it was the 
decline in that market In the late 1980s 
which started Heron's problems, writes 
Christopher Price. 

Heron moved into the booming Ameri- 


can thrift business - the equivalent of 
British building societies - by baying 
Pima in tbe early 1980s. By 1984 Pima 
was claimed to be the fastest-growing 
financial institution in its home state of 
Arizona. 

But from being potentially one of the 
group's biggest earners, Pima became a 
huge drag on its finances. By 1989 tbe 
thrift industry had over-extended and col- 
lapsed as ambitious borrowers got into 
difficulties. Pima began to cost Heron 


some £40m a yean it was tbe business to 
which Guinness paid much of the £5.8m 
for Heron’s s upp ort in the Distillers bid. 
Heron returned toe money. 

As debts mounted, Mr Ronson was 
forced to sell assets, a protracted affair 
given the size and variety of his empire. 
The disposals included petrol stations, 
video distribution, leisure interests and 
car distribution. This culminated with tbe 
sale of tbe Heron Motor Group for £l6m, 
leaving just the property company. 




Mid-States 
raising and 

By James Whittington 

Mid-States, the US motor parts 
distributor quoted on the USM, 
has announced plans to go 
ahead with a delayed issue of 
some $15m (£9.4m) in new ordi- 
nary shares in the US along 
with the implementation of an 
American Depositary Receipt 
programme. It also plans to list 
on Nasdaq to expand its US 
shareholder base. 

Shares in the company, 
which operates through its 
subsidiary Mid-State Automo- 
tive Distributors of Nashville, 
Tennessee, rose 3p to 78p yes- 
terday. 

Mr Paul Dumond, company 
secretary, said the move to a 
US listing was because of “a 
general lack of interest from 
London investors in small US 
businesses". The company 
might also seek a full quote in 
London. 

The funds raised from the US 


plans fund 
US quote 

issue will be used to pay off 
bank debts of $23m and to help 
the acquisition of distribution 
centres and retail stores 
throughout the US. It bought 
two businesses in Mississippi 
for $2.8m in ApriL 

Mid-States also reported a 21 
per cent fall in pre-tax profits 
for the third quarter to Sep- 
tember 30, from £2m to £1.6m. 
£230,000 of which was attri- 
buted to the losses in acquired 
businesses. Turnover increased 
by 28 per cent to £21. 8m 
(£17.1m). 

In the ninp months turnover 
improved 22 per cent to £58.7m 
(£4Sm) while pre-tax profits 
rose by just 5 per cent to 
£4.85m (£4.61m). 

Earnings per share dropped 
to 2.7p (3.7p) in the quarter and 
to 7.4p (8.2p) for the nine 
months after an increased tax 
charge. There has been no divi- 
dend so far this year - a total 
of 0.75p was paid In 1993. 


FT Managed 
Funds Service 

From today, the Financial 
times will no longer be pub- 
lishing tbe cancellation price 
on unit trusts - the minimum 
redemption price. This follows 
changes announced by the 
Securities and Investments 
Board in September, designed 
to liberalise the industry's pri- 
cing structure. 

Trusts no longer have to 
publish cancellation prices, 
though these will still be 
available from fund managers, 
and from today are allowed to 
Impose exit charges. 

In place of the cancellation 
price, the FT will be publish- 
ing notes advising on exit and 
other fund charges. 


Calltina at premium 

Shares in Calluna, disk drive 
manufacturer, showed a 42 per 
cent premium to the flotation 
price of 65p when they closed 
at 92p on the USM yesterday - 
the first day of trading. 




Cones - 

Total 

Total 

Currant Date of 

ponding 

for 

last ■ 

payment payment 

dividend 

year 

year 


Danka Business Int 

0.9 

- 

0.75 

- 

1.5 

Edinburgh Inca — _ 

— fin 

0.04O 

Dec 21 

- 

0.04 

- 

Renting Chinese _ 

— fln 

0.5 

Dec 22 

- 

0.5 

- 

GBE . 

Int 

0.5 

Jan 3 

- 

- 

1.25 

Lowland Imr Co — . 

_fin 

6 

Dec 21 

5.8 

9.3 

9 

Panther Secs 

— int 

1.1 

Dec B 

• 

- 

- 


Dividends shown pence per share net except where otherwise stated. tOn 
increased capita!. §USM stock. <r Maiden dividend. 


NEWS IN BRIEF 


RECRUIT, the employment 
agency owned by Mr Tony 
Berry, former chairman of 
Blue Arrow, has acquired Euro 
Professionals for £650,000. Euro 
Professionals and Recruit’s 
recent acquisition, the Mary 
McCoombe agency, have a 
combined turnover of £4J25m. 
SAFELAND has acquired 75 
per cent of Salim ann Hannan 
Healy, a commercial property 
auctioneer, for up to £495,000, 
including £247.500 which will 
become payable if SHH shares 
are sold in next year. 
SEDGWICK GROUPS wholly- 
owned French credit insurance 
broking company. Cabinet Bil- 
let. is to acquire Cabinet 


Dragon, a specialist credit 
insurance broker based in Aix- 
en-Provence. 

SIND ALL (WILLIAM) share- 
holders approved acquisition of 
Morgan Lovell and change of 
company's name to Morgan 
SindaH Also, of the 4.41m new 
ordinary shares subject to the 
placing and open offer. 2.36m 
(53.6 per cent) were taken up. 
Valid applications were 
received in respect of 506,338 
shares, or 19.9 per cent. 

WORLD OF LEATHER: Of the 
4.02m shares available in its 
recent l-for-2 rights issue, 2.4m 
were pre-placed and 1.17m 
taken up representing 89.3 per «s 
cent. - 




This announcement appears as a matter of record only. 



Nomura Bank International pic 

U.S.$ 1,000,000,000 Note Programme 

Arrangers 

Nomura International pic 
NOMURA BANK (Deutschland) GmbH 

Programme DeaJers 
Nomura Bank International pic 
Nomura International pic 
NOMURA BANK (Deutschland) GmbH 

We are pleased to announce that 

we have been awarded the following long term rating 

Standard & Poor’s 
AA- 


Nomura Bank International pic 
1 St Martin's-le-Grand 

London EC1 A 4NP Tel: 071-929 2366 Fax: 071-626 0851 




^HICKSON 


NOTICE IN RESPECT OF BEARER BONDHOLDERS 


Tfri- rtMicr is imp •run! jnJ n.i]uir» (he immcdulc aikminn or holders ■•( ilv 
Bonds. 1 1 holders arv in ,m> Hunt* .is in ihc arum iIms should lake. >hc> Oiuuhl 
SIHI-Uli an inJcpcnJcul luuiw'ull adii-cr aultkiios'd under ihc FnsilKUl Soi'RXs 
Atl IWMikiihiiul dclas. ■ 

HICKSON CAPITAL LIMITED 
i Ihc "Issuer" I 

i incnrpxawd in Jcr*-\ umlcr life: Cnrnpinic-. iJtrt) 1 Law, ISM lu 

£49.000.000 

~ pei uM. Ci*ini«r GipiryJ Bum), .Vsii 
nhc 'Bonds*) 

FLurunh-nf •»! a -uh-n.linau.iJ ha-i- b* 

HICKSON INTERNATIONAL PLC 
i msinp s-ju-d in fin-land under de CompuiKTs Acl I'UH) 
and inn cn i Me min ' jvrccnl. 

F.setunpijHc Rok-cmjNc Prclenrmc Shares 
■luc J(«U m die Issik-r i ihc "PrcTcieiKC Slures") 

NOTICE OP REQUIRED CONVERSION AND REDEMPTION 

Nui&i' is IsTvhv «ivcn inhnIikT, nl life.- Bond' I Ihc " Bondholder-" i Itial pur-sun 
lo Conihltini *hC i Ihc Roods ihc Issuer has JcKrmiTn.il in tmten all ihc 
Bonds into Prclcrenu- Shan-, im jctunlaiuT with Cmii'iuii llliaiut ihc Bonds i 
ulnch Pielcn-mc Shan.-, shall (hen he redeemed Inrihuiih upon ihcir allmmrni. 
Es.fr omsumlinc muons cried Bund miff he tomcnnl on l| a Dnnsfrr, (‘"M 
llhe "Rnfuitnl r,mscTsiii) tJale'i iniuonr ft- (creme Share Infeir-a will Hr paid 
rm the Bonds m respect ul the p/nud (rum and irKludinc VMi lira:. I'NJ in hut 
ciclifeJm? If*: Rnpuml Cni'crHi Date anil •ulUea*: martrueiitanj inN.nhlnic 
untnmru.il Bands mi il* R 1 .- 1 jum. 1 J C-iivurMnn Crate. The PaTcimiv Sluics * ill 
he redeemed on ihe Knpnn.il CnnsctMon Dale at their PjnM.lp Value of IIHIp 
each. Supplemental Interest ■■( M *J‘p u ill he paid in rc-yctf »*f <-xh mnl id life; 
Bonds contend on ilv Rebuild Cancpn Dare. 

Payments ul principal and accrued iniercsi will H- fiu-lr. in aeconianc.; with the 
Terms ai»J Conditions ,.i ih- U*r»ls. a£antJ surre ruler irf ilte Bunds ai ihc s[vcificd 
mfiLt *H am nl the Pas mu ami CiaiseisMi Apt-ms listed tvinw. F,cli tkml .huuM 
tv presumed tor com nsaal tow her with all inmuiuicil Coupons appertaining 
ihcrcK fuihnp »lixli Ihc amount ol any -ach diis'inu unmanned ("uiipiuis will 
he drduUrd firm ihc sum due tor pnymcie m ihc Rct| lined Cimtertntn Dale 
Each amount so deducted will tv paid ill llle manner mcnliuned above jc.hiim 
sjrrrroVr nl ihe tuLiine niwstn-,: Cuuput at ans lime prim iu the t-spiry m n years 
Inm the due i laic lor payment ul suet) Coupon. Lrtcunscrtcd Beixfri will tvcinnr 
snid unless ptcCTihrd lm paymcnl within the [vriud nf I ' jvjn ln.«ll tile Retjuiml 
Ciimcr-nm Dju 

PRINCIPAL PAYING AND CONVERSION AGENT 

Uni<n Bank m Sw iimiaul BjMvfsirjvv 4>. CII-WUI Zurich 
PAVING AND CONVERSION AGENTS 
Uninn Bank of Swu.-crlaifel. Union dc Bampics Sui-.-c- tUiwniKurpi S A . 
I— Ueadmlull Streu. VvVt CrmirRuf 

Lunik m, EC'V JIJI. L-2HII Ln*cmhnnv 

Hr Hick wo Capital Limited / tVoi em/bi 


\ 


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COMPANY NEWS: UK 


M':‘ .. 



FINANCIAL TIMES TUESDAY NOVEMBER i 1994 * 

Inspirations to launch 
own airline next spring 



By Michael Skaplnker, Leisure 
Industries Correspondent 

inspirations, the tour operator 
which floated on the Unlisted 
Securities Market last Decem- 
ber, is to launch its own airline 
next spring. 

The- airline, to be called 
International Airways, will be 
run by Mr fiamonn Mullaney, 
former managing director of 
Caledonian Airways, British 
Airways’ charter airline. 

- Int e rna tional Airways is to 
lease three new Airbus A32Q 
aircraft, to be delivered in 
April 1995. 

Mr Vic Fatah, Inspirations* 
chief executive, said the 
launch of the airline posed no 
threat to the company’s future. 
He said other airlines which 
had run into trouble, such as 
Laker Airways, Air Europe and 
Dan- Air, had done so because 


of problems with scheduled 
services. 

International Airways will 
operate only in the charter 
market. 

Mr Fatah said Inspirations 
had decided to launch the air- 
line because the price of char- 
tering other companies' air- 
craft had risen in recent 
months. He did not think the 
Increases were a temporary 
phenomenon. 

The company said the three 
aircraft would accommodate 
nearly all Inspirations’ winter 
customers. 

Mr Mullaney said, however, 
that the aircraft would give 
Inspirations slightly more 
capacity than it needed for its 
own summer customers. 

The reason for the disparity 
was that winter flying involved 
using the aircraft to reach 
long-haul destinations such as 


India. Summer flights were to 
destinations such as Palma in 
Majorca, which is near enough 
for one aircraft to make the 
same journey several times in 
a day. 

The company would have no 
difficulty selling the excess 
summer seats to other tour 
operators, said Mr Mullaney. 

The new airline would not be 
dependent on rival tour opera- 
tors to All excess capacity on 
its winter flights as all seats 
could, if necessary, be taken up 
by Inspirations’ customers. 

Mr Fatah said that Inspira- 
tions was on target to fulfil 
its flotation undertaking that 
it would acquire or start up 50 
travel agency outlets in its 
first year. 

He said the company had 47 
retail outlets so far, which 
were being run by the travel 
agency chain AT Mays. 


Looking forward to the 
end of the price war 


James Buxton on The Herald’s postponed float 



empire 






\ >:• i • 







S hockwaves from the 
newspaper price war 
have extended for beyond 
Fleet Street. For The Herald, 
the Glasgow-based morning 
paper, the resultant loss of 
sales has helped postpone its 
-stock 1 exchange flotation, 
which was expected to take 
place in mid-1995. 

Caledonian Publishing, the 
paper’s owner, badly wants to 
escape the treadmill of heavy 
interest payments on the debt 
taken on when management 
bought the business from Lon- 
rho in May 1992. Lonrho sold 
George Outran, as it was then 
called, for £74m in a deal 
organised by the merchant 
bank Robert Fleming, the lead 
investor. 

The company had to raise a 
further £20m for working capi- 
tal and to buy the newspaper 
presses, which had been 
leased. 

Though costly, the MBO was 
a cause for celebration in Scot- 
land. A new Scottish company 
hnd been born and The Herald 
had escaped the dutches of an 
owner which did little to 
strengthen the business. But 
the past two and a half years 
have not been as successful as 
the buy-out team — led by Mr 
T.iam Kan e, chief executive - 
had hoped. 

The Herald, founded in 1783. 
Is one of Scotland’s two quality 
dailies, mainly serving Glas- 
gow and the west of Scotland. 
It is more cheerful and 
broad-minded than The Scots- 
man, whose heartland is 
around its Edinburgh base and 
whose circulation is more than 
80, 000 compared with The Her- 
ald’s current 111,000. 

■ Caledonian Publishing also 
owns the Evening Times, the 
Glasgow evening paper, and a 
n umb er of. magazines, includ- 
ing the Scottish Farmer. Its 
turnover last year was £59m. 

After the buy-out Mr Kane, a 
former News International 
executive, embarked on 
strengthening the two newspa- 
pers and reducing their operat- 
ing costs. 

The company invested £2m 
In on-screen page make-up and 
in introducing new sections to 
The Herald, devoted to busi- 
ness. homes and gardens, jobs, 
property and sport 



Limn Kane: still uncompetitive 
despite cost cutting 


The Evening Times Tarmnhpd 
a weekend newspaper. 

A series of cut-backs in the 
advertising, circulation and 
production departments have 
reduced staff numbers in the 
group from 1,045 at the time of 
the MBO, incurring excep- 
tional costs of film. By the 
end of thfe year the headcount 
win have fallen to 813. 

Yet The Herald’s circulation 
has never regained the peak of 
125.000 reached in February 
1992. The newspaper dropped 
“Glasgow” from its title but 
any benefit to sales was can- 
celled out by economic gloom. 
Average circulation in the year 
to September 1993 was 115.000 
(119,500). 

Despite expensive TV adver- 
tising, The Herald has not 
made as much progress as it 
had hoped outside Strathclyde 
region, where sales now stand 
at about 30.000, 

“Economic recovery is under 
way now but it is led by manu- 
facturing rather than consump- 
tion," said Mr Kane. 

Caledonian Publishing's 
operating profit foil from £IQm 
In 1992-93 to £8m In 1993-94, 
with a drop in operating mar- 
gin from 17 to 14 per cent 

In July Mr Kane told staff: 
"Despite a lot of work in reduc- 
ing costs, we are still hugely 
uncompetitive compared with 
the newspaper groups we face 
in the daily battle for readers 
and advertisers." 

He launched a further pro- 
gramme of cost cutting and 
redundancies, this time biting 


into The Herald's editorial 
department, and trimmed a 
staff pay rise. 

Caledonian Pub lishing also 
had to go back to its banking 
syndicate, led by the Royal 
Bank of Scotland, to borrow a 
further Cfim. Al thoug h it hn< 
repaid £5.5m of the £43m it 
took on in 1992. it faced having 
to defer repayment of £2m 
because of its inadequate profit 
performance, and took on 
another £3m to cover further 
redundancies and other costs. 

That means interest pay- 
ments, which had declined 
from £6m in 1968-93 to £5.3m in 
1993-94, will rise to about £5.6m 
this year. 

The price war has only 
aggravated matters. Mr Kane 
says the cut in the price of The 
Times last year to 30p did not 
make much difference to The 
Herald; but this June the Daily 
Telegraph cut its price from 
50p to 30p, followed by a fur- 
ther price cut by The Times 
and a cut by The Independent. 

Though the bulk of the circu- 
lation of The Herald is pro- 
tected because most of its read- 
ers buy it for its Scottish 
coverage, the price war 
reduced the paper's sales by 2 
per cent this summer. A cut in 
the The Herald’s cover price 
was out of the question. 

However, the largest single 
effect of the price war. says Mr 
Ron MacDonald, Caledonian 
Publishing's finance director, 
has been to reduce the price/ 
earnings ratios of newspapers 
on the stock exchange. “Until 
there Is a change of sentiment 
regarding national newspapers 
as well as regional^, then the 
Caledonian float can wait” he 
says. 

It is projecting pre-tax profits 
of £5 3m for the current year 
and Mr Kane says there has 
recently been some improve- 
ment in advertising. A float 
next year, he says, is “still a 
possibility”. 

A flotation would have other 
benefits for The Herald. *Txn 
still waiting for them to deliver 
the product I know they are 
capable ot but don't seem to 
have the finance to achieve. ’’ 
says Ms Christine Tulloch, 
media director of Fauids 
Advertising, one of Scotland's 
leading agencies. 




Dfn-RNATKWAL rRIV*TE BANKING 


, On l November 1994, 

National Westminster Bank Finance (C.I.) Limited 
will become 

Courts & Co Financial Services (C.I.) Limited. 
The company is part of the Courts & Co Group, 
che private banking arm of 
the National Westminster Bank group. 


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31 


Third promising treatment makes company one of best in sector 

British Biotech new cancer drug 


By Daniel Green 

The first clinical trials of a new cancer 
treatment from British Biotech, revealed 
yesterday, showed that the drug has no 
significant side effects and triggers a 
potentially useful reaction in volunteers. 

The drug, code-named B8-10010, is the 
third of British Biotech’s cancer drugs to 
show promise in trials. 

The success so far of the others, led by 
Batimastat, has made the company one of 
the test share-price performers this year 
in the UK and US biotechnology sectors. 


Yesterday, the shares rose ISp to 598p, 
giving a market value of almost £300m. 
making it the tenth biggest in the UK and 
US sectors combined. 

BB-10010 was tested on 3fi healthy volun- 
teers. As well as demonstrating its safety, 
tests on the volunteers showed that the 
□umber of white blood cells in the blood 
increased, as predicted in animal trials. 

Quantitative measurements of this effect 
will be made at the next stage of trials. 

The drag has two potential uses: to pro- 
tect the bone marrow from damage during 
chemotherapy and to mobilise white blood 


cells so that they can be “harvested” from 
the blood before chemotherapy and rein- 
jected afterwards. Currently, patients have 
bone marrow itself removed before chemo- 
therapy and replaced afterwards, an awk- 
ward and painful treatment 
• Tepnel Life Sciences, the biotechnology 
company, has signed a marketing deal for 
its Daras technology, a product for screen- 
ing DNA patterns in infectious diseases. 
Peers, the New York-based subsidiary of 
the Long-Term Credit Bank of Japan, will 
seek suitable licensing or joint venture 
partners for Tepnel in Japan. 


Improving the survival index 

Daniel Green and Tim Burt analyse biotech investment prospects 


Biocompatibles 
considers offer 
despite 
imminent 
flotation 

By Tim Bwt 

Biocompatibles International, 
the research company aiming 
to raise £40m from its immi- 
nent flotation, was yesterday 
said to be discussing a possible 
takeover offer. 

The loss-making company, 
which has developed a new 
type of contact lens, was 
expected shortly to announce 
the pricing for its shares as 
part of a placing and Interme- 
diaries offer. 

Directors of the company, 
however, have recently been 
considering proposals for a 
joint venture, merger or sale. 
The bid is thongbt to have 
I emerged only after the publi- 
cation last month of its path- 
finder prospectus. 

That showed that Biocompa- 
tibles, wbich describes itself as 
a manufacturer of medical 
devices rather than a biotech- 
nology business, had accumu- 
lated losses of £9.77m at the 
end of June, and warned that 
investment in the company 
involved a higher than normal 
degree of risk. 

Robert Fleming, sponsors to 
the issue, said impact day had 
□ot been delayed, adding that 
“there had never been a fixed 
timetable for the pricing”. 

If the flotation goes ahead, 
the group is expected to have a 
market value of about £80m. 

Of the £40m which is being 
raised, £25m will be placed 
firm, with the balance avail- 
able to meet retail demand 
through intermediaries. 

Panther makes 
£1.13m for 
six months 

In its first results since taking 
over Etonbrook Properties in 
July, Panther Securities, the 
property company headed by 
Mr Andrew Perloff, reported 
pre-tax profits of £l.l3m for 
the six months to June 30 
against £707,354 for the year 
to December 31. 

The result included a 
£920.000 profit ou the disposal 
of shares in Cementone. for- 
merly Multitrust. 

Panther now has 85 per cent 
of Etonbrook. Mr Perloff said 
that although the acquisition 
had brought £2 .5m in cash and 
£2 .2m of uncharged properties 
before the minority interest, 
the benefits would not be 
apparent until the second 
half. 

Tnrnover amounted to 
£3.47m (£3. 28m for 12 

months). Earnings per share 
were 49.3p (33.8p) and an 
interim dividend of l.lp is 
declared. A l.6p final is antici- 
pated. 


I s the UK biotechnology 
sector now becoming 
respectable? 

British Biotech has consoli- 
dated its position in the 
world’s top handful of biotech- 
nology companies by market 
value, and others, such as CeU- 
tech and Scotia, are making 
steady progress through clini- 
cal trials. 

But investors have yet to be 
convinced. 

British Biotech is alone 
among those joining the mar- 
ket in recent years to see Us 
shares remain above the flota- 
tion price. 

And the sister sector in the 
US continues to labour under 
the burden of poor sentiment. 

Investor scepticism in the US 
has left companies there in 
serious financial difficulties. 
Accountants Ernst & Young 
say 50 per cent of the industry 
has sufficient capital only for 
the next two years. 

In its latest biotechnology 
annual report, the linn has cut 
its survival index - the time 
until the cash runs out - for 
the median US company from 
34 months to 25 months. Some 
26 per rent of companies are 
scheduled to run out of cash 
within a year unless they can 
find new sources of finance. 
This is happening at a time 


By Joan Gray 

Northumbrian Fine Foods, the 
USM-quoted cake and biscuit 
maker, continued its recovery 
with an increase in interim 
pre-tax profits from £104,000 to 
£355,000. and may return to the 
dividend list once a group reor- 
ganisation is completed. 

The recovery was helped by 
a continuing improvement in 
the manufacturing side, fur- 
ther growth in the distribution 
business and a five months’ 
contribution from Jesse Old- 
field. the cake maker NFF 


when Investor confidence In 
the sector is at a low ebb. 

There has been a series of 
failures three In the last 
two weeks alone - of drugs at 
the latest stages of clinical 
trials, when most of the uncer- 
tainties ought to have been 
eliminated. 

The consequence of failure is 
usually a slide in the compa- 
ny’s share price and an unfor- 
giving mood among investors, 
most of whom have yet to 
warm to the sector. Without 
the confidence of City or Wall 
Street Investors, biotech com- 
panies have turned for funding 
to drugs companies. Deals 
have been concluded, for 
instance, between Cell tech and 
Merck, Proteus and American 
Home Products, and Celltech 
and Bayer of Germany. 

The strategy is risky because 
pharmaceuticals companies try 
to buy control of a biotechnol- 
ogy company’s products. 

Mr Bernard Taylor, chair- 
man of the acquisitive drugs 
company Medeva, warns that 
biotech companies which seek 
support through allian ces are 
"selling their birthrights". 

Nevertheless. Mr Louis da 
Gama, executive director of the 
Bioindustry Association, says 
that “mergers and acquisitions 
are likely to be the dominant 


bought for £2 .56m in April. 

Operating profit for the six 
months to September 30 was 
ahead at £586,000 (£288.000). 
with £221,000 (nil) from acquisi- 
tions. Turnover was up at 
£12-3m <£&09m), with acquisi- 
tions contributing E3.76m (nil). 

The company is reorganising 
its structure to increase effi- 
ciency and reduce costs, said 
Mr Philip Wilbraham. chair- 
man. This will also enable it 
“to resume dividend payments 
when appropriate earnings and 
gearing levels allow”. 

Earnings were 0.58p (0. 2Sp). 


British Biotech 

Share price (pence) 



Jan 1904 Oct 

Source FT Graphite 


aspect of the Industry over the 
next five years". 

Biotechnology company 
executives recognise that stra- 
tegic alliances may cost a com- 
pany dearly in terms of lost 
future earnings. 

They follow two simple strat- 
egies to limit the damage: 

• Good news items about 
progress, however minor, in 
drug trials is published. Little 
effort is made to point out that 
success at the early stages 
means little. 

Less than one third of drugs 
that successfully complete 
Phase I trials eventually 
become products, according to 
stockbroker Lehman Brothers. 


Shares in GBE International, 
the engineering company, fell 
5p to 33p, their lowest level of 
the year, following the 
announcement of losses for the 
first half of 1994 and the 
immediate departure of its 
finance director. 

The company said its pre-tax 
loss of £3.95m. against profits 
of £l.08m, followed a review of 
its order book, costs and man- 
ufacturing processes. Turn- 
over fell by £3.3m to £15m. 

Mr Gerald Edwards, chair- 
man and chief executive, said 
the company was now trading 


• Drugs are pushed through 
trials quickly because the more 
advanced the clinical research, 
the higher the price it fetches 
in cash-raising negotiations. 
Some borderline drugs that 
might have been dropped by a 
larger company make it 
through to the late stages of 
testing. Only in the glare of 
large scale triala do they show 
up their weaknesses. 

But these tactics risk l ulling 
investors into thinking their 
company is doing better than it 
really is. 

“Some UK biotech companies 
are asking us to accept ‘good 
news 1 without so much as even 
a scientific meeting abstract let 
alone a peer reviewed publica- 
tion," complains Mr lan Smith, 
an analyst with Lehman 
Brothers. 

He says that UK biotech 
companies are not as vulnera- 
ble to failure as many of 
their US rivals because they 
have broader development 
portfolios. 

Nevertheless, the statistics 
imply that some of the UK bio- 
tech sector's drugs that now 
look promising will fail at 
some stage. 

The sector may be approach- 
ing respectability, but it is in 
its nature to continue to 
deliver a few nasty surprises. 


profitably but it would still be 
in loss at the year end. He 
added that he was optimistic 
for 1995. 

Although losses per share 
were 5.53p (earnings 1.37p) an 
initial Interim dividend of 0-5p 
is being paid and a final divi- 
dend of at least Ip is expected. 
Last year there was a single 
payment of 1.25p. 

The core process engineering 
division suffered operating 
losses of £3. 87m (profits 
£1.3m). Packaging profits 
improved from £6.000 to 
£158,000. 


Northumbrian Foods 
continues recovery 


GBE shares down to 
33p after fall into red 


NEWS DIGEST 


Campbell & 
Armstrong 
cuts losses 

Campbell & Armstrong, the 
shop and office fitting group, 
cut pre-tax losses from £ 1.88m 
to £198,000 in the six moutbs to 
June 30. 

Turnover in the period rose 
by 8.6 per cent from £24. 5m to 
£26 .6m, Last year’s figure, how- 
ever, included £168.000 from 
discontinued operations. At the 
operating level there was a 
profit of £95.000, against a defi- 
cit of £912,000 last time. 

The pre-tax outcome was 
helped by the absence of excep- 
tional items - last year the 
company boobed an £815.000 
loss on disposal of a subsidiary 
undertaking, less a release of 
closure provisions of £78.000 
made in 1991. The net interest 
charge rose from £228.000 to 
£293,000. 

Losses per share came out at 
1.4p <7.9p>. 

BPT/Harborne 

Bradford Property Trust has 
increased its offer for Harborm? 
Tenants from 230p to 260p per 
share, valuing the property 
investment company at £ 12.9m. 

Harbome shareholders may 
elect to receive new BPT 
shares instead of all or part of 
the cash offer on the basis of 
140 new BPT shares for every 
£260 payable under the offer 

They may also elect to 
receive £1 nominal of BPT loan 
notes for every £1 cash entitle- 
ment Other conditions, includ- 
ing the preference offer, are 
unchanged. 

The increased offer follows 
information relating to the 
recent revaluation of Har- 
borne’s properties. 

Newport at £25,000 

Newport Holdings, the prop 
erty investment cutnpanv 
which came to the market in 
March, had pre-tax profits of 
£25.000 in the throe months to 
June 30- Net rents receivable 
amounted to £377,000 and earn- 


ings per share were 0.3p. 

The company had previously 
stated that such a short trad- 
ing period would not justify 
payment of an interim divi- 
dend. 

Net asset value at the period- 
end was £6.26m. Two acquisi- 
tions made since then have 
increased net asset value by 
£630.000. 

Van Diemen’s Land 

The Van Diemen’s Land Com- 
pany. the Australian pastoral 
company, has applied to the 
London Stock Exchange to can- 
cel the listing uf its ordinary 
shares with effect from 8.30am 
on November 14. 

The move comes as a result 
of VDl.'s long-standing nun- 
compliance with the rule that 
requires more than 25 per cent 
of the share capital to be in 
public hands. 

Tasman Agriculture. VDl.'s 
majority shareholder, is to 
make the minority sharehold- 
ers a cash offer for their shares 
following the delisting. The 
directors of VDL will then 
announce details of a rights 
issue to finance development 
of the Wool north farming 
assets. 

Pascoe's cuts loss 

Pascoe's Group, the pet food 
manufacturer, reported that 
the expected improvement in 
the six months to July 2 did 
not materialise. Mr Douglas 
Strachan. chairman, blamed 
‘several miforeseen factors". 

He added that the results 
reflected the costs of restruct- 
uring the business. 

The shares closed at 30p, a 
/all of 25 per cent since before 
the results announcement. 

On turnover of £4. 36m 
(£8.3lmj. including £25.000 
(£4.l2nii from discontinued 
activities, pre-tax losses were 
halved at £i-26m fCL5uu. The 
result was stuck after provi- 
sions of £609.000 iEU3m> relat- 
ing to property write-downs. 

The company expects net 
assets to fall below half paid 
up nominal share capital and 
has arranged for a £400.000 
convertible loan note to be 
issued to an existing share- 


holder, who will also under- 
write the issue of new shares 
worth £225,000. 

Losses per share were 857p 
(34.21 pj or 6.6Ip folly diluted. 

Macro 4 

Macro 4, the systems software 
group, has acquired 844.000 
ordinary shares in the com- 
pany for cancellation at a price 
of 430p. 

The share repurchase pro- 
gramme is being undertaken to 
enhance earnings per share. 
The shares closed lip up at 
434p. 

Caverdale buy 

Caverdale Group is acquiring 
its first multiple-franchise 
motor retail site for £250,000 
cash. The Lincoln site com- 
prises Volvo and Citroen fran- 
chises, with room for a third. 

The deal also includes an 
adjacent one acre site with 
planning permission for a 
fourth franchise. The group 
will use this space initially for 
selling used cars. 

The franchises will trade 
under the Godfrey Davis name. 

Toye reduces Joss 

Reduced pre-tax losses of 
£138.957 compared with 
£247.313 were reported by Toye 
& Company, the maker of civil 
and military regalia, for the 
half year to June 30. 

The company also said that 
in order to cut costs it was 
simplifying its structure by 
concentrating all its business 
through one principal trading 
company, Toye. Kenning and 
Spencer instead of the six at 
present. 

Turnover amounted to 
£4.37m, against £5.8m includ- 
ing £893,635 from discontinued 
operations. Interest costs took 
less at £30.777 f £68,871). Losses 
per share were cut to 6.18p 
i Up). 

Following a review of the 
associated companies. Weston 
Cap and Shipmate Flags. Toye 
has acquired the remaining 
assets and liabilities of both 
from the respective joint ven- 
ture partners for a total of 
£32.000. 


Rackwood advances 

Pre-tax profits at Rackwood 
Mineral Holdings rose from 
£29.000 to £111,000 for the half- 
year to June 30, helped by a 
£283.000 profit on the sale of its 
Old Ley land Green Remainder 
site. 

The opencast mining group 
had operating losses of 
£130,000. compared with profits 
of £250,000. on turnover down 
44 per cent from £2.97m to 
£l.67m. 

Earnings per share came out 
at 0.44p (O.iSp). and there is no 
interim dividend. 

FairBriar trims loss 

Pre-tax losses at FairBriar, the 
property management group, 
were down 3 per cent for the 
half-year to June 30. at £l-5lm 
compared with £L55m 

Turnover, at £6.19m, was 2 
per cent down on £6.3lm last 
time. The figure relates to 
sales of properties covered by 
the limited recourse arrange- 
ments. The profit from proper- 
ties covered by these arrange- 
ments is not recognised in the 
profit and loss account, but are 
used to reduce secured credi- 
tors’ debt. 

Losses per share came out at 
7.9p (8.14p). 

Lowland Investment 

The net asset value per share 
of Lowland Investment Com- 
pany was virtually unchanged 
over the 12 months to Septem- 
ber 30 at 282.3p. against 282.4p 
a year earlier. 

Net revenue was also static 
at £2.21ra (£2. 22ml Earnings 
came out at 9.4p (9.45p) and the 
proposed final dividend of 6p 
(5.8p) makes 9.3p (9p) for the 
year. 

The primary objective of the 
trust, which is managed by 
Henderson Touche Remnant, is 
to give shareholders a higher 
than average income return of 
both income and capital over 
the medium to long term. 

Abtrust New Thai 

Abtrust New Thai investment 
Trust had a net asset value per 
share of 2l0.12p at August 31 


against 126-35p a year earlier 
and 179.08p at the February 
year-end. 

Fully diluted, the values 
were I92.99p, 122.5p and I655p 
respectively. 

Net revenue for the six 
months amounted to £219,887 
(£98.857) for earnings of 1.46p 
(O.B6p) per share, 

ICD £1.09m ahead 

International Communication 
& Data, the USM-traded mar- 
keting services and database 
group, reported pre-tax profits 
of £1.09m for the year to May 
31. compared with a £4. 92m 
loss for the 15 months to May 
31 1993. The group returned to 
the black at interim stage, with 
a pre-tax profit or £191,000. 

The £6m turnaround was 
partly the result of a substan- 
tial decrease in exceptional 
costs, which helped bring 
about an operating profit of 
£2 .37m (£3 .32m loss). ICD also 
made a £48,000 profit on dis- 
posal of The Database Group, 
compared with a £993,378 good- 
will write-off during the previ- 
ous period. 

Earnings per share emerged 
at 2.2p (6.2p losses). 

Edinburgh Inca 

Edinburgh Inca Trust, the spe- 
cialist Latin America trust 
launched in February by Edin- 
burgh Fund Managers, had a 
net asset value per share of 
56.55p at September 30. 

That represents a 18.6 per 
cent improvement over the 
period from commencement of 
trading on April 5, and com- 
pares with an 11.4 per cent rise 
in sterling terms of the bench- 
mark IFCI Latin American 
Index. 

Net revenue for the period 
was £71,000, which represented 
in the main interest received 
on initial cash balances follow- 
ing the trust's launch. This 
level of revenue would not be 
repeated in the coming year, 
the directors said. 

Earnings per share emerged 
at 0.0S63p. In accordance with 
the rules governing investment 
trusts, the company is obliged 
to pay a dividend, and a 0.04p 
distribution is recommended. 





Il^ 


FINANCIAL TIMES 


TUESDAY NOVEMBER 


1 1994 


COMMODITIES AND AGRICULTURE 


LME ready for 
US warehouses 


N American wood-pulp prices raised again 


By B ernar d Simon in Taranto 


to stock copper 


By Kenneth Gooding, 
Mining Correspondent 


The L on don Mptni Exchange 
seems certain to ping a Mg gap 
in its international coverage 
early next year by allowing its 
warehouses in the US to stock 
copper. 

The US is the biggest con- 
sumer of copper in the world 
but It is also the second-largest 
producer. When the LME's first 
authorised warehouse was 
opened there in 1992 copper 
was excluded because. It was 
said, the LME did not feel the 
time was right to rfiaitaig g the 
New York Commodity 
Exchange’s copper contract 

There was another reason: 
copper at that time was traded 
in the. LME ’Ting” in sterling 
while Comes copper was 
traded in dollars and this gave 
occasional arbitrage opportuni- 
ties to t.mh traders. However, 
subsequent turbulence In the 
currency markets caused a 
change of heart among most 
London-based traders, so the 
copper contract was switched 
to dollars in July last year. 

It was obvious then that it 
would not be very long before 
the LME put copper into its US 
warehouses, particularly as its 
present chairman, Mr Raj 
Bagrl, was determined to 
enhance the exchange's inter- 
national status. “There can be 
no no-go areas,” he inmetori 

Mr Bagri said yesterday at a 


ceremony to marts the LME's 
move to new premises in Lead- 
en hall Street, in London's 
financial district, that the 
question of expanding the 
warehousing network was “at 
the top of the LME's agenda." 

He would not say more but 
traders suggested last night 
that the topic might be raised 
at this month’s board meeting 
after which there would have 
to be a SO day "consulting” 
period before the move to put 
copper into the US could be 
confirmed. 

The LME has spent £5m to 
refit its new premises, on 
which it has a 30-year lease, to 
produce a trading floor and 
auxiliary activities to suit Its 
needs exactly. The traditional 
seats In the "ring” have been 
incorporated along with mod- 
ern communications booths 

apri small nffirei for members 

in an area twice as big as the 
LME’s previous home in Plan- 
tation House, Fenchurch I 
Street, a short walk away. 

However, Mr David King, the i 
chief executive. Insisted that i 
the LME had no present inten- 
tion of changing its trading' I 
practices. For example, there 
were no plans to switch to 
all-day trading Cram the pres- 
ent methods - an inter -office 
telephone market and two 
open-outcry floor sessions. 
This is little different from the 
system the exchange used 100 
years ago. 


Several North American 
wood-pulp producers have 
announced their fifth price rise 
of the year to levels that are 
roughly double those at the 
bottom of the cycle in midrl993- 
The producers plan to raise 
the {vice of northern bleached 
softwood kraft pulp, the indus- 
try’s benchmark product, by 
US$50 to $750 a tonne on Janu- 
ary 1. The increase, if success- 
ful , will bring prices to within 
striking distance of the record 


$840 reached in 1988. 

The WOlld. pulp markup has 
been buoyed by a strong rise in 
papa: consumption, especially 
in Europe and South-east Asia, 
and by fears of a strike at pulp 
and paper mills in British 
Columbia. Demand is so strong 
that many North American 
producers are unable to meet 
their customers' full require- 
ments. World-wide producer 
stocks have fallen by almost 
half from the peak reached last 
year. 

According to the Canadian 


Pulp and Paper Association, 
Canadian pulp mills operated 
at 96 per cent of capacity dur- 
ing the first nine months of 
this year, up foom 85 per cent 
in 1993, Shipments of market 
pulp to western Europe 
climbed by 21 per cent, to 
Japan by 39 per cent and to the 
rest of Asia and Africa by 49 
per cent. 

Analysts are divided on 
whether and for how long the 
price surge will continue. Mr 
Chip Dillon of Salomon 
Brothers in New York recently 


forecast that NBSK prices 
would peak at $860 a tonne in 
1997. lake many other market 
watchers, however, Mr Dillon 
predicts a correction in early 
1995, rejecting the startup of 
two large new mills in Indon- 
esia and a slowdown in the 
stocks build-up. 

The unexpectedly steep 
climb in pulp prices last week 
led Kimberly-Clark, the Dallas- 
based papermaker, to cancel a 
plan to spin off Its pulp mins 
in Ontario and Alabama into a 
new public company. 


PNG miner expects 
Lihir gold lease soon 


By NUdd Taft to Syrttey 


US plans food aid for former Soviet bread basket 


By Alison Maitland 


The US hopes to sign an 
agreement to provide Ukraine, 
once the Soviet bread basket, 
with $20m in food aid as a 
safety net in its transition to a 
market economy. 

Mr August Schumacher, 


head of the US Department of 
Agriculture’s foreign agricul- 
tural service, said in London 
yesterday that the aim was to 
avoid food shortages in the 
cities as agricultural reforms 
took effect. The agreement is 
expected to be signed when 
President i-anniH Kuchma vis- 


its Washington at the aid of 
this month. “We're exploring 
with Ukraine whether more 
will be needed, and we're hop- 
ing Europe w01 also be able to 
help,” said Mr Schumacher, 
who spent last weekend in 
talks in Kiev. 

He said the aid would be part 


of the World Bank/Intema- 
tkmal Monetary Fund stabilisa- 
tion programme for Ukraine. It 
was vital that Ukraine, with 
53m people, should have fertil- 
iser and seeds for spring wheat 
planting next year and foreign 
exchange to buy harvesting 
machinery and spare parts. 


Niugini Mining, the Papua 
New Guinea-based company 
which is controlled by Calm- 
da’s Battle Mountain Gold, said 
yesterday that it expected the 
crucial "special mining lease 
which would allow the Aglhn- 
plus development of the Lunr 
gold mine to go ahead, to be 
before the end of the 

year. 

The T.fhir project, which Is 
joint venture between Britain’s 
RTZ and Nhigini Mining and 
would become one of the 
world's largest gold mines out- 
side of South Africa, has been 
. clouded by uncertainly for the 
best part of a year as the PNG 
government has debated the 
project’s structure, and tried to 
determine what stake local 
landowners should be given. 

A break-through came in 
August, when Mr Paias Wlngti, 


PNG’s forma: prime minister, 
was replaced by Sir Julius 
Chan, who quickly indicated 
that priority would be gjffaa to 
resolving the s tt uatio m How- 
ever, Niugini Mining's state- 
ment yesterday - part of. its 
quarterly operations report - 
was the firmest indication; of 
the timetable now espertad.' 

Niugim bfiuing saU that fbe 
landowners' stake ba the proj- 
ect would be met from the 
PNG .government’s share* 
which would be pegged ait .30 
par cent as originally plaimfid. 
“Landowners are expected : to 
respond to a government pro- 
posal concerning landowner 
equity in lateOctobar," it odd. 

. Financing forthe project is 
expected to cioihprise a ndx of 
debt and. equity -again, in Hne 
with the original scheme.’ Niu- 
gt rji Mining said work an the 
equity issue, halted earlier this 
year, had recommenced. 


Coffee recovery falls short of bonanza for Colombia 

Improved returns will allow farmers to repay loans and renew plantations, writes Santa Kendall 

"■T" aC Q C L o nnflrtv AnFFoo on oAmafkinfr intn tliA N fha ffv*Viw4/»4l TirfL thlTllfK if* ft IWlt TlftRfl 


H igh coffee prices are 
bringing relief and 
recovery but it is too 
soon to talk about a bonanza, 
according to Colombian coffee 
growers. 

Just as the National Coffee 
Fund will be able to pay off 
debts and move intn tbs black, 
so too the fanners are planning 
to repay loans and renew plan- 
tations as they gather in the 
main harvest 

“Many of the farms here are 
in a poor state,” says Mr 
Alberto Restrepo, director of 
the Risaralda coffee growers’ 
committee. “But the small 
fanners, who make up 80 per 
cent of the producers in Risar- 
alda, were not so badly affected 
by the crisis be cause they sup- 
ply their own labour and grow 
their own food. Even so, the 
growers should be getting a 
bigger share of the interna- 
tional price so that production 
can recover quickly." 

The support price paid to cof- 
fee growers in Colombia has 
been increasing steadily and 


MARKET REPORT 

Gold hits 9-week low 


The GOLD price slumped to its 
lowest level in nine weeks yes- 
terday as US investment fonds’ 
patience with the lacklustre 
market broke in a wave of sell- 
ing, dealers said. 

An an unusually Lon- 
don filing session ended with 
the price at $383.75 a troy 
ounefe. It ended at $384.50, still 
$2.40 down from Friday’s close. 


“It goes to show that these 

funds «an control this marlrwt 
completely and there is noth- 
ing you can do about it,” one 
dealer commented. 

London Co mmodity 
Exchange COFFEE futures 
slipped on what traders called 
a bearish private forecast for 
Brazil's 1995-06 crop. 

Compiled from Reuters 


now stands at the equivalent of 
about U5$ L10 a pound. It is 
the most important at several 
instruments used by the gov- 
ernment and the coffee grow- 
ers' federation, Federacafe, to 
control production and protect 
farmers from the ups and 
downs of the international 
market If the support price is 
too generous it can start 
another cycle twirling to over- 
production, 

Colombia's 1993-94 coffee har- 
vest is estimated at li.6m bags 
(6 (ftg each), probably rising to 
12.3m bags in 1994-95. Com- 
pared with the 1991-92 peak of 
more than 17m bags, these fig- 
ures are low, largely because of 
the spread of broca disease, a 
low rate of plantation renewal 
and minimal use of fertiliser. 
About 50,000 hectares out of 
the total Llm devoted to coffee 
in Colombia have also been 
eradicated over the last two 
years. 

However, same farmers have 
kept their plantations in good 
order. Luis Alberto Arcila, who 


has 3.5 ha under coffee on 
steep hiliKiriM in Risaralda, co- 
ordinates one of the Federacafe 
farmers' groups in his area and 
has been learning how to live 
with broca, applying insecti- 
cide and a fungus he himself 
prepares. 

The broca insect enters the 
coffee cherry about 100 days 
after dowering; in Colombia 
the plants flower so often that 
the producer has to pick the 
fruit constantly through the 
year to prevent broca infesta- 
tion and Oils puts his costs up 
by about 8 per cent Mr Arcila 
says that only 3 per cent of his 
coffee is affected by broca. 
Despite Federacafe 's intensive 
education efforts, many form- 
ers are less careful and some 
10 per cent of Risaralda's crop 
is damaged. 

“Now the price is better I'm 
working with more spirit. Inst 
year I cleared one lot of coffee 
plants but I couldn’t renew 
them because of the economic 
situation. With this harvest I 
can pay my debts and put 


something back into fh» farm," 
says Mr Arcila. 

Although the previous two 
years were particularly lean 
ones for Colombia's 300,000 cof- 
fee producers, decades of 
investment in roads, electricity 
and social welfare programmes 
have given the coffee growing 
region a relatively high stan- 
dard of taring and low level of 
violence. 


N ow Federacafe is 
introducing “greener" 
methods using for less 
water for the de-pulping pro- 
cess aid, instead erf tipping the 
pulp on to valley slopes where 
it will contaminate streams, 
formers are mixing it with 
other organic rubbish and 
worms to mafca rich humus. 

“We’re reforesting to protect 
the springs and watersheds. 
The only thing to do about the 
water problem is to educate, 
educate, educate," says Mr Res- 
trepo. 

“The spending cuts affected 
infrastructure projects but not 


the technical assistance pro- 
grammes. The awiwll grower 
here is technified and very 
receptive to new things like 
fish breeding ponds, rabbits, 
worms - everything.” 

Colombia’s 1994 coffee 
income Is forecast at over 
USSl.Tbn, compared with US? 
L2hn in 1993. Even the most 
conservative estimates suggest 
that m» yf year’s ftarnrng R will 
be above US$2 bn, which 
means that US$600m or more 
can be saved abroad for diffi- 
cult times. 

Over the past five years Fed- 
e racafe has nil budgets , 
nearly halved its staff and cut 
marketing costs. As a result 
the federation - which handles 
about half the country’s 
exports on average - is now as 
efficient as the private export- 
ing companies. 

The special comroisskm set 
up to study Colombia's coffee 
sector recommended earlier 
this year that Federacafe 
should not play such a big part 
in exports. “The federation 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Prfooa from AfTNdgsiMtsd Mold Tredbitf 
■ AUIMMUM, 9 Ql 7 PURITY (S per tonra) 


Precious Metals continued 

■ SOLD COMEX (100 Troy 021 ; S/Troy oz.) 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E par tame) 


SOFTS 

■ COCOA LCE COtaml 


MEAT AND LIVESTOCK 

■ LIVE CATILE CME (4QJMnbs; cootVtw) 


CROSSWORD 

No.8,599 Set. by HIGHLANDER; 



Cash 

3 ntths 

Dow 

1787-8 

1809-10 ' 

Previous 

1805-6 

1827-8 

Mghflow 

1801 

1830/1790 

AM OflidM 

1801-2 

1821-2 

Kmb dose 


1612-3 

Open bit 

280048 


Total duly turnover 

68,635 


■ ALUMMUM ALLOY (S par tonn^ 


Gas® 

1786-85 

1820-6 

Prevtoiia . 

178060 

1815-SS 

Hghtow 


1875 

AM Ofltca 

1785-90 

1820-5 

Kwto do«8 


1815-26 

Open H. 

2,728 


Total defy turnover 

470 


■ LEAD (1 per tonne) 



Close 

653-4 

888-70 

Previous 

6666-76 

67162 

HJghAow 

6576 

6747069 

AM CMHcW 

6576-6 

673-36 

KMbdbsa 


670-1 

Open bit 

4S6&6 


Totel deS/ tuiwer 

5674 


■ MCKB. (5 per tame) 


Close 

7196-205 

7310-5 

Pimloua 

7218-28 

7330-40 

IbtfiAow 

7275/7272 

7390/7290 

AM Offldd 

7275-6 

7380-6 

Kert) dose 


7325-30 

Open inL 

87655 


ToM daby tumow 

176« 


■ TIN $ per tome) 



Close 

6870-60 

5955-60 

Previous 

5885-96 

5970-80 

High/low 


5995/5960 

AM Official 

6006-16 

5890-6000 

Korb dose 


5970-80 

Open bit 

18655 


Total doty turnover 

6,441 


■ ZINC, special high grade (5 per tome) 

Ckxe 

11056-86 

1127-8 

Previous 

1114-5 

1135-8 

HlghAow 


1134/1125 

AM OTCdeJ 

11116-2 

11336-4 

Kertj does 


1127-6 

Open fait 

103677 


ToM rie*y turnover 

14.062 


■ COPPm, greda A (9 par tome) 


Oosa 

2684-6 

2649-50 

PrevtoB 

28736-806 

2656-9 

HtfiAow 

2684 

2665/2640 

AM Official 

2883-4 

ZB83-36 

Kerb dose 


2653-4 

Open bit 

222673 


Total tteby tunxwar 

61644 



SMI Dajft 4 m 

pita changa Ugh fare W tori. 

Hat 38X5 -18 - 3 3 

DM 3849 -39 38A7 3817 0£293 31516 

Jen 3806 

Fab • 388A -18 9923 387 JQ 20J95 £359 

Apr 3922 -35 3832 3912 1873 1,786 

JM 3956 -36 3886 3956 1681 77 

TMM 167,779 41JXB 

■ PLATtaUM NYbgX (50 TVoy or.; S/boy azj 


SMI Mf 
ptta rbupw 


10560 -025 10660 10560 


JM 11265 - - - 140 

Sap 9660 -0.15 - - 40 

TMM . £5M 21 

■ VWCAT C8T pnOQbu n*t canteffiOto bushefi 


ta* 



Sett 

Dafi 


0p*n 



SMI Day's 

OPTO 


IM 

tori 


turn i 

tap 

■toto 

Law M 

tori 


price dnreiw tab 

In ta 

tori 

801 

48 

Dac 

855 

-3 

968 

064 21242 

uno 

Dac 

70000 *0050 70.100 

80550 30275 


1.BB5 

82 

tar 

983 

-3 

DOS 

082 43,741 

1678 

HD 

0&080 +0.175 60.100 50025 20^08 

£034 

16» 

80 

■w 

m 

-4 

1004 

SOI 14463 

333 

Apr 

BSLSOD +0275 00975 80490 12,908 

£480 

1672 

43 

JM 

1008 

-5 

1015 

1009 0356 

33 

Jta 

65075 +0O7S 08075 

65.700 4,313 

434 

140 

- 


1018 

-5 

1032 

1010 12J05 

118 

*ta 

64.975 +0200 66X05 

04650 1,400 

57 

40 

- 

Dec 

1037 

- 

1038 

1035 8A28 

12 

Oct 

65050 +0.150 65050 

- 257 

0 

toBW 

>13 

ToW 




113JD6S 3JB6 

TOM 


89^8 10637 


■ COCOA CSCE (10 tomes; Vtonnaa) 


■ UVE HOGS CME (40JXHbS; cents/lbs) 


taa 

4187 

-7.1 

. 

1 

. 

Dac 

384M 

-7 tO 

381/4 

384/0 38,138 11A2S 

Dac 

1327 

■fl 

1348 

1323 26,479 £717 

Dac 

35275 

-0.125 3Sj450 34600 

17J28 

4215 

Jta 

4167 

-7.1 

43BJ0 

4175 20208 

1,467 

tar 

3950 

-6/0 

401/2 

384/4 21715 

£710 

tar 

1372 

■6 

1392 

1388 25,723 £965 

m 

37.950 

-0075 30150 37600 

£188 

1652 

•ta 

4236 

-7.1 

4305 

4244 £838 

158 

■te 

374* 

-4/4 

370/4 

374/4 4288 

421 

•tar 

1369 

-a 

1414 

1395 £449 

335 

tar 

37675 

-0025 30000 37660 

£571 

822 

JM 

427.7 

■7.1 

- 

- 1292 

82 

JM 

346/4 

-4/4 

350/4 

348/0 10,120 

1.480 

JM 

1425 

-fl 

1438 

1430 £03B 

Z 7 

Jta 

42600 

-0100 42600 42660 

£121 

200 

Oct 

4324 

-7.1 

* 

- 446 

1 

See 

SI/D 

-3M 

353/1 

3SW 258 

X 

Sep 

1452 

-fl 

- 

- 1,383 

2 

tag 

42150 

-0050 42.150 41675 

371 

40 

Jta 

435A 

-7.1 

- 

2 

- 

Dac 

381/4 

-Ml 

361/0 

381/2 148 

1 

Dac 

1479 

-8 

1494 

1494 £979 

• 

Oct 

38650 

-0150 38650 38600 

310 

23 

Total 




25288 

1,716 

ToM 




77,778 1£D73 

TOM 




74611 

7,123 

Tata 



7£545 

7/5M 


■ PALLADIUM NYMEX (100 Troy cc.; STtroy oxj ■ MAIZE C8T (5.000 bu mftowfeQSbbuaheQ 


■ COCOA QCCO) (SDfTa/tame) 


■ PORK BELLES CME (40,000013: oenta/Ba) 


Dec 

15960 -1.15 16050 15038 

4687 

813 

Doc 

Z15/6 

-1/0 

216/4 

215/4117,496 20367 

Octarr 28 


Price 

Pim. riqr 

M 

42675 *0225 42675 41600 

£718 

£018 

tar 

Jua 

16120 -1.16 10160 10160 
1622D -1.15 

£278 

405 

361 

Mar 

tar 

22M 

23401 

-1/2 

-I/O 

228ID 

Z35/B 

220/4 81.154 
234/4 24,808 

7658 

1673 

Ota 


. 092.42 

180284 

ita 

42650 +0300 43600 42650 
44650 +0400 44.100 43650 

16B7 

312 

512 

106 

tap 

16265 -1.15 

31 

- 

JM 

240/4 

-Ifl 

241/4 

24K2 316& 

£834 

■ cans LCE (S/tonrwi 


JM 

44.750 +0375 44600 44600 

319 

95 

TMM 


7661 

1,174 

*ta 

245ffi 

-Offl 

248/4 

245/2 £788 

231 

Bov 3417 

Jta 3*57 

-71 

-31 

3490 

3458 

3390 £921 1610 
3*05 >1642 16«1 

tag 

43650 +0450 43650 4X400 

74 

7 

■ SHLVER COMSc (100 Tray oz^ CantaAray ok) 

Dm 

Tata 

250/4 

-DM 

25143 

2500 13J55R 

xsjasr 

796 

Total 


10721 

4638 


Mow 5242 -103 - 100 100 

Dac 5202 -106 5386 8256 73.704 17,330 

Jm 5286 -106 5306 5296 79 1 

KM 5346 -106 54S6 5346 11141 1,854 

tar 9406 -107 5446 5416 4680 8 

JM 5417 -102 5666 5476 4,109 7 

TMM 111*2 11717 


■ BARLEY LCE (E par tonne) 


ENERGY 

■ CRUDE OIL NYMEX (42.000 US gafla. fl/bnO 


■ LME AM Offlcta Ot rats: 16228 
LME Ctoebifl OS rate: 16335 


Spot 1.6353 3 H9K16343 6 MK16319 9 ma»162B8 
■ HKW OHADE CO PP ER {COMEX) 

tar* Opes 



Ckm 

tain Bob to* 

hri 

M 

tav 

12360 

-035 13400 12125 

1689 

098 

Dm 

12260 

-066 12860 121 JO 41627 

7698 

Jm 

12160 

-060 12230 12230 

B01 

22 

R* 

121.15 

-073 121.10 121.10 

STS 

16 

tar 

12025 

■070 12050 11560 

£011 

1688 

Apr 

TMM 

119.15 

•070 

701 21 

01,753 106*3 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
tMc— taPgjtd by N M Rottactttd) 


Gold(IYoyazJ 


Operine 
Morning fix 
Afternoon flx 

nv-exen 

Dd/aLow 

Previous dose 
UwoUfttMnm 

1 month 

2 months 

3 mortal ... — ... 


S price £ aqffiv. 

36460-384.70 
387.10-38760 

387.40 . 238664 

38366 236.706 

387M-387.B0 

38140*38260 

366.70-387,10 

Gam Landtag Rtaw (VS USS) 

__466 6 mortal 6.19 

—468 12 month* 146 



tari 

Days 


OpM 



prica 

chugs 

HP 

UM tat 

tori 

Dm 

18.18 

-005 

1863 

1014 91675 42615 

Jm 

1B61 

-005 

1014 

1860 70544 2£616 

Mi 

1762 

-062 

1861 

1761 35671 

7610 

Itar 

1762 

-062 

1768 

1761 23675 

£894 

Apr 

17J8 

4001 

1765 

1777 18635 

855 

May 

17.72 

- 

1772 

1772 11683 

1,798 

Tfata 




384721 88644 

■ CRUDE CHL 0>E (S/band) 




Urinl 

tart" 


OpM 



taka 

dlMBB 

H* 

Low tat 

tori 

Dac 

1082 

-019 

1768 

1878 80673 27752 

Jan 

1662 

■015 

1B62 

1867 50 383 15620 

Fat) 

1048 

-013 

1865 

1048 15674 

£910 

tar 

1044 

-064 

1862 

16.43 11,118 

£1*3 

Apr 

1037 

-004 

1037 

1037 5612 

977 

ta» 

1038 

+002 

1038 

1034 3657 

1678 

Total 




■n 50448 

■ HEATING O*. HYIEX (42600 US BMO; C/U5 gMcJ 


Latest 

tart 


OpM 



prica 

chMga 

ffinb 

Lea M 

tori 

tar 

4030 

-on 

4070 

4010 8688 

9697 

Dm 

4050 

063 

4095 

4045 46624 

14,148 

JM 

5010 

068 

5065 

5010 326M 

3741 

Ml 

5085 

+002 

5065 

5060 21652 

£072 

tar 

5045 

+062 

5085 

5045 10779 

1631 

AW 

4090 

- 

- 

- 7698 

3® 

ToM 




108671 

3WBZ 

■ GAS OIL re (Mom) 





tea 

Dart 


OPM 



tatori ctaaga 

a* 

la* hri 

W 

■aw 

150 60 

-160 1S275 

15060 28686 

4698 

Dm 

15225 

0.75 15460 15225 27^48 

4783 

JM 

15460 

-050 

1S3JB 21,188 

1600 

Fab 

15560 

-050 U860 .15660 £588 

94 

Uw 

15560 

0.75 15028 15560 7^47 

67 

ffr 

15225 

-07S 15125 15X25 £420 

5 

Totel 




1*4681 10JS38 

■ NATURAL GAS HTbCl (10600 HllOtm SteoBbi) 


Latest 

Dirt 


OpM 



tato« 

CbMDi 


torn H 

tori 

DM 

1680 

0632 

1675 

13*6 29699 

7624 

JM 

£080 

0614 

»IW! 

£065 18,013 

2628 

Mi 

2620 

0600 

oooa 

2610 12606 

16« 

tar 

1600 

0.012 

1660 

16S0 12656 

752 

AW 

1690 

-0013 

1690 

1680 0623 

304 

to*T 

1685 

0609 

1600 

1680 6637 

184 

TMM 




132,1 H 14,187 

W UNLEADED OASOUNE 



INMH (42600 (fi gNta «« 0*4 



lev 10120 465 10125 10125 145 8 

Jm 10150 -030 - 410 

tar 10560 -065 - - 130 - 

tar 10115 ... <8 . 

sap 9360 - 5 

TMM 744 9 

■ SOYABEANS C8T ffJOOEo rah; pmMBCfc tatefi 

Bar 542(2 -4M 5400 S41M 2*472 &J33 

Jan 584/D -4/B 55878 5S3M 54663 27297 

tar 564/0 -478 58874 58374 24662 4674 

Mar 572/2 -&Z 577/0 STUB 11621 1132 

JM 57W0 -570 582/8 5TTK 90259 3,106 

Aug 58143 -574 586/2 5816 1637 482 

TMM 141114 64633 

■ SOYABEAN OB. CST (BOJOOtac oanta/Bj) 

Deo S68 4189 2148 2557 31044 14608 

Jaa 2462 -0.70 2137 2465 114<1 1885 

Mr 2434 -081 2*85 2*28 1&2S7 1825 

MV 2465 -055 - 2360 1£40B 2668 

JM 2362 065 2420 2375 6640 1.735 

tap 2360 -050 24.10 23.70 1900 99 

TMM 91029 21014 


3429 -25 3428 3390 8634 1,202 

3413 -26 3401 3380 USB 78 

3380 -45 - 1840 

3370 -38 - - 1.461 


LONDON TRADED OPTIONS 

Strika price $ tonne Cata - Puts — 


i ■C CSC6 {37600tae oerna/ta) 


187/40 -110 18760 185.10 12606 2696 

19235 -165 19ZJ5 19110 12748 BBS 

19175 -175 194.75 19360 5613 184 

78K5B -150 79575 19360 7690 75 

19140 -260 18735 19660 911 18 

19175 -125 197.75 19675 878 95 

31*78 1298 

g pCOHUSceni s/ pouxD 


■ ALUMMUM 

(98.7%) LME 

1800 

182S 

1B60 


Dec Mar Deo Mar 

54 06 61 BO 

„ 43 84 64 83 

_ 33 73 79 107 



Ocktar 28 


MM 

topi, tav 

Corap. <Oh 



17949 

18060 

15 (try wsraga 

— 

18109 

18369 

■ No7 PTBHRJU RAW SUGAR LCE (cents/lbs) 

Jaa 1100 

- 

- 

90 

Hr 1265 

-064 

• 

- 400 

H* 1360 

-006 

- 

• 450 

JM 1362 

Tata 

+062 

" 

MO 


■ SOYABEAN MEAL C8T (100 ton* Vton) 


■ WHTTE SUQAR LCE (S/tonna) 



Dm 

1808 

+07 

1014 

1601 43693 17613 

Dm 

355.10 

4-160 35050 35360 

£100 

475 

Jta 

1026 

404 

1626 

1616 1£108 

4629 

tar 

34760 

41.10 34060 34560 

9634 1688 

Mar 

1896 

401 

1884 

1053 156*8 

2480 

MW 

34050 

4160 347.10 34460 

£811 

748 

tar 

1006 

406 

1701 

1808 8628 

910 

Aog 

3434Q 

+1.40 34360 34260 

£840 

40 

JM 

1736 

- 

1744 

1710 8678 

1663 

Oct 

32060 

4010 32160 31860 

890 

71 

Ata 

175.1 

403 

175.8 

1746 1603 

83 

Dm 

31010 

4010 

14 

- 

Tata 




100682 Z7S78 

ToW 



18686 2620 

■ POTATOES LCE (Btante) 



■ SUGAR 11- CSCE (11£000bs; centaAba) 



(Grade A) LME Dec 

2600 112 

2660 S3 

2700 60 

■ COFFEE LCE Jan 

3600 225 

3560 206 

3600 180 

■ COCOA LCE Dec 

925 38 

950 20 

976 10 

■ BRENT CRUOE PE New 

1600 94 

1650 53 

1700 26 


Mar Dac 
129 47 

104 88 

83 95 

Mer Jan 
310 288 
293 299 

278 332 

Mar Dec 
89 6 

74 16 

81 30 

Dec Nov 
107 10 

75 18 

54 41 


LONDON SPOT MARKETS 

■ CRUDE OO. FOB {per barrcVtSecJ +or 


ta* 1506 

Mar 1D56 ..... 

Apr 2243 -16 2276 2246 1,432 67 

Mar 2423 

Jaa 1073 

TfltM 67 


1260 -063 1267 1173 9765011.249 

1183 -064 1269 12JB 21377 3,41 B 

1171 -062 1178 1165 11105 1673 

1131 -064 1137 1277 11371 1631 

1160 -062 1160 1160 1664 73 

1160 -002 1165 1165 44 

15MM11842 


Dubai S1142-&54Z -0.09 

Brant Blend (dated) SI 7.03-7.05 -Q.14 

Brent Blend (Dec) SI 6.78-8.78 -0.14 

W.T1 (1pm «Q Si 8.02-864* -0.14 

■ OIL PRODUCTS NWEprompt dafmy C)F (tome} 


OM 

1872 

+1 



458 


■ COTTON NYCE (SOJtoObs; canta/BM) 

Nor 

1810 

+10 

1828 

1820 

319 

IS 

Dac 

7225 

+030 

72.70 

71.70 23605 6629 

DM 

7730 

+27 

1735 

1725 

330 

17 

Mar 

7X50 

4025 

7860 

7360 15617 1,629 

Jm 

1868 

+13 

1675 

1000 

1,138 

20 

Mar 

7460 

4015 

7460 

7467 8615 1,188 

Apr 

1625 

+15 

1B30 

1621 

891 

4 

JM 

7560 

4027 

mao 

74J5 4,104 130 

Jd 

1484 

+18 

- 

- 

137 


Qd 

7065 

-000 

- 

- 538 1 

TOM 





£200 

82 

Bm 

68JS7 

-003 

tan 

BOS £771 213 


Bte 

ftav 





Tfata 




83677 8670 


Premium Gasoflne 
Gas 06 
Heavy Fuel 00 
Naprthe 


Si 81 -184 

SI Si -163 -26 


NqpMha S1B9-171 -16 

Jet fuel SI 77-1 78 -3.0 

□toeel *158-189 -2.0 

PeOTfcwn AigUL TmL Lon 1071) 359 8782 
■ OTHB1 


■ ORANGE JUICE NYCE fHLOOOta: oantatoM 
Nov 10560 *1.15 10760 10260 16*9 6 


Nov 10560 *1.15 10760 10100 16*9 689 

Jm 11060 -t065 11150 10060 11432 1603 

tar 113JS +065 11560 108.75 0628 142 

tar 11140 4660 11716 11475 1.418 4 

JM 11960 4060 120.73 11750 873 3 

SAP 12140 4-1.15 12420 12460 543 10 

TMM 2*602 1JHZ 


Mrarlta 

prtroy ot 

USds eqtriv. 

tar 

Spot 

mao 

534^0 

DM 

3 monttn 

334.15 

541JS5 

Jn 

6 months 

33BJSB 

548.15 

Fab 

1 yaor 

36265 

58010 

Mra 

Gold Coins 

S price 

6 equhr. 

Apr 

Krogenrand 

388-302 

238-241 

TMM 

Maple L«f 

39460-307 JO 

- 


New Sovereign 


554# 



prtoa donga Ugh Lam tat M 
5860 +024 60.10 5765 1264 14696 

5860 t(L31 60.10 5925 27.778 19^58 

6060 40.16 9760 5844 18629 5,153 

55 JO 4001 5560 5520 6639 1666 

5&9D ... 3681 348 

5170 -019 9 10 5870 4677 123 

70431 41 /DM 


tarried leas met good general demand, 
nporta the Tee Brokers’ A—ocIMlon. Aaaama 
cane b 1 hn mariest apart from ptatast 
seta. &W*wt Kenya and Bunid lau aoU 
wMl M uy firm to dearer rates. partcuMy 
pefs. BMnv beat aorta and cokaay madk/ma 
ware hagtor m I reMy ataedy. Ceykxn mat 
Improved demand wtth brighter bop's aaBng 
wafl at dearer mas. Other aorta wen kregMwfy 
aaMar. Otahonc good demand wta brighter 
taca fuly flrra. pun Ugendta wen unwanted. 
OooWtant best avMlabte 200p*%, good UtW 
kg, good mattam 120p/kg, raadtam HOpta, 
kM maefum SapAg. The Mghaat price neaBaad 
Ms weak mb a 2QBp/kg far an Aaeam pt 


VCOUMEOAXA 

Open Merest and Vbtome date shewn tor 
contracts traded on COMEK, NYMEX, CST. 
NVCE, CME and CSCE are one dagr to amara. 


INDICES 

■ aBuroapaagia/ttOieigci 

Oct Jf Oct SB month ago | mar ago 
21056 21046 2077A 16103 

■ CMS Futures (Bare: 1867-100) 

Oct 28 Oct 27 month age year ago 

234,40 23466 22965 21039 


Odd filar troy reft 
Star filer troy ez}f 
PMfauna (par troy Ob) 
PaBedhvn (per troy ozj 
Copper (US prod) 

Lead (US erod) 

Tte QOiMa Uvnpur) 

111 (New York) 

Cattle (Ova weig h t)! 
SIMP (five wlghtf* 

war taf. 

Lon, day sugar [raw) 
Lon day auoar fwta) 
Tau A Lyle export 
Borioy fEng- taa«9 
Mata (US No3 Yaflow) 
Wheat (US Dart North) 

Rubber (puff 

Rubber Unriff 
Ruttar R',:-' Nol JuQ 
Coconut oa (Ptd)§ 

Palm Ol (ktota Jfi 

CoprapiffS 
Soyabeans (US) 

Cotton Outtook’A' Index 
Woo/topa (84a Super) 


ACROSS 

1 Not there after source of 
water is drunk (L4) 

5 Mark is becoming a fish out of 
water <6) 

10 Reason for detailed record 
taking in court Initially (5) 

11 Frightened to show quarter In 
a loose maul (9) 

12 Settled second NEC amend- 
ment (9) 

13 Indigenous African emperor 
holds the key (5) 

14 Hardly ever depend on artist 
( 6 ) 

15 Secret member of the army 
C7) 

18 Central Europeans uttered 

bills of exchange (7) 

20 First application for school- 
book (6) 

22 Award for particularly large 
vehicle© 

24 The French intend to take the 
German chap from Arctic <3r- 
cle<9) 

25 She looks after children pro- 
duced, one hears, by sister 
perhaps (9) 

26 Retired from fashionable 
foundation (2,3) 

27 Oppose broadcasting rise 
that's on the way (6) 

28 Textile workers provide same 
bowlers (8) 


DOWN 

1 Perhaps Raleigh went west to 

diversify (fl) 

2 Part of journey is delayed by 
pass laws (9) 

3 Locates new living areas near 
to each other (2A8) 

4 Expert In any form erf general 
disorder (7) 

6 Escalation in numbers pro- 
vided one action is misrepre- 
seated (15) 

7 Virus gets on top of half Ring 
cast (5) 

8 Assume control of profits on 
deliveries for lords (4,4) 

9 Take Mickey direct to univer- 
sity (4J) 

16 A repair by expert be 
flh a p gffd (9) 

17 Glass vessel (8) 

19 Unfortunately turns up with 
morning greeting for Mushm 
( 6 ) 

20 Spoke out in high pitch to sig- 
nal arrival of sweet (turn- 
over) (5,2) 

21 Deals with some of the extra 
design requirements (6) 

23 Body of men - or body of 
with foot amputated (5) 


Solution to Saturday's prize pmzle on Saturday November 12. 
Solution to yesterday's prize puzzle on Monday November 14. 


Of broking and jobbing the Pdikan's fond, 

See how sn wily he puts your word onto bond. 




£ p* lam irinv oOwwta Mri. ppMHi^ e I 

r itagtas "• MM^tan aw*** rOamap. v NmOmu 
oafluTz Dan. I Nov. V Itan Wteta t \ CF hm» - 
dm*BtaMo*taMM*♦ShMp•tavrigMpricM^• 
QMtg* mi -44k O PiWt ■» lor pv*u «ta- 


JOTTER PAD 






pric 


. ; 








•Ml - ' 


->■ 

vss-7 1/!:- ; - 


"f . • 


|tilitie s 

K» n d 


jain® 


thinks that it’s not possible to 
divorce marketing from stabil- 
ity, the commission, wants to 
keep the domestic support 
price system in place, so we «p r 
need a cash flow to maintain 
stocks and so on," says Mr 
Diego Pizann. at Federacafe. 
“Missions from, other producer 
countries have been coming to 
see how the Colombian model 
works. By managing three 
variables - support ptae, credit 
and technical assistance - we 
have control over the produc- 
tion level." ;- 

Production is well below the 
ideal level of lfim bags defined 
by toe cammisskin, but sbonld 
reach this in 1996-97. With sup- 
pliers agreements covering 
over 13m bags and domestic 
consumption of about 1.5m 
bags, the 15m target is realis- 
tic, says Mr Pizano. But if 
prices drop again in two years' 
time and the revaluation erf the 
peso continues, there could 
come a moment when Colom- 
bia’s ability to compete will be 
seriously under mined. 






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FINANCIAL TIMES TUESDAY NOVEMBER L 1994 

•tar 


33 

LONDON STOCK EXCHANGE 


MARKET REPORT 


• Share prices below the best following US data 


FT-SE-A Ail-Share index 


1.850 






•li; .. 


— +■_ -el*. ^ 

> ” " . r> A., 


By Terry Byland, 

UK Stock Market Editor 

Econo mic data from the US 
dominated the London market yes- 
terday. and although an attempt 
was made to break away above the 
FT-SE 3J0Q mark, shares backed off 
when Wall Street fell at t he opening 
of the new session. Once again, 
trading volume was very thin , caus- 
ing increased volatility in London 
stocks. 

Tbs FT-SE lOOshare Index closed 
18.6 up at 3,097.4, having moved 
towards 3,100 at the finish as mar- 
kets steadied after an initially bear- 
ish reaction to rises in the Chicago 
Pu rc h as i ng Managers' Index and in 
OS personal incomes, both seen as 
iofiatfcm threatening. 

Nervousness over inflationary 
pressures on interest rates were 


heightened in London after the 
announcement of a 7.3 per emit gain 
in domestic MO money supply, and 
a modest rise in the British Pur- 
chasing Managers' prices index set 
the scene for further Important 
developments this week. 

Today brings publication of the 
Bank of England's Quarterly Bulle- 
tin, and the monthly meeting 
between the chancellor of the 
exchequer and the Governor of 
the Bank of England takes place 
tomorrow. 

Some analysts believe that the 
chances that UK base rates will be 
raised before the end of the year 
have increased as economic data in 
the US has suggested that economic 
expansion is bringing inflationary 
pressure in its train. 

However, Richard Jeffrey at 
Charterhouse TUney said be did not 


believe that a further policy tighten- 
ing in the UK “would be valid” at 
the moment Inflationary pressure, 
he noted, is coming chiefly through 
commodity prices, over which the 
UK authorities have no control. 

Base rate worry cut into UK bond 
prices and this undermined a brave 
start by equities which took the 
Footsie index to within a few points 
of 3,100 in very early deals. The 
domestic economic data helped to 
reverse early gains and push the 
Footsie briefly into negative terri- 
tory. taking it down to 3,079. 

However, a strong stock index 
futures market soon took underly- 
ing equities ahead again. By mid- 
session the market was comfortably 
through tbe 3,100 barrier with a 
gain of nearly 28 points on the 
Footsie. 

The negative reaction from Wall 


Street and the US bond markets to 
the Chicago Purchasing Managers’ 
Index soon undermined markets in 
Europe, and the advance in the Lon- 
don market was checked, share 
prices briefly losing about one-third 
of early gains before the Dow Jones 
Industrial Average steadied. The 
Dow index had trimmed its [ail to 
around 8 points when London 
closed for the day. 

Traders shook their heads over 
another volatile session which had 
seen the market move through a 
range of more than 30 points, in 
both plus and minus trends on tbe 
Footsie, yet still brought disappoint- 
ing turnover. 

Seaq volume was down to -186.7m 
shares from Friday’s total which 
exceeded 500m. Renewed strength 
in the utility stocks, seen as candi- 
dates for further share buybacks or 


special dividends, boosted the 
FT-SE Mid 250 Index, which moved 
forward 15.3 to 3,516-9. But the blue 
chips, discouraged by the dollar’s 
lack of vitality, focused around 
prospects for company trading 
news. 

Oil shares were strong as higher 
crude prices and Wail Street’s 
response to good statements from 
the US oil majors set tbe scene for 
trading results due this morning 
from British Petroleum. Shares in 
BP hit new highs in sterling and 
dollar terms yesterday, fuelled by 
hopes for good news on the divi- 
dend front 

A further easing in the British 
Aerospace shares, while VSEL 
remained just under the GEC offer 
price, suggested that the market is 
assuming that GEC will emerge as 
the winner from the bid duel 



Equity Shares Traded 

Turnover by vohxne (miJtonJ, Excluding: 

busktcea and avoraara turnover 




■ Key Indicators 
In eflees and ratios 

FT-SE 100 3097.4 +13.6 

FT-SE Mid 250 3516-9 +15J 

FT-SE- A 350 1551.1 +6.8 

FT-SE-A All-Share 1536.31 +6.49 

FT-SE-A All-Share yield 3.99 0.94) 

Best performing sectors 

1 Electricity +2.1 

2 Water +1.9 

3 Merchant Banks +1.4 

4 Utilities +1.3 

5 Telecommunications + 1.1 



FT OreSnaty index 2351.9 +S8 

FT-SE-A Non Fins p/e IB. 87 (18.79) 

FT-5E100Fut Dec 3100.0 +8.0 

10 yr Gilt yield 8.83 (8.76) 

Long girt/equity ytt ratio: Z24 (223) 

Worst performing sectors 

1 Life Assurance -0.7 

2 Diversified Inds .-05 

-0.4 

-oa 


3 Retaflars, Food .... 

4 Gas Distribution _ 


5 Property ......... — — 


.-0.3 





•J 

r -1^* i! 




Utilities 

extend 

gains 

Water and electricity stocks 
left the rest of the maricp t far 
behind as domestic and over- 
seas institutions chased both 
sectors, responding to yet more 
bullish broker circulars, the 
prospect of more big special 
dividends from the recs, and 
on hopes of bumper results and 
dividends from the water 
stocks. 

There was one notable casu- 


alty in Che recs in Manweb, 
whose shares, very strong 
early In the session, came 
under pressure following news 
of the resignation - "by 
mutual agreement” - of its 
finance director Mr John 
AstaJL 

Other recs, although gener- 
ally dosing below their best 
levels, still displayed hefty 
gains, with those perceived as 
strong candidates to deliver 
special one-off dividends 
heavily bought Southern, up 
28 at 800p, was seen as one of 
the favourites for such a move, 
as was Eastern, up 30 at 796p. 

James Capel was said to 
have been the latest broker to 
recommend the water sector. 


following last week's positive 
notes from BZW, UBS and 
Credit Lyonnais Laing. Thames 
Water opens the water sector 
reporting season this morning, 
with the market looking for an 
interim dividend of at least 8p, 
a rise of around 8 per cent 
Thames put on 10% at 532p. 
Severn Treat jumped 14 to 573p 
and Southern 12 to 608p. 

Vickers hint 

Vickers made rapid progress 
after an uncertain start. Down 
to around 164p in early trad- 
ing, the shares subsequently 
began to move ahead on strong 
support prompted by a positive 
circular published by Robert 


EQUITY FUTURES AND OPTIONS TRADING 


A healthy premium in stock 
Index futures provided 
arbitrage opportunities which 
tended to set the tone for the 
day's trading, writes Peter 


John. 

The FT-SE 100 contract 
expiring in December moved 
forward sharply in morning 
dealing, widening its lead on 


■ FT-SE 100 W4PEX FUTURES flJFFE) £25 per tuM Index point 


(APT) 


■ - < 





Open 

Soft price 

Chanoa 


Law 

Eat ta 

Open M. 

Dec 

3104a) 

3109.0 

+60 

3130 J) 

3007.0 

12557 

53611 

Mar 

3140.0 

312SL0 

+76 

31400 

31250 

82 

3859 

Jun 

31004) 

3151 J) 

+60 

3180.0 

31000 

20 

00 


■ FT-SE WO 880 MPEX FUTURES (UFF9 ETC per Ml lnd« point 


Dae 


3640.0 35200 -200 35400 35310 


210 


4235 


a FT-8£ MP 250 MPEX FUTURES (OMUQ £10 par tufl Index point 

Doc - - 3520.0 - 

Al opin HotMt Dgunn » for prariwe day- 1 Bu*ri voter* shorn. 

■ FT-SE Ktt INDEX OPTION (L1FFE) (-3097) 210 per UMmpoM 


QRD 




2000 - 2950 3000 ' 3150 3200 3260 

CPCPCPCPCPCP 
214b 6 168 Kft 122*2 17*2 84 29 S3 48 3ft Aft 
2»2 21*2 18ft 30 153 44 1W 58 St 80 Bft 107 

mh&zmkWi in m 140 eft rift 101 aft 124 


tan 


NO* 

Doe 
Jan 

Fab 2B7:43£ ZSObKh «4 0ft 1W 
inf 313 73 24 Pt 105 

OSb 7,961 Pits 11330 . 

■ EURO STYLE FT-SE 100 INDEX OPTK3N (UFFE) £10 per f*< Index point 


3300 3350 

C P C P 
IS 112*2 7h 157 
43 137% 29 174% 
67 152 49 18512 


89 135 10ft 108 13412 87 16312 95 
ttftttft 139 197 


194 


■.* 



as an 302 s 
now 188 8 Uft 13 102 23 
DSC 20ft 28 188b 3ft 133*2 50 

Jin 225*2 34% 15ft 63 

ZSftffife Uft 67 

287 79*2 232 111 


3070 3125 3175 3278 

» 38 41*2 80*2 22*2 Sift 11 *2 129*2 5*2 173 
NS 88 74V 90 Bft *17 33 148 29 185 
UftlOft » 164*2 

Uftttft lift 10ft 

T7ft74ft 126V 97*2 


■ HMQ8TnElT-CE«IP2M MPEX OPTttM pMLfl CIO par ft* todaxptant 


1JB38 Pals 1334 * UntatynB M wte- ftmtan* Mm are kntd no MUmamt prim, 
tag MM m**y nuaDm. 


3400 3400 3500 3S50 3600 3850 

Oct . lift 05% Oft 88 0ft lift 

aw o Ita 0 Siaiiiu pita ta *Bhm in Mm e 430gin. 


1’ - SE Actuaries Share 'Indices 


3700 


3780 


the underlying cash market to 
some 26 points. 

This compared to a current 
fair value premium estimated 
at around nine points. The 
sellers moved in and drove the 
December contract down 
towards 3,100 shortly before 
the official 4.10pm close. 

However, a last minute 
scramble sent the contract up 
to 3,109, a premium of 12 
points to cash. 

The day’s economic 
statistics - MO money supply 
and purchasing managers 
figures - appeared to have 
little effect on the market, 
which was dominated by 
technical haring. NatWest 
Securities and GN1 were said 
to have been keen buyers, but 
overall volume was thin in 
comparison with recent levels 
and turnover failed to reach 

12.000 lots by the end of the 
pit-trading session. 

Traded options volume was 
also down from Friday’s level, 
with only 31,215 lots changing 
hands. Guinness was an active 
market with 1,895 contracts 
traded, but the other leaders - 
National Power, HSBC, British 
Steel, Eastern, Tesco and BP 
- were significantly below 

1.000 contracts. 


Fleming Securities. They 
closed 5 higher at 172p. 

Another bull story in Vickers 
was that the company may 
conclude a joint venture with 
Germany's D aiml er Benz by 
the end of the year in the 
development of new Rolls- 
Royce cars. Specialists said 
they expected D aimle r to buy a 
20 per cent stake in Rolls- 
Royce Motor Cars for around 
£40m to £50m and eventually 
increase the holding to 49 per 
cent 

Demand for Hanson 

International conglomerate 
Hanson was among the most 
heavily traded stocks in Lon- 


TRADING VOLUME 


■ Major Stocks Yesterday 

Vw. doing Day's 
OOOi prioa ctetoqa 

at 

ASDAGroupt 
Abbey NaUanait 
AOxalFUnr 
Anted Domecqt 
AngUen Water 
Aigos 

AiJd Wisobwt 
Assoc, an. Foodsf 
Assoc am. Puts 
BAA+ 

SAT bids, t 

BET 

acc 

BOCf 
Bt- 

BFB bids. 

BTBf 

Bb* itf Scmtanat 
Baciayst 
Bearf 

BmeCMat 
Bodnar 

Boottf! 

(lowinert 

Sr* AemspKxrt 
QrttWl Airisyst 
BnnsJi Gast 
Brblsh 1M 
SnWmSttMt 
Quid 

Bumnh Cosbott 
Sum 

CsoteJMfrvt 

Cadiury Bctnmcpmt 1.900 
Caradonf 
Carttgn Comms-t 
Coaa *lyta 
Comm. Untent 
Coohson 
Ccnstmiht 


Do La I 
DUorta 

Easmni Boct-t 
&»g M Mand Bog. 

Eniatp rt M Oit 
Etmmmai Urns 

na 

Rsoob 

i4Cd.LT 


The UK Series: 1 


. Dvta • ■■■ 

Oct 31 OigaM Oct 2B Oct 27 Oct 28 


Year 

«QQ 


Ov. Earn. 
yMd% yMd% 


P/E 

ratio 


Xd aefl. Total 
ytd Return 


FT-SE 100 3097.4 

FT-SE Mel 260 ' 351&9 

FT-SE MM 250 OK lm Trusts 3514.1 

FT-SE-A 380 1561.1 

FT-SE SmsOCsp 1780.91 

FT-SE SmnflCnp ex kiv Trusts 1749-81 

FT-SE-A ALL-SHARE 1S38J1 

■ FT-SE Actuaries All-Share 


+0L4 3QB3JI 3O2SJ0 29380 3184-4 4.00 7.01 1034 110JS8 1173.22 

+0.4 3501.6 3480l1 3487J 36205 058 6.81 2079 111^2 1314J6 

+04 34805 3479.1 34801 3S21J2 3.72 628 1926 11824 131056 

+04 16443 15212 15004 15772 327 074 1720 5406 1203.77 

+0L2 177723 177415 177418 180323 323 498 2622 49.79 1388.14 

+Q.1 174004 174066 1747.44 178829 324 055 2006 61.78 138028 
+04 152922 150035 148080 1562.16 323 081 17.99 52.83 1212.73 



Hanaanf 
HnnmCnMi 


HI 

Pt 

tec#«3»p»t 


■X 


Od 31 

Day* Year 

chge% Oct 28 Oct 27 Oct 20 ago 

ON. 

ytafcM 

Earn 

yiefcM 

P/E 

ratio 

Xd at$. 

yw 

Total 

Return 

■ I— 

10 MBM81AI. EXTBACnONflB) 

12 Extacflve biduatrieo(4) 

277400 

386209 

+68 2752.71 2891.03 2082.10 247100 
+64 3907.96 386000 380302 315920 

322 

3.31 

423 

529 

25^3 

23.40 

HP S3 
9602 

1117.15 

107129 


16 Ofl exrforat fan A Prodfll) 

19Q333 

+02 199927 189127 187033 1988.40 

61B 

£. 

t aaos 

1101.35 


vi-S" 


20 QQ4 MANUFACTURBISPSI) 

21 Bdklng & Con«tructton(33) 

22 BuBtSng MsUb & Marchapq 
.23 Chamlc8iBf29 

24 DtusnUsd IndustriabCie) 

28 Bactmnlc & Ssct Equlp{34) 

26 En^tMSikwm) 

27 En^neering, Vet*Soa(12) 

28 Printing. Paper A PckofSQ . 

29 MaL&JBEMffla 


16 S 668 

185608 1B3663 1831-67 1S25J90 

4.12 

5.1 B 

23.41 

6721 

94923 

1036 78 

-61 1039.47 104025 104028 1170.10 

320 

524 

24.70 

3606 

81325 

181123 

+02 180728 1797.11 1784.76 106720 

4.11 

526 

22.64 

6620 

BS724 

229699 

+02 229422 229687 2294.14 222220 

4.03 

4.43 

27.8S 

7928 

1020.16 

177630 

-05 178221 175120 172821 200020 

617 

621 

2327 82.75 

01221 

184726 

-02 186004 1820.42 1B2521 2140.40 

426 

681 

1722 

81-88 

905.84 

178691 

+0.1 1785.48 177122 177229 170020 

320 

526 

23.41 

5329 

102525 

2247.02 

+02 222690 221421 2232.41 194720 

4.45 

1-55 

aaoot 9224 

1099.08 

27B5.85 

+02 Z791 23 277725 275631 2461.10 

326 

525 

21.87 

75.71 

110223 

1582.45 

+0.4 1565-74 1562.73 154721 196610 

421 

693 

17.70 

4828 

98425 


KteBfltart 
Kn* Sava 
Ladbmkst 
Land Secumaot 
Laperta . 
L»3ri » Oonerdf 
Lloyds Abbay 
Lkadri BanbT 
LASMO 
London Bscr. 

Lonrfto 
L upg . 

MEPCt 

MR 

Manweb 

Maria & 




30 CONSUMBt 00000(67) 

274521 

+02 273221 269728 2669-17 2813.70 

427 

7J30 

1534 10673 

948.83 

+ *- •, * - 

* - 5? 

, .81 BramrieefIT) 

2268-49 

+12 224601 2231.70 221603 2074.40 

4.17 

7J57 

1603 8143 

101 6B2 



32 Sptrtta. wines 6 Odws(10) 

285673 

+08 283520 278091 2747.06 272220 

3^0 

678 

1698 101JO 

98222 


• . • •*- 

33 Food Manultioluran(23) 

228421 

+0.1 2281.70 2251.18 2233.56 238020 

425 

7.63 

1528 8626 

98S.13 



34 Houaehold Goodafia) 

241722 

+08 240638 2379.50 2388.77 2740.50 

678 

7.51 

1553 8958 

875.48 



30 Health Carepi) 

101428 

♦02 161607 160629 100281 1738.40 

612 

634 

<2.13 4624 

94050 

t. ' 



300682- 

+Oj6 298653 295707 233678 313300 

4.49 

7.12 

1625 1ffi28 

901.77 



38 Totsaccoft) 

368221 

-0.1 3887.00 3024X8 349625 415630 

5l89 

9^3 

11J1 217J37 

84008 



40 seRwcesfiHfl) 

1SC2J54 

-HL1 190153 168153 187554 168050 

625 

642 

1851 

52.10 

93615 


41 DtaMbutonOO) 

250651 

-0.1 251155 249955 248737 200020 

674 

751 

1618 

8526 

87670 


42 Leisure & Hotta(20) 

2043.72 

+05 2040.43 2037.76 202751 1939.30 

638 

458 

24.11 

5750 

1010.43 


- <3 u*aeC3B) ■ . . 

2852.15 

+02 284669 2773.48 275950 282440 

243 

526 

2278 

8951 

98246 


44 BetaBsra.-Fbod(lQ 

1694*7 

-0.4 1 70241 108270 1087.80 1041-50 

682 

9.45 

1358 

5250 

101459 


45 RstaBers, Generates 

183227 

103697 182640 183615 10B24O 

624 

6.65 

1851 

4457 

874.48 

- .t- 

48 Support Stovfcfte^l] 

150282 

+08 149202 147652 148358 1190750 

280 

643 

1635 3582 

91558 



2262.32 

+03 224631 221235 219638 228450 

673 

552 

2062 

6152 

B8S.37 

* m 

61 Other Sarvtces & SuBfneae(7) 

123456 

-0.1 123673 123455 1234.76 122060 

4.10 

615 

47.79 2853 

1DS3.Q0 


l (Wtn* 

NFC 

NaMast Bantt 
Nanond Powert 
Nan 

No«i Wear VUaMrt 
NonMm Sacx. 
Normam Foodst 
Morvmb 
Paarscrrf 
PA Of 

Pw*«Gert 

PmCenbarf 

RMCf 

nra 

Racal 

HanbCtet 
Racten £ Cdmartf 

ntedtendt^ 

HKtetetLt 

Ftentok&t 
Rodent . 
BofaRoycet 
RylBkr ‘ 





60 inrunesm 

02 Bectrtcttyf17) 

64 Gas DistrttJUtlanto 

66 TtaoonsnunltilitineW 
68-Wstefaa 

245206 

9WSa.9Q 

193686 

208657 

191680 

+15 242041 237456 234621 253350 
'"+2.1 260052 2464.72 244057 221280 
-05 1944.00 1890l29 188550 225150 
+1.1 204059 168655 197045 235070 
+15 1870.70 186634 1842B3 190290 

459 

359 

618 

609 

557 

TXT 

687 

t 

750 

1234 

1558 8157 
1234 8648 
t 11756 
1602 5052 
0.83 6955 

948.19 

1081.40 

90951 

88255 

95759 

66 NON-RNANCIALS(637) 

185680 

+04 1851.63 182639 1817.18 187052 

350 

637 

1857 55.90 

117629 

70FWiANCWLS(104) 

71 Bamafiq 

73 tnBwanoe(l7J 

74 .Life Assurance^) 

75 Msrrfrtrt BanloW 

77 Other FtnancW(24) 

79 Ptbb«rw<41) 

218450 

2877.32 

125751 

289687 

272258 

183351 

144272 

+05 217750 213850 211607 234670 
+05 286153 280620 2764,69 2904.10 
+04 125238 121658 121221 147350 
-0.7 241619 238320 233750 279350 
+1.4 288457 264697 284752 327450 
+08 182154 181678 179284 178350 
-03 144664 143933 144159 1717.50 

444 

4.19 

638 

5.33 

352 

603 

452 

608 

957 

MS 

7.77 

1611 

6 52 
459 

1252 8959 
1159 11639 
1210 $151 
1559 12752 
6S2 87.78 
14.04 6631 
2754 4459 

06647 

88558 

88607 

92643 

82214 

98359 

82687 

ad MVESTMBMT IBUSTBffSfl 

273677 

+04 272750 289954 2880.49 270670 

225 

157 

51.41 55.51 

921.77 

89 FT-SE-A ALL-SHAM30B5) 

153631 

+04 162682 150635 149680 1562.16 

353 

661 

1759 5233 

121273 

■ HourtymowMnenti 

- Open MO 

1050 

1150 1250 1350 1450 

1550 

1610 

Wgh/day Low/dey 

FT-SE 100 3097.5 30827 

FT-8E Md 2S0 35165 351M 

FT-SE-A 300 : -1SSS.0 15445 

3105.1 

3617.1 
1554.1. 

3100.7 31065 31068 31160 

3517.7 35205 35205 35205 

1552^4 15545 15562 15563 

31067 

3521.4 

1S565 

30875 31115 

36165 35220 

15505 15575 

arrat 

35062 

15461 


SCOBtehftNwr.t 

Scot. Hydro-BOCL 
Scannh ftewort 
Saont 
Sedgwick 
Sedxaad 
Severn Trenrt , 
ShaB Trsoportt 
Stetat 
Sough Eks 
SmHhlWH) 

Snwi « Neonavt 
SmM Baacnamt 


Southern Bsct-t 
SouTi Wales Boo. 
Swab Wta Wlaier 
Southwest. Boa. 
SouJtmn Water 
icnantLt 


In oLFT-SE 10Q.OW* Ntfc Sm2.Dsjf» tow 30701. FT-BE 1» 1994 3m3J SO ) Imr. 2B7M PAK,. 

« FT-SE Actuaries 360 Imftustry baskets __ 

OpM MO • iqob 1120 1220 lano 14JOO ISOO 1O10 Close Prevtoua Ghana* w*tx»g"^ejt 


Sun AKancet 
1W 

TlGjoupt 

TBBt 

Tarmac 

Txs&Lyto 

Taylor Woodrow 

Teacot 

ThsmooWaWt 
Thom Barf 
rnmhhst 


113 

323 

*1 

4200 

ana 

-1 

3.100 

410 

-5 

£03 

42 

ft 

644 

590 

44 

££3 

547 

46 

14 

325 

-*2 

15)0 

202 


358 

270 

41 

105 

SC 

<4 

1.400 

275 

+1 

1,300 

51 0 

*4 

3.100 

439 

-*2 

6600 

109*2 

44 

712 

330 

-3 

Brg 

074 


6200 

436 

4ft 

3.800 

290 

-7 

7200 

3B4 

4+lj 

45» 

J07 

-6 

1200 

204 

-1 

6100 

583 

♦1 

1.400 

557 

44 

1.000 

204 

43 

21 

404 


IjQOO 

53Qlj 

+1*! 

283 

448 

*3 

a too 

+40 

-It 

3600 

353 

-3 

4.400 

292 

-1 

571 

379 

-1 

3.500 

100 

ft 

461 

163 

-1 

142 

040 

4+ 

657 

£6 


6800 

421 

40 

1.900 

+37 

-4 

1.700 

266 

-2 

611 

are 

*1 

2200 

190 

♦2 

60S 

547 

-1 

070 

237 

-a 

979 

445 

410 

S22 

431 


843 

970 

43 

562 

19ft 

ft 

1.300 

796 

00 

441 

006 

419 

250 

460 


eoe 

302 

*8 

333 

387 

-1 

»JOO 

235 

*4 

626 

150 


3,100 

117 

.1 

870 

13+ 


2300 

230 

44 

919 

504 

•1 

3300 

277 

-1 

2000 

sag 


136 

330 

♦1 \ 

373 

S22 

-4 

5400 

415 

44 

1.100 

501 

*4 

550 

IBS 

♦2 

062 

007 

-4 

3,400 

400 

44 

1400 

726 

40 

264 

338 

41 

7.500 

*300 

331 

4l 

164 

♦1 

«4 

a» 

44 

1,700 

189 

ft 

149 

299 

-1 

1,700 

79ft 

*5 

»1 

+36 

-1 

67 

M5 

+3 

726 

472 

-1 

220 

540 

-9 

932 

151 

-1 

791 

017 

40 

26 

660 

-2 

1.200 

444 

-4*’ 

1.400 

353 

-3h 

asco 

574 

40 

2.700 

150 

41 

476 

725 

419 

1J0D 

132 

<■'/ 

2.000 

193 

*2 


+23 

-7 


132 

-3 


807 

4+ 

2,000 

415 

-1 

■UN 

705 

•23 

Kill 

134 

♦1 

UBD 0 

178 

-3 *2 

2.700 

504 

•2 

2.100 

487 

•0 

9G2 

24S 

*2 

1.000 

503 

•4 

3 40 

835 

428 

1-000 

205 


72 

815 

*20 

77S 

034 

*9 

a. 100 

536 

*10 

322 

102*2 

ft 

1.000 

567 

•6 

5,100 

31B 

-3*2 

125 

970 

*3 

3iOO 

650 

+2 

70S 

255 

-2 

1.500 

404 

•6 

1.000 

585 

45 

1JJ00 

465 

-7 

1.100 

751 

4l 

601 

227*2 

ft 

8.700 

470 

41 

2^00 

175 

ft 

1.700 

440 

♦1 

3JW0 

292 

*3 

1.700 

306 

-3 

9 

1360 

*25 

490 

51B 

il 

1JOO 

322 

44 

1J00 

359 

42 

8.700 

107 

-1*2 

160 

154 

42 

190 

+32 

.17 

1.700 

573 

414 

2.400 

734 

*3 

On 

538 

•+ *2 

848 

230 

-3 

tee 

484 

*1 

2.000 

143*2 

ft 

2.700 

>107 

*3 

2J00 

373 

♦1*2 

BB 

+46 

*ft 

1.000 

800 

420 

50 

920 

423 

7«8 

52+ 


323 

796 

-22 

633 

608 

+12 

£.300 

293 

43 

1.700 

210 

-J 


unfiavwf 
united BacuMf 


330 
218 
MB 
226 
123 
428 
128 

2.100 23+ 

1/000 S32 H04 

975 
211 
82 
338 


1300 

1.800 

668 

2/100 

2+00 

434 

489 


494 

2JC0 

sea 

510 


«1 

+6 

•5*2 

«7 

*1‘j 


-3 

ft 


658 1138 

iflfti 306 


don as the shares received sup- 
port from reports of higher 
commodity prices. 

Analysts said that the price 
for polyethylene, which is 
manufactured by Hanson sub- 
sidiary Quantum, had 
increased by five cents a 
pound. The fundamental firm- 
ness combined with an increas- 
ingly attractive yield has been 
encouraging buying interest 
after a steep slide since the 
start of the month. The shares 
firmed a penny to 23lp, with 
7.5m traded. 

Kwik Save hit 

Stores group Kwik Save slid 
9 to 546p as securities bouses 
stressed their sell stance ahead 
of figures on Thursday. There 
is a market consensus for full- 
year profits of around £130m. 
and Yamai chi's Mr Bill Myers 
echoed tbe thoughts of several 
when he said many superstore 
majors now offer what Kwik 
Save alone used to offer. 

In a sell recommendation 
which hit client's desks yester- 
day. Mr Myers said: “Without a 
change of strategy, profits are 
set to plateau at about £130m 
for many years." 

J. Sainsbary. which also 
reveals figures this week, 
slipped 3 to 398p on concern 
over the price fighting among 
tbe leading food retailers. Ana- 
lysts expect interim profits 
tomorrow to come in around 
£445 m. 

Cal Inna, the Scottish-based 
designer and manufacturer of 
miniature hard disk drives, 
made an impressive stock mar- 
ket debut. The shares, placed 


NEW HIGHS AND 
LOWS FOR 1994 

NEW MQH8 (235. 

(HITS tn BUUMNO 8 CNSTHN PI VtBnxAmL 
DBIRBUTORS p) Adam £ Haney, Ideal 
Hodwtee, Ncrbaln. HVBttfftS) MDLS C1| 
msiMM. SLBcrmc a elect qoup (i f 
Magnun Power. ENGINEER! MO (3) stock & 
Decker. Unctt. S<*iu Smco. MVESTMENT 
TRUSTS 0 Qartnwe VAwZbri Prf., Second 

Crakl, LBSURE a HOTCLS 01 Dwrfd Uoyd. 

GHL EXPLORATION 4 PROD 0 Anna. 
Gt*araam Rea, Oft, INTEGRATED (1) BP. 
OTHER nMAMCIAL (2) ErtnCurgli Fund Mngm, 
Jup*w Tyndal. OTHER SBRVS S BUSNS (1) 
Anqlo-East Ptaraa., PHARMACEUTICALS <2) 
Aston. Bra BUttOh HM3, TEXTTLS ft APPAREL 
(1) Bntpon-OiMy. 

NEW LOWS (B8L 

GATS ft) BUIUMMft CNSTRN O) B al IW). 
Morgan SmdaA BLDQ MAILS A MCHTS (1) 
Hrwte. DISTRIBUTORS CSO Gtenchawron. 
PeraonD. Young (HI, DIVERSRB) INDUS (1| 
Powd Duffryn. ELBCTRNC S ELECT EQUP (1) 
Bfck. EMOHEEnm » Aromeacwi. Canto. 
GBE. Huntkig. Johrsar & Rnh. Locka (T) A 
McfCecfme. OML Ftobtecn. EXTRACTIVE INDS 
« Ayer Hton. Ftecfewaod. POOD MANUF (E) 
Atxn Rstwr. Cte wrthw i Pten. Dm>, Pascoe's. 
LKMma, HEALTH CARE AAH. Hosmocaf. 
HOUSBIOLD GOODS ft) ComwM Parker A. 
INSURANCE IH PWS. HUESIVENT TRUSTS 
(7) MVESTMBIT COMPAMES P) LEISURES 
H0TBS 0 AHoura IMp PI. Tmg. MBMA 0 
tetereuepe Taeft, TiMy. OIL EXPLORATION B 
PROD ft) LA8MC* Ops. OTHER FINANCIAL (3) 
Irearmadate Cap, Towry Law. Union. OTHER 

sens a busns ftl Batts, prtng, paper a 

PACHG (3) AG. Bemrarw. kamak. PROPERTY 
M Oaotan. London & MMin, Okven. PaeC 
Regalan. Sawto, Sanmft Mean, Spaoatoy 
Shops. RETAILERS, FOOD ft) Nuta I 
ftoacoCA. RETAILERS, GENERAL (1) Scthebyn, 

SUPPORT SSWS H CranpN. Oreeham. Hoob 

Rotamon, IS8-lhrl Sent. Sya, JBA. Oxford 
MokKutar. TEXTILES ft APPARH. ft) lianr, 
AMERICANS ft) UnUk 

at 65p. and sponsored by 
Albert E. Sharpe, the Midlands 
stockbroker, opened at 87p and 
raced up to close at 92p, with 
9.6m changing hands. 

The current vogue for on- 
market share buybacks contin- 
ued as Macro 4 shares moved 
off their 1994 low point of 423p, 
closing 11 higher at 434p after 
the company instructed its bro- 
ker S.G. Warburg to buy in 


1.1m shares, or just under 5 per 
cent of its Issued capital. Just 
before the close of trading 
Macro announced it bad 
bought in 844,000 shares at 
430p. 

The market’s 100-points plus 
upsurge over the past three 
sessions injected renewed con- 
fidence in the financial sectors 
where recently battered mer- 
chant banks and investment 
management groups attracted 
keen interest. 

Hambros, which followed SG 
Warburg in announcing a prof- 
its warning early last month, 
extended Friday’s strong per- 
formance. closing a further 6 
higher at 234p while SG War- 
burg put on the same amount 
to 612p. Kteinwort Benson rose 
7 to 488p and Schraders 30 to 
1365p. Edinburgh Fund Manag- 
ers Jumped 14 to 723p, M & G 
Group 22 to 955p and Mercury 
Asset Management 14 to 628p. 
Switching out of Abbey 
National and into TSB, 
thought to have been triggered 
by Credit Lyonnais Laing, saw 
the latter move up 7 to 226p 
and the former 5 lower at 416p. 

The two quoted Premier 
League football clubs gave 
good performances on the 
stockmarket as well as on the 
field. Manchester United 
moved up 12 to 657p after dos- 
ing the gap on the premiership 
leaders and ahead of their 
European Champions League 
match against Barcelona on 
Wednesday. Tottenham edged 
up 6 to 124p. 

British Aerospace tumbled 
11 to 446p with one dealer tak- 
ing the view that the VSEL bid 
saga “Is all over bar the 


shouting; BAe has been out- 
manouvred by GEC.” 

Brewer Whitbread jumped 15 
to 172p as some chart-based 
analysts argued that the stock 
had broken through into a new 
trading range. 

Property and shipping com- 
pany P&O improved 10 to 636p 
with dealers reporting a good 
two-w?y pull on the stock 
ahead of the official opening of 
the Channel T unne l Traders 
said that investment institu- 
tions were taking a stand on 
the effect that the Channel 
would have on ferry traffic and 
dealing accordingly. 

A certain amount of bear 
closing saw troubled channel 
tunnel group Eurotunnel 
bounce 4 to 235p in the Units. 

Transport group NFC suf- 
fered slightly after it was 
announced that its former 
chief executive Peter Sherlock 
is suing the company for £L3m 
in compensation. The issue is 
unlikely to hit profits but did 

dent sentiment and the sharesz 
dipped to to 178p. NFC also 
said it was in talks with John I 
Jacobs to sell some of the 
assets of its BRS car delivery 
unit. Jacobs shares gained 4 to 
63p. 

Shares in Daily Mall Group 
fell 30 to 983p in the ‘A’s after 
the monopolies and mergers 
commission blocked its pro- 
posed acquisition of T. B alley 
Forman publisher of the Not- 
tingham Evening Post 

MARKET REPORTERS: 

Steve Thompson, 

Peter John. 

■ Other statistics. Pago 28 


LONDON EQUITIES 


LIFFfc EQUITY OPTIONS' V * * 


RISES AND FALLS YESTERDAY 


FftBa 


Option 


Ca»s Puls — • 

-ton Apr Jul Jan Apt JiM 


Option 


AftaHhraetu 350 54% 63 89*4 0 Illy Ifl't 

<"587 ) 600 21 33ft 40 24 31 43 

AftjyB 76Q 13V- 21 24'4 13 I7*t 22V? 

rac } 280 a i 2 w ia zs ss* 34*s 

ASHA 60 5 0*4 0 4 5W e 

C60 1 70 1*4 3 4W 10H 12 12 

Bril Always 330 31 40 46^ 6 13 19** 

("352 ) 360 141* 24 31 22 27 34 

SttORSpA 39»Z7**3BJ* 43 1? 19 24 
r«6 I 420 13*+ 22 29 27H 34 » 

Boon 900 V) OS 59 74 14<+ 22 

r530 > 550 124 254 32*+ 33V» 38V> 47 

BP 420 274 364 424 104 174 22 

P435 ) 460 84 17 234 X 384 43 

flrtMiStta 160 9 144 174 04 II 14 

neoj ibo 3 7 94 22 24 ae 

Bs» 550 23 34 41 4 25 304 37 

C550 1 600 a 15 224 61 64 69 

C*e&MN 420 24 36 45 214 284 36 

r«0 { 460 10 204 28 40 53 80 

Quotas 420 35 45 504 104 14 22 

("444 ) 460 134 244 304 30 34 424 

Comm (Mo 543 28 304 - 174 314 - 

T547 I 592 9 17 - 48 634 - 

IQ Kfl 38 51 814 27 <4 54 

fWl 1 856 164 29 41 574 75 834 

nrentar 46o 32 464 si 13 * 224 so 

T472 ) 560 13 28 32 34 44 5*4 

Land Sear 600 284 41 474 14 174 284 

("616 ) 650 B 194 24 444 40 574 

Mata & 5 390 32 414 48 5 10 12 

{*414 ) 420 14 24 38 17 23 244 

Names! 500 284 39 46 184 33 39 

1*503 | 550 >0 <04 26 504 054 694 

Samowry 380 22 34 414 M 20 27 

(-397 ) 4J0 9 20 284 314 37 M 

snel Trans 700 49 59 0S4 74 184 234 

("734 ) 750 184 304 384 274 43 474 

SwtftJU* 200 224 26 294 24 *4 6k 

HUB I 220 ID 144 18 94 124 15 

Trafalgar 90 84 94 114 44 8k 74 

rez I 80 3 54 7 104 12 134 

Jnttevw 1100 804 80 614 18 33 44 

ni37) 1150 32 524 644 404 57 68 

ZoUte 050 43 574 89 13 41 484 

I-B60 ) 900 204 34 464 51 694 77 

Option Nov fffli May Nov Feb May 


Catei Puts 

Nat Ftb May Nov Fep May 


British Funds . 


Hanson 
(-230 ) 
Lasmo 
nso J 
taas tons 
H92 1 
P&O 
C636 1 
PtWngton 
("193 I 
Prudential 
(*317) 

BT7 
rasa 1 

Bedbnd 
1*486 1 
Royal haw 
(291 I 
Tesco 
(*234 I 
ttxufone 
(*21! ) 
Vflfcnt, 

(*344 I 
Option 


220 13 17 2D 14 6 10 

240 Z 74 104 1041 6M 20k 
134 17 - - 4 - - 

154 34 - - 74 - - 

100 144 28 24 14 54 9 

200 34 94 1*104 15 19 
600 384 56 84 14 13 244 
650 104 28 39 194 30k 404 
1B0 12 181914 - 44 7 

200 14 64 10 04 14 104 
300 10 274 31 1 0 12 

330 Z4 12 164 13 154 Z74 
850 23 49 604 114 28 444 
900 5 204 374 434 554 73 

460 16 334 41 74 174 32 

500 24 16 234 344 40 57 

200 164 27 334 4 11 174 

300 64 164 234 134 20 274 


Other Fixed Interest 

Mineral Extraction 

General Manufacturers . 

Consumer Goods 

Services .... — 


Unities — 
Financials . 


Investmenl Trusts ,... 
Others 


Tools 


4 

58 

9 

0 

0 

14 

54 

63 

79 

124 

117 

39+ 

47 

28 

112 

97 

78 

320 

33 

1 

10 

7B 

106 

183 

178 

30 

257 

69 

18 

28 

682 

499 

1408 


Ms tasmJ on ttxxo companies fata on trm London Sws Serves. 


Expiry 

Settlement 


January 26 
February 9 


220 18 234 284 
240 34 114 174 
200 14 204 Z7 
217 44 114 - 
325 214 - - 


1 44 10 
B 14 194 

2 74 10 
9 154 - 
1 - - 


TRADITIONAL OPTIONS 

First Dealings October 24 

Last Dealings November* 

Cads: Aviva Pot, Cafcsia. Caumfete, Magnum Power, Modem, NHL (Pratf), Stan- 
hope, Tetemetrtx. Puts & Cans: Cmerdale, Eurotunnel Wta. 

LONDON RECENT ISSUES: EQUITIES 


354 4 - - 12 - - 

Jm Apr JU Ja Apr Jul 


Cram mw 

390 

28 VJ 

37 Vi 

43k 

ik 

11 

15 

1*416 1 

4M 

8 

19k 

27k 

iiw 

24 k 

X 

LadbrtAe 

140 

13 

19 

22 

1 

4k 

7k 

i-TSl 1 

160 

2k 

9 

12k 

10+ 

1 + 

I8k 

um Bbcu* 

i 300 

12 

23k 

27k 

4k 

10 

10 

1*305 1 

MO 

1'5 

10k 

14k 

25 

27k 

3B 

OpiWl 


Dee 

Ha r 

Jtun 

Dec 

« V 

Jun 

Flams 

110 

Idk 

15 

19 

4 

6k 

8k 

ni7 1 

1J1 

6 

10 

14k 

9k 

Mk 

13k 

Option 


Nov 

Fab 

May 

MOV 

FW 

May 

Btfl Aflro 

+20 

36 

51 

59 

7k 

19 

27k 

T«5 1 

480 

Mk: 

30k 

40 

76k 

37 

46 

BAT tarts 

4 20 

24 

38 ' 

45k 

3k 

11k 

23 k 

(■440 ) 

■160 

5 

IB 

ZS 

Z3k 

31 

+5 

m 

w 

12k: 

22k 

27 

a 

10 

17 

(-307 1 

330 

ik 

9 

14 

’3k 

27k 

34*5 

BrtTNKOT 

1 MO 

11 

17k 

26 

6 

16 

19k 

C383 1 

AX 

Ik 

7 ' 

13k 

27 , 

36k 

38k 

CtaunSdi 430 

2034 : 

33k : 

38k 

2k 

9 

16 

(■438 1 

460 

2 

14 

IB 

s : 

29k 

40 

Easton Bet 

7 » 

Slk 

73 90k 

iok: 

20 k 

37k 

(*795 1 

800 : 

20k 

46 64k 

3D 

51 

60 

Gtanass 

460 

14W 

2B 33k 

5 

12k : 

2ik 

(-468 | 

500 

T 

11 

17 

£ 

36 

441* 

GEC 

HQ 

20 

21 : 

»k 

k 

5 

7k 

C277 ) 

280 

6W ■ 

12k 

18 

6k 

13 

16 


BAA 500 27 384 48 11 154 204 

(*515 1 525 144 2S - 23 274 - 

Hemes WV 500 »4 524 60 104 1S4 254 
P532 ) 550 14 27 34 35 404 51 

Option Dec Mar Jte Dec Ma- Jun 

Attey HU 390 334 42 48 44 134 IBM 
|*415J 420 14 244 294 15 28 33 

Amaral 25 44 54 64 4 14 2 

r29 » 30 14 3 4 3 4 44 

Bardsys 550 444 564 66 7 184 25M 

(-5A3 1 600 154 304 394 274 43 504 

Blue Chctt 200 15 22 28 9 134 21 

(*2B3 ) 300 B4 134 19 204 244 32.4 

Britt* Gas 280 IBM 264 31 4 9 75 

(*292 1 MO 74 154 254 124 17 2S 
D tarns 180 21 254 304 3 8 11 

fl* 1 WO 94 144 20 104 17 204 

HUfcdown ISO 13 18 204 3 E 10 

TIM I I0P 3f 04 17 104 It 17 

LorrWj 130 B 124 154 5 10 114 

1*132 1 140 44 84 114 104 IB 17 

Nan Power 460 424 S34 85 5 124 204 

(•W 1 500 16 304 42 194 284 30 

SOU Power 330 374 44 514 44 12 16 

("359 | 260 10 27 354 154 244 204 

Sears 100 94 12 14 1 34 54 

nor 1 110 4 7 84 5 8 104 

Forte 220 16 224 264 5 7 13 

TOO 1 240 6 12 164 15 164 234 

Tarmac 120 8 14 174 5 0k 12 

H23 ] 1ST 4k 10 (3 104 134 T7 

Thom BM 950 484 S3 86 134 31 384 

[*97-1 ) 1000 214 374 58 38 53 604 

TSB 220 14 10 23 54 12 15 

f-226 1 340 54 9 14 17 23Vi 264 

Tenter* 200 IE 204 2B 4 84 10 

(*210 ) 220 54 104 TS 134 184 Z1 

WeOertiH 600 564 15 854 11 3 334 

(*640 j 650 28 47 59 314 444 57 

Option Jm Apr JU Jan Apr ill 


Issue 

price 

P 

Amt 

paid 

up 

MkL 

cap 

(Bn.) 

1994 

W^i Low Stock 

Ctaoe 

price 

P 

*/- 

Net 

ttiv. 

Div. 

cow. 

Ore 

V« 

WE 

net 

- 

FJ>. 

088 

8*2 

4 AP7A Rtante 

ft 


_ 

_ 



- 

FP. 

983 

73 

83 Artesian Ests. 

73 

+4 

- 

- 

_ 

. 

100 

F.P. 

178.0 

93 

89 BZW CommocHas 

89 


w 

- 

_ 

- 

- 

F.P. 

iax> 

47 

42 Da. Wrta 

45 


fa 

- 



- 

F.P. 

49.6 

92 

65 iJCjfluna 

92 


fa 

- 



S3 

FP. 

12.2 

68 

B5 Enmorix 

67 


RN0.71 

53 

13 

04 

- 

FP. 

52.5 

125 

IDS FJtronlc Ctek 

125 

+5 

RN0.75 

26 

08 

42,1 

116 

FP. 

33.1 

126 

115 Games Workshop 

126 


RN4.0 

ZS 

4^ 

11^ 

- 

FP. 

2.24 

35 

27 Gnxp Dv Cap Wta 

27 


- 

- 

- 


- 

F.P. 

29.0 

62 

58 Hambros Sm Aston 

58 


fa 

fa 

- 


- 

F.P. 

Z70 

30 

27 Da Warrants 

27 


fa 

- 


. 

180 

FP. 

1898 

223 

205 Irish Permanent 

223 

+1 

uWLO 

4.6 

3.4 

7S 

160 

FP. 

4268 

181 

100 Man ED & F 

166 

♦1 

RN8.B 

1.6 

05 

9.1 

- 

F.P. 

3402 

488 

475 PrcWteht 

400 

+3 

fa 

fa 

fa 

fa 

135 

FP. 

50.3 

1« 

136 Servtadr 

145 

-1 

HNS. 8 


3J3 

23.S 

- 

FP. 

8.28 

82 

57 WWchuCh 

62 


RN12S 

3X1 

2J5 

13-0 

- 

F.P. 

282 

360 

335 Wrexham Wfeter 

336 


- 

- 

fa 

_ 

- 

FP. 

4.74 

330 

320 Do. NV 

320 


- 

- 

- 

- 

RIGHTS OFFERS 








13SUB 

Amouil la tool 





Ctastna +«r- 

price 

paid Renun. 

1994 




price 


P 

up 

date 

High Low Stock 




P 




17 

hi 

2/12 

2 pm 

1 +pm 

APTA Hearth 

Vpm 


20 

Ml 

9/12 

4pm 

3*lpm 

Bufcre 

4pm 


118 

NS 

20*11 

20 pm 

8pm 

Catties 

11pm 

+2 

Ir4p 

NS 

25/11 

>4pm 

*+pm 

Dragon 01 

’tpm 


500 

N4 

12/12 

50p«n 

39pm 

Matthew dark 

39pm 


25 

Ml 

22/11 

’♦pm 
1ft pm 

’♦pm 

Novo 

’♦pm 


ISO 

Ni 

fl/12 

5pm 

SKftW 

15pm 

+7 

ta330p 

Ml 

23/11 

£»pm 

25pm 

Smulh (J) 

40pn 

+1 

5 

Ml 

15/11 

2>2pm 

■\pm 

$LMon Square 

%pm 



FINANCIAL TIMES EQUITY INDICES 

Oct 31 Oct 28 OCX 27 Oct 26 Oct 25 Yr ago -High 


■Low 


Ordbrary Share 2361 .9 2345.1 2310.8 2298.5 2301.0 2392.1 27134 22400 


on etv. yWd 

4.37 

4J8 

4.45 

4.47 

4.47 

aB7 

4X1 

3X3 

Earn, ykl % Ml 

c oa 

6.25 

6.34 

6J7 

SSI 

4.48 

651 

182 

P/E ratio net 

18.47 

18.42 

18.15 

18.06 

18.00 

2755 

3143 

16.34 

P/E ratio nt 

iaoi 

17^8 

17.70 

17X1 

17.62 

25.90 

30X0 

17J0B 


(■bm 
raw > 
HSBC 75p tie 
<*K!6l 
Bft*n 
T470 ) 
Option 


550 W 
600 324 
700 584 
750 31 
460 35 
500 16 
MW 


78864 9 

40 594 274 
73 834 224 
484 594 47 
4406 534 12 
25 M 324 
FW May Mov 


214 27 

43 494 

44 534 
714 904 

31 25 
41 454 
Feb May 


MK-Rwtt 

P7S| 


160 104 
180 34 


224 254 4 
11 144 8 


4 74 
124 17 


* Unfolvng sscunty pnea Pramuma Shown me 
bused m eeruaitei* pncec 
October 31. Tool contacts: 3T.SS7 Cate 15.740 
Put* 16.917 


Tor 199a Ordtoery Sham tartan since eomptoUon: luffi 27136 2/02/94; low 49.4 2&U40 
FT Onteiery Gtae Mm bees dote 1/7/35. 

Ordinary Sham hourly changes 

Open 9 l 00 10J0 11J0 12J0 IQjOO 14 jQ 0 1S.00 18 j 00 Hfah Law 
2355.B 2344.3 2358J5 2354^ 235a 1 2360.1 23012 2361.5 2351.S 2383.1 3341.6 
Oct 31 Oct 28 Oct 27 Oti 25 Qc» 2S Yr ago 

SEAQ bargains 27.021 22^467 21,112 21,225 24,673 28.404 

Equity tungw (£m)t 11B4J 1109.6 96LB 1211.5 10908 

Equity barganst - 26,018 24,353 24.627 27j31S 33J825 

Shams traded (mt)T - 462.4 4602 404.7 467.1 6713 

lEwteidteg htm-mariasl buSteeas and onrwua unw. 


977.1 


ID 


'NCfa'&'fatakixi 961.4 979.4 9T&2 977.7 97 M 9760 9769 977.1 9764 978.1 

Ftemoatidt 20702 2953.7 29066 2964.7 2973J 2fl7S.fi 29662 29963 2974J 2B75JS 29564 +161 

- ' 10960 1922.9 19165 1927^ 1B27J 19Z5L5 1921S 19160 1314.T 1879J +34 S 

Berta - 2911JJ 29061 2934.7 2B20J 29861 . 29Z76 2B27J3 2920J 291 2£ 29164 2897.8 +166 

S?£X*jS3S^BlS»^lJWta»WJtamtiRapuMcmWBndtWtaimoTh.Firi»taTlm«Ui^ 

Ir r-c e* ml ■Tuotlfa* nrr P+-* rM nanAeii oarteol ihe London Stock (Mange *nd The RmrofeA Uniee UnBed.T)ie FT-SE Atavles Sham 

Mkm « SBdtad W 1 ho*S CootaV- 1 Wren WS tadoe tyeew dwi 00 ■■ not shfam. 4 ^VMm ■« neutae. 


Wakh Water 
Woeaax Water 


WBSams HUgs-t 
IMBteGeman 
WhW, 


vetahn Bee. 

Yotahlra water 
Zeneoet 

Based en Paring mta lor a setocucn el m«¥» 
■ecunaec dMB tmough me s£A0 aystem 
yasantenr imU 4 JOpm. TV ode* rri one rnfayi m 
momnerounoecrcfowix f tetmaue* an FT-SE 
100 Inden r a na M imnl 


2.700 

211*2 

614 

«8 

■ FT MtHES lHDE^ ^ : 

Hi 

iSttti 

BOB 

S75 

960 

639 

S+fl 

310 

♦9*2 

♦13 

♦12*2 


Oct % cfe Oct Oct Tear 

28 00 Hay Z7 25 0fle 

Grass dv 
yi«W % 


670 

500 

196 

289 

345 

145 

137 

776 

4-1 

EMI Mna index (34) 

216185 -13 221030 225339 196441 

1-96 

2367.40 170232 

-1 

♦17 

■ Re^txul tod lees 
Mnranei 

3585 21 -12 36M.« 3644.76 2724 23 

377 

3711.87 230445 

+47 

553 

♦19 

Australasia (71 

281453 -2.7 2891 26 2888 86 21 8434 

1.73 

301339 2169.34 

1,800 

801 

*12 

Norm Amarus (ill 

165326 -21 1688.06 1745 47 171474 

081 

203935 1488.11 


Copvngtil Tbrj Finjr'Oul T«r»* LniiMd 19W 

Figa« ito"to*r el pranojraR Ba» LS DoUon. Base V.tJum: IDO) DO 31/12/82. 

pf«tocm«'< M+tos too*?' C>o Jl ?/S 9 . (toy's rfawpe -5.5 pomte. Year age 224.8 T Partial. 
Latoel prc« tittv t^nvaldr.fa (c« etannn 


Fidelity Options Trading Service 


few 




^1% 


coTUmtssion 
savings. 


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^A?y tfme any place 
any share... 

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FINANCIAL TIMES TUESDAY NOVEMBER 11994 


CURRENCIES AND MONEY 


MARKETS REPORT 


Sterling firmer on interest rate speculation 


money rates 


. - -> 
Ir 


October 31 9“? 

mgnt 


Sterling rose on the markets 
yesterday as speculation about 
a rise in interest rates intensi- 
fied, writes PfriUp Gawith. 

The trade weighted sterling 
index finished at 81. its highest 
level since the beginning of 
March, but still below a high 
for the year, around 83, 
reached in January. The pound 
finished in London at DM2.4583 
against the D-Mark, from 
DM2.4505, and at $1.6306, from 
$1.6235, against the dollar. 

Attention today will focus on 
the Bank of England's quar- 
terly bulletin, and the inflation 
report, whose publication will 
provide the background to 
tomorrow's monetary meeting. 

Market activity was gener- 
ally quiet yesterday, and this 
will continue today with a 
number of European markets 
closed for All Saints Day. 

The dollar had a fairly quiet 
day, with the market showing 
little Inclination to build on 
Fridays rally. It closed at 
DH1JS077 from DM1.5094, and 
at Y96.95 from Y97.335. 

The D-Mark had a quiet day 


in Europe. The Swedish krona 
weakened slightly, to SKr4.78Q 
from SKr4.759, following an 
announcement from Moody's, 
the rating agency, that it 
would be reviewing the status 
of Sweden's sovereign debt 


■ Speculation about higher 
UK rates was fuelled by the 
October MO money supply fig- 
ure, which rose by 7.3 per cent 
year-oi»-year. This was higher 
than market expectations, well 
above the monitoring range of 
0-4 per cent, and the fastest 
annual rate of growth since 
January 1988. 

To some extent, though, mar- 
ket expectations of higher 
rates possibly being sanctioned 
at the monthly meeting also 
reflect a new found credibility 
in UK monetary policy. Under- 
lying inflation, at 2 per cent in 


■ Pound h Haw Yort 


Ocl 31 

—latent— 

-Rev. doe - 

£ spot 

16355 

1.B240 

1 mBi 

1.B347 

12234 

3 rath 

18340 

1.6229 

IK 

1.8228 

1JI35 


September, is at its lowest 
level in 27 years. 

Mr Avinash Persaud, head of 
currency strategy at JP Mor- 
gan in Europe, commented: 
“The Bank of England has 
managed to build credibility so 
that the market now believes 
the government is inclined to 
act pre-emptively. There is a 
belief that the monetary 
regime has now changed. The 
UK is now acting more like a 
European country." 

The December short sterling 
contract dosed at 9350 yester- 
day, showing that the market 
expects UK interest rates to 
rise to 65 per cent by the end 
of the year. Three month 
LIBOR is currently at 6^ per 
cent, up from 6 per cent. 

Mr Richard Phillips, analyst 
at brokers GNI, said the firmer 
cash rates reflected both a 
month-end squeeze, and press 
speculation about the prospect 
of higher rates. There has 
been a shift in sentiment from 
the possibility to the probabil- 
ity of a rise in rates." 

While most economists are 


Starling 


3-month UBOH rata (%} 

&2 


5.8 


5,8 Ml — 


32 — 1.-1 


Source; FT Graphite 


now predicting a further rise 
in rates by the end of the year, 
it is still only a minority who 
are expecting this to follow in 
the immediate aftermath of 
tomorrow's monetary meeting. 
Many analysts argue that, with 
the chancellor probably unde- 
cided about the extent of tax 
changes in this month's bud- 
get, it would be wise to leave 


any monetary policy changes 
until the December meeting. 

Mr Eddie George, governor 
of the Bank of England, last 
week lent some support to 
those arguing against a precip- 
itate move. He said bond mar- 
kets were exaggerating the 
inflationary threat 

In a speech in Birmingham, 
he added; “There are relatively 
few imm ediate signs that infla- 
tion is about to pick up 
strongly." Contributing to the 
governor's optimism about the 
inflation outlook will have 
been sterling's recent strength, 
putting downward pressure on 
imported infla tion. The trade 
weighted index has risen from 
a low around 78, in mid-Au- 
gust to 81 now. 

On the other hand, the possi- 
bility that market expectations 
mig ht hasten the next rate rise 
was highlighted by Mr Ken- 
neth Clarke, the chancellor, 
during the September monthly 
meeting. He said: ‘‘Financial 
markets were expecting inter- 
est rates to be raised sooner 
rather than later. If those 


expectations were not realised, 
the markets could become 
more volatile and the eventual 
rise in rates might need to be 
larger.” 

Although the timing of a rise 
in rates is in dispute, there is a 
measure of agreement that the 
likely trajectory of UK rates 
will be gradually upwards, 
rather than sharply, as often in 
the past. Mr Persaud said the 
good behaviour of the current 
account and Inflation, during 
the present recovery, "would 
allow rates to peak at a much 
lower level than before.” 


Belgkan 

Aft 

week ago 

48 

Franco 

5& 

week ago 

54 

damony 

225 

week ago 

4.85 

Ireland 

5^ 

week ago 

BA 

iwy 

8)4 

week ago 

Btt 

NulMifaMfl 

4.84 

week ago 

4A4 

SwttsartamJ 


week ago 

38 

US 

4N 

week ago 

4B 

Japan 

2i 

week ago 

2 Vi 


Lamb. 

Us, 

R-po 

'A , 1 

J, k 

■ ■ _ 


intar. 

isN 

rate 




7.40 

433 

*<•••■ 

_ v*. 

Tm \ ‘ 



7.40 

4JSD 

L 

• . 



200 

- 

275 

V. *: 



2 ffl) 

- 

275 

y 5 

- / 


6 D 0 

420 

285 

f- ^ 

2 

' - j 

B.00 

<30 

4J5 

v-. •: • 

l r 

. ..1 

- 

- 

225 


‘ - 1 ' 


- 

■- 

825 


'i 1 


- 

7^0 

820 

3* f" .1 



- 

720 

220 



- ' 

_ 

525 

525 

’ : 



... ' . 

6.625 

3-50 

_ 

r 

•* 


2B2S 

250 

. - 

.? 

\ ; 


_ 

4A0 

_ 


^ •/ 


_ 

4 M 

_ 

\ \ * 


. . ■■ , • 

- 

1.75 

- 



• _ - 

- 

1.75 

_ 

/, • .* 




B The Bank of England pro- 
vided UK money markets with 
£1.321 bn assistance, including 
£355m late assistance, after 
forecasting a £L4bn daily 
shortage. 


■ $ UBOR FT London „ — _ 

Interbank Ftdng 54 ** fS 12 

week ago . 54 5W Sg 6» 

US Doftar CDs - " I 

" 8 * aao ’ £ 4 — — - 

3DR Linked Ds - .3** 34 . 

week ago 3% 3fc 3* 4 " “ 

ECU unhid Da nU mm 1 man Stt: 3 md* 51- B mitre: 6 i: 1 year. WkS 


raw are altart raw lor *lBn quart » me ■TTiT'Jr w — wbw 

day. The banks arc Barbra That B«* of T okyo. 

Md raw -» <WI tar ttw domee* Money Raw. U3 S Ct» and 80S Urtrad OquO. p*. 


EURO CURRENCY INTEREST RATES 


■ OTHER CURRENCIES 


0a 31 E 5 

Hunger 175.790 - 171213 107.840 ■ 108 040 

Iran 285800 - 288100 174800 - 175000 

luirrsi 0 4840 - 0.4846 02969 ■ 02971 

Poand 3754122 - 37725.0 230300 - 231300 

Russn 503855 - 50*144 3(39000 ■ 303100 

UAL 5.9097 - 60116 16715 - 36735 


Tbrw Six 
months norths 


Banyan Franc 
Dart* Krona 
D-Mrek 
Dutch Giridv 
French Franc 


4*-4B 
5ft -5ft 
5ft -4it 

5-4* 
5ft - 5ft 


Portuguese Esc. 9*4 - 0 
Spareah Peseta 7ft - Th 
Startog 5ft - 5* 


POUND SPOT -ORW-iPZ, AGA-'tS” 7-:E PO-.'O 


'DOLLAR SPOT FORy/ARD, A-3Aif'.'ST‘ THE DOUAP Vr.V* *r‘ r . • . * * I 


Oct 31 


Ooalng 

mkHMkri 

Change 
on day 

Bld/ofter 

Day's 

high 


One me 
Rate 

nth 

%PA 

Three me 
Rate 

mths 

%PA 

1* 

II 

Bank ot 
Eng. Index 

Europe 














Austria 

(Sch) 

17^994 

+0.0619 

906 - 082 

17.3082 172440 

17.295 

0.3 

172832 

04 

- 

- 

1152 

Belgium 

(BFr) 

50.5873 

+0.1944 

578 - 181 

50.8181 503600 

503579 

0.7 

50.4879 

02 

50.0129 

1.1 

117.0 

ftmnw* 

(DKr) 

9.8318 

+0.0398 

168-270 

9.6270 

0.573T 

93195 

03 

9.6342 

-05 

9.8133 

Ol 

117.0 

Ftrtend 

(FM) 

7.5363 

+00607 

243 - 400 

73480 

7.4630 

- 

- 

- 

- 

- 

- 

88.7 

France 

(FFt) 

8.4190 

+0.031 

138 - 241 

8.4241 

83778 

8.4179 

Ol 

8.412 

03 

82415 

03 

110.6 

Germany 

(DM) 

2.4583 

+00078 

570 - 695 

2.4595 

24466 

2457 

06 

24534 

08 

24198 

1.6 

1263 

Greece 

PD 

378.777 

+1.605 

509 - 044 

379.044 377.065 

- 

- 

- 

- 

- 

- 

- 

Ireland 

yq 

1.0158 

+0.0021 

153-165 

1.0165 

1.0075 

13157 

02 

1.0154 

02 

1.0171 

-0.1 

105.6 

Italy 

IL) 

2515.33 

+9.06 

402 - 663 

251633 2497.11 

2521.08 

-27 

253243 

-27 

2578.93 

-25 

743 

Luxembourg 

21=11 

605879 

+0.1944 

676 - 181 

60.8181 i 

503600 

503579 

07 

50.4879 

08 

500129 

1.1 

117.0 

Netherlands 

IR) 

27563 

+0.0109 

545 - 580 

27580 

27430 

2755 

0.5 

27512 

07 

27154 

1.5 

1212 

Norway 

(NKt) 

10.6891 

+0.0402 

837 - 945 

103945 103381 

10.6891 

0.0 

10.6907 

-0.1 

10.6897 

0.0 

863 

Portugal 

(Bl 

251.349 

+1.005 

OK - 663 

251.653 250297 

253.079 

-23 

25625S 

-7.8 

- 

- 

- 

Spam 

(Pta) 

£04546 

+4X586 

447 - B42 

204,842 202588 

204315 

-22 

200.94 

-103 

208.04 

-1.7 

85.9 

Sweden 

(SKr) 

11.7564 

+0.0876 

460 - 668 

11.7888 113632 

11.7754 

-13 

113179 

-21 

11.9824 

-13 

753 

Switzerland 

(SB) 

20513 

+0.0063 

499 - 528 

20526 

20421 

2.0482 

13 

20415 

19 

1.9992 

25 

1226 

UK 

ra 

- 

- 

re 

- 

- 

- 

- 

- 

- 

- 

- 

81 3 

Ecu 


12996 

+0 0045 

887 - 905 

1.2905 

1.2839 

12896 

0.0 

12897 

0.0 

12828 

0.5 

- 

SOR) 

- 

0.912183 

- 

- 

- 

- 

- 

- 

■ 

- 

- 

- 

- 

Americas 














Argentina 

(Peso) 

1.6303 

+0.0007 

298 - 308 

13308 

13192 

- 

- 

- 

- 

- 

- 

- 

Brad 

m 

12770 

+0.001 

758 - 782 

13782 

1.3718 

- 

- 

- 

- 

- 

- 

- 

Canada 

(CS) 

22054 

+0.0139 

044 - 064 

22064 

21B93 

22047 

0.4 

22029 

03 

21966 

0.4 

86.8 

Mexico (Now Paso) 

5.8026 

+0.0287 

969 - 082 

5.6082 

53613 

- 

- 

- 

- 

- 

- 

- 

USA 

(5) 

1.6306 

+0.0071 

301 - 310 

1.8310 

13190 

1.6289 

05 

1.6792 

02 

13181 

0.8 

61.0 


Closing Cnange BWoder Day's mu One month Three months One j rear J.P Morgrei 

mid-point on ctty spread high low Rtto %PA Rate %PA Rate ^PA Indent 


Europe 

Austria (Sch) 10.6095 -0.008 070 - 120 10.6470 10.6070 

Beigkan (BFr) 31.0250 -0.015 150 - 350 31.1300 31.0100 

Denmark (DKr) 5SWIQ -0.0011 99? - 015 5.9179 5.8960 

Finland (FM) 4.0213 +0.0173 1 BO - 268 4.0398 45943 

France (FFr) 5.1633 -0.0033 615 - 6SO 5.1775 5.1615 

Germany (D) 1.5077 -0.0017 073 - 080 1.5127 15072 

Greece (Dr) 232300 -002 200 - 400 232.900 232.200 

Ireland (HJ 1.6051 +0.0037 048 - 056 1.6056 16005 

Italy (U 1542.83 -1.12 225 - 300 1548.00 1540.90 

Luxembourg (Ur) 31.0250 -0.015 150 - 350 31 1300 310100 

Netherlands (H) 1.B904 -0.0006 898 - 910 1.8854 1.6899 

Noway (NKr) 6.5555 -0.0037 540 - 570 6.5819 8.5510 

Portugal (Eg) 154.150 -0.05 000 - 300 154.550 154.000 

Spaki (PM) 125.445 -0.195 420 - 470 125.900 125.420 

Sweden <SKr] 7.2101 +0.0226 057 - 145 7.2385 7.1735 

Switzerland (SFi) 1.2580 -0.0022 575 - 565 1.2828 12S75 

UK (E) 1.8300 +0.0071 301 - 310 1.6310 1.6190 

Ecu - 12844 +0.0011 639 - 649 10849 1.2805 

SORT - 1.49142 - - - 


Swiss Franc 
Can. DoBar 
US Drier 
(Wan ura 
Yen 

Asian Sang 


5% - St 

3ft -3ft 
5>a-4iS 
4S-4S 
9 - 7ft 

zi-2* 

2ft - 2ft 


Shan term rmtrvs ran erf tar the 

■ THU MONTH HBOR 


4(J - 4J2 5-4% 5% - 5% 5ft " S& ^ ■ °ft 

5% - 5ft 5% - 5% 6*2-6% 6ft - 8ft 7ft - 7ft 

413-4 il 4a-4ij 5% - 5 5%-5% g - 6ft 

5 -4ft 5 -4ft 5ft - 5*t 5% - 5^* 5* -5ft 

SA - 5ft 5ft • 5ft 5% - 5ft 5ft - 5ft 8ft - 8ft 

8ft -9 9ft -S? ltfft-10 10A - 10* 10ft - 10& 
7ft - 7ft 7ft - 7ft 7ft - 7ft 8ft - 8ft 9ft - 83 

5ft -5ft 5% Sft 6ft - St3 6ft -8^ 7j-7ft 

3ft - 3*2 3ft-3ft 4ft -33 4ft -4ft 4ft - 4ft 

5ft -4ft 5ft -43 5ft -5ft 8 -5ft 6ft - 6ft 

4]i - 4» 5ft - 43 5ft - 5ft 53 - ^2 8ft - 5ft 

•8A-8f« 8A- 8ft 8tt'-8* 9ft - 9ft 10ft - 93 

2 ft - 2ft 2ft - 2ft 2ft - 2ft 2ft -2ft 23 - 2ft 

2ft - 2ft 3 - 2ft 3ft - 3ft 3ft - 3ft 4ft - 4 

US Dote art Yen, others two days’ noOca 
RlTliraa (MATIF) Paris Interbank offered rate Oct 28 


V. “ 

?" .c. ■' 



Open 

Sett price 

Change 

Hflh 

Low 

fist H3f 

Open kn. 

i- 

Dec 

9428 

9429 

+0.02 

94.30 

9425 

16.093 

58.084 


Mar 

9281 

9285 

+006 

9339 

9278 

14332 

38386 

j X . - 

Jim 

9329 

9244 

+0.06 

93.45 

93.35 

6398 

20,009 


Sep 

9299 

9205 

+0.08 

9205 

9297 

2268 

19,166 

1 ■ . 


Norway 

Portugal 

Spain 

Sweden 

Switzerland 

UK 

Ecu 

SORT 

Americas 

Argentina 

Brazil 

Canada 


1 MONTH EUMOPOLLAH (LtFFE)* Sim pofclte ot 100% 
Open Settpnce Change Wgh Low 
94.04 -002 

93.60 -aoi 

98.13 -002 

82.79 


Btt. vol Open InL 
0 2490 

0 1388 

0 350 

0 56 


IgJffEyDMImpdntaof 10056 


Psdfic/Mkkle Emt/ Africa 


(AS) 2.1971 +00119 957 - 984 2.1964 2.1805 2.1992 


Hong Kong (HKS 12J997 +00544 958- 038 12.8036 12^116 12^931 


-1.1 0202 -09 2.2159 -09 
06 12^372 04 12J176 07 


India (Rs) 51.1608 +02314 403 - 808 51.1808 507920 

Japan (Y) 150T382 +0058 967 - 207 160207 157.710 157.657 

Malaysia [MS) 4.1688 +00242 670-705 4.1705 4,1341 

New Zealand (NZS) 2.8481 +0.0102 483 - 488 2.6499 2^301 2.6527 

Philippines (Pew) 40^681 +0.1429 754 - 606 406606 403275 

Saucfi Arabia (SR) 6.1165 +0^3263 146 - 184 6.1164 6^1742 

Singapore (S® 23973 +00083 962 - 984 2.3984 2JS852 

S Africa (Com.) (R) 5.7090 +00251 062 - 113 5.7116 5^697 

S Africa (Fire) (R) 05548 +00202 387 • 729 05729 6.5165 

South Korea (Won) 1299.80 +6.76 919 - 040 130040 1289.70 

Taiwan (TS) 424710 +01922 543-678 42487B 424543 

TTmand (81) 406382 +01887 107 - 657 406657 406107 

taon raw Nr Oct mOdtalferapraeiM In the Pound Spot trtla (how orlythalmtltnadaclnud 
but a* tripled by current Unrest raw. Stattia wda* calcilatrt by tha Bar* af Enteid. Bare at 
the Oate Spat CS*» rtortvad tan THE WM/RHilStS CLOSMQ SPOT RATES. Sara wSum t 


32 156657 26 151452 43 


-2.1 2.682 -2.1 26819 -1.3 


Argentina (Peso) 09999 -0.0002 996 - 999 1.0000 0.9988 

Brazil (RQ 06445 -0003 440-450 08470 0.8440 

Canada (CS) 1.3626 +0.0027 523 - 528 10545 10517 

Mexico (New Peoo) 24360 +0.0027 335 - 365 24385 3.4335 

USA (6) - 

Padffc/Mddto East/ Africa 

Australa (AS) 10475 +0.0015 470 - 479 1.3486 10446 

Hong Kong (HKJ) 7.7273 - 270 - 275 7.7275 7.7270 

Incfla (Re) 31.3783 +00083 725 - 600 310976 31.3725 

Japan (Y) 909500 -0385 000 - 000 97.5000 909000 

Malaysia (MS) 20567 +0.0038 563 - 570 25576 25527 

New Zealand (NZS) 1.6241 -0.0008 234 - 247 1.6263 1.6215 

Philippines (Peso) 240800 -0.02 300 - 300 24.9500 240000 

Saudi Arabia (SR) 3.7512 -0.0001 510 - 513 3 7513 3.7510 

Sngapors (SS) 1.4703 -0.0012 700 - 705 1.472S 1.4700 

S Africa (Carre) <R) 30013 +0.0003 005 - 020 3.5065 3.5005 

S Africa (Fire) (R) 4.0200 -0005 100 - 300 4.0300 4.0100 

South Korea (Won) 797.150 +0.7 000 -300 797.400 790.700 

Taiwan (TT) 260470 +0.0052 440 - 500 26.0580 260390 

Thafland (Bt) 24^230 +0.008 130 - 330 24.9330 24.9130 


1.3524 0.1 

3.437 -0.3 


1.3521 0.1 1.3576 -0.4 83.7 

3.4388 -03 24462 -03 

043 



Open 

Sett price 

Chengs 

Hflh 

Low 

Est vol 

Open InL 

l- 

Dec 

94.87 

9432 

-003 

0437 

9432 

10944 

168472 


Mar 

9439 

0434 

-0.05 

9431 

9434 

17721 

156626 

. . • 

Jim 

9421 

94.16 

-005 . 

9422 

94.15 

10683 

112240 

' • ; : • - 

Sep 

9333 

9278 

-004 

9284 

0277 

7501 

77103 



i MOUTH EUROURA BIT JUTE I 


I (UFFE) LlOOOm polntaof 100N 


1.3478 -0 2 
7.7263 0.1 

31.4613 -3.3 
96.73 2.7 

2.5476 43 

1.6251 -07 


1.3465 -03 1 3558 -0.6 85.8 

7.72S9 0.1 7.7358 -Ol 

31.6063 -29 - - 

96.15 32 92585 25 1505 

2.53S2 22 28097 -21 

1.6269 -0.7 1.6322 -05 



Open 

Sett price 

Change 

High 

Low 

Ebl vol 

Open M. 


Dec 

9097 

9094 

-0*03 

91.00 

9082 

3384 

32417 

Cr 

Mar 

9025 

8021 

-006 

9025 

9020 

2123 

29791 


Jui 

89.70 

89.66 

-007 

88.71 

89.65 

1501 

16090 


Sep 

8031 

8928 

-037 

8923 

8927 

823 

20372 



I FUTURES (UFFE) SFrlrtl points of 100% 


pWee. Forward raw ore not dtaedy quotrt to the markM 
araga 1985 * lOOBId, Oder and Mkf+otu In bolii Ma and 
ra rankd by tha F.T. 


19DR ran lor Oct 2IL BUMtar ipraads m tha Date Spat W show arty the Iasi Ir 
but os knplrt by cunant intereat raw. UK Maid S ECU are quoted n US oummey. 


2 7525 -0.4 
1.4688 1.1 

3.5168 -52 
4.0637 -10.1 
800.15 -45 
26JJ67 -0.9 
245955 -3.5 
Hdochne plaaae. F< 
JP. Mtxgari nanOnal 


3.7566 -06 3.7752 -06 

1467 09 1.4603 07 


3.5451 -5.0 3.6218 -24 
4.1125 -S3 



Opal 

Sett price 

Change 

Hgh 

Low 

EsL vol 

Open inL 

Dec 

9536 

95.84 

-034 

9537 

9533 

1598 

19649 

Mar 

96.60 

9535 

-003 

9530 

9532 

933 

17589 

Jun 

95.18 

95.15 

-002 

95.18 

95.14 

315 

5156 

Sap 

9432 

94.78 

-032 

9432 

04.78 

66 

1809 


80265 -32 822.15 -21 

26.107 -0.9 


i MONTH KU I 


I Eculm points of 100% 


25.123 -33 25.603 -2.7 

Forward rates m not dtrrcOy quoted to the mortal 
Hi mdcM Q« 2a Base atrerage 1990= '00 


CROSS RATES AND DERIVATIVES 



Open 

Settpnce 

Change 


Low 

EBL Vd 

Open InL 

Dec 

9334 

9090 

-0.04 

93.94 

9339 

280 

7893 

Mar 

93.46 

93.45 

-003 

93.48 

93.43 

609 

7006 

Jun 

92.97 

92.93 

-0.03 

0237 

92.91 

338 

3990 

Sep 

92.45 

92.45 

-0.02 

92.<7 

92.42 

286 

2419 

•UFE Um tratfed on APT 







EXCHANGE CROSS RATES 




Oct 31 


BFr 

DKr 

FFr 

DM 

E 

L 

n 

NKr 

Es 

Pta 

SKr 

SFr 

E 

CS 

s 

Y 

Ecu 

Belgium 

PFi) 

100 

1932 

1634 

4.860 

2.007 

4972 

5.449 

21.12 

4908 

4043 

2333 

4.056 

1.977 

4359 

3.225 

3124 

2546 

Denmark 

(DKi) 

5237 

10 

8.751 

2355 

1355 

2614 

2.885 

11.10 

2613 

2126 

1221 

2132 

1.039 


1.695 

1643 

1340 

Franca 

(FFr) 

8038 

11.43 

10 

2320 

1308 

2987 

3374 

1239 

2983 

2423 

1336 

2436 

1.168 

2619 

1.937 

187.7 

(331 

Germany 

(DM) 

2038 

3314 

3425 

1 

0413 

1023 

1.12! 

4345 

1022 

8330 

4.780 

0334 

0407 

0897 

0.664 

8438 

0324 

Mend 

(16) 

4933 

9.479 

8395 

2.422 

1 

2478 

2.715 

1032 

2473 

2013 

1138 

2021 

0.985 

2172 

1307 

155.7 

1370 

Italy 

(U 

2.011 

0.383 

0335 

a098 

0040 

100 

aiio 

0425 

9392 

8.131 

0467 

0082 

0040 

0088 

0066 

6362 

0051 

Netherlands 

(FO 

1&35 

3.491 

3.055 

0.892 

0388 

912.6 

1 

3375 

91.18 

7430 

4363 

0744 

0383 

0.800 

0392 

5733 

0468 

Norway 

(NKf) 

4736 

9.008 

7.883 

2.301 

0950 

2355 

2381 

10 

2353 

1913 

11.00 

1.920 

0336 

2065 

1327 

1473 

1307 

Portugal 

(Eel 

20.13 

3.829 

3360 

a978 

0404 

1001 

1397 

4350 

100 

8138 

4.878 

0316 

0398 

0377 

0349 

6267 

0313 

Spain 

(Pta) 

24.73 

4.705 

4.117 

1302 

0498 

1230 

1348 

5322 

122.9 

100 

5.748 

1303 

0489 

1.078 

0.798 

7736 

0330 

Sweden 

(SKr) 

43.05 

8.188 

7.186 

2.092 

0884 

2140 

2346 

9389 

2133 

174.0 

10 

1.748 

0351 

1.877 

1388 

1343 

1.097 

Switzerland 

(SR) 

24.66 

4.091 

4.105 

1.198 

0495 

1226 

1344 

5307 

1223 

99.71 

5.729 

1 

0.488 

1.075 

0795 

7734 

0628 

UK 

ra 

5038 

9.621 

&419 

2.458 

1.016 

2515 

2.758 

10.88 

251.3 

2043 

11.78 

2051 

1 

2305 

1.881 

158.0 

1389 

Canada 

(CS) 

2234 

4363 

3.818 

1.115 

0480 

1141 

1350 

4344 

114.0 

9274 

5329 

0330 

0.454 

1 

0740 

71.68 

0585 

US 

<s> 

3131 

5.899 

5.162 

1.507 

0622 

1542 

1390 

6.848 

154.1 

1254 

7304 

1358 

0613 

13S2 

1 

9637 

0790 

Japan 

(Y) 

32.01 

6389 

5328 

1.568 

0642 

1592 

1.744 

8.759 

159.1 

129.4 

7.437 

1393 

0.633 

1396 

1332 

100. 

0316 

Ecu 


39.24 

7r464 

8331 

1307 

0.787 

1951 

3136 

6365 

1953 

1507 

9.116 

1391 

0776 

1.711 

1365 

1226 

T 


While you are rushing 

ahead of your competitors ▼ ▼ ▼ 


Oartai Kronor, Frandi Frvre Norwegian Kroner, end SwrxMi Kronor per 10 Belgian Franc. Yore Escudo. Lira rad Peseta 
■ D-MARK FUTURES (HA4) DM 125,000 per OM ■ JAPANESE 


■ JAPAMBSfl YEN FUTURES (BUM) Yen 125 per Yen 100 


Dec 

Mw 

Jun 

■ sms 

Open 

06815 

03630 

S FRANC FU 

Latest 

03621 

OB632 

08853 

TUBES (TA 

Change 

-00004 

-00005 

IMJSFr 125 

fflgh 

0.8637 

08834 

>,000 per SF 

Low 

0.8812 

08828 

r 

EsL vol 
86392 
1300 
688 

Opwi bit 
88371 
5383 
1349 

Dec 

Mar 

Jun 

■ mn 

Open 

1.0305 

13405 

tLBIQ FtfTUF 

Latest 

1.0325 

13409 

13496 

IES0MM)! 

Change 

+00012 

+00010 

E82300 par 

High 

1.0333 

13412 

c 

Low 

1.0298 

1.0403 

Ebl vtn 
30361 
543 

1 

Open inL 
61322 
7,085 
718 

Dec 

07931 

0.7945 

+00001 

0.7985 

07931 

33378 

41388 

Dec 

1.6190 

1.6222 

+0.0004 

1.8234 

1.6178 

24.180 

45.544 

Mar 

07970 

07980 

- 

07982 

07978 

170 

2066 

Mar 

1.6190 

1.6220 

+03014 

1.6224 

13190 

es 

529 

Jim 

- 

03020 

- 

08020 

- 

6 

168 

Jun 

- 

1.81 70 

- 

- 

13170 

1 

9 



UK INTEREST RATES f 


ERBS EUROPEAN CURRENCY UNIT RATES 


LONDON MONEY RATES 

Oct 31 Over- 7 daw 


Oct 31 Over- 7 days One Three Six One 

night noooa month months rnontfg year 

wertw* Sterling Bft - 4ft 5ft - SA 5ft -5A 6/« - 6J1 6& - 6, 7 , 7ft - 7ft 

Startng CCS - 5ft - S£ 5jJ - 5JJ 6,1 - 7ft - 7ft 

Treasury Bib - 5ft - 5ft 5‘J - 5ii 

BankBle - 5ft ■ 5£ SQ - SfJ Bft - 8ft 

Local authority daps. Sft - 5ft 5ft - 5ft 5,1-5* 5ft - 5ft 84 -6ft 74 - 6]J 

Oboount MarHet deps Sft - 4ft 5ft - 5ft 


Netherlands 2.19872 

Mend 0806628 

Belgium 402123 

Oarmeny 1.94964 

France 633883 

Denmark 7.43679 

Portugal 192854 

Spain 154550 


UK deraing bank I 


I taxing rate 6ft per cent tram September 12 1994 

Up to 11 1-3 3-6 6-9 9-12 

month month months months months 


NON ERM MS4BBRS 
Oroece 264^13 

Italy 179219 

UK 0.786749 


Certs ol Tax dep. (CIOOOOO) 1ft 4 3ft 3ft 3ft 

Oena at Tax dap. C100JX30 b i*;pc. Depanlra wxhd ra — i lor cMi 4«ta. 

Ave taxta rata rt dlecouni SA342pc. ECOD ftaed ran Sdg. Export Fhraica. Mihe up (Wy Odl 31. 
10M. Awed rate tar pertad Nov 2S. 1®« » Dee 23. 1904. Sehernn a A ■ TJBSpc. Reference rote tor 
PdWOBI. 1QB4 ID Oct 31. 1084. actMnws IV & V SOaSpc. Fkionoa t+oim Bn Ron Bpc bom Nov 


Change 

% +/- from 

K spread 

Dkr. 

on day 

cm. rata 

v weakest 

bxL 

+0.00099 

-2.18 

5.70 

- 

-0.000078 

-138 

5.46 

13 

+0.0163 

-133 

5.43 

14 

+0.0008 

-138 

5.16 

- 

+030218 

0.38 

331 

-3 ] 

+0.00253 

0.82 

2.56 

-a 

+0.018 

131 

1.78 

-11 

-0.082 

3.40 

0.00 

-24 

-0326 

11.63 

-738 


-0.6 

930 

-540 

- 

-0301726 

-036 

4.09 

- 



H sJP 









Ecu central raw set by me European Conmfesicn. OumncW are In deocendtag «Vta drenstti. 
Psmitago tiwn^n era lor Ec u; a poataire rtwnga denceea e n idi curancy. OtaeigeiKe sheen I he 
raho beteraen tao pam me pere e raage dBareooe between the ectud mratatred Ecu eeretal raw 
tar a cutmy, ad die maximum pe m taed percentage dewnflon of die currency's market rare tarn Sa 
Ecu central mm. 

(I7/Brt2) Swtag end Union Lea suspended from EHM. MfriBtanm atauWed Oy the FWneM Thao. 


■ THR« WOWTH KIBBLING FUTURES (UFFE) ES00.0QQ pplnia Ol 100% 


Open 

Sett pnee 

Change 

Hgh 

Low 

Est vol 

Open W. 

9338 

8330 

-0.08 

9338 

9X46 

14241 

143438 

92.75 

9236 

-a 12 

32.76 

82.63 

18053 

7ff03 

92.11 

92.04 

-0.11 

92.11 

92.02 

4489 

68948 

9138 

91.80 

-a 10 

9138 

9138 

2718 

53468 


■ PHBLAPBUPWA 8C KI% OPTlOttS £31 ^50 (cents per pared) 


Ttadad an AFT. Al Open Mwes flge. ere tar previous day- 


' KTEWJHO OPTIONS (UFE) £600,000 pcVnte q« lOOW 


Strike 

Price 

AlOv 

— CALLS - 
Dec 

Jan 

Nov 

— PUTS — 
Doc 

Jan 

1360 

735 

733 

735 

- 

an 

039 

1375 

5.10 

5^16 

536 

031 

037 

032 

1300 

2.77 

332 

439 

an 

032 

132 

1326 

1.00 

2.05 

235 

0.78 

1.68 

2.S5 

1350 

0.18 

1.0S 

1.68 

2.46 

331 

533 

1375 

0.02 

0.47 

095 

4.69 

531 

5.99 


► ► ► we take care 
of your banking requirements. 


As you know, the prompt and reliable services of Hamburgische Landesbank 


Strike 

Price 

Dec 

- CALLS - 
Mar 

>kai 

Dec 

— PUTS 
Mar 

9350 

9375 

9400 

aie 

ace 

032 

aoe 

032 

aoi 

i°P 

0.18 

031 

032 

ago 

1.11 

135 


Previous my - * wU Cell 7JBS3 Puts 22390 . Pier. da/S open InL. Cads 4SBJ84 Puts 409J62 


are also available to you in London. We can offer you a wide range of 


. Cede SB80 Pure 3709. Awnous day's apan InL. Crar 336109 Aits 202542 


! MONTH EURODOLLAR (HAM) Sim poWb ot 100* 

Open Latest Change High Low Era. vol Open mL 

94JM 94.05 -aoi 9406 9*04 184,809 430^82 


9260 204,168 406222 
9213 127007 296,969 


competitive banking products with speedy responses to your requests. 


BASE LENDING RATES 


■ US TREASURY BO.I. FUTURES iTMM) Sim por 100% 


In addition the know-how of a major German bank for your enterprises 


Mam & Company 5.75 

Aled Tlust Bank _fi.75 

AIBBank 275 

•Henry AnahaSier 5.75 

Bonk cf Benda 5.75 
Banco Bttno Mzcaya- 275 

BerttofCypras 5.75 

Bank of Ireland 675 

Ba*oflrtfl 0 275 

BarttolScofand 5.75 

BadayaBark 275 

Brt Bkol MM East..— 5.75 
atjptey 8 Oo Lid 5.75 
CL Bank Nederland ... 6.75 

CUboHNA _..i75 

Oytiestiate Bank 675 

The OpoperaSre Bank. 5.75 

CoUM&Co -S.75 

CreckLiwvda 273 

Cyprus Popular Bar* -S.75 


% 

OuncrerLmris ...... — 275 

EffitarBarttLiTlted-. &75 
Gen Bank.. 25 
•Robert Ftamfrig & Go-5.75 

Gkobank 275 

•CUrness Mahon 275 

Hat* Bar* AG Zurich . 5J5 

•Hambrae Bank _&75 

Hftfcbte&QflnlfWBk.275 

•MSoniaL 275 

C-Hoare&Co 275 

Htmgkong ft Ghanghar. 275 
Juton Hodge Bank.— 275 
•LflCRCM Joseph ft Sans 2*5 

Lloyds Bart _275 

Meghraj Bart Ltd 275 

UdandBar* 275 

* Mouit Banking . 6 

NatWeetmkiatar 276 

•ReaBraOieis 276 


* Roxbughe Gwrartoe 
CapaFdkM LMsd a no 

iangor authorised as 
abcrikinglnsflUin 8 
Ro^ Bk ol Scotland _ 275 
•SmNiA VWmsnSece. &7S 

TSB 275 

•UnartBkrtHuwaR-. 275 
Unity Trust Bark Pic.., 275 

Wootom Treat „275 

WMnmsy Lajdanr 273 
YotXshku Bank -275 


Dec 

9434 

0432 

-ora 

94.64 

9432 

1303 

18.158 

Ma 

94.13 

94.14 

. 

94.14 

94.13 

409 

10383 

Jui 

- 

8337 

- 

- 

9337 

16 

5345 


and business ideas is at your disposal. Come and talk to us if you are 


M Open Merest fig*, rae tar prevora day 
■ BUROMABK OPnOM OTB DMIm points Of TOW 


• Iriembera ot Lcrdon 

U. imj^WsmaiA DiuJihBI 

■3¥SS97lClfK oawviy 

AnoGUon 

* to afl n HguA n 


SHie 

Price 

NOV 

Dec 

CALLS — 

Jan 

Mar 

Nov 

PUTS - — 

Dec Jen 

Mar 

9475 

aio 

ai4 

0.08 

013 

003 

007 039 

034 

9900 

0(71 

0.04 

003 

006 

0.19 

022 0.48 

nca 

9GSS 

0 

0.01 

am 

002 

043 

044 0.72 

0.73 

vol tauL cafe t US Puts B2& Aeiilaua day’s open ait. CriM 200258 PUB 1SGSM 
• IWO MBS FRANC OPTIONS OJFFE) 8Fr 1m points el 100H 


Strike 




MIlH — 



PUTS 


Price 

Dec 


Mar 

Jun 

Dec 

Mar 

Jun 

9575 

0.15 


aio 

038 

0.06 

020 

068 

9600 

033 


035 

a 03 

019 

0.50 

0.88 

9GES 

aoi 


ao3 

aoi 

042 

0.73 

1.11 


looking for a bank that works fast and hates red tape. Mr. McCol! would 


welcome your call. Hamburgische Landesbank. Your individual consultant. 


i i n * A HAMBURGISCHE , AA 

LANDESBANK 


EM. vd mol, Ccfla 0 Was 2 Pnwtaue d aft open W.. Cm S(CT Puts S4S 


Moorgale Hall. 155 Moorgate, London EC2M 6X6 • Tel.: 071 972 9292, Fax 071 972 9290 



(J* 


\.C 





EUROPE 
hot* pet 31 /sea) 


fee** 1X00 
BMW 7BQ 
QMI 833 
EAGM 2,80® 
BIN 1.334 

|jw txra 


MZn Biz 
taMI 402 
SMD 107 
WAc 1,001 
VW& 334 
WBM BBS 
«W 479 

Marts 3,760 


430 £200 1,780 Z6 _ 
-24 1,270 7WJ1JJ _ 
+« BM G87 13 _ 
+004^1430 0* 
4101,7131,100 14 _ 
-SU071JSDO5 __ 
♦1 744 m _ - 

aa = 
3 s aa ™ 

4131,180 874 __ 

+10 408 911 141 _ 
419 701 S«E 24 _ 
— BOO 430 1J7 „ 
+004X40 3XM M _ 


(MHH 
WCSP 40890 
Lontr 1219Q 

Lufati 1,119 
Lagrao uoo 


57D 340101 
700 SfflOS 
BOS BBT 2.1 
4BU0 377 39 
1 67-70 10BXQ __ 
1X96 IXMM 




„ *1&X0 

Meuhx 117,70 
MB MU 03S 

IKES' 12290 
Omn 
Pant 

Pmjft 


OT« M fl l lXFMM UaB{0ct31 /R*) 


* 1 - 






MB 

371SU8 79 


SHIMS 3900 

sr s 

SMtiP U83Z 
Tsfacu 42ZD 
TtooM 84400 
TDtiFr 16.430 
(Mam ii/MO 


-4910 8973 

JSiigaSiS 

413 tjm 1X0Z 29 

auras « 

+002**215X00 34 
+4OOMUnft0S5 IS 


— cmUWS(0ct31/RiL] 


stas 

flam 

SriUS 


1.-? 
71.775 310 

190 39 


~ 4 I 


-1 215 134 0J _ 


QM ' 7,110 -20 8900 8,100 1 J 

1 i UN’ 

G8L 3970 +1D4XBQ3X25 £5 

$£ *32 zlggffiiS 

QBrtm 7®0 410 9,190 7^140 Si 


2rtjo 

U*b 27030 

Worms 340 


g 

J?8iJS ? J 

792 9Z3 39 
29001.710 29 
529292.19 — 
377 22940 39 
237X8183X0 29 
3,120 2201 19 

214192.10 64 
.J150 20.10 34 
22*90 mfio 33 

484 333 4.1 
660427X0 EJ 
BOO 403 8.1 
307 221 12 
33S 840 34 

353237.10 4J7 



TX& 

UC8 23900 +75 

Unllta 2.740 +10 

KHNK(tlCt3iyXf} 


*7 
24 
2440 44 


010 ... 780 566 29 

100 -1 281 175 23 

DMA 2BT +1040 333 2EO 19 

CMtm 5400 — 7900 5900 09 

WS12A 103900 *1900 0*3* MW 09 
DO**» m<2 +4 22S17U0 19 

DaM 310 +2 427 307 39 

166 -220325 150 54 

990 -a 515 378 ai 

STD +2 843 445 2.1 

1B2 _ 278 160 19 

386 ♦6*75 330 2 l 

910 _ 1950 SB5 04 

324 +4 388 252 3.1 

602 +123778391 488 0.7 
473 -fl 787 418 1.1 

504 _ 015 407 08 

, 316 +m 073 429 00 

SUrt 9B2 *1 485 321 29 

t3©b 339 +13S8.3J 300 — 

-MOM B20 +301972 510 19 

iHdM 238 ♦« 26720798 42 


I (Oct 31 /MM 


111 ■ 
140 

BQnA 5590 
EnsoR 4000 

147 

8X9 
mum 
348 
126 
150 
156 

IMtsSA 214 

MSSSB 214 

|M<U> 6B5 

MM 8790 

68 
46 

9050 . 

SHanB 241 

M IS 
14 

WOW 100 


- +2 154 69 19 

+2 T7B 121 19 
-105 84 — 

—.10 4090 3390 19 
+2 233 141 29 
-1740 an — 
+20 BO 46 29 
-1 7TB 502 19 
-2 150 100 09 
+2 247 140 19 
+2 250 13B 19 
+9 238 200 09 
-4 2W M«U 
-7 704 287 04 
-1 100 60 _ 
+6 104 . SO 14 
— 102 64.10 19 
SO 5790 41 _ 

+190 120 0490 19 
-1 260 175 29 
+90 911490 _ 

+90 2090 12 — 

_ 126 89 _ 


TBAMCE(0ct28/Frs.) 





Bat* 

Rnfl 
Rsatty 
AmM S950 
STUB* 393 


W 
knrmwq 730 
taPISB 38.10 


— 768 304 89 

— 614 . 85B 29 
_ 013 464 49 
_ 330 2171*6 

— 716 570 4J 
__WSLED 227 1 9 

_ 683448.18 39 

— 3,73029*0 39 

— 760 503 XI 

— 19001953 49 
— 1.155 794 4A 

— 2103016800 89 
. —21120 15850 — 

— 2970 1.711 29 

— 20513250 49. 
— 19701,204 39 
_ 485 346 29 

— 3BU» 201 29 
— 1988 700 79 
_ 8SS 370 39 

— 40836193 — 

— 737 370157 

— ai 60 5900 07 
— 1902 BBS 39 

— 830 010 — 

— 476 317 19 
977 700 24 

— 740 418 U 

— 74B 608.29 

— 433356.10 5-1 

— 382 298 89 
_ 2»Z 101139 

— 1,(168 685 — 
— US 680 K4 

— 830 035 17 

— 3487.2750 29 

— 29691.709*9 

— .734 858 29 

— 1670 8.1 B 99 

— 182 100 89 
— MS SB0 32 

— 09M49S 19 
, — 878 30529 

— 29341970 0.7 

— 389 23050 29 

— 846 MS as 

— 46186 388 29 
_ eao 406 29 
_ ?iB 422 as 

— 1978 B5Z 09 
— - 118 9795 77 


3 Brawn (Oct 31 /Duo 

133 +4901MJO 140 1.1 
62650 +S30 836 400 ZX 
1970 +301446 lfltBJ 13 

2907 +02 29112.122 08 

842 +1560690 575 1 9 

810 -81.101 700 — 

736 +161925 016 19 

BA8F 31890 +390 mm 278 29 
BOnak 40150 -1 SJ» 435 19 

Bohgss 380 — 468 348 29 

Ba»W 36190 +4904049033010 3-1 

— BmarH 30590 +290 9283GB6D 3.7 
” WWfflr 773 +16 029 830 19 
“ BSyfllV 44890 +1050 573 385 29 

B*adar 1946 +30 1.10G 815 14 
BMW 207 —94030 238 21 

BHPBk 38S90 +3.50 526 374 3.7 
mta a« +4 861 750 1 9 

CKM&Y 790 +201930 765 14 

CKAfi 1973 +17 1900 1,140 09 
OnraJjk 31B.50 +390 SS3S &m 39 
Com 22130 +190 200 21790 19 
BtW 419 +1 60038030 09 

art* 773 +17 004 eas 19 
452 *7 666 486 19 

22530 +2.4028650 210 — 
Dwrtk 741 +16887900936 23 

DMAS 14290 +130 IBB 131 29 
Doutf* 488 +0 607 47B 29 

DIB** 316 -2 337 260 19 

DMBk 40290 +040090 94S 3.4 

S14 +2 616 485 1A 

*3 307 245 29 
+2 828 580 13 
— 2*5 190 39 
+713801.141 19 
-6 881 «2 1.7 

+3 440 310 3.1 
022 -10 1989 857 19 

3Q3fegmgo ai 
♦31916 7W 19 
207 +70 253 20fi 29 

260DI +490 313 2B4 39 
337 -ID 483 32S 24 

K*OS 16790 +890 188 131 — 
+6 640 5 J6Z1 
+8 558 *51 29 
+2 18130 11610 — 
170 102JD 3.7 
BOD 616 7* 
-2 £60 IHO 19 

— Unfa 08030 +1530 90S 830 19 

— LfaoH 336 +3 410 811 29 

— Urtm IBB -190 2163015730 — 

LuflPf IBS -90 200 151 19 

40790 +830 470 378 U 

" 3n +4 367 205 29 

_ Hum 402 +1904SKSD 309 IJt 

— Ikmem 650 — 822 850 — 

— kfeoflo 15790 +620 286 101 61 

_ MWRi 2.770 +25 3917 2970 04 
-nm 233 -2 282 210 — 

— nflCmn 605 _ 630 483 39 

— PMch 642 +7 950 822 04 

— Pmo 44030 -3080190 416 29 

— RHE 481 +69052090 380 29 

— nWER 680 +« 424 M13 

— RMK 1957 +2719201930 09 

— (fenNB 278 +14 372 284 29 
+3 207 200 57 

, _ +4 313Z3U0 24 

190490 +4L5D (ill 866 14 
+4 438 Sfiffl 19 
+1170090 807 2.1 
+1 085 810 19 
— 600 480 19 
28790 +490 32823030 21 
318 +2 3BO 288 3.1 

304 +3505030 460 29 
370 +1 400 317 29 

32S +4 416 318 29 

473 +4.SS 328 436 14 . 
44190 +4 SO 554 418 06 . 
+390 443. *37 09. .. 
+121973 780 13 . 
+3 270 ZB 19 . 


8330 

91 

OcMGr 740M 
5690 
75 

noboca 11390 

Rodnco 61 
Koine 11820 
Roranl 82 

nOutCtl 18020 
Stork* 4590 

IMDP 20070 
Mil 180 

WOOpR 48 2D 
WNDpR 12190 


*13 M 

284 34 
59 
2J 
34.70 29 
72.10 09 
4408890 74.70 2 A 
+90 57904090 2.1 
—3D 6290 42.10 09 

39 

<7 JO 59 
+1.1010020 72 24 

+190 92.40 0175 - 
+90 *, rn 3 o 

+1.70 saw 40 0.1 
-90 6490 7060 19 
+1.10 131 11140 11 
-90 68 50 61 

+1401354011398 29 
— 10030 61.70 54 
+1 2164018*80 44 
+40 5030 4090 1.7 
+90 23817640 29 
+3 20318*50 UO 
+90 6830 46 29 

+4O13UD1D190 19 


NMta 1,178 
(MAg 130 

« 

MB IK 

RenmBr 1936 
HdWEk 11900 
RErtCh 5 985 

z:_ 

SMH{^ IK 
S lift* G55 
SRbfti 828 
BdnPC 1,400 

4i2ftn 868 
TiMfini 382 
SHOWS 17390 


Urtrtr 1,177 
WRA) 539 
ZurtnB 1,146 


+2 071 782 1.7 
— 100 14U0 1.7 

+6 881 an 19 

-8019751.400 29 
♦2014371963 2.1 

+i its nia - 

+20 (.738 1900 45 
+70 5940 3970 — 
+1 283 178 89 
+10 1940 1901 — 
— IMHO HUB'S 04 
+TS 7970 6,100 B0 
+1202900 1940 29 
+101956 642 14 
+4 227 148 13 
+1 

+4 870 806 — 
+401960 1950 39 
+7 1.100 845 29 
-2 331 352 44 
-190 26017230 *3 
+4 815 584 14 
+8 770 519 14 
+24 BK 736 - 
-23 1903 1.063 27 
+14 882 964 27 
+10 1.618 1,125 1.7 


640 +12 720 601 _. _ 

+2 615 515 
+3 070 811 09 _ 

■Oman I960 +20 1938 1980 09 — 

-. .a, ^ jj, 

1,li +10 19001,120 _ — 

ROM 836 -7 050 737 ~ — 

MdEto 2970 -10 2460 i./uu 

= = 


PACIFIC 

JAM* (Oct 31 /Yon) 


r (Oct 31 /Kranarj 


+90 112 
-I 179 
+20 IBM 
-1 IK 
-90 114 
-1 140 

+4 396 
+811650 
-3O2AU0 
-1 208 
+1 305 

— ie*a 
+2 01 
+1 01 

— 07 

— 122 
+4 151 

-40 8490 


BS 44 

IK 0.7 
1190 — 
125 1.1 
07 _ 
100 17 
200 29 
80 39 
206 19 
140 OX 

18B90 21 
130 34 
72X0 26 
70 27 
72 69 
65X0 14 
114 22 
21 — 
55 BO 


— SPAM (Od 31 /Pit) 


+60 6280 6160 29 
+10 8700 4,700 62 
+3S393S27BD 29 
-10 3400 2415 74 

— 4.476 2075 4.1 
+70 17700 HOOD 89 
+1DB921 4.400 6-7 

+81435 700Z3X 
+80 3900 2410 21 

— 6.1 10 1400 27 
+12D 11990 7.650 27 

+80 2715 1J46 49 
+35 1,775 1,210 19 
+26 39B0 2900 39 
+30 2100 6.1 DO 25 
-10 1.100 704 6X 
+2 024 418159 
+50 5.140 3X30 3 8 
+8 1910 700 7.4 
+10 7400 4900 20 
+90 79304900 20 
+60 6,400 3.800 24 
♦ISO TSXDO &420 19 
-» 2200 1900 — 
+80 4900 2>05 2S 
+10 356 102 OX 
+8 006 3611ft? 
-IT BIS 505 69 
+6 4450 2905 23 
-6 21BS19H6 3.7 
+8 738 848 79 
+45 2900 050108 
-40 1910 1,150 5J 
+8 21201980 22 

— 3X80 2935 14 


I (pd 31 / Krona) 



- Itturpetm/Ut) 


ft Comm 3980 

amz*a 2000 
Bftam 1940 

Mn4 112 
20,100 
2640 

2771 

1.700 

1JMQ 


ormn 
AarFfa 12K 

5* 0200 

Iwr 3,720 
FkW 39SO 
RonAn 119W 
fieWfa 1,290 
SnW 38900 

^24^ 
6400 
10.033 
> , >3K 
10910 
4700 

10900 

Untnc 1Z7B0 
Monfad 1901 

w 

.3980 


5IET 4950 
9aflaA 49BO 


+856902 5340 59 
-7039K2941 — 
-824501X25 19 
Z11 78 — 


■am^Hwan 19 
+31012*50 8.110 — 
+1 3,100 1984 29 
-10 29121902 — 
+6 2996 1983 49 
+24 2910 040 — 
+33 29161940 52 
U274 0945 — 
+8429641,123 — 
+88 7,330 4,071 19 
+6849202.110 27 
+1400,1085101 49 
♦230 17980 10(09 51 
+22 1985 1236 29 
+TOO*4j233£m 09 

+2SD8IUD0l520a 19 
+10 0090 5925 19 
—413 T+XOO B.I70 — 
+10 2430 2900 — 
— 20139*8 8902 19 
+80 6440 4456 29 
+200 103GB Um 2.1 
-20MUW129HI 79 
+111940 870 _ 
-10 3.140 vrra — 
+1B0 B.100 3440 19 

-20 39831970 

+6® 3*980 17908 19 
-« 12190 7^ 24 
+17510,154 7900 29 

^8^4^25 

+70 7900 4,146 — 


+2X0 03 581*4 

+29575 571*7 

+8 860 250 19 
+7 BBS 438 19 
+6X0 107 15 OX 

+6 104 144 OX 
+2XD 108X33 65 ai 

+210060 70 09 

+1X0 439 202 1.7 
—XO 44250 326 19 
+3 134 87 29 

+4 134 BS ZS 
_ 11078X0 CL5 

— 430 2X1 19 

+90 80 S8XO 24 

+2 311 137 39 
+2 312 178 3JJ 
+2X0 550 155 29 
+190 215 152 29 
♦1 372 17 — 

I +2 155 14 IX 

l +2 1B5 108 19 

— 105 102 29 

_ 156 90 29 

i +1 16* 122 — 

*190 IBB 124 92 
! +290 143 09X0 19 
+2 142 8X0 18 
-.10 73 3090 _ 

+2108500790 19 
I +290 233 120 29 
+2 475 351 19 
I +2 480 350 IX 

I — 144 83 2.1 

I -2 110 88 2.1 

-1 122 82X0 14 
+1 128 76 — 

+4X0 IBS 108 5J 
' +2 175 105 59 


HinoMt 955 

— tfcwr 1750 

— HafanBk 820 

= S8S 

— MtOud 1970 

— HtKoM 1940 

- IWtot 1.730 

- HOM 1990 

= K 

- fSS 485 

- tSSS 2^ 

= W ’ffi 

= s as r 

_ Ss 


+10 1420 1200 — — 

+15 737 468 — - 

+101910 801 04 — 
+201980 018 — _ 
♦lOUtt) 001 - — 
+90 19901970 — — 

+14 74* 603 19 — 

+301,700 940 — — 
+8 534 m U — 
-10 8X00 2910 — — 
+10 59404970 0.0 _ 
-1019501920 — — 

+101.2501900 — 

+10 811 500 1.1 - 
_ 0:1 1.040 — _ 

+6 620 410 OX _ 

_ 513 360 19 — 

+8 670 660 — 

+1 938 056 — — 

+20 1900 I960 09 _ 
+2 801 416 — — 

-60 3940 2.410 — _ 

+5 1920 842 49 — 
+19 785 438 ._ — 
+101920 1X30 — — 
+180 3900 2980 —419 
+10 1910 1920 19 — 
+18 811 316 — _. 

-2 462 337 19 — 

— 907 841 ._ — 

-8 003 400 — 

— 1,440 1.0+0 OX — 
-4 708 571 1.1 — 

+30 2970 2.440 — ... 

+20 1.330 1920 — — 
+2D 2.780 2900 — — 

— 1900 1910 — — 

+10 964 772 19 — 
♦12 MB 758 — — 

+ 14 G2T» 410 „ _ 

*8 SOT 397 — _ 

+40 19701980 _ — 

_ 1X001.050 OX _ 
+40 2.060 1.700 — — 

♦10 1X10 1.400 — — 
-61920 ODD — _ 

+10 1938 731 ... — 
_ 610 551 — — 

+3 S70 413 — — 
+-I0 , — *“ 

♦20 

♦0 

-6 1980 720 

+1 BOG 687 09 _ 

1.1 TO 051 _ — 

-101.7101930 —819 
+50 1970 1930 08 — 
+20 4X50 3900 07 _ 
+13 545 19 _ 

+5 638 409 — _ 

+20 1910 1950 — _ 

+3019801930 _.. _ 

+101.180 B93 — _ 
+1104940 3900 — _ 

+11 7DB 52T (LB — 
+30 2.450 1920 — — 
+2 803 443 — — 
+30 2960 2,000 _ _ 
*7 738 695 J9 _ 
-1 513 275 _ — 

— 605 300 _ _ 

+20 1940 710 _ ... 
+30 1.270 BOO _ _ 

_ 2X00 I960 _ — 
+20 1.180 841 — — 
+4 788 614 — _ 

+4 833 787 _ _ 

— 1,050 BK _ - 

-3 M 426 08 — 
♦1 1250 038 _ _ 
+7 638 440 _ „ 
+4 734 802 1.1 _ 

+3 840 
+4 S25 

+10 780 
+101.130 __ _ 

-9 560 397 19 _ 
♦10 850 870 _ — 


732 +7 787 

-1 983 

744 +10 787 

KnrtW 487 +9 573 425 19 — 

Kurrta 4» +18 523 91 

nnra 123D +201950 i9i„ ... _ 
Kuan 660 +13 845 408 — — 

+10039002920 — _ 

♦120 7920 5900 _ _ 

+B 555 375 1.1 — 

742 +8 880 730 — 

369 +741960 803 — — 

2940 +1029802^=0 - - 

078 +11 782 838 .. _ 

_ 1,230 78S „ - 

+201940 see ox _ 

643 +13 680 51? _ _ 

S ^Hi 1 ® = = 

748 +15 800 780 29 — 

429 +14 483 321 - — 

1.77® 4304810 1920 19 _ 

I960 -30 2920 1.7;® __ _ 

1910 +20 1920 1900 _ _ 

Mcdana 1970 +101920 800 1.1 — 

.7*0 -20 3940 2960 _ 

861 +6 980 711 _ _ 

MUHM 575 +5 848 307 _ - 

720 +9 882 688 — — 

+10 732 557 — _ 

-1 702 582 0.7 _ 

MMX 1.400 -3019*01950 69 — 

841 -1 083 480 — _ 

•Mffl -7 GU 385 ... 

Mai 620 _ 1930 700 09 — 

MbEfart 2.430 +4039102970 ... _ 

MlCOrp 1X20 +3019=0 1920 — — 

+6 738 520 

+io 1900 eos__. 

-2 550 335 ._ 

7W +14 B33 003 ... 

+8 584 384 ... 

-21910 7« — — 

1950 +301930 842 — — 

740 +4 702 487 _ — 

483 -7 580 407 — 

*4 484 318 _ _. 

+4 885 305 _. — 

1900 +1019K1.14D .... _ 

IMIMb 1970 +1019101 ~~- 

IM3MOI 672 +18 5B4 

884 +15 BOO 

B7D +13 BB6 _ 

347 >3 400 301 — 

MtFud 1900 +20 1.420 19» OX — 

735 +1 860 723 19 — 

+8 460 

♦7 453 _ _ 

+S 840 57B _ _. 

+S 940 77D 0.7 ... 

430 +4 449 810 — — 

1,120 +20 1,400 845 - . ... 

903 +3 1,110 780 .. — 

MWnB 1.430 +402230 1230 03 — 

824 +10 782 505 _ — 

1JB0 +20 1910 8SS ... ... 

2900 +B0 2X00 1983 04 — 

Nknartl 575 +15 524 43s 09 — 

MortS 2.700 — 2.7BQ 2.000 — 

MnMan 3.800 _. *.490 3.472 ... ... 

MC 1J40 +20 1910 B69 _ — 

NQKfa 1920 +101,171) 965 .... — 

NBKSp 1X40 _ 1.460 l.COO _ _ 

+4 B30 335 — — 

+2 300 231 _ 

4® 030 565 ... — 

784 -3 795 525 19 

745 +18 787 493 ... — 

*40 +1 404 SlE — 

670 *24 010 811 _ 

064 +11 1940 781 09 — 

506 +5 588 500 ... ... 

MdHK) 1.450 +10 2X801.410 — .... 

3s ■a , « i e = - 

738 -4 810 628 — 

+1 558 400 17 ... 

+1? 351 570 — 

+8 520 412 — .... 

1.140 +40 1/M0 1X60 0.7 ... 

968 -22 1.140 055 ... — 

M-Md 5.410 +160 7XD0 5X4O ._ — 
843 -1 8X60 802 — — 

425 -4 482 316 — — 

2X70 +20 2,130191 

2,100 +30 2900 1J23_ 

.050 +30 1,110 037 — 

71 H +12 802 093 IX — 
519 +0 020 450 — — 

1,710 +30 2,190 1X50 0.7 — 

738 +3 850 826 — _ 

710 -4 796 476 — — 

1.42D +10 1.880 1,400 IX — 

700 +5 764 653 ... — 

847 +0 7B0 5U — .... 

785 +14 788 484 — 

1X50 — 1900 1X20 IX - 

586 -1 817 *50 — ... 

1X60 +1019001X30 09 — 

SS7 -1 815 441 ... - 

782 +10 1.110 7*2 .... — 

1X80 +»0 1.640 I.37D — — 

1900 ...1,5101.180 ... ~ 

550 +2? 550 

400 +4 +01 

483 +3 534 



SunCtan 572 
Sung* 1X00 
Sums* 1950 
SunHw 405 
SUnUM 413 


TtraSh 800 

Tinwa 1X70 

T)ato5i 1X00 
TanM 
OWl 574 

BH3 778 

TfadMi 




+7 512 381 19 — 
+2K 8960 7930 — — 
+20 1X10 1X20 _ _ 
*10 2980 2X80 _ _ 
-BD1.110 77B — — 
+10 29201910 _ 
+101X40 840 — — 

— 1,200 1,130 _ _ 
+20 1.380 1X80 ... _ 

+6 BK 433 1.1 — 
S BID 411 _ „ 
+4 385 256 

— 700 GOO — — 

G23 401 

-10 1980 1,110 — — 

— 2920 2950 — — 

*14 828 700 09 — 
+00 8980 3.490 _ — 

+XSS2 518— — 
+2 747 425 — — 
+30 2X90 1.700 — — 
+4 687 404 — „ 

1.100 837 — — 

+301X801X80 — — 
*16 475 3B0 _ - 

+8 485 288 — 

+7 1X30 851 09 — 
+8 387 252 _ - 

— 1X10 864 _ _ 

+14 573 432 — — 

+7 734 811 19 — 
+201.120 BIB _ _ 
-2019201X90 _ - 
+1 315 874 - - 

-19201X50 — - 
+20 5X50 ajSD — — 
+8 748 810 — — 

+30 2X10 1,750 1.1 — 

722 HO — — 

+16 862 878 09 - 
+201950 1X70 — — 
+1019401X80 — — 

-31X«0 815 — — 
+1S 605 «0 _ _ 

*2 820 BIB OX _ 
+3 1.100 705 09 — 
+1 K1 5GE 0.7 — 

+8 666 367 19 — 
+2 720 602 — — 
+23 903 670 — — 
+11 607 533 — _ 

+40071500 17.200 _ - 

+10 3X312.460 _ _ 
_19201.no _ _ 

+5 538 325 _ ._ 
+7 507 415 — — 

— 1900 1.120 0.7 _ 

+8 615 421 _ — 

+10 1.720 I960 _ — 

—BO 2X20 1X10 _ — 

+10 2X00 1970 — — 
+30 3X40 2X00 _ — 

+20 3.4HO 2J40 — _ 
+9 5Hi 428 „ _ 
_ 71® 520 — _ 

-30 2,780 2X00 _ _ 
+10 2.140 1X10 0.7 _ 
+1 780 450 — „ 

+14 8SO B57 — __ 
+4 730 512 — _ 
._ 1,660 1,480 _ _ 

— 1,560 1,19a _ — 

+4 788 575 — — 
-3 878 870 — _ 

+8 1X80 S70 

+1 770 433 — ._ 

+2 B23 SSS .. ._ 

+5 *35 285 __ ._ 

+40 2X901.470 — — 
+2 588 421 IX — 
+10 2X60 1,430 _ 689 
+8 754 515 _ — 

+13 733 524 — _ 

+20 3.450 2X80 — _ 

+«7 2X501.700 — _ 
-8 527 330 _ _ 

— 1950 965 — — 

+0 505 330 — — 

+8 880 432 _ .. 

♦1 BK US 

♦10 436 285 — _ 

— 418 272 — _ 

+301900 835 _ ._ 
+30 1930 1X00 IX — 
-10 1930 8S0 — ._ 

+3 3®0 B20 _ _ 

+221X10 £32 IX ._ 
+ 10 2X301X40 — 

+20 1X10 I960 _. ._ 

+101X50 BOO — — 

— 7X50 1,110 — _ 
+30 2X90 1940 09 — 
♦10 1.3501X10 _ _ 

♦fi 56* 350 IX _ 

— 869 705 1X48.1 
+1 1X» 734 _ _ 

+101.120 780 ... — 
+46 086 B35 _ _ 

-2 74fi 528 — — 
+121.1E0 880 — — 
-10 1,180 0121 ... — 
-a 783 442 — — 
♦O 745 406 — _ 


seeud 291 

TUT 291 
TetCpH 4X2 
Watar 893 
win 898 
wanfi bxo 
warn 290 
WBfaoe 492 
m»m sxz 
WMl 298* 


+95 3.70 298 8X209 
+97 274 1X1 — _ 

— 4.72 3X8 S3 - 

- 0 X 8 aio 4.7 

+X4 aso 8X0 IX — 

— 092 790 29 — 

+X5 2XS 2.18 39 — 

+Xfl 595 *XS 3.1 _ 

+97 5X2 3X0 19 - 

+94 39? LTD 42 - 


MBHDK(0ct31 /HJCS) 


AmOyPf 090 
BEAsfa 3390 
1196 
37X0 
4020 
87.75 
7X6 

23X5 

fttfartl 16.76 
DRra 10X5 
BEada 490 

ftlionr. *H filial 

HSBC 0190 
HLlingD 13X5 


. . .. 7-10 

taLnd SQ90 
SSSW 14X5 

Hcsnw 10x0 

IK Nr 3390 
HXEfa 2490 
HKLim 1090 
ram 1698 
WTM 1695 
hdphi 795 

HutCtMl 3520 
Hyan 2D90 
“ — 0X0 

B*S 

20.70 

KMAa 16.10 
MmoOr 10X0 
Mmwu M96 
HWXA 35X0 
SHKPr 58 
SWfiBr 1345 
SMK 3.77 
anao 10JSM 
SOW 493 
SHKCD 3X8 
StWaA M 
Satie 0.15 

TaMr 3520 
Wlaaf 3090 
■Meek 1820 
WMOOn 1030 
mMor 10X0 


+.16 1590 035 49 BJ 
+.70 9 2690 2X 239 

+.1515201040 3.7 — 

+90 52 3090 2.7 — 

+20 67 37 3X9TX 

— «1 SO 29 59.1 

+96 14 8.15 — — 

+95 27X0 1690 19 - 

_ 10.10 1690 39 169 
+.1018X0 B9S 09 _ 
+.13 MS 4.10 89 - 
+9S 4S 2990 19 — 

+190 6090 32B0 6.1 _ 
+9024X5 15 29219 

+1X0 ,6 15 axoaxixe 

Z 

+X0 30X518-10 39 209 
+90 T720 12 3.1 — 

+901080 5-90 *7 — 

+14X.S9 2790 19 — 
+9033X510X5 49 _ 
-.10 1X10 790 09 — 
+1.75 8490 48X5X3 — 
+.15 3890 2*90 09 - 
+.10 2S 1290 229 239 
+95 12« 020 09 — 
+90 <2.30 2020 39 _ 
+.70 38 30 39 85X 

*1.75 774190 39 702 

+95 M 11 29 49.0 
+97 8.15 X10 4911.4 
+J» 18.40 0X5 101 329 
-92 6.45 3X0 8X — 
+XB 7« »U _ 

+2 71 SO 19 20.1 

+.15 1190 8 tS 1S9 

+1.70 37X0 23 2X — 

+190 41 25X0 Z2 — 

+90 23X01*75 2X _ 

— 18JB 080 22 — 

— 1790 0X5 70 — 


07201 ^K 

3000 Gncol 

41408 EurMav^ 
5410 FPl I 
29000 Rmtil 
10400 WMAj 
4400 FcntJ I 
20681 PrRw 
250 F*fmvl 
52*00 FMnAl 
■51620 Wnm 
78701 QBmbl 


a& ;$i§ Z !§ 

JNil 


;is 

+^1 25% 2» 

.. +20 400 385 

18*2 SlfrfclK 


JS270 miSI 
12015 SUM* 


24700 TIU8W 
1407K TaekB 

a Tamil 

KHb itnP 
521688 Torftan 
300147 TTKoPn 
Uira Tnrta 

TrScll 
7200 liAPAW 
■lOOO ucnrpx 
753243 UUDdb 
■ 10413 Vton H 
■7205 WICbI 


14 +i« 014 15% 
104* SlV* 104* 

15 15 16 

11% ->9 011$ 11% 

11% -%S11< 11% 
m, TS mi, at! 

4^t tih 

8% +%S8% 8% 
45 545 44% 

14% -%SM%14% 
7% 67% 7 

154* 516% 815 

10% mo 

0 -% SBfU Oh 
23% 

23% -% -■ — 
25% +% 


MONTREAL (0ct3l/CanS) 
4pmdosa 



2413? ftsfflSB 
19 Com rt 
100 liTCB 
17135 JOniu 
16100 MHCA 
7SBi « mamc 
4KOO Pnrtgo 


sisss 

-% sao% irt 

15% C15V 15\ 

a u a 

n% +% *11% n% 
16^ +%Slffl iS 

12% -% 513% 12% 


“ MALAYSIA (Od 31 / MYR) 


37513 Hwifafl 

75800 Bound 
Bztna m_BrH 


2SOS87 knpOl 
119638 HXJ>B 


Bouatri 492 
arming 2X50 
15X0 
Mart* 17.40H1 
IMfei 4 

sauPjEfl *32 
pea 4X2 
Stono 795 
TrWan 2OJ0 
Tanagi 1X80 


-.18 890 392 29 _ 

-00 25.75 ixn 1.1 . ^ 

—.10 1X10 12X0 OX — 111301 IncM 
+98 1090 1X30 1.1 — 57000 AnniKk 

— X30 X10 19 — “E* 1 

-22 8X5 zm 83 — "* ,fc “ 

-.06 8X5 X52 IX — 

+.15 X40 590 XI _ 

— 24.10 16X0 QJ _ _ 

+90 20901290 _ — 812225 LawB 


SM&APORE (OQ 31 /SS) 


+20 12.70 IBM 19 B.7 
+20 19X0 16 0.7 — 

+92 3.48 294 39 — 

— 3X8 X46 XI — 

+.15 6.65 4X2 59 — 
+90 1X50 8 15 _ 

+90 1X70 11 19 — 

+96 7X0 5.75 OX — 
+901X101X40 IX — 
+.1017.10 HID 19 _ 

— 3X6 X14 OX — 

+X6 *_2B 116 39 — 
+.10 530 3X8 1.7 — 

+.101190 8X8 29 ... 


= NORTH AMERICA 

>-1 CAUDA 

— TOftOVTD (Oct 31 / Can S) 
“ Bpmctase 


- AUBTRALM (Od 31 /AusJS) 


SMtlZOLMD {0ct31 /fix) 


+2 292 101 — 
+5 721 558 29 
+8 713 587 29 
+f 39MZ173 19 
+11 19*0 1915 19 
+2 250 IK 1.7 
+8 747 500 39 
+4 070 702 2J) 
+1 942 686 29 
+8 422 327 _ 
— 3980 I960 19 
+za 1 jog 1980 29 

+30 2X32X140 XJ 
+20 008 650 19 



+11 678 
+18 1.120 
+21 048 71 

+30 29401 
+401,1 
+50 

-10 1930 
+1 759 

+13 
+10 

rf 

+ie no w _ 

-10 2XS0 

+301 

+1 — _ 

+102940 1960 00 
+30 2930 1950 
*6 520 383 — 
+12 1930 525 OL0 
+41X70 723 _ 

»ig*S = 

+20 29101,370 — 

*]? SS 770 19 
= 

+10 2X701.730 — 
— 084 528 _ 
♦30 19701900 08 
+3 448 284 — 
+20 778 805 07 
+7 501 39B _ 
+0 688 470 _ 
-20 2,1201X10 

+8 400 

+10 840 

+8 715 431 
+20 19*0 822 OX 
+30 2900 2X50 OX 
+80 13.400 0.750 _ 
+20 1970 1910 09 
-3 IX® 825 _ 
+30 I960 1980 _ 
+30 2982 1,700 _ 
+8 420 339 _ 
+13 828 518 OX 
-8 570 430 — 
+20 2X70 1410 — 
+6 80S 425 .. 
+1019101.140 _ 
+8 500 338 _ 
♦0 422 271 — 
+10 454 303 — 


SjpTMfar 24900 +30027700 18X90 04 ... 

NTT 005X00 +1M»l«nMi«B — — 

amVMn <W7 -4 

+11 557 

582 +7 610 

1X30 .>.19701 

565 +38 834 

827 +3 034 

.400 +30 1,570 1 

.130 -20 1,320 1 

B28 +7 902 

500 +6 510 

MM 1,130 +18 1970 _ 

538 +7 559 401 ._ - 

BOO *191X40 780 - — 

NatoFd 2900 +20 3X00 2950 1.0 — 
NMD 1.420 1,710 755 ._ .... 

-10 i.7d6 1930 r — 

are 1 ®" r 

+0 B09 BS6 . — .... 

+3 773 582 — .. 

1X80 +20 1,100 887 ... — 

775 +13 

077 +12 m* -ua .... - 

733 -01,110 700 1 4 — 

Byrne 1X70 -10 1940 999 ... . 

1,750 -ID 1,800 1,450 

4940 — 5910 *510 0 3 .... 

V : 

3X80 +80 4920 2X00 0.4 81X 

+6 536 408 ... . . 

+4 770 5W 19 ... 

2930 +20 3940 2.410 — ... 

450 +5 582 300 1.1 .... 

4 TO +14 filfl 440 IX _ 

90S -14 1X20 705 .. — 

4950 +80 4950 3930 ._ .. 

1970 +K0 1.770 1X80 - - 

818 +3 668 447 _. ._ 

Bakun 1230 +30 1940 1930 — .. 

845 +8 704 515 - — 

2920 +20 29K 2,110 0.4 ... 

1.420 +10 2-150 1X10 — .... 

snwrtk 2X30 +20 2.370 1.850 ... . 

+7 1.000 E£5 _ .... 

+3 609 415 .... 

SPPOTO 887 +8 1X00 870 

Saco™ 8.470 +58 7.280 8.350 OX .. 

- 5X30 + 70 0940 4.450 

- 4900 +30 4.B50 3970 — 

SCMT 1910 +30 1,0201980 0 6 

— 1910 _. 1,3001X60 ... 

-10 1910 1.120 - .. 

« ___ +11.1W 956 

SafcHm 1.100 +10 1.4K1X60 IX . 


AMoyl 4X8 
— - 8X6 

4X7 
840 
3X4 
3X0 
496 

AM 195 

BHP 2084 
Sim* 2.40a) 
Bart 3.39 
BOUpCp 0X5 
Bnrtfa 13.48 
"• ' 1X2«r 

3X4 


19.1 
110 
122 

«l 

uni*u. 5.75 
CrtUlBk 745 
Cnnfr 190 
DomMnQ 039 
*05 
195 
Q.7B 

™» 2-78 

BrnC 3.83 at 

&R?r 29M 
291 
1.25 
1.27 
295 
1X0 

... — 195 
ICIAie 1190 
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■ ACTIVE STOCKS: 


HioO noOuim| 
181500 BnpO0l 


82671 
347030 

280740 

50824 ItoyOok 
Monday, October 31, 


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10.1m 

299 

+2 


3.0m 

335 

8.7m 

454 

+10 

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3.0m 

1110 

5.7m 

567 

+13 

Sunttomo Carp — 

2.6m 

1000 

5.4m 

367 

+6 

Itochu - 

24m 

754 


Any time any place 
any share... 


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anywhere in the world 


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INDICES 


US ‘INDICES* 




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38722 301X3 37075 4B&0B VZ 

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137528 1371J4 13S7.11 188295 9/2 

. (A 432780 47K79 9nian IW 

M 410695 421292 427892 20TW 

M <28800 4205XB 4B0MO 2M 

W 207272 208117 332223 1/2 

M 662*4 5581 X 567020 19710 


K^trrlSTSt 


oct Od act 

31 a 27 

» 257152 250229 


201798 27/10 
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37804 zsno 

10TL38 6/6 


CBS IWhCenfSd 83) 4419 4379 4309 
CSS AI Sir ^nd S3) 27E3 2749 270B 


0490 31/1 
29050 31/1 


40UD Z1A 
25790 21/6 


C90-4O (1/709 


210037 2095.17 2090*2 


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mranWnOOST) M0G0O 147190 148690 

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■ RATIOS 










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1 2.70 

2.72 

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177 



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239 

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20X2 

27.77 

20.91 

2X57 


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BSESU£9ft|' 43037 427471 43374 482R57 12» 


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■ STANDARD AND POORS 500 MDEX FUTURES »00 times index 


FINANCIAL TIMES 


0p6h 

Latest Change 

Hign 

Low 

Esl vd. 

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Dec *7650 

476.05 -0.15 

476 90 

475.90 

101.491 

220,715 

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Nov - 18700 1&15L0 +500 19100 18605 27^84 20302 

ties 18700 1924X +505 IKSlO 1875.0 611 27335 

Open fafand Igcm tor (ntious doy. 


■ HV YORK ACTIVE STOCKS ■ TRADING ACTIVITY 


KUEQMP44MM9 11 DWB liiao# TlQlA UUK 5ft BMI 4M 

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5.151.000 404* 
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Amen 1 7X0? 23.47* 75043 


MYSE 

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New Lows 


'INTERNATIONAL 


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mi nuortad by Toward represent 0 * hJgtvw and toms vafaes mat Ufa Mm hoc leacrtd 
pmvtouc day'll. ¥ fiubloel to effioa) reeatoufaitorv I 


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The i.-.rq.-.s! prcv-df.T of dedicslfd tinsncu+l ultimate finnneist pager ort the market. ,ry 
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4, pm doss October 31 


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45% 33% AnwrBsc 15 3656 38 37% 37% 4% 

7% 4% AM Bp 1 100 4% 4% 4% 

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17% 15% Bator Fool 


2% 17 BatoH 

27% 21% Baktar Be 
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BE 

OUR 


GUEST. 


CORINTHIA PALACE 


When you slay with us 

in VALLETTA (Malta) 

stay in touch - 

with your complimentary copy of the 



FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


m n ab on Pm. 

n 1 Mb up km tor dm 

048 13 a 176 12% mz% 12% 


17$ +% 
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090 1.1 24 417 54% £3% 54% 

054 £2 Z7 1370 25% 24% 24% 

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Continued on next page 




V , . - 1 

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as Ti 


I 




FINANCIAL TIMES TUESDAY NOVEMBER 1 1994 ★ 


4 pn dose October 31 


NYSE COMPOSITE PRICES 


! 


in N a 

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AMEX COMPOSITE PRICES 


4 pm dose October 31 


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Sain the edge ow your competitore by. having the financial Times delivered to your home or office every working day. 
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r *i 

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41 


NASDAQ NATIONAL MARKET 


4 pm dose October 31 


r; sb 

Stock to. E W Ip to Ito 

AfiStads 020 19 34 13% 13% 13% 

ACC Dap 012152 287 16% lA 16% 
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Argonaut 1.16 8 63 28*2 28% 29% -% 

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1.16 91500 29% 
21 859 8% 
042 32 12 15 

12 107 12% 
044 13 144 30% 
012 19 4 12% 

100 240 5% 
016 17 597 12% 

008 14 73 13 

5212115 50 

29 1836 11% 

1.08 13 83 35% 

14 3267 45% 
136 9 1793 29% 
029 IB 782 20% 

IB au32% 
11 7774 11% 
078 5 8 31 

75 1931 u16% 
080 19 7100 48*2 
024 27 10 11% 

035 20 4014 9% 
008 9 33 27% 
048 5 144 3 

15 4311 10% 

19 549 11% 
<6 275 14 

65 9 34% 

040 0 144 34% 


rt 

•% 

rt 

«-ft 


rt 

rt 


05 5% +ft 
13% 13% rt 

Oft ft 
16% 16% -% 
14% 14% 

19% 20 rt 
17% 17% -% 
14% 14% 

22% 22% rt 

31 31 rt 

26% 27% *ft 
22*4 22% ** 
57% 57% 

29*2 29% 

8*2 8ft 
14% 14% 

12*4 12% 

35% 36*4 
12% 12% 

4% 5 

12 % 12 % 

12% 13 rt 
46% 49+1% 

11 % 11 % -% 
35 35% -% 
45% 45% rt 
20% 29% -% 
19% 20% *% 
31*2 32 ♦% 

10*4 10% rt 
30*2 »% -% 
18% 16% 

48*2 «% +1% 
11% n% +% 
B% 9% rt 
26% 27% 

2% 3 

10*4 10% 
dll 11*4 
13*2 13% 

34*J 34% 

33% 34% 


+1 

rt 

-% 

rt 

rt 

-1 

rt 


- C - 

CTte 280 186 ?8 26% a+1% 

Cabot Med 7 51 5% 5*4 &*4 rt 

CariSOmpa 099 16 1M 28% 28% 20% +% 

CadmudComOre 21 £96 18 17% 18 +ft 

Caere Cp 831 8Q24ul6% 14% 16% +1% 
Cafcene 225 5 723 8% 8% 8% -% 

CtoWcro 29 1172iflrt 30% 31 h 

CandaraL i re 2% 2% 2% ■% 

Cndite 3 74 i% 1% 1% 

canon Inc 053128 10u92% 91% 92% +% 
Canaue 45 255 6% 6% 6% 

CartmCm 053 24 Un 29.15 297015 +.15 

Cascade 0.60 22 2 23*2 23% 23% 

OO0 19 404 13% 13% 13ft -ft 
5 1 40 6% 6% 6% 

19 31 13 12% 12% -% 

8 6797 10 17% 17ft +,i 

1 12 10 459 29% 20% 28% rt 

20 55 10% 10% 19% 

» 9 rt 4% 4% 

Chapter 1 * 008 7 1622 20% 19% 20% rt 
CtvraSh 009 7D4KC: 7% 7% 7% -% 

Ctenott 19 5 13% 13% 13*2 

□vmpwrer 13 a 3% 3% 3% -% 

11 1402 5% 5% 5% +ft 
65 40Q? 57% 85% 67% *1% 
128 11 833 50% 49% 50 -% 

017 34 778 u 36% 35% 35% -*a 


CaseyS* 

Ceigenr 

CEMCp 

Gentorar 

cm Fid 

cm sot 

Chandler 


CnhK&Te 
Chiron Ct> 
CtonRn 
Cknascp 


rt 

DmBLgc 

30 4603 

»% 28% 28% 

rt 

-% 

OS Tech 

137 660 


2% 2% 

+% 


DacaSyc 

1633681 

30% 29% 30% 

+ % 

£ 

CCBancp 

108 16 ag 

38% 

28 28% 

-% 

CtornUx 

24 2864 

6% 

6% 6% 

rt 

rt 

Cmbft 

44 115 

13% 

12% 13 

+i 

-% 

CWftestm 

6 I-W8 

4 

3% 3 7 « 

+ft 

+% 

CocaCotaS 

100 16 in 

M% 

» »% 

+% 

-*5 

CMUEngv 

135 559 

7 

6% 6% 

rt 


Qxtatetm 28 33 >’% 

Cogrto Cp 38 1457 25 

Cor mos ir 468 15* a 

Cuberenr iff 115 14% 

Crdtagen 040 87 38 22% 

COM Gas 126 12 20 19% 

com Grp a® i? re .v% 
Conan OX 15 £89 22% 
CmcOA 0.(8 201901 17% 
OncaASp O09 41 6M1 17% 
CDmTnSksnso.68 n 3i5 r 

comma are so 02 is 

CwnmrC 19 35501128% 

CnmprLate 33 658 8% 


il 17 
24% ?<% 
14% 14% 
74 14% 
21 % 21 % 
19 19 

34 34% 
21*4 21% 
16% ’6% 
16% 16% 
31*2 31% 


Comsharo 

Contsiockfi 

Cangbum 

Camera 

CntrCaB 

CooraA 

Copynw- 

Conus Cp 

CorbWA 

CteeterB 

Cray Comp 

Down Res 

Cytogan 


03CCm 

DanGrou 

DaaSwteti 

Daialle* 

DatesoxM 


ORkatoEn 


Deksiamcs nj.44 


6< 597u14% 
J6 684 3ft 
5 425 6% 
M 135 24% 
162 3930 8% 
050 18 1455 17% 

34 54 3A 

25 2468 56% 
47 iw; 17 

007 26 2545 22% 

1 959 lA 

35 205 5% 

2 C70 3% 


- D - 


17% 17% 

27% 28% +% 
9*2 8*2 


13% 14% 

3% 3% 
5% 6% 
24% 34% 
6ft 6*2 
16% (7% 
rt 4% 
57% E7% 
16% 17 

?1% 32 
1% 1ft 

5% 5% 
3*2 3*2 


*u 

W Sa 

■> E HUB Itya Iflt LaB 

Ctoc 

DedComp 

4620482 u4&% <3% 44% 

+% 

CUpty 

ore 22 1052 31% 31 31 


oapetr 

1.12 8 294 28% 29% 

rt 

Devon 

020 4 12 8% 8% 8% 


OHlacti 

20 132025% 24% 21% 

rt 

DtbrdB 

OBO 31 703 22% 21% 21% 

*% 

DVtoU 

16 305 17 10% 18% 

+% 

DlgMteD 

9 423 15 14% *4% 

rt 

Dg Sound 

81 5128 113% 3 3% 

+% 

Diasyat 

33 931 10% 9% 9% 

rt 

fflttwrty 

17 (07 37% 37 37 


Dbdatfn 

020 38 857 7% dB% 7 

rt 

DMA Ptoit 

2 678 3% 3*2 3% 

+A 

OdtarOD 

020 295511 U30 2&% 29 

rt 

Dadim 

0G8 15 10 13% 13*2 *3% 


DreaEqgy 

9 113 9% 8% 8% 

rt 

DrasBam 

10 374 9% 9% 9% 

rt 

Drey 60 

034 22 121 25% 25% 25% 


ChugBopo 008 46 147 4% 4% 4% 

rt 

DS Oncer 

109 15 15 28*2 28% 20*2 


Dubois 

042 131884 18 17 18+1.18 

Dyotech 

11 960 29% 28% 28% 

rt 

Open 

- E - 

1 51 2% 42% 2% 

+% 

Easel ty 

1 1307 2% U2% 2H 

rt 

EadEmtrt 

5 17 1 dB B 

rt 

ED Tel 

032 254339 19% 19% 19% 

rt 

Eg^edd 

283 827 8% 8% 8% 


BPasoe 

0 288 1% 1 Ift 

-ft 

Beau 

1621991*17% 16*2 18% 

rt 

Becaxfi 

ore SB 3 52 51% 51% 


Bbcttits 

26 8900 23 22 22% 

rt 

Enron Am 

18 53 5% 5 5% 


Emetax 

671 11% 11 11 

-% 

EngyHxro 

48 nOD 14 14 >4 


EmlrSn 

64 35 IB IB IB 

-ft 

Dcrnibr 

31078 2% 2% 2*4 


EquayOl 

aiore 138 5% 5*8 5% 


EricsnB 

048169 4719 61% 80% GOB 

iV 

Etokd 

50 7% 7% 7% 


Bans Sin 

30 90S 12%tfl1% 11% 

-% 

Exabyte 

28 1 348 22% 21% 22 

+% 

eater 

10 S3 8% 7ft 8 

rt 

Evfcjrfl rr. 

13 1563 17% 16% 17% +1% 

Expedtl 

aiO 24 159 21 20% 20% 

rt 

EaaipAm 

17 532 1D% 10% 10% 

rt 


FH Dp 
Fan Cp 


FHPInB 
fiffliTM 
Fifty 00 
RggfcA 
Hamf 
Ret Am 
FaficOhto 
MM k 
FtoSefly 
Fa Tom 

RHUMB 

FsUmMc 

Htetler 

Ftanta 

Fherr 

Botoim 

RxxLA 

FontB 

Foramut 

Fbndmer 

Foster A 

FilhFta 

Fsl Ftnl 

FstHmal 

Fitter Mix 

Futtarfin 

Fumn 

FtdDKdAOR 


- F- 

10 7 4% 4% 

024 35 2 5% 5% 

004 71 3255 u46 44% 
18 1006 29*4 28% 
124 15 430 52% 52 
13 620 4% rt 

024 0 151 8 d7% 

35 976 25% 25 

U10 7 750 30% 30% 
100 10 228 24 % 23% 
OfiO 20 137 22% 22% 
1M 10 503 20% 25% 
108 11 1296 <7% 47 

038 8 82 BIO 9% 
056 61161 21 20% 

104 B 181 32% 31% 
57 196 0% 0% 
29 B73U23% 23% 
18 411 0% 6% 
009 154830 5% 5*2 
009575 1635 5% 5% 
108 10 3 32% 32% 

101862 11% 11% 
« 747 3ft 3ft 
104 13 7001132% 32 

OAO 7 663 14*2(113% 
1.18 ID 239 27% 27% 
058 21 852 33% 33 

0£B 10 61 19*2 18*2 
024 27 295ll2I% 20*2 
12 275 3 2% 


-ft 

rt 

+ft 

rt 

rt 

-ft 

+% 

rt 

-ft 

rt 


rt 

rt 


4% 

5% 

44ft 
29 
52% 

4*2 
7% 

25*2 
30% 

23ft 
22*2 
26% 

47 
10 
29% 

32% 

9% +% 
23*2 
6ft +ii 
5ft fft 
5% rt 
32% -% 
11% rt 
3ft -1% 
32 rt 
1* -% 
27% 

33% 

18*2 -1 
21% rt 
2ft -ft 


Gil Apn 

GBKSrv 

Bunts 

bamai tte 

GebiCo 

GadBRxt 

Gertyta 

GenaaPt, 

Centex Cp 

Genus he 

Gernyme 

Obama 

OddmgsL 

Steen A 

BtthBfom 

Good Guys 

GotddsPmp 

GradcnEys 

Groans 

Green AP 

SraKtiPti 

Oossnans 

& mm 
Gil Carp 
GbNYSvg 


Honing A 

Hartwyvl 

HwparGp 

HanteCmp 

HBO&Cu 

Hetotncar 

HeaBwe 

Hwdhdyn 

Hrcrtngar t 

Hniom) 

Heteilipy 

Herod » 

Hogan Sys 

Htoogto 

Home Bad 

Hon Ms 

Kondiedi 

HareaWes. 

HumjBx 

tammgin 

mra Co 

HuKtiTecti 

HycnBu 


- Q - 

5 28 3% 

007 25 329 16*z 
0 201 2ft 

11 IDS 3% 

016193 19 7% 

040 22 87 21% 

17 14 4*2 
11156 5 

400 « 765 34% 
2292309 u7 
45192S 33% 
040 10 7B4 15% 
012 11 2117 15% 
080 15 15 13*2 

12 9 5% 

15 449 11% 

080 19 56 21% 
387 129 u4 
020 72 209 22% 
034 12 61 19% 

0 2247 a 

1 5703 3 

037 325 13% 

339 16% 
S 366 9 


d3 3 
15% 18*2 rt 

2ft 2ft 
*% 

7% 

21 

4>2 


3% 

7% 

21 

4*2 

4% 

24 

6*8 


i: 


24 

6% 

32% 32% 

14% 14% -% 
15% 15*2 -% 
13% 13% -1*2 
5% 5% +% 

11% 11% rt 
21*2 21% 

3% 3% 

21*2 21% 

16 19% 
ft ft 

2% 3 

13% 72% 

16% 16*2 
6% 8ft 


rt 

rt 


- H - 

65 20 7% 
008 9 906 24% 
020 12 4300 13% 
763 14*2 
016 27 6003 32% 
25 8337 28% 
0.06 20 396 12*2 
12 163 8% 
016 18 2446 11% 
61 9*4 

11 745 u19 
088 11 2108 16% 
015 16 343 6*2 
71 334 16*4 
090 8 113 re>2 
044 19 147 27% 
16 6350 15% 
044512 40 5% 
020 16 1005 17% 
000 7 1470 18 

008 I 27 4% 
131106M 24 

18 102 4% 


7% 7% 

23% 34% -*2 
13% 13% -% 

12% 14+1% 

31 32% +1% 
27*2 27% +% 
11% 12% 

B*s 6*8 
11 % 11 % 

U8*2 8*2 
)B*2 10% 

16% 16% 

6% 6% 

15% 15% 

ao>4 re% 

26*2 26*2 
14% 15 

5 5% 

16% 16% +.14 
17% 17% rt 
3ft 3ft -ft 
22 23% -1% 
4% 4% -ft 


rt 

-ft 

-% 

-ft 

rt 


-% 

-i 

+% 

rt 


FI Sys 

IDflCwnms 

l&tmai 

Immucor 

Immunogen 

import Be 

uxi His 

ul Res 

Mom n 

hSiesMd 

hiegrDw 

MgtdSys 

HgtdWst 

irasl < 

town 

rooms 

Wet Tel 

mtericeA 

Hgph 

Merita 

toBtaC 

niarvuc 

nDsriyOA 

MRas 

bn Total 

Invacare 

Iomega Cp 

bomafc 

Bsvaterid 


48 841 
2717454 
31102 
33 134 
1 511 
040 31 90 

024164 47 

SO 5038 
33 8163 
066 15 SO 
3422543 
35 126 
6 50 

004 1133613 

8 107 
040 20 1191 
18 332 
024 151072 
31447 
2 1365 
72882 

28 3664 

14 55 
04E 17 SO 
275 19 

005 20 172 

31196 
17 799 
1.12 39 2 


6*2 

9% 

3ft 

6% 

3*2 


16*4 15% 
12%tel*2 
15 14% 
27% 26% 
11% 10% 
20% 27% 
14% 14 

2% ?% 
63 61ft 
2% 2 
15% 15% 
6*2 8% 
11 % 11 % 
B% 8*2 
4% 3% 
Ul0 16% 
*6*2 15% 
17 16% 
2% 2% 
5% 5% 
31 30 

04*2 4% 
19 16% 
215 215 


7% rt 

9% -% 
3% rt 

5% % 

3 -ft 
16*4 +% 

11*2 rt 

15 rt 
Z7% rt 
11% rt 

re% rt 

14% rt 

2ft -ft 

«3% -% 

!ft rt 

15*2 

8% 

Tl% -% 
8% 

35i -ft 


rt 

rt 


X 

7686 

J1 

30% . 

30% 


J&JSnedk 


13 

210 

11% 

n% 

33 

14 

66 

64% 

85 

+2 

Jason toe 

026 

14 

12 

9% 

8% 

12 

2% 

2*4 

2% 

2% 

JLfihd 

aio 

33 

36 

re% 

38 

38 

330 

9% 

9 

8% 


Johnson W 


» 

235 

23% 

22% 

17 

1692 

18% 

16% 

17*2 

-1 

Jones bit 


10 

219 

13% 

13% 

10 

fill 

24*4 

23 

a 

-% 

Jane? Med 

0.10 

13 

269 

8% 

8% 

15 

15 

5 

5 

5 


JOriynCp 

ire 

28 

10 

27% 

26% 

» 

<5 

16% 

15% 

16% 

rt 

JSBFto 

are 

15 

57 

25 

24% 

44 

45 

»% 

29% 

30 

rt 

■tanoUfl 

ore 

19 

520 

19 

18% 

9 

199 

18417% 

18 

rt 

Jisr 

aw 

10 

999 

13% 

13 


16% 

*5% 

17 

2% 

5*2 

30% rt 
4% rt 
18*2 +% 
215 


11% rt 

9*2 rt 
38 -% 

22% rt 

13% rt 
8% rt 
27% rt 
M% -ft 
1B% -% 
13 -% 


Ite C ISOS Ita ta to) (tag 


tenon Cp 

Iflqd 

KaflySi 

Keabsky 

fimtafl 

Nrsdwr 

KLAtask 

Knmtadge 

KMA 

Xmaghc 

HUMS 


- K - 

QJ8 11 1139 a 
044 5 84 9% 
0 502 6% 
072 a 1341 30% 
011 11 11 B% 
001 13 3 

22 4 

70 3387 
2 371 
11179 
2253830 25% 
12 1557 18% 


24 

10ft 

S3 

4 

a 


21 >2 21*2 

9% S% 

6% 6% *A 
29% 29% -% 
8>2 8*2 +% 
23% 23% -% 
10% 10ft 
S2% 52% -% 
3% 4 

a H rt 

24% 24.06 -.40 
16% 16% 


-L- 

072 21 273 17% 
UddFum 012 361837 6% 
Urafedi 518741946% 
(aocaOer 04815 613 34% 
Lance toe x 096 18 54 is 
LmtekEph 26 1579 21% 

0 14 7% 

27 933 4*2 

UUceS 141216 17% 

LtasonPr 048 IS 214 2S% 

LOOS 33722547 23% 

IttCp 016 17)00 5% 

Ucnm 22 342 18 

173041 29 

are is 2 18% 

S IBB 5% 

029 13 181 13% 

TOO 448 136 

052 16 204 16% 

13 165 30% 

UnemTec x (US 39 2689u49% 
Uqteox 0« 17 6 33% 

Lemma Gp one 29 554 24% 

Lane Star 12 884 6% 
letuaD 38213153 39% 

LTXCo 31228 u4% 

LVMH a46 4 6 32% 


.1% 

rt 

+1 

rt 


Legem Cp 
UtaTsto 
Lrfeine 

LOyHdA 

UiBr 

LtoateT 


17 17 

B% G% 

44% 45 

34 34% 

17*2 IB 
19% 20% 

7% 7% 

4*8 4% 

16% 16% -% 
25*2 26% rt 
22% 23% +1% 
5% 5% rt 
17% 17% -% 

28*2 2fl*z rt 
18% 18*2 rt 
4% 5% 4% 
13% 13% +% 
136 138 41% 
16% 16% -% 
29% 30% 

47% 48 

33*2 33*2 
24% 24% 

6 &% 

36% 38% 

4% 4% 

31% 32% 


rt 

-% 

rt 

rt 

-1 

+% 

rt 


ua an 005 2048110 23% 
MS Ur*S 20 774 23% 
ttacia 080 43 IDO 13% 
UataaotfiE 108 14 24 33% 
Magma Pte 1710963 37% 
Magna &p 0.76 13 226 29% 


MW Bn 

Cp 
Dr 
MxfctoCp 
Mnuest 
Mantata 


15 260 10 

109 317 ID 
1D2B90 4% 
9 20 41% 
2 30 1% 
17 70 8% 


12 7100 12 

060 11 1884 20% 
9 22 7% 
Msdmtot 51 1035ii67% 
ItatarCp 01504 3% 
UcGndh R xOU 12 3 15% 

McCarmit 048 16 555 20 

Mutatoc 016 18 215 14% 
UedtotoeS OW 14 338 23% 
m umm are r * iso 10% 
Matter Cp 016 56 235 17 

UteXrG 024 35 2834 13% 
080 17 047 21% 
07D 8 351 30% 
108 11 889 29% 
91457 9% 
Melhxta A 012 19 173 19 

WSCm » 1208 37% 
F are 19 387 10% 
MU) NMB r20O353 219 78% 


MEramtS 
Moony G 


MtonMtti 

Mcraage 

Ucmcotn 

Mtor^aft 

McrpoOa 

Hcsft 

Mid AO M 


14 151 5% 
92978 12% 
8 6708 10*4 
101244 6% 
21289 8% 
3336657083% 
24 8 20 


MMUnbex 0» 11 2422 28% 
IKdwGntln raS) 21 50 26% 
Mtoer H 052 19 574 26% 
MUcm Z77 ZB% 

tMimtecb 19 169 15 

MobteTBi re 5724 20 

Modem Co xOre 21 99 B% 
UmflruMI 052 21 370 29% 
Motel 004 1206 41% 

Mdertac 004 33 860 n45 
Mucom 004 15 811 8% 
MBtaaftpxarere 33 27% 
MTS Sys are 9 13 23*4 
Mttned 13 92 29% 

Mycogsn 5 IS 5 10% 


22% 23 rt 
23% 23% 

13% 13% 

33 33 

37% 37% +% 
20% 20*z rt 
9% 0% 

9*4 9% 

4 4ft -ft 
re% 4i% 
i*« i% 

6*4 8% -% 
12 12 +1 
20% 20ft +ft 
7% 7% 

66 B7% +1% 
3% 3% 

15*4 15% 

19% 19% 

13% 14*2 
23*4 23% 

10 10% rt 
16% 16% +% 
13% 13% -% 
20 % 21 
30 30 
28% 285 
9 9% 

18 19 
37 37 

9% 9% 

77% 77% 

4% 4U 
11 % 12 % 

8*4 9 

6% 

8 
63 
28 
28 
28 


5*2 

8 

62 

27% 

27% 

2fi 


-ft 

rt 


rt 

rt 

rt 

rt 


rt 

-ft 

-% 

rt 

rt 

rt 

-ft 

rt 

rt 

+% 

rt 

+% 


rt 
rt 

28*4 26*2 rt 
27ft 28% rt 
14% 14% -% 
19% 19% +% 
7% 8% +.96 
29 29*4 rt 
41 41 -% 

44% 44*2 -ft 
7% 7% -% 
26% 27% rt 
22% 23% +% 
29 23% +% 
10 10 -ft 


NAG Ra 

NasftRidi 

Hat Comm 

Mm Sura 

NMgator 

NEC 

Meteor 

Nets* Gen 

IteWlS 

Neuragen 

NewEBus 

New Image 

NbrdgeNet 

Nanpri Cp 

Noble Dri 

Morrison 

Ndstan 

Nmtoi I 
NStarun 
NorffnTd 
IW Air 
Havel 

Movefile 
MPC A 

HSCCtrp 


- N - 

016 11 2009 26 2S% 

072 10 24 16%rf1S% 
036120 127 14*2 14 

020 21 73 14% 13% 

GOO 6 2 17 17 

043108 180 63% 63 

193464 31% 29% 
308295 21% 20% 
99 3014 7% 6% 
B 721 6% 6% 
080 21 115 19% 18% 
32 B3S 5% d5% 
22 1414 30*2 29% 
004 23 157 7% 7% 
231 6975 7% 7 

056 25 37 57 56 

0re28 6476u49% 48 

15 478 20 19*2 

3 6 5 4% 

088 12 1456 38% 3&% 
22 3422 21% 20% 
92573063 18% 17% 
492624 54% 53% 
177 6% 6 

7 10 2% 2% 


25% 

T6 rt 

14% +% 
14% 

17 

63 

31 rt 
21 % + 1 % 
6K -ft 
6ft +A 
18% 

5% 

30 

7% rt 

7% +% 
56 -1 

49% +1 

20 

36ft -ft 
21 +ft 
18*2 +1% 
54% 

6% +% 
3% 


OCbartsys 
Oad Dm 
OdMfcsA 
Otiamg 
OtfebarH 

OtuoCs 
Old Kent 


Ortoenctxp 

Om Price 

OrariaS 

On Sens 

Omotedi 

OctaSupp 

OragonMat 

Osbap 

CriUBA 

OsntashT 

OttoTal 


Paccar 

PacOuriop 

PTelcm 

PadfiCre 

Paramedic 


- o - 

IB 319 11% 
17)421 a% 
19 335 7 

13 325 13% 
ire 10 S 31*2 
1. 46 6 769 29% 
1^ 10 3569 32% 
092 16 34 38% 
100 6 296 26*2 
8 84 10*2 

671 7332 u4&*2 
55 5881 21% 
009 25 192 9*4 
7 14 9% 

031 12 46 6*2 
IS 737 2% 
041500 896 15% 
050 II 51 11% 
1J2 14 29 33 


10*2 *1% 

21% 21% 

6*2 6 % 

12% 13% 

30*2 31*2 
29 29% 

31% 32% 

36% 36*2 
25 26 -% 

10% 10% 

45% « +% 

20*4 21% +1% 
8% fl7jj +% 
9*ff 9% 

6% 6% +% 
2*2 2% +% 
14% 15 +% 

11 % 11 % -% 
32% 32% +% 


Payra Am 

Prates 

PwnTriy 

flamlArg 

PonWrx 

Parted I 

FemwaL 

PWWtsHJ 

Paoroite 

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42 


Tuesday November 1 1994 


WORLD STOCK MARKETS 


FINANCIAL TIMES 






AMERICA 


Dow lower at 
midsession on 


profit-taking 


Wall Street 


US share prices were mostly 
lower yesterday morning as 
equity investors regrouped 
after Friday's big gains, writes 
Frank McGurty in New York. 

By 1pm, the Dow Jones 
Industrial Average was down 
5.04 at 3,925.62, while the more 
broadly based Standard & 
Poor's 500 was up a scant 0-19 
at 473J96. 

On the NYSE, advancing 
issues were outnumbering 
declines by an ll-to-nine mar- 
gin. 

Activity eased from Friday's 
heated pace, with a moderate 
176m shares traded, by early 
afternoon. In the other leading 
markets, the American SE 
composite was 0,27 better at 
458.43, while the Nasdaq com- 
posite dipped 0.04 to 776.11. 

Early in the day, profit-tak- 
ers came to the fore on the 
heels of Friday's 55-point surge 
by the Dow industrials. Bonds 
were a little lower, following a 
big advance of their own. The 
day’s economic news came in 
fairly close to expectations and 
bad little impact on sentiment. 

The commerce department 
reported a small increase in 
personal spending and income 
during September, while the 
Purchasing Management Asso- 
ciation of Chicago said that 
both of its October index of 
business activity and the 
prices-paid component of its 
monthly survey had risen. 

Investors took little notice of 
either development, with atten- 
tion centred on today’s 
national survey of purchasing 
management and Friday’s cru- 
cial data on conditions in the 
labour market 

Among the Dow components, 
Philip Morris was marked 
down $2% to $ 61 % in heavy vol- 
ume of nearly 4m shares. A 
Florida court ruled in favour of 
allowing any smoker who fell 
III because of nicotine addic- 


Canada 


Toronto was mixed in listless 
midday trading as rising golds 
and pipelines vied with losing 
industrial products and media 
for dominance. The TSE 300 
composite index was just L79 
higher at 4390.41 by noon. 

The precious metals group 
jumped 0.9 per cent, defying a 
downward slide in gold prices, 
as American Barrick Resources 
rallied on better than expected 
third quarter results. Barrick 
picked up C$% to C$32%. 

The industrial products 
group lost 0.9 per cent as Meth- 
anes and Newbridge Networks 
posted sharp losses. 


Brazil 


Shares in Sdo Paulo were off 1 
per cent in moderate midday 
trade as higher interest rates 
triggered profit-taking. The 
Bovespa index had fallen 468 to 
48308 by 1pm in turnover of 
R$uaim ($L333m). 

Brokers said that higher 
interest rates, combined with 
worries about inflation, had 
prompted domestic and foreign 
investors to cash in profits 
after the market bad risen by 
13.4 per cent over the last four 
sessions. 


MARKETS IN PERSPECTIVE 







* d~V> 

% etianga 


1 clwga la tool omq f 


riaritaBt 

hr US 9 t 


f WMk 

4 MmU 

1 Tour 

Start of 

Start ol 

Starter 





1994 

*94 

1994 

Austria 

+0.37 

-434 

-8.48 

-14.65 

-10.67 

-138 

Belgium ... 

-0.18 

-009 

^.11 

-1070 

-531 

+4.01 

Denmark 

-2.21 

-237 

-6.43 

-1135 

-6391 

+2.06 

Finland . 

♦1.13 

+5.66 

+2063 

+29.14 

+48.04 

+62.44 

France .. ... 

+2.75 

+060 

-1132 

-1531 

-11.69 

-3.10 

Germany 

+0.52 

+0.85 

-2.74 

-1136 

-7.07 

+1.98 

Ireland 

+0.60 

-0.78 

+5.03 

-0.75 

+2.79 

+12.78 

Italy ... 

+2.85 

-087 

+937 

+3.79 

+4.90 1 

+15.09 

Netherlands 

+2.68 

+233 

+1.49 

-3.66 

+0.85 

+10.65 


-0.75 

+1.10 

+130 

-0.61 

+3.87 

+1337 

Spain 

+0-99 

-013 

-7.08 

-10.51 

-732 

+1.81 


+0.70 

+4.11 

+431 

+5.52 

+1133 

+2238 

Switzerland 

-0.75 

-1.75 

-5.65 

-14.00 

-7.63 

♦135 

UK 

+1.47 

+1.74 

-2.46 

-9.65 

-9.65 

-036 

EUROPE 

+130 

+058 

-238 

-932 

-630 

+ZA9 

Australia 

-0.48 

+052 

-135 

-5.77 

-539 

+3.15 

Hong Kong 

+056 

-2J91 

+5.56 

-22.18 

-29.08 

-22.18 

Japan 

-068 

-0.44 

-2.18 

+838 

+13.15 

+24.15 

Malaysia 

-1.10 

-2.60 

+16.01 

-1230 

-15-65 

-7.45 

New Zealand — 

+2-32 

+2.97 

+3.39 

+1.72 

+2.01 

+11.93 

Singapore 

+015 

+434 

+1336 

-132 

-1.56 

+8.01 

Canada 

-0-24 

-0.63 

+5.09 

+234 

-833 

+038 

USA __ ..... 

+1.86 

+235 

+1.49 

+1.82 

-730 

+1.82 

Mexico 

-5.71 

-5.11 

+2832 

-1.56 

-1833 

-10.04 

South Africa 

-0.71 

+1.20 

+49.48 

+1730 

+14.14 

+2534 

WORLD INDEX 

+072 

+078 

+003 

-041 

-237 

+734 


Apparent variations in the European response to the US 


upward lead last week include a 2. 75 per cent gain in 

World Indices, set 


according to the FT- Actuaries 
one of just 0-52 per cent in Germany. However, 
Jerry Evans, European strategist at Klein wort Ben- 
son, points out that measuring both over the week to late 
Friday afternoon wipes out most of the deficit. Italy’s 
gain, he says, reflects two prior weeks of underp e rform- 
ance, and speculative excitement about corporate stories 
and rumours against a background of low volume. Den- 
mark, in contrast, fell after outperformance in the week 
before, and Switzerland slid mostly on worries about the 
dollar and its currency translation effect on earnings of 
the big Swiss internationals. The week’s worst performer 
was Mexico, depressed by earnings below expectations at 
Telmex, the country’s largest private company. 


FT -ACTUARIES WORLD INDICES 


Ambroveneto 


tion to be included in a class- 
action suit against cigarette 
makers. 

Shares in BJR Nabisco, 
another big tobacco company, 
dropped to $6%. Sellers 
were influenced by the addi- 
tional news that RJR planned 
to divest 19 per cent of its food 
operations in a stock offiering 
and would drop its plan to 
acquire a minority stake in 
Borden, down $A at flStt. 

In pharmaceuticals, Pfizer 
gained JIVi to $74% after agree- 
ing to acquire Namic USA. a 
medical equipment supplier, in 
a deal valued at 8158m. Namic 
surged $3£, or 28 per cent, to 
$17£ on the Nasdaq. 


Yesterday’s downswing In US 
sentiment, weighing upon the 
New York morning, was mam- 
test in the European afternoon. 
writes Out Markets Staff. 

MILAN continued to feature 
bid activity and speculation In 
banks, while the strength of 
Fiat also contributed to a 1132 
or l.S per cent rise in the 
Comit Index to 635.43. 

Traders commented that vol- 
ume held up surprisingly well 
at around the recent depressed 
daily average of L500bn with 
banks closed by a strike for 
much of the day and ahead of 
today's public holiday. 

Ambroveneto, rumoured as a 
bid target, advanced a further 
L462 or 9.7 per cent to 15,236, 
taking its surge over the last 
three sessions to 34 per cent 
BCI, thought to be a possible 
suitor, gained L94 or 2.7 per 
cent at L3356. 

Credito Romagnolo picked 
up L71 to L1634S, off a high of 
L17.400, but still short or the 
L19.0Q0 price offered by Credito 
Itahana Credito rose L35 or 2J2 
per cent to Ll.640. 

Fiat put in a solid perfor- 
mance, climbing L59 to L6.283 
on renewed buying by Italian 
funds. Ferruzzi added L60 or 
4.9 per cent at L1393, with 
investors who had sold the 
stock at higher prices said to 
be retu rning a s buyers. 

FRANKFURT offered appar- 
ent gains on the session, but 


I'FT-SE'-Acl 

tuarie 

-a ohr- 

■ ,tJ ' !Ui:; 9 

■v - , 



Ociai 

Hwtly changes 

Open 

1030 

11J» 12.00 

THE EUROPEAN SERES 
1100 14.00 15JM Ck» 

FT-SEBnhadi 100 
FT-SE EunMmck,2D0 

133X71 
1401 JO 

1339.7S 
1401 JS 

133X28 1339X1 13*031 
1400X3 1401.48 140293 

134043 

140X90 

1339.41 1337.14 
140240 140954 



Oct 28 

Oct 27 

OtJ 26 

OdM 

0(3 24 

FT-SE Embark 100 
FT-SE Eurobadt 200 


132661 

1366X1 

130X28 

I361JJ2 

1300.71 

1358.10 

1296.00 

1356.47 

131132 

137256 


Bn 1DU (8flDW|i HflMfar 1*- >9*1* M0- HOUOlMWr 100 ■ 1337 14 ZDO ■ MOQMJhattf 


these mostly reflected last Fri- 
day afternoon, when a higher 
dollar, rising bond prices and 
an ebullient Wall Street made 
their mark in Europe; yester- 
day the Dax index closed the 
official session at 2.07L63, up 
31.31. of which 27.12 points 
were gained on Friday. 

Later indications were more 
subdued. The Ibis indicated 
Dax ended 3.28 lower at 
2,06138, with individual fea- 
tures few and far between. 
Turnover rose from DM5.4hn to 
DM5.6bn. 

However, Mr Eckhard Frahm 
of Merck Finck in Dfisseldorf 
produced his monthly review 
of the Dax and its constituents, 
which included a couple of 
hopefUl pointers in yesterday's 
uncertain times: 

• first, while there were some 
almost superstitious worries 
about the month of October, 
the Dax did better than many 
expected last month, with a 3 
per cent gain against a 9.1 per 
cent fall in September; and 


• second, the presence of 
three banks, Deutsche, Bayem- 
verein and Bayemhypo, in the 
top five Dax performers in 
October could suggest that the 
bond market is over the worst 
- although Mr Frahm was cau- 
tious about this, with US elec- 
tions coming up. 

ZURICH put in another firm 
performance, with dollar sensi- 
tive issues leading the way, 
and the SMI index finished 16.0 
ahead at 2306-5 but off a day's 
high of 2,521.6. 

Among the dollar earners. 
Roche certificates gained 
SFT125 at SFT5385. 

Surveillance surged SFrl20 
or 7.1 per cent to SFri.820 
while Holderbank and Nestte 
each improved SFr20 to SFr969 
and SFrl,i74 respectively. 

In the banking sector. UBS 
bearers fell SFr23 to SFrl.177 
as investors continued to 
switch out of the stock ahead 
of the extraordinary sharehold- 
ers meeting on November 22. 
The bank's statement that 


unfavourable market condi- 
tions would cause this year’s 
earnings to fall short of the 
1993 level came after the mar- 
ket closed. C-S Holding, a bene- 
ficiary of switching out of UBS, 
gained SFr8 to SFr549- 

Among firm insurers, Zurich 
rose SFrlO to SFrl.145 and 
Winterthur added SFr4 to 
SFr638 francs ahead of Thurs- 
day’s news conference. 

AMSTERDAM climbed as 
investors awaited third quarter 
results from a number of major 
Dutch companies later in the 
week. The AEX index gained 
357 to 41232. after 415.35. 

The market was also sup- 
ported by strength in the dol- 
lar and in bonds, although 
there was a slight sell off when 
Wall Street opened down. 

Philips was among the day’s 
gainers, up FI 1.70 or 3.1 per 
cent to FI 55.80 ahead of Its 
third quarter results which are 
due on Thursday. The figures 
are expected to show that the 
electronics group is making 
substantial progress in its 
return to financial health. 

DSM, which opens the 
reporting season today, went 
against the trend, off FI 130 to 
FI 146.00 as profits were taken 
following strong gains in the 
past week. Analysts expected 
the chemicals group to return 
a profit ol around Fl 102m, 
ag ains t a net loss of Fl 52m in 
the same 1993 period 


Akzo Nobel, which reports 
tomorrow, moved ahead Fl 230 
to Fl 21230. 

MADRID managed to report 
a gain in spite of renewed bond 
market weakness. The general 
i ndex rose 037 to 29530 as the 
domestic December bond 
future teQ 50 basis points to 
86.75. 

Turnover was thin ahead of 
today’s holiday, at ptal83bn. 
Repsol was the big blue chip 
winner with a rise of Pta5Q to 
pta4,0Q5, off an intraday high 
of PtaAffra. The oil company is 
expected to release third quar- 
ter results soon. 

Constructions, weak last 
week, recovered with Cubier- 
tas Ptal20 higher at Pta8,050 
and FCC up PtalSO at 
Ptal2300. In retailers, Cortefiel 
rose Ptal20 to Pta4 ,480 on first 
half results which showed net 
profits up 73 pm- cent 

STOCKHOLM enjoyed a 
broad rally led by the pharma- 
ceutical group, Astra, and the 
engineer, A sea. The AffSrs- 
vaflden General index rose 13L2 
to 1,485.0 with Astra A up 
SKr530 at SKr 19430 and Asea, 
which owns 50 per cent of the 
Swiss-Swedish engineering 
group, ABB Asea Brown 
Boveri, up SKr7 to SKr522 in a 
rebound after recent losses. 


S African 
golds lose a 
nearly 3% 


Weakness in the price of gold 
bullion, which hit a low of 
about $382 an ounce in London 
trading during the session, 
made its effect felt on the 
Johannesburg gold shares 
index, which dropped by 
nearly 3 per cent. 


critic 


l|iir5 ndlirc 


that gold would attain the 
8400 level, which had been 
su ppor ting prices during late 
September and early October, 
had receded, thereby resulting 
in heavy selling. 

The golds index closed 67 
down at 2,224, with sellers 
also coming into the market 
after the release of US con- 
sumer expenditure data which 
showed a smaller than expec- 
ted September rise. . 

The industrials index was 
affected by the tell in gold, but 
managed to regain positive 


^ . • . 4 /. 



C3 


T4Q «- »-V ' 

• . •••••■ -TV V! OoMfc' 


Written and edited by WIDtem 
Cochrane, John Pitt and Mchaei 
Morgan 


ASIA PACIFIC 


Nikkei higher as Hong Kong sees 2.8% rise 







eat* 




Tokyo 


An easing of selling pressure 
on Japan Tobacco, whose 
unsuccessful listing last week 
eroded confidence, encouraged 
buying by overseas and institu- 
tional investors and the Nikkei 
225 average gained ground, 
writes Emiko Terasono in 
Tokyo. 

The index closed 184.44 
higher at 19,989.60. rising for 
the fourth consecutive day. It 
fluctuated between 20,000-70 
and 19356.47, with trading by 
securities dealers also lifting 
activity. 

Volume totalled 245m shares, 
against 251m. The Topix index 
of all first section stocks 
gained 1734 at 1384.66, while 
the Nikkei 300 put on 3.71 at 
29030. Rises outnumbered falls 
by 776 to IBS. with 172 issues 
unchanged. But in London the 
ISE/Nikkei 50 index was 138 
easier at 1305.46. 

The advance on Wall Street 
on Friday encouraged futures 
trading which, in turn, 
prompted arbitrage buyers. 
Overseas investors, followed 
by domestic institutions, 
bought large-capitalisation 
stocks, including steels and 
shipbuilders on hopes of a 
worldwide recovery in steel 
demand. 

Over the next few weeks the 
market is expected to focus on 
interim earnings announce- 
ments and forecasts for the full 
year. However, some analysts 
did not think that profit 
increases would lift share 
prices for the time being. Trad- 
ers also said potential sellers 
around the 20300 Nikkei 225 
level were expected to cap a 
rise in shares. 

Steel companies led activity. 
Nippon Steel rose Y4 to Y400 
and NKK by Y2 to Y299. Ship- 
builders were also traded, with 
Hitachi Zosen up Y13 to Y567 
and Mitsubishi Heavy Indus- 
tries by Y14 to Y789. 

Japan Tobacco, which 
declined sharply following its 
listing last week, rallied 
Y20.000 to YLOSm, while other 
privatisation issues were also 
firm, with East Japan Railway 
up Y1.000 to Y483.000 and tfip- 
pon Telegraph, and Telephone 
gaining Y15.000 at Y905.000. 


Japan Telecom, the long dis- 
tance telecommunications 
operator, fell Y60.000 to a new 
low for the year of Y3.54m on 
profit-taking. Kyushu Matsush- 
ita Electric, an affiliate of Mat- 
sushita Electronics Industrial, 
shed Y400 to Y2.440: investors 
were discouraged by a 61 per 
cent fall in interim pre-tax 
profits and the forecast of a 40 
per cent earnings decline for 
the full year. 

In Osaka, the OSE average 
rose 165.79 to 22.094.95. 


Roundup 


Friday's rally on Wall Street 
provided a lead for some 
Pacific Rim markets. Taiwan 
and Manila were closed. 

HONG KONG followed Wall 
Street and saw a flood of 
pent-up de mand drive the mar- 
ket ahead by 23 per cent, its 
biggest one-day rally since 
August 30. The Hang Seng 
index rose 266.78 to 9,64635 in 
a broadly based rally led by 
recent laggards. 

The mood was also boosted 
by growing expectations that 
Britain and China were close 
to a deal an the financing for 
Hong Kon g's new airport, 
which took HSBC Holdings up 
HK8130 to HK89130. 

BANGKOK finished L5 per 
cent higher amid demand for 
bunding material and property 
development shares, ahead of 
the launch of a Btsbn mutual 
fund to invest in these sectors. 

The SET index closed' at the 
day’s high, up 22.71 at 132833, 
in heavy turnover of Bt9.ibn. 

SEOUL was higher in active 
trading after wide fluctuations 
an the back of renewed buying 
interest in securities houses 
and lower-priced manufactur- 
ing shares. The composite 
index closed 7.36 ahead at 
1,105.62, having hit a day’s 
high of 1,115.48. Volume, at 
553m shares, was sharply up 
from Friday's 47m. 

Securities shares with good 
earnings forecasts found 
demand. Ssangyong Invest- 
ment and Hanshin rose 
Won! ,000 each to go limit-up at 
Won25.300 and Won21,000 
respectively. 

SYDNEY finished higher, 
taking its lead from foreign 
markets, but the market 


remained overshadowed by 
today's domestic balance of 
payments dam. 

Volume was thin at 1383m 
shares as the All Ordinaries 
index closed 23.6 or 12 per cent 
up at 2,0443. 

Finance stocks met healthy 
buying. The four major banks 
all finished higher, with inves- 
tors buying in anticipation of 
strong final result announce- 
ments shortly. ANZ rose 10 
cents to A$330 and Westpac 8 
ce nts t o A8433- 

WELLENGTON was modestly 
firmer after a number of lead- 
ing stocks went ex-divldend, 
putting a restraining influence 
on the main index. The 
NZSE-40 Capital index, which 
does not adjust for ex-divi- 
dends, ended 521 higher at 


2,100.37, while the NZSE-40 
Gross index, which does 
adjust, put on 2335 at 2260.78 
in turnover of NZS382m. 

KUALA LUMPUR'S early 
gains were cut short as inves- 
tors largely ignored the 1995 
budget announced last Friday, 
and prices put under more 
pressure by bouts of forced 
selling by clients unable to 
meet margin calls. 

The composite index ended 
4.19 off at 1,108.85 after bitting 
an early high of 1,122.72. 

SINGAPORE saw property 
and finance issues make the 
most headway, while Malay- 
sian stocks were lower, again 
on forced selling. The Straits 
Times Industrial index rose 
1627 to 237933. 

JAKARTA held on to early 


gains at the close on the back 
of brisk foreign buying and a 
firmer Indosat price. The offi- 
cial index ended 739 higher at 
523.49. Indosafs strong perfor- 
mance in New York was 
reflected in the domestic mar- 
ket, with its price rising 
another Rpl25 to Rp8,650. 

COLOMBO edged ahead on 
domestic buying, but turnover 
of SLRs302m was at its lowest 
level this year on poor foreign 
demand. The All-share index 
gained 333 at 1293.65. 

SHANGHAI’S A share index 
fell 4.7 per cent, but was off its 
lows after the exchange presi- 
dent reiterrated July's commit- 
ment to introduce market 
boosting measures. The index 
lost 32.78 at 668.63 in very thin 
turnover of Ynl.tim. 


territory by the dose, adding 6 
at 6,604. The overall index 
slipped 27 to 5,723. 

Since reaching a year’s high 
of 2235 at the start of Septem- 
ber, the golds Index has fallen 
■ by 12 per cent, but remains 2.7 
per cent up from its position 
at the h w gi li nin g of January. 

Among the day’s movers, 
Brief onteln, the gold miner, 
dipped R2.75 to R64, while 
Western Deep declined Rio to 
R214. Geneor ended 25 cents 
OB at R14.75. 

De Beers, which said it was 
increasing investment in Tan- 
zania through its Will croft 
subsidiary company, relin- 
quished R2 at R9&55. 

Vaal Reefs finished R12 
down at R416, while Freegold 
retreated R2 to R68 and 
Loraine softened 25 cents to 
B1930. 


tfSS*'" 


jjfiSf* 7 - 5 0 : t " 


trtteF* ” ' '' 




ifiiljir- trade 


Jointly compiled by The Fh u n cia l TVnea Lkt. GcWmon, Sacha & Co. and NalWeat Securities Lid. In conjunction with the Institute of Actuaries and the Faculty ot Actuaries 
NATIONAL AND 

FRIDAY OCTOBER 28 IBM - - ■ — THURSDAY OCTOSS1 27 189* - DOLLAR INDEX 

US Day’s Pound Local Local Grass US Powd Local Year 

Doner Chengs Stating Yen DM Currency H chg Div. DaQar Stating Yen DM Currency 52 week 52 week ago 
% hides Index Index Index on day Yield Index Index Index Index Index Ugh Low (mprp«] 


REGIONAL MARKETS 
Figures In parentheses 
show number ol tines 
Of Stock 


Aurirete <BS) . - . . 

172.12 

-0.0 

157.20 

10530 

135.07 

154.08 

-03 

3.60 

173.10 

15670 

10832 

134.74 

154.60 

18X15 

14X38 

15&S2 

Austrians _ _ 

161.32 

-0.3 

165.59 

11136 

14238 

142.15 

05 

1.13 

18135 

16432 

11138 

14135 

141.40 

19X88 

187/48 

177.14 

Bdgkm (MJ 

16H.17 

-03 

154.50 

104.08 

132.75 

12930 

03 

4.26 

169.73 

15185 

103.96 

132.11 

12881 

177.04 

14X33 

150.03 

Canada (t 03! _ — 

-13658 

0 2 

124.73 

84.03 

107.17 

13350 

03 

234 

13636 

12335 

83/W5 

lOBjoa 

13338 

14531 

12054 

13265 

Danmark (33) 

252^8 

-1.4 

23041 

16533 

19738 

202.53 

-03 

1/47 

255.74 

23132 

156.64 

199-06 

20X48 

27X79 

23027 

23X95 

Fhiland (24). __ _ 

_„^_200.12 

-OS 

182.78 

123.12 

157.03 

19336 

0.7 

0.73 

201 /*1 

18033 

1233A 

156.77 

192.10 

201/41 

116BS 

12X47 

Fnnce ( 101 ) 

170J1 

1/4 

165.72 

10431 

133.80 

138.19 

23 

3.14 

isaio 

152.17 

107-96 

130l64 

135.12 

1BSJ7 

15X34 

109.41 

Germany (5B) 

143.02 

03 

13081 

8739 

11233 

11233 

1.1 

134 

14238 

129.07 

8733 

11098 

11096 

160.40 

12837 

132.62 

Hong Kong CSS) 

380.77 

03 

347.75 

23438 

29831 

377.78 

03 

3.16 

377.73 

341.95 

23135 

29432 

374.75 

50656 

341 33 

36037 

Ireland (14). 

-206.88 

03 

19077 

12832 

16332 

18331 

1.0 

3.44 

20831 

18837 

12739 

162.14 

181.92 

21X60 

171^6 

174.00 

Italy m. 

78.94 

2.4 

72.10 

4837 

6135 

91.01 

05 

1.72 

77.07 

6077 

4730 

5099 

8738 

97.78 

57 J8 

0054 

Japan (4M) 

161.56 

-03 

14735 

89.40 

126.78 

99X0 

aa 

077 

16234 

14696 

99.43 

1K36 

99.43 

170.10 

12454 

14148 

KatayotafST), . 

547.46 

03 

49938 

33834 

429.61 

53026 

03 

136 

542.71 

49130 

332.40 

422.44 

63X30 

021.63 

43071 

47079 

Mexico (10) 

_ 2126.47 

0.4 

194234 

130835 

166838 

788234 

05 

138 

211838 

191736 

1287 65 

1643.12 

7939.63 

2847.08 

1666.28 

184056 

Netharland (i0) 

220.32 

1.0 

201.22 

13538 

172.00 

170.04 

13 

3.40 

218.14 

197.48 

13X61 

16930 

167-09 

220J2 

187471 

195.09 

New Zealand (14).__ 

76.01 

03 

BSAZ 

4077 

5935 

0537 

03 

3.71 

75.44 

6838 

4021 

58.72 

6120 

77^8 

5922 

6122 

Norway (23) 

204.73 

-03 

18097 

12536 

16065 

18237 

03 

131 

20531 

185.77 

12169 

150.73 

18126 

211.74 

18552 

180X5 

Skigapore (44) 

J96J8 

-0.1 

38234 

24434 

31131 

209.16 

0.0 

137 

397.43 

359.78 

243.42 

30935 

28X22 

39901 

394.86 

322.85 

South Africa (59) 

334.57 

-0.7 

30535 

205-85 

26ZS4 

294.33 

03 

2.17 

32009 

30187 

20634 

28X22 

293/43 

342 JOO 

202.72 

212.68 

Spam ( 38 ) — 

141.67 

03 

12836 

8739 

11133 

135.03 

1.7 

432 

14080 

127/48 

8024 

10939 

132.70 

15179 

12188 

14151 

Sweden (36) — 

JM<U1 

-0.3 

219.47 

147.85 

18830 

25539 

04 

137 

24234 

21938 

148/43 

18084 

25489 

24X34 

175^3 

20X83 

Swttariand (47)— - 

162J0 

as 

14023 

9936 

127.36 

126.80 


1.92 

16138 

146.00 

98.78 

12534 

125.00 

17X68 

14X64 

14X76 

UNM Kingdom (204) — 

203^8 

03 

185.G5 

125.07 

1SLSZ 

105.65 

1.7 

4.10 

201.72 

18231 

12335 

157.02 

18281 

214.98 

181.11 

191.54 

USA (SI 5) _ - 

19137 

1.7 

17830 

11838 

151.74 

19337 

1.7 

232 

18013 

172.12 

11045 

14739 

19113 

18X04 

17X95 

19032 

EUROPE (707) 

173.79 

0.7 

158.72 

10633 

13636 

14937 

13 

3.12 

17231 

166.17 

105.66 

1343B 

147JZ9 

17X58 

ISC. 79 

161 JO 

Nontic (1163 

231.81 

-08 

211.70 

142.62 

18130 

ciaeo 

03 

1.41 

5 

21139 

14X23 

182.02 

209.96 

23X91 

17X19 

101.83 

Pacfflc Beatii (747). 

170.91 

-03 

15639 

105.10 

134.12 

11021 

03 

130 

171.51 

155-26 

10105 

13330 

1ial7 

17XBS 

134.79 

15157 

Euro-Pec*: (1454) 

172.00 

Ol 

157.09 

10633 

13437 

126.03 

07 

136 

17131 

15533 

10533 

13173 

125.14 

17114 

14X68 

15X41 

North America (016) 

189 .85 

1.0 

173.38 

110.61 

14836 

18936 

13 

231 

186.70 

16009 

114.40 

14589 

18119 

192.73 

175.87 

18X03 

Europe Ex. UK 003 

15438 

07 

14039 

94.98 

121.14 

128.70 

1.8 

9 KO 

15127 

138.78 

9187 

11930 

128.88 

15X12 

13X94 

141 J01 

Padfle Ex. Japan (27W 261 .65 

03 

239.14 

101.11 

205.48 

232.18 

04 

2.78 

28036 

23124 

15934 

20X13 

23183 

29621 

23X34 

234.70 

World Ex. US (1634) 

173.88 

ai 

158.81 

10639 

138/45 

12930 

07 

137 

17171 

15735 

10839 

13121 

12X91 

17X85 

14158 

15921 

Wbrid Ex. UK (184S) 

17BJ99 

07 

101.64 

10839 

13838 

14638 

13 

2.07 

17534 

150.18 

107 JO 

136.87 

144.17 

17X59 

15X98 

16X44 

World Ex. So. AE 

17830 

07 

18Z.84 

108.70 

13932 

148.18 

1.1 

237 

177.09 

16031 

108.46 

137.84 

14181 

180.03 

15X54 

16X46 

Wbrtd Ex. Japan (1861) _ 

190.78 

1.1 

174.22 

11737 

140.09 

17835 

13 

230 

10830 

17073 

11531 

14680 

17802 

195^0 

17134 

181.18 

The World Index (2140) _ 

__ 17931 

07 

lto.75 

11032 

14070 

14024 

1.0 

337 

178.12 

1S1.2S 

109.10 

13184 

147.00 

180X0 

15X85 

16X85 


Copyright The Rnandol Thnaa LMM. Gofeman. £ad» ml Co. and mom SurUn Unfed. 1087 
USSR) prices wets una w are lot Util nttn 


Ls is the man who 


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runs a drugs 


racket f who 


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sells arms t o /■— w* 


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who launders 


the proceeds through 
supposed legal means. 


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expert C r,:i. 


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■.S&frv.' _ • 


This is the man who could 




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be investing with you. 




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